BusinessDay 02 Oct 2018 by BusinessDay

businessday market monitor FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

Foreign Exchange

Foreign Reserve - $44.3bn Biggest Gainer Biggest Loser Cross Rates - GBP-$:1.30 YUANY-N52.77 Nestle Seplat Commodities N630 1.29 pc N1400 -2.27 pc 32,766.37

Cocoa

Gold

Crude Oil

US $2,057.00

$1,196.50

$82.72

news you can trust I **TUESDAY 02 OCTOBER 2018 I vol. 15, no 152 I N300

₦2,295,592.88

-0.31 pc

Buy

Sell

$-N 358.00 361.00 £-N 472.00 480.00 €-N 418.00 426.00

Market I&E FX Window CBN Official Rate Currency Futures

($/N)

Spot ($/N)

363.92 306.35

0.14 12.74

NGUS DEC 26 2018 364.27

LOLADE AKINMURELE & DAVID IBIDAPO

he country’s small bank, often referred as Tier-II banks are growing their loan books even as the big banks keep a tight lid on theirs. Data compiled by Business Day show that while the big banks, often referred to as Tier-I banks largely cut back on loans and advances to customers in the first half of the year, small banks gave out more loans. “The small banks are taking an aggressive approach to lending because they need to grow their balance sheet, while the big banks are holding back and derisking their balance sheet,” in an economy that is not growing convincingly and is faced with political uncertainty ahead of the

L-R: Mike Perlis, CEO and vicechairman of Forbes Media, presenting the Africa’s Oil and Gas Leader of the year award won by Benedict Peters, executive vice chairman, Aiteo Group, at the “Best of Africa” event by Forbes International, to Francis Peters, deputy group managing director, Aiteo Group, at Forbes headquarters in New York recently.

Continues on page 38

Ambode faces the ultimate battle for political survival in APC’s primaries

rguably, one of the best performing governors in the last three years, the Lagos State governor, Akinwunmi Ambode is faced with the ultimate battle of his political life. If he loses, he will be the only incumbent governor to have been denied the opportunity to do a second

term among his peers. Across the country, all the incumbent first term governors picked up their party’s ticket for the second term without much trouble. But Ambode is being made to sweat it out to get his with the stakes highly packed against him today. Ambode is challenging the long standing formidable political hegemony of his godfather, Bola Ahmed Tinubu, national

-0.04 13.17

-0.08

14.96

NGUS MAR 27 2019 364.72

10 Y 20 Y -0.06 -0.07 15.13

15.15

NGUS SEP 18 2019 365.62

Nigeria’s small banks go big on loans as big banks slow down

JOSHUA BASSEY

fgn bonds

Treasury bills

leader of the All Progressives Congress (APC) and former governor of Lagos (1999-2007) who is against the governor’s re-election bid. Since leaving office on May 29, 2007, Tinubu has remained a dominant factor in Lagos politics having built a structure that is not only invasive but permeating even to the grassroots. Together with men and women of like

minds, bonded in a forceful political ‘machine’ known as the Mandate Group, the former governor has continued to enjoy the rare privilege of having the final word on who becomes the governor of Nigeria’s richest state. It would also seem a mission impossible to emerge the speaker of the State House of Assembly Continues on page 38

How Benedict Peters emerged Forbe’s Oil & Gas Leader of the Year ... plans $4.3bn new investment

enedict Peters, international business leader and founder of Aiteo Group, Benedict Peters, was on 27 September named as ‘Africa’s Oil and Gas Leader of the Year’ at Forbes’ Best of Africa Gala. The well attended event held at Forbes Headquarters, New York, United States of America. “Recipients are singled out for their work in bringing prosperity to all 55 countries of the African continent” Mike Perlis, the CEO and Vice Chairman of Forbes Media said while presenting the awards. The award is, according to Forbes, is an acknowledgement of Peters’ significant contribution to oil and gas development in Africa through his visionary leadership, distinguished service and transformational positional of Aiteo as a major player in a sector dominated by international oil companies. Continues on page 38

Inside Ademola Adebise now MD/CEO of Wema Bank, Moruf Oseni deputy managing director P. 3

2 BUSINESS DAY NEWS

Tuesday 02 October 2018

C002D5556

Pan Ocean’s multimillion-dollar pipeline to deliver value in 2019 HOPE MOSES-ASHIKE, ENDURANCE OKAFOR

he massive investment that Pan Ocean, a leading indigenous oil and gas sector player has made in its Amukpe-Escravos Pipeline Project (AEPP) is set to begin to pay off in 2019 and beyond as the project enters completion stage. The 67-kilometer pipeline project was jointly initiated by state-owned oil company, the Nigerian National Petroleum Corporation (NNPC) and Pan Ocean. When complete, it will boost the capacityofcrudeoilproducerstoexport, especially from Nigeria’s mid-western Niger Delta area and strengthen oil sector related infrastructure. Started by Pan Ocean seven years ago under the leadership of company managing director, Dr Festus Fadeyi, the project has already gulped several million dollars in finances made available by a consortium of Nigerian banks led by Polaris Bank Limited (former Skye Bank Plc). Implementation was carried out by various indigenous Nigerian oil services firms as the project is supposed to be a symbol of local content and capacity. “We are glad that finally those who invested in this project are going to reap the benefit of patience and hard work,” company General Manager, Gas/AEPP, David Aboderin said in response to questions sent by mail. “These kinds of projects have long gestation periods, but in the end, investors reap tremendous benefits,” he added. When fully operational, investors and the Nigerian economy will feel the full impact of the asset as it will significantly reduce pressure on the 87-kilometer TransForcados Pipeline (TFP), an over four-decades-old pipeline system. The last two decades have seen the Trans-Forcados Pipeline struggle as it has experienced several breaches as the system has become easy target

for criminal elements and vandals looking to scoop crude oil. In the period between February 2016 and early 2017, disruptions on the Trans-Forcados Pipeline forced oil producers to lock-in output, a situation which caused the Nigerian government considerable budgetary strains, and for crude oil producers, lean bottom lines. Trans-Forcados Pipeline was shut down for 305 days in 2016, and more than 182 days in 2017. In the 20062007 and 2009 periods, total crude deferred due to downtime of TransForcados Pipeline by Pan Ocean alone was 16.2mmbbls, an equivalent of $812million (assuming a price of $50/bbl). In the 2016-2017 period, total crude deferred due to downtime was 3.7mmbbls, equivalent to $188million. These losses applied to most of the crude producers who are expected to use the Amukpe-Escravos pipeline in the near future. “The vulnerability and instability of the Focardos pipeline give credence to the project…. The downtime usually experienced by companies that currently use the Focardos pipeline is usually very dire on their financial performance,” says Jubril Kareem, acting Head of Energy Research at Ecobank Transnational, a pan African lender. According to Kareem, given that the project is only 67km, the amount of time taken to build it so far is definitely longer than usual. However, several considerations have to be considered, the project was awarded in 2011 but does not necessarily mean it was fully funded same year. A lot of factors could be associated with the delay, including financial and security issues. The crash of crude oil price could simply have meant such project take the back seat in company’s CAPEX allocation.

•Continues online at www.businessdayonline.com

Oil prices hit $84 mark per barrel HOPE MOSES-ASHIKE & FRANK UZUEGBUNAM

il price on Monday breached the $84 mark per barrel, the highest since 2014, following expectations the sanctions on Iran will test OPEC’s ability to replace the shortfall, despite the group agreeing in June to pump more after pressure from US President Donald Trump. The higher oil price is good news to Nigeria which is currently struggling to fund its N9.1 trillion 2018 budget which was based on a US$51 per barrel oil price. Brent futures were up $1.55 a barrel at $84.28 reaching the highest levels since November 2014. US light crude futures were up $1.48 at $74.73 a barrel, after touching $74.89, also the highest in nearly four years. Ayodeji Ebo, managing director, Afrinvest Securities limited said this is positive for Nigeria’s oil receipts amidst widening budget deficit. Nigeria depends on revenue from crude oil exports to finance its budget and as a major source of foreign exchange. “This will also provide some form of comfort for the foreign investors as this will cushion the depletion rate of the external reserves in the face of increasing capital flight”. The downside, he said is that the NNPC will have to bear more cost in form of subsidy due to the higher landing cost of PMS. In addition,

the government may draw back on its efforts to push more policies to diversify the revenue base of the economic from oil. “If the trend of high crude oil prices is sustained for some time, we could see an upward review in pump prices of petroleum products in Nigeria, “said an analyst. According to Bloomberg report, Mercuria Energy Group Ltd has predicted $100 per barrel by end of the year. Trafigura Group expects crude oil prices to pass the $100 threshold in 2019. They are not the only ones with that prediction. Total SA sees $100 oil on the horizon but the French energy giant is not thrilled about it. Patrick Pouyanne, Total Chief Executive Officer, sees supportive elements, such as looming sanctions on Iran and disruptions in Venezuela that are stripping supply from the market and pushing prices back into triple digits for the first time seen since 2014. US sanctions against Tehran are widely expected to have an immediate impact on Iran’s oil exports, although the estimates of exactly how much of the country’s oil could disappear from November 4 vary widely. Some energy market analysts expect around 500,000 bpd to disappear once US sanctions against Iran come into force, while others have warned as much as 2 million bpd could come offline over the coming months.

President Muhammadu Buhari signing the Anniversary Register during the 58th Independence Celebration in Abuja on Monday, with him are: Vice President Yemi Osinbajo (r); Bello Mohammad, FCT minister (2nd r); Tukur Buratai, chief of army staff (l); Ibrahim Idris, inspector general of police (2nd l); Gabriel Olonisakin, chief of defence staff (3rd l); Sadique Abubakar, chief of the air staff (4th l); Masur Dan-Ali, minister of defence (5th l), and Ibok-Ete Ibas, chief of naval staff.

MTN considers ditching IPO plans …to list by introduction on NSE EMEKA UCHEAGA & CYNTHIA IKWUETOGHU

alph Mupita, Chief Financial Officer of MTN Group Ltd, the wireless carrier has said that the company is considering dropping its plan to raise capital through an initial public offering (IPO) on the Nigerian Stock Exchange. Mupita told Bloomberg that the telco giant is considering other options of trading its shares on the Exchange, including listing by introduction, in which existing shares of MTN are listed on the exchange. In an IPO, MTN would have raised fresh funds through listing but listing by introduction is a way of listing shares already in issue on another ex-

change and MTN would not need to raise fresh capital in the process. However, invrestors would be able to buy while existing shareholders would be able to sell the company’s shares. The listing approval procedures for a new listing by introduction are the same as those for IPOs. Mupita said the new plan became necessary due to current market conditions that may not support the Nigerian business getting a fair value for its shares if an IPO was to take place. The company’s stock has plunged in the wake of a dispute with the Central Bank of Nigeria (CBN) over the repatriation of $8.1 billion out of the country and a separate tussle with the attorney general’s office over

$2 billion in back taxes. MTN is currently seeking board approval to go through with the new plan to list by introduction on NSE. MTN could complete the listing in Nigeria which is arguably its biggest market by the end of this year or first quarter of next year, the CFO said. MTN was expected to list its Nigerian unit this year on the NSE as part of a settlement in 2016 over unregistered SIM cards that saw the Nigerian Communications Commission (NCC) slam a $5.2 billion fine on the telco before interventions by the South African government helped bring the fine down to about $1 billion (N330 billion). MTN has so far paid around N165 billion out of the N330 billion fine.

Okowa and former Chairman of National Human Rights Commission and senior member of Open Society for Justice Initiative, Professor Chidi Odinkalu, who will keynote the conference. The theme of this year’s confer-

ence is: Credible Election, Sustainable Democracy and the Nigerian Media. A statement signed by the Chairman, Planning Committee of the conference, Mr. Ken Ugbechie, said the theme was chosen to reflect the prevailing political reality in the country.

Okowa, Odinkalu, others headline 2018 Editors’ Conference in Delta

he 2018 All Nigeria Editors’ Conference (ANEC) billed for Asaba, Delta State from Wednesday October 10 to Sunday, October 14 will be headlined by many notable speakers among whom is host Governor, Dr. Ifeanyi

Pat Utomi to fly APC governorship flag in Delta

ounder of Centre for Values in Leadership (CVL), Professor Pat Utomi, has been declared winner and candidate of the All Progressives Congress (APC) for the 2019 governorship election in Delta State. The professor emerged victorious in the Delta APC governorship primaries conducted by the Cyril Ogodo-led factional State Working Committee of the party in Asaba.

Favour Adibor, who acted as the returning officer, declared Utomi winner of the primaries that started Sunday and ended in the early hours of Monday. Out of the 3,755 total votes cast by the delegates, Utomi scored 2,486 votes to defeat three other aspirants for the Delta APC governorship ticket. Victor Ochei, former speaker of Delta State House of Assembly, scored 801 votes to come second,

Cairo Ojougboh, a former national deputy chairman (South-South) of the People’s Democratic Party scored 368 votes to occupy third position, and Great Ogboru came fourth with 106 votes.

Tonye Cole wins APC governorship ticket for Rivers Ignatius Chukwu

igtimeentrepreneurandCEO of Sahara Energy, Tonye Cole, has emerged as governorship candidate of the APC in the Rivers state primaries of the party. He will be challenging PDP’s Nyesom Wike, the incumbent governor, who was nominated few hours in the PDP primaries to go for a second term. Cole’s emergence means that the states elections in 2019 will be upland versus riverine battle for the

seat of power. Cole, recently resigned as CEO of Sahara Energy to contest the state’s APC primaries. The Rivers state PDP adopted indirect primaries as their preferred mode of selecting their candidate for the election. Announcing the result at Igboukwu Field, venue of the gubernatorial primaries, Chairman of the APC Gubernatorial Primaries Committee for Rivers State, Jafaru Lawal Isa (Rtd), said Cole got a total of 3, 321 votes to beat other aspirants to the position. The other gubernatorial aspirants, in-

clude Dawari George who scored 491 votes while Dumo Lulu-Briggs scored 38 votes. Senator Magnus Ngei Abe scored only one vote while a total of 18 votes were declared invalid. But Abe conducted his own primaries where he too won outstandingly, an indication of a divided APC in the state.

Tuesday 02 October 2018

C002D5556

3 NEWS

BUSINESS DAY

EU-Nigeria business forum 2018 set to discuss partnerships for growth, job creation DANIEL OBI

he Delegation of the European Union (EU) to Nigeria and ECOWAS in collaboration with EU Member States diplomatic missions in Nigeria is organising the seventh edition of the EU– Nigeria Business Forum (EUNBF) in Lagos. The EUNBF is a business event designed to bring European and Nigerian investors and companies together with policy makers to discuss business opportunities and address bottlenecks to inward investments. The 2018 edition is tagged “Building Partnerships for Growth and Job Creation” and divided into three sessions - focus on the launch of the European Business Organisation

(EBO) in Nigeria, discussion on the Circular Economy and Exploring Opportunities for Nigeria, and lastly, leveraging innovative financial instruments to attract investments to Nigeria. According to a statement, the EBO is a global initiative of European companies that seek better business environment in the host countries for their investors towards increasing investments and creating jobs locally. “The launch of the EBO in Nigeria means integration into a network of over 35 key global markets, supporting Nigeria’s goal of identifying obstacles towards improving in the ease of doing business ranking and proffering solutions to these challenges. The keynote presentations on “Why an EBO in Nigeria?” will be delivered by Folashade Ambrose-

Medebem, president, European Business Organisation (EBO), Nigeria. The second session titled “Circular Economy and Exploring Opportunities for Nigeria” will explore the strategy towards identifying the opportunities for Nigeria in the circular economy. According to Vice President Yemi Osinbajo, “plastic pollution is an environmental epidemic due to its impact to fisheries, tourism and biodiversity in the country.” Single-use plastics have been said to take between 500 to 1000 years to degrade with the un-recycled plastics estimated in excess of 4.5 billon tons. With the boom in Nigeria’s telecommunications industry also comes the challenge of disposal of e-waste but also provides an economic opportunity.

The EU has adopted an ambitious Circular Economy Action Plan towards, amongst others, making all plastics packaging recyclable by 2030. Therefore, recycling of electrical and electronic products and opportunities for Nigeria in the circular economy will be discussed extensively during this session. The third session on “Leveraging Innovative Financial Instruments to Attract Investments to Nigeria” will explain how the External Investment Plan (EIP) works and identify opportunities for partnership in its implementation. It will also discuss other financial instruments and tools offered by development banks and international financial institutions that contribute to attract investments to Nigeria.

L-R: Sola Oyetayo, vice president/chairman, Lagos Chamber of Commerce and Industry (LCCI), advocacy committee; Adeoye Adefulu, partner, Odujirin & Adefulu; Babatunde Ruwase, president/chairman of council, LCCI; Gabriel Idahosa, vice president, LCCI, and Tolu Aderemi, partner, Peastone&Greays, at the LCCI stakeholders’ forum on petroleum industry bill in Lagos. Pic by Olawale Amoo

Record load factor highlights strong August passenger demand IFEOMA OKEKE

nternational Air Transport Association (IATA) announced global passenger traffic data for August 2018 showing that demand (measured in total revenue passenger kilometres or RPKs) climbed 6.4 percent compared with the year ago. This was slightly above the 6.1 percent annual increase for July. August capacity (available seat kilometres or ASKs) increased by 5.5 percent, and load factor climbed 0.7 percent percentage point to 85.3 percent, which was the highest for any month since at least 1990. “The industry experi-

enced continued strong traffic growth in August, putting the cap on a very good peak travel season. The all-time record load factor reflects that airlines are maximizing the efficiency of their assets at a time of rising fuel prices and other costs that are limiting the opportunities for low fare stimulation,” Alexandre de Juniac, IATA’s director-general/CEO, said. African airlines’ traffic climbed 6.8 percent in August. While this was a slowdown from the 7.4 percent growth recorded in July, the bigger picture is that demand remains strong, despite an increasingly challenging environment in the continent’s largest economies.

South Africa slipped back into recession in the second quarter and business confidence in Nigeria has moderated in recent months. Capacity rose 3.8 percent, and load factor surged 2.2 percentage points to 78.2 percent. August international passenger demand rose 5.6 percent compared with August 2017, in line with 5.5 percent year-over-year growth achieved in July. All regions recorded increases, led by airlines in the Asia-Pacific region. Capacity climbed 5.1 percent, and load factor edged up 0.4 percentage point to 85 percent. Asia-Pacific airlines’ August traffic increased 7.5 percent compared with

the year-ago period, which was acceleration compared with a 7.2 percent rise in July. Capacity rose 6.1 percent and load factor rose 1.1 percentage points to 82.6 percent. The upward trend in passenger traffic remains very strong, supported by structural changes, including on-going rises in living standards in the region, as well as more route options for passengers that translate into time savings and ultimately stimulate demand. European carriers saw August demand climb 5.1 percent year-to-year, which was also an increase from the 4.5 percent growth recorded in July. However, in seasonally-adjusted terms, growth has tracked sideways since late spring.

Moruf

Ademola

Ademola Adebise now MD/CEO of Wema Bank, Moruf Oseni deputy managing director

ema Bank plc has announced that Ademola Adebise has been made the managing director/CEO of Wema Bank following the retirement of Segun Oloketuyi in September. He was initially appointed acting managing director in July after Oloketuyi proceeded on terminal leave in July 2018. Adebise assumes the new role October 1, 2018. Prior to this appointment, he was the deputy managing director, a role he held since January 2017. Adebise has been part of the bank’s executive management team since 2009, and has played a pivotal role in the execution of its strategic turnaround plan. He has over 28 years experience in the banking industry (inclusive of four years in management consulting), and has worked in various capacities in Information Technology, Financial Control and Strategic Planning, Treasury, Corporate Banking, Risk Management and Performance Management. Also, the bank announced the appointment of Moruf Oseni as its deputy managing director, effective October 1, 2018. Since joining the Wema Bank board in 2012, Oseni has contributed immensely

to growing the bank’s retail business. Until his appointment, he was the executive director in charge of retail, managing assets including ALAT, Nigeria’s first digital bank. Both appointments have been ratified by the Central Bank of Nigeria. “In Ademola and Moruf, the bank has two finance veterans with a wealth of experience in senior executive positions across several countries,” Babatunde Kasali, chairman of Wema Bank, said. “With their proven track record in the financial services sector, the board is confident that their appointments will lead to the continued transformation of the bank as it positions itself as a market leader in Nigeria’s retail banking segment through technology and innovation.” Moruf Oseni brings a wealth of banking and nonbanking experience to his new role. Before joining Wema Bank, he was the CEO of MG Ineso Limited, a principal investment and financial advisory firm. Prior to MG Ineso, he was a vice president at Renaissance Capital, where he was responsible for capital markets origination and execution for sub-Saharan African corporates and financial institutions.

NAMA tasks oil industry on local production of aviation fuel IFEOMA OKEKE

anaging director of the Nigerian Airspace Management Agency (NAMA), Fola Akinkuotu, has charged the oil and gas sector in Nigeria to consider critically the production of aviation fuel (Jet A1) in the country in line with the Nigerian Content Development initiative of the Buhari administration. Akinkuotu, who was a guest speaker at the annual Health, Safety, Security and Environment (HSSE) forum organised by PSRG-Richardson Oil and Gas held at Eko Hotel and Suites, Lagos, said the call became imperative given the high cost of aviation fuel, which gulps over 30 percent of operational cost of airlines in Nigeria. Apart from cost, the sup-

ply of the product is sometimes epileptic, resulting in flight disruptions, he said, stressing that the production of Jet A1 in Nigeria will regularise supply, bring about reduced cost, which will also translate into lower airfares by airlines. The NAMA boss, who delivered a paper on the topic “Aviation Safety in Nigeria – Challenges, Issues and Solutions,” said the high cost of aircraft maintenance, which he described as “atrocious, largely because these costs are domesticated in dollars.” He revealed however that effort was being made by the Federal Government to set up an MRO (Maintenance, Repairs and Operations) facility “as part of strategic plans to reduce capital flight, lower the times aircraft leave the country for repairs and lower the cost of maintenance.”

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

6 BUSINESS DAY NEWS

C002D5556

Nigeria-India relations: Envoy appeals for reciprocity in work permit

igeria’s High Commissioner to India, Major General Chris Eze (Rtd.) has appealed to the Indian government to reciprocate the issuance of work permit to Nigerians in the country. Eze made the appeal while speaking with the News Agency of Nigeria on the 60th anniversary of Nigeria-India relations and 58th Independence anniversary of Nigeria in Delhi, India. He said that commission issues an average of 500 work permits to Indians per month to work in Nigeria, saying “it will be nice if some kind of reciprocity is returned. “I keep telling them now that the world has been globalised and with globalisation, you cannot keep people out no matter how hard you try, you cannot kick people out.

“So, I keep asking them, do the much you can to give work permit to Nigerians who get educated here or who get skills to compete on the labour market, they could do that. “Also, please give import licences; you cannot believe that when our women go to the market to buy Nigerian food, it is sold to them by Indians. You cannot imagine it, it is that restrictive.’’ The envoy said that the consulate had been trying to address the challenge of closing opportunities to Nigerians who desire to work in India. Eze, however, recalled the incident that made six Nigerian lost international job in India due to that policy of not allowing foreigners to work in the country. “They are six Nigerians that finished their education here and they were offered Jobs by an international In-

formation Communication Technology (ICT) Company. “Apparently, it seems that they had some programmes they wanted to develop which they wanted to translate into Nigerian languages. “They had to get work permit to take the job offer and they had to go to Nigeria to apply through the Indian High Commission. “They applied and they called us and I called the High Commissioner myself, made a presentation to the Ministry of External Affairs. Sadly, noting came out of it,’’ he said. According to him, the consulate is advocating and sensitising all stakeholders that the aspect of the country’s relationship with India should be looked into. In addition, Eze said that it was working to get information about Nigerians coming to India for various purposes.

National Lottery Trust Fund distributes sports equipment to 2,017 public schools

ational Lottery Trust Fund (NLTF) has distributed sports equipment to 2,017 public primary schools in the FCT and the country’s 36 states, Bello Maigari, the Fund’s acting executive secretary, says. Maigari told the News Agency of Nigeria in Abuja that the distribution aimed at helping to develop sports from the grassroots was handled between 2016 and 2017. He said the intervention was in nine sports, namely football, taekwondo, basketball, table tennis, volleyball, judo, badminton, handball and athletics. Maigari said that the equipment were given out to no less than 40 schools in each state, with the exception of the FCT which had only 22 schools receiving the equipment. “We visited all the 36 states of the federation and the FCT in 2016 and 2017 to hand over worldclass sports equipment to

over 2,000 public primary schools and 13 premier universities across the country. “This is unprecedented in the history of NLTF and indeed in the history of sports. There has never been a major intervention to grassroots sports in the history of sports in Nigeria. “We are the first to articulate that vision and we actualised it. We are pleased to tell Nigerians that the funds were applied judiciously and this is serving the purposes for which the trust fund was set up.’’ The NLTF acting executive secretary explained that the equipment donated had propelled pupils to develop interest and participate in sports. He said the intervention had helped the country to discover Rosemary Chukwuma, whom he described as a talented athlete who won a bronze medal at the Commonwealth Games. The Games was held at Gold Coast in Australia in April.

Maigari added that many of the schools have the facilities to utilise the equipment, stating that the distribution was based on the report of the needs assessment of the selected schools. On how the Fund had been tracking the progress of their projects, he said NLTF developed a World Bank standard of a monitoring and evaluation framework. “We adopted the World Bank standard of monitoring intervention programmes. Tracking the utilisation of this equipment is on periodic basis. The framework envisages that we monitor on monthly, quarterly and biannual basis of course. “And we also use the expertise of consultants to carry out post-impact assessment of these interventions at the end of the year. If the outcome is positive then we replicate it in the near future, and so far the reports are positive.’’

Buhari, Obaseki meet Nigerians in Diaspora, assure on sustained development

resident Muhammadu Buhari and the Edo State governor, Godwin Obaseki, last week on the sidelines of the 73rd session of the United Nations General Assembly in New York, met with Nigerians in the Diaspora with an assurance to sustain the tempo of development in Nigeria. Buhari charged the Nigerian professionals to lend their voices to developments in their home country and be quick to condemn bad leadership characterised by corruption and other prac-

tices that could reverse the growth of the nation. At a separate event organised by Global Hope Coalition, Governor Obaseki represented President Buhari. The event had in attendance the President of Niger Republic, Mahamadou Issoufou, and other global leaders. According to the organisers, “Global Hope Coalition is empowering courageous individuals who stand up to terror and violence, preserve our heritage and build bridges across cultures.” The coalition is a network

of three not-for-profit foundations based in New York, Zurich and Hong Kong. The foundation noted, “Violent extremism is one of the gravest dangers of our time-threatening to unravel the fabric of our societies, irreparably destroy invaluable cultural icons and jeopardise the future of intercultural relations.” The foundation honours men and women who are everyday heroes around the globe, and “are taking great risks to oppose extremists– wherever they spread lies, bigotry and hatred.”

Tuesday 02 October 2018

C002D5556

Teachers’ training, panacea to educational woes - IEDUMAN IFEOMA OKEKE

he International Educational Management Network (IEDUMAN), a platform for educators to connect, collaborate and learn industry insights and best practices with the aim of impacting nationally on the education system, has maintained that the training of teachers is the solution to Nigeria’s educational woes. This was disclosed at a stakeholder meeting IEDUMAN held recently, dealing on key issues bedevilling the Nigerian educational system and for the umpteenth time, matters bordering on the quality, welfare and passion of teachers topped the reasons for the malaise. At the end of its brainstorming session, the stakeholders, drawn from different sectors, unanimously agree that giving teachers’ welfare out of the doldrums and strategic training will go a long way in restoring Nigeria’s lost glory in education. Onyeka Jaivbo-Ojigbo, IEDUMAN’s founder and president, set the tone when she reiterates that education is

the key to national development and that teachers hold the key. Adams Onuka, chairman, advisory board of IEDUMAN, asserts: “To make education work is a whole gamut of all stakeholders coming together playing their roles. Leaving it to teachers alone will be disastrous; and if the teachers abandoned their work, it will be disastrous.” Lamenting the abysmal quality of education in Nigeria, Nnamdi Udoh, retired managing director, Nigerian Airspace Management Agency (NAMA), observes, “When all the big men are taking their children to study in India, Ghana and Ivory Coast, then there is something fundamentally not right with our education.” The problem of the education sector, according to Bunmi Omeke, a lawyer and an educational consultant, is multifaceted and interwoven, with socio-political and economic systems of the society. “Some of the problems are foundational and that include the teachers,” she points out. Expatiating further on the “teacher problem” she adds:

“We agree we need to have good hands in the educational industry and we always talk about teachers, however, the effort of teachers must be complemented by parents.” She calls for a holistic approach to the teaching profession in the country. “When we talk about training teachers, we must talk about training people who want to go into teaching. We also want to talk about a database and a source where schools can recruit good hands, good teachers.” She canvassed for “an educators fair comprising of educationists, HR managers, lawyer and admin personnel” reminiscent of EDUFAIR, the network’s annual flagship fair for vocation skills targeted at schools. Chinyere Osadebe, CEO, Science Museum, stressed the underlying issue that affects teacher. “We have identified that most of the teachers we have in school find themselves teaching because they do not have other choices,” she said. “A lot of them have a problem in that they see themselves in the wrong place and therefore, they have the wrong mindset.”

Our fight against pre-registered SIM scam is yielding results – NCC

igerian Communications Commission (NCC) says its awareness campaigns against the menace of pre-registered SIM cards, which has been a recurring trend in the country’s telecom sector is yielding results. Salisu Abdu, head, Enforcement Unit of the commission, made this known in a statement in Lagos on Sunday. Abdu said that the commission had carried out a three-day comprehensive enforcement in some major markets in Lagos to fish out perpetrators of pre-registered SIM card. He said that the latest enforcement exercise was largely informed by a report from the office of the National Security Adviser about the prevalence of preregistered SIM cards at some locations in Lagos. He said that the adviser however expressed some measure of satisfaction that the trend seemed to be on a downward trend when compared with what obtained few years ago. “We visited computer village, some markets in Ikorodu and we also visited one in Bariga with the objective of identifying where the sale of pre-registered SIM cards is ongoing.

“Fortunately enough, it was only in computer village we were able to buy only one Airtel SIM card from a mobile agent. “We appreciate the level of compliance in Lagos; it apparently means that there is adequate awareness campaign that people are now aware that the sale and buying of pre-registered SIM card is criminal,” he said. Abdu said that the commission had addressed the media on the outcome of the outing at the Lagos Command of the Nigeria Security and Civil Defence Corps (NSCDC), where some of the apprehended suspects were taken for interrogation. “We went to two locations, Alaba International market and Orile market along Badagry expressway. “At Alaba market, we purchased a pre-registered SIM card from an agent, a Globacom agent and in Orile we found pre-registered SIM cards on a market woman who, in fact, was seated with a lot of SIM cards being sold to members of the public. “It is those same cards that criminals are using to commit a lot of crime and you can now understand why it had sometimes been difficult for security operatives in the course of their investigations

of criminal offences to identify people who have actually committed such crimes,” Abdu said. The enforcement official said that the last day of the raid of phone markets in Lagos was concentrated largely on the Saka Tinubu market in Victoria Island where two more persons who were found selling pre-registered SIM cards and were picked up by the combined team of NSCDC and NCC officials. While speaking on the commission’s next line of action, Abdu said that investigations would first be carried out by the NSCDC, which accompanied the enforcement team during the exercise. “We have to get to the root as to where they are getting the pre-registered SIM cards and I am sure the old woman and some of the persons arrested are not the ones doing the registration, there must be somebody who is supplying the SIM cards to them. “We will need to find out the people who are behind it and we believe some of these challenges are coming from registration agents. So, we have been trying as much as possible to warn network operators to ensure that they checkmate their registration agents.

7 NEWS

BUSINESS DAY

‘World cement consumption to decline, Africa to recover’ CYNTHIA IKWUETOGHU

lobal cement consumption is projected to decline marginally to 4.05 billion tons (3.6bn tons) in 2018, but Africa is expected to grow by 1.6 percent in 2018, according to CW Research’s 2H2018 update of the Global Cement Volume Forecast Report (GCVFR). This followed a sustained slowdown in Chinese demand for cement, which has had a significant impact on overall worldwide figures. It is expected that global consumption of cement will record a slim rise of about 1 percent per year through 2023. According to the report, the global consumption of cement will increase to 3 percent if China is excluded from the worldview, as lack of investment in the real estate and infrastructural sectors has caused China’s cement demand to be dragged down. In total, the Chinese cement demand is expected to consume 2.55 billion tons of cement in 2018, a decrease of about 3 percent compared with the previous year. In the Middle East, ce-

ment consumption is prone to decline in 2018, as Saudi Arabia and Iran continue to strive with overcapacity and sluggish demand domestically. However, it is forecasted that there would be a recovery in regional cement consumption in 2024. However, Africa has seen lower-than-expected growth in 2018 and so its projection was revised downward from the previous forecast. Consumption is expected to grow by 1.6 percent in 2018 and 3.6 percent on average per annum until 2023. This year’s figures for Africa have been negatively impacted by under-performances of the Egyptian, Tunisian and especially, the Kenyan markets. For the US, CW Research expects a growth in cement demand by 2.8 percent on a cumulative annual growth average. Also, in Western Europe, cement demand is expected to increase to about 3 percent year-on-year in 2018 while maintaining an average growth of 2.2 percent between 2018 and 2023. “US cement demand is being propelled by an increasing consumer spending, which is reflecting on the growing residential construction. Nevertheless, the ambi-

tious infrastructure plans envisaged by the Trump administration remain on hold, translating into a lacklustre increase in cement demand,” Robert Madeira, managing director and head of research of CW Group, said. In developed markets such as the US and Europe, cement demand has been sustained by a steady growth in the economies and is likely to ease in the upcoming years. The cement market of Latin America is also likely to recover in 2018, following years of declining cement demand. During the next five years, growth is prone to speed up as the regional economy recovers. Argentina on the other hand has surpassed the remaining countries of the region due to its construction sector and large projects such as dams, highways, bridges, and tunnels, while Brazil continued deep in political and social uncertainty. “The global economy has been accelerating since the beginning of 2018, but the recent improvements in growth remain unevenly distributed across countries and regions,” Raluca Cercel, CW Group associate, said in the report.

8 BUSINESS DAY NEWS World Bank, EU Investment Bank score Edo high on project execution

he World Bank and the European Union Investment Bank have scored Edo State as one of two best states in Nigeria, where projects are being executed in line with global best standards. The state’s new ranking is based on her transparency and other reforms adopted by the Governor Godwin Obaseki-led administration in executing projects. The assessment of the state was disclosed during a courtesy visit by representatives of the World Bank and the EU Investment Bank to Governor Obaseki in Benin City. Task Team Leader I, Nigeria Erosion and Watershed Management Project (NEWMAP), World Bank, Amos Abu, commended the commitment of the Obaseki-led administration in tackling gully erosion ravaging communities in parts of the state, adding that Edo State is one of the two best states in Nigeria in the implementation of projects funded by the World Bank. Abu said: “It is because of the trust the Bank has in Edo that money is given directly to the state government to implement its projects along with her budget. Edo State has not been interfering in the bid and procurement processes of the World Bank projects.” Abu expressed the bank’s delight at the commitment of the state government in executing projects funded by international donor agencies, adding that the World Bank has increased the grant to fight ecological problems in Nigeria from $500 million to $1 billion. The team leader, EU Investment Bank, Jaime Barragan, said his team was in the state for “due diligence assessment of the erosion problem in the state.” According to Barragan, “The Bank has earmarked 175 million Euros for gully erosion problems in Nigeria, and from what I am seeing in the presentation by the Governor, Edo needs urgent approval and I must say that the state is ahead of other states in Nigeria in the fight against gully erosion.” The governor, who was represented by the deputy governor, Philip Shaibu, said the state government was poised to tackling gully erosion problem, adding that the government had commenced the process of awarding contracts to reclaim seven erosion sites while eight others had been marked as deserving urgent attention.

C002D5556

Tuesday 02 October 2018

$20bn power investment saga: Probe GE, group urges EFCC HARRISON EDEH, Abuja

coalition of Civil Society Organisations has called on the Economic and Financial Crimes Commission (EFCC) to investigate and prosecute the alleged fraud and sabotage of the nation’s power sector by General Electric (GE). The group made this known during a peaceful presentation of a petition to the acting chairman of the EFCC, calling for the prosecution of the prime culprit in the 2008 House

of Representatives report on the power sector. Addressing newsmen, Solomon Adodo, national coordinator, Empowerment for Unemployed Youth Initiative, stressed that a detailed investigation of the facts entailed in the petition would help the anti-graft agency determine the actual economic loss and havoc done to Nigeria by GE and its allies, especially Rockson. According to Adodo, the activities of GE and Rockson were bleeding the country to death fi-

nancially, as billions of naira had been lost with nothing to justify what he described as “humongous pillaging of our resources” by both companies. “The House of Representatives in 2008 constituted an Ad-hoc committee which is annexed to this petition did not only thoroughly berate and depreciate the fraudulent, outlandish and sordid acts of GE and its allies, notable among whom was Rockson. “The report specifically recommended that GE, Rockson and their

cronies be subjected to criminal investigation and their prosecution. “It is saddening to note that General Electric International and her Nigerian business partner Rockson Engineering Nigeria Limited, have bribed their way out of appropriate sanctions that ordinarily be visited on them for their conspicuous roles in the fraud and deliberate sabotage committed against Nigeria as revealed by the House Report. “We are further disenchanted at the fact that

GE and Rockson Engineering still continue to bleed Nigeria of direly needed funds through highly over inflated contracts skewed in a manner that they are doomed to fail. “It is therefore highly imperative that the Economic and Financial Crimes Commission expedite action to halt this vociferous decimation of our economy while hounding the individuals behind these crimes to jail to serve as deterrent to other individuals or entities,” he said.

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

C002D5556

COMMENT

Tuesday 02 October 2018

comment is free

Send 800word comments to comment@businessdayonline.com

Losing & wining at extra time: The burden of an umpire

MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

here are ominous signs in the air. Seeds of instability are being sown and we seem to be watching helplessly. I held my breath as I watched concluded election transit to inconclusive and the concluded return to inconclusive. On Saturday 22nd September 2018, Osun people went to vote for who would take over from Rauf Aregbosola as their governor. Rauf who became “popular” for owing arrears of workers’ salaries was completing his very tumultuous tenure. It was a hotly contested election with an unprecedented number of parties-about 38 fielding candidates for the elections. Everybody expected the competition to be fierce and so it was. The elections closed and votes were counted at the different pooling booths. Then collation started at ward levels and was concluded. Then it moved on to the local government collation centres and was concluded. The LGA returning officers moved their collated results

STRATEGY & POLICY

MA JOHNSON Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

igeria celebrated fiftyeight years of independence yesterday, 01 October 2018. In the past 58 years, a number of high points have been recorded undoubtedly, which vividly suggests that nothing is comparable to freedom and independence. For fifty-eight years, Nigeria has been free to decide what she wants as an independent nation within the international community. There is no doubt today that the infrastructural climate of Nigeria is better than what it was before independence on 01 October 1960. Whether we accept it or not, Nigeria has made some progress in entrenching a better climate for infrastructure especially in the 1970s and 1980s when the national economy was less stressful. This was the period when the federal government revenue increased on

to the state collation centre where Prof Joseph Fuwape was both the chairman, master of ceremony and returning officer. Watching him on television, he took full control of all that happened and his voice was commanding and he sounded excited. When he finished collating results of all the concluded collations from LGAs, his voice went mellow. The excitement was diminished if not lost. An otherwise ebullient man, became hesitant. The unexpected had happened. The “dancing” Senator Adeleke was winning. And that’s how an already concluded election turned inconclusive. INEC who cancelled elections in some booths for sundry ‘justifiable’ reasons, then realized, they had shot themselves on the foot and then reversed themselves. A supplementar y election would be held to correct the ‘anomaly’. Last Thursday 27th September a supplementary election was held in seven pooling stations in four LGAS. When the results were added up, Adegboyega Oyetola was winning and Prof Fuwape regained his cool and then declared the concluded elections which had become inconclusive now concluded. He subsequently asked those who were unhappy to go to court. With this, many matters now arise which in the end may make this concluded matter return to an inconclusive mode. First, Senator Ademola Adeleke who was winning before the matter became

‘

It was like a referee awarding penalty kicks at extra time to the losing team, allowing them first to equalize and then going ahead to score the winning goal at which time the referee stopped the match

’

inconclusive has vowed to reclaim his victory in court, which means that all the previously concluded matters would be reopened and the courts would then conclude the unconcluded, inconclusive and reopened matters at the Supreme Court. Second, the “unholy” alliance negotiated between APC and Senator Iyiola Omisore may soon unravel. Already, Adams Oshiomhole’s version of the deal differs in material detail from Omisore’s version and both are different from the information gathered from the grape vine. There are already disputations as to how much was agreed as electoral expense write off; automatic, semiautomatic or manual senate seat, number of commissioners to be allocated and how the gov-

ernment will be run by the alliance; dropping of the EFCC charges and the final closure on the Bola Ige matter. Soon the concluded deal may become inconclusive. Thirdly, Chief Olu Falae, Chairman of the SDP, on whose platform Omisore ran seemed to have distanced himself from the alliance and that creates some inconclusiveness, which may scuttle the alliance. The real worry here is that seeds of instability are being sowed in the polity. Senator Ademola Adeleke strongly feels he has been cheated and robbed of victory. His Party PDP feels this is a rape on democracy and that it was part of APC’s desire to win by all means- fair or foul. Osun people are divided down the line- half feeling bitter and half feeling happy. Other Nigerians are also divided with perhaps more people empathizing with the ‘weak’-Adeleke. Many also feel that what APC did is what PDP would have done if they had the power. Additional worry is created by the damning report of the international community on the supplementary election. In an unusual undiplomatic manner, the envoys of the USA, UK and the EU condemned the conduct of the election, alleging interference, intimidation and violence. This was quite weighty and must have some consequences, now or in the future. They do not often speak this way! They have even made additional comments since then. All these rub off negatively on INEC. It is true that nobody accepts that he lost election in Nigeria, fair

and square except for Goodluck Jonathan who accepted defeat as a lamb, did not protest, did not resist, did not complain, and refused to go to court. So it is normal to hear losers complain of impropriety and many observers often give the electoral umpire, the benefit of doubt. But this Osun election left bitter taste in the mouth of many. In the front of everybody, INEC declared an election which had been concluded in the eyes of many people inconclusive. Then it arranged a supplementary election reported to have been interfered with and looking all in the face announced that the man who was leading at close of the election has lost at extra time. It was like a referee awarding penalty kicks at extra time to the losing team, allowing them first to equalize and then going ahead to score the winning goal at which time the referee stopped the match. Yes, the favoured team will rejoice but the cheated team will protest. This looks like the game we just watched in Osun. Will this be the pattern of the games under this umpire? What does it portend for Nigeria’s democracy? Edo, Ondo, Ekiti and now Osun have all ended with shouts of foul by PDP while APC has rejoiced. Many who love this nation are praying that the pattern of referring must change. I just pray that this prayer is answered.

Send reactions to: comment@businessdayonline.com

Nigeria @ 58: Transforming potential to greatness the back of crude oil. The country had money but didn’t know what to do with it. The concerns we have on the pitiable state of infrastructure are to be blamed on poor maintenance culture and the dumping of national development plan. It’s interesting to know that Nigeria’s development plan have consistently identified technological development as a core objective. Most importantly, the 1962-1968 Development Plan predicted the attainment of a self-reliant technological development by Nigeria before the fourth plan period (1981-1985). Even the fourth development plan had technological development as its main objective, while secondary objectives include: “Increase in the real income of the average citizen; reduction in the level of unemployment and under employment; increased in supply of skilled manpower; reduction of the economy on a narrow range of activities; balanced development; greater self-reliance and increased productivity”, amongst others. Most state and international airports, oil refineries, iron and steel plants, seaports, vehicle assembly plants, etcetera, are products of the development plans. We must commend those Nigerians who worked religiously to ensure that these projects were conceptualized and implemented. But when the military government came in 1983, development plan was abandoned and replaced with

rolling plans. Since then, several visions and programs have been articulated by successive governments at state and federal level, but some of their achievements are no more seen. The technological backwardness and underdevelopment experienced in the country are products the total situation within the society. Yet, the population was increasing in the 1980s. Today, population is about 200 million with a growth that is more than economic growth. The result is that many Nigerians are poor and miserable. The country stopped effective investment in infrastructure to the extent that those provided in the 1970s and 1980s are now dilapidated. Currently, both roads and railway lines are being rehabilitated. But Nigeria still scores appallingly low marks in infrastructure. The state of healthcare is an eyesore and it’s not different in any way from that of infrastructure. Today, the state of education which first became a priority in Nigeria after independence in 1960 is poor. We have a situation where about 10.5 million of our children are out of school, according to a United Nation’s report. Add to this is the low funding on education in the last 10 years. Out of the N55.19 trillion budgeted in the past 10 years, education got only N3.9 trillion (7% of budget), according to reports. The challenges in the education sector are numerous, and it’s almost becoming impossible for Nigeria to develop highly skilled and technologically skillful citizens in quantity and quality that will enable

her compete with other nations in a world that is in the 4th industrial revolution. The Nigeria of today is absorbed in a pool of challenges that are almost becoming intractable. Virtually every major report give some knocks to Nigeria. Despite these negatives, Nigeria is the largest economy in Africa. Besides corruption, one major threat to good outing of the country is the state of insecurity. The Niger Delta militants, North East religious extremists and North Central bandits are threats to peace and stability in Nigeria. There are more police stations than factories in some parts of the country. Without peace and stability, there will be no development. This writer has concluded that the high level of insecurity is as a result of the country’s approach to operating democracy. Much as our politicians try, they still have to learn how to operate our own type of democracy with reverence for the citizens. Most politicians in Nigeria have the tendency to speak the language of the military almost twenty years into democracy. It is certainly wrong for Mr President to declare publicly to the disappointment of Nigerians and members of the international community that rule of law is subject to national interest and national security. It will also, be incorrect to say that there is no going back on a policy that is flawed such as the one on privatization of the PHCN. Since 2013, the nation has not achieved the efficiency expected in the power

sector. Report has it that only 59 percent of Nigerians have access to power supply in 2016. From the foregoing analysis, one can see that Nigeria faces a number of challenges. Their cumulative effect is that Nigeria as a country is digging below her weight with concerns on her ability to turning her potentials to greatness. But before the country arrives at the Promised Land, certain steps are expected to be taken by elected and appointed officials to ensure that the country’s economy grows. The first set is to have quality political leadership who have the capacity and will to sustain development programs. As we have commenced the process of electing new political leaders, Nigerians should “shine their eyes” to vote those aspirants who have credibility in the society. Citizens should not sell votes because it is akin to selling their future to the devil. Democracy will certainly solve the numerous challenges of this country which many citizens are worried about. What is required is consistency, deepening of approaches in solving national problems, and more participation by the citizens in governance. Once the people are lost in any democratic enterprise, what remains is an empty barrel. Fellow Nigerians it’s time to transform our potential to greatness. Once again, happy independence anniversary to you all.

Send reactions to: comment@businessdayonline.

Tuesday 02 October 2018

C002D5556

COMMENT

BUSINESS DAY

comment is free

Send 800word comments to comment@businessdayonline.com

Increase the minimum wage RAFIQ RAJI “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

o be heard, organized labour has to do something drastic each time, it seems. It is often ignored otherwise. That is even as the current labour leadership is believed to be sympathetic to the Muhammadu Buhari administration. It is probably the case that the president does not lose much sleep when the Ayuba Wahab-led Nigeria Labour Congress (NLC) barks. Not that he likely takes it for granted, but since he likely considers the current leadership an ally of his administration, it is natural for him and his officials to be a little complacent. It does not help, of course, that the labour movement has become factionalised as well, with the emergence of the rival United Labour Congress. That said, the minimum wage issue is an emotive and unifying one. At 18,000 naira, about US$50, it is ridiculously low. It is perhaps no more than the average worker in Lagos, Nigeria’s commercial capital,

spends on transportation alone. Not only is an increase necessary, it should be institutionalised to occur yearly to reflect the prevailing cost of living; which tends to increase rather than decrease. So, to my mind, the question in negotiations between organized labour and the government is not so much about whether the minimum wage should be increased but by how much. Coverage, level & compliance According to the International Labour Organisation, a United Nations body, there are three main dimensions of an effective minimum wage. First, it should cover all workers. Second, the level should be adequate; that is, it should cover basic needs like food, transportation, accommodation and so on. Third, there should be complete compliance by all employers. A refrain about too high a minimum wage is often that it would force employers to cut their headcount. Research suggests that is not often the case. Besides, in countries where hitherto there was no minimum wage, in South Africa for instance, myriad arrangements by various labour unions made such jurisdictions relatively unattractive for manufacturing foreign direct investment (FDI), the kind that creates massive jobs. Having now instituted a minimum wage of 3,500 rand per month, about US$277 or 99,720 naira, after much resistance by labour unions, it is expected the country would get more manufacturing FDI, which

‘

The minimum wage is ideally aimed at workers in the private sector who might not have wage protections otherwise. It is illegal for a maid, driver, and other lowincome earners to be contracted below the minimum wage

’

it direly needs to curb dangerously high youth unemployment. There have been arguments about whether Nigeria can afford a minimum wage as high as 65,000 naira (US$180) that organized labour desires. The concern is that in light of the current high headcount in the federal and state civil services, the respective governments might not be able to afford it. In my view, this is not an appropriate way to look at the issue. The minimum wage is ideally aimed at workers in the private sector who might not have wage

protections otherwise. It is illegal for a maid, driver, and other lowincome earners to be contracted below the minimum wage. That is even as many private employers flout the law in this regard. Nonetheless, if the minimum wage is reflective of realities on the ground, there is a threshold to aspire to, or to seek redress against, at least. Yes, the services of these workers are often acquired by “middle-class” Nigerians without written contracts. But were one to be insisted upon, it is doubtful such employers would want to put pen to paper on what would clearly violate the law. In other words, the minimum wage issue matters for all workers; both public and private. In any case, with elections around the corner and a president desirous of a second term, it is almost a sure thing that labour would likely get what it wants from the government; to some extent, at least. Unfortunately, the whole exercise is potentially self-defeating. With all the ceremony beforehand, artificial price increases for basic goods and items are likely. That was the case for past minimum wage increases, at least. And in the event of a currency depreciation, as many basic goods and items are still imported, the purchasing power of a potential increase could also be quickly eroded. Fortunately, the outlook for the price of crude oil in the international markets suggests the commodity would likely remain dear for importers and thus beef up the coffers of exporters like Nigeria.

So, a major depreciation of the naira is not likely soon. To avoid artificially raising inflation expectations in the future, however, an automatic cost of living adjustment to the minimum wage, done yearly, is advised.

chapter now” Bronwyn added. The capital flight from South Africa pension funds however has been quite significant. Tom Mundy Head of JLL SSA research put this at approximately $14 billion. Is this the case for other sources of funding such as the DFI’s? Olaf Schmidt Mgr. Africa department IFC shared his views by first stating “The one predictable element in Africa is that Africa is unpredictable”. The IFC sees Sub-Saharan Africa as a long term play with a real growth potential. As such, with a total portfolio worth $23 billion, IFC’s intention is to increase its $500 million commitment to real estate projects in Africa via a similar diversification approach. Their long-term perspective and diversification strategy will serve as a key differentiator, Mr. Schmidt proposed. Real estate requires long-term capital and this is the challenge with the traditional sources of financing that have funded projects in Africa thus far. Patient capital such as pension fund monies is needed vs. short-term focused capital such as PE funds. Nonetheless, there are still opportunities for different funding sources, both long-term and short-term. For PE funds, the challenge remains where to deploy the 60 billion usd of capital that they have raised. There is an essential lack of suitable assets for these funds. To address this issue, IFC specified the need to partner with

the right counterparts who can deliver the required product.It is no longer a build it and they will come approach. Instead, the strategy is to find the right partner with the right platform that can deliver in response to market driven forces and to the quality demanded by international institutions. This is particularly the method the IFC intends to employ towards affordable housing. To successfully enter into the affordable housing market, it’s essential to design a different model and risk profile, and partner with the various required stakeholders. Each have a role to play. Mortgage institutions for instance have the off-takers and need to provide mortgages at suitable interest rates. Government agencies need to address land and title concerns. Finally developers are required to deliver housing solutions at the right prices. All these stakeholders have to come together if a sustainable affordable housing solution is to emerge. As such, companies that have a platform that can be used by these various stakeholders for the delivery of a sustainable affordable housing product, on a pan-African basis, have a distinctive competitive advantage.

Position workers for the future Some pundits suggest the NLC’s minimum wage proposal would make Nigeria even more uncompetitive. That is, in light of already many constraints – like little or no power supply, myriad taxes, and so on – weighing on job-creating business activities, manufacturing especially. That should not be a major consideration in my view. Just like one would advocate for the public service, private firms should only hire the staff they need to do the most productive work for the best wages. With automation and artificial intelligence increasingly reducing the need for labour-intensive tasks in industry, human workers that would be needed in the not so distant future would be those with skills that augment these technologies or that the machines cannot yet deploy without error. In other words, organized labour, whether in Nigeria or elsewhere, should begin to look beyond remonstrations over paltry wages to instead how their members would be better positioned for a future where they might be paid no heed, no matter how loud their noise is, if their skills do not meet the needs of employers.

Send reactions to: comment@businessdayonline.com

Africa has not lost its gloss

CHINWE AJENE-SAGNA Chinwe Ajene-Sagna is an expert in the real estate industry with over 20 years of experience, including strategic advisory, asset/portfolio management and transactional services. She has a Harvard MBA, Dartmouth BA (H. Honors) and is an MRICS (chartered surveyor)

he 9th edition of the Africa Property investment Summit & Expo recently concluded in Johannesburg. Africa real estate industry leaders met to network and dialogue around this year’s theme: Building a Smarter Future for Africa Real Estate. Various speakers highlighted the key issues facing the industry as a whole. Dr. Martyn Davies – MD Emerging markets and Africa, Deloitte spoke about the so-called resource curse facing Africa and other resource rich nations. “Resources don’t matter!” he argued and he presented examples of countries from Singapore to Switzerland who without any resources have achieved tremen-

dous and sustained GDP growth. “What does Switzerland have?” Dr. Davies asked: “8 million people and a couple of cows. Yet it is now the richest nation in the world.” In Africa, Rwanda was the one country he saw as taking rapid steps towards achieving sustainable growth without a dependence on natural resources. From drone delivered healthcare services to speedy company registration processes (30 days maximum) Rwanda is utilizing technology and setting in place polices that will enable its economy leapfrog to the first world levels. This amazing feat for a post war country and its clear vision for the future is epitomized by their local currency notes which features children with laptops vs. deceased local leaders, indicated Dr. Davies. Delivering smarter cities in Africa requires investments by both local and foreign entities. However our continent especially power houses such as Nigeria have recently been plagued with tough economic downturns. This has led to investment flight particularly to Eastern Europe by South African investors. Have the negative sentiments begun to change? The Pan-African Investor & Developer round table: Reassessing and analysing the Africa real estate investment case sought to address this issue. Ben Kodisang CEO of ALT Capital Partners a Pan-African real estate investment fund shared his positive views on the matter. Ac-

cording to Ben, the worst is behind us as evidenced by the recent successful capital raises by both GRIT and Growth Fund Capital. One can’t argue against the demand for retail, commercial and logistics that is still within our countries, he stated. Bronwyn Corbett CEO of GRIT shared a mixed perspective. What matters is the diversity of your operations in order to balance out country risks. During their roadshow, GRIT’s key focus was on educating investors that Africa is not one country - hence a diversified portfolio is an essential solution. It is important to move away from the herd mentality and design a targeted portfolio of assets that will appeal to certain investors. Many investors have made mistakes in their strategies but have blamed the countries instead of focusing on why these strategies failed. It’s why the South Africa funds are now focused on Eastern European markets for instance, she argues. You cannot be the jack of all trades. GRITs investment approach is to be clear and ruthlessly stay the course. For instance, they are currently looking at a multi geography solutions with an initial emphasis on stable pegged to the Euro currencies such as those of the francophone African countries of Senegal and Ivory Coast. A focused strategy is key and accounts for how GRIT was able to raise 100 million usd from pure UK financial institutions.“We brought fresh capital into Africa and I’m really looking forward to the next

Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Send reactions to: comment@businessdayonline.com

BUSINESS DAY

C002D5556

Editorial PUBLISHER/CEO

Frank Aigbogun EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya

EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

Tuesday 02 October 2018

The centrality of FDI to economic growth

here is now unanimity among economists that Foreign Direct Investment (FDI) is a key part of private sector investment which is needed to drive economic growth in developing countries. FDI is particularly needed to complement the level of domestic investment, as well as “securing economic-wide efficiency gains through the transfer of appropriate technology, management knowledge, and business culture, access to foreign markets, increasing employment opportunities and improving living standards.” What is more, studies have consistently shown a strong relationship between foreign investment and economic growth. Examples also abound. For instance, Singapore, a poor, inconsequential former British crown colony with a meagre population of 1.6 million in 1960 and with no natural resources, was able to transform itself to one of the richest countries in the world with the third highest GDP per capita partly through attracting foreign investment into the country. To put it simply, large inflows of FDIs are now a sine qua non for developing countries to achieve a sustainable high trajectory of economic growth. It therefore goes with-

out saying that developing – and even developed – countries are always in competition to attract FDIs into their countries. Central to a country’s ability to attract FDI is its ease of doing business. Besides the more technical requirements, which consist of infrastructure and access to raw materials, communication and transport links, and skills and wage costs of labour, there are much more central requirements of security, political predictability, social cohesion and upholding the rule of law, part of which must consist of a strong and independent judiciary that will adjudicate promptly and impartially on trade disputes. Besides being prerequisites for attracting FDIs, these are actually preconditions for sustainable development in any society. Sadly, Nigeria is doing badly all of these scores. Besides its macroeconomic instability, dilapidated or absent infrastructure and lack of social cohesion, it has a much more debilitating problem of insecurity, political unpredictability and a culture of trampling on the rule of law. Of course, Nigeria naturally has the potentials to attract lots of FDIs because of its size, population, natural and human resources; and investors are willing to overlook its unstable macroeconomic environment, the underdeveloped infrastructure and

social tension and still invest in the economy. Sadly however, what most investors are unwilling to accept is political unpredictability and a culture of impunity. Sadly, it is these two instances that Nigeria is most notorious. The history of FDIs in Nigeria is a history of government recklessness, unilateral and illegal termination of agreements, contracts and projects, often without any compensation. That has not ended even with the return to democratic governance and has continued to this day. Take for instance, the recent travails of successful foreign businesses in Nigeria like the South African telecommunications giant, MTN and pay TV firm, Multi Choice. Another shameful example was the attempt by the National Assembly, last year, to illegally, unilaterally and surreptitiously amend the Nigerian Liquefied Natural Gas (NLNG) Act to force the company to remit 3 percent of its annual budget as funding to the Niger Delta Development Commission (NDDC) against the contract willingly entered into by Nigeria and the other stakeholders of the NLNG covered by Bilateral Investment Treaties (“BITs”) with France, The Netherlands and the United Kingdom to retain agreed fiscal and security regimes of the investment and not to levy any tax inapplicable to companies

nationwide. Regrettably, it is always the case in Nigeria that once investors come in and their investments begin to flourish, Nigerian regulatory agencies or even governments begin to heckle these businesses, resurrecting hitherto forgotten infractions, seeking to extort money or subject them to hitherto unknown, un-agreed, hurriedly enacted and ultimately unjust laws and regulations in the name of protecting national interests. This is giving us a bad name, making the country unpredictable and thus, unattractive for investments. Yet the song on the lips of every government – and they are known to travel to the ends of the earth soliciting for it – is that of seeking for foreign investments. The most depressing part is now the attitude of Nigerian public officials, which suggests calling the bluff of foreign investors and telling them to keep their FDIs. Meanwhile, virtually every knowledgeable person in the country knows the country does not have the resources to provide the necessary infrastructure, amenities and jobs needed to revamp the economy and assure sustainable economic growth. The government must begin to reset its priority and rein in its overzealous officials who appear to know nothing about the fundamentals of growing an economy.

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

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

ENQUIRIES NEWS ROOM 08023165438 08169609331 Lagos 08033160837 Abuja

}

ADVERTISING 01-2799110 08034743892 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 www.businessdayonline.com The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 LEGAL ADVISERS The Law Union

MISSION STATEMENT To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.

OUR CORE VALUES

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven. • The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessdayonline.com

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

Tuesday 02 October 2018

Digitalisation of business is enabler to increased productivity - experts Daniel Obi and Jumoke Lawanson

usiness executives and technology experts are assertive that digitalisation of business operation will help increase productivity and foster business and economic growth if the tools and technology solutions are properly utilised. This was the unanimous consensus of the panellists who discussed ‘The impact of digitalisation on businesses in Nigeria,’ at the official launch of Ogilvy Nigeria, held in Lagos at the weekend. Segun Ogunsanya; CEO of Airtel Nigeria, John Ugbe; managing director of MultiChoice Nigeria, Funke Opeke; CEO of MainOne Cable company and Bisi Onasanya; former group CEO of First Bank of Nigeria, all spoke as members of the panel session, and agreed that the evolution in business organisations and enterprises as a result of digital transformation in the last 15 years, has greatly contributed to increased productivity and ability to serve consumers better. Connectivity of people has grown, the demands of the market have changed and this has intensified competition not only globally but locally since the introduction of GSM in Nigeria in 2001 and according to the business executives, the option to stay in business is to embrace digital to meet the market dictates. On his perspective, Segun Ogunsanya said the telecom industry has democratised access to the internet and this has assisted the business. “We connect people with people, machines, information”. He said Nigeria has 160

TN Nigeria, in partnership with Microsoft recently held the first session of the MTN - Microsoft Training Program in Lagos, aimed at empowering Nigeria’s fast-growing SME segment to streamline their financial and business processes, improve customer interactions and make better decisions with integrated intelligence. The training allowed business owners to standardise their entire organisational

million mobile subscriptions and 75 percent of this figure access the internet through mobile phones. Ogunsanya is of the view that companies that choose to ignore digitalization are dying, and advised that businesses should embrace technology to avoid going extinct as digitalization creates efficiency, connection and it is also a cheaper way for marketing as it does not differentiate between a big and small company. With digitalisation, businesses can reach many customers across boundaries, he said.“Analogue culture is different from digital culture. The people at the top must create the environment for workers to embrace the technology and this creates new jobs and new intelligence. “Selling in digital era requires changing the business model to a platform led model. This reaches many more people. Digital is cheaper and more efficient for connecting

people,” he said. Also speaking at the forum on digitalisation and how it impacted First Bank, Bisi Onasanya who described digitisation as making use of technology, creating information and services and presenting them to the customer using technology and the internet said the most appropriate institution to talk about digitalisation in banking is First Bank. “This is an institution of about 125 years old with a large customer base, made up of old and new generation customers with demands of service and quality. We therefore realised that the only way to service the segments of the market was to embrace technology”. Without technology, he said servicing the increasing customers would have seen increase in the cost of operation. Onasanya said what banks have done with digitalisation was to buy the plat-

form and push the customers to carry out the transaction themselves. He reminded business executives that digitalisation is an endless process. “This is because what companies think they have done today will become irrelevant tomorrow”. If you have provided a platform which is not just efficient but customer friendly, the business has not succeeded. Under digitalisation, Onasanya said it is normal for people to fear change but when they see the advantage, they will key into it. In digital, some will lose their jobs but they will be replaced with people with tech skills to deal with the requirement of the job. On his perspective, John Ugbe said the media has seen the impact of digitalisation. “I come from a company where digital is our DNA”. He said digitalisation has democratised channels for viewers. Also speaking, Funke said MainOne was founded 10

Yemi Osinbajo, vice president of the Federal Republic of Nigeria, flanked by Lolu Akinwunmi, managing director, Prima Garnet Africa, (right) and his wife, Josephine Akinwunmi, at the the launch of the book; Skin to Skin: The Prima Garnet Story,and announcement of the Lolu Akinwunmi Family Foundation, in Lagos.

years ago to enable digitalisation. She said the pace of how digitalisation has impacted business is quite slow. But there is rapid case of innovation and introduction of new technology and the impact has led to massive distribution of information, application and innovation. Opeke said the banking sector has made progress in terms of digitalisation, with some content being delivered online, but there is a lot of infrastructure still underutilised to bridge the gap to the consumer. She said there is still a lot of work to be done. Speaking earlier, the Group CEO of Algorithm Media, Seni Adetu who said digitalisation has redefined business and it will further do so said Ogilvy is a new agency and digitalisation is one of the platforms to manifest that new age orientation. “Our clients are asking questions about digitalisation and our interest is how we can go ahead of the curve in terms of digitalisation”. Ogilvy is a member of WPP Group and an integrated creative network that creates experiences, design and communications for brands. Ogilvy has now become another subsidiary under First Primus Group. The First Primus Group founded in 2015 commenced operation in Nigeria with Algorithm media and MediaCom. Both Algorithm and MediaCom are media planning and buying agencies. The opening of Ogilvy Nigeria was made possible after WPP acquired a 24.9 percent stake in First Primus Group. Ogilvy Nigeria will complement the other subsidiaries in the Group by offering strategic and creative Above –TheLine (ATL) and Below-TheLine (BTL) services.

MTN, Microsoft equip SMEs on business processes, customer interactions business processes, including sales, finance, human resources, operations, logistics and marketing to function as one integrated whole, by connecting data across accounting, sales, purchasing, inventory and customer interactions. The SMEs gained access

to a holistic view of business management and chart financial performance in real time. According to a statement, over 50 SMEs benefited from the 6-hour session and gained first hand experience on how to use Microsoft Excel to improve accounting and record

keeping. Speaking on the experience, one of the entrepreneurs, Cecelia Edom, CEO of Cece Confectionary said, “This has been very instrumental in helping to bring technology and management closer to entrepreneurs. It was a great

opportunity to show anyone that they can learn the basics of computer science in a fun and engaging way.” The participants demonstrated great enthusiasm throughout the sessions, as well as the willingness to learn how to perfect their organisational skills.

LBS says it aims to impact business management across Africa

he Lagos Business School (LBS) has said its aim is to impact on the knowledge and practice of management and business in Africa, leveraging human capital development initiatives that proffer home grown solutions to specific business challenges in Africa. Uchenna Uzo, the academic director of the LBS made this disclosure at the International EMBA week celebration. The international EMBA week was created by the LBS to celebrate the creative industry in Nigeria and discuss its business implication to the rest of Africa. According to Uzo, Nigeria has great potential in its creative industries, however, some people lack adequate knowledge about the business aspect of these industries. “This forum seeks to expose our Global Network Alumni and students to what it takes to invest in these industries and to export our creativity and productivity to other parts of Africa and the world. We do this to help them understand where the action is and what it takes to invest and improve inter-cultural exchange among people studying in Africa,” said Uzo. Also speaking, Steve Babaeko, the CEO of X3M Group, an integrated marketing communication said the creative industry is the biggest public relations tool that the government can explore in driving development benefits.

According to him, the creative industry is the second largest employer of labour, apart from agribusiness . “There is nothing that gives the government of any country the opportunity to create mass employment like the music and entertainment industry; unfortunately our government has not looked into that area,” Babaeko said. Desmond Ovbiagele, a Nollywood movie producer, director and script writer said Nollywood has made the transition from making films in video tapes, CDs, DVDs, into being shown in cinemas, cable/pay TV, internet and view on demands. According to Ovbiagele, investment is needed by the industry to enable it compete favourably on the global stage.

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

APCON, Neta & Netas firm sign franchise agreement for advertising information

he Advertising Practitioners Council of Nigeria (APCON) recently signed a Memorandum of Understanding (MoU) with Neta Nwosu, the Chief Executive Officer of Neta & Netas limited, a thriving Media, PR and Events Company for editorial consultancy and cooperation. The Franchise agreement, which accentuates the Council’s trust in the editorial expertise of Nwosu, will also see her and her team undertake the production and marketing of APCON’s bespoke quarterly journal, the ‘Advertising News’. Signing the MoU, on behalf of APCON, the Acting Registrar/Chief Executive Officer, Ijedi Iyoha expressed that “it was time the magazine assumed the responsibility of shaping the discourse in the industry and I believe that Lady Neta Nwosu is just the right person to drive the process. She does not just have the requisite editorial knowhow, but has sufficient influence within the industry to reposition the journal for growth beyond the level it is currently,” she added. Expressing appreciation to the Council’s management for the confidence reposed on her, Nwosu, according to a statment gave the assurance that the Neta & Netas team will in no doubt surpass APCON’s expectation.

L-R: Ijedi Iyoha, acting registrar/CEO, APCON, and Lady Neta, Nwosu CEO, Neta & Netas Limited, signing the Memorandum of Understanding (MoU) on Advertising News at APCON office, Lagos.

She noted: “My team and I plan to bring to bear on this task a high level expertise and professionalism, in keeping with global best practice. We are already working on the next edition and promise it will be a bumper pack of authoritative coverage of advertising and marketing industries. “I thank the APCON’s editorial

Firm highlights benefits of IoT to businesses

elecommunication company, 9mobile has said it is working with strategic partners and other key players within the digital services ecosystem to help Nigerian businesses deliver breakthrough results through the rapid adoption of Internet of Things (IoT). IoT allows a network of ‘things’ any form of equipment or device with embedded electronic and powered by software - that are connected (via the Internet and other forms of connectivity) and designed to interact in a specific context (business, social, etc.) through the exchange of data. It creates opportunities for businesses and governments to access real time information that can improve efficiency, responsiveness and overall performance. Speaking as a panel discussant on ‘Making Internet of Things Work for Business’ at the 2018 Nigeria Com Conference held in Lagos, Otuyemi Otule, 9mobile’s Chief Product and Information Officer, according to a statement highlighted the benefits IoT can bring to businesses, and stressed that security and the people implications are as important in IoT

considerations as are the drivers for adopting IoT in the first place. Otule, who explained that anything capable of gathering data and transferring such to a central location where decisions are taken and the data that is transmitted are potential targets for cyber criminals, stated that businesses have to ensure that none of the components in their IoT network (devices, the operating software, etc.) is vulnerable. According to him, “risk could be anywhere, not just on the device but across the network, the threat landscape is ever changing, and cybercriminals are hard at work looking for loopholes. Most software developers never thought of designing security into their solutions until the rise of cybercrimes. Hackers can hijack your device and compromise the data transmitted; they can intercept the information you send and use it to gain valuable insights into the business or its executives’ lives. With more devices than people on the planet today and growing exponentially, the risk landscape is complex and dynamic. It is therefore important for businesses to pay attention to security as they embrace IoT. “The best way to protect your business is to embark on this IoT journey with a partner who understands your threat landscape because it is illogical to focus your resources on dealing with the ever-changing threat landscape rather than on your core business.

team for the insightful management of Advertising News that has brought it to its current esteemed status and the council’s stakeholders who have helped in its sustenance in one way or the other. We will work with both teams to achieve greater results.” The Advertising News, originally conceptualized to serve as the Council’s mouthpiece and a chan-

nel through which its activities are publicized, has since evolved into a journal that educates and informs industry practitioners. Neta Nwosu, is the Founder/ CEO of Neta & Netas Limited. She was the General Manger, Marketing and Corporate Services of The Sun Publishing Limited, where she served for 15 years.

Arewa24 unveils Q4 programmes, hires top executives

REWA24, the foremost Hausa language entertainment and lifestyle channel in Nigeria, has announced a slate of new premium programming for Q4 and Q1 2019, including the launch of the channel’s muchanticipated new original Hausa drama series in January, complementing its current long-running and award-winning series, “Dadin Kowa.” The ambitious new drama series is currently in production, and it is expected to set a new standard for originality and quality in Hausa language television production, a statement said. AREWA24’s new slate of programs launching in October includes “Amo Daga Arewa.” This primetime music series features live performances and interviews with the incredibly talented musicians from across the North, including traditional music genres, as well as R&B, soul and religious. “Amo Daga Arewa” brings together the more traditional elements of the rich Northern Nigerian music culture, adding to AREWA24’s already popular Hip Hop programs. Re-launching in the fourth quarter with a brand new format and hosts, “Matasa@360” is a contemporary, street-wise and relevant youth show, focusing on the talent, innovation,

and creativity of Northern Nigerian youth. The show also addresses the very real challenges facing young people in the region and the pressures they experience on a daily basis. The show explores how Northern Nigerian youth navigate daily life, relationships, media, entrepreneurship, performing arts, current affairs, campus life, technology and other areas that youth from all over the world can relate to. AREWA24 has also green-lit a

fourth season of “Haske: Matan Arewa,” featuring the dynamic women from Northern Nigeria as they tell their stories intimately and passionately. Breaking social and cultural barriers to becoming leaders, traders, teachers, entrepreneurs, rural activists, filmmakers and more, these amazing women share their successes, their struggles, their disap-

Development bank unveils new television commercials on how to access loans

he Development Bank of Nigeria (DBN) has launched television commercial to be broadcast across various platforms to educate the teeming Nigerian Micro, Small and Medium Enterprises (MSMEs) on how to access the DBN loans through the various Participating Financial Institutions (PFIs). The 60- second TV commercial, according to a statement aptly recounts the struggles of entrepreneurs who must meet their customers’ orders despite seemingly impossible deadlines. The stories progress with the protagonist in a frantic search for loans to help them meet their client’s orders; family and friends disappoint them but at the climax of their struggle, DBN provides a solution through its financing which is available through commercial banks, micro finance banks, and other financial institutions with tenors of up to ten years and eighteen months moratorium, where necessary. Commenting on the launch of the TV Commercials, the Managing Director of the bank, Tony Okpanachi, in the statement said “there are a lot of innovative and brilliant entrepreneurs out there who are critically challenged by access to financing and have no clue on how to address it. The commercial is intended to educate the public on the available funds from DBN for the development of the MSMEs, which is globally acknowledged to be the engine room of growth for any economy.”

Chi introduces Frooty Happy Hour in 100 ml pouches

hi Limited, maker of Happy Hour by Chivita Fruit Drink, has launched Frooty Happy Hour by Chivita. The new fruit drink which is available in 100ml pouches is touted as a healthy, refreshing, fruit flavoured drink with exciting variants that offer an instant shot of refreshment for consumers. Retailing at a N25 price point, Frooty Happy Hour by Chivita is currently viewed as the most affordable quality product in the market. “It is a healthy beverage as it offers natural fruity benefits as well as provides high quality refreshment for the mind and body”, a statement said. Along with its handy pack size which resonates with an upwardly mobile youthful consumer segment desirous of rejuvenating satisfaction anytime and anywhere, Frooty Happy Hour by Chivita further seeks to increase its appeal and create a connection with consumers with three intriguing variants of Orange, Pineapple and Red Berries. Speaking about the new product, Managing Director of Chi Limited, Deepanjan Roy, said in the statement that Frooty Happy Hour by Chivita was introduced to invigorate and tap into a market demand for more affordable options of great tasting, refreshing and healthy drinks.

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

COMPANIES & MARKETS Co m pa n y n e w s a n a ly s i s a n d i n s i g h t

IMF links declining money market rates to CBN’s liquidity operations HOPE MOSES-ASHIKE

he International Monetary Fund (IMF) has said that the Central Bank of Nigeria (CBN) liquidity operations and rising excess reserves have pushed money market rates down. Amine Mati, senior resident representative and mission chief for Nigeria, said this at the 2018 Financial Markets Conference organized by the Financial Market Dealers Association of Nigeria (FMDA) in Lagos. He said inflation tends to be significantly higher in countries with multiple exchange rate systems. He urged the CBN to: “Remove multiple currency practices, restrictions on FX access for 40 categories of goods, unify FX market and continue strengthening external buffers”. Godwin Emefiele, governor of the CBN said the adoption of risk-focused and rulebased regulatory framework, adoption of zero tolerance in regulatory framework for data/information rendition/

reporting and infractions and strict enforcement of corporate governance principles in banking sector have help to stabilize the sector. Emefiele, who was represented by CBN executive, Olatoun Akinola said expeditious process for rendition of returns by banks and other financial institutions through e-FASS application software, revision and updating of relevant laws for effective corporate governance and ensuring greater transparency and accountability in the implementation of banking laws and regulation have also boosted confidence in the sector. He explained that some key developments that contributed to the strengthening of the financial market to moderate illiquidity after the global financial crisis include the establishment of a resolution vehicle (Asset Management Corporation of Nigeria) in 2010, to soak the toxic assets of Deposit Money Banks (DMBs). Also, let me mention the “Alpha Project Initiative” which brought about the “new

L-R: Godwin Chukwu, CEO, Toncia Energy Consulting and Professional Services Limited; Charles Ngeribara, GM, corporate social responsibility , SD, Total E&P Limited, and Moyo Areola, manager corporate cocial responsibility, SD, Total E&P Limited, Pic by Pius Okeosisi during the closing ceremony of the Total Business substance for new entrepreneurs in Lagos.

banking model” structure that replaced the hitherto onesize-fits-all model of banking. This new model resulted in the establishment of international banks, national banks, regional banks and special-

ized banks. He said that Nigerian banks are now ranked amongst key players in the global financial landscape with some of them featuring amongst the first 20 banks in

NADDC, renewable energy experts partner for electric vehicles HARRISON EDEH, Abuja

he National Automotive Design and Development Council, (NADDC) said the council has engaged with global experts in the renewable energy sector for the support needed to produce electric vehicles in Nigeria. Jelani Aliyu, director general of NADDC who confirmed the development said discussions were held with global experts on renewable energy sector during the International Investment Summit in Beijing, China where he led a NADDC delegation to promote China/Africa investment and technological collaboration.

The director general noted that NADDC delegation met and discussed with renewable energy sectoral experts, including the China New Energy International Alliance, in strategic efforts towards the adoption, support and development of vehicles electrification in Nigeria. The director general pointed out that the Nigerian delegation also met with potential investors and technical partners for the NADDC’s planned three automotive industrial parks located in Nnewi, Kaduna and Oshogbo, of which the Nnewi project already has a master plan design, and is already almost completed. According to him, the discussions also involved talks with PowerChina, a

multinational infrastructure development company as a potential investor in power generation for the projects in Nigeria. “China has taken the bull by the horn. Electric Vehicles are already a major part of their automotive sector, with over 580,000 sold so far. These renewable energy vehicles range from high end vehicles such as Tesla’s models S and X, to BYD models, and all the way to simple cost-effective utilitarian vehicles, in cities, small towns and farms”, the director general explained. This new development for the automotive sector in Nigeria, Aliyu said, is coming just few weeks after the signing of a memorandum of Understanding, (MoU) with Volkswagen for the develop-

ment and production of Volkswagen vehicles in Nigeria, The director general explained that the significance of the signing of Memorandum of Understanding (MOU) with Volkswagen of Germany, which is Europe’s largest automotive manufacturer, is that it will not only produce vehicles in Nigeria, but create other development opportunities and have positive multipliers effects on the economy, including massive job creation and skill development and transfers. “The NADDC is also working on an auto finance scheme that will assist Nigerians own brand new vehicles without having to put down one hundred percent cash down payment, the director general said.

Africa and among top 1000 banks globally. “I want to say that the Nigerian capital market is not left out in terms of reforms to enhance market performance. Take for instance, since the

aftermath of the effect of the global financial crisis on the capital market, the apex regulator in the capital market has stepped-up its surveillance activities and initiated different programmes”.

Farmers urged to embrace technology to boost production

overnment, private Investors and farmers have been urged to embrace the use of technology into the farming system in Nigeria in order to boost agricultural produce for local consumption and export. This call was made during the 6th Lagos International food and beverage trade fair tagged ’Food Security through Technology’. Speaking at the event, Ndubuisi Ekekwe, an entrepreneur and international scholar said the time has come for Nigerian farmers to move away from traditional farming system to the modern trend where technological application is widely put into use. Speaking further, Ekekwe advised that the use of technology in our farming sector will guide farmers through the process of efficient farming that will reduce their loss during harvest. He however lamented that lack of formal education

may pose challenges to most of the farmers to key into the process. According to him, the introduction of technology will make loans easily accessible to farmers because technological application will make the progress on farms available to government and private bodies charged with the responsibility of monitoring the use of the loans. On his part, the special adviser to the Lagos state Governor on food security, Ganiu Sanni Okanlawon said they are prepared to embrace technological innovations to make farming easier in the state. He also disclosed that a Task Force set up to ensure food consumed in the state are of hygienic nature have done so well in their duties. According to Okalawon, Lagos state has partnered some organisations towards making food processing equipment available to farmers while also fast-tracking access to lands for agricultural purposes.

Tuesday 02 October 2018

C002D5556

COMPANIES & MARKETS

BUSINESS DAY

Business Event

US firm’s $25m farm to create 6,000 jobs in Osun BOLADALE BAMIGBOLA

n American company, Cade Creek International, Colorado, United States, in partnership with a Non Governmental Organisation (NGO) Youth Off The Streets Initiatives (YOTSI), is setting up a $25million farm in Ifon, the headquarters of Ifon Orolu local government area of Osun state. Announcing the partnership during the presentation of the Memorandum of Understanding (MoU), by all the parties involved in the business at the palace of Olufon of Ifon Orolu, Oba Almaroof Magbagbeola, the Chief Executive Officer of Case Creek International, Patrick Alley, said when fully operational, the farm would create over 6,000 direct jobs. Alley told newsmen that he received spiritual directive to come to Africa to help provide jobs and add value to the living

of many people when praying in his house in year 2008. To ensure maximum yield, the American said an irrigation specialist would be brought from the US, adding that besides providing jobs, the farm would also train people of the state in different new innovations of modern method farming. He added that different crops would be planted, and emphasised on a new cornflakes company that would be opening in the country soon, adding the company would source for corn from the farm. He further explained that the primary purpose of Cade Creek Farming is to provide effective and environmental friendly agribusiness in Africa, utilising it vast experience to help the people of Africa in the farming sector. He noted that the intention is to teach the local labour forces how to use the equipment and give them knowledge of commercial farming.

Also part of the initiative, Alley opined that Cade Creek would also contribute funds for housing the employees and for the medical and school. Alley said: “I had the vision to come to Africa and help in empowering people in year 2008 while praying. The vision kept on coming. Our goal is to make Africa independent of any food that is needed in the continent and to help the poor.” In his remarks, the president of Youth off The Street Initiative (YOTSI), the initiator of the project, Comrade Kennedy Nyere, he said his NGO has, as one of its five cardinal programmes, agriculture and food security, stressing that empowerment of the unemployed remains main motive behind the establishment of the farm. Nyere added: “the farm has taken off since May. A team visited the site of the farm and conducted soil test and our soil experts certified the soil good for farming.

L-R : Jordi Borrut Bel, managing director, Nigerian Breweries Plc; Mojeed Alabi, Winner, Nigerian Breweries Golden Pen Report of the Year; Eric Dumo, Nigerian Breweries golden pen reporter of the year; Bunmi Azeez, Nigerian Breweries Golden pen photo journalist of the Year and Professor Ralph Akinfeleye, chairman, panel of judges at the 2018 Nigerian Breweries Golden Pen Awards in Lagos last weekend.

Airtel’s Port Harcourt 4G launch to boost business Ignatius Chukwu & Favour Ichemati

irtel Nigeria has rolled out its 4G network facility targeting fast data outlay that would boost businesses and make transactions faster in the modern world. The managing director, Segun Ogunsanya, who led the deputy governor of Rivers State, Ipalibo Harry Banigo, to unveil the 4G grade, said Port Harcourt was chosen for the best because of the city’s importance as the hub of hydrocarbon industry. He said the unveiling began in Ibadan and moved to Abuja, Asaba, Warri (delta), Onitsha and Awka (Anambra) before anchoring in the oil city. It was gathered that Lagos would be last but the service is available there. The CEO said 4G was introduced to meet demands of fast

and heavy data traffic in Nigeria suitable for business transactions and other uses. He said it has proven useful to entrepreneurs who would not want to lose much time in getting things done. Describing Airtels’s 4G as the largest and best so far, Ogunsanya said unlike many others, the Airtel brand is available 24 hours without the usual breaches and downturns. He said the best was reserved for Port Harcourt. He said: “4G will boost creativity, creates entrepreneurs, improves life and connects more people worldwide. Airtel will empower people”. He said a lot of work was put into the new technology and that it has proved useful because its stable where others were irregular. Explaining how 4G works, he urged users to first get a handset that can work with it, get a 4G SIM card and the rest would be easy. He said Airtel was giving three

months free data for those that would buy now. The company gave out two galaxy phones to lucky customers. The CEO said the speed of 4G was great, 15 times faster than the latest technology but said Airtel was very robust. He admitted that 5G is already out in some countries but that 2G, 3G and 4G would all be in existence and serve various market segments. The deputy governor applauded Airtel saying they have joined in the influx of investors into Rivers State, but urged them to move into the rural areas. She commended them for offering to partner with the state government to host the next National Festival of Arts and Culture next month in Port Harcourt. She said Port Harcourt is the next business destination and said Airtel was safe in Rivers State.

Heritage Bank supports Next Titans to encourage young entrepreneurs

eritage Bank said its sponsorship of Nigeria’s foremost entrepreneurial reality show, “The Next Titan’s” is driven by its faith in the ability and willingness of young entrepreneur’s ability to contribute to Nigeria’s economic growth. Ifie Sekibo, managing director of Heritage Bank, disclosed this while receiving a group of ‘Next Titan’ contestants on a courtesy visit to bank’s head office in Lagos, stressing that the bank has a strongly desire to see young men and women succeed in other areas other than what they study in school. The Next Titan is Nigeria’s

foremost entrepreneurial reality show headlined by Heritage Bank. It features a 10 week entrepreneurial reality TV show geared at igniting the entrepreneurial spirit of young Nigerians, which gives opportunity to young aspiring entrepreneurs to battle against one another for a grand prize of N5 million and a car to the winner. Sekibo said: “I am particularly impressed by what I have seen and what touched me most is the diversity in your areas of competence. But the intriguing part is that many of you are not actually doing what you studied in the university. For the fact that most of you are doing

something different from what you study gives me hope for this country. It gives me hope to the extent that it shows it is not about what you study but about your passion. Your desire to succeed gives me hope for this country”. “One of the reasons why we chose as an organization to support “The Next Titan’s” is to see young men and women venture away from their seeming comfort zone after five years of a particular study at the university. You abandon what you study and check what humanity needs and try to cover that gap for humanity by being the best in that field”, he stated.

L-R: Mark Loxley ,general manager, Southern Sun Ikoyi ; vice commodore, Lagos Yacht Club, Julian Hardy; 1st Place winner of the Lightning Fleet category, Massimo Bettanin; Sales and Marketing Manager, Southern Sun Ikoyi, Ubong Nseobot and 1st Place winner of the Lightning Fleet category, Will Grace at the Prize giving Ceremony of the 7th Southern Sun Ikoyi Offshore Sailing Event at the Lagos Yacht Club

L-R: Segun Adebanji, chairman; Ganiyu Musa, group managing director/CEO and Anthony Egbuna, non-executive director during the 26th annual general meeting of Cornerstone Insurance Plc in Lagos

L-R: Philip Shaibu , representative of Edo State governor and deputy governor; task team leader i, Nigeria Erosion & Watershed Management Project (NEWMAP), World Bank, Amos Abu; head of the European Union Investment Bank Team, Jaime Barragan; and National Project coordinator, NEWMAP, Alhaji Salisu Dahiru, during the courtesy visit by representatives of the World Bank and EU Investment Bank, to the governor at the Government House in Benin City, Edo State.

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

Energy Report Oil & Gas

Power

Renewables

Environment

Nigeria urged to manage her oil resources well, save for future OLUSOLA BELLO

igerians have been told not to be deluded with the myth of resource curse associated with countries that are endowed with natural resources as there have been many countries across the world that are not wasteful and have managed their resources for the benefit of their citizens. Advocates of Nigeria’s oil and gas reforms said countries like Norway, with about $1 trillion sovereign wealth fund, Saudi Arabia , Qatar and even Kuwait have used their natural resources to uplift the living standards of their people and have also made good savings for their citizens through sovereign wealth funds earmarked for the future of their citizens. The speakers who spoke at the inaugural Devel-

opment Dialogue Series with the theme “Oil sector reforms, Revenue and Stabilisation” said they don’t believe that Nigeria is deceased because it is endowed with natural resources but that she has failed to manage her

resources well, hence the level of poverty in the land. If the country has basic management system in place, they said the oil and gas resources would have been more beneficial to her citizens. Isreal Aye who spoke on

reforms in the sector said that there has been significant decline in joint venture productions and that something fast must be done to arrest the situation through reserve replacement so the revenue realised can be used as interventions in

NNPC assures of 37 days of fuel sufficiency

he Nigerian National Petroleum Corporation has sa i d t hat t h e country has 37-dayPremium Motor Spirit (PMS), otherwise called petrol, selfsufficiency, assuring that all the corporation’s depots nationwide have abundance of petroleum products to meet the needs of Nigerians even as it added that the depot managers have been put on alert to ensure uninterrupted loading of products in their domains. This assurance was coming on the heel of the recent strike embarked upon by the Nigerian Labour Congress NLC over the issue of increment of the minimum wages Maikanti Baru group managing director of the Nigerian National Petroleum Corporation (NNPC), who gave this assurance also reminded Oil and Gas workers in the country to sustain the industrial har-

mony the sector has enjoyed in recent times. Ndu Ughamadu ,NNPC group general manager, group public affairs, in a release quoted the corporation boss as saying that the Oil and Gas Sector was central to Nigeria’s overcoming the recent past recession, stressing that oil workers owe the country the duties to ensure that the nation does not slip back to the slum. Ughamadu stated that the the group managing director thanked the two national industry unions: the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG), for the exceptional maturity they have shown at critical moments on issues affecting the industry. The release explained that the NNPC Management under the leadership of the maikanti Baru would continue to partner the unions in the interest of the nation

and the industry workers, saying the corporation’s doors are open to the union leadership to move the sector forward collaboratively. Ughamadu also quoted Dr. Baru in the release as informing that NNPC had 37-dayPremium Motor Spirit (PMS), otherwise called petrol, selfsufficiency, assuring that all the corporation’s depots nationwide have abundance of petroleum products to meet the needs of Nigerians even as it added that the depot managers have been put on alert to ensure uninterrupted loading of products in their domains. Meanwhile the Nigrerian Labour Congress to which the two oil and gas unions belong has suspended its ongoing strike which commenced on September 26. Ayuba Wabba, National President of the NLC, announced the suspension of the strike at a press conference on weekend in Abuja. He said the suspension means workers are expected to resume duties on today.

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson.

poverty, adding that the number of people living in extreme poverty in India is falling while the opposite is true in Nigeria. Extreme poverty she said rises in Nigeria by six people each minute, while the number of extreme poor in India drops by 44 people a minute. “Indian population of 1.3 billion people, now has 5 percent of its population living in extreme poverty. Nigeria, population of about 191 million has 44 percent in extreme poverty. Nigeria and Congo are the only OPEC countries with highest poverty rating” The meeting which was aimed sensitising some of the presidential aspirants of the happening in the oil and gas sectors so that they can take informed positions on the sector, especially now that President Muhammadu Buhari has failed to sign the Petroleum Industry Governance Bill (PIGB)

Benedict Peters, Aiteo boss, bags Forbes Oil & Gas Leader award 2018

..as NLC suspends strike OLUSOLA BELLO

areas that would secure the future of the country. Oby Ezekwesili, former vice president, World Bank said Nigeria and Congo are the only members of the Organisation of Petroleum Exporting Countries ( OPEC) with high poverty ratings. According to her Nigeria realised a total revenue of about $755 billion between 1999 and 2017 but has 83 million citizens living in extreme poverty. She said if the issue of poverty is not tackle on time more people would fall into the category. She blamed the wastages resulting from the lack of management of the oil revenue on huge expenditure on fuel, generally increasing fuel consumption figure and a constitution that does not encourage savings. She said Nigeria overtook India in May 2018 to become the country with the world’s highest number of people living in extreme

The workers are demanding a new minimum wage of about N50,000 instead of the current national minimum wage of N18,000. Most state governors as well as proponents of true federalism have, however, argued that states should be allowed to set their own minimum wage especially as many states are barely able to pay the current N18,000 current minimum wage. Last week when the strike started, the NLC president, Ayuba Wabba, said the union was open to dialogue on the strike.“Our demand is that the tripartite negotiating council should be called back to conclude its assignment on minimum wage.” Wabba said. Chris Ngige, the minister of Labour and Employment, then assured the unions that the tripartite committee will reconvene to complete its negotiation. “Before the meeting on October 4, all necessary demands by organised labour would have been factored in,” Ngige said.

enedict Peters, an international business leader and founder of Aiteo Group was awarded Africa’s Oil and Gas Leader of the Year at the Forbes Best of Africa Gala which held at Forbes Headquarters, New York City on September 27, 2018. A press release from the organisation says the award is an “acknowl edgement of Peters’ significant contribution to oil and gas development i n A f r i c a by v i s i o na r y leadership, distinguished service and transformational realignment of a sector dominated by International Oil Companies.” The organisers also say the Forbes Award recogn i s e d Pe t e r s’ c o m m i tment to bettering the lives of people and societies across Africa by philanthropic engagement. “Peters’ ascendancy in Africa’s Oil and Gas sector has been exemplary a s w e l l a s re v o l u t i o n -

ary. His company, Aiteo, has thrived for about two decades – going from a downstream start-up to becoming a leading integrated energy conglomerate with strategic investments in hydrocarbon (or commodities) exploration and production,” Paul H. Trustfull, Editor, Emerging Markets for Forbes said. Peters reinvented himself in times of great personal challenge. He resurrected his identity and reputation while battling injustice. He proves that inspirational leadership in a difficult industry is possible.” Trustfull added Maikanti Baru, NNPC Group managing director was the winner last year. Forbes says the awards are given specially to top oil and gas personalities who have made far-reaching and positive contributions to the development of the sector, and have caused sustained stability of the economy in which they operate.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378;

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

Energy Report

Nigeria lags behind as $100 per barrel debate rages Stories by OLUSOLA BELLO

il prices were extremely bullish last week, with U.S. sanctions on Iran and a fear of global supply shortages sparking a debate over the possibility of $100 Brent. WTI and Brent held onto their gains during early trading weekend and look set to close out the week strongly up. The tension between dwindling Iranian supply and the extent to which Saudi Arabia will increase production is sure to dominate the market narrative over the next few weeks. But this is not too good for Nigeria who import virtually all the fuel products she uses because her the 450,000 capacities refineries are not working. With oil at $80 per barrel, it means the subsidy level of the petrol would also be very high and this would affect what is remitted to the federation account by the Nigeria National Petroleum Corporation( NNPC). According to Oil Price. com, the mood at the Asia Pacific Petroleum Conference (APPEC) in Singapore was

highly bullish on oil prices in the short-term, largely because of the supply losses from Iran. Bloomberg also noted that the number of Brent options has surged to its highest ever, “driven by record call trading, including bets on $100.” Oil traders Mercuria and Trafigura see global production losses of about 2 million barrels per day and 1.5 mb/d, respectively, mostly related to Iran. The “special purpose vehicle” to help Iran continue to do business with European companies may not have much of an impact on the oil trade. Buyers are not likely to be entirely protected from U.S. secondary sanctions. “I think it is a welcome development,” Daniel Martin, a partner and sanctions expert at Holman Fenwick Willan in London, told Bloomberg. “But oil is not the arena it is going to be tested and used first.” CEO Patrick Pouyanne says $100 oil is possible but isn’t excited about it. “I’m not sure it’s a good news” he told Bloomberg. “Even for the oil industry, because you know, when price goes too high then you open the door to your competitors” while demand will likely decline, he said. OPEC+ decided against

Buhari

further production gains last weekend, although Saudi Arabia has indicated it would increase production in September and October. However, Saudi Arabia is also wary about creating a new supply glut, as the market will see a seasonal dip in demand in the winter. Riyadh is running the risk of a supply crunch in the fourth quarter, but Saudi officials fear the opposite problem if they increase production too much. As the oil market tightens,

????????????

scrutiny over Saudi Arabia’s spare capacity is picking up. Saudi Arabia claims it can produce up to 12.0-12.5 mb/d, implying spare capacity of at least 1.5 mb/d. Analysts and industry insiders are skeptical. Bloomberg reports that executives at the Asia Pacific Petroleum Conference in Singapore privately questioned Saudi Arabia’s ability to even go beyond 11 mb/d. “Near-term spare capacity is effectively maxed out,” Amrita Sen of

consultant Energy Aspects Ltd. said. Despite the increase in the price of crude oil at the international market there are no tangible investments that are been made in the industry by Nigeria. This lackadaisical attitude on the side of the government towards the oil and gas industry is given industry experts serious concerns. The non signing of the Petroleum Industry governance Bill (PIGB) which would have perhaps stimulate investments in the industry by president Muhammadu Buhari. Oil and Gas industry experts have expressed deep concern over the drop in investment in oil and gas projects to lowest level in recent years, leading to the stagnation of the country oil and gas reserves. Some oil firms cutting back investment in the sector due majorly to delay in the passage of the Petroleum Industry Bill (PIB) and lack of incentives from the government. The only major discovery in recent years is ExxonMobil Owowo of about one billion barrels of reserves of crude oil because of a slowdown in exploration activities by

oil firms. Nigeria oil reserves have stagnated at 36.18 billion barrels, as at the first quarter of 2018, according to the Minister of State for Petroleum, Ibe Kachikwu, who spoke at the recent Nigeria Oil and Gas (NOG) conference in Abuja. The current reserves are less than the 37 billion barrels in 2010, despite the target of 40 billion barrels set by the federal government for 2010. With the dwindling rate of discoveries, experts fear that Nigeria might lose her top-ranking position as Africa largest oil producer. In recent years, most of the increase in oil production had come from existing fields, as only limited exploration wells have been drilled in recent years. Expectations were that the oil price rebound would trigger more exploration activities in Nigeria, after years of investment cuts occasioned by youth restiveness and violence in the oil-rich Niger Delta, and the 2016 economic meltdown. However, the delay in passage of the remaining components of the PIB and government failure to incentivise oil companies to invest in exploration, have dampened those projections.

BUSINESS DAY

AVIATION

GUIDE

C002D5556

Tuesday 02 October 2018

in association with

Air France to provide better travel experience to passengers with its new cabins

Stories by IFEOMA OKEKE

ravellers are in for an exciting experience onboard Air France as the airline sets to roll out its new economy and premium economy cabins on board its 15 Airbus A330s which will be refitted as from January 2019. In addition, customers will progressively discover a new colour scheme and additional products and services to improve the travel experience on all the airline’s longhaul flights. The new cabins and more widely, the new economy and premium economy offer which was at display at the BHV Marais in Paris on the September 26 has since got commendations from across Africa and beyond, especially because every passenger on AirFrance will have a new experience going forward. For the economy seats, there will be more space between the arm rests (44cm); reinforced ergonomic foam in the seat, a 79cm legroom, a larger tray and a wider, latest generation touch screen.

For even more comfortable trip, a new design and new accessories are being introduced. A deep blue monochrome fabric signed with the accent, the symbol of the Air France brand, adorns the new cabin cushions and head rests. To accompany passengers’ most prefect dreams, a new bright red blanket, the company’s iconic colour as well as collectible night masks, inspired by the company’s destinations are also available. The economy seat allows passengers use their electronic devices throughout the flight with a USB plug and an individual electric socket. Finally, customers can stay connected with WI-FI throughout their flight, which is being progressively installed on all Air France aircraft and enjoy a wide range of entertainment with an audio headset available on each seat as soon as they settle in on board. For premium economy, more comfort and services are provided as privacy and elegance prevails. It provides A 130° seat recline in a fixed shell; one of the widest seats with 48.3 cm; 102 cm seat pitch; lumbar support adapted to different body shapes; additional storage space; a wider footrest and

a latest-generation 13.3 inch (33.9 cm) HD screen. The softer seat cushions and wider leather armrests have also been redesigned. On board all its long-haul aircraft, Air France also guarantees its customers moments of relaxation with a red feather pillow and a deep blue blanket. A comfort kit renewed every 6 months is also available. Between relaxation and gourmet

delights, each customer can enjoy Wi-Fi on board, an electric socket and two individual USB ports as well as a wide choice of entertainment. Speaking during the display of the cabins in the BHV Marais in Paris, Anne Rigail, vice president, customer at AirFrance, said “the new creations are part of a strategy to move up market that we have been pursuing since 2014 for all our products and services. In the air transport industry,

improving our products and services is permanently ongoing as our priority is always to follow the latest trends to meet customer expectations. “In recent years we have improved most of our products and services, from the services we offer our premium customers in our business lounges at the airport and the real cocoon in the sky with a seat-bed in the business cabin as well as our services in the economy cabin.” Rigali explained that the airline is continuing work on the economy and premium economy experience, with concrete progress both in terms of the quality of the seat and the services offered. She disclosed that 90percent of the airline’s long-haul customers travel in economy and premium economy, representing more than 14 million passengers every year, adding that to meet their expectations, Air France has invested over 150million euros in the new cabins on its A330s. She reiterated that all these attentions are aimed at offering customers a friendly, warm and festive travel experience so that everyone feels at home as soon as they board Air France flight.

Air Peace rolls out plans for international operations … seeks FG’s intervention in ‘Aero-politics’ on International routes

irPeace, Nigeria’s largest carrier has rolled out plans for the commencement of its international routes which will kick off November, 2018. Allen Onyema, Chairman, Air Peace Ltd, has said that the 10 B737 aircraft it purchased would be deployed to Lagos-Paris; Lagos-Frankfurt; Lagos-Amsterdam; Lagos-Milan; AbujaJeddah; Kano-Dubai and EnuguLondon, adding that the B777 would be used on London, United States, China and Johannesburg. Onyema also said that all is set for the airline to commence Dubai and Sharjah routes by November, 2018. It will be recalled that the airline few weeks ago signed an agreement with Boeing for the acquisition of 10 brand new 737 MAX 8 aircraft, making history as the first airline in West Africa to add the equipment to its fleet. Air Peace already operates Boeing 737s and Embraer 145s on its domestic

and regional routes. The airline, which recently added Boeing 777s to its fleet, is looking to soon launch its international flight operations. Speaking during a press conference last week, the airline’s boss said the airline has trained over 40 pilots since in four years, will do everything in its powers to launder Nigeria’s image through its international operations. According to him, an end has come to when Nigerian airlines are castigated for having short life span, adding that Air Peace has come stay and ready to compete with any international airline. He said the company’s prudence and financial integrity has attracted local and international financiers to it in recent times, adding that government now needs to create an enabling environment for operations. “The era of demonising Nigerian airlines is over. I want to tell you

today that Air Peace is ready to succeed. Currently, most financial institutions want to work with us, if the banks that have written out Nigerian airlines are now coming back, then they have seen something better but we need government support to move forward. We are not asking for money from government because it is the duty of banks to lend us money for business “Nigerian banks are ready to invest in us, financial institutions from across the world are ready to work with us, so why won’t Nigeria embrace its own, this government has challenged us to rise to the occasion and fill the gap of a national carrier by suspending the Nigeria Air project, the rest is left for domestic airlines to rise to the occasion,” he added. Onyema called on the federal government to immediately intervene in what he termed as ‘aero-politics’ currently going on international and

continental routes, saying it was seriously affecting airlines designated on some of the routes. He said the high level politics is such that a country would by all means, try to frustrate any airline wants to operate to its airspace despite being designated on that route by Nigerian government. Onyema, who recalled the several ordeals of Arik Air and Medview Air on London route, said his airline was almost frustrated to quitting some routes on the West Coast because of high power politics. He said for instance, it took Senegalese government almost two years to grant a request to operate to its airspace and that when it was granted, the country’s airport authority never provided an office for the airline. “We also want government to intervene in international aero-politics, we discovered that whatever we make on local routes are being expended

on West Coast, and we have lost over one billion naira on Western routes because of high chargers. “When we operated to Cote ‘divore, we were asked to pay $10,000 as we landed and there was no office allocated for us, which was after delays in grating the request to operate to their country. When government gives us rights to fly abroad, it should also help fight the politics that follow it because Nigerian airlines are on the losing side. Our international operation begins by the end of November; there is need for government to on behalf of the airlines, rise to any resistance that could cause frustration. Sometimes, they will even tell us there is no slot but Nigeria gives them slots anytime they apply for it”, he said. Onyema, also asked government to help Nigerian airlines by renewing infrastructure at airports, reducing routes designated to foreign airlines, among others.

BDTECH

BUSINESS DAY

Tuesday 02 October 2018

In association with

‘Nigeria’s free-to-air market is vibrant, offers growth opportunities’ A new revolution of 13 free-to-air (FTA) television channels delivered using SES satellite at 28.2 degrees East was recently launched for the local television broadcast audiences in Nigeria and West Africa. In this interview, Clint Brown, the vice president of sales and market development for SES video in Africa tells Jumoke Lawanson about the need for high picture quality free channels and the wide reach service of SES satellite. Excerpts.

Who is SES? ES is the world’s leading satellite operator with over 70 satellites. Its satellites deliver television services to more than 351 million households worldwide and network connectivity to over 130 countries. Today it carries over 7,900 channels and is the single operator carrying the most HD (2,700) and UHD (50) channels globally. SES has a media services subsidiary, MX1, which offers end-to-end solutions to enable broadcasters and media companies to easily deliver their content to multiple platforms. In Africa, SES has been supporting the growth of digital TV in Africa for many years. It broadcasts over 900 channels in Africa, and hosts eight DTH platforms that serve over 30 million TV homes across the continent. With our 10 GEO satellites serving Africa we are accelerating the digital switchover in the region, and complementing Digital Terrestrial Television (DTT). Satellites deliver signals to terrestrial TV towers in densely populated areas and directly to individual homes in sparsely populated regions. What exactly is the free-to-air bouquet launch about and how is SES involved? SES is working with Africa XP to deliver 13 new free-to-air (FTA)

ticularly vibrant and offers great opportunities for growth. The current market can be variable and with this offering of 13 channels, we hope to bring a new experience to viewers. The bouquet of PREMIUM.FREE is extremely attractive and we are confident it will foster consumer choice in the local market.

Clint Brown, vice president, sales and market development, SES.

channels as a bouquet called ‘PREMIUM.FREE’ to Nigeria as well as to other parts of West Africa. The bouquet’s launch channels will be supplied by AfricaXP and delivered via SES’ satellite at 28.2 degrees East, a prime orbital location from where SES delivers Direct-to-Home

(DTH) services to over 9 million households in West Africa. Why are you partnering with PREMIUM.FREE to deliver this bouquet to Nigerian and West African market? The Nigerian FTA market is par-

What differentiates the PREMIUM.FREE bouquet offering from other satellite TV offerings? The bouquet really stands out because it combines both local and international content that is attractive for end-consumers, and is offered in high picture quality. AfricaXP is the leading independent content distributor and producer, and the PREMIUM.FREE bouquet sourced from their library really showcases that. The bouquet is made up of African programming with top-flight international content across a diverse range of themes from sports to movies, telenovelas, kids, factual, reality and lifestyle programming, all of which will be familiar to local audiences.

bouquet without charge from Astra 2G located at 28.2° East. If a household’s dish already points towards the 28.2 orbital location all they need to do is use the stand search process on their STB and they should get the channel very easily. Others will need to hire a professional to repoint their dishes before using the search feature and they will get the new channels plus the rest of channel channels available from the platform at that orbital location. While the channels can be viewed using a 78 cm dish, the quality of the viewing experience, and resilience to disruption that is sometimes caused by rain, can better achieved using 90cm dish.

Do you need a Set Top Box to receive the PREMIUM.FREE service if you have other service provider? Anyone with a Set Top Box (STB) and satellite dish in West Africa can access the PREMIUM.FREE

What is the ASTRA 2G satellite? We launched the ASTRA 2G satellite in 2014 to the prime orbital location of 28.2 degrees East. Since then SES has built the largest freeto-air reach in sub Saharan Africa from the orbital location, now reaching over nine million Directto-Home households across West Africa from this orbital position. ASTRA 2G and a second satellite, ASTRA 2F, share the orbital location to complement each other and provide expanded coverage of the West African region. From these two satellites audiences in the region can receive the largest proportion of local content of any satellite.

would further boost the confidence of investors in the shares of the company. He stated that deliberations with quoted companies and the NSE often results to business growth that would lead to boosting confidence in them and also contribute to the overall economy of the country. Also present at the meeting were senior members of the manage-

ment of eTranzact which include Olayimika Philips, non-executive director; Olufemi Aminu, chief risk officer; Adebunmi Wellington-Ogunlewe, group head, product development and Emmanuel Ogunji, chief financial officer. Others were Adeyemi Adeyemo, group head, financial services; Eme Godwin, group head, legal and Omowumi Adedurotimi, company secretary.

eTranzact guarantees high return on investment at NSE

Tranzact International Plc, an electronic payment solution company, has assured stock brokers at the Nigerian Stock Exchange (NSE) of a bright future as investment in it will yield exciting returns. Niyi Toluwase, MD/CEO of eTransact who was introduced to stock brokers at the recent closing gong ceremony at the NSE, assures Oscar Onyema, the chief

executive officer, NSE, who was represented by Tinuade Awe, executive director, regulation division, that he was confident in the performance of his company at the stock exchange which he believes will yield exciting returns for investors. Toluwase was also granted the opportunity to beat the closing gong to close trading and commended the management of the

NSE for the privilege given to him and his company to play the important role. “We are very experienced in processing electronic payment and we are sure that all our aspirations will be realised,” he said. At the meeting between the two companies at the NSE, Awe appealed to the management of eTranzact to be present at the “Facts and Figures” session as it

BUSINESS DAY

Tuesday 02 October 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

CR2 recognised for delivering ‘Excellence in Channel Banking Software Solutions’ Stories by JUMOKE AKIYODE-LAWANSON

R2, leading channel banking software company and partner of Global Info Swift has been awarded for ‘Excellence in Channel Banking Software Solutions’ at the Nigeria edition of New Age Banking Summit 2018. Now in its eighth year, the annual summit, organised by UMS Conferences, and held in Lagos, is a distinguished knowledge-sharing forum of carefully selected senior banking and technology experts who provide insights into the key trends and challenges of banking in the digital era. With 100 banks in total, including Stanbic Bank, ABSA, Diamond Bank, Standard Chartered Bank, Access Bank and other reputable banking institutions across Africa using CR2 services, the recognition for excellence is said to be well deserved, as the companies has succeeded in providing cutting edge fintech solutions that have helped in the digital transformation journey of many financial service providers. The announcement of CR2’s New Age Banking Award came at the end of the first day of the two-day con-

From left-right: Daniel Akumabor, country manager, CR2; Afolabi Oke, managing director, Global InfoSwift Limited; Kieran Kilcullen, chief commercial officer, CR2 and Mike Brady, chief operating officer, CR2, during a press conference held to announce the ‘Excellence in Channel Banking Software Solutions’ award won by CR2 in Lagos recently.

ference, which is widely considered as one of the most prestigious occasions on Africa’s fintech calendar. The leading global banking software company, has developed a strong market presence across Africa, and today enjoys significant growth in Nigeria, where two of the country’s biggest banks, (Diamond Bank and Access Bank) serve as its customers. Fintan Byrne, chief executive officer of CR2, who accepted the award on behalf of the company, said; “We are thrilled to receive

this recognition. Our footprint across the African continent continues to grow significantly, largely due to our award-winning technology, but also our knowledge and expertise of the shifting market dynamics in each local African country”. During a press briefing to announce the company’s achievements, Mike Brady, chief operating officer, CR2 said “the company’s solutions are preferred because we try to work with already deployed technology in the banks to help the banks cooperate and compete with

other financial service providers.” “In the case of mobile money or mobile banking, where the telecommunications operators play a major role, our solutions help the banks to cooperate with the systems so that transactions can be as seamless as possible and in the case of fintech companies, we help banks remain competitive with our solutions. We have launched the revolutionary Amole in Ethiopia specifically for financial inclusion,” Brady said. Also speaking to journal-

ists, Kieran Kilcullen, chief commercial officer, CR2, said that the company is dedicated to the Nigerian and African market as it continues to invest hugely this region which is responsible for 70 percent of its business. “For the past 15 years, CR2 has engaged in trainings for local expertise. There is a lot of investment in research and development and skills transfer, hence our strong partnership with Global Info Swift (GIS). Our presence in Nigeria which is one of the biggest markets in Africa, helps us to envisage the needs of other African countries,” Kilcullen said. Afolabi Oke, managing director, Global InfoSwift Limited said; “we understand that the company is very committed to local content and this is why CR2 has partnered with us to train and use local expertise.” With headquarters in Dublin, Ireland, CR2 which means ‘creating results together’ has more than 100 retail banking customers in over 60 countries. Founded in 1997, the Irish vendor has earned a respected reputation as an enabler of digital transformation through its integrated self-service ATM, internet and mobile platform, BankWorld.

Stakeholders attribute growth in retail sector to payment innovation

takeholders in the Nigerian payment industry have said that solutions that guarantee immediate value for customers and merchants alike will drive growth and expansion in the retail sector of the economy, in line with global trends. Merchants were also encouraged to be positive in their approach towards the adoption of innovative payment solutions. These and many more were the points made by participants at the just-concluded 3rd quarter 2018 edition of PoS Innovation Summit held in Lagos, powered by Global Accelerex Limited, the innovation leader in payment technology in Nigeria, and the Committee of e-Business Industry Heads (CeBIH). The summit with the theme: “Expanding Retail Merchants’ Possibilities”, focused on highlighting the various opportunities avail-

able to retail merchants for payment processing in light of the ingenious solutions being rolled-out almost on a daily basis. Christabel Onyejekwe, keynote speaker and executive director, operations and technology, Nigeria Inter-Bank Settlement Systems (NIBSS) Plc, revealed that growth trend for immediate value services ex-

hibited a sharp growth trajectory from 2012 to 2017, indicating a clear market preference for services that offer immediate value to the beneficiary. She added that in 2017, PoS (point of sales) volumes were at 230 percent of the 2016 volumes, while NIP recorded 241 percent of the 2016 volumes. Speaking at the event,

L-R: Obiora Atuokwu - director, marketing, Global Accelerex; Tunde Ogungbade – managing director, Global Accelerex; Emmanuel Akala – finance manager, Prince Ebeano Supermarket; Stanley Peters – ED & chief technology officer, Global Accelerex; Rotimi Akintan, IT manager, Krispy Kreme; and Olukayode Ariyo, ED, business Devt. & COO, Global Accelerex, at the 3rd quarter 2018 edition of PoS Innovation Summit held in Lagos recently.

Tunde Ogungbade, managing director of Global Accelerex, reinstated the commitment of the company to use the summit as a platform to harness collective knowledge and effort that can birth innovation for the retail payment sector and the development of the industry. Stanley Jacob, chairman of CeBIH, commended Global Accelerex for the initiative and expressed the readiness of the Committee of e-Business Industry Heads to always collaborate with stakeholders in the industry to towards driving growth in the payment industry. Tosin Eniolorunda, chief executive officer, TeamApt Limited, disclosed that opportunities to advance the retail business sector abound such as customer information systems, loyalty systems and embracement of emerging payment channels like fingerprint

and voice. In attendance at the summit were representatives of commercial and microfinance banks, Payment Terminal Service Providers (PTSPs), Regulators, Licensed Mobile Money Operators, merchants and other stakeholders in both the payment industry and retail business sector. The representatives of Prince Ebeano Supermarket, Krispy Kreme and 5 Platters Restaurant, who formed the panel of discussion, commended service providers for their creative payment solutions that have already been deployed and have had tremendous positive impact on their businesses. They were however unanimous in their appeal for the industry to look into issues such as nonimplementation of same day, real-time settlement, reconciliation issues and downtime on the terminal management system.

Agile conference urges use of emerging technologies for business agility

he Agile Practitioners of Nigeria, Nigeria’s largest Agile professional body, held its 2nd Annual Agile Nigeria Conference on the 27th of September 2018 with a large number of company executives, managers, software developers, researchers and innovators were in attendance to discuss the need for business agility. The Annual Agile Nigeria Conference is dedicated to furthering Agile principles and providing a venue for people and ideas to flourish. The main conclusions of the Agile Conference reflected how Agile will transform workplace, businesses and services as well as the adoption of Agile frameworks by the participants at the conference. According to the Agile Practitioners of Nigeria, it is understood that Nigeria needs transformation in both Private and Public Sector. They are therefore of the view that this much desired change can be achieved using the Agile Methodology which allows a paradigm shift towards an innovative and problem solving mind set. Driven by market needs, customer expectations, and evolving technological innovation, today’s constantly changing business environment is forcing companies to adapt their Agile models of management and corporate governance—or risk being left behind. The Agile Practitioners of Nigeria says that through its partners and members, the group is able to provide the opportunity that will allow organisations to connect with other industry leaders and jointly share experiences and insights, helping all members and organisations to better navigate the emerging and complicated domain of business agility. Speaking to journalists before commencement of the Agile Conference, Abiodun Osoba, CEO, The Agile Advisor Nigeria, gave practical examples of how businesses have been totally transformed and internationally recognised by Agile. “I’ll give you a real life story of a dress maker who was transformed by Agile and now connects to customers from anywhere around the world. With our globally recognised partners, the professional body for business agility will help train and certify you to be able to work anywhere in the world,” Osoba said.

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

LegalPerspectives With Odunayo Oyasiji Case Review

METALIMPEX v. A.G LEVENTIS & CO. (NIG) LTD (1976) LPELR-1870(SC) Appearances: CHIEF SOBO SOWEMIMO (with him, Messers A.A. Odunsi and G. Alatise) For Appellant(s) CHIEF OBAFEMI AWOLOWO ( with Messrs Olaniwun Ajayi and Ladi Opanubi) For Respondent(s)

What to notehis is a review of an already concluded matter before the Supreme Court of Nigeria. This is a commercial law matter. It sheds light on legal matters having to do with Bills of Exchange and Company law. Facts WASCO is indebted to the appellant to the tune of 673,511 pounds sterling (equivalent of N1,347,022.00 as at 1971). The indebtedness is due to the fact that before March 1971, WASCO was importing different goods on credit from the appellant. WASCO not having the capacity to pay the debt and also willing to continue doing business with the appellant decided to make alternative payment arrangement with the appellant. WASCO wrote a letter dated February 18, 1972 to the appellant proposing that the payment be spread over a period of time (starting from March 1972 to February 1973). The payment is to be in monthly equal instalment of the sum of N56,126 to be paid into a special account in United Bank for Africa, Lagos. AG Leventis (Nigeria) Ltd signed an undertaking guaranteeing the monthly payment and also wrote a letter to secure the N25,000 monthly ordering on credit of rolled steel products from the appellant. In addition to the undertaking of AG Leventis, the appellant also requested and accepted 12 bills of exchange covering the 12 months monthly instalment of N56,126. The bills were indorsed by P. Myrianthousis as Director of AG Leventis. The first bill of exchange was honoured while the second one was not. The appellant therefore filed the action “claiming against the respondent the sum of N102,702.73 as indorsers of a bill of exchange dated 1st March, 1972, and payable on 30th April, 1972, and in the alternative as guarantors of a contractual undertaking made to the ap-

pellants by Messrs. West Africa Steel and Wire Company Ltd. (hereinafter referred to as “WASCO”), a trading company incorporated in Nigeria; this amount (i.e. N102,702.73) is made up of the principal sum of N97,798 due under the bill, the sum of N4,890.13 being interest thereon and the costs of noting protest on the said bill, being the sum of N14.60. The appellants also claim interest on the total sum claimed (i.e. N102,702.73) “at 10% per annum until judgement is delivered”. Issues for determination The court pointed out that from the pleadings of the parties, it can be deduced that the issues in the matter were “(1) the alleged want of authority on the part of Myrianthousis to indorse the bill; and (2) the alleged want of consideration for issue of the same.” Submissions of Parties The Respondent was represented by Chief Obafemi Awolowo, The defence of the respondent was mainly that Mr Myrianthousis had no authority to bind the company in the transaction in dispute as he was not authorized by AG Leventis to either sign the undertaking or indorse the bill of exchange. It was also alleged that Mr Summ, Mr Myrianthousis and Mr Louvaris conspired to defraud the company- this allegation was not supported with evidence. The Supreme Court noted that from the Statement of Defence of the respondent, the respondent’s defence can be divided into three i.e. fraud and

illegality, lack of authority on the part of Myrianthousis and lack of consideration in the alleged transaction between the appellant and the respondent. Counsel to the appellant argued that the respondents cannot deny the authority of Mr. Myrianthousis to sign and indorse the bill of exchange on behalf of the company as the first bill of exchange that was signed on behalf of the company was negotiated and honoured by the company. The Chief Legal Adviser of the appellant (Dr Hontvari) while testifying in the trial court in favour of the appellant noted that the bills were indorsed by P, Myrianthousis as director of AG Leventis. He further stated that he came to Nigeria in March 1972 to confirm the genuineness of the signature of Mr Myrianthousis from the bankers of the AG Leventis and WASCO and that he was satisfied that the signature was genuine. Judgement of Court On the issue of lack of authority of Mr. Myrianthousis to sign the undertaking and indorse the bill of exchange on behalf of AG Leventis, the court held that “when contract is entered into on behalf of a company the question which arises is whether such a contract is binding on the company and can be enforced by or against it. The answer depends inter alia on whether the contract is (1) ultra vires (ultra vires means ‘not within the powers of )’ the company or (2) intra vires (intra vires means within the powers of ) the company but ultra vires its directors. If the contract is ultra vires the

company neither the company nor the opposite party to it can generally sue on it. If, however, the contract is intra vires the company but ultra vires its directors the opposite party to it can, in certain circumstances, sue the company.” The court further held that the memorandum and articles of association of a company are public documents and anybody dealing with a company is presumed to have knowledge of what the company can deal in and the powers of its directors. Therefore, if a person deals with a company in a manner that contradicts what is in the memorandum and articles of association of the company such a person must face the consequence. It was further held that “a person may hold a company liable on any contract between them although ultra vires the directors of the company if:(a) the company has held out the director as having the necessary authority; or (b) the circumstances fall within the well known rule in Royal British Bank v. Turquand (1856) 6 E. & B 327 which put shortly is this: a person dealing with a company is assumed to be aware of the powers of the company which are set out in its public documents (i.e. the memorandum and articles of association) filed with the Registrar since he has access to these documents, and although it is his duty to see that any contracts he proposes to enter with the company are within its powers he is not bound to do more. He need not inquire into the internal working of the company; and he is entitled to assume that everything is being done properly or

constitutionally. There are, of course, limitations to the above rule and it does not apply in the following cases: (a) cases of forgery or “non genuine” transactions; (b) where the person seeking to rely on the. rule is himself aware or has knowledge, of irregularities; or (c) where the transaction is of such an unusual nature that a person dealing with the officers of a company might reasonably be expected to make inquiries to ‘assure himself that those with whom he is dealing are acting regularly and within the authority of the company; or (d) where the person seeking to rely on it was not aware of the contents of the memorandum and articles of association of the company.” On the issue of lack of consideration, the court held that “ unlike other forms of simple contract, bills of exchange (and promissory notes) are presumed to stand on the basis of a valuable consideration; on the basis of this presumption therefore the burden is on the party who alleges want of consideration (and in the instant case, this will be the respondent) to prove the same. The respondents gave no evidence in the court below. The evidence on record, however - that of the appellants - establishes that the subsisting debt of WASCO was the consideration for the bill (exhibit E); and the case of Balfour v. Sea Fire Life Assurance Co. (1857) 3 C.B. (N.S.) 300 is authority for the view and proposition that a subsisting debt from a third person is good consideration for a bill of exchange, at least, if the instrument is (as in the case in hand) payable at a future date (because it amounts to an implied agreement - as it clearly does in the case in hand - to give time to the original debtor, and this indulgence to the original debtor, is indeed, consideration to the maker or indorser of the bill).” The court resolved the matter in favour of the appellant. Conclusion The matter gives a perfect example of the usefulness of incorporation documents –especially the articles of association. It also shows how the acts of a director can be held to be binding on the company. The issue of what constitutes consideration in bills of exchange was also properly addressed by the court.

28 BUSINESS DAY

C002D5556

Tuesday 02 October 2018

INTERVIEW

I want to return Cross River to

EYO EKPO, a legal practitioner, energy sector specialist and public administrator, is a governorship aspirant for Cross River State o the aspirant says he has the competence to return the state to the path of growth given his rich resume and experiences garnere has stopped working and there is an urgent need to rescue Cross River before it is too late. Ekpo also touches on other issues. Ex

number of private sector operators are now going into politics; and you are one of them. May we know what informed your decision to do so? Cross River State as I like to say is a state that had experienced good governance in the past. People have seen the practical result of that good governance.Foundations had been laid ad rather than continue to build on those foundations, Cross River State has fallen very much by the wayside. When you look at every item and what you may call the index of good governance and development in the country, we are not there anymore. So, bringing Cross River State back to that path of growth on which it previously was, that is my mission.Anybody who had experienced Cross River and had seen the goodness of Cross River, those of us who are from Cross River, those who have also invested in Cross River really cannot afford to let it just go away like that. Some efforts must be made to recover the state and then begin that process of growth once again. So, that’s why in a nutshell I set myself on this path. Watching a football match from the sidelines, usually spectators see a lot of missed scoring chances. Whereas those in the field of play may not see such. What experiences are

you bringing on board for the people of Cross River State? You know, I was once the attorney-general of Cross River State; but before then from 2003 to 2007, I started out a legal practice and in 2001 I went into the public sector as a deputy director in the Bureau of Public Enterprises (BPE). I worked on the World Bank-funded programme that saw me taking a position as the bank sector reform team lead. So, at a very young age of 35, I saw quite a lot about governance at a high level and the difficulty of reforming. I did that for two-and-half years. Then came to Cross River as the attorneygeneral. I was invited by Donald Duke to join his cabinet. That was a wonderful experience for me. It took me back to the state I had left about 17 years earlier as a fresh graduate to go out into the world and make something of myself. I came back 17 years later effectively after leaving in 1986 and I contributed my quota. I was privileged and I was very lucky to be part of a government that actually wanted to be a government that was led by a governor that had the best interest of his people at heart; and went beyond rhetoric and actually did things. I was privileged to be right there at the time many of these initiatives; many of those programmes and plans were discussed, activated and agreed to be executed and implemented. In sum, the lessons I learned at that time has stayed with me. I then went back to Abuja before

another three years with LiyelImoke government. I resignedfrom the administration in 2010, went back to Abuja where I first started with the power sector reform team. I went back to, shall I say, my starting ground which was the power sector; joined the power sector reform team as one of the team leaders. Six months later I was in NERC. I spent the next five years in NERC and the cutting edge of electricity reform in Nigeria. I was in charge of Market Competition and Rate (MCR) in NERC and that basically put me in the driver’s seat for the redesign of the Nigerian Electricity Market which I did for five years. Again, I learned so much; I was able to implement and also learn how to work with people with various interests; people who don’t understand what you are trying to do but you still have to carry them along in some way. We had to learn how to manage failure; we had to learn how to manage people who have no interest or desire in enabling you to achievewhatever you want to achieve; people who are just basically self-interested, but also people working with you who want to deliver on the promise of bright future for Nigeria. So, NERC was at the centre of the power sector reform efforts. Unfortunately, I can’t say that we were able to produce the 100 percent target we had set; you know as the commissioner, you are one out of several other members and you have to make sure that your colleagues are on the same page with you. May be, I can’t say it was a 100 percent success, but for me it was entirely successful; because what I set out to achieve as one person, I did. I learnt a lot; I gave a lot and I left with my head held up high. When I went to the private sector GE (General Electric), transportation, it was again another two years of massive learning. So, what I want to put across to you is that over 17 or so years, between 2001 and now I have been to school once again, school of life. Along the way, I have had lots of continued education – Lagos Business School- Advanced Management Programme; Harvard- Management of Regulatory and Enforcement Agency; Harvard (again)- Governance; acquired a Master’s degree in Law; another Master’s degree in War Studies- interestingly that’s really about how to make peace and keep it; there’s another one they called ‘Understanding the Concept of National Security in the context of the wellbeing of the citizen, not in the context of maintenance of government for whatever it does, which is the way we see national security in

Nigeria. So, I have learnt; I have been educated; I have been prepared. And Cross River stands at a point in its history when it actually needs informed leadership; leadership that knows what the people feel; leadership that stays among the people, leadership that can understand what is achievable and what is its dream; leadership that knows how to plan; how to design and to execute; leadership that knows how to lead. We don’t have any of these things in Cross River State now.We were raised on a diet of good governance in Cross River State but we are now being starved of good governance. My job is just to go back and bring back that goodgovernance and

then make Cross River healthy again. Talking about returning the state to the path of growth, there were projects that were put up which were projected to generate huge revenues for Cross River, such projects as Tinapa, Obudu Ranch, among others, but the projects are now moribund. Do you have any intention of revamping such projects or just ignore them and mount new ones? The slogan of my campaign is ‘Recover and Restore? So, there is no question about doing new things for new things sake. We will not and we will never. But at the same time, we will do things; after we have first re-established the foundation for growth in Cross River. I told you earlier that there were good foundations

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

the path of growth - Ekpo

on the platform of the Social Democratic Party (SDP). In this exclusive interview with ZEBULON AGOMUO, ed over the years in some sensitive assignments he has been able to handle. It is his belief that the state xcerpts:

laid in Cross River, they have now been broken up; so, that foundation has to be re-established. It may take a little bit of time, but that must be done. Once we have done that, like I said at the beginning, we will return the state on a growth path. The key responsibility of the Cross River government on my watch will not be to try to reinvent the wheel and doing business that is best done by business people; it will be to re-establish the perception, and the reality that people used to have that Cross River was a state that was welcoming; a state of business and leisure investments; a state that had a leadership that knew what it was about; a state that had a plan and was executing that plan. Once you have those things, you then focus on governance. Those things take you down quite a few roads – social development, law

and order, creating a place of heritage; re-establishing the things that you talked about – the Obudu Mountain Race; the Tinapas of this world; recovering the infrastructure that has become moribund across the state- stateowned infrastructure, not the ones that belong to theFederal Government. So, you see that there’s a lot of work that needs to be done. In a matter of days, what I called my blueprint, titled ‘A Re-development strategy for Cross River State’ will be rolled out; it means that at one time we were developing; but we are no longer developing today. So, that is where my focus is. I really want to talk about something here; we tend to pick out individual’s

projects and then highlight them as if that was what Cross River is all about. Cross River State is not about Tinapa, or was it merely about Tinapa; or Obudu Ranch or the Mountain Race; Cross River State was about an endeavour that was rooted in the conviction that we were not a ‘civil service’ state. We are a state of abundant promise; of abundant talents and of abundant resources. And it did not require that we go to Abuja to indulge ourselves in the monthly ritual of FAAC allocation share before we could live and live well. So, we want to change that perception about Cross River. The endeavour therefore, was to set up a context for growth; the context for development, realisation of ability of the people themselves which will never happen if we are waiting for FAAC allocation and civil service salaries to come. What was then set out to be done by the first administration we had post 4th Republic was to lay the basic foundation– there were programmes for rural access to roads, there wasa programme for the electrification of the state; there was programme for the industrialisation of the state, there was programme for revamping of our social welfare platforms; these platforms were developed and actually executed.So, where I am going is that there was a context and we would want to go back to that context that would make people realise that Cross River State as it was then a product of a concerted effort to develop the state, at the back of that catalystic investment that Cross River State Government had made in Tinapa to come and add to it just like it happened so many years ago in Dubai when somebody built on airport in the middle of a desert. All these skyscrapers you see in Dubai were not there 30 years ago. When that happened, people realised, we can actually do something here and then the financial centre was established and many others came up, all because somebody had built a half-way house between Europe and Asia.That is the context we should look at all these projects. We are part of the concerted efforts to expand the Cross River coast and letting the whole world know that regardless of whatever is going on in Nigeria, we in Cross River State are open for business.That those projects you mentioned have gone to where they are today is a consequence of lack of vision. Cross River problem is not Tinapa, it is not the Ranch, but it is the governance of the state as led by the present administration that does not possess the ability to lead us in the right way.

Could you please lead us into some of the contents of your economic blueprint, although it has not been officially rolled out? I wouldn’t call it an economic blueprint; I said it was a redevelopment strategy.It stands on four legs. I am not going to discharge my gunpowder now, but I will describe those four legs for you. Number one is governance that is not quite economics, even though it has a direct link- governance and our debt management. I can say to you that we don’t have governance in Cross River at the moment. We used to be a case study in the symbiotic workings with the political class; with the traditional institution, and with the people.Simple basic things- as you finish your council meeting on Wednesdays, the governor says, two of you or three of you commissioners go and brief the press.And in the process of talking to the press such commissioners will enhance themselves. They will gain confidence and ability, and understand better how to speak in public. That was a basic teaching. In the civil service, we had fewer permanent secretary then than we have now. You could see at that time there was a close connection between policy makers and the political class. Policy is advancing the cause of the civil service.That reflected in the way policy was developed and executed. We have to bring that back and it doesn’t cost too much money to do. The second one is social welfareinfrastructure. This will include the health care, education, etc. Then the third leg is hard physical infrastructure; which in budget we call roads and bridges. We have a huge stock of infrastructure in Cross River State– power,

transportation, (both land and sea); we have not done much about maintaining not to talk of building up on that stock. Those federal roads that I talked about earlier are gone. The state urban renewal programme is gone, everything is gone. So, there is really need for us to work out a strategy that manages our debt in such a way that the fiscal space is opened and then we can take funds (capital) and place into investment not into recurrent which isonly where our money is going. We are spending all our money in paying salaries. We live from overdraft to overdraft in Cross River State.The government and the governor do not have time to think through how to clean up these infrastructures. Youth unemployment is high in Cross River. Many of these youths have their PVCs but they appear disenchanted with the goings-on in government. They even think that their votes may not count this time around.What level of mobilisation and sensitisation are you doing to ensure that this mindset is changed and then the youth will participate in the voting process? There are no two ways about it. I cannot win an election from my sitting room. One has to go out. The name of SDP (Social Democratic Party) is resonating across the state. People are definitely aware; you can never gauge too well how it is going, you can only talk to people. I only call on people and it is what I love doing. For me, it’s been tough; but disciples are being won purely on competence; particularly among the Continued on page 30

28 BUSINESS DAY

C002D5556

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

INTERVIEW

I want to return Cross River to the path of growth - Ekpo EYO EKPO, a legal practitioner, energy sector specialist and public administrator, is a governorship aspirant for Cross River State on the platform of the Social Democratic Party (SDP). In this exclusive interview with ZEBULON AGOMUO, the aspirant says he has the competence to return the state to the path of growth given his rich resume and experiences garnered over the years in some sensitive assignments he has been able to handle. It is his belief that the state has stopped working and there is an urgent need to rescue Cross River before it is too late. Ekpo also touches on other issues. Excerpts:

BUSINESS DAY

C002D5556

INTERVIEW

Tuesday 02 October 2018

I want to return Cross River to the path Continued from page 29

youth demography; the name is spreading. My focus, everything I am doing is to increase our spread, and not just increase our spread, but to make sure that people will buy into it. You are a new entrant into the game. The issue of election rigging has been with us. Some politicians are entrenched in it. How would you ensure that the votes meant for you are not diverted? The SPD, our party, has a very unique structure.The structure doesn’t go down and stop at the world level, it goes below the ward level into the polling unit level. So, we are going to have on day of election, at least 15 to 20 people at each polling unit. We will have those polling units well monitored. We will have our people ready and willing and able to fight for their rights. We will have our people trained to understand how the rules work. We will have our people inside these places; we know what they are trying to do and we will not allow them. So, our party is growing, it is growing exponentially at the grassroots level where all parties have their eyes on. How have you fathomed in the issue of power shift in

the state.If you happened to win, would that not distort the arrangement because that would mean that the incumbent who is from the North senatorial district would no longer complete the two-term of eight years which may put his district at a disadvantage? Again, wouldn’t that consideration affect your chances? In the minds of, thankfully, the majority of the people of Cross River State, it doesn’t count. What counts is that we have had since 1999 three governors from the senatorial districts; each of them had to fight to win their ticket except the incumbent governor, Professor

Ayade. From 1999, at the back of the so-called Attan Congress which is an agglomeration of the 11 local governments in the central and in the north to gang up against LiyelImoke, it didn’t work; what worked was recognising that each of the governors fought for themselves and they had to fight for their second terms. In the case of Donald Duke and LiyelImoke, they did fight for themselves for their second term.And they had opponents from other parts of the state so, there was no zoning arrangement that was expected by anybody. The only person, whose candidacy has been so respected out of a sense of fairness is the current governor. For him, his predecessor, LiyelImoke, got up and said, fairness demands that we should ask the north to produce a candidate, which was why the north had over 20 gubernatorial aspirants, most of whom, if not all of whom, were from the PDP. Only one emerged which was Governor Ayade. So, that is one side to it. The other side to it is that we never really had a zoning arrangement in Cross River State even as PDP. In 1999 everybody came out; 2003 everybody came out; 2007, 2011 everybody came out, even when some people were told ‘don’t go, it doesn’t favour you’, they still went.

So, that is not a big deal in Cross River State. The third point is that it is a misguided opinion, for me to say ‘O, I am from the north, it is not your turn, stay back’, and all that. It is a misguided opinion, because, I will say this very clearly and calmly too. I believe that the north has already had a governor; that is Donald Duke. You see, zoning is how people look for the lowest common denominator when you are looking for the highest common factor. You dumb down; and look for the least problematic procedure, that’s the only way zoning works. So, you have a situation where Cross River State does not have any particular one of its

my party; because I am the only aspirant for governorship on the platform of SDP in Cross River State. We will make it a mutual programme; a mutual association, whereby all of us join this thing because of the belief in what we are doing. We don’t want any dividends or whatever but for the good of our people and our state; we want to see where the money is going.

problems zoned to a particular party and poverty is widespread from north to east; and lack of infrastructure is widespread from north to east; our agricultural richness is widespread from north to east. The failure to exploit it is widespread from north to south; our health problems; our educational problems is from north to south and why will anybody come and tell me he has solution based on where he comes from. We went to Donald Duke and asked him, why are you going back after the north defeated you in an election; they didn’t want you; they voted against you; why did you allow us to go back and work in the north; they don’t like you? He said because they are Cross Riverians. The Mountain Race is at the Ranch; the Ranch is in the north; the Rice field, and many others they are all in the north. So, if because some of those people did not vote for you and decide that you will not give the benefit of even development to those people, who do you spite? It is yourself, because you still have to go and solve that problem. What I have tried to say is that whoever is the governor of Cross River State, whether he is from the south, north or central he has to be seen as doing the job. We have problem with Ben Ayade’s legacy and it has nothing to do with the north; and this is my final point on this; that Ben Ayade, the elders know this so much, that even though he says he is from the north, he is really not for the north. If you are from the north, you will not allow the Ranch to die, you cannot scarify a 70km road – the only main artery that goes from west to east and abandon it. You would not do that. If you look at all these, you discover that it is not about zoning, it is about competence. Who is capable; who is best

educated; who is exposed enough; who has the integrity; who has the plan; who has the ability to execute and can take us out of this doldrum we find ourselves and back to clear blue sky that we can fly again. You said agriculture is abandoned in the state or that it is not being given enough attention; but that is the major area of preoccupation of the state government and the governor says he is doing a lot in that area; what is happening? What I did say was that it has not given us the optimal that it should give us. Our agriculture should have grown by now beyond primary produce into processing. We should have gone beyond where we are now, and building on the things that had been laid down. We should have seen a phase two Tinapa underway, even a phase 3. There should have been an extension of the airport from its present location in Calabar to somewhere else with more space. How liquid are you; I mean do you have the financial war chest to drive your aspiration given the fact that it is about money and you are contesting against an incumbent that may be funding his second term ambition from the state coffers as it is done in this part of the world, or are you doing crowd-funding? My resources are there. Friends, donors who do not know me, but have seen me talk and read what I have said are willing to help. I haven’t gone out consciously to organise fundraising. It is only my friends who have heard what I am doing and putting efforts because I am not a candidate yet. But as of this moment, I am speaking to you; am the unofficial candidate of

In the area of security; what do you intend to do to enhance the security in the state by virtue of the growing number of unemployed people in the state? Yes unemployment is a huge issue. In terms of insecurity in the state; perception has changed now. It has changed based on events that had happened – the communal clashes we thought had died down both interstate and intra-states; and a lot of these clashes, particularly intrastate, where it is stated that a lot of people even those in government are fighting each other for supremacy. So, along with that has gone the reputation of law and order because the government has never gone to visit any of the communities that have been attacked. The proliferation of small arms has affected us a lot. So, a lot of small arms are dancing around and one worries about the election, but we really have to work to just go back to the basis – the collaboration between the federal agencies; but a situation where some people in government have been accused of sponsoring these clashes or are known to be cult members, you begin to wonder who is governing; who is really taking care of security. So, we have a situation where it seems we have lost sight how we used to manage our relationship with the security agencies and we need to go back there. Someone said that elections are not won or lost at the polling booths but during collation. Given what we have seen in the recent elections; the issue of vote buying and all that, how in your opinion can this be mitigated? Education. Education; very important. There must be a number of repeated broadcasts; a repeated talking about dangers of giving money; of taking somebody’s N5,000. We are poor in Cross River; but then we also have people who are well educated; we have people who understand the choices before them. So, whether people will go with the money or go with their common sense is what I am waiting to see. We will definitely try our best to make sure that people go out to speak with their conscience and understand that this is something that we all are interested in. That is the idealistic side. In practical terms, the SDP is organised down to the polling unit level as I have earlier said. We will properly and adequately man our polling units. We are waiting to see how it goes.

BUSINESS DAY

Tuesday 02 October 2018

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Educationists, UBEC lead discourse on attaining functional basic education in Nigeria KELECHI EWUZIE

ducationists, private and public sector stakeholders who converged at the second national conference organised by Fafunwa Educational Foundation (FEF) were unanimous in their stance that by neglecting the problems in basic education, Nigeria is compromising the integrity of her socio-economic existence. Industry experts from private sector and managers of the universal basic education across the country maintained that collaboration is essential to attain functionality in this important level of education. Presenters at the conference which served as a platform for scholars and head of government agency in charge of basic education to shared interdisciplinary knowledge and experience that reflected not only the truly diverse manifestations and implications of basic education in Nigeria but also give plausible, pragmatics and policy impacting solutions. Omaze Anthony Afemikhe, Institute of Education, Univer-

sity of Benin, Edo State Nigeria, in his keynote address on the theme, ‘Functionality of Universal Basic Education in Nigeria, observed that to achieve functional basic education, teachers and learners must collaborate and use ongoing assessment and pertinent feedback to move learning forward. According to him, “If we want to enhance learning for all students, the role of assessment for learning must take on a much higher profile” He further said it is imperative that concern stakeholders play strategic role in enforcing a functional basic education system that will ensure the ability of the learners on graduation to be able to possess critical thinking skills, problem solving skills among others which are indicative of the functionality of Basic Education. “We should attempt to move further than UBEC is presently doing. Such will make the functionality of basic education easily discernible”, he said. Hamid Bobboyi, executive secretary, Universal Basic Education Commission in his presentation at the event said basic education sector represents the foundational

L-R: Toyin Owoyemi, local organising committee, member FEF; Tani Fafunwa, managing director, Resourcery Plc; Hamid Bobboyi, executive secretary, Universal Basic Education Commission (UBEC) and PAI Obanya, conference Chair, 2018 Fafunwa Education Foundation at the second National conference of FEF in Lagos.

stratum upon which all other tiers of our educational system are predicted on and nurtured. Bobboyi observe that it is equally important to take cognisance of the fact that basic attitudes and behaviour as well as skills and competences are imbibed at this basic stage of our educational development. In his presentation titled ‘Issues and challenges in the

implementation of Universal Basic Education in Nigeria, Bobboyi said the task of realising a qualitative and functional basic education has always served as a key indicator of how seriously a nation takes its future and its role in human capital formation and socioeconomic development. He observes that a nation that neglects its basic educa-

tion sector is, undoubtedly, putting serious obstacles on its path to national greatness. According to him, “It should also be pointed out that societies that place a high premium on building a universal, qualitative and functional Basic Education sector have found it easier to pursue dynamic socioeconomic policies and to realize their developmental goals.”

Bobboyi stated that Nigeria has been accorded the unenviable reputation of having the largest number of out-ofschool children in the world with figures ranging from 8.7 million to 13.5 million. He further opines that the Commission is keenly interested in developing an active partnership with other stakeholders in the development of basic education in Nigeria. On his part, Pai Obanya, conference chairman said that the by organising the national conference to address the huge challenges in basic education has very huge potential. Obanya observes that the life of Babatunde Fafunwa represents a life committed to promoting a system of education that de-emphasis formal structured, examination-oriented curriculum for a more holistic, functional education that emphasis flexibility, creativity, initiative, industry, dexterity and usefulness to the society. Other speakers at the conference said regular interactions between education stakeholders will move basic education from where it is now to where it should be in terms of functionality.

Focus on special education: Developing early reading skills

Isaac Osae-Brown

pecial needs take a variety of forms and can range from developmental disabilities, learning disabilities, health conditions, or even giftedness. The strategies below will empower and educate parents and caregivers on steps they can take to improve reading outcomes for their child. Your child has a right to attend and succeed in a great public school. Regardless of income, ethnicity, family circumstances, disability or school readiness, all children are entitled to an education that will help them reach

their full academic, professional and personal potential. As a parent or guardian, you are the best advocate for ensuring this happens. Children with disabilities struggle daily to decode letter sounds that can help them read fluently. Fostering a love and aptitude for reading is critical to your child’s success, from the moment they start school. Your child needs strong reading and comprehension skills to succeed-not just in English, but in science, math, social studies and various school activities as well. Struggling readers and children with special needs should be guided with creative and hands-on strategies to motivate them to read. Understanding of the relationships between pictures, words and sounds, and responsiveness to rhythms and rhymes will be a good start. Have lots of books at home and visit the library frequently with your child. You may ask family members

to read to your child and ask for books and jig-saw puzzles as gifts. As you continue to read with expression, use different voices for different characters and animals. Point to pictures that relate to what you’re saying and have your child repeat or sing them along with you. I have made conscious efforts to include these reading strategies with my English learners and struggling students with special needs. As you constantly make reading a daily habit with your child, pick a regular time such as before bed by using pictures to start building vocabulary. Talk with your child about what the pictures show and ask him to point to things as you say them. It is absolutely important to link reading to real life experiences to enhance understanding of the big picture. Encourage your child to ask questions and as you read, stop regularly and prompt him with questions of your own, such as “Why did the spider get lost?” or

“What do you think will happen next?” Finding books on topics you know will interest your child, is a good way to promote comprehension and retelling. Parents and educators should read the same stories over and over since repetition helps the child become familiar with the way stories are organized. Another strategy of building vocabulary and listening skills is by talking through what you’re seeing and doing while cooking, driving or visiting new places. Children with special needs learn through tactile manipulation. Use magnetic letters to spell out basic words, or cut letters out of magazines. As your child progresses, point out new words in books and practice pronouncing them. As they advance further, point out parts of words that are important to the definition, such as “un,” “full” and “less.” Take turns reading out loud. Talk about the main components of stories

and discuss the plot and characters. Ask your child how different characters are related, how they think a character will solve a problem and what parts of the story were the beginning, middle and end. Ask how characters or subjects in one book are similar to or different from those in others your child has read. Ask your child to name the stories they like best and why. Books that focus on special education and disability types should be encouraged! Children need to know the disability types as well. At the end of reading a book, ask your child to name anything they learned or enjoyed. Ask about the author’s intention: “How did she want us to feel?” “Did she teach us anything new?” It is important for parents to work in collaboration with educators to find common strategies that will build solid foundation in reading. Parents should be positive and learn to advocate for

their children’s education at all times. This can be done by attending educational conferences and advocacy support groups that work to create better outcomes for the education of all children including those with disabilities. Famous among these advocacy support groups is The Council for Exceptional Children (CEC). This is the largest international professional organization dedicated to improving the educational success of individuals with disabilities and/or gifts and talents. The target audience for this site is the education practitioner and parents of children with disabilities. Isaac Osae-Brown works for the Compton Unified School District in California as an Education Specialist and a beginning Teacher Mentor. He is an advocate and a speaker for Special Education services in the United States and abroad. www.facebook.com/ inclusivemindset/

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

Markets + Finance ‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

Fidelity Bank’s ROE of 12.23% in HI, highest since 2008 ..Increase in non-interest income drives earnings BALA AUGIE

idelity Bank Plc just released its half year 2018 financial statement that showed improvement in key performance metrics. The bank has been utilizing the resources of shareholders in generating higher profit as return on equity (ROE) of 12.20 percent in the highest since 2008, as it continues to translate top line (revenue) impressive performance into bottom line (profit) growth. Fidelity Bank has 240 branches across the country, 778 Automated Teller Machines (ATM), and 4513 Point of Sales (POS). The Nigerian lender has a solid retail and digital banking segment, as about 40 percent of customers now self-enrolled on mobile/internet banking products. Over 80 percent of customers transactions are now done on electronic banking channels, which is why the lender has continued to make progress in ensuring more Nigerians have access to financial service. It has 4.2 million mobile customers as at June 2018, which represents an average growth of 10.50 percent from 2.8 million customers in 2014. Increased non-interest income drives gross earnings Fidelity Bank reported a growth of 3.60 percent in gross earnings to N88.91 billion in June 2018 from N85.81 billion the previous year. The growth was primarily driven by a 33.8 percent increase in fee income and 25.8 percent growth in interest income on liquid assets, an impressive performance that validates the lender’s dominance in the internet banking space. Interest income rose by 2.50 percent to N72.87 billion in the period under review

Nnamdi J. Okonkwo, managing director/Chief executive officer

from N71.09 billion as at June 2017. A breakdown of interest income shows loans and advances to customers fell by 6.48 percent to N47.94 billion in June 2018 as against N51.05 billion the previous year. Tier 2 lenders have turned off the tap on lending to the real sector as they are still nursing the wound caused by the sudden drop in oil price in mid2014 that saw Non-performing loans (NPLs) balloon. Also, banks are not encouraged to propel lending to the private sector because companies in these sectors are highly risky. Fidelity Bank’s net interest income (NIM) dropped to 6.5 percent in June 3018 from 7.3 percent as at December 2017 as decline in its average yield on earning assets outpaced the improved funding cost in half year of 2018. Interest expense was up 10.05 percent to N41.98 billion in the period under review from N38.15 billion as at June 2017. The increase in interest expense can be attributed largely to a marked increase in the interest paid on debts issued as well as other borrowed funds (+64%y/y). Average funding costs dropped to 6.6 percent on account of improved deposit pricing as average cost of deposits dropped to 6.7 percent from

7.9 percent as at December of 2017. Growth in operating income supported despite rising operating expenses For the second quarter period ended June 2018, operating income grew by 5.1 percent to N48.26 billion from N45.93 billion the previous year, while credit loss expense increased by 46.09 percent to N4.81 billion in June 2018 from N2.59 billion as at June 2017. The growth in operating profit was largely driven by 9.90 percent increase in noninterest income to N17.37 billion in the period under review from N12.98 billion the previous year. Net fees and commission income was up by 45.60 percent to N13.70 billion in the period under review from N9.41 percent the previous year. Increased profit amid harsh operating environment The bank’s profit after tax increased by 31 percent to N11.84 billion in the period under review as against N9.0 billion as at June 2017. Pretax profit followed the same growth trajectory as it grew by 27.31 percent to N13.01 billion in the period under review from N10.21 billion as June 2017. The growth in profits was largely due to an uptick in earning assets, deposits and

fee income. Fidelity Banks’ total operating expenses were up by 5.70 percent to N32.83 billion in June 2018 from N30.90 billion as at June 2017. The increase in operating expense was due to regulatory charges (NDIC/AMCON charge) and technology cost. But the bank’s investment in technology has paid off as automation activities resulted in improved efficiency. Cost to Income Ratio (CIR) inched up marginally to 67.7 percent in June 2018 from 67.3 percent in June 2017. A breakdown of total operating expenses shows staff cost fell by 5.19 percent to N10.50 billion in the period under review from N11.07 billion the previous year. Other operating expenses moved to N22.16 billion in June 2018 from N19.82 billion the previous year. Depreciation cost was up by 51.80 percent to N2.81 billion in the period under review from N1.85 billion as at June 2017. The increase in depreciation cost was driven by digital banking and technology related assets. With the stronger profit already recorded so far this quarter, it is expected that the bank will close 2018 financial year with a solid balance sheet. “From what we have seen so far and going by our half year results, we are staying with our guidance for the full year” said Nnamdi Okonkwo, Chief Executive Officer of Fidelity Bank. Improved Balance sheet The bank’s balance sheet increased by 13.65 percent to N1.56 trillion in June 2018 from N1.36 trillion the previous year. The growth in total asset was due to a 100 percent surge in debt instrument at fair value to N221.0 billion while cash and cash equivalent grew by 19.52 percent to N322.26 billion in the period under review from N269.62 billion the previous year. Total deposits increased by 19.7 percent year on year (Y/Y) to N927.9 billion in June 2108 from N775.3 billion as at December 2017. Deposit growth was across all products and the bank has already achieved its guidance for the year ended December 2018. Low cost deposits now constitute 73.8 percent of total deposits from 77.0 percent as at December 2017, however,

BD MARKETS + FINANCE Analysts: BALA AUGIE

absolute figures increased by 14.7 percent to N684.8billion from N597.0 billion as at December 2017. Fidelity Bank’s savings deposits grew by 10.6 percent

sector. Coverage ratio improved to 112.7 percent from 109.4 percent in December 2017 in line with the implementation of IFRS 9 and increased loan

year to date (YTD), which contributed to the decline in its funding cost. The growth was as a result of the disciplined execution of retail banking strategy and improved cross-selling of digital products. Reduction in Non-Performing Loans (NPLs) validates risk management strategy Fidelity Bank’s excellent risk management strategy and an optimal mix of portfolio has paid off as evidenced in improved asset quality, and a reduction in Non-Performing Loans (NPLs) while the lender continues to maintain its financial intermediation strategy. NPL Ratio down to 6.1 percent in June 2018 from 6.4 percent as at December 2017 while gross NPLs stood at N51.86 billion as at June 2018. Absolute NPLs increased by 2.0 percent due to N1.8 billion increases in the transport

book. Total loans and advances to customer increased by 11.05 percent to N911.9 billion in June 2018 from N821.01 billion as June 2017. Loan growth was principally driven by 4 sectors: Manufacturing, General Commerce, Transport and Public sector. Fidelity CAR improved to 17.0 percent from 16.0 percent as at December 2017 as capitalized profit increased Tier 1 Capital by N10.1 billion. “We have established a stronger connection with the consumers through a focused and consistent communication of our brand essence and vision. These awards are a reflection of the hard work and determination of everyone at Fidelity Bank over the past couple of years. They are also a reminder that expectations are high and as Fidelity people, we must continue to strive to meet and surpass expectations” said Okonkwo.

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

In association with

How land-swap approach can bridge housing demand-supply gap CHUKA UROKO

nlike other social problems in Nigeria including insecurity, militant activities, kidnapping, youth unemployment and others, housing deficit seems not to bother government, hence the poor attention given to the problem. But, increasingly, professionals and other stakeholders in the housing sector are showing keen interest in how to resolve the deficit which has left about 25 million households, comprising 4-6members each, without their own homes. In any given opportunity at conferences, summits, seminars and even at private levels, discussions are always extensive on ways and means of bridging this deficit which is not only deepening the socio-economic inequality, but also affecting productivity level in offices and industries. New building technologies which have the capacity to mass-produce houses, use of alternative building materials, especially locally sourced materials, which will cut off import duties, have always been canvassed and even deployed without much result because the cost implications are huge. But there is another approach which experts consider viable and more costeffective is land-swap. This model is being explored in many developing countries and it involves government and a real estate developer signing off a deal that the former will offer a defined parcel of high valued land to the latter at no cost, while the recipient or developer will, in return, build an agreed number of units of social housing for the government to be given out to low-income earners who cannot afford to buy or build. The housing deficit which, in 2014, the World Bank estimated at 17million units is high because of this class of people whose demand for housing is ineffective. Expert say the deficit is not so much the problem as the low level of effective demand for what is on offer on the housing

Infrastructure Maintenance With TUNDE OBILEYE

Generator maintenance

L-R: Olurogba Orimalade, chairman, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos branch; Sulaiman Balogun, chief business officer, PropertyPro.ng; Femi Akintunde, group managing director, and Wole Olufore, executive director, Commercial, both of Alpha Mead Group, at the African Real Estate Conference Awards (AFRECA’18) in Lagos recently.

market. The level of effective demand for housing in Nigeria, Africa’s largest economy, according to the experts, is very low, not more than 10 percent of the deficit. The implication of this is that even if, by any stroke of chance or magic, the country offsets the deficit by building 200,000 units annually, only about 2million units will be bought at any given time by those who have the capacity to buy. Besides poverty, however, there are also reasons for low level of effective demand. Basically, not everyone who desires housing can afford it while most of those who can afford it do not have easy access and this is the main reason for the mismatch of demand and supply for different levels of buyers—low, middle and high income earners. If demand for housing is not effective on account of poverty, it means there are other factors that are constraining not only demand, but also supply. “Economic conditions leading to low purchasing power, and constrained access to land with valid title such as government bureaucracy and the ‘omo-onile’ factor can make demand ineffective,” explained Femi Akintunde, GMD, Alpha Mead Group, at Africa Real Estate Conference and Awards (AFRECA) 2018 in Lagos recently. Despite all the arguments to the contrar y, Akintunde believes that government has a role to

play in housing delivery, especially in finding solution to the nagging issue of housing deficit. In his contribution to the theme of the conference, ‘Sustainable & Equitable Housing: The Role of Government & Private Sector’, he reasoned that, given the many challenges militating against the provision of sustainable and equitable housing in Nigeria, “land-swap is the catalyst needed for resolving housing deficit”. Akintunde emphasized that, though government might be constrained by lack of requisite data to determine citizens with little or no purchasing power to own homes, it should explore a pre-qualification process to ensure that the social housing units are given out to citizens in dire need of them. He pointed out that the success of the land swap model would depend on government’s ability to come up with a holistic plan, practical execution strategy and a measurement tracker that must ensure housing supply in both urban and rural settlements meets effective demand at all times. GbolahanLawal, Lagos State Commissioner for Housing, assured that despite the prevailing economic challenges, the state government remained committed to providing affordable homes to its populace. Lagos at the moment is grappling with a housing deficit

estimated at 3 million units. But the commissioner assured , “as a forward-thinking government, this administration has a strong interest in the many ways we can make housing provision more efficient and affordable with projects such as our partnership with Echostone which seeks to push housing development frontiers by deploying the use of technology to build homes within record time.” He disclosed that the state has set a target to build about 14,187 affordable homes by 2020, revealing that the state government bought into several innovative ideas towards the last quarter of 2017 that were capable of changing the real estate landscape in the state. At private sector level, however, it was noted that major issues impeding housing supply ranged from state ownership of land which creates insecurity and crisis of confidence in mortgage lenders, low viability of housing projects due to high cost of building materials, to forfeiture laws which discourage banks from lending to developers, and multiple taxation. Part of the highlight of the conference (AFRECA) was that Alpha Mead Facilities, a strategic business unit of the Alpha Mead Group, was recognized and awarded the ‘Best Facilities Management Company of the Year’. “The award is a testament of our innovative approach to facilities management in the last 12 months”, Akintunde enthused.

he use of generators continues to be the major source of electricity in Nigeria despite the enormous efforts and massive investment in the power sector. With such use of generators in both residential and corporate environments within private and public sectors, generators need to run smoothly and efficiently to provide power. To this extent, it is extremely important that generators are well maintained. However, there are a few common problems facilities managers should be aware of in order to prevent generator downtime. The most common generator problem is neglect of maintenance. Proper engine maintenance is critical to running generators efficiently. Problems will develop if engine components are not routinely checked for wear and tear in addition to preventive maintenance. Having a maintenance plan that aligns with the manufacturer and distributor’s recommendations will often comprise routine, semi-annual and annual generator services. Some of the components to focus on are the cooling system, fuel system, engine monitors, safety controls, water separator, oil and fuel filters, automatic transfer switch etc Another problem is the improper sizing of the generator. Most clients often want to buy larger generators than what is needed for their use with future needs in mind. Unfortunately, running a diesel generator with under loading can result in serious damage and wasteful inefficiency. One of such damage is wet stacking. This occurs when the engine’s operating temperature doesn’t reach minimum temperature and pressure for the expansion joints in the exhaust system to seal up properly. This causes the diesel fuel not to burn completely, allowing wet fuel (black oily liquid) to gather in the engine stack and leak through the exhaust. Facilities managers must ensure at least 35 percent of the load capability of a

generator is utilized. When additional load is not added in good time, the generator will function inefficiently and can be damaged. A major maintenance plan that facilities managers must carry out is an annual load bank test which eliminates wet stacking in diesel generators by burning off un-burnt fuel, oil and carbon in the cylinders and exhaust system. It also will exercise and test the unit’s fuel and cooling systems and evaporate moisture from inside the generator and engine. Another problem facilities managers must avoid is often the lack of adequate fuel when a generator is in operation. The obvious effect from this is the generator shutting down because there is not enough fuel to burn for power. Also, there’s the effect of the intake of air into the fuel system. Additionally, not running the generator on a regular basis can cause air in the fuel system. When facilities managers fail to implement a regular maintenance plan combined with an irregular use of the generator, there will be stagnant fuel in the tank. Stagnant fuel results in water condensation, which, in turn, causes an acceleration of microbiological growth. This creates contamination and damaging sludge to appear, which can hurt fuel filters, create clogs and cause leaks. The easy solution to most generator problems is found in regular maintenance. Facilities managers should have a planned service agreement with a company they trust. A planned service agreement is the most effective solution to mitigate and prevent problems associated with generators. Furthermore, working with the generator manufacturer and distributor will outline proper use of a generator to ensure the correct load amounts are regularly applied. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

BUSINESS DAY

Tuesday 02 October 2018

‘Forex instability has discouraged foreign investment in construction industry’ In spite of its great potential to create jobs and generate wealth, the construction industry in Nigeria has not received enough investment from both domestic and foreign investors relative to the size of the country. RAMZI CHIDIAC, managing director, ITB Nigeria Limited, a subsidiary of the Chagoury Group, in this interview with CHUKA UROKO, speaks on the opportunities available in the industry for local investors. He also speaks on the challenges and the role of technology in the industry. Excerpts:

TB Nigeria has been in the construction industry for over 16 years; from a player’s perspective, how has the industry evolved over the years? The Nigerian construction industry has experienced a significant boom in recent years. Although there was a slight halt as a result of the economic recession, the industry has begun to visibly improve. Recently, there has been an emergence of more indigenous firms, but we need a lot more. There is an opportunity available for more Nigerian construction firms offering expertise, quality, skill, and excellence to spring up and address the construction needs in the country. The industry has also evolved in terms of the technological techniques adopted in carrying out projects. There is also a recent trend in smart/green buildings that are environmentally friendly and efficient.

issues of the role of engineering in development for the ever expanding demographics in Nigeria. We also invest in our manpower by training our engineers, surveyors and others, thus contributing to the development of skills of workers in the construction industry.

Ramzi Chidiac

Nigeria is a developing nation. From your experience, has the construction industry contributed to the development of the country? The level of construction in any country is a measure of the country’s success. So, it is not farfetched to say that the construction industry in Nigeria not only serves as a means of sustainable economic growth, but also contributes to the standard of living of Nigerians and guarantees increase in employment opportunities.

is the recent forex instability. This instability has discouraged foreign investments in the construction industry. The number of investors have reduced as they have become weary of not receiving returns on their investment. Another major challenge is the dearth of skilled workers including engineers, architects, surveyors and contractors in the industry. As a result of this, ITB invests heavily in its manpower. We ensure our employees have access to relevant trainings within and outside the shores of Nigeria that promote their creativity, professionalism, expertise and output. We believe that investing in our employees is key to unlocking the full potential of our company and contributing to the overall growth of the construction sector.

Given the economic downturn in Nigeria, what do you consider major challenges that players in the construction industry face, and how do they deal with those issues? Players in the construction industry like builders and engineers, as with every other sector, experience some major challenges in the course of business. One of such challenges

Your company emphasizes post-tensioning technique; how many projects have you executed using this technique? ITB adopted post-tensioning techniques which guarantee premium quality structures, ensure flexibility of layout and servicing, lighter structure, and lesser construction time in the construction of its major projects. Post-tensioning is a technique used

for reinforcing concrete with highstrength steel strands or bars and it has numerous advantages over standard reinforcing steel. We have employed this technology on the Sapetro Towers project in Victoria Island, Lagos, and other landmark projects across the country like Ocean Parade; Keystone Bank Headquarters on Adeyemo Alakija Steet, Victoria Island, Lagos; Trinity Towers on Chief Yesufu Abiodun, Oniru Road, Lagos; and the Azuri Peninsula, Eko Atlantic City, Lagos. Till date, what could be the extent of ITB’s involvement in developing Nigeria through investments? We strongly believe in giving back to our host community and to the society at large, because without the society, we would not exist. We are involved in numerous CSR activities around Nigeria including the refurbishment of FRSC stations in Lagos, renovation of some hospitals, sponsorship of some art shows and so on. Recently, we sponsored 5 Engineers to attend this years’ Council for the Regulation of Engineering in Nigeria (COREN) Engineering Assembly which addressed the crucial

Looking at Nigeria in terms of development, do you think the country needs more construction companies/activities? The Nigerian construction industry as previously mentioned has experienced a substantial growth in recent times but there is still a gap to be filled. The rate is still low compared to the past. With more construction projects, foreign investments and private public partnerships, the construction industry can once again assume its role as a great contributor to the Gross Domestic Product (GDP) In the light of global warming, how strong is ITB Nigeria in the area of green buildings? Green buildings optimize the use of natural resources to provide clean and cost effective working ambience. For us at ITB Nigeria, we view green buildings as the safer, cost efficient and responsible way to go in construction. We put the environment into consideration with every project we undertake and we are proud to have constructed Heritage Place, the first commercial building to achieve the Leadership in Energy & Environmental Design (LEED) certification in both design and construction in Nigeria. The building has a 30 percent to 40 percent reduction in energy use, several environment-friendly approaches such as water recycling, and re-use, automatic presence detectors and high efficiency lighting, building orientation to maximize natural light and ventilation and high efficiency glazing and external thermal envelope.

There is keen competition in your industry today because technology gives everybody an edge. What technology do you employ that puts you ahead of competition? Technology is evident in every aspect of our lives and its impact in modern society is undeniable. The construction industry which was the least digitized sector has started adopting technological changes and advancements. We embrace technologies such as the post-tensioned slabs which allows for flexibility of layout and servicing, cost savings, lighter structure, and faster construction. We also have two fully automated batching plants that have the capacity to produce up to one million cubic meters of concrete with capacities ranging from six cubic meters to nine cubic meters. In addition, we have a MEP division that is a new generation of mechanical, electrical and plumbing technology. How does ITB Nigeria encourage local content and backward integration? A major percentage of the materials we use in construction are sourced locally. We have multi-million dollar investments in local factories enabling us to substantially reduce expenses accrued from imports. We have a pre-cast factory that produces pre-stressed hollow core slabs, spun concrete poles, and beams. The hollow core factory produces approximately 100,000 square metres of hollow core slabs yearly. We also have a duct factory, with two workshops in Lagos and Abuja, which provide full coverage for the HVAC needs of the Nigerian market. We make use of local content and encourage the adoption of recycled materials in building construction. Employing our local people boosts the utilization of our human resource here in Nigeria.

NIESV housing summit seeks alternative building techniques for mass supply

or decades, conventional building methods have been employed for housing development in Nigeria and very limited success has been recorded. Alternative building techniques that have the capacity to produce houses on a scale that can close the country’s housing gap are still in fits and starts. When, therefore, housing experts and sundry stakeholders

gather next week in Abuja for the 6th edition of the annual National Housing Summit organised by the Housing Faculty of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), focus will be mainly on alternative building techniques. Besides financing mass housing looking at the prospects and challenges, the summit will also be taking a critical look at how

L-R: Ayodeji Odeleye, publicity secretary; Ade Akosile, vice-chairman; Tosin Kadiri, secretary; Kehinde Abayomi- chairman, National Housing Summit Planning Committee, and Casmir Anyanwu, immediate past secretary, all of NIESV Housing Faculty, at the faculty’s press briefing in Lagos recently

to accelerate housing delivery process through dry construction system as against wet construction that involves cement and sand to produce brick and mortar. The NIEV’s faculty of housing is mainly about advocacy, drawing attention to housing problems and pointing the way for solution. The Faculty, according to its chairman, Chika Okafor, recognizes the humongous size of the country’s housing deficit, and believes that the solution to that deficit is in mass and affordable housing for low income earners. To achieve the goal of mass housing, Okafor highlighted the need for the deployment of alternative building techniques. “Considering the current challenges presented by growing housing deficit in Nigeria today, our professionals and real estate developers have come up with sustainable alternative building techniques which are readily employed in building construction to achieve mass housing”, Okafor disclosed at a press briefing in Lagos at the

weekend. Continuing, Okafor, who was represented at the briefing by Kehinde Abayomi, chairman of the summit planning committee, informed that there was already on ground “a new innovation that is capable of producing up to 1000 units of quality and affordable houses within a month from foundation to finishing”, assuring that this technique would provide a clear step to reducing the housing deficit, but would require government’s intervention. This means that private developers could collaborate with the relevant government agencies to build houses for a target group and such houses should be given out based on need and not sold in the open market which favours the highest bidder and schemes out a certain class of people. Essentially, the summit which expects Vice President Yemi Osinbajo as special guest, Babatunde Fashola as host; Bode Adediji as summit chairman; Tunde Reis, Dare Bello and Roland Igbinoba

as speakers, is aimed to educate Nigerians on the discovery of the new technique. The summit also aims to deal with the process of financing mass housing and to sensitise both government and the people on the importance of housing as a social and economic factor that aids productivity and sustains human existence. Casmir Anyanwu, the immediate past secretary of the faculty, disclosed that beyond the summit, the faculty was also involved in developing and collecting data which, they hoped, would guide investment in the housing sector. “We are working on data to guide investment; we are also planning to undertake housing census in the country; we hope that this will provide information on available house-types in a given location, especially in the major cities of Nigeria; we believe that a good knowledge of housing statistics will enable government to plan for housing”, Anyanwu stated.

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

Tips & Talking Points

Harvard Business Review

Are you wasting your company’s coaching budget?

TALKING POINTS Open for Discussion 64%: According to a recent study, distractions occur 64% more frequently in an open office environment than a traditional one. + Who Are the Champions? 46%: Male employees are 46% more likely to have senior-level colleagues who champion for them at work than female employees, according to U.K. economist Sylvia Ann Hewlett. + On the Rise 25%: In 2016, emerging-market companies contributed around 25% of total global corporate revenue and net income. + Approaching Destination $1.3 billion: Five years ago Google bought Waze, an Israeli navigation app startup, for $1.3 billion. + Historic Highs One-quarter: In 1933 when President Franklin Roosevelt began his first term, one-quarter of America was unemployed.

ot every executive will benefit from working with a coach. And if you’re the person who decides which company leaders get to work with an outside expert, you want to spend your budget wisely. To assess whether a struggling leader is ready for coaching, watch for a few red flags. First, be wary of an executive who always has an excuse when things go wrong. Coaching requires self-awareness and introspection, so someone who consistently

blames external factors for problems may not be a great choice. Second, think carefully about a leader who favors quick-fix tactics. The best candidates for coaching are willing to challenge their assumptions and beliefs about how to get things done. And third, beware of managers who delay the start of coaching to “do more research” or “find the right person.” It may be a sign that they’re just not ready to confront their issues.

eing laid off is one of the most difficult experiences a person may face in his or her career. It can make you feel shock, grief and anxiety — but it doesn’t mean your career is over. Since so much is out of your control, focus on what you can actively manage: your thoughts and attitude. Start by pairing the inevitable negative thoughts (“This is a disaster I’ll never recover from”) with positive questions (“What career opportunities am I now free to explore?”). Then focus on your strengths and the successes you’re most proud of. Think back to a time when you suffered through a difficult situation that you ultimately overcame. Ask yourself: What skills did I use to get through it? What did I learn about myself in the process? How can I use those strengths in this current difficult situation? Layoffs are destabilizing in the short term, but the right attitude can help you rebound and get your career back on track.

(Adapted from “4 Signs an Executive Isn’t Ready for Coaching,” by Matt Brubaker and Chris Mitchell.)

(Adapted from “How to Silence Your Inner Critic After a Layoff,” by Susan Peppercorn.)

Helping an employee through a personal crisis starts with listening

To learn a new language, set goals and practice

also the facial expressions, posture and body language involved — all the cues we use to intuitively decode what’s really being said. The discussion will feel more organic, which will increase the quality of the ideas and the thoughtfulness of the comments, and make it easier for you to keep people fully engaged.

t some point, we all have a s t re s s f u l l i f e event that distracts us from work. Perhaps it’s a family member’s illness, a divorce or the death of a friend. If someone on your team is going through a personal crisis, what can you do as manager? First, make yourself available. If you maintain an atmosphere of compassion in the office, people are more likely to come to you when they’re going through a tough period. When they do approach you, don’t ask prying questions. Respect people’s privacy and simply listen. Your employee may just want a sounding board about the difficulties of caring for a sick

relative or an opportunity to explain how his divorce has affected productivity. And don’t jump to conclusions. If you immediately suggest that workers take a leave of absence or adjust their schedules, for example, they may be put off if that’s not what they need. Ask employees what changes to their work would help them, and then explore the options together.

earning another language can be a boon to your career (especially English, which has become the lingua franca of the business world). Whether you need total fluency or just a working knowledge, having a plan can help. To start, set specific goals for your learning. Decide what you want to be able to do (“I will comfortably deliver a presentation in English ... “) and by when (” ... before the end of next quarter”). Then create habits around practicing. Maybe you could read one industry article a day in the new language, or write your weekly team updates in it. And don’t turn learning into a slog. If you find yourself dreading practice time, rethink your approach:

(Adapted from “Stop Sched(Adapted from “How to uling Conference Calls and Manage an Employee Who’s Finally Commit to VideoHaving a Personal Crisis,” by conferencing,” by Scott EdCarolyn O’Hara.) inger.) c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

We have you covered through CBN’s special intervention for speciﬁed retail invisible transactions.

Are you travelling abroad for vacation

Visit any of our designated branches nationwide for your following invisible trade transactions: School Fees Pilgrimage & Other Travel Allowances (PTA and BTA) Medical Allowances

or studying abroad?

We are here to serve you. *Terms and conditions apply

www.ﬁrstbanknigeria.com

Being laid off Is really hard. Thinking about your strengths can help

Stop using conference calls and start using videoconferencing e all know what happens on conference calls. People dial in and then multitask, barely paying attention. You spend more time refocusing the conversation and getting people to participate than you do solving problems. The next time you have a meeting with people in another office or city, consider using videoconferencing instead. The visual connection ensures that people stay engaged and focused, and that those who are struggling to join the conversation can visually indicate that they’d like to talk. And unlike conference calls, videoconferencing allows us to consider not only the words being spoken but

Tuesday 02 October 2018

C002D5556

FirstBankofNigeria

@FirstBankngr

Firstbankngr

FirstBankofNigeriaLtd

@ﬁrstbanknigeria

+FirstBankNigeria

Read the translated version of your favorite book, for example, or enroll in a cooking class that’s taught in the language. Most important of all, believe in yourself. If your goals start to seem unachievable, make them smaller or more manageable until you regain your confidence.

(Adapted from “How to Improve Your Business English,” by Minh Tran and Peter Burman.)

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

38 BUSINESS DAY NEWS Nigeria’s small banks go big on loans as the... Continued from page 1

2019 presidential elections, said

Johnson Chukwu, CEO of asset management company, Cowry Assets. “If the small banks can manage the quality of the risks they are taking and it translates to higher interest income, it provides a window for them to catch up with the Tier-I banks,” Chukwu said. The loan books of Guaranty Trust, Zenith, Access, United bank for Africa and First bank, shrank cumulatively by 6.6 percent as at June 2018 compared to the level at the end of 2017, with two of the country’s most capitalised banks, GTB and Zenith contracting the most by 11 percent a piece. While big banks have taken a conservative approach towards lending this year, the loan books of smaller banks from Sterling to Fidelity bank has risen sharply, with exception of Ecobank and Diamond bank. Sterling bank and Fidelity grew their loans by 20 percent and 10 percent respectively, while Stanbic Ibtc and Wema bank grew theirs by 9 percent each. Those loans primarily went to Micro, Small and Medium Enterprises (MSMEs), according to spokespersons from two of the banks (Sterling and Fidelity). “We are big on small businesses and have created several loan products for that segment,” a spokesman of one of the banks said.

While Union bank slightly increased its loan to customers by one percent, Diamond bank and Ecobank bucked the trend after their loan books contracted 30 percent and 9 percent respectively. According to its financial report, Sterling Bank boosted loans by the most to the consumer sector, following a 48 percent spike to N8.5 billion as at June 2018 from N5.7 billion from December 2017. Sterling bank has capital adequacy ratio of 12.1 percent, just above the regulator’s minimum threshold of 10 percent for its category of banks. Themanufacturingsectorwasmost attractive to Fidelity bank while Stanbic IBTC loans to the downstream petroleum sector saw the biggest jump over the six-month period under review. Nigerian banks pulled the plugs on private sector lending to manage a worrying spike in non-performing loans, after the economy slumped to its first recession in 25 years two years ago, causing loans to go bad and threatening the asset quality of lenders. The economic crisis was triggered by the decline in oil prices and productionandbecausebanks were largely exposedtotheoilandgassector,badloans spiralled out of control in 2016 but the situation has since improved after an oil-led recovery took the economy out recession in the second quarter of 2017. Oil prices have rallied and production in the Niger-delta has sta-

C002D5556

bilised, having been disrupted by militant attacks in 2016. Brent crude is selling above US$80/barrel and has more than doubled since 2016’s average of $38 per barrel. Other macroeconomic indicators have also improved. The economy expanded some 1.7 percent in the first half of this year and is tipped to expand by the International Monetary Fund (IMF) to grow by 2 percent by year-end compared to 0.8 percent in 2017 and -0.5 percent in 2016. Although in GDP per-capita terms, the economy is still in recession with economic growth rate below the population growth rate of around three percent. Inflation has declined significantly to around 11 percent from a peak of 18 percent in January 2017 and FX liquidity has improved, helping the exchange rate stabilise at around N360 per USD at a marketdriven window called the Investors and Exporters window. The window was created by the CBN in April 2017 to boost autonomous dollar inflows. Armed by the improved economic situation, banks largely forecast 10 percent loan growth during investor presentations at the start of the year, but earlier than expected political tensions heading into the 2019 presidential elections and fragile economic activity have forced banks to renege on their promise and be conservative with credit creation. The recent upturn in yields on government securities is another competition for bank credit.

L-R: Segun Ogunsanya, MD/CEO, Airtel Nigeria; John Ugbe, CEO, Multichoice; Seni Adetu, founder/group CEO, Algorithm Media; Funke Opeke, CEO, MainOne, and Bisi Onasanya, former GMD/CEO, First Bank, during the unveiling of the Ogilvy brand in Nigeria in Lagos.

Ambode faces the ultimate battle for... Continued from page 1

without the endorsement of the man many like to call Asiwaju. Indeed, most political office holders in the state- senators, members of the federal House of Representatives, chairmen of local governments, including many

commissioners in the Ambode-led administration are Tinubu’s loyalists. It is not uncommon to hear politicians in the state referring to the former governor as ‘Our Leader’ and in many of their political gatherings especially where tough decisions are to be taken, singing the mandate anthem with hands on their chest: “On your mandate we shall stand; Bola on your mandate we shall stand.” Many times, party faithful have had to submit to the mandate’s position where arguments arose. In 2007, as Tinubu began to wrap up his eight-year administration, names of several of his political godsons and appointees had come up as possible successor. The leader had settled for a less known Babatunde Fashola, his Chief of Staff, in what almost tore the then Action Congress (AC) family to shreds,

leading to the defection of about 11 strong members, including deputy governor, Femi Pedro, who felt they were better candidates to succeed Tinubu. What followed afterward was realignment, with majority of the members standing with Tinubu to endorse Fashola as the party’s flag bearer. Fashola went ahead to defeat others- including Pedro who contested on the platform of the Labour Party. In 2015, as it is characteristic of politicians, names had flown across the Lagos APC as Fashola’s successor. Prominent among them; Adeyemi Ikuforiji, then speaker of the State of Assembly; Femi Hamzat, commissioner for works and infrastructure; Supo Shasore, commissioner for justice and attorneygeneral and Akinwunmi Ambode, a retired permanent secretary and accountant-general of Lagos. Tinubu and the Mandate Group, against the choices of the sitting governor, Fashola, had settled for Ambode, who won in the party primaries and went ahead to defeat his opponents from other political parties in the 2015 general elections, including Jimi Agbaje, of People Democratic

Party (PDP). Ahead of the 2019 general elections, Tinubu, the Mandate Group and political forces within APC, have settled for Babajide Sanwo-Olu, a former commissioner in the state, and until recently, managing director of Lagos State Development and Property Corporation (LSDPC) to take over from Ambode. Barring any last minute changes, the party primary election holds today across the 245 wards and 20 local government areas of Lagos. The primary meant to select the party’s candidate for the 2019 governorship election, has been shifted five times: From Tuesday, September 25, to Saturday, September 29, to Sunday September 30, to Monday, October 1, and today, October 2, 2018. For party members and the aspirants, it has been intriguing and challenging. For the governor’s support groups, which have held several rallies and pro-Ambode processions since the crisis began, “it is unfair to deny a sitting governor who have done quite well in his first term, the opportunity for a second term.”

•Continues online at www.businessdayonline.com

Banks could pile even more cash into government securities in the coming months as rising interest rates in the US after yet another hike in September and guidance for one more this year and two in 2019, could feed into Nigeria’s risk premium, pushing yields on government securities up, so that they are attractive for foreign portfolio inflows. “As a big bank in a relatively challenging environment, it is difficult to grow loan book,” said Tajudeen Ibrahim, head of research at investment bank, Chapel Hill Denham. “To get new credit worthy clients in the current economic situation is not straight forward unless they want to throw away money. It seems a good strategy to me,” Ibrahim added. “It makes sense that as yields rise, the big banks that have the advantage of size over the smaller ones will look at high yielding government securities once more.” Yields on government securities are hovering around 14 percent, after starting the year at around 12 percent.

Tuesday 02 October 2018

Banks made a killing from investing in treasury bills last year but were already starting to adjust to a lower yield environment informed by reduced government borrowing in the domestic market. Yields are, however, headed back north thanks to rising interest rates in the US. The Federal Reserve Bank of America raised interest rate for the 3rd time this year to a range of 2-2.25 percent last Wednesday. The rate hike is set to increase capital outflow from emerging markets and increase Nigeria’s risk premium as investors will demand higher yields for the Nigerian market to remain attractive enough to retain foreign capital. The Monetary Policy Committee last week held interest rates at 14 percent, where it has been for two years now, despite declining inflation and exchange rate stability. The Central bank governor, Godwin Emefiele, said rates were retained to keep naira assets attractive to foreign portfolio inflows amid rising US interest rates.

How Benedict Peters emerged Forbe’s Oil... Continued from page 1

“Peters’ ascendancy in Africa’s oil and gas sector has been exemplary as well as revolutionary. His company, Aiteo, has thrived for about two decades – going from a downstream start-up to becoming a leading integrated energy conglomerate with strategic investments in hydrocarbon (or commodities) exploration and production”, Paul Trustfull, the Editor, Emerging Markets for Forbes, was quoted as saying. Trustfull noted further: “Peters reinvented himself in times of

great personal challenge. He resurrected his identity and reputation while battling injustice. He proves that inspirational leadership in a difficult industry is possible.” Peters was on hand to receive the award which dedicated to Aiteo employees worldwide. “The acknowledgement by Forbes as ‘Oil and Gas Leader of 2018’ is inspiring. It means a lot to me and the entire Aiteo Group. I am delighted that the international community recognises our contribution towards Africa’s self-sufficiency in energy and our aspiration to become a reference point for indigenous capacity in oil and gas.” He promised that the Forbes award would motivate the company “to broaden our vision for the continent, despite all odds, and accelerate her economic transformation. We believe that Africa has what it takes to lead the world and we will continue to push the frontiers of development through our investments in people and technology. The success of our oil and gas upstream subsidiary proves that the future we envision in Africa rests to a large extent in the hands of Africans.” Peters ventured into the oil and gas sector as an entrepreneur in 1999 and initially traded mainly in the downstream sector. But in the short period Aiteo has emerged as the highestproducing indigenous oil exploration and production company in Nigeria. In 2015, Peters consolidated Aiteo’s asset portfolio with a $3 billion acquisition of sub-Saharan Africa’s largest onshore block (OML 29). “Subsequently, Aiteo optimised the asset’s yield from 17,000 barrels of oil per day (bopd) to almost 70,000 bopd within a year of the asset’s acquisition.” The largest indigenous energy provider currently peaks production at around 100,000 bopd, doubling its initial asset value to $6 billion within

three years. The company plans to invest another $4.3 billion acquiring additional offshore assets with a projected total output of 250,000 bopd in the short to medium term,” the company said in the statement. It further disclosed that beyond oil, the Aiteo Group had investments in mining, agriculture, infrastructure development, electricity generation and distribution, with a fast-growing retail distributionnetwork and focus onserving the needs of communities across the continent by leveraging a unique combination of a strategic asset base, technology, innovation, and some of the best technical and business minds across the industries it operates in. The group has been expanding rapidly to extend its operations to different countries across Africa and beyond with emerging international presence in the DRC, Ghana, Guinea, Liberia, Zambia, Zimbabwe as well as offices in Geneva and Paris, the statement further revealed. “Peters is passionate about youth empowerment and has donated generously to support football on the African continent. Through Aiteo, he sponsors the Nigerian Football Federation, CAF Awards, Aiteo Cup (the Federation’s foremost tournament in Nigeria) and a football team in his company’s host community. “He has also assisted thousands of internally displaced persons in northern Nigeria while supporting clean water sanitation initiatives in Africa, in partnership with Face Africa, improving the lives of over 25,000 people in rural Liberia. Peters addresses social and environmental issues in the agricultural sector through the Joseph Agro Foundation, set up in July 2014 to tackle chronic unemployment and water shortage,” it added. In recognition of his “groundbreaking contribution to development”, Peters was one of four recipients of the Marquee Award for Global Business Excellence at the Africa-US Leadership Awards in 2014.” In the same year, he received the ‘Leadership CEO of the Year’ award. In 2015, Peters was conferred with the ‘Dr. Martin Luther King Jr. Legacy Awards’ in the ‘Economic Empowerment’ category. He was listed among the ‘50 Most Influential Nigerians in 2017’ by BusinessDay. More recently, he has been recognised as the ‘Oil and Gas Man of the Year’ at the prestigious 2018 Guardian Awards.

•Continues online at www.businessdayonline.com

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

A2 BUSINESS DAY NEWS

C002D5556

Tuesday 02 October 2018

Obaseki salutes Nigerians as country celebrates 58th independence anniversary

L-R: Linus Okorie, founder/president of Guardian of The Nation International (GOTNI); Folusho Philliphs, executive chairman/ founder, Phillips Consulting Limited, and Ifie Sekibo, MD/CEO, Heritage Bank, at the Heritage Bank Premiere of The Next Titan Nigeria, Season 5 in Lagos

Why Lagos is the most visited city in SSA BUNMI BAILEY

he business opportunities and the various economic hubs in Lagos State, Nigeria’s commercial capital are why it was ranked the most visited city in sub-Saharan Africa (SSA) in 2017, according to analysts. According to the 2018 Mastercard’s Global Destination Cities Index report, Lagos is the top spot in the SSA with roughly 1.5 million international overnight visitors generating $29.7 billion. Ayodeji Ebo, MD, Afrinvest Securities Limited, said, “Lagos State remains the business and economic hub of Nigeria, hence the high number of international visitors. In addition,

the state is relatively safe relative to other states. As a result of this, it has contributed significantly to the success of hotel services in Lagos.” Ebo said further, “More improvement on the road network and introduction of a fast train to connect major cities will further boost the economic activities as Lagos State accounts for over 40 percent of the total internally generated revenue of the states in Nigeria.” The report which offers an important analysis of travel to and within major cities around the globe said that visitors tend to stay in Lagos for seven nights and spend only $57 per day, on average, considerably less than its SSA counterparts and visitors to Lagos, are most often from the USA,

United Kingdom and China. “The international overnight visitors are short visits made by business people. Lagos State serves as the major aviation hub in Nigeria and also there are people from neighbouring West African countries like Togo, Benin Republic, etc. that transit through Nigeria in some instances,” Johnson Chukwu, CEO, Cowry Asset Management Limited, said. “It serves as a transit route for other business visitors in the country. And again the oil and gas industry has literally moved their businesses and offices to Lagos, which are the recipient of most of the international visitors,” Chukwu further said. In 2016, Lagos had a total of 1.04 million overnight international visitors, which

generated $0.4 billion in revenue. According to Ayo Akinwunmi, head of research, FSDH Merchant Bank, the business opportunities taking place in Lagos attracts a lot of international visitors. The rest of the top visited cities in SSA after Lagos are Dakar in Senegal, Kampala in Uganda, Nairobi in Kenya and Accra in Ghana, which had 0.8 million, 0.5 million, 0.4 million and 0.4 million, respectively. The Mastercard Index of Global Destination Cities ranked 162 cities in terms of the number of their total international overnight visitor arrivals and the cross-border spending by these same visitors in the destination cities in 2017 and gives international overnight visitor growth forecasts for 2018.

overnor of Edo State, Godwin Obaseki, has congratulated Nigerians on the country’s 58th independence anniversary celebration. The governor, in a statement, reflected on the sacrifices and broadmindedness of Nigeria’s founding fathers, noting that the efforts of past heroes shall not be in vain as Nigeria remained on the path to greatness. According to Obaseki, “On behalf of the government of Edo State, I heartily salute all the people of our great country Nigeria, as we celebrate the 58th anniversary of the nation’s independence.” He noted, “As we mark this historic event, let us passionately reflect on the memory of our broad-minded and visionary founding fathers who laboured day and night to secure our freedom on October 1, 1960, thus creat-

ing for us a sovereign nation under God. “On this day, I join all patriots to once again affirm that the labour of our heroes past shall never be in vain.” Noting that Nigeria has remained together despite challenges, he said, “We have indeed travailed and triumphed over several challenges and have remained united, resolute and undaunted. “The hiccups in recent times are normal occurrences in a democratic, developing nation and would naturally be overcome because democracy has self-correcting mechanisms. “Like millions of Nigerians, I believe that Nigeria, indeed Edo State will continue to witness transformation in every sector, remain politically and economically strong and indivisible in line with the principles of our founding fathers.”

Edo photo expo to amplify call for return of stolen artefacts at EDOFEST

he Edo State government has concluded arrangement to organise a photo exhibition to amplify call for the return of stolen artefacts from the Benin Kingdom, as part of activities lined up for the 2018 edition of Edo Festival of Arts and Culture (EDOFEST). Commissioner for arts, culture, tourism and diaspora affairs, Osaze OsemwegieEro, disclosed this during an interview with journalists in Benin City, the state capital. “I am excited about the photo exhibition of our stolen artefacts. We have over a thousand pictures of the stolen artefacts that are kept in museums across the world.

“If you go to the Metropolitan Museum in New York, there is a space for Benin artefacts. Go to Liverpool in the United Kingdom, Berlin, France, Canada and other museums across the world, we have our artefacts that were looted from us in 1897,” the commissioner said. He explained, “The Ministry of Arts, Culture, Tourism and Diaspora Affairs has the pictures of the artefacts. We are planning to have a 2x6 metre size photos of the artefacts that will be shown to the world. The exhibition will take place in the palace of the Oba of Benin, His Royal Majesty, Oba Ewuare II, who is leading the campaign for the return of the stolen artefacts.”

New MAN president to partner FG on competitiveness World Habitat Day: Edo assures of sound

he new president of the Manufacturers Association of Nigeria (MAN), Ahmed Mansur, has pledged to boost the competitiveness of the domestic manufacturing sector through greater collaboration with the Federal Government. Speaking at the association’s 46th annual general meeting held in Lagos, he applauded Executive Order 003, which aims to increase the level of patronage of made-in-Nigeria goods by public procurement agencies. Mansur, also an executive director of Dangote Industries Limited, said the Order 003 showed that the present administration was serious in building local productive capacity, adding, “We will work with the Federal Government to ensure that the Nigerian manufacturing sector is competitive.”

He reiterated his commitment to strengthen the association’s level of collaboration and interaction with the Federal Government to ensure that the Executive Order 003 was fully implemented to boost local patronage of made-in-Nigeria products. He said MAN would continue to engage all the Ministries Departments and Agencies (MDAs) to showcase made-in-Nigeria goods, saying, “When this contact is made, we would encourage its members to compete both in terms of price and quality. I believe if we continue to work with the government in this manner, we would bridge the gap between us and the public sector requirements.” He, however, appealed to the Federal Government to provide the necessary basic infrastructure in a bid to bring down the cost of production for manufacturers

in the country, saying that the impact would be massive on the real sector of the economy. He said the association had kick-started the partnership by presenting a compendium of all members of the association to showcase to the federal government all the locally produced goods in the country. “They have to know who and where to contact to get quality made-in-Nigeria goods, so this is the first step we have carried. Our interactions with the Bureau of Public Procurement (BPP) are also steps in the right direction so that we understand the requirements and their expectations,” he said. Commending his predecessor, Mansur said, “Let us thank the outgoing council under the able leadership of Dr. Frank Jacobs for the meritorious service they offered during the past four years.

environmental governance with new policy

do State governor, Godwin Obaseki, has assured that the state’s new environmental policy will engender a regime of sound environmental governance that will deploy best practice in waste and water management. Obaseki, who gave the assurance on the occasion of the celebration of World Habitat Day, observed on October 1, each year, said efforts at repositioning the state’s environment to better serve Edo people and residents had begun yielding positive results. “The Edo State Ministry of Environment and Sustainability recently reviewed the activities of burrow pit and abattoir operators as well as those of sand miners across the state. “We have undertaken an aerial survey of the

state’s land assets and were shocked at the degree of abuse and exploitation of our forests and natural resources,” he said. The governor stressed: “We are resolute about restoring sanity to the sector to ensure we have an environment we all will be proud of, and which will outlive us.” He explained that the flash floods that have wreaked havoc in parts of the state are caused in part, by human activities and called on community and religious leaders as well as other stakeholders to support the state’s blueprint for the sector. “At the recent expert session convened to review the Edo State Environmental Policy, I charged experts drawn from the United Nations’ specialised organisation to fast-track work on

the policy that was tabled for validation. I am confident that when unveiled, the environmental challenges we currently face will be tackled head-on,” the governor said. The policy document, which was prepared in partnership with the United Nations Industrial Development Organisation (UNIDO), according to Obaseki, would address environmental issues such as flooding, deforestation, among others. World Habitat Day is a day set aside by the United Nations to reflect on the state of towns and cities, and on the basic right of all to adequate shelter. The United Nations explained, “The Day is also intended to remind the world that we all have the power and the responsibility to shape the future of our cities and towns.

Tuesday 02 October 2018

C002D5556

ADC says country has witnessed monumental rot in last three years INIOBONG IWOK

ational chairman of the African Democratic Congress (ADC), Ralph Nwosu, says the present administration of Muhammadu Buhari is the worst in recent history of Nigeria. Nwosu, who was speaking at the party’s secretariat in Lagos, during activities celebrating the 58 anniversary of the country, lamented that the country had witnessed monumental rot in all sectors since 2015. He berated the Buhari’s administration for failing to tackle the killings across the country, stressing, “the administration does not deserve a second term in office. “The current administration has failed and he should not be re-elected and does not deserve a second term in office. Right from his days as a military ruler, the president has always been a disruptional leader. “The country is more

... ready to absorb Ambode divided now than when he came to office; look at the killings, who have been reprimanded? There is sadness in the land as we mark this Independence Day.” Speaking earlier, the Lagos State chairman of the party, Tunde Daramola, disclosed that the party was ready to absorb Governor Akinwunmi Ambode as its governorship aspirants if he was denied the All Progressives Congress (APC) gubernatorial ticket. Daramola expressed happiness with the press conference Governor Ambode granted over the crisis in the APC on Sunday, saying a cabal had been ruling Lagos. According to Daramola, “We thank Governor Akinwunmi Ambode for what is happening in Lagos State APC. Revolution normally starts from within. We have a cabal that is ruling Lagos State in the APC. This cabal consists of just five peo-

ple, but I will not mention names. So, it is good that Governor Ambode is fighting them. “The cabal has stifled Ambode to the throat. Residents of Lagos State should support him. We will welcome Ambode to our party if he decides to cross over, but we will not give him an automatic ticket, he will have to compete with other aspirants for the governorship ticket.” On the 58th independence of Nigeria, he said it was shameful that the country had not moved forward over the years, adding that though the country had enough resources, it had problem of leadership. The chairman stated that Nigerians had been taken for a ride for too long, and that the people had failed to claim their rights, saying what the nation needed was restructuring, as its structure was defective and that the people must claim their

rights now. “People thought former President Goodluck Jonathan was a fool for introducing card reader into our electoral system. This is what has helped in our previous elections and it is helping till today. “However, we need restructuring and we should use our resources for development purposes. “We are celebrating 58 years of independence with nothing to show for it whereas countries such as Singapore and Indonesia that got independence at the same time with us are no longer regarded as developing, they are now called developed countries. “I was in Vietnam five years ago and I felt like crying with the level of development there. There is nothing to write home about in Nigeria. Agriculture and petroleum industries are zero. We now buy fuel at N145 per litre.

A3 NEWS

BUSINESS DAY

GSK, PSN commemorate to emphasise pharmacists as medicine experts

s the world marked World Pharmacists Day recently, GlaxoSmithKline (GSK) Pharmaceutical Nigeria plc partnered the Pharmaceutical Society of Nigeria (PSN) to honour Nigerian pharmacists. The commemorative event in Lagos saw pharmacists and health care practitioners gather to show appreciation for the role that Pharmacists play in improving healthcare in every part of the world and discuss topical issues in the Nigerian healthcare sector. According to Bhushan Akshikar, GSK managing director at the event, mentioned that GSK was honoured to be a part of the event as the company sees the partnership with PSN as a valuable platform to improve the discipline of pharmacy and celebrate dedicated pharmacists for their contribution to improving the nations’ healthcare sector. Pharmacists are playing their part in the actualisation of Goal 3 of the Sustainable Development Goals (SDGs), which is to improve good health and well-being for people, Bhushan said. In his words, “For us at GSK, we take great pride as being one of the largest employers of Pharmacists in Nigeria with over 160 pharmacists, this year’s World Pharmacists Day, we are going over and above to celebrate with Pharmacists across Nigeria. We have and will continue to support the huge roles Pharmacists play in the Nigerian healthcare sector.”

Speaking at the event, the President, Pharmaceutical Society of Nigeria, Ahmed Yakasai, appreciated GSK for its support adding that pharmacists need to be supported to develop the capability and competence needed to improve the practice of the profession in Nigeria. “For the Nigerian healthcare sector to move to the next level pharmacists must be recognised as medicines expert; they should be rewarded for their significant expertise, skills and training. We also need optimum medicine management and Pharmacists as medicine experts are crucial in the actualisation of this goal,” he said. Commenting on the impactful role that pharmacists play in the improvement of the nation’s healthcare, marketing director, GlaxoSmithKline, Kunle Oyelana, said, “We recognise that Pharmacists are medicines experts, they provide enormous value to the healthcare system and to the health and wellbeing of the populace. Oyelana, who made the disclosure during a seminar to mark the 2018 Annual World Pharmacists Day, assured that GSK will continue to support Pharmacists in Nigeria “At GSK, as part of our commitment to partnering with Pharmacists in Nigeria, we continue to engage in several initiatives like the World Pharmacists Day programme, the Young Pharmacists Programme, sponsorships of Pharmacy conferences and many other world class educational programme,” he said.

Nigeria @58: Ahmed preaches unity among Nigerians SIKIRAT SHEHU, Ilorin

K L-R: Ahmed Mansur, president of Manufacturers Association of Nigeria (MAN), executive director, government /strategic relations, Dangote Industries Limited; Samuel Yaw Osafo-Maafo, Ghanaian senior minister, representative of Ghanaian President; Frank Jacobs, former president of MAN; Aisha Abubakar, minister of state for industry, trade and investment, and Yemi Dipeolu, senior special adviser to the president on economy, representative of the Nigerian President, at MAN’s 46th Annual Lecture/ Presidential Luncheon, sponsored by Dangote Industries in Lagos.

Lagarde appoints Gita Gopinath as IMF chief economist ONYINYE NWACHUKWU, New York

nternational Monetary Fund (IMF) managing director, Christine Lagarde, has appointed Gita Gopinath as Economic Counsellor and Director of the IMF’s Research Department. Gopinath currently serves as the John Zwaanstra Professor of International Studies and Economics at Harvard University and will succeed Maurice Obstfeld, who announced in July that he would be retiring at the

end of 2018. “Gita is one of the world’s outstanding economists, with impeccable academic credentials, a proven track record of intellectual leadership, and extensive international experience.” Lagarde said of Gopinath who is a US citizen and an Overseas Citizen of India. “All this makes her exceptionally well-placed to lead our Research Department at this important juncture. I am delighted to name such a talented figure as our Chief Economist.”

Gopinath is co-editor of the American Economic Review and co-director of the International Finance and Macroeconomics Program at the National Bureau of Economic Research (NBER), the IMF said in a mailed statement. She is co-editor of the current Handbook of International Economics with Former IMF Economic Counsellor Kenneth Rogoff and has authored some 40-research articles on exchange rates, trade and investment, international

financial crises, monetary policy, debt, and emerging market crises. Gopinath was born and grew up in India. She received her Ph.D. in economics from Princeton University in 2001 after earning a B.A. from the University of Delhi and M.A. degrees from both the Delhi School of Economics and University of Washington. She joined the University of Chicago in 2001 as an Assistant Professor before moving to Harvard in 2005. She became a tenured Professor there in 2010.

wara State governor, Abdulfatah Ahmed, has called on Nigerians to continue to promote bidding factors that would sincerely sustain the hard fought and won freedom by the foremost nationalists whose labour must never be in vain. Ahmed, in a statement signed by his chief press secretary, Abdulwahab Oba, on the occasion of 58th independence anniversary celebration, congratulated all patriotic citizens of Nigeria for the journey into nationhood. According to the governor, “it is therefore incumbent on us all to jealously guard our freedom and do nothing that could truncate the hard earned democracy.” He reassured all patriotic citizens of the country that the administration would remain focused in the pursuit of its programme to bring back the lost glory of this great nation in the shortest possible time. Governor Ahmed promised all Nigerians that the

government would leave no stone unturned to bring smiles to the faces of the entire citizenry, saying that the government would explore those factors that bind the country together as an indivisible entity. The governor urged Nigerians to cultivate a sustainable habit of brotherhood, eschew ethnic chauvinism, religious bigotry, political discordance and sectional interest that had the tendency not only to tear the country apart but impede the pace of growth, development and progress. “We shall continually engage with vigour and dogged commitment, programmes of economic diversification through accelerated development of critical infrastructures, qualitative education, indigenous industrial development and agriculture,” Ahmed said. He pleaded for continued support, understanding and above all, prayers for the leadership and government of this great nation for enablement to bring to fruition the vision for a better and prosperous Nigeria.

A4 BUSINESS DAY NEWS

C002D5556

Tuesday 02 October 2018

Lagos APC primaries: Fouad Oki raises alarm over manipulation of membership register INIOBONG IWOK

... accuses party’s national leadership of double standard

head of Tuesday’s governorship primaries of the Lagos State chapter of the ruling All Progressives Congress (APC), factional chairman of the party in the state, Fouad Oki, has raised an alarm over alleged plans to manipulate the party’s membership register in favour of a particular aspirant. Oki, who disclosed this yesterday while addressing the press in Ikeja, doubted if the gubernatorial primaries would be free and fair, stress-

ing that the venues and other information about the primaries were keep in secrecy and only disclosed to certain group of party members. He faulted the membership cards and register that would be used for the primaries in the state, alleged that some members of the party would be disenfranchised in the process. Speaking further on the presidential primaries that took place in the state on Friday, he wondered where the party got a figure of 1.9 million members that was

Edo set for NNPC National Science Quiz Competition finals HARRISON EDEH, Abuja

ith less than one week to the grand finale of the 2018 Nigerian National Petroleum Corporation National Science Quiz Competition billed for October 8 and 9 at the corporate headquarters of the corporation in Abuja, participating states are taking measures to ensure successful outing by their representatives. Edo State, one of those presenting finalists in this year’s competition, has taken the event a notch higher with pledge by the state governor, Godwin Obaseki, to provide the needed fulcrum that will ensure the successful outing of Alikah Joseph Ehiagwina, the state representative in the 2018 competition. The governor, in a statement last week, said the impressive performance by Ehiagwina was a call on other Edo youth to apply themselves vigorously in socially approved and rewarding ventures to make their parents and the state proud. “We will continue to provide the needed support for Edo children such as Alikah to excel academically. His performance at the state level of the competition is encouraging and goes to show that, when given the opportunity, our children can compete favourably with their peers anywhere in the world,’’ he said. The governor noted that the exploit also shows that much could be achieved through sustained collaboration with all stakeholders in the education sector and government’s insistence on standards. He urged the student to make the best of the opportunity offered by the NNPC and return home with the coveted trophy.

announced to have voted in the primaries. According to Oki, “We don’t know which membership register would be used for the gubernatorial primaries tomorrow. “We raised the issue the other time that the recent State Congresses was illegal because they hold it in 57 LGAs instead of 20 LGAs, which our laws say and the national leadership refused to respond to our letter, we are still in court. “There was no way such a number of people

would have voted in that primary election, as they were busy with other levels of primaries. “Majority of our members were disenfranchised in the election. Even when our party leaders postponed the governorship election in the state there were elections in isolated places. “We will like to know those who conducted the presidential primaries in the state and the register they used for that purpose. “The membership card of the party was only distrib-

uted on Saturday and Sunday to select members of the party. I cannot keep quiet because I was part of those, who stayed back in Nigeria to fight the military tyranny then when some other people ran abroad for dear lives. “I demand to know those who conducted the presidential primaries. The membership cards were given to local government chairmen to distribute instead of party chairmen in the council areas. “The question now is was Lagos State given member-

ship cards by the national of the party since no state had been given cards in the last one month.” Oki, who was a former head of the Lagos State Safety Commission, added that his group was challenging the National Secretariat of the party to speak out if they had printed membership cards to Lagos State and if they ordered selective distribution of the cards. He alleged that some set of people were planning to truncate the nation’s democracy, adding that if there was party primaries all the members must participate.

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

FINANCIAL TIMES

World Business Newspaper

Finland’s fitness fiend ready for exhausting EU race Alexander Stubb sees himself as underdog in contest to run European Commission MEHREEN KHAN AND ALEX BARKER

lexander Stubb is a former prime minister, foreign minister, and finance minister of a eurozone country — but he still sees himself as an underdog as he plots a European political comeback. The former Finnish leader is expected to announce his bid to become Europe’s centre-right candidate for the job of European Commission president this week and casts himself as an unfancied hopeful. “I come from a small state. My team is very small. But I’ve done it before, and you never know, perhaps . . .,” Mr Stubb told the Financial Times. The 50-yearold fitness fiend, who competes against hundreds in Ironman triathlons, is joining a much smaller race — potentially just two candidates — for his European People’s party’s nomination to replace Jean-Claude Juncker. His main rival to be the EPP’s Spitzenkandidat, or lead candidate, for the European Parliamentary elections in May is Manfred Weber, a German MEP and the group’s parliamentary leader. Mr Stubb’s pitch to lead the commission will be about reviving the “liberal internationalist” values of openness and the rule of law that are under assault from ascendant Eurosceptic forces from France to Poland. “I want to stand on the European barricades and defend our way of life. I’m not saying that it’s perfect; it never will be. But I’m saying that it’s worth keeping,” said a defiant Mr Stubb, who is promising a “positive” five-week campaign. Mr Stubb’s chances of winning the EPP nomination improved last week after Michel Barnier, the EU’s Brexit chief negotiator, ruled himself out. But the Finn, who comes from a country of just 5.5m people and has been absent from frontline politics for two years, makes Mr Weber the favourite.

To win, Mr Stubb will have to command the majority support of his EPP family — the EU’s once-dominant political force, which includes German chancellor Angela Merkel, Austria’s Sebastian Kurz and Hungary’s Viktor Orban. It is Mr Orban, rather than Mr Weber, that the Finn sees as his political adversary. Hungary’s champion of “illiberal democracy” was given an unprecedented rebuke by the European Parliament for breaching the EU’s rule of law last month, after more than 100 of the EPP’s MEPs voted against him. Mr Stubb wants the EPP to discuss expelling Mr Orban at a party meeting later this month. “Either you’re with us, or you’re out. You simply have to abide by the rules,” he said. With the EPP drifting rightward in response to populist anti-migrant parties, Mr Stubb can seem a relic of an age when the EU’s conservative moderates went relatively unchallenged from Eurosceptic forces. Fluent in five languages, and a graduate of the College of Europe, the EU’s finishing school, the socially liberal and cosmopolitan Finn seems more in tune with Emmanuel Macron’s school of EU thinking. Mr Stubb said the French president, who wants to create a rival pan-EU centrist group, was an ally in European parliamentary elections that would pit pro-EU liberals against Eurosceptic nativists. “Just because he is not the EPP, does not mean that he is not one of us,” said Mr Stubb. “If it’s between Macron and [Italian deputy prime minister Matteo] Salvini, put me right in the Macron camp.” Unlike his main rival, Mr Stubb boasts direct experience in containing Eurosceptic forces. Finland’s rightwing True Finns were bought into a coalition government under his watch in 2015, and recently splintered. It is a strategy Mr Stubb calls “hugging them to death” — but one he would not replicate with Mr Orban or his populist allies.

Elon Musk’s wings are clipped but critics expect little change Corporate governance experts say SEC penalty is unlikely to alter Tesla CEO’s behaviour RICHARD WATERS AND PETER CAMPBELL

lon Musk has had his wings clipped — but this weekend’s regulatory action against Tesla is unlikely to change his wayward behaviour or make the company’s board any more effective in standing up to him, corporate governance and legal experts have warned. Following a settlement on Saturday with the Securities and Exchanges Commission, the Tesla chief executive must pay a fine of $20m and step down as chairman for the next three years. He must also submit any future market-moving tweets for

clearance. Yet he will stay on as chief executive and a director of the US electric carmaker, with a personal 22 per cent stake. He could also play an influential part in picking a temporary chairman to stand in for him, and will be safe in the knowledge that he will in effect remain chairman-in-waiting for the next three years. The attempts by the SEC to put restraints on the irrepressible Mr Musk, which also include a requirement for Tesla to hire two new directors, are likely to make little difference, according Continues on page A7

Former Finnish prime minister Alexander Stubb wants to revive the ‘liberal internationalist’ values of openness and the rule of law © EPA

Canada and US negotiators reach deal to revamp Nafta New trilateral pact to be called the United States Mexico Canada Agreement JAMES POLITI AND JUDE WEBBER

he currencies of Washington’s trading partners have rallied in the wake of Canada’s decision to sign up with the US and Mexico to a deal to revamp Nafta, an accord that ended months of uncertainty that had affected the economies of all three countries since Donald Trump took office. The Canadian dollar strengthened to its highest level in just over four months on the news of Ottawa’s deal with Washington, advancing 0.8 per cent to C$1.2800 against the US dollar on Monday morning, while the Mexican peso was up 1.1 per cent at 18.50 to the dollar. Officials from the US and Canada said the agreement had been reached late on Sunday, just hours before a deadline for the US and Mexico to send the text of the deal to Congress. The new trilateral pact is to be called the United States-Mexico-Canada Agreement, they said. “USMCA will give our workers, farmers, ranchers and businesses a

high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region,” Robert Lighthizer, US trade representative, and Chrystia Freeland, Canada’s foreign minister, said in a joint statement. “It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.” The US-Canada agreement follows weeks of tensions between Donald Trump, the US president, and the Canadian negotiating team, as they hashed out a compromise over measures relating to the dairy sector, dispute settlement mechanisms, car tariffs and cultural provisions. A full Nafta deal involving Canada and Mexico completes a series of efforts by the Trump administration to soothe trade relations with traditional US strategic allies, while ratcheting up commercial tensions with China. The US has imposed levies on $250bn of Chinese goods, or half of all imports from the country.

Last week, the US agreed to begin bilateral trade talks with Japan, and did the same with the EU in late July. Still, the Trump administration continues to study the possible imposition of tariffs on cars on national security grounds, and has threatened to pull the US out of the WTO unless it is reformed. Senior Trump administration officials said Sunday’s deal included “a host of provisions” that would “rebalance” trade with all three countries. Mr Trump had been a fierce critic of Nafta, the 1994 pact signed by former president Bill Clinton, on the 2016 election campaign and since becoming president. Senior administration officials said the US had secured greater access to Canada’s dairy market, which benefits from hefty protections under the “supply management” scheme, as one of their big wins in the deal. However, Canada was able to retain a dispute settlement system used by its lumber industry to challenge US countervailing and anti-dumping duties, in a win for Ottawa.

Danske Bank board ousts chief following €200bn scandal Thomas Borgen steps down with immediate effect while bank’s chief legal officer has also resigned RICHARD MILNE

anske Bank reversed course and ended Thomas Borgen’s reign as chief executive with immediate effect as Denmark’s largest lender seeks to overcome its €200bn money laundering scandal. Mr Borgen announced his resignation last month but said he would continue until a permanent successor was appointed. However, chairman Ole Andersen said the board had decided that the leader of the bank should be somebody who would remain at Danske. Danske said Mr Borgen would receive 12 months’ salary, which in 2017 was DKr11.5m ($1.79m). The bank’s remuneration policy states that severance payments should not include bonuses or pensions. Jesper Nielsen, head of Danish banking, has been named interim chief executive but the bank emphasised that he was not a candidate for the permanent position. Danske’s top legal officer also announced his resignation on

Monday. Flemming Pristed said he wanted to try “something new” after five years including the “very demanding” Estonian case. The moves came as an influential European shareholder adviser, Hermes EOS, urged Danske’s board to explore suing executives over the alleged money laundering, as German conglomerate Siemens did over its bribery scandal. “ The board needs to assess whether management has breached any of its duties and could be liable to the company, just as Siemens did. They need to test whether anyone should have done anything differently,” Hans Hirt, head of Hermes EOS, told the Financial Times. Danske’s own investigation revealed how €200bn of foreign money — much of it from Russia — flowed through its tiny Estonian branch over a nine-year period, with a large amount of that sum feared to be suspicious transactions. Mr Andersen said on Monday that the search for a permanent

chief executive was progressing. “We are of the opinion that, with the situation the bank is in, it is best that the chief executive is also part of the bank’s future. Thomas Borgen is, as is known, not that, as he has resigned.” Mr Borgen added that it was “natural that I stop now” as he had delegated his responsibilities. Investors have expressed dissatisfaction with Danske’s own report on the scandal, written by a law firm that previously advised the bank. The report said that neither Mr Borgen nor Mr Andersen had breached legal obligations in their employment contracts. Deminor, another large shareholder rights group, has called for a special investigator to be appointed at Danske’s next annual meeting and is in talks with investors about its views. Edouard Fremault, a partner, said he was checking what Danske had disclosed to shareholders against disclosures in the report for “potentially misleading information”.

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

NATIONAL NEWS

Elon Musk’s wings are clipped but critics expect...

ICE makes its move in $15tn US mortgage market

Continued from page A6

Exchange group bets on modernisation as it takes full control of home loan registry MERS

to boardroom experts. “He’s seen as a reckless and impulsive person. He will carry on being a reckless and impulsive person,” said John Coffee, a professor at Columbia University law school. “I’m really surprised the SEC didn’t do more,” added Charles Elson, a professor of corporate governance at the University of Delaware. “I would have thought they would take him off the board.” The scepticism reflects Mr Musk’s handling of his self-induced crisis since he tweeted, wrongly, that he was close to a $70bn buyout of Tesla in early August. He has showed “a lack of contrition and inability to admit a mistake”, said Mr Elson, suggesting he is unlikely to change his behaviour now. Last Thursday the Tesla boss inflicted further damage on his company’s shareholders, refusing to bow to a settlement with the SEC and wiping 14 per cent off the company’s share price the following day. Reversing course 48 hours later has done little to make up for that — or to repair the credibility of the company’s board, which issued a statement of wholehearted support for Mr Musk after his initial intransigence threatened to tip the company into crisis. “You still have a board that is woefully weak and passive,” Mr Coffee said. “Even during this crisis they were missing in action.” Mr Musk’s brother Kimbal sits on the board, as well as some of Tesla’s early backers, and James Murdoch, a close friend of Mr Musk. The directors have faced criticism before for failing to put adequate checks on their CEO, most vocally two years ago when Mr Musk engineered an acquisition of SolarCity, a company he was also involved in. “The board does what they’re told,” said one previous highranking executive. “It is unclear that the board or an independent chair can control Musk and that he will do more to stay out of trouble,” added Carl Tobias, law professor at the University of Richmond. “One possibility is that this action is a warning and if Musk/Tesla don’t improve, SEC will enforce the securities laws more strictly next time.” One shareholder said on Sunday that a “big hitter” was needed to rein in Mr Musk — semi-seriously suggesting Al Gore or someone with intellectual stature or history in the sustainable energy industry to add weight to the position. Under the terms of the deal, Mr Musk must stand down from the chairman’s position within 45 days, though this deadline can be extended at his request, potentially giving Tesla additional time should it wish to seek an external candidate. An additional filter on Mr Musk’s exuberance reaching the public sphere is the highly unusual requirement by the SEC that his social media postings are signed off by the company before being sent. The agency’s filing on Thursday depicted how chaos broke out inside the company in the hours that followed Mr Musk’s “funding secured” tweet. The head of investor relations sent a text to Mr Musk’s chief of staff asking if the tweet was “legit”.

GREGORY MEYER

T Where the male backlash finds its expression: Jair Bolsonaro of Brazil, Rodrigo Duterte of the Philippines and Matteo Salvini of Italy © AFP / EPA

Sex, violence and the rise of populism The Kavanaugh hearing in the US has shown that men fear a loss of power and status GIDEON RACHMAN

he most popular explanations for the rise of populism have focused on inequality and race. But the storm surrounding the nomination of Brett Kavanaugh to the US Supreme Court points to a third factor: male rage. Traditional gender roles are under challenge, leading many men to fear a loss of power and status. That fear is visible in the misogynistic tone of populist movements in the US, Brazil, the Philippines, Italy and elsewhere. The male backlash finds expression not just in relatively civilised debates about women in the workplace or gender roles at home. As the Kavanaugh hearings highlighted, it quickly moves on to the rawest and most emotive topic of all — sexual violence. Rodrigo Duterte, the president of the Philippines, and Jair Bolsonaro, the frontrunner in this month’s Brazilian presidential election, have incorporated gibes about rape into their political rhetoric. Matteo Salvini, the dominant figure in the Italian government, has used sexual slurs to demean female politicians. Mr Bolsonaro once claimed that Maria do Rosário, a Brazilian politician, was “not worth raping; she is very ugly”. More than 3m women have joined an online group to oppose his surging candidacy, with the

hashtag #nothim. With the first round of voting taking place on October 7, hundreds of thousands of women have just demonstrated against Mr Bolsonaro on the streets of Rio de Janeiro and São Paulo. Mr Duterte once joked about the gang rape and murder of an Australian missionary, suggesting that, because he was mayor of the town it took place in, he should have been allowed to go first. (US president Donald Trump has since said that he has a “great relationship” with the Filipino leader.) Mr Salvini, Italy’s deputy prime minister and a Trump admirer, has also taunted female politicians. In 2016, at a political rally, he pointed to a sex doll on the stage and claimed that it was a “double” of Laura Boldrini, who was then president of Italy’s Chamber of Deputies. In a recent interview with Politico, Ms Boldrini said that she has received numerous rape and death threats in recent years, adding that Italy’s populists had targeted her because “I was a woman and I was advocating for refugees, for human rights, for women’s rights”. As Ms Boldrini suggests, the use of demeaning misogynistic rhetoric looks like a direct response to the rise of powerful female politicians. It is suggestive that Mr Bolsonaro has come to prominence in the immediate aftermath of the presidency of Dilma Rousseff, the first woman to

lead Brazil. And Mr Trump, of course, was running against Hillary Clinton, who would have been the first female US president. By the debased standards of Messrs Duterte, Salvini and Bolsonaro, Mr Trump’s misogynistic language was relatively restrained. But it may have served a similar political purpose — sending a message to angry male voters that he was on their side. Mainstream commentators, including prominent Republicans, assumed that Mr Trump’s remark about grabbing women “by the pussy” would hurt him in the presidential race. But some men probably quietly relished his taboo-busting macho talk. In the event 53 per cent of American men (and 62 per cent of white men) voted for Mr Trump. Mr Trump’s period in office has coincided with the #MeToo movement against sexual harassment — which has ended the careers of some prominent men in Hollywood, the media, business and politics. But the rise of #MeToo may also have stoked the male reaction that feeds populism. Senator Lindsey Graham, one of Mr Kavanaugh’s most vociferous supporters, certainly embraced the language of victimhood when he said during the judge’s confirmation hearing: “I’m a single white man from South Carolina and I’m told I should shut up. But I will not shut up, if that’s OK.”

Wigwe reiterates commitment to improve banking …meets Satya Nadella, Microsoft ceo

erbert Wigwe, the group managing director of Access Bank has reiterated the Bank’s commitment to improving banking practices in Nigeria and Africa by leveraging massively on technology. Wigwe stated this during his strategic meeting with Satya Nadella, chief executive officer of Microsoft in Seattle, United states of America on Thursday September 27, 2018. Access Bank as one of the a leading financial institution in Nigeria has recently announced its five-year strategic plan focusing on enhancing Africa’s position in the global community and this highlevel meeting with Satya Nadella is definitely a step in the right direction to achieving this goal. “Africa is currently experiencing a massive growth in wider access to and adoption of technology,

especially in improving businesses processes and lifestyle as well as optimum use of resources,’’ said Herbert Wigwe. ‘‘However, we still realise that there are still untapped and immense opportunities, to provide essential and well-secured channels for transactions using technology to raise the standard of banking services in Africa, even while understanding the socio-economic dynamics of the countries.” Satya Nadella, ceo of Microsoft stated, “I want Microsoft to enable organisations like Access Bank to innovate digitally and grow their business exponentially.” He noted that only two entities are capable of being the Alibaba of Nigeria – A massive retail operation or a large financial institution. “We need partners like you who have deep ambition for exceptional customer service.”

“We will be delighted to form a deeper relationship with Access Bank to drive innovation, and by extension exceptional customer experience in the African financial services space.” Access Bank through this partnership with Microsoft has already begun its five-year mission to enhance the perception of Africa by drawing the attention of the global community to the indigenous products of Africans - their rich history, people, culture, art, and lifestyle - while providing channels where businesses can fully participate in commercial activities globally. The Bank has consistently positioned itself to lead the innovation conversation among financial institutions by leveraging on technology to provide fast, secure, and reliable banking experience for customers within Nigeria and the African continent.

he company that owns the New York Stock Exchange is putting itself at the centre of the $15tn US mortgage market in anticipation of an epochal switch to electronic documents from unwieldy stacks of paper. Intercontinental Exchange, which is known for transforming musty financial institutions into lucrative high-tech trading venues, is close to taking full control of Mortgage Electronic Registration Systems, which keeps track of almost 30m US home loans. It is doing so at a time when 99 per cent of mortgage documents are still on paper, but amid an industry push for digitisation that ICE’s founder Jeffrey Sprecher hopes will turn the utility-like MERS into a new profit engine for his company. Mr Sprecher first bought a controlling stake in 2016, and has only hinted at his ambition for the business since then. He has likened MERS to the Depository Trust & Clearing Corp, the securities clearing house owned by banks that long dealt in paper share certificates. Brendon Weiss, chief operating officer at MERS, told the Financial Times that ICE intends a “full acquisition” of the registry. The deal for the remaining stake it does not already own is expected within the next few weeks. “ICE’s experience in the past has been taking analogue markets and making them digital,” he said. Among those were the London’s former International Petroleum Exchange and the New York Board of Trade, whose noisy trading pits shut after ICE acquired them (see below). MERS was created in 1995 to track changes in loan ownership and servicing rights, making it easier for loans to change hands among its 5,000 members. For ICE, full ownership of MERS presents an opportunity to transform the member-owned utility by reducing costs and improving efficiencies. “It’s a very big total addressable market. It’s probably the second largest in the world,” said Christopher McEntee, ICE’s director of corporate development, who joined the company from the Federal Home Loan Bank of Atlanta. The arrival of ICE into the mortgage industry has sparked intrigue as to its plans. Founded in 2000 as an energy trading platform, it is now the world’s second-most valuable exchange group. Federal records show the company’s representatives have lobbied Congress on “Housing Market Structure Modernisation,” efforts ICE executives would not shed more light on. In mid-September, ICE migrated MERS’s almost 30m records to the same high-security data centre in Mahwah, New Jersey where NYSE matches deals between microsecond-speed stock traders, a company spokesman said. “If I had to guess, what is probably their long-term play is to create the New York Stock Exchange for mortgages,” said Tim Anderson, director of eStrategy at DocMagic, a software vendor connected to the MERS system.

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

A17

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

A10 BUSINESS DAY

Tuesday 02 October 2018

C002D5556

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Donald Trump’s global trade offensive gathers speed US president adds Canada to ‘successes’ from push to negotiate one-on-one with partners ALAN BEATTIE

midnight deal with Canada on Sunday served as further proof: Donald Trump’s campaign to remake the world’s trading system is gathering speed. He counted two successes last week in his push to negotiate new one-onone deals with big trade partners. South Korea agreed to revise its accord with Washington under the threat of punitive tariffs and Japan gave in to pressure to start bilateral talks on a new deal. Now Sunday’s agreement with Ottawa has given him what is symbolically his biggest triumph yet. After nearly a quarter of a century, the North American Free Trade Agreement will become the United States-Mexico-Canada Agreement (USMCA). Having already won concessions from Mexico, Mr Trump’s pressure on Canada to revise the pact paid off. The US has pushed the EU to the negotiating table with its threat to impose tariffs on European cars, and has slapped record duties of $250bn on Chinese imports to the US. So how far is Mr Trump reshaping the realities of world trade with his shift to aggressive bilateralism? And now that the US no longer wants its traditional role of anchoring the world trade system, how successful are other big countries’ efforts to replace it? Divide and conquer Having abandoned the 12-nation Trans-Pacific Partnership, the US’s flagship regional deal, Mr Trump has sought to pick off trading partners across the world one by one, demanding concessions as he imposes tariffs with threats of more to come.

South Korea’s decision to tweak its trade deal with the US to limit steel exports and import more cars made the country one of the first to buckle under the pressure. In return, Seoul was granted exemptions from US tariffs on steel and aluminium imports. Mr Trump’s tactics on Nafta involved forcing Mexico to break a promise to Canada that it would maintain a common front with Ottawa in the renegotiation, agreeing concessions in direct talks with the US. Those changes allowed Mr Trump to raise the pressure on Canada to also agree to alterations or be excluded from a US-Mexico deal. Even the EU, which frequently touts its multilateralist credentials, abandoned its pledge to require Mr Trump’s steel and aluminium tariffs to be lifted before it was prepared to negotiate directly with the US. Brussels and Washington are now working towards a deal on goods tariffs excluding agriculture and autos. Such an agreement would violate both World Trade Organization rules, which stipulate that bilateral deals should cover “substantially all the trade”, and the EU’s own pledge not to negotiate before steel and aluminium tariffs were lifted — all to prevent new restrictions on its precious car industry. Japan has tried to keep the multilateral spirit alive, leading the successful push to revive and complete the TPP without the US. But Tokyo now also finds itself pushed down the bilateral route. Of the big trading powers, only China, whose talks with Washington have started and collapsed several times, has declined to make concessions despite huge and expanding unilateral US tariffs.

UK housebuilders fall on proposed foreign buyers tax

Trade agreement with Canada has given US president Donald Trump what is symbolically his biggest triumph yet

Canadian dollar, Mexican peso jump on new Nafta deal Italian bonds volatile as country’s finance minister seeks to reassure investors EDWARD WHITE AND KATE BEIOLEY

he Canadian dollar and Mexican peso strengthened on Monday following Canada’s decision to sign up with the US and Mexico in a revamp of the Nafta trade deal. The loonie climbed to a fourmonth high, gaining 0.8 per cent to C$1.280 per US dollar, its strongest intraday level since late May. The move came as Canada’s cabinet met on Sunday night to approve a deal with the US to revamp the trade pact, joining an agreement reached by the US with Mexico in August and ending months of uncertainty over trade in North America. Justin Trudeau, Canada’s prime minister, gathered with key ministers, including Chrystia Freeland, the foreign minister, to approve the plans. The Mexican peso also climbed, advancing as much as 1.1 per cent to 18.50 pesos per dollar, its highest since August. The dollar index, measuring the greenback against a basket of peers, rose 0.1 per cent to 95.073. Ian Samson, markets research

analyst at Fidelity International, said: “Unsurprisingly, the Canadian dollar and Mexican peso are two of the best-performing currencies globally today, with the Mexican peso slightly the stronger.” The yield on US 10-year Treasuries rose 2.8 basis points in European early trading, to 3.089 per cent, while Canadian 10-year debt advanced 1.1bp to hit 2.21 per cent. Richard Champion, deputy chief investment officer at Canaccord Genuity Wealth Management, said the rally in the Canadian dollar reflected “the lack of material changes to the underlying terms, outside of some relatively minor areas, and relief that the impact of the renegotiation on economic growth is unlikely to be significant”. He added: “With prospects for growth in North America less troubled by regional trade issues, US 10year bond prices fell and yields rose slightly, although the trade skirmish with China is now the key focus on whether the Fed can continue its moves to monetary normalisation over the next year or two.” Overview European equities posted modest

gains with the Euro Stoxx 50 index rising 0.6 per cent, driven upwards by gains in materials and information technology stocks. Frankfurt’s Xetra Dax gained 0.7 per cent. The FTSE 100 crept up 0.2 per cent as the Conservative party conference kicked off in Birmingham. Asia equities were lower in quiet trading, with markets in Hong Kong and China offline for national holidays. The Topix in Tokyo was flat, giving up gains made earlier in the session when most market segments were in positive territory. Forex and fixed income Italian bonds continued their choppy start to the trading week, despite the country’s finance minister Giovanni Tria seeking to reassure investors that the government’s public spending plans were sustainable. Speaking on Sunday after European Commission vice-president Valdis Dombrovskis said the populist government’s fiscal plans broke commitments to the EU, Mr Tria sought to head off a confrontation between Brussels and Rome by insisting that the country will reduce public debt alongside plans to increase spending.

Amber Capital founder says any new approach must top €50 a share CAMILLA HODGSON

K housebuilders Berkeley, Barratt and Taylor Wimpey were among the top 10 fallers on the FTSE 100 on Monday morning, after prime minister Theresa May announced plans to impose a new tax on foreign buyers of properties in Britain. Berkeley, which operates predominantly in London — where concerns about foreign ownership and the impact on house prices of wealthy investors purchasing luxury properties prices are most dominant — was down 3 per cent in early trade, while Barratt and Taylor Wimpey fell 2 per cent. Housebuilder Persimmon was also down 1 per cent. Speaking at the Conservative Party conference on Sunday, Mrs May announced plans for buyers of UK property who do not pay tax in Britain to be subject to a new stamp duty surcharge of up to 3 per cent, with the proceeds going towards a scheme for tackling rough sleeping. The proposed tax would be levied on both individuals and companies. While London house prices have

been falling this year, they have risen at a rapid clip in recent years. The high number of luxury housing developments and of homes bought as investments that stand empty, particularly in the capital but also elsewhere in the country, have prompted calls for the government to tackle what is seen as a UK-wide housing crisis and build more affordable housing to accommodate the rising population. Mrs May said there was evidence that foreign buyers who do not pay UK taxes had helped push up prices and reduce the rate of home ownership in the UK. When she became prime minister in 2016, she made solving Britain’s housing crisis a priority. The rate of homelessness in the UK has also risen rapidly since 2010-11, which has been blamed on the lack of affordable housing and rising property costs combined with government cuts and austerity measures. Earlier in September Berkeley reported “prevailing economic uncertainty” as a result of the slowdown in the London housing market, and warned its full-year profits were likely to be considerably lower from 2018-19 as house prices came under pressure.

Tesco Bank fined £16.4m by FCA over cyber attack Weak defences left customers vulnerable to ‘largely avoidable’ attack in 2016 CAROLINE BINHAM

esco’s banking arm has received a £16.4m penalty over an online fraud two years ago, the first fine the UK’s financial regulator has issued because of a cyber incident. Tesco Bank’s weak cyber defences left its customers vulnerable to a “largely avoidable” attack in 2016 that netted attackers £2.26m, the Financial Conduct Authority said in a statement on Monday. It added the banking arm of the UK’s biggest supermarket did not properly respond until after the attack started to a specific warning around its online defences. Still, the FCA more than halved the draft penalty of £33.6m that Tesco Bank was initially facing because it agreed to settle, cooperated fully and had already compensated customers.

The eventual £16.4m fine is the first time the FCA has penalised a company for an online fraud and it comes as banks are increasingly under scrutiny for IT failures and cyber attacks. Last month, millions of customers were locked out of their online accounts after both Barclays and Royal Bank of Scotland’s NatWest suffered IT outages. “The fine the FCA imposed on Tesco Bank today reflects the fact that the FCA has no tolerance for banks that fail to protect customers from foreseeable risks. In this case, the attack was the subject of a very specific warning that Tesco Bank did not properly address until after the attack started,” said Mark Steward, the FCA’s enforcement director. “This was too little, too late. Customers should not have been exposed to the risk at all”. While Tesco Bank customers affected by the attack — described

by regulators at the time as “unprecedented” — were initially estimated to be as high as 50,000, the final tally stood at just 34*. The bank has insisted that no customer data were lost and none of its systems were breached in the “highly sophisticated attack”. Gerry Mallon, the bank’s chief executive, said in a statement: “We are very sorry for the impact that this fraud attack had on our customers. Our priority is always the safety and security of our customers’ accounts and we fully accept the FCA’s notice. We have significantly enhanced our security measures to ensure that our customers’ accounts have the highest levels of protection. I apologise to our customers for the inconvenience caused in 2016.” The FCA fined RBS £42m in 2014 but that was over an IT outage rather than a cyber attack specifically.

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

A11

ANALYSIS India: the creation of a mobile phone juggernaut Mukesh Ambani’s Reliance Jio is helping transform the country but some worry that regulatory decisions have favoured his company KIRAN STACEY AND SIMON MUNDY

ver the past two years, more than 200m Indian phone users have flocked to take advantage of arguably the greatest corporate gamble in the country’s history.

Sberbank: the bank trying to shape Russia’s future The Kremlin’s largest lender is diversifying under Putin ally Herman Gref, but the threat of more sanctions makes investors MAX SEDDON

n a bucolic village on the outskirts of Moscow sits a Palo Alto-style campus. Built with discoloured brownish Italian marble, the result of workers laying the stone too quickly as they rushed to finish before a planned visit by President Vladimir Putin, it is an unlikely place to hatch a plan to reform Russia. But that is the aim of Herman Gref, chief executive of the stateowned Sberbank, who is trying to use technology and western management techniques to drag the company, and with it Russia, into the modern world. Employees regularly visit the campus, which serves as the bank’s Corporate University, for study programmes designed by Insead as well as Sberbank’s own courses. They include virtual reality sessions that simulate being an elderly man with glaucoma struggling to pay a bill in one of Sberbank’s more than 16,000 branches. In his nearly 11 years running the Kremlin’s largest lender — with total assets of Rbs25.8tn ($390bn) — Mr Gref’s full-throttle focus on the future has transformed Sberbank. Once considered moribund and corrupt, even by Russian standards, Sberbank was thought to be beyond saving. A decade later, even Kremlin critics such as the opposition leader Alexei Navalny praise the bank’s efforts at reform. Despite having been under US and EU sanctions that limit access to international debt markets since 2014, the bank has posted four record-breaking quarters out of six in recent years. Its record Rbs749bn profit last year accounted for most of the revenue in an otherwise troubled state-owned banking sector. Its previous incarnation as the Soviet Union’s savings monopoly has given Sberbank natural advantages. It retains a near stranglehold on the retail market, holding 46 per cent of deposits and servicing 110m customers, and is majorityowned by the Russian central bank, which has no intention of privatising it. But Mr Gref ’s success, colleagues say, comes from leveraging Sberbank’s huge resources to show that sweeping liberal reforms are possible in Russia, where statedominated cronyism has taken root during Mr Putin’s 18-year reign. “It’s absolutely do-able if you have the resources, the people and the tech. And it happened randomly because this German guy Gref happened to come along,” says one former bank executive.

A Putin adviser since the 1990s, Mr Gref says Sberbank’s model offers Russia a way out of its dependence on oil and gas. “If structural reforms happen and economic growth is higher, then we could achieve even more significant results,” he says. “Imagine if economic growth was 4 per cent instead of 2. Our retail [business] would go up 22 per cent and our corporate bloc would grow 12-13 per cent.” But, say allies, the path he has taken Sberbank on has not been followed by Russia. “It’s a parallel universe,” the former executive says. “There’s no demand for it. We did a gazillion governance sessions at the monthly oligarch meetings and most people just wrote us off as quirky.” Now, the Kremlin backing that underwrote Sberbank’s success is threatening to turn into a millstone around its neck. The existing sanctions have effectively ended Mr Gref’s plans to expand in the west, while the US is considering new sanctions against Russia that would blacklist state banks. “Our US shareholders are our best lobbyists,” an executive says. “But geopolitics limit what we can do.” The child of an ethnic German family exiled to central Asia by Stalin, Mr Gref, 54, grew up in Soviet Kazakhstan and Siberia before moving to St Petersburg to study law in 1990. His supervisor Anatoly Sobchak, a leading figure in Russia’s democratic movement, became mayor a year later and brought him into the city government, where he worked alongside Mr Putin and other future top officials. Appointed economy minister by Mr Putin in 2000, Mr Gref became a leading advocate for liberal reforms. He successfully pushed for a 13 per cent flat tax rate — a landmark measure at a time when evasion was rife. The ministry began privatising several state companies and lobbied for Russia to join the World Trade Organization, which it eventually did in 2011. By Mr Putin’s second term, however, the impetus for the reform agenda had subsided. “After 2004 it was obvious that the wind was changing. Russia was hit by this golden rain: oil prices were going up, the budget and economy were growing exponentially,” says Andrei Sharonov, then a deputy to Mr Gref at the ministry, now dean of Skolkovo business school. “There was this euphoria where people thought there had been enough reforms and things started moving in the other direction.”

Current and former colleagues of Mr Gref portray his move to Sberbank as an attempt to show the Kremlin that reform is possible, and scaleable. “We have this slogan inside the bank: ‘when we change Sberbank, we change the country’,’” says Lev Khasis, Sberbank’s first deputy chief executive. Sberbank’s position is so dominant that its lending rates essentially dictate conditions to the whole market. But its situation when Mr Gref arrived was dire. “In April 2008 we didn’t have any [financial] numbers for the previous year,” says a Sberbank executive. “There were papers lying all around the office, the printer didn’t work, it smelt of old people, and there were posters of [2008 Eurovision Song Contest winner] Dima Bilan on the walls. They were losing market share to everyone, but they were happy to let it go.” Having visite d Sb erbank branches across Russia, Mr Gref was shocked by the long lines and surly service — a hangover from the Soviet era. Its vast operations ran on nearly 3,000 different IT systems, meaning it could often only serve clients in the branch where they opened their account. It was also haemorrhaging money. Made up of 18 separate banks across Russia, its regional managers essentially ran their own small fiefdoms and gave out loans with little or no central supervision. The bank could hardly have tracked them if it had wanted to — it had fewer than 50 risk managers at its headquarters. “Pre-Gref, the business model was: you give a loan to a friendly oligarch, that oligarch buys shares, the shares go up, and the oligarch gets the profits,” a former adviser to Mr Gref says. These cozy relationships were ended and belowmarket interest rates axed as the regional managers were brought to heel. Mr Gref’s personal relationship with Mr Putin allows him to turn down pet projects that benefit special interests rather than the bank, the former adviser says. “He can say ‘no’ to many deals that [other state banks] cannot.” To reassure investors that Sberbank’s corporate governance had improved, Mr Gref put Mr Navalny, then an activist shareholder campaigning against corruption in state companies, on a minorities’ rights board. “It’s one of the few places where everyone works for the state, but they don’t avoid me like the plague,” Mr Navalny told the Financial Times.

India’s prime minister, who has promised a level playing field for business.

Mukesh Ambani, India’s richest man, has spent $32bn building up his telecoms company Reliance Jio— the biggest private sector investment in India’s history — as he fights for dominance in the world’s second-biggest telecoms market by user numbers. Much of that money has been spent giving away free access to what Jio says is now the world’s largest mobile data network, with its clients consuming about three times the amount of data of an average European customer. The launch of Jio has helped to engineer a socio-economic revolution in India. For the first time, millions of

In the view of Rahul Khullar, former chairman of the Telecom Regulatory Authority of India, the recent judgments made by his former organisation have tipped over into discrimination in favour of Jio. “In my 40 years as a civil servant, I did not see a single instance where a regulator was accused of bias,” he says. “But now there is clear partisanship in favour of Jio.” The early days of the fast-growing Jio were shrouded in mystery. In June 2010, the government conducted an auction of part of the telecom spectrum. The bandwidth being sold was not particularly attractive to most of the incumbent companies, so they were surprised when a previously little-known company called Infotel Broadband Services emerged victorious, having bid Rs128bn — then worth

Indians are able to access the internet to register for benefit payments, download school textbooks or simply watch India beat Pakistan at cricket. The rapid growth in the telecoms network has encouraged some of the world’s biggest retail and technology companies to plough money into the country. Walmart this year announced the world’s largest ecommerce deal by buying 77 per cent of Indian online retailer Flipkart for $16bn. Google is beefing up its India team, while Netflix says it hopes to add 100m customers from the country. However Jio’s aggressive expansion has caused headaches for some of the world’s biggest telecoms groups, including the UK’s Vodafone, which has written off €6.3bn from its Indian business as a result of the subsequent price war. The consequences have been more severe for Mr Ambani’s younger brother Anil, who inherited the family telecoms business RCom during the 2005 break-up of their father’s conglomerate, but who is in the process of selling his mobile towers, spectrum and fibre-optic cables to his brother, having been one of the hardest hit by Jio’s entrance into the market. The deal is a powerful symbol of how Mukesh Ambani’s side of the Reliance empire has outshone his brother’s since their acrimonious split. Yet Jio’s stellar rise has also raised some concerns. In particular, it has been accompanied by persistent questions about how much it owes to the elder Mr Ambani’s business acumen or to favourable political and regulatory decisions. Many of those rulings since Jio’s inception in 2010 are beginning to draw criticism from rivals, a former regulator and even India’s supreme court. The controversy threatens to become awkward for Narendra Modi,

$2.7bn — 5,000 times the company’s own net worth. Hours after the auction closed, Infotel made another announcement — it was being bought by Reliance Industries, Mukesh Ambani’s part of the family business, which had agreed to invest Rs48bn for a 95 per cent stake. Looking back, executives at Jio’s rivals admit they were outsmarted. “We would have entered the bidding if we had known Mukesh was going to end up owning this bandwidth,” says one. By emerging from “behind this unknown company, he managed to get the spectrum at a far cheaper price”. Jio did not comment on this point. Even with this new chunk of spectrum, however, Mr Ambani still had a problem — the licence he had acquired did not allow him to launch voice services. In 2013, this problem was resolved when, at the request of the government, the regulator announced that all licences should now allow companies to transmit both data and voice calls. Mr Ambani agreed to pay Rs16.6bn as a “migration fee” to convert the licence, giving him a viable telecoms company. That deal attracted the attention of India’s state auditor, known as the comptroller and auditor-general. In a 104-page draft report, seen by the Financial Times, the CAG was scathing in its provisional findings about the process, adding that, based on the value of more recent spectrum sales, Jio had in effect underpaid for its eventual unified licence by nearly Rs230bn. The best course of action, it said, would be to cancel the licences and rerun the auction. A pared-back final report, in 2015, found Jio’s underpayment to be a much smaller Rs33.7bn, and made no mention of cancelling the auction. Asked why the final report was so different from the draft, Suman Saxena, the deputy CAG, told reporters: “A draft is a draft.”

A12

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

A13

A14

BUSINESS DAY

C002D5556

CEO INTERVIEW

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

A15

OLUSENI BABAFUNTO MOBOLURIN Chairman of Capital Bancorp Plc

Interview with Private Sector Leaders

The financial system needs an overhaul, says Mobolurin

financing needs of small and medium sized enterprises. We financed cars, generators, air conditioners over 24 to 36 months. For many years, banks shunned the business until after the banking capitalisation exercise of 2006. Our credit worthiness has stood us in good stead and has allowed us to be able to fund ourselves in all circumstances. We have been around for thirty years and we have never defaulted on any loan or Commercial Paper issued by us. Throughout the finance house crisis, we lost only One Million Naira to a finance house that we believed the owner would have taken utmost care in controlling his risk. All our transactions with most finance houses was on assetbacked financing basis. It insulated us from the recklessness of the era.

OLUSENI BABAFUNTO MOBOLURIN a highly revered investment expert called the Lion of the Nigeria’s Capital Market is the Chairman of Capital Bancorp Plc . He is a Fellow of the Chartered Institute of Stockbrokers (CIS). and the second President and Chairman of the Institute . A distinguished 1975 Accounting and Finance graduate of the State University of New York at Binghamton (now Binghamton University) and holder of Master of Business Administration degree of the School of Management Studies (now Schulich Business School), York University, Toronto, Canada. He has served in various capacities in the financial market and he is still on the board of many blue chip companies. In this engaging interview with Businessday, Mobolurin put into perspective his journey to the financial market, three decades of Capital Bancorp’s ethical business, his views on the capital market, the economy and the way forward.

ir, how did you start your academic journey? I entered University of Ife (now Obafemi Awolowo University) in September 1971. I was supposed to study English. But before the end of that session, I got a tuition waiver to study Management in the State University of New York. In those days, State University of New York had tuition waiver for students they considered deserving. My father was not so enthusiastic about my going abroad so I stayed to the end of the academic year. However, I decided that if I were to stay back, I would rather switch to a professional degree. My preferences were to change to Law in Ife or Mass Communication in University of Lagos then. In the end I took the option to go to State University of New York but instead of studying Management, I decided to major in Accounting and Finance. After that, I went to York University’s School of Management (now Schulish Business School) in Toronto, Canada, where I did an MBA. Nigerians who finished at that time - 1997 were rushing to come back home, because the economy was booming. There were employment opportunities. I came back to Nigeria and did my National Youth Service (NYSC). I found out I was not technically expected to serve about two months to the end of my service year. In Canada, I couldn’t get information on who was supposed to participate in the scheme. Apparently, you were supposed to serve if you got your degree after June 1975, as a foreign graduate. I narrowly escaped that. I graduated in May 1975. Nigerian University students close in June. Most schools in the United States of America, close by May. All the same, I went through the youth service in Jos first in the Accountant General’s Office which I found very boring but I was lucky to change my primary assignment to Plateau Investments Company Limited, a new investment company just set up by the State Government. It gave me a peep into the Nigerian Capital Market. At the end of the service year, I had an option of working in an accounting firm or any company that has financial planning as a function. One of the things that thrilled me when I was doing my MBA was financial modelling. Interestingly, one of the courses I took in the business school in Canada exposed me to financial modelling. We were shown how computer modelling could aid corporate planning in a company, such that you could change the variables at any point and check the effects on the balance sheets, income statement and the cash flow instantaneously. ESSO Canada came with a portable terminal connected to the University Main Frame Computer. That was quite intriguing for us in those days; there were no laptops, no VisiCalc, no Lotus 1-2-3 or Excel.

I understand you wanted to study Law at a time As an undergraduate student of Accounting and Finance one career that appeared fascinating was Investment Banking. I thought a Law degree would put me in better stead and that it would be better to come back to Nigeria to read Law. My brother who was also in the US doing a Ph.D advised I took an MBA and if I still wanted to study Law, then I could do so. I still think a combination of Accounting, Finance and Law is still the best background for Investment Banking. So how did you then get into Investment Banking? When I finished my Youth Corps service, though I already had some job offers - a Planning position in a multinational company, a position with Lagos State Internal Revenue Service and a position with a Federal agency and of course City Securities Limited. I had also gone through an interview and a written Financial Analysis test with an American managed merchant bank – I still interviewed with one of the international accounting firms. I was told that all the big

firms paid new entrants the same very depressingly low starting salary whether you had a first degree or an MBA. That ruled out working for any accounting firm. Hence, I didn’t even border to honour any interview invitation from other accounting firms. In any case, even before I finished Youth Service, I had responded to an advert by City Securities Limited. Incidentally, a cousin of mine had also given my CV to the founder, Otunba Subomi Balogun. I received a letter requesting me to stop by anytime I was in Lagos. On a visit to Lagos, I went to see my cousin who also had left a message that I should see him. He decided we should see Otunba Balogun notwithstanding my protestations that I was ill-clad for an interview. I was wearing a pair of jeans with about one dozen pockets and a T-shirt with flags of many countries all over it. He said it was only for a chat. We talked and a few weeks after, I got a letter offering me a position. It offered the best package. How was City Securities? I resumed in City Securities Limited within a week of returning to Lagos, I

think that was June 1 or 2 1978. It was in the middle of the 1977 indigenization exercise. All applications for companies that were to indigenize must be filed by June 30 1978 with the Nigerian Enterprises Promotion Board and the Securities and Exchange Commission (SEC) which then was known as the Capital Issues Commission (CIC). The race to meet the deadline was frenetic. On the Issuing House side of the business, there was the Chairman, a Manager and I. I was put through the job a couple of days and had to start preparing applications from literally the third day. I think a week or so after I joined, the Manager resigned and I had to carry on for a while with the Chairman’s guidance on my own until another Manager was employed. Given my facility with Accounting and Finance, it was not very taxing but the number of clients to be attended to was challenging. I had to extract information from the account of the companies, do the financial analysis, determine the number of shares to offer to Nigerians to fulfil the requirements of the law, determine if the compliance will be by offer for sale or offer for subscription, value

the shares and do a write-up on the company. For an MBA holder with first degree in accounting, all these were not very really difficult but were laborious in an era in which you only had memory typewriters and errors may need to be corrected by Typpex or whole pages re-typed to correct errors. The real task was to demonstrate insight into the business of the company, ensure that the indigenisation exercise served the long term capital restructuring of each company and enhance investor interest in the companies’ shares. I spent eleven months of intensive activities at City Securities. Frankly, I could not have gotten the kind of experience and exposure I had in City Securities in a bigger institution in three or four years. The level of responsibility and exposure that I had was incredible. Otunba Balogun had unbelievable confidence in me and he pushed and exposed me. He allowed me latitude to gain experience. Even if I had been in a bigger firm, I wouldn’t have had such experience in three years. In eleven months, I trained as a Stockbroker, concurrently managing Issuing House and Financial Advisory transactions and also managed the trustee functions of the company. I was at home with Balance Sheets as I was with the intricacies of Trust Deeds securing loans of multiple tenors and security (fixed and/or floating charges).

I was carrying work home from my second day at work because we had a large number of clients that needed to indigenize and there were only two analysts when I joined the company, the Manager and myself and the manager left six days after I had joined. Here was a new industry to me. But Otunba Balogun was incredible. He will give you support, point out things to you and also allow you to express yourself. He will not allow you to be bullied by anyone once a partner in an accounting firm thought he could push me around challenging my impudence in reporting them to their multinational client for not meeting the deadline for a public issue. Otunba of course rose to my defence pointing out that I was in charge of the transaction and that they had to respect my views. Otunba gave you authority and backed you up. One day, I ran into the wife of a friend to my brother who had come back to Nigeria, in a departmental store in Lagos and she told me they had relocated to Lagos and that the husband had taken a general manager position in Chase Merchant Bank. I linked up with him later and learnt that his mandate was to set up the Corporate Finance Department (which at the time meant Capital Market, Loan Syndications and Equipment Leasing). I offered to help him learn the lay of the terrain. We met a few evenings a week. But after a few meetings, he said all the people he had been talking to had not been able to give my kind of insight about the market. He asked me to join his team. I declined. I told him I was a big fish in a small reputable pond where I am valued and would rather not become a small fish in a big pond at Chase. But he kept assuring me that I would do well in Chase. He gave me an application form that anytime I changed my mind, I should let him know. I subsequently weighed the options and decided to join Chase Merchant Bank in 1979. Chase was interesting. The agglomeration of several smart Business School graduates and

front desk officers in Nigeria challenged the intellect of all. Everyone learnt from the other. I also learnt a lot from the institution, its methods, training resources and interaction with officers throughout its global network. What motivated you to set up Capital Bancorp? By 1982, Federal Government’s influence in the management of Chase became overt and it became increasingly obvious that one’s future would be determined more by politics rather than ability. I started investigating various service gaps that one could fill within the financial services industry. City Securities and Otunba Balogun had provided a model and served as an inspiration. By 1988, I had reached a management level where advancement was going to become more political. Having evaluated a few business configurations to fill gaps not served, I put my business ideas down on paper and built a financial model on my computer. I had over the years self-taught myself Lotus 1-2-3 and had learnt how to build complex financial models, allowing me to change any variable and have the Balance Sheet, Income Statement and Cash Flow updated instantaneously. I had mastered the ESSO modelling magic. Once I was comfortable with the financial model, I decided to look for investors. We needed a modest N2.4 million to start with. I talked to a few people. I was bent on building an institution that was owned by both individuals and financial institutions. I sent out preliminary letters to a few people. Even before the final Information Memorandum was completed, commitments had reached N2 million. Some people I spoke to, spoke to others and well ahead of our projections, we were subscribed. Some institutions did not even ask for the document. They

just asked for how much I wanted them to invest. It was a humbling experience of the trust reposed in me by those who invested. It is a burden of trust and a duty to the trusting investors that we carry every day. From hindsight, if I had wanted to raise money for a Merchant bank, I would have. But our vision was not to set up a Merchant bank. Actually, two years later, we tried to set up a commercial bank, because, I had seen Merchant banking from inside. I had also seen financial market and treasury business, because I had also run the treasury business in Continental for some periods. I know the challenges Merchant banks have. I remain an apostle of universal banking. I taught we already had all that in Capital Bancorp and therefore we need to have a commercial bank that has the deposit base to be able to underwrite products in the Capital Market space. There are thousands of Nigerians who can see the opportunities but they don’t have capital to start the business. You need to marry ideas with capital and then you can talk about loans. People have ideas but they don’t have the risk capital to start the business, giving them loan will not solve the problem. I think we need to get the basic principles right. The other part of it is that, people in government also need to understand that the economy will not grow unless people have confidence that this economy will be managed in a manner that will ensure stability in policy and macro-economic system. These are the critical issues we are missing. What are the initial challenges you faced at the early stage of the business? When we started in 1988, there were a few finance houses. Capital Bancorp started actually as a multi-disciplinary company. We incorporated Capital Bancorp and Bancorp Securities. We wanted Capital Bancorp to be the finance house and issuing house and Bancorp Securities to be the stockbroking firm. The Stock Exchange at that time said it would only admit one company into ordinary membership and dealing membership. So we had to put everything in Capital Bancorp and put Bancorp Securities in abeyance. From day one, we structured our business to be diversified enough to cover the whole spectrum of the financial services industry partly because I have had experience across the entire fi-

nancial services market system but more importantly allowing us to leverage on whichever segment of the market that the Nigerian ever turbulent economic terrain will from to time to time allow to thrive. We started out with stockbroking and money market being the bread and butter business. Our Money market activity focused on raising commercial paper for prime companies. We were squeezed out of that business with the entry of discount houses and the business eventually became discredited by the abuse of the product by some commercial banks and unscrupulous finance houses. Though back in the market, it is now largely a business dominated by banks. Knowing that this market does not pay for advisory services, we looked at Capital market transactions as opportunistic transactions. We therefore added equipment leasing to meet the

At the formative stage of Capital Bancorp Plc, did you encounter any challenge emanating from the regulatory environment? When we started finance house business, there was no regulation. We all tried to structure our business in a manner that would keep us free of regulation but at the same time abide by the law. This is on the finance house side. On the stockbroking side, of course, it has always been regulated before we even came in. We were very few when Capital Bancorp came into the market. I am not sure we were more than twelve in the market at the time. Of course, now we are over 200 on paper. The then Director General of the Stock Exchange was quite supportive when we were coming into the market. The regulatory environment was very clear and the Securities and Exchange Commission (SEC), though strict was fair-minded. They didn’t arrogate to themselves absolute knowledge as you could engage them in debate and we learnt from one another. The market

Continues on page A18

A16

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

C002D5556

BUSINESS DAY

A17

A18

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

CEO INTERVIEW

Interview with Private Sector Leaders

Financial system needs an overhaul, says Mobolurin who have peculiar requests.

Continued from page A15 grew on the basis of innovation and suggestions that came from everybody. I am not saying that such no longer happens today. Maybe I see less of that today. The Capital Market needs a major boost to enable it play its proper role in the economy. Capital Bancorp has clocked 30years and has achieved tremendous successes in providing financial services to the investing public. Where would you like to see Capital Bancorp in the next 30years? In a system like this, clocking 30 years is a great achievement. But, I can tell you that we are not where we think we should have been in 30 years. Just like Nigeria is not where she should be by now. Part of it is because of environment and our own failings. We all have our own failings. Perhaps, if we have started as a bank, it would have been different. We perhaps had limited vision. We should admit that perhaps, we didn’t take enough risk. But today, the environment also constrains us. The political environment and the economic environment have also circumscribed what we can be. We must however thank God for where we are. We know of some companies that dominated various segments of our markets over the years, they are non-existent today. We have seen banks come and go. That we are here today, we celebrate not in any arrogant manner but in humility as to our good fortune through God’s grace I hope that in the next 30 years, this economy would be run better and will be an economy that is more productive. I hope we would have reduced the cost of governance and will be committing more and more of our revenue on education and building infrastructure; remove price distortions on petroleum products and electricity that militate against investment’ I hope we will be able to commit to a development plan that cuts across party lines. Perhaps, we shall stop playing politics and take certain fundamental painful decisions to survive as a nation. The future of Capital Bancorp is intertwined with the future of Nigeria. What is your take on demutualization of The Nigerian Stock Exchange? From what I hear, there is a consensus amongst the members of The Exchange, both Ordinary and Dealing members on the way forward. I don’t know whether the President has signed the Bill on demutualization yet but it is has come to be. There are implications about what the post demutualization market would look like, for which I am not sure stockbroking firms have prepared their minds. While the market is now settled on demutualization, I don’t think government is paying enough attention to the stock market. One of the problems that we have today is that Nigerians are not investing. The foreign investors have become the most influential participants in the market. When they come in, the market goes up, when they go out,

the market crashes. We need to mobilize more domestic savings to stabilize the market because too many Nigerians had lost their savings and are still losing by investing in the stock market. Many of them have left the stock market. Even our pension funds have stopped investing in the stock market. There are implications for all these. Equity investment represents the longesttenor form of investment you could have, because it has no maturity date and what is more, the returns on equities is the residual returns from the company. It has no cap on returns as on debt instruments and for many other reasons, it acts as hedge against inflation. Unless we have an equities market that is thriving, long term savings will always be sub-optimal in returns. If everybody is investing in debt instruments, what will happen when interest rates fall? It is important that we have a strong stock market. The second thing is that if people perceive equity investment as risky and a nogo area the rate of capital formation in the country will decline. The only contribution to capital formation by a middle income person who will not be in business is his investment in the stock market. If the stock market is shunned by Nigerians, it means that Nigerians are not participating in the capital formation process. It is a sad development that ten years after the meltdown, many Nigerians are yet to go back to the stock market. Investors are apprehensive about the political climate in Nigeria due to utterances of politicians. How would you advise the political class in this regard? Everywhere in the world, politics and elections affect the stock market. I don’t think we should worry too much about it. However, people may worry about what can happen after the elections. It may turn some people totally away from Nigeria if they perceive it is an unstable country. If you scare people by giving them the impression that this is a country that is about to breakup, that is where I see a problem. Politicians need to watch their utterances in this regard. There will always be conflict and disagreement. The problem is that we don’t talk to each other, we talk at each other. We don’t listen to each other and we ignore the grievances of groups rather

than seek the comfort of each other in the union. It is not only the foreign investors that are affected, even Nigerian Investors do not want to keep money in this economy if they perceive that the country is going to blow up. Nigerians must demand from the government and the politicians, stability in the political system, economy, and currency. They must demand for low inflation because, that is where the prosperity of every citizen can be assured. If our system becomes more stable and we improve the environment for business and investment even Nigerians who have money abroad will start bringing them back here. What is the secret behind Capital Bancorp’s lofty achievement at 30? We started Capital Bancorp on strong ethical values. We don’t cheat our customers. We strive for professionalism which means we invest in our people, train them to be knowledgeable and ensure that they deal with customers in a manner that is fair and ethical. We do everything in our power to adhere to regulations and to play by the rules. Above all, we thank God that He has equipped us with enough wisdom to be able to chart Nigeria’s choppy waters. When you say that, you are celebrating 30 years, you are basically saying thank God we are alive and we are doing well. What is your message to the staff of Capital Bancorp Plc? My hope is that 30 years from now, those that are here will keep carrying on the good work. Professionalism, innovation and ethical behaviour must remain with us. We have been at the fore front of innovation in this market. In our own little way, when the government was coming back to the market, we were there; we acted as Financial Advisers. There are a few things in the market that we have spear headed. We pushed for the issue of private placement for quoted companies. We have also structured a few landmark transactions in Nigeria. For instance, we have used preference shares significantly in this market. We have done distribution of assets in specie to shareholders in this market. We have always found unique solutions that would meet unique needs of our clients. We shall continue to provide innovative solutions for customers

In the light of the current developments in politics, how would you advise potential investors who want to invest in the Capital Market? Today, valuation is down for most companies. This is always the best time to buy. However, don’t go into the market by throwing a dart on a list of companies that wherever the dart falls that is the company you will buy. Study the market. The market may be undervalued. Not every company is undervalued. There are still companies that are overvalued based on prospects into the future. If you have lost money on a company that has a future, buy more to reduce your average cost of holding. This is because, when it bounces back, you will still make more money and I believe that this market will bounce back. My hope is that we would get our politics right and we would get our economy right. We need to become a more productive economy and everybody will prosper. However, everybody must understand that the stock market is not a savings account, if you want savings that you can fall back on in an emergency; stock market is not for that. Go and buy a savings bond or a similar financial instrument. You can trade that at any time. Even government securities fluctuate in prices so you may lose money. Go and put some money into your savings account first. The stock market is for long term investment for a person who wants to make legacy investment. The market still represents the best way. But, you don’t invest in the stock market and go to sleep because fortunes of companies change. The winners in 1977 are not the winners today. You need continuous monitoring. If you are not a professional investment adviser, get one. You will be glad you did. Who are your mentors? They are many. On the Business side, Otunba Olasubomi Balogun, late Mr. Gamaliel Onosode, Chief Ebitimi Banigo, Chief Chris Ogunbanjo, Chief Olusegun Oshunkeye and several others. I have learnt a lot from many people to whom I am eternally grateful for their guidance and inspiration. What are your views on how to improve on the Nigerian economy and Capital Market in particular? The financial system needs an overhaul. We need to look at it holistically and decide on how it can best be structured to serve our economy. The system is not serving our development needs. Our system is not fit for purpose. The Germans after World War II evolved a system that served their rapid economic growth. We are imitating developed economies and we are doing it poorly. We are not saving enough, and we are not channelling the right kind of capital in the quantum needed to entrepreneurs to trigger the kind of growth that will transform the economy. Loading businesses with loans do not make for rational fi-

nancial structure rather we may just be over-leveraging companies and increasing the risk of business failure. AMCON portfolio, I am sure is full of companies with inadequate risk capital. There are other ways we can channel savings into medium sized and large enterprises. We need to get capital into the hands of those who have ideas. Like I always say, let us enable a thousand flowers to bloom. We cannot satisfy the consumption needs of two hundred million people on the basis of importation and expect to prosper. We must get this economy back to work. There are too many things we can produce that we are not. All those with ideas should not be hampered by only lack of risk capital. No bank will lend to a business with no risk capital. We were talking about where we can get savings. Let us reduce some of these redundant taxes and put them into venture capital or private equity funds which will drive enterprises and increase the tax base. It will strengthen the banking system because the more equity you have in companies, the lower the risk of that business failing and the higher the possibility that the business shall pay back the bank loan. In essence, we can set up enterprise funds that would de-risk the economy. Do you have any regret in your journey so far? Regret? I don’t want to talk about regret. I prefer to say that Nigeria has been kind to me, God has been extremely kind because, when I look back at where I started from, growing up in Lagos of the 1960’s we had dreams and hope of where we want to be. Have I fulfilled my dreams? Maybe not, but I thank God because it’s been a tremendous journey. Sometimes difficult, but always enriching. I don’t know whether I will be here in the next 30 years, but the point is that God has given us a country with tremendous opportunities. If we do not become one of the greatest nations on earth in the next 30 years, it is not because God has not endowed us. It would be because of our own failings. As for me, what I want to do until I leave this place is to always push for how we can make Nigeria better. That will be what my own retirement life would depend on. That is what my children and grandchildren will inherit. I am committed to making Nigeria prosperous because Capital Bancorp Plc will prosper in a prosperous Nigeria. How do you relax sir? I used to play table-tennis but I don’t play much of that today. I listen to music, I discuss and debate a lot on politics and the economy. I read and of course, for health reasons, I find time to exercise too. How would you like to be remembered in the financial industry? I would like to be remembered as somebody who was in the market, who was innovative, forthright, diligent in his work and fair-minded. One of the things I am known for is being forthright: I speak my mind and I tell you as it is.

Politics & Policy Tuesday 02 October 2018

C002D5556

BUSINESS DAY

A19

Adelabu, ex-CBN deputy governor, emerges APC guber candidate as PDP picks Makinde in Oyo AKINREMI FEYISIPO, Ibadan

ormer Deputy Governor of the Central Bank of Nigeria (CBN), Adebayo Adelabu, has emerged as the gubernatorial candidate of the All Progressives Congress (APC) ahead of the 2019 general election. Also, Oluwaseyi Makinde has been elected as the gubernatorial candidate of the People’s Democratic Party (PDP) in the state. The former CBN boss was pronounced winner in the early hours of Monday at Adamansingba Stadium by the Chairman of the electoral committee and a chieftain of the party from Lagos State, Demola Seriki. Adelabu secured 4,889 votes to defeat his rivals among whom were former governor of the state, Adebayo Alao-Akala who got 65 votes; former commissioner for Health, Abdulazeez Adeduntan who got 07 votes. Former governor of the state, Adebayo Alao-Akala had earlier announced his withdrawal from the race due to alleged imposition of a certain candidate by the state governor, Abiola Ajimobi. Another aspirant, Abdulazeez Adeduntan also announced his withdrawal from the race without giving a reason.

Adebayo Adelabu

The trio of Joseph Tegbe, Olusola Ayandele and Owolabi Babalola stepped down, saying they were doing so in the interest of the party and the governor of the state, Abiola Ajimobi. “We are stepping down for Adelabu in order to ensure unity and harmony in the ruling party in the state. This made the contest to be between Adelabu and Adeniyi Akintola (SAN), who said he was not ready to step down but later announced his withdrawal mid-

Oluwaseyi Makinde

way into the election at about 6.50 p.m. Sunday evening. According to the Chairman of the party, Akin Oke, who addressed journalists at about 7.30 p.m. on Sunday, “Yes, Akintola has withdrawn. But, as you can see, we have already started the process. We are already in the process and we have to complete it. If he had withdrawn before the exercise started, that is another thing. But, he did not withdraw before we started. “Secondly, you know Alao-

Benue guber: Ortom emerges PDP candidate

Agbakoba’s People Trust leads alliance of 31 parties to monitor guber primary in Lagos

hirty one political parties in Lagos State under the aegis of Alliance for New Democratic Lagos (ANDL) have cautioned Lagos Governor’s Advisory Council (GAC) against obstructing democratic process but to allow credible party primaries to determine the second term aspiration of Governor Akinwunmi Ambode instead of pressurising the Governor to step down his quest for re election in 2019 The spokesperson of the alliance of the 31 political parties, Segun Awe Obe made this disclosure on Monday in Lagos following the stakeholders’ consultative rally held in Ikeja, Lagos, on Thursday, where leaders and stalwarts of 31 political parties being coordinated by the

Olisa Agbakoba-led People’s Trust, decided to wade into the matter in the interest of democratic governance and the Lagos electorate The movement asserted that rather than compel the governor to step down for his opponent, Jide Sanwo-Olu as was allegedly done in the case of another aspirant, Obafemi Hamzat, members of the Lagos Governor’s Advisory Council, GAC as democrats should allow the primary elections of the party to determine the acceptance and popularity or otherwise of the second term bid of Governor Akinwunmi Ambode “We are of the strong view that the Lagos Governor Advisory Council as a supposed body of democrats cannot be seen shortchanging or

Akala said he will not participate, but he did not withdraw officially, we have not seen his letter. So, we have to go ahead with the process that we have already started before we announce the winner, because, we don’t want anyone to take us to court”. Meanwhile, Makinde who emerged at Obafemi Awolowo Stadium (formerly Liberty Stadium) Oke Ado, Ibadan, the state capital, scored 2,772 votes to defeat his rival in the race, Senator Hamzat Ayoade Adeseun who got 21 votes in the

result of the election announced Sunday night. Adeseun had earlier called for cancelation of the election due to alleged manipulation of delegates’ list. Likewise, members of the Socialist Party of Nigeria (SPN), Oyo State chapter have elected an Ibadan-based human rights activist, Abiodun Bamigboye as the gubernatorial candidate of the party for 2019 general election. Bamigboye’s emergence was sequel to his nomination by one of the chieftains of the party, Adebayo Babajide which was seconded by Sola Otolola, who both acknowledged that Bamigboye has satisfied the conditions laid down by the party’s constitution to contest the gubernatorial election in the state. The nomination was subsequently affirmed and ratified by members of the party from the 33 local government areas in the state at the party’s gubernatorial, National Assembly and State House of Assembly primary elections held in Ibadan, the state capital. The primary elections were moderated by a National Executive Committee (NEC) member and secretary of Osun State chapter of the party, Kola Ibrahim and the party’s candidate in the just concluded Osun State gubernatorial election, Alfred Adegoke.

BENJAMIN AGESAN, Makurdi

circumventing democracy as well as the popular rights, will and mandate of card carrying members of the Party but to allow Ambode and Sanwo-Olu to exercise their democratic rights to test their popularity before the supposed owners of the party, APC members in Lagos,” the group cautioned. Finally, the new Lagos alliance, in furtherance of its agenda to birth a new democratic Lagos also announced that it has accredited about five hundred and fifty independent monitors and observers to be deployed to cover the governorship primary elections of the APC in Lagos to ensure free, fair and credible primary elections in APC involving both Ambode and Sanwo-Olu on Tuesday.

he incumbent Governor of Benue state, Samuel Ortom has emerged as the 2019 governorship candidate of the People’s Democratic Party (PDP) in Benue State. Ortom defeated three other contestants: Survey John Tondo, Prof. Felix Atumen, and Paul Orhii at the keenly contested primary election. The Chairman, PDP Electoral Panel for the state, Zainab Amina announced that Samuel Ortom scored 2,210 votes to emerge winner, while Tondo got 475, Atumen 44 votes and Orhii polled 10 votes. She noted that the party had seven aspirants initially but three later declined their intentions in favour of Samuel Ortom.

Samuel Ortom

According to her, the election is free, fair, peaceful and was conducted in accordance with the party’s constitution. Amina urged PDP members to remain loyal to the party and also work hard to reclaim the state. He commended the delegates for their resilience and well-behaved conduct during the exercise.

Dickson congratulates PDP governorship candidates SAMUEL ESE, Yenagoa

overnor Henr y Seriake Dickson of Bayelsa State has congratulated all those who emerged as governorship flag bearers in states controlled by the People’s Democratic Party (PDP) during the primary elections. Dickson, in a statement by his Special Adviser on Media Relations,

Fidelis Soriwei on Monday, said that the governors deserved the party tickets due to their sustained efforts in developing their respective states in their first tenures. The governor also commended the governors for their resilience and loyalty as good party men who stood by the PDP even during difficult and trying moments in the nation’s democratic experience. He commended the peaceful out-

come of the gubernatorial primaries in which virtually all the governors of the party were returned as flag bearers for the 2019 general election. The governors are Ifeanyi Ugwuanyi (Enugu), Emmanuel Udom (Akwa Ibom), Okezie Ikpeazu (Abia), Nyesom Wike (Rivers), Ifeanyi Okowa (Delta), Ben Ayade (Cross River), David Umahi (Ebonyi) and Darius Ishaku (Taraba). In his words: “I commend the

peaceful outcome of the primaries in the various states, especially the emergence of the first term governors as the party’s candidates in the 2019 election without rancour in the respective states. “The peaceful and orderly conduct of primaries was clearly a reflection of the true wishes of the people of their respective states for continuity in their policies and developmental exploits. “These are loyal party men and

leaders with demonstrable commitment to the development of their respective states apart from standing firm on the side of the party even during very difficult and trying moments.” Dickson urged PDP members to go into the presidential primaries in the same spirit, without bitterness and rancour in order to produce a candidate for the party in a free, fair and credible process.

A20

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

Tuesday 02 Octoer 2018

C002D5556

BUSINESSINTELLIGENCE

BUSINESS DAY

A21

In association with

Lessons from the deportation of illegal migrants by the federal government of Nigeria OZOR CHINEDU

cting in accordance with the provisions of the Immigration Act 2015, the Federal Government on Wednesday, 12 September 2018 approved the deportation of 36 Indians and 2 nationals of the Democratic People’s Republic of Korea. The deportation order which was signed by the Federal Minister of Interior was issued pursuant to the powers vested on the Minister under Section 45 (2), (3) and (4) of the Immigration Act 2015. Whilst the Indian nationals were accused of having gained entry into the country using fake visas and counterfeit immigration stamps, the Korean nationals were alleged to have failed to regularize their stay upon the expiration of their contract with the Zamfara State government. Both infractions are punishable under Sections 56(3)(c) and 57(5) of the Immigration Act respectively. Section 56(3)(c) specifically provides that “a person who without lawful authority, alters

any document issued or made under or for the purpose of this Act or has in his possession any forged or altered passport or other travel document, or produces or reproduces any travel document without lawful authority, commits an offence”. On the other hand, Section 57 (5) states that “any expatriate who fails, neglects or refuses to apply for the regularization of his stay in Nigeria within the stipulated period of three months; renewal of his Business, Transit, Visitors Pass or Temporary Work Permit after expiration; or renewal of his residence permit 30 days after its expiration, commits an offence and is liable to imprisonment for a term of three years or a fine of five hundred thousand Naira or both’. Section 45 (2) of the Immigration Act confers the power to order the deportation of migrants from Nigeria on the Federal Minister of Interior. The Section specifically provides that the Minister, if satisfied that it is in the public interest, shall make a deportation order against the person as a prohibited immigrant, regardless that the person may not have been prosecuted for an offence under the Section or not notified that his entry into Nigeria is prohibited. The Minister’s

power under the Immigration Act is hinged on Public Policy, a principle that encompasses the common sense and common conscience of all citizens and extends to matters of public health, safety, and welfare. The deportation underscores the sanctity of the laws of the land and that non-compliance will not be treated lightly. Beyond deportation, is the issue of criminal liability for the offence of forgery. It has been argued that the deportees should have been duly prosecuted.. Examples abound on the trial of migrants for criminal offences in Europe and America and the enforcement of mandatory jail terms after which such persons are deported. It would therefore not have been out of place to have first tried the foreigners, have them serve their sentences before deporting them. Beyond the individuals, liability for violation extend to organizations who invite such expatriates or undertake immigration responsibility on their behalf. To this end, Sections 51(2) and (8) and 56(2) provide that any person who harbors any person whom he knows or has reasonable grounds for believing to have committed an offence or acted in contravention of this Act, commits

an offence and is liable on conviction to imprisonment to a term of imprisonment or fine or both. It therefore behooves on the Management of entities who invite expatriates to Nigeria to take steps to ensure that the process culminating in their entry into Nigeria aligns with the law and laid down regulations and that their continuing stay in Nigeria is legal. Indeed, more often than not, expatriates who enter Nigeria illegally or remain here when their legal stay has expired, hardly do so without assistance from a firm or individual. Familiarity with the provisions of the Immigration Act 2015 and the Regulations issued pursuant thereto is the first practical step towards safeguarding the corporate reputational risk associated with illegal entry and residence of expatriates in Nigeria. Furthermore, periodic checks of the immigration documents of the expatriates to ensure these comply with the above are useful. Needless to say that the Investigation, Inspection and Enforcement Directorate of the Nigerian Immigration Service is empowered under Act and Regulations to undertake periodic and unscheduled visits to companies to ensure compli-

ance with the provisions of the Act. The impact of the sudden deportation of a valuable expatriate to the business and the potential loss in both time and resources as well as the reputational damage to the organization could be devastating. The attendant sourcing of replacement could be cumbersome and a strain on resources. Immigration Regulations allow the Nigerian Immigration Service to place violators of the Immigration Act, Regulations and processes on a “Watch List” with strict conditions placed on future issuance of immigration facilities to them. Such expatriates may be ineligible for entry visas for upwards of 10 years. Even when the period has elapsed, experience has shown that the issuance of immigration facilities to known violators of the immigration process is comparable to the proverbial camel passing through the eye of a needle. Ozor Chinedu DCSL Corporate Services Limited. +2348055402929, +2348055371550 cozor@dcsl.com.ng www.dcsl.com.ng ; twitter handle @dcslnigeria

A22

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

INSIGHT

Nigeria’s self-styled Macron wants to win power by ending corruption IAN KING

irst there were the Brics. After coining that acronym in 2001, Jim O’Neill, then chief economist at Goldman Sachs, came up with the “Next Eleven” two years later, identifying 11 economies capable of joining the Brics as the world’s fastest-growing. Fidelity Investments developed this further when, in 2011, it identified the Mint economies, which it said could prove as rewarding for investors over the next decade as the Brics had been in the previous decade. The Mints — Mexico, Indonesia, Nigeria and Turkey — have not kept that promise. Indonesia probably has been the most reliable, its economy growing at just under 5 per cent or more in every year since 2011. Turkey and Mexico have delivered variable growth. The worst of the four and the biggest disappointment by far has been Nigeria, which slid into recession in 2016, going on to achieve GDP growth of only 0.8 per cent last year. Yet Nigeria boasts vast resources and huge potential. It is the world’s seventh most populous nation and by the middle of the century the United Nations expects it to be the third largest, with its population doubling from the present 200 million. Moreover, that population is urbanising rapidly, with Lagos projected to become the world’s biggest city by population by 2100. As well as one of the world’s youngest and fastest-growing populations, Nigeria enjoys vast natural resources, most obviously oil and gas. It owns 2.2 per cent of proven global oil reserves, according to the BP Statistical Review of World Energy, while accounting for 1.3 per cent of global natural gas production. It also boasts generous gold, lead, zinc, coal and uranium reserves.

A key policy area for Kingsley Moghalu will be equality for women.

Why, then, does Nigeria’s economy underperform so dramatically? The most obvious answer is corruption. Nigeria is ranked 148th out of 180 in the latest corruption perceptions index published by Transparency International. Corruption and poverty go hand-in-hand, poverty is still rising and so is the jobless rate, because GDP growth is not keeping pace with population growth. All this will be keenly debated in Nigeria’s presidential election, due in February next year, in which the incumbent, Muhammadu Buhari, will be standing. So, too, will be Atiku Abubakar, candidate of the People’s Democratic Party, the party of former presidents Goodluck Jonathan and Olusegun Obasanjo, under whom Mr Abubakar served as vice president. The most intriguing candidate is Kingsley Moghalu,

a former deputy governor of the Central Bank of Nigeria and candidate of the Young Progressive Party. A lawyer who worked for the United Nations for 17 years and who was educated in Nigeria, the United States and Britain (he

Nigeria is ranked 148th out of 180 in the latest corruption perceptions index published by Transparency International. Corruption and poverty go hand-in-hand, poverty is still rising and so is the jobless rate, because GDP growth is not keeping pace with population growth

has a PhD in international relations from the London School of Economics), Mr Moghalu presents himself as a thoroughly modern presidential candidate in the mould of Emmanuel Macron. Last week, while on a visit to the UK, he said: “One of the major things I am going to do is move away from dependence on oil and move the economy towards innovation. We will have to look very seriously at the philosophical foundations that drive successful capitalist economies, make sure that there’s property rights, make sure that there’s innovation, make sure that there is capital. I shall be introducing a major venture capital fund that is going to fund small businesses and stimulate the economy.” Mr Moghalu’s policy prescription also includes more infrastructure investment. He accepts that while Nigeria has benefited from the process of “leapfrogging”, where a lack of landlines has encouraged rapid take-up of mobile technology and a lack of established electricity grids has enabled the rapid adoption of off-grid solar power, that can go only so far: “Nigeria, in particular, has a very high level of mobile phone technology and that’s a good thing, but I don’t think you can apply leapfrogging to every aspect of development. I still think Nigeria needs an industrial base. You can’t go into a post-industrial society, as some people recommend, without having been an industrial society.” The would-be president also has controversial views on Chinese investment in Africa. He says that many African nations have not benefited as they should have done, arguing that a lot of the continent’s leaders have lacked the “intellectual soundness” to drive a harder bargain with the Chinese. He argues it has exacerbated

debt traps around Africa and increased dependency on foreign loans. Two thirds of taxes raised in Nigeria go on servicing its debts. Another key policy of Mr Moghalu is greater equality for women. He argues that Nigeria’s education and legal systems prevent too many women from reaching their potential and is promising a 50-50 gender balance in his ministerial appointments. But is Nigeria ready for a technocratic president? Mr Moghalu, who points to his work nation-building in Rwanda, Angola and the former Yugoslavia during his time at the UN, insists that it is. Pointing out that the country has become poorer since it became a democracy in 1999, he argued: “The people of Nigeria are tired of the old, recycled and corrupt political class, which President Buhari’s government represents.” Many will wish him luck. If this is to be the African century, the continent’s biggest country must fulfil its economic potential. If it does not and poverty continues to grow, the chances are that an increasing proportion of Nigeria’s growing population will head elsewhere, adding to the global migration crisis.

Ian King is business presenter for Sky News. Ian King Live is broadcast at 6.30pm from Monday to Thursday.

Tuesday 02 October 2018

C002D5556

BUSINESS

DAY

A23

INSIGHT

Extinct Skye Bank: Bridge Bank as NDIC’s resolution option of choice Bashir Ibrahim Hassan

he bold assurance by Nigeria Deposit Insurance Corporation (NDIC)’s boss, Ibrahim that the extinct Skye Bank board members who were alleged to have been responsible for the bank’s downfall are under investigation and whoever is found wanton will be appropriately prosecuted by the appropriate agencies, came as a relief to key observers of the Nigeria’s financial market trends, as reported by the media. The assurance came in the wake of revocation of the extinct Skye bank license by Central Bank of Nigeria (CBN) on September 21 and the subsequent transfer of its assets and liabilities to a newly licensed bridge bank called Polaris Bank. The collapse of the defunct Skye Bank has generated debates among Nigerians and their friends over the incessant collapse of Nigerian banks almost every half a decade. There are divergent views trying to interpret the continual collapse of the banks. Some believe it is purely factor of corruption that bedevils all sectors of life in the country others believe it is lack of governance structure that can ensure only genuine and qualified customers are advanced loan facilities and crass insider lending. Both views believe there are regular external examinations by regulatory bodies like the CBN and NDIC but more needs to be done especially with regards to timely application of sanctions for detected infractions. None of the holders of the two views deny the need for the reforms of our criminal justice system which should address quicker dispensation of justice. Regulatory bodies like the NDIC face enormous challenges in the discharge of its dual roles of guaranteeing deposits and being liquidator of failed banks, and has no made secret of these challenges, which include the following among others: (a) Cumbersome, slow and bureaucratic judicial process resulting in long-drawn out litigation on winding-up actions and debt recovery matters. There is also the issue of court actions by erstwhile shareholders; (b) L ow level of public awareness of the Deposit Insurance System and clear understanding of its benefits and limitations; (c) Uncooperative attitude to the bank closing team and poor record keeping (financials, mandate records, broken down IT systems etc) by closed banks; and

Umaru Ibrahim

(d) Problems of Asset realization (loans and physical assets) due to large size of insider loans, poor loan documentation, poor quality, lack of secondary market and court sympathy for debtors and weak title for landed properties. One can appreciate these challenges even more if he/she realizes that the NDIC had so far closed 52 deposit money banks (DMBs), out of which 49 are currently in liquidation while the remaining are involved in litigations challenging the revocation of their license by the CBN. It was reported that the heavy borrowings by former Chairman of the defunct Skye Bank Tunde Ayeni and one of its directors Mr. Festus Fadeyi are largely linked to the insolvency of the extinct Skye Bank, which led to its being taken over by the CBN two years ago. Records from the last financial results showed that Ayeni, and Fadeyi, had borrowed heavily from the bank. Ayeni and his partners were alleged to have taken loans to fund their acquisitions of the Ibadan and Yola Electricity Distribution Companies; NITEL/M-Tel; and an energy services firm, Ascot Offshore Nigeria Limited. Also, Fadeyi, through Pan Ocean, took loans to fund the firm’s oil and gas upstream projects which were considered as one of the major non-performing loans amongst others. Both Tunde Ayeni and Festus Fadeyi are now under investigation following the revocation of the license. But what is the fate of the depositors and staff of the extinct

bank? It is gladding to the heart to note that, courtesy of NDIC’s intervention and its depositor-friendly resolution mechanism no one was going to lose their deposits. In fact, the NDIC has injected close to 800 billion to shore up the bank using the bridge banking resolution mechanism, which appointed a whole different bank—in this case Polaris Bank Limited—to run without further disruption to the system. This is in line with the delineated roles of the NDIC. The NDIC shares the responsibility of failure resolution with the Central Bank of Nigeria (CBN). And to delineate the roles of individual institutions in that regard, the two institutions jointly developed a Contingency Planning Framework for Banking Systemic Crisis, with thresholds for intervention indicating when and how each institution is to intervene. To avoid conflict of role in provision of liquidity support, the two institutions also jointly developed a framework for liquidity support. This framework clearly demarcates when the NDIC liquidity support is needed as against the lender-of-last-resort role of the CBN. When a banking license is revoked by the CBN, the NDIC serves as Liquidator. The bridge banking option places priority on the interests of the banking public, especially the primary depositors preventing outright liquidation, which would have had systemic consequences on the financial system and undermined or eroded public confidence in the banking system. This is not the first time NDIC is experiment-

ing with this option. The success recorded with bridge bank model has made it NIDC’s resolution mechanism of choice. We could recall how in 2011 the corporation took over the assets of the critically distressed banks and assumed liabilities in the three bridge banks, namely: Mainstreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited, to replace the erstwhile Afribank Plc, Bank PHB Plc and Spring Bank Plc, respectively. The CBN subsequently revoked the operating licenses of the three banks, i.e. Afribank Plc, Bank PHB Plc and Spring Bank Plc, on August 5, 2011. Through adoption of the bridge bank option operations in all the 577 branches of the three failing banks was preserved and sustained. Similarly, in the process 6,667 jobs in the affected banks were safeguarded. More significantly, too, depositors had unfettered access to a total deposit of ₦809.4 billion (U$5.58 billion) as against ₦130.57 billion (U$842.39 million) insured deposits guaranteed by NDIC. The three bridge banks (Keystone Bank, Mainstreet Bank and Enterprise Bank) were acquired through share subscription by Assets Management Corporation of Nigeria (AMCON). In the past, the option to resolve the situation of distressed banks would have been Imposition of Holding Actions (HAs). These were corrective or selfrestructuring measures. They may also have involved recapitalization, restriction on new lending, debt recovery, restriction on new capital project, and rationalization of branches and staff, among others. These measures when closely studied seem to run contrary to the major policy objectives of putting in place a deposit insurance system (DIS) in place. That major objective is to provide an orderly mechanism for failure resolution. Timely and effective handling of failing and failed insured institutions including the adoption of exit strategies, enhancing confidence in the banking system, help contain costs, and avoid adverse effects on other safety-net participants, the government, the public, the banking industry, and the economy. It is the bridge bank resolution option that approximates this all-important policy objective. Bridge bank measure is an innovative bailout option NDIC has adopted in Nigeria because of its depositor-friendly nature. But debt crisis involving banking and financial system is not peculiar to Nigeria. It is a global phenomenon especially since the financial meltdown that started in the US in 2008. Euro zone debt crisis of the

2009 and beyond is typical of the crisis the extinct Skye bank faced albeit on smaller case. Although the euro zone crisis resulted mainly from the structural problem of the euro zone as a currency union (i.e., one currency) without fiscal union (e.g., different tax and public pension rules) but like the case of Ex-Skye Bank and other defunct Nigerian banks easy credit conditions during the 2002–2008 period that encouraged high-risk lending and borrowing practices, and other sharp practices by their banks management helped plunged many European nations into debt crisis. As a result several euro zone member states (e.g. Greece, Portugal, Ireland, Spain and Cyprus) were unable to repay or refinance their government debt or to bail out over-indebted banks under their national supervision without the assistance of third parties like other, the European Central Bank (ECB), or the International Monetary Fund (IMF). For the bridge bank option to work the intermediation of bodies like AMCON with mandate to mop up the non-performing loans NPLs from the banks and stabilizes the economy is necessary. AMCON’s objectives include assisting eligible financial institutions to efficiently dispose of eligible bank assets; efficiently manage and dispose of eligible bank assets acquired by it; and obtain the best achievable financial returns on eligible bank assets or other assets acquired by it. The bottom-line is the money injected in buying up NPLs of distressed banks are tax payers money and need to be managed diligently and recovered completely without any fear or favour. This will lead the new bank to stabilize and return to profitability and then sold to a preferred bidder upon fulfilling all the legal requirements as dictated by the AMCON Act. This is expected to happen under the Ahmed Kuru led AMCON. Whatever view one takes as being responsible for the collapse of the banks one thing is clear; our banking executive don’t seem to learn from history. If NDIC has so far closed 52 DMBs there must be a pattern to study and avoid pitfalls that lead to the collapse of these banks against active ones. The news that some people are being held responsible for the collapse of the extinct Skye bank is quite in order. It will serve as a deterrence to others. Bank executives should henceforth be held fully responsible for the collapse of the banks they lead. And NDIC should continue to perfect its bank resolution option of choice—the bridge bank. Hassan is a financial analyst and contributed this piece from ABUJA

A24

BUSINESS DAY

C002D5556

Tuesday 02 October 2018

BUSINESS DAY

C002D5556

news you can trust I TUESDAY 02 OCTOBER 2018

INSIGHT/INNOVATION The long and short of PMB’s presidency

Ogho Okiti Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

ne of the most enduring images of the period leading to the 2015 general elections was the public demonstration led by President Muhammadu Buhari. In that demonstration, he led the current governor of Kaduna State, Mallam Nasir El Rufai, the former chairman of the party, John Odigie Oyegun and many other leaders of the All Progressive Congress (APC). I think the demonstration was in response to the postponement of the elections for about six weeks. But the reason is not as important today as the implications of that march. The march resembles that of the civil rights of the 1950s and 1960s in the US, those against apartheid just over two decades ago, and or the one led by Indira Ghandi against British colonial laws in 1930. The march connotes that of freedom fighters desperate to deliver Nigerians from the shackles of poverty, ignorance, and tyranny. Many

PROPHYLAXIS

Ayuli Jemide Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker, author and adjunct faculty, Lagos Business School. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

few days ago, I heard an astonishing story from a Swedish citizen who was in Lagos on a business trip. She told me she visited Nigeria about 2 years ago with a Swedish business delegation led by a Swedish Minister. During the trip the delegation had a 9am appointment with a Nigerian Federal Minister and the Minister did not turn up in his office until 11am. The Minister opened the meeting by saying to the delegation (please hold your breath). I quote: ‘’I was so tired this morning that I told myself that even if my father came to my house to drag me out, I will not leave my house before 10am this morning’’. My Swedish friend expressed utter shock and went on to say that it was obvious during the meeting that this Minister lacked the requisite intellectual capacity to discuss the subject matter at hand. His garbs were clearly much bigger than his girth. The last thing she said to me was that she told the Minister who led the Swedish

Nigerians, and I believe many of those that voted for President Buhari in the elections afterwards, following the demonstration, believed they have found a leader that will fight for their cause, lead their freedom, and deliver Nigeria’s long term growth and prosperity agenda. Unknown to many, even supporters of President Goodluck Jonathan that felt Nigeria could do better, also fell for what has turned out to be a scam, one chance, and expression of the worst kind of mediocrity Nigeria has ever seen. Oh no, Nigerians did not spite themselves by voting for the President in 2015. They saw in the President the active and serial determination to become President as evidence that he has thought very carefully of his plans for Nigeria. They had thought to themselves never to hear the words of regret that he was the best President Nigeria never had. So, as I argued two weeks ago, Nigerians reluctantly reconciled the lack of clear evidence of his plans, and held one to the promises made, which suggested that it could not be worse than the People’s Democratic President (PDP) they sought to replace. For many, the superb manifesto of the APC reignited their hatred for President Goodluck Jonathan, reminded them of the excesses of his party, and generated the raw domestic and international emotions needed for the push in 2015. They relied on the optics, the tweets, the new suits, and the optics of a broadminded democrat and reformist. In case you never read it, or you have forgotten, let me remind you of some of the promises made by APC in their 2015 manifesto. They included proposals to amend the constitution with a view to devolving powers to the states, strengthen the Independent National Electoral Commission (INEC) to reduce/eliminate electoral malpractices (this one makes me laugh in Spanish, given recent experiences), consultations towards the amend-

The president did not make promises. Indeed, there is no record of him promising Nigerians what he would do as their President. It was the Vice President and the wing of the APC in Lagos that felt and was convinced that they need to make promises in order to garner support for the President

ment of the constitution to enable states employ police, and bring permanent peace and solution to the Niger Delta and other conflict prone areas such as Plateau, Taraba, Bauchi, Borno and Abia. Wow! These are just some of the promises. If APC had truly made a dent on these promises, would they need to rig in Ekiti, Osun, or relying on extreme propaganda ahead of the 2019 elections? Now, the failure of the APC to meet even the basics of their promises is not new in our politics. They have simply repeated and replicated the failures of the past. Ahead of the 2019 elections, we must then begin to analyse what the underlying problem is. I can hazard two reasons. First is that the promises were never the ideas of the President seeking the position. The second is that they never tell us how they will be achieved. Let me provide some details. Since the aspirations of the President started to gain momentum, and some will argue that since he was forced out of office in 1985, the President has become accustomed to delegating responsibility, but lapping up the glory. So, it is very clear

that the President is not aware of the contents of the manifesto, and he spoke nothing about it in 2014 / 15. Just weeks ago, they suggested that the Vice President will represent the President in the 2019 elections debate, and in the last few weeks, the Vice President has represented the President in conflict and environmental disaster areas including Anambra, Plateau, Niger States. But Nigeria cannot make progress with a delegated presidency, especially when the delegated authority does not trample on the President’s core believes, attitudes, and primordial sentiments. Following from this, the argument that the President is long on his promises and short on delivery is flawed. The president did not make promises. Indeed, there is no record of him promising Nigerians what he would do as their President. It was the Vice President and the wing of the APC in Lagos that felt and was convinced that they need to make promises in order to garner support for the President. As far as President Buhari is concerned, his ambition was very modest – be the President of Nigeria again, be called the President of Nigeria, and deal revengefully with those that he believed was responsible for denying him this possibility since 2003. And for 2019, his aspirations are modest again –to do his possible best for Nigeria. In conclusion, and ahead of the 2019 elections, I am tired of consultants writing manifestoes, party members speaking for candidacies, and spokesmen speaking for the President. I am tired of someone or some group buying presidential forms, and primaries holding when the president is far away in New York (by the way, did you hear of the millions that voted using the APC app?). I am simply tired of someone being called the President, presiding over mediocrity, but we keep blaming people that have no such tags. Let every presidential candidates bear their own cross. I thank you.

Of federal ministers and their capacities delegation that this Minister is not a fair representation of the average Nigerian she has met in the course of her business. This last statement is indeed a fair statement which we hear very often as people wonder why many political appointees (with some exceptions) fail to represent the ethos and pride of the Nigerian private sector magnates and intelligentsia. As the 2019 election approaches Nigeria is confronted with the humdrum of appointment of ‘’new’’ federal ministers when a new President is sworn in. Please take notice that politicians are already horse trading and promising ministerial appointments as bait for electioneering support. Ministerial slots are allotted like lottery tickets. Should the process for appointment of ministers for the largest company in Nigeria (Nigeria itself ) be any less rigorous than hiring in the private sector? These appointments can swing the pendulum for any government because surely bad ministers or wrong portfolios dilute good governance. As citizens, we should question how the Federal Executive Council (Nigeria’s highest arm of decision making) is constituted because the incapacity of ministers affects our wellbeing. We should hold the incoming President to higher standards in the appointment of ministers and insist on minimum criteria for appointments. Anyone who would ordinarily not make a

Should we institute a public accountability system for minister’s targets and KPI’s? Should we pass a law that institutes process and criteria for appointing individuals charged with ‘’management’’ of our resources?

shortlist for a CEO position in a grade “A” privately held company should never make a ministerial shortlist. Ministers should be proven team leaders, project managers, boardroom tacticians, savvy entrepreneurs and industry experts (round pegs in round holes). An ICT Minister must be an ICT professional. It is not negotiable! Companies take hiring of the key members of the management team very seriously and CEO’s surround themselves with people who have the right set of skills to achieve agreed goals and targets. Why would the federal government not run like that? One may ask at this point: Does the President have any restrictions in his choice of ministers? The only constitutional restriction is that he must appoint ‘’at least one minister from each state who shall be an indigene of such state’’. Nigeria is not short of egg-heads, so it should not be difficult to get shortlists of at least 3 top notch CEO grade candidates from each of the 36 states. A President needs to bite the bullet and make appointments based on competence and devoid of politics. Nothing but himself stops him from doing so! We the citizens of Nigeria are tired of the management of our country going to ‘’political rewardees’’ (excuse my new diction). ‘’Political rewardees’’ are ‘’people who political parties need to reward for donating to campaigns and playing active roles in electioneering’’. Can we not detach the management of our country’s resources from the political party reward systems? Surely there must be several other avenues to reward such people? Must we toe the line of Zimbabwe where the Vice President and two cabinet ministers are the three retired generals who led the military coup that ousted Robert Mugabe in November 2017. As we strive to improve the quality of people who manage our commonwealth, we should ask some hard questions: Should ministers be subjected to a trans-

parent recruitment process? Should professional politicians who jostle for appointments for the intrinsic benefits be our first choice for ministers? Should we have a drop box system to enable people without godfathers apply to be ministers? Would we attract the right people and reduce conflicts if ministers are paid a fair CEO level wage? (Ministers today earn circa 13 million Naira (basic salary and allowances with no house provided). Should we institute a public accountability system for minister’s targets and KPI’s? Should we pass a law that institutes process and criteria for appointing individuals charged with ‘’management’’ of our resources? All over the world, the hunt for talent is permeating governments. It has become important for governments to attract the right people devoid of primordial considerations. One good example is Mark Carney, the 120th and current Governor of the Bank of England who is a Canadian. He was appointed in 2013 as the first non-Briton to hold that position. Note that the Bank of England recently advertised for Mark Carney’s replacement until he agreed to extend his tenure to 2020. The British Prime Minister, Theresa May, recently explained the reasons for a cabinet reshuffle. She said it was all about: ‘’bringing fresh talent into government’’ and ‘’ensuring the government looks more like the country it serves’’. Prime Minister May is signaling that governments should hunt for talent and aspire to achieve the proficiency that characterizes successful private sector institutions. Arguably Nigeria has one of the most vibrant private sectors in the world. Nigerians in the private sector have distinguished themselves ; making richest men lists, creating great institutions and endearing legacies, and more. The question is: would we one day have a President who would truly seek to mirror the private sector in governance?

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.