BusinessDay 02 Oct 2019 by BusinessDay

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news you can trust I **WEDNESDAY 02 OCTOBER 2019 I vol. 19, no 406

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President Muhammadu Buhari releasing a pigeon during a special change of guards/silent drill display in commemoration of Nigeria’s 59th Independence anniversary in Abuja, yesterday. NAN

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Buhari still stuck in the past – Experts …as president appraises economy in Independence speech

CBN increases banks’ minimum W loan-deposit ratio to 65% SEGUN ADAMS

hat President Muhammadu Buhari said on the economy in his Independence Day speech on Tuesday failed to

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Inside

RCCG brings independence cheers to IDPs in Abuja P. 37

as loans surge by N829bn btw May and Sept

OLUWASEGUN OLAKOYENIKAN & OLUFIKAYO OWOEYE

he Central Bank of Nigeria (CBN), in its bid to improve lending to the real sector of the Nigerian economy, has for the second time this year upwardly reviewed deposit money

banks’ portion of minimum loanable deposits to 65 percent with immediate effect. The decision, which is subject to quarterly review, was informed by appreciable growth in the level of the banking sector’s gross credit following the pronouncement of a 60 percent minimum Loanto-Deposit Ratio (LDR) in July

2019 and the need to sustain the momentum, the apex bank said in a September 30 circular seen by BusinessDay. “All Deposit Money Banks are required to attain a minimum of LDR of 65 percent by December 31, 2019,” the CBN said. “To encourage the SMEs, retail, mortgage and consumer lending, these sec-

tors shall be assigned a weight of 150 percent in computing the LDR for this purpose.” Loan to Deposit Ratio (LDR) compares a bank’s total loans to its total deposits for the same period. A higher LDR means the bank is issuing out more of its deposits in

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Wednesday 02 October 2019

BUSINESS DAY

news CBN to roll over N134.0bn maturing treasury bills today HOPE MOSES-ASHIKE

Dapo Abiodun (r), Ogun State governor, waving to cheering crowd at the MKO Abiola Stadium during the 59th Independence Day celebration in Abeokuta. He is flanked by Bashir Dabup Makama, state commissioner of police.

Nigeria @59: Sanwo-Olu, Obaseki, Ihedioha, others preach unity, tolerance JOSHUA BASSEY, Lagos, MIKE ABANG, Calabar, RASAQ AYINLA, Abeokuta, IDRIS MOMOH, Benin, SABY ELEMBA, Owerri, NATHANIEL GBAORON, Jalingo, & FRANCIS SADHERE, Warri

tate governors, including Babajide SanwoOlu (Lagos), Godwin Obaseki (Edo), Ifeanyi Okowa (Delta), Ben Ayade (Cross River), Darius Ishaku (Taraba), Emeka Ihedioha (Imo), among others, have harped on tolerance and unity of purpose to forge a common front in national development. The governors spoke in their respective states to mark Nigeria’s 59th Independence anniversary on Tuesday. In Lagos, Sanwo-Olu, at the Police College, Ikeja, where residents, students and pupils thronged the parade ground, said Nigerians also needed to keep hope alive and join hands with the leaders in the task of building a prosperous nation.

The governor, who dressed in Neighbourhood Safety Corps’ uniform, noted that Nigeria over the years had made irreversible progress and his administration would continue to build on the legacies bequeathed by the nation’s founding fathers. He observed that the effort to rebuild Nigeria and keep it on a path of progress was on course, while also assuring that the implementation of his party’s programmes would bring greater good to the majority of citizens. “Today, we take glory to the men and women who laboured and sacrificed their time, knowledge and resources to see that our nation gained freedom from colonial rule and attained the status of a sovereign nation,” Sanwo-Olu said. “Since 1960, we have achieved significant progress despite our challenges and setbacks. We have remained

united in our determination and desire to build a truly prosperous nation that will be the pride not only to Africans but the entire black race. As we celebrate this year’s Independence anniversary, we must remain committed to achieve our collective aspirations as a nation,” he said. He charged the residents to eschew actions that would divide the country along ethnoreligious line, and pleaded for patience as government at all levels rolled out activities to make the system better. In Edo, Governor Obaseki urged Nigerians not to lose faith in the country, noting that despite the difficult times, the nation would be great again. He said that Nigeria has not experienced needed economic growth because over the years, policies had not been aligned to drive growth, adding that President Buhari-led administration has got it right by coming up

with policies that would spur economic growth. “For economic growth in the country, we need to build the basic infrastructure to move people, goods and services. This country has the resources to produce what it consumes, but over the years, policies have not been aligned to do so,” Obaseki said. “The Economic and Growth Recovery Plan is a new direction to push growth in the country. The President is emphasising infrastructure, law and order and other policies to grow the economy, which are commendable,” he said. In Ogun, Governor Dapo Abiodun, who paid glowing tributes to the nation’s founding fathers for their untiring efforts in seeing to the development and unity of Nigeria, said 59 years of nationhood was fraught with civil war, military rules and political upheavals.

•Continues online at www.businessday.ng

Nigeria’s next biggest earner will be human capital, not oil – Soludo …as Rewane, Obi, Gupta task FG to be proactive in solving unemployment …potholes, population size, transport system responsible for Lagos’ gridlock – Sanwo-Olu MICHAEL ANI & DIPO OLADEHINDE

igeria is depending too much on oil, making its economy susceptible to developments in the global oil market, thus putting much

pressure on the finances of the government. But the country’s biggest bet is never in oil but in a growing population which has been challenged by a high illiteracy rate at 60 percent due to a failing education system,

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said Charles Soludo, a onetime governor of the Central Bank of Nigeria (CBN) and member of President Muhammadu Buhari’s newly appointed Economic Advisory Council (EAC). Soludo, while speaking at

The Platform, a programme organised by the Covenant Christian Centre to mark Nigeria’s 59th Independence Day, said the future of Nigeria would be driven by people,

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he financial markets resumed today after the Independence holiday with expectations of N134.0 billion worth of maturing treasury bills (TBills) to be rolled over at the primary market by the Central Bank of Nigeria (CBN). The market also awaits inflows from Open Market Operation (OMO) maturity worth N472.4 billion to be auctioned on Thursday by the CBN. These inflows are expected to boost the system liquidity. “We expect to see more investors position at the longer end of the curve,” said analysts at Afrinvest Securities Limited. The analysts advised investors to take advantage of T-Bills with attractive yields across all tenors in the primary and secondary markets as well as potential OMO offers. Last week, the T-Bills secondary market reversed its two-week bearish run on the back of improved system liquidity (N260.0bn long as at Tuesday) stemming from a FAAC disbursement (N341.0bn) which hit the financial system the previ-

ous Friday. In addition, OMO maturities worth N422.0bn further buoyed system liquidity, spurring buying interests particularly on the medium and longer end of the curve – 26-Mar-20 (-129bps), 02Apr-19 (-113bps) and 11-Jun20 (-93bps). Consequently, average yield across all tenors closed at 13.3 percent Wo-W, 34bps lower than 13.6 percent the previous week. Despite improved system liquidity, the CBN conducted a much-anticipated OMO auction once last week, offering a total of N250.0bn on Thursday across the 84-day (N20.0bn), 184-day (N30.0bn) and 364-day (N200.0bn) tenors. The shortand medium-term maturities were 98.5 percent and 93.0 percent undersubscribed, respectively, as bills with similar tenors commanded high rates in the secondary market. However, the 364day bill was 339.0 percent oversubscribed (N200.0bn offer vs. N678.3bn subscription) as more investors positioned on the longer end of the curve.

•Continues online at www.businessday.ng

9.47m registered vehicles in Nigeria missing on insurance industry database …as NIA launches ‘Wetin U Carry’ campaign to tackle fakery Modestus Anaesoronye

f the 12 million re g i s t e re d v e hicles in Nigeria, only 2.53 million are captured in the Nigerian Insurance Industry Database (NIID) as at Monday, 30 September 2019, according to the Nigerian Insurers Association (NIA). This means that a whopping 9.47 million are either without insurance cover or have fake insurance. The huge gap, said the NIA, is mind-boggling and not only robs the industry of its expected revenue but puts many Nigerian publics

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on risks of accident, death or other losses without compensation. NIA said it would go all out to let Nigerians realise that the insurance policy in their hands is a valuable asset that should be cherished, which implies that they get their cover from the right sources. “We are telling Nigerians that insurance is something valuable if you have genuine one because it gives you relief and peace of mind,” Yetunde Ilori, director-general, NIA, said at the launch of a new campaign ‘Wetin U Carry’

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Public policy and the quality of life: Tracing the root of poverty (2) SMALL BUSINESS HANDBOOK

EMEKA OSUJI

ast week, we discussed how the absence of effective planning is at the heart of our poverty. Well, it’s just one of the causes of our low level of living. We cannot plan for people whose numbers we do not know, and those without proper identity and addresses. So, we can add the absence of a national database or reliable statistics. It is really hard to concentrate on the challenge of poverty reduction without reference to what we have long identified as poverty generators in Nigeria. And they are quite a handful – corruption, leadership failure, lack of commitment to the nation, poor managerial capacity in high places, weak institutions and planning without facts and data. Each of these problems can wrestle any nation down. So, we have a nation in total disrepair and now manifesting incapacity to play good host even to its own citizens, as evidenced by rampant insecurity. The war against poverty can never be won until we accept the fact that we have collectively failed; identify our errors and honestly accept them, and then start anew. Nigeria has been grappling with the problem of poverty for many years. However, there seems to be

no significant progress, as it has grown from the affliction of some to the plague of all Nigerians. Truly, we have been living in denial, when it comes to the question of poverty. If we take account of the fact that most Nigerians provide their own light, water security and even roads, in some cases, then we can see clearly that there are very few rich people here. It is actually hard to feel rich when more than half of your countrymen are abjectly poor. Government is busy doing all kinds of good-intentioned things to support the hurting families but one thing is missing – the result is not showing. Development has changed from a concept of economic growth, measured in terms of expanding per capita income, to something more complex but more robust. Development is now more concerned with factors affecting the overall development of the human person, than quantitative growth rates. I have said elsewhere in this column that Nigeria has long since the early 80s, stopped effective economic planning. Otherwise how does one explain the fact that most of the infrastructure we enjoy today were built in the 80s when resources were much smaller. Very few serious social overhead capital items have been created during the past several years, despite the rising value of our annual budgets. The total investment envisaged under the Fourth Plan (1981-85), was only N82 billion, but we all know the roads and bridges that were built then. Of course, this has always been a public sector driven economy (one of the many ills that everyone knows but nobody wants to confront). Of

that proposed investment, the public sector was to account for N70.5 billion, while the private sector’s share was put at N11.5 billion. The planned investment was expected to generate an annual GDP growth of 7.2 percent. With regard to growth of the key sectors, the manufacturing sector had a projected average growth rate of 15 percent over the plan period, with significant positive impact on the living standards of the citizens, at the end of the plan period. Out of all the four development plans that were launched after independence, the Fourth Plan was the most ambitious, with regard to size of investment. The Fourth Plan had many challenges and unique features. It was the first to be drawn under the presidential democratic system of government first headed by Shehu Shagari. It came at a time when the debts acquired by the military had begun to materialise and so was bugged down by debt service costs. As a result, Nigeria recorded dismal growth figures in many sectors of the economy. This sadly marked the beginning of the disregard for proper economic planning in Nigeria. Although the Fourth Plan was said to be the least successful of all the plans, it was not a major failure when viewed against what we now have in the so-called Economic Recovery and Growth Plans (ERGPs), being half-heartedly implemented. Under the Fourth Plan Nigeria achieved the following results: we established and commissioned the Oku Iboku newsprint paper project, Egbin power station and Akure Airport. NITEL set up 87 telephone exchanges all over the country. The

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For Malaysia, this expenditure approach resulted in imbalances in the external sector warranting borrowings to fund the investment gap. But we borrow to bail out corrupt state governments and cannot hold them to account

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Dr Emeka Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emekaosujii

Ministry of cross-purposes

can’t speak for anybody else but thank God I can at least speak for myself. I was a tad disappointed when I went through the list of federal government ministries approved for this new administration. I looked out for a new ministry. Perhaps the most needed, if happenings in the first term are anything to go by; the ministry of crosspurposes. Established to resolve the confusion and attendant mess created by the various government bodies and agencies as they constantly work at cross-purposes, making total nonsense of what should be a common agenda and sending confusing signals across the land. Not to talk of reducing our confidence in them further still. If we are to start recounting the different incidences, we’ll be here all day. Literally, in what appeared to be a comedy of errors at first, I recall how the Department of Secret Services (DSS) vehemently opposed the President’s attempt to confirm the nomination of Ibrahim Magu as the EFCC’s substantive chairman. Two agencies supposedly serving the same government! “Wonderful”, as some of our people like to say. Still reeling from that, we woke up one day to hear about the spat, in full glare, between the then Minister of State, Petroleum and the MD of NNPC. Can’t fully recall how that panned out but I think it will suffice to say no head rolled. Yet, another was the ludicrous comment credited to our rolled over minister of labour, that the haemorrhage of doctors fleeing the country in search of the golden fleece abroad, is nothing to worry about, as it obviously

means that we have more than enough doctors. I wondered how this attitude could in anyway help the hapless minister of health, struggling to bridge the gap of doctor to patient ratio which current stands at 4 doctors to 10,000 patients as against the ideal recommended by the World Health Organization (WHO) of 1 doctor to 600 patients. In the US and the UK, it’s 26:10,000 and 28:10,000 respectively, according to WHO’s report of April 2019. While we’re on it, it might interest you to know that India, despite its huge population of over 1.3 billion has accomplished an enviable ratio of 1:1000. To continue, we have the ever-present police vs army saga. The infamous kidnapper, Wadume, just recently narrated how the army captain who allegedly ordered his release, thereby aiding his escape from justice, also allegedly gave his subordinates an order to murder three policemen, while they were faithfully carrying out their duties. Even more recently, the federal high court ordered the DSS to release the former presidential candidate and convener of the revolution march, Sowore on bail, but have so far refused to obey the court order; desecrating the very law they swore an oath to uphold. To so blatantly rubbish the constitutionally backed authority of another arm of government is completely antithetical to the very essence of democratic rule. Should we then be surprised when so many countries, even those whose corners we fought in the past, treat Nigerians with contempt? When our own government makes no pretence of respecting its citizen’s rights? We scratch our heads, trying to fathom

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the generally unruly nature of our people and then marvel at how unruly Nigerians transform into model citizens when they relocate to better developed nations. It’s not difficult to understand though. We’re no different to other human beings. Citizens will simply watch and then follow the lead of their respective nation’s authorities. If people representing government are seen by all to follow the law religiously and hold it sacrosanct, everyone will simply whip into line. If the opposite is the case, the opposite too will be taken as the grundnorm. As a leader, you cannot reasonably expect others to respect that which you so obviously hold in disdain, except when it suits you. The Nigerian Shippers Council made an announcement on behalf of government last week that they will slash duties in order to reduce costs and encourage spending. This ordinarily should lead to some level of growth but the question is, will customs adjust accordingly or will they pretend to be unaware? Thereby, making nonsense of the goal set by the same government they both represent. Please permit me to stretch this crosspurpose conundrum to the political sphere too, where we saw some former governors (two of whom are now serving senators), driven by an inordinate quest for power and control, made audacious attempts to continue to steer the affairs of their states even when no longer in office. They pushed their “anointed successors” to contest under the banner of other political parties when they couldn’t secure the APC ticket, while they as godfathers remained in APC.

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subscriber base, was nothing to write home about, increased from 188,000 in 1981 to 297,000 in 1985. Some achievements were also posted on the educational front as enrolment at all levels increased. It was at this time that Nigeria witnessed the most extensive infrastructure development with the construction of thousands of kilometres of roads. The Agricultural Development Programme (ADP) was implemented in 17 out of the then 19 states in the federation. All these were done with Shagari’s N82 billion investment. We can compare those modest achievements with what happens today with trillions of naira being spent and judge. The Babangida regime introduced the structural Adjustment Programme, thereafter the downward spiral began, and we introduced the ERGPs. How many people in Nigeria’s planning community can tell you the result of the past and current ERGPs – there is no scorecard and no reprimand for failure. Malaysia, to which we often make reference, introduced its Vision 2020 in 1991, during the launch of the 6th Malaysian Plan. She achieved an average growth rate of 6.7 percent between 1981 - 84, when Nigeria was recording negative growth rates. The success was achieved largely through expansionary countercyclical public expenditure.

CHARACTER MATTERS WITH DAPS

DAPO AKANDE After all, why should they lose any of the benefits being at the centre automatically bestows upon them? The irony of this situation doesn’t seem to register with them at all. To such people, the whole notion of integrity must sound like arrant nonsense. Like I asserted in my book, integrity is not a relative term but one with a meaning which remains constant. It speaks of honesty, moral uprightness and reliability. Reliable, because one can vouch for it to always do the right thing, no matter how attractive the wrong thing may appear to be. It’s therefore not subject to expediency as it always places honour above gain. This trending phenomenon of normalising wrong cannot but crumble before any thorough legal or moral interrogation and if not checked, could mark the beginning of the end hopes of us developing a sane and civilised society. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

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Independence Day: What is there to celebrate?

hen Nigeria achieved independence in October 1960, the nation was hailed as a beacon of hope for the African continent. Blessed with educated elites and copious quantities of natural resources, the future seemed bright. Fifty-nine years afterwards, predictions of a glorious future are yet to be fulfilled. While the potential of the country has never been in doubt, the gulf between the country’s reality and its undisputed potential has never been wider. As the nation marks its 59th Independence anniversary, it continues to grapple with basic socio-economic problems. Poverty, corruption and social injustice remain characteristics of the Nigerian state while stagnation best describes the current state of the nation’s economy. The nation is also silently straining under the weight of its debt, as the national debt stock has more than doubled in the last three years to over N24 trillion. However, perhaps most alarming is the unprecedented rise in youth unemployment. Since 2015, the unemployment rate in Africa’s largest economy has soared, rising from 8.2 percent to 23.1 percent in the third quarter of 2018. For young people aged 15 to 35, the figures are even worse as 55 percent of the youth population are unemployed or underemployed. In addition to these galling

figures, the nation continues to fail to prepare future generations for a fastchanging world, with over 10 million children currently out of school. Such is the state of Nigeria as it celebrates its 59th Independence anniversary. The dire state of Nigeria’s underdevelopment across six decades comes to the fore of Nigeria’s stagnation when compared to its pre-independence contemporaries. Back in 1960, Nigeria and South Korea had similar Gross Domestic Products of $4.1 billion and $3.9 billion respectively. Today, the South Korea’s is estimated to be $1.5 trillion, while Nigeria’s GDP is estimated to be less than $400 billion. The same developmental stagnation can be observed in education. Singapore in the early 1960s had educational statistics similar to that of many African countries including Nigeria. Today, Singapore is far ahead of Nigeria across various educational indices. All of these paints a sordid picture for Nigeria. A combination of poor leadership, corruption and incompetence has resulted in a failure to develop the nation’s economy, invest in critical infrastructure and harness the nation’s most valuable resource – its people. Thus, on this independence anniversary, there is seemingly little or nothing to celebrate. Nevertheless, all hope is not lost, and the Nigerian nation may yet be rescued. An important first step in the process of rescuing our nation is the realisation that political will for restructuring is necessary for progress. There must be an urgent will to address pressing issues such as the nation’s

reliance on oil earnings, the archaic land use act and the non-practice of fiscal federalism, all of which combine to hinder the nation from realising its potential. In addition, the nation’s ticking time bomb of youth unemployment must be resolved through the enactment of viable job creation policies and enhancement of labour productivity. This however, will not be possible without sustainable investments in education and infrastructure development. Investments in education, particularly science, technology, engineering and mathematics (STEM) education, are critical in order to prepare the young generations for the jobs of the future. Besides, education and citizen enlightenment have also been proven to be effective tools necessary for the transition of nations from third to first world. Thus, there is a need for the prioritisation of sustained investment in education. The need for infrastructure development for economic growth cannot be overemphasised. Therefore, while the federal government’s current focus on infrastructure development is laudable, the government must also realise that its resources are limited. Thus, it must encourage private sector participation in infrastructure development via public-private partnerships, concession agreements etc. Furthermore, all levels of government must incentivise and encourage private sector participation in various sectors of the economy and infrastructure development. The government must create an enabling business environment for small and medium-sized enterprises to thrive by

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Nevertheless, all hope is not lost, and the Nigerian nation may yet be rescued. An important first step in the process of rescuing our nation is the realisation that political will for restructuring is necessary for progress

Rufai holds a first class degree in Management and Masters degrees in Management and Finance. He is a finance and strategy analyst and can be found on Twitter @LanreRufai_.

Tyranny and chaos as Nigeria slides into indirect rule

uch like the British colonialists maintained the Nigerian territory under their stronghold through indirect rule, Nigeria has again become captive by an unelected cabal who indirectly want total dominance over governance of Nigeria and her resources. This cabal is represented by the man known as the Chief of Staff to the President, Abba Kyari. As a colonial governance strategy, indirect rule was designed to use existing tribal structures and traditions as conduits for establishing rules and regulations while English officials worked behind the scenes and could exercise a veto power over decisions. In some cases, the British designated a person to act as “chief” in settings where there was no clearly hierarchical structure in place. The chief was essentially a puppet, while the British overlords held sway behind the scenes. All these changed, or so we naively assumed, upon Independence when elected Nigerian officials functioned not as puppets but as de facto leaders. At the dawn of the current democratic experiment in 1999, we all had high hopes that democratic governance would usher in prosperity and progress for a critical mass of Nigerians. In terms of optics and structure, President Olusegun Obasanjo borrowed a leaf from the USA and created the office of the Chief of Staff (COS) who was meant to be the engine room of the President’s office at the Villa. His choice - who worked with him for eight years - was Abdullahi Mohammed, a distinguished Sandhurst educated army general. Moham-

med was at various times, Director of Military Intelligence, Director General of the Nigerian Security Organisation (precursor of the DSS, NIA & DIA) and was National Security adviser to Obasanjo’s predecessor, Abdulsalami Abubakar, also a general. Mohammed brought gravitas, panache and strategic policy direction to the Obasanjo presidency and was respected by cabinet members and heads of ministries, department and agencies (MDAs). He did not surreptitiously deceive his principal, neither did he usurp his powers. He also had an excellent working relationship with Atiku Abubakar, the then vice president and SGF Ufot Ekaette. This harmonious state of affairs continued till 2015 as all occupants of the office of COS made no attempt, covert or overt, to stage a palace coup. But things changed drastically in 2015, with the appointment as COS of a Kanuri, red cap wearing ex-banker, who up until 2015 was a known critic of President Buhari - Abba Kyari. With no known track record beyond his stint and eventual sack as CEO of the old UBA, Kyari’s appointment as COS was resoundingly rejected by numerous Nigerians as he was not a Buhari supporter neither did he believe in the change agenda of the President. In the President’s first term, he was allegedly fingered in numerous scandals such as the MTN bribery scam. He’s believed to have used strong hand tactics to buy Etisalat, Keystone Bank, amongst others. The preponderance of opinion was that the President should sack him as he was adding absolutely no value to the administration. But building monstrous fiefdoms is not

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enough for this cabal but still lacks the presence of mind to be conscientious or decent. He is very vindictive and authoritarian and must have his way come what may. To the chagrin of Nigerians, upon his re-appointment, he has swiftly upped his game to perpetuating indirect rule in Nigeria. His constant appearance in pictures with the President when he receives dignitaries is to send a message to the world that he is in charge. He ensured any minister that appeared objective in the previous cabinet did not return. His grouse with Audu Ogbeh was that he dared to question Kyari’s RUGA misadventure. Ask the current civil servants how they feel about Ogbeh’s replacement and you can see that competence was not the motivating factor in the replacement. He did not support RUGA and was booted out. Or, ask the former Head of Service whom he removed at a whim for daring to reveal the truth about reinstating Maina. The streets of Abuja are awash with stories of how many of the current ministers on the cabinet paid millions of dollars to secure their seats on the cabinet. He fired a daring salvo by allegedly inserting a paragraph in President Buhari’s speech to Ministers at the end of the recent retreat to the effect that all issues and requests for appointments by Ministers should be passed through him. This function has traditionally been performed by the SGF. Emboldened by that act, he moved to the office of the vice president where the Economic Management Team was domiciled, got the team dissolved and set up an Economic

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making Nigeria a progressively easier place to do business. Far-reaching reforms which will encourage industrial manufacturing, technology and innovation in sectors where Nigeria can develop sustainable competitive advantages must be delivered. Subsequently, Nigeria’s ballooning debt problem must be swiftly addressed. The nation is currently expending over 60 percent of its revenues on debt servicing, thereby leaving nothing for infrastructure development which in turn leads to the government taking on more debt to fund projects. If left unchecked, the national debt stock might soon reach the level last attained prior to the debt relief in 2005. We only need to look at countries like Venezuela, Greece, and Zimbabwe to see how dangerous a public debt crisis can be. Therefore, the rising national debt volume must be tackled with urgency, perhaps starting with reducing government spending on recurrent expenditure. Overall, fiscal prudence and investments in education and infrastructure are key to unlocking Nigeria’s potential. However, this is only achievable with political will, implementation of market reforms and creation of policies which will improve the living conditions of a rapidly growing, young population. The future of Nigeria is dependent on this. Otherwise, 50 years from now, there might still be nothing to celebrate on Independence Day.

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IBRAHIM UMAR-BASHIR

Advisory Team that, on paper, should report to Mr President, but would in practice report to Abba Kyari. Given that he has already cut off ministers from the president, side-lined the SGF, shutting out the VP from the economic strategy of the government was the main focus of his quest for indirect rule. As things stand today, the economic advisory team, just like the ministers, would have to pass their request to see the president through Abba Kyari and he decides what the president would do or not do. This is man that did not move a muscle during both the 2015 and 2019 presidential campaigns. As things stands today, Abba Kyari has essentially enthroned himself as president of Nigeria and he is governing via indirect rule. He has made a caricature of the office of the president, and he is intent on destroying our patrimony. Nigerians did not vote for Abba Kyari as president. We must put an end to indirect rule now. It’s either the president and vice president resign to allow for fresh elections so that Abba Kyari can stand for election as president, or the president sacks Kyari NOW! Umar-Bashir is the national convener, Thought Leadership Political Action Committee (TLPAC) and be reached driubashirtlpac@gmail.com

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Bashir Ibrahim Hassan

Slow but steady progress in lighting our higher institutions

he Energising Education Project of the Rural Electrification Agency in the Federal Ministry of Power made a commendable stopover at Bayero University Kano on September 16. EEP brought officials of the Federal and Kano State Governments to launch and bear witness to the lighting of a 7.1MW off grid solar hybrid power plant in the university. We commend the initiative. The Bayero University hybrid power plant commissioning followed an earlier one August 12 at the Alex Ekwueme Federal University, Ndufu-Alike (FUNAI). The Ndufu-Alike project was for 2.8MW hybrid solar. The projects are among the 37 the Rural Electrification Agency has mapped out to power the nation’s higher institutions. It is making slow but steady progress in providing power to these critical institutions. The BUK hybrid power plant has capacity to provide

access to uninterrupted power to 55, 815 students and 3, 077 staff of the university. More significantly, the BUK project trained 20 females in renewable energy operations. They are now technicians, programmers and other roles in the value chain. Similarly, at Ndufu-Alike, the programme trained 20 female STEM technicians. The plant at NDufu Alike will serve its 7, 700 students and nearly 2000 staff. The Energising Education Project (EEP) is a federal government intervention focused on developing off-grid independent power plants and rehabilitating existing distribution infrastructure for power provision. It will supply clear, safe and reliable power to 37 federal universities and seven affiliated university teaching hospitals. The project commenced in 2017 with the signing of a memorandum of understanding between the agency and the universities with the National Universities Commission serving as chaperon. Nine insti-

tutions signed on to the first phase that would build nine power plants. Seven of the nine would be solar plants. The initial nine consisted of eight universities and one teaching hospital. They are Abubakar Tafawa Balewa University, Bauchi, Bayero University Kano, Usmanu Danfodio University, Sokoto, and Federal University of Agriculture Makurdi. Others are Nnamdi Azikiwe University, Awka, University of Lagos, Akoka, Federal University of Petroleum Resources, Warri, Obafemi Awolowo University, Ile Ife and Obafemi Awolowo University Teaching Hospital, Ile Ife. The Energising Education Project is one of the measures the Rural Electrification Agency is implementing in efforts to provide options to power supply using the existing grid. A significant aspect of the programme is the emphasis on green solutions. The plants run on solar hybrid or gas-fired captive power. The emphasis on lighting the higher institutions deserves

commendation. It will provide the enabling environment for serious academic work by students and faculty including teaching, research and community service. There should be a difference in the output and atmosphere in these institutions in the next two sessions following these power plants. The plants are particularly welcome against the backdrop of the avoidable riots at the Federal University, Oye Ekiti recently over sustained power outage. Steady power should be an enabler and a catalyst for improved productivity in research and development in our universities. The nation needs to hear of significant breakthroughs on the back of this new situation of sustainable power. We urge the universities to embrace the related training on renewables that comes with the package to develop local capacity in this area. REA should drive to ensure that they get the projects back to the agreed schedules and, more critically, that they complete this phase and move on to the next.

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Wednesday 02 October 2019

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59 years: Rethinking Nigeria!

FRANKLIN NGWU

t 59 years, a man should be described as a matured man having the basic necessities of life – food (including water) clothing, shelter, education and healthcare, safe and clean environment. If the man lacks the above basic necessities, questions will be asked as to what might be wrong with the man. The man is our dear country Nigeria! At 59, over 100 million brethren are classified as extremely poor and unable to afford the basic needs of life. What might be the cause? Depending on who you ask, many answers emerge – poor leadership, corruption, tribalism, insecurity, weak management of the economy and structure of the country, just to mention but a few! The problem is not really with listing the possible causes, the main problem is our inability to learn from our mistakes and plan better for today and tomorrow. While the federal government have from time to time formulated and launched economic development plans such as Vision 2010, NEEDS and presently the Economic Recovery and Growth Plan (ERGP) or the Next Level Plan, there seems to be no proper thinking and plan in our states and local governments. Most of the limited

development projects are ad-hoc with no proper assessment and link to the medium- and long-term plans of the states. Except the very few appointees of the government, majority of the citizens are completely ignorant of state/local government policies and programmes. With a population growth rate of about 2.7 percent that will result into about 400 million Nigerians in 2050, a key question for our governors is what plans they have for the youths of their states particularly their human capital development. Visiting our state capitals and interacting with government officials and youths reveals the precarious situation we have and the time-bomb we are sitting on. The situation is dire and sad. It is a story of failure! Failure of governance and leadership of our states amidst abundant human and natural resources. The youths crave for direction, opportunities and freedoms through the provision of effective and functional educational system! As such direction, opportunities and freedoms are presently not provided or inadequate, a sub-culture of frustration and violence is rapidly emerging which will do no one any good. A key cause of the sad situation is our present approach to human capital/ skills development which can be described as a process of “accomplishment of natural growth” with little or no strategic plan, vision and guidance. It is similar to Jamaica’s then education system to which William M. MacMillian described as “narrow and insecure” in his work “Warning from the West Indies.” He warned that the education system in Jamaica was a major contributory factor to worsening inequality, poverty, unemployment and social divisions. He

‘

What is needed is an education system that can be described and developed from the concept of concerted cultivation and development. This approach will give direction and focus, imbue confidence and trust, create a sense of ownership and belonging to our children and youths

beckoned on the government to act urgently to avoid social crisis and violence. Remarkably as he warned, wide spread violence and social unrest ravaged the Caribbean with many killed and injured a year after his book was published. While William M. MacMillian has not published the Nigerian version of his book, it is clear that his warnings are all over Nigeria with pervasive unemployment and insecurity across the country. To avoid escalation of the crisis, I deeply beckon and implore our governors to act now! What is needed is an education system that can be described and developed from the concept of concerted cultivation and development. This approach will give direction and focus, imbue confidence and trust, create a sense of ownership and belonging to our children and youths. Failure to do this is an inevitable invitation and preparation for the exponential escalation of social crisis possibly higher than Boko Haram and other violent groups. Adopting and effectively executing the concept of concerted cultivation and development is the only way our exponentially increasing population can be turned into assets of sustainable development and growth. It is the fulcrum upon which any kind of development can be meaningful and sustainable but which is sadly attended with levity. For people to be employed, they have to be properly educated and skilled especially in science, technology, engineering and mathematics (STEM) that Nigeria desperately needs. Creating a high level of human capital and skill development in Nigeria does not start and end with building new class rooms or promotion of teachers as done in some states. Either is part of it but a very little or insignificant part of what is needed.

What if Donald Trump wins a second term?

his question would appeal to so many people at many levels. For Americans of all hues, it is a fundamental question that goes to the very heart of what it means to be American in the 21st century. When the erstwhile President Barack Obama won his first time, the entire world marvelled at what miracle of democratic and liberal aspirations America’s political culture could make possible. That a black man could overcome all historical and racial odds to become the president of the US was just too good to be true for almost everyone across the world. And then Obama completed his two terms, and, again, against all odds, Donald Trump succeeded Obama. And his first term has been filled with all manner of sensational occurrences, political and diplomatic anomalies. Trump, in his very essence, defines a nationalist sentiment that seems to cancel out the supposed political miracle of electing a black man into the White House. So, what if Trump undermines all odds to win a second term? For many European states, from the UK to Switzerland, and from Greece to France, such a possibility spells a lot for the economy and for national politics. The emergence of Trump has turned out to be a wildcard that swings international politics in multiple directions. On the one hand, his arrival on the scene has provided a nationalist stamp of legitimacy for many right-wing parties and figure — from Victor Orb an in Hungary to Marie Le Pen in France. “Making America Great Again” has become a rallying cry for nationalist parties all across Europe. On the other hand, Trump has also served a fundamental notice against the age-long America-Europe alliance, formed at the end of the Second World War,

against the emergence of a single power like Nazi Germany and its imperialist designs against the whole world. This vision of a new world order was grounded on the idea of an expanded NATO since 1999. All this has been thrown asunder when Donald Trump became the 45th president of the US. In the aftermath of a deteriorating world order, we cannot but ask what Trump second term will portend for the African continent. This question is not out of place. The foreign policy of one state has always had deep implications for other states. The US is a global political power whose foreign policy dictates reverberate across the globe, and have unquantifiable influence on Africa’s existence. For instance, when Barack Obama became the president, Africanists wonder what impact a black president, with a filial connection to Kenya, would have on the diplomatic relationship between the US and Africa. This question is much more significant in the face of the significant global security and economic issues that a Trump second term would unleash on the world, and on Africa. The global world order which world leaders have taken effort and time to fashion since the end of the second World War seems to be gradually going up in flames. Two fundamental incidences foreground this conclusion. First, the growing but steady visibility of China in global geopolitics has become a major feature of today’s world order. And this, second, has been simultaneous with the receding visibility, and even docility, of Europe in international affairs. Thus, with the emergence of Donald Trump, several global issues are thrown into dis-

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Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mailfngwu@lbs.edu.ng,

TUNJI OLAOPA

equilibrium. Trump has consistently taken decisions that have questioned the need for a transatlantic alliance between North America and Europe. Despite being a party to the Article 5 of the NATO Treaty, Trump has continued to undermine the capability of NATO to face global military threats. Beyond this, Trump has also consistently undermined Europe’s confidence as a global power by the intrusive politics he had played against individual European states. He has, for instance, attempted undermining the Brexit negotiations by playing it out against a possible future US-UK relationship. Europe’s military capacity as well as its openness to refugees has also come under Trump’s rightwing attack. Unfortunately, his Trump’s relationship with Vladimir Putin has also left a lot of geopolitical dynamics hanging. And Trump queries the fact around the dangers of climate change! In the final analysis, there now seems to have been lost, the united front that could be very significant in the face of the eroding balance of power in Asia, instigated by Putin’s power play; the unravelling power tussle in the Middle East around Iran’s hegemonic ambition; and most frightening of all, there is an uncoordinated response to the spreading threat of global terrorism, with Al-Shabaab, Boko Haram, and ISIS gradually spreading their tentacles across the world. Donald Trump’s possible second term portends the hardening of a nationalist and isolationist politics that shut America and Europe into themselves, and critically undermine the multilateralism that defines the old-world order which Trump has assiduously been trying to undermine. Multilater-

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It will require a detailed and comprehensive understanding of the kind of Nigeria we want in 5, 10, 20, 50 and 100 years. This will help in understanding the kind of skills required in the short, medium and long term. Expectedly, this will require a robust involvement of all the relevant stakeholders to carry out a comprehensive re-examination and re-packaging of the curriculum and value system from nursery to university. It will also need effective training of competent teachers and then their continuous and rigorous supervision and re-training to ensure that they are meeting agreed expectations and targets. To achieve the above will require deep thinking and foresight that expectedly should come from a strategic think-tank and cabinet. Your Excellences, I passionately implore you to deeply reflect on level of underdevelopment (especially human capital/skill development) of your states so that you can appreciate the enormity of the development and governance expectations we have of you. Given the enormity of problems and consequences of no action, I profoundly implore our excellences to declare a state of emergency and allocate at least 30 percent of the state budgets to the education sector even though UNESCO recommends 26 percent for Nigeria. It will be the most assured way to lift over 100 million Nigerians out of poverty and create a new Nigeria!

alism as a global network builds an alliance, under the auspice of the United Nations that becomes the hub of strategic actions against global threats and challenges like terrorism and climate change. For instance, it does not seem obvious yet that Donald Trump and the damaged multilateral global dynamics have yet understood the global implications of the rise of China as a global economic power. Presently, the US is engaged in a trade war rather than engaging in a fruitful dialogue with Beijing. A downward spiral in the US-China bilateral relations will not only hurt the two states, but it has the capacity to further damage the comatose world order, while the consequences—intended or otherwise—will boomerang against “innocent bystanders” across the world. This is where Africa comes into the picture. What does what we can call the Trump Factor imply for the security and economic prospects of the continent? A response to this question must necessarily be multidimensional in its attempt at following through on the multiple implications of a Trump second term in the White House. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng

(Being remarks at the intellectual fiesta on emerging development in Europe and North America: Implications for Africa’ organised by the Olusegun Obasanjo Presidential Library (OOPL) in Abeokuta on September 16, 2019)

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Nigeria’s seasonal egg glut creates investment opportunity in powder production JOSEPHINE OKOJIE

igeria spends billions of dollars importing egg powder into the country despite its yearly glut recorded by farmers across the country. Experts say that entrepreneurs can tap into the opportunity in the industry created by the glut if they start processing fresh eggs into powder. This they say will also save the country billions of dollars it would have spent on the importation of egg powder while creating both direct and indirect jobs for Nigerians. “We need to start processing eggs into powder to help address the issue of egg glut in the country and also increase the shelf life of our eggs,” said Kabiru Ibrahim, former president of Poultr y Association of Nigeria (PAN). Nigeria is the largest producer of eggs in Africa, with 10.3 billion eggs annually, according to data from the Poultry Association of Nigeria (PAN), but has failed to take advantage of its status through the processing of eggs into powder. Each year, millions of tonnes of eggs are harvested in Nigeria but

L-R: Obafemi Omokungbe, Rector, Yaba College of Technology; Adebayo Olalekan Adebekun, corporate services manager, Flour Mills Nigeria (FMN) Plc, and Okolie Nwabueze Peter, dean -School of Technology, during the FMN presentation of a brand new Toyota Hiace bus to the school in Lagos recently.

a good number of them go down the drain as wastages, due to the short shelf life and low demand for the product at a particular period, making farmers experience glut. This usually occurs between February and May each year, which farmers attribute to rising temperature at that time of the year, and a corresponding fall in the consumption of tea, bread and fried eggs. Currently, they say there is also a low demand for

fresh eggs owing to the economic crunch in the country. Nigeria’s inability to process its excess eggs into egg powder, despite suffering a yearly egg glut, is costing the country a minimum of a $1billion every year, Nigeria’s Poultry Association says. Egg powder is used in the production of oil-based emulsions. It is also used in the preparation of foods such as icecream, bread, cakes, biscuits,

noodles, and doughnuts. It can likewise be rehydrated to make dishes such as scrambled eggs and omelets. It is used in the manufacturing of a wide range of products across the food and beverage industry. Raw eggs are said to last about four weeks, while powdered eggs can last up to a year. The yolk, the whole eggs, and the albumen can be processed into powder. Tapping this opportunity currently in the country is Answer Industries Limited, makers of Kara Kara egg powder. The company is the only player in Nigeria and West Africa egg powder market. Answer converts fresh farmed eggs into powder at its factory located at Atoyo Ijebu in IjebuEast Local Government Area of Ogun State. “We produce a ton of egg powder per day using between 3,400 and 4,000 crates. The demand for the powder is very high as we have a lot of food and beverage companies patronising us,” said Samuel Sewoniku, director of general operations, Answer Industries Limited. “We use the spray dr ying technology that is used by the dairy industry in converting milk to powder to extract the moisture

content from the eggs, turning them into powder,” Sewoniku said. He noted that investment in technology is very vital for the country and the poultry sector in particular, as it would help address some of the fundamental problems besetting the sector. Players in the poultry subsector have estimated Nigeria’s egg powder industry to be worth about $1 billion (N350bn) currently. With less than five percent produced locally, the country spends about $950million on the importation of egg powder. On a monthly basis, an average of $79.2 million of egg powder is imported into the country. In terms of volume, this could not be ascertained as the country does not have any data for the industry. The business is viable and suitable because eggs in powder form are more durable, stable, portable and applicable for multiple usages in various food and beverages industry, military establishments and production of fast foods, instant baby formula, beverage and health products; athletes’ and bodybuilding foods, several value-added products and mayonnaise.

BATN targets youth in agriculture with ‘Wealth is Here’ campaign ...awards 7.5m grants to youth agripreneurs DESMOND OKON

s efforts are still being put in place to evacuate the next batch of Nigerian migrants from South Africa, following violent attacks on foreign nationals seeking economic liberation, British American Tobacco Nigeria (BATN) Foundation has launched ‘Wealth is Here’-an agribusiness campaign, to tackle migration, create and expose opportunities inherent in the agricultural sector. Launched recently in Lagos, the campaign aims to change the negative narratives of agriculture in Nigeria by engaging youth in agriculture and turning their creative ideas to successful business enterprises. With well rated agricultural resources and arable land mass of 78.5 million hectares, and a climate favourable to a wide variety of crops, the Federal Government has constantly canvassed for agriculture as an alternative means of revenue. But BATN Foundation believes mass migration of Nigerian youth to other countries threatens any development efforts in the agricultural sector as youth are expected to take over from the aging population. Speaking on the motivation for the initiative in this sector, Abimbola Okoya, executive director, BATN

Lolade Johnson-Agiri, general manager, BATN Foundation; Temitope Akinsanya, human resources director, BAT West Africa; Aniagolu Lucy Chioma, BATNF Farmers for the Future 3rd prize winner; Yarub Al-Bahrani, area director, BAT West Africa; Kola Jamodu, chairman, BATNF; Iyiola Taiwo, 1st prize winner; Abimbola Okoya, executive director, BATNF and Chiamaka Ndukwu, 2nd prize winner, during the launch of BATNF Wealth is Here campaign recently in Lagos.

Foundation, said agriculture was the fastest way to build an army of prosperous people. “There are opportunities to thrive in the sector and through the wealth is here campaign initiative BAT Nigeria Foundation will expose young people to entrepreneurial opportunities, advocate for policies that affect agric-preneurs and farmers,” Okoya said. According to her, the initiative would provide access to finance, markets and technical support to encourage the establishment of viable businesses. “Through this initiative, we www.businessday.ng

would show the youth and everyone who needs to know that wealth is here in Nigeria,” Okoya adds. Also addressing stakeholders a t t h e e v e n t , Ko l a Ja m o d u , chairman, Board of Directors, BATN Foundation, lamented the lack of interest in agriculture by many educated Nigerian youth who are rather “pre-occupied on migrating to Canada or Europe.” While reiterating the invaluableness of human and natural resources to building a strong economy, Jamodu said to drive growth in agriculture, carefully-thought-out solutions and

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programmes were being articulated for the youth to get involved, hence, ‘wealth is here’. “The ‘wealth is here’ campaign will support these solutions. The objective of the campaign is to change the mind-set of Nigerians to believe they can excel in Nigeria by exposing them to agric-preneurial opportunities. The campaign is a reminder of the wealth-creating opportunities in agriculture that awaits those who are willing and diligent to seek it out,” he said. In the second quarter of 2019, the sector contributed 21.9 percent to the national GDP and was ranked the third highest of a nonoil sector. Hence, also addressing the audience, Yar ub Al-Bahrani, managing director, BAT Nigeria, described Nigeria’s agricultural sector as a national treasure, “a gem that can support generations to come”. “It is the largest employer of labour and an industry with the potential to generate billions of dollars,” Al-Bahrani said. However, he argues that to leverage on that knowledge to the country’s advantage, there must be a mind shift. “We must change the narrative that Nigeria has little to offer the youth because our story of wealth and prosperity will be impossible without the active @Businessdayng

participation of young people who represent around 70 percent of the country’s population, he said. He added that the campaign was an initiative to change the narrative and rewrite “our story”, provide hope. “Most importantly it is about creating multipliers in the economy for inclusive growth and shared prosperity,” he adds. Apart from the launch of the campaign, a grant totalling up to N7.5 million was awarded to three recipients of the Farmer for the Future Project—a project seeking to encourage and support the youth in sustainable agriculture, targeting final year students and recent graduates of agriculture. Going home with the sum of N5 million, 24-year-old Taiwo Olawumi Iyiola, a graduate of Forestry and Wood Technology from the Federal University of Technology, Akure, could not hide her feelings as she explained how glad she was receiving the grand prize. “It just came as a flash. We have been itching for expansion all these while, so the prize is a good way for us to start expanding. And to bring forth our products, we have ideas that we could not even implement because of funds, but now we have the funds. So, we will start those things and bring them to life,” she said.

Wednesday 02 October 2019

BUSINESS DAY

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IDH, Solidaridad collaborate to launch NISCOPS initiative to support oil palm growers JOSEPHINE OKOJIE

n a bid to protect the Nigerian forest environment and boost local oil palm production sustainably, IDH – the sustainable trade initiative and Solidaridad have collaborate d to launch the National Initiative for Sustainable Climate Smart O i l Pa l m S ma l l h o l d e r s (NISCOPS,) Nigeria. The initiative is aimed at developing the Nigerian oil palm industry through the provision of technical support to smallholder farmers which currently produces 80percent of the country’s total oil palm production. “We are launching the NIS COPS program that has been put in place by IDH with the support of the Netherlands government and in partnership with Solidarid,” said Chris Okafor, senior program manager, IDH the sustainable trade initiative, during the launch. “The program is focused on growing the Nigerian oil palm sector that has been abandoned for years. The initiative will look at ways to

develop the industry using climate-smart agricultural techniques and making sure that smallholder farmers are not left,” Okafor said. He defined the landscape approach that will be used in developing the country’s oil palm sector as the process of looking at the activities within the environment holistically and making sure that crops grown on it is being done in a proactive manner that preserve the ecosystem.

He noted that despite the program is currently focused on oil palm but will be extend to other crops in due time. He added that the program will be piloted in Ondo and Edo state. “We are going to develop a system by bringing together stakeholders and agreeing on the intervention to improve the livelihood of players across the oil palm value chains.” “We would have them develop a sustainable

deliverable mechanism that will include giving trainings to farmers, access to inputs and finance by helping banks de-risk their long term investments to these farmers,” he added. Since losing its position as one of the world’s largest palm oil producers, Nigeria is yet to recover and take its proper place in the comity of crude palm oil-producing nations owing to the discovery of oil, which changed the country’s

Premier Agribusiness Academy debuts in Nigeria to boost farmers’ productivity …to hold first class October 5th JOSEPHINE OKOJIE

n a bid to boost farmers productivity and ensure Nigeria attains selfsufficiency in food production, Premier Agribusiness Academy has debut into the Nigerian agricultural sector. In a chat with journalists during the unveiling, Francis Toromade, director general, Premier Agribusiness Academy said that to make agribusinesses profitable, farmers must acquire cognitive skills and essential knowledge needed to boost production. Toromade state d that farmers needed to build their human capital development, marketing and sale skills as well as logistics and supply chain management through continuous training and learning processes. He applauded the Federal Government for its food selfsufficiency initiative and move towards diversifying the economy through agriculture, saying that no nation can survive without feeding itself. He however noted that, for

Ayoolowa Okediji, founder AgroInfoTech Africa; Francis Toromade, director general, Premier Agribusiness Academy and Oladimeji Oguntoyinbo of World Farmers’ Center during the Premier Agribusiness Academy’s press briefing which held in Lagos recently.

Nigeria to realise this vision there must be significant increase in local food production cutting across livestock, crop and aquaculture. According to him, agriculture had the ability to contribute significantly to the overall development of the nation’s economy if effectively and efficiently managed. He explained that there was a huge difference between agriculture and agribusiness while stressing that what makes agriculture a business is its ability to generate profit. www.businessday.ng

He further said that, until farmers began to see agriculture as a business venture and invest in acquiring the managerial knowledge needed to boost production and ensure profitability, self-sufficiency in food production for Nigeria would remain a mirage. “The key is agribusiness. It is not enough to know the technical aspect of agriculture or study agriculture in school. To become successful and profitable in agriculture, there is a need for farmers to acquire knowledge of the business side

of agriculture which is what Premier Agribusiness Academy offers,” Toromade said. “All over the world, people are no longer talking about agriculture; the stress is on agribusiness because that is where profit lies,” he further said. “For farmers to be profitable, they need to acquire knowledge of strategies to market their products, effectively manage their human, capital and material resources. All these competences are what the academy offers in its courses. According to him, the vision of Premier Agribusiness Academy is to transfer well researched and innovative competences required for sustainable investments in non-allied industries of the agricultural sector. Toromade who is also the business development consultant for Rome Business School and a facilitator at Lagos Business School, revealed that the institution offers short executive courses, poultry management courses, aquaculture management and consultancy services to farmers.

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palm oil narrative of the 60’s. As a result, Indonesia and Malaysia have now surpassed N i g e r i a ’s p r o d u c t i o n becoming the global leaders in oil palm production. Ni g e r i a i s c u r re n t l y producing about 970,000 metric tons, making the countr y the 5th largest palm oil producer behind Indonesia with 36 million MT, Malaysia with 21 million MT, Thailand with 2.2 million MT and Colombia with 1.3 million MT, data in the global oil palm industry shows. While local consumption is estimated at 2.7 million tons per annum, indicating an estimated demand-supply gap of over 1.7 million MT. Daan Wensing, global director, IDH Landscapes P ro g ra m s a i d w i t h t h e initiative Nigeria’s oil palm smallholder farmers would be able to increase their yields per hectare sustainably, which in turn will boost the country’s total production. Wesing noted that the NISCOPS project would build on the work IDH has been doing in Nigeria in the past eight years. “We now want to take these lessons and bring them to the

oil palm sector by supporting smallholder farmers with access to finance, good seedlings and markets (local and international),” he said. Speaking also during the launch, Kene Onukwube, program manager – Oil Palm, Solidaridad West Africa said that his organisation had been working in the Nigerian oil palm value chain and was able to increase the yield per hectare of 1,788 smallholder farmers from 2.7 tons p/h to 10.4 tons p/h. O nu kw u b e s ay s t hat the project would consult with key stakeholders at the state levels and replicate the successes made in its previous oil palm programs in Enugu, Akwa Ibom, Cross River, and Kogi states. Representing the farmers, Adebola Bolariwa, chairman, National Palm Produce A s s o c i a t i o n o f Ni g e r i a (NPPAN), Ondo state chapter said that the program will help farmers increase their yields per hectare. Representatives from Edo and Ondo state appreciated both organisations for the initiative and for selecting their respective states for the pilot program.

Expert seeks govt intervention on locust beans production REMI FEYISIPO, Ibadan

s Nigeria moves to diversify her earnings away from oil, an expert and member of the America Chemical Society, Adebola Ademilua, has said that locust beans could generate enough income for the country if necessary steps are taken by the various levels of government. Ad e m i l u a s t at e d t hat governments at all levels should enhance and modernize the production of locust beans, stressing that the country has a comparative advantage in its production. “Locust beans is one of the crops that should be considered because Nigeria is a global leader in its production,” he said. Ademilua, who is also a member of women in forestry of FRIN, gave the advice while speaking with journalists recently in Ibadan. She said it was high time the country improved and invested in the production of locust beans in order to stop the importation of tocopherol, which can be gotten abundantly from locust beans. She called on the country to focus more on quality production of locust beans so @Businessdayng

as to stop the importation of some raw material that can be locally substituted for using locust beans. Speaking on the economic importance of locust beans, Adebola said with enough quantity of locust beans which can be substituted for imported tocopherol, it would enhance and improve Internally Generated Revenue (IGR) as well as creating employment opportunities. “To work along the value chain from production to market, one has to consider productivity and adding values,” she further said. According to her, the government needed to support farmers in the production of the crop and also promote value addition, saying that such support will help farmers produce at a lower cost and make their product competitive. “Lowering the production cost will ensure that the product sells at a price where one can take care of the production cost and also have good profit”. She noted that with the proper training and improved agronomic practices now locust beans can find its way into the global market.

Wednesday 02 October 2019

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Wednesday 02 October 2019

COMPANIES & MARKETS

BUSINESS DAY

COMPANY NEWS ANALYSIS INSIGHT

OIL & GAS

Shell sees increase LNG output in Q3 after slump in Q2 profit OLUFIKAYO OWOEYE

il-giant, R o y a l D u t c h Shell, in a preliminary disclosure for the third quarter ending September said its Liquefied Natural Gas (LNG) output increased by at least 10percent, however, its upstream output slumped 2.7percent and charges up to $850 million for the third quarter. A snapshot of results ahead of its full quarterly earnings statement, scheduled for October 31, Shell puts its Q3 upstream production at 2.60 million-2.65 million b/d of oil equivalent, down from 2.67million boe/d in the third quarter 2018, without indicating the oil and gas split. Shell noted that the end-of-quarter statement was in response to investor feedback and part of efforts to increase transparency. According to Shell, prices for gas and natural gas liquids continued to be “disconnected” from

Brent benchmark oil prices, reflecting exceptionally weak gas market conditions, indicating an uptick in write-offs for unsuccessful exploration drilling, saying well write-offs would be $250 million-350 million higher than in Q3 2018, when the write-off level was $149 million. Shell refinery availability had been in the range of 90-92percenr, roughly in line with a year earlier. Oil product sales were up compared with a year earlier, at between 6.70 million and 7.35 million b/d, while chemical sales were down, at 3.90 million-4.00 million mt, it said, noting it had completed the sale of its stake in Saudi refining joint venture SASREF in September. Shell had in August reported a slump in second quarter on the back of lower oil output and LNG Prices. The company’s total production available for sale in Q2 2019 was 3.6 million barrels of oil equivalent per day (MMboe/d), a decrease from $3.8 MMboe/d in Q1 2019 but an increase from $3.4bn

in Q2 2018. Shell’s revenue for Q2 2019 was $90.5bn, a decrease from $96.8bn in Q2 2018 but an increase from

$83.7bn in Q1 2019. The company also saw cash flow of $11bn from operating activities in Q2 2019, an increase from $8.6bn and

$9.5bn in Q1 2019 and Q2 2018 respectively The company’s offshore operations saw Current cost of supplies

(CCS) earnings of $1.4bn, a decrease from Q1 2019 earnings of $1.7bn and Q2 2018’s at $1.5bn respectively.

L-R Seye Fadahunsi, executive director, Pillar Oil; Akin Osuntoki, chief executive officer, Richardson Oil and Gas Limited; Rick Kennedy, director, Deepwater Services and PSC, Chevron Nigeria Limited, and Alex Weekse, representative of former managing director Niger Delta Exploration and Production Plc, during award presentation to Engr Fadahunsi and former NDEP chief, Dr Layi Fatona, at the 2019 PSRG-Richardson HSSE Forum in Lagos.

FINANCIAL SERVICES

Sigma Pensions boss tasks investment professionals on continuous capacity building for relevance MODESTUS ANAESORONYE

s the investment climate changes with impact of technology even on global scale, Investment Officers and Financial Analysts have been urged to continue to upscale their knowledge through continuous capacity building to remain relevant. Dave Uduanu, managing director/`CEO, Sigma Pensions who made the call at the Chartered Financial Analyst (CFA) Society Nigeria Career fair in Lagos said continuous education and certification

will ensure sustainability, increased productivity and continuous relevance. Uduanu who was part of an array of financial institutions, pension funds administrators (PFAs) and investment banking firms gathered to mentor and recruit students and early careers personnel. He was part of a panel discussion with other chief executives on where they deliberated on how to ‘Leverage the CFA designation across different stages of career’ and urged the participants to be CFA certified citing it as important

to career scaling. Speaking to the participants, he said: “For people who want to be financial analyst, investment bankers and players in the financial sector, it is important to be chartered, but more importantly even after you are chartered, you need to continue to read and go for training programs and the CFA program itself is a premier certification for investment management professionals in the world.” Furthermore speaking on the side-lines on why Sigma pension sponsored

the fair, he said: “This is the first time the CFA society is doing this fair and it is fair for students, candidates in early stage workers who are in investment industry and are interested in understanding the opportunities in that space. And we felt since Sigma is an investment management company it would be good to position ourselves before these potential employees as a brand that recognises talent, recruits and is willing to nurture talent.” “It also reinforces our interest in furthering the

investment management practice in Nigeria and we thought we should support the CFA in this initiative.” He further said: “We advised the younger ones on the options available to them in the investment management space and to better guide them to make better career choices and also more importantly to let them know that they need to make the sacrifice first and the need to read and get their CFA chattered firstly and then subsequently, the career world is open to them.” “The pension industry

is growing and it is one of the biggest holders of assets in Nigeria and there are opportunities for ambitious and bright investment management professionals in that space.” Also in her presentation, the Vice President Business Development West, Mabel George said Sigma Pension as of 2018 was ranked the second best performing in returns to its customers due to the companies due diligent and the firm’s commitment towards providing exceptional value towards its stakeholders.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

Wednesday 02 October 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

TECHNOLOGY

Firm launches data-free media streaming platform to boost Nigeria’s film industry

layMock, a data-free media streaming platform, is venturing into the Africa Market, with a focus on boosting Nigeria’s film industry. Due to its no-data requirement and cost effective subscription model PlayMock, envisions putting seamless streaming into the hands of the everyday African. In addition to the African market, PlayMock intends to have a foothold in North America, Europe and Asia targeting Africans and consumers of African content in the diaspora. With aims of being a one stop shop for entertainment that is accessed via the app alone. PlayMock users will be able to view some of the best Hollywood, Nollywood and international content through their smartphone, tablet or smart TV. Speaking during the weekend at the launch of PlayMock, George Ibekie, Chief Executive Officer, PlayMock has said providing access to content in a cost effective way is the goal of the service. “The goal is to use technology to solve the problems that

people have when it comes to consumption of entertainment. Nigeria produces a lot of content but the problem is access. We are creating access and levelling the playing field so that everyone can participate. It’s about innovation and the next best thing. “Piracy is not free and people pirate when there is no cost effective way to view content. What we are doing here is that we are creating access to content at a price that most Nigerians can afford,” Ibekie said. This is also as experts in the Nigerian film industry have said that diversification in the way films and content is being distributed would go a long way in improving revenue streams currently realised from the industry. Zack Orji, Actor and filmmaker has described new innovations in the way films are being distributed as a welcome development in the sector. Orji who spoke during the launch of PlayMock said, “For me as a filmmaker this is a beautiful thing. The sky is so big that it can accommodate everybody. I see this as people taking advantage of opportunities that are available. Anybody who views this as a rivalry,

then that person doesn’t want any progress for us in the industry. It just simply means people should keep re-engineering themselves to getting better. “The economic implication of this simply means more income for filmmakers if they learn to take advantage of this. More income for filmmakers means more revenue is being injected to the economy. It can only be better for the economy if it is well harnessed.” Orji also said that diversification of film distribution is the way to go and has warned against anybody claiming proprietary rights over the ways content should be distributed in the industry. PlayMock is an American based company with operations in Nigeria. The streaming service which claims that consumers would not require data to access content on its platform has the ability to connect up to eight users at a time to a single PlayMock device. The service says its offering to its customers is that of accessibility to content with the opportunity to choose from a wide range of content at an affordable price.

L-R: Omoniyi Oniyide, operations excellence manager; Eustesia Ogunsusi, marketing services manager; Edo Edeko, operations excellence manager; Ethel Mba, marketing manager, and Sadiq Olorode, restaurant manager Mr Bigg’s and Debonairs Pizza, all of UAC Restaurant, during the Mr Bigg’s customer experience activation at Amuwo Odofin store in Lagos.

L-R: Ngozi Nkwoji, portfolio manager, non-alcoholic drinks, NBPLc; Noble Igwe, fashion and lifestyle entrepreneur, and Emmanuel Oriakhi, marketing director, Nigerian Breweries Plc., at Nickfest with Maltina In Lagos.

Mr. Biggs re-positions, expands operations to create consumer traction DAN OBI

n pursuit of its repositioning and expansion drive, Mr Bigg’s, the foremost quick service restaurant brand has opened a new state-of-theart store in Amuwo Odofin, a suburb in Lagos. The first of its contemporary restaurant was opened in Northwest Filling station in Victoria Garden City Lekki in July this year. A statement said residents of Amuwo Odofin and Festac Town have commended UAC Restaurants, Limited owner of Mr. Bigg’s for locating a contemporary combo store housing two of its brands- Mr Bigg’s and Debonairs Pizza in their neighbourhood.

It would be recalled that UAC Restaurants Limited recently commenced remodelling of its Mr Bigg’s stores nationwide in a new initiative aimed at positively redefining the lifestyle of its numerous customers. While commending the new store housed by Peridot Filling station along Festac link road at Amuwo Odofin, Ademola Shabi, a businessman said, “location of this store could not come at a better time as the country celebrates its 59th independence anniversary.” Another customer, Linda Moneme, who visited with her family expressed joy over the new store particularly the state-of-art facilities and excellent cus-

tomer service. “A good family restaurant is one that offers delicious food that reminds people of the favorite meals their mothers cooked when they were kids,” she said. Speaking on the new combo restaurant, the restaurant manager, Olorode Sadiq said, “The new outlet is designed to sustain the heritage of the 33 years old outfit by raising the customer service to a new level. “The new store is patterned to deliver highquality food and good ambience as the basic standard. The menu offering is aimed at providing wide variety of choices to meet the customer tastes and trends,” he said.

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Olubunmi Adeleye, head, corporate services/communications, Leadway Assurance presenting school packs to female students of an IDP centre in Yola, Adamawa State, during the Leadway Charity Drive in support of female child education tagged ‘School in a Bag’ project.

L-R: Olufunmilayo Ogunbodede Brand Manager Goldberg; Korede Ademuyiwa, area sales manager, Akure Sales Area, Nigerian Breweries Plc.; Ajibade Gbadegesin Ogunoye III, Olowo of Owo Kingdom, and Austin Aka, regional trade marketing manager, Akure Region, Nigerian Breweries Plc., at the Olowo’s Palace during a courtesy visit to present the new Goldberg bottles to the Olowo recently.

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Wednesday 02 October 2019

BUSINESS DAY

cityfile

Oyo to build 3 additional abattoirs REMI FEYISIPO, Ibadan

A Leader of the delegation of Council of Obas from Akoko North/West Federal Constituency, Olukare of Ikare, Oba Akadiri Momoh presenting a plaque to the speaker, Femi Gbajabiamila during a courtesy visit on the speaker at the National Assembly.

Police recover 177 guns in 3 northern states

o fewer than 177 guns have been re covere d by police in Sokoto, Kebbi and Zamfara States in the ongoing efforts to reduce high incidence of crimes in the three northern states. Bashir Musa, spokesperson of the Zone 10 command of the Nigeria Police, disclosed this in

Sokoto. According to Musa, the recovered guns comprised AK-47 rifles, light machine guns, FN rifles, lar rifle, pistol, GPMG rifles and locally fabricated den guns. He said the amnesty programme in Zamfara played a great role in the recovery. Musa added that an amoury belonging to a notorious bandits’ gang

known as Zakuri in Zamfara was discovered where 30 AK-47 Rifles were recovered at once. According to him, two suspected kidnappers and 10 others on alleged culpable homicide offences were arrested including the suspect who was allegedly involved in the attack of the Nasarawa state deputy governor. He added that 143 animals comprising sheep

and cows along with eight motorcycles were recovered from the hoodlums. Musa reiterated the resolve of the zonal command to sustain the efforts and ensure that all sub commands under it lived up to the expectation. The police spokesman urged the citizens to be law abiding and assist the police with useful information on suspicious movements.

Bakers to train prison inmates in A/Ibom ANIEFIOK UDONQUAK, Uyo

g ro u p k n ow n as Akwa Ibom State Bakers Community has indicated interest in training inmates of the Nigerian Correctional Service (prison) on various pastries. Beulah Nelson, leader of the group who led other members on a visit to Uyo Medium Security Custodial Centre, said this would assist inmates rediscover themselves economically after discharge

from lawful custody. “We are here to partner with Nigerian Correctional Service in the area of human capacity development, to train these inmates in pastries so they don’t go back to crime after discharge”. The group shared cup cakes and other goodies with the inmates. The deputy controller of corrections in charge of Uyo Custodial Centre, Babafemi Jaiyeoba commended the visitors and prayed God to reward their gesture.

Meanwhile, it was a solemn moment for inmates and staff of Uyo Medium Security Custodial Centre as members of Akwa Ibom State Ethical and Attitudinal Reorientation Commission (EARCOM) visited the centre. The group, led by the executive chairman, Dorathy Thompson was at Uyo Medium Security Custodial Centre on a reorientation and sensitisation programme. Thompson appealed to the inmates to embrace

a spiritual rebirth and shun activities capable of bringing them back to the centre. She said “I am not happy seeing women in this place because before now, hardly you see women committing crime in the society”. The deputy controller of corrections, Uyo Medium Security Custodial Centre, Babafemi Jaiyeoba said that the visit was timely and in line with the new vision of the service and reformation policies of the correctional service.

Makinde approves 250-truck parking space REMI FEYISIPO, Ibadan

o e n s u re f re e flow of traffic in Oyo State, the government has approved a 250 capacity truck parking space in Ibadan, the state capital. The park which sited at Sanyo in Ibadan would reduce the level

of road carnage caused by indiscriminate parking of haulage trucks on highways in Ibadan metropolis. The executive chairman, Oyo State Traffic Ma n a g e m e n t A g e n c y (OYRTMA), Akin Fagbemi disclosed this when men and officers of the agency visited the popuwww.businessday.ng

lar Ibadan tollgate that was usually characterised by haphazard parking of heavy duty trailers. The Governor Seyi Makinde’s approval, Fagbemi narrated, was in a bid to restore sanity and discourage disorderly parking by motorists at the tollgate and other corridors across the state.

Addressing petroleum tanker and heavy duty vehicle operators at the tollgate, Fagbemi said: “Vigilance of everyone is safety for all; negligence of anyone is danger for all. It is the quest of the governor to ensure safe highways for the people of Oyo State and its environs.”

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s part of measures to enhance consumption of wholesome meat, Oyo State government is to build three additional modern ultra modern abattoirs in the state. According to Ojemuyiwa Ojekunle, the commissioner for agriculture and rural development, the proposed abattoirs would complement the existing facility at Akinyele, and go a long way in reducing health hazards associated with the consumption of unhealthy meat. Speaking at a one day symposium organised by the Nigerian Veterinary Medical Association, O yo chapter, in Ib a d a n , t h e c o m m i ssioner called on stakeholders in the agro busi-

ness to key into the state government economic blueprint. “The essence of this programme is to sensitise the public on the need to eat healthy meat because of the health hazards associated with consumption of unwholesome meat. The s t a t e w o u l d b e ov e rwhelmed in any case of outbreak of epidemic. “As stakeholders we have to do more. This is why the present administration is working to establish three more abattoirs within the state to enhance healthy processing and consumption of meat.” The commissioner, h o w e v e r, c o m m e n d ed the association for complementing government’s effort in sensitising the public on the importance of consuming healthy meat.

Arise Women empowers 1,000 with entrepreneurial skills ENDURANCE OKAFOR

bout 1,000 women have been trained in various skills by Arise Women, a nongovernment organisation, under its empower ment scheme for 2019. Siju Iluyomade, pastor of Redeemed Christian Church of God, City of David Parish, Lagos stated this during a ceremony to mark the 11th anniversary of adding value to the society, held in Lagos on September 28. The women were trained catering, gele tying, soap making, decoration/event planning, wig making, digitalmarketing, photography, tailoring and fashion designing.

Other skills imparted to the women during the 5-day event which started Tuesday, 24 to Saturday 28, September 2019 included, mat making, bead making, shoe making, bag making and traditional master of ceremony (MC).. The NGO in fulfilling its objective engages the services of professionals to take on different classes in respect of the skills acquisition entered for. Iluyomade said series of other events have been lined up to mark the yearly Arise Women’s conference on October 12, 2019. The Arise Women’s conference with the theme, ‘bloom’ is one of the special programmes aimed at identifying talents and empowering women.

Flooding: Community seek intervention from Jigawa

he people of Maruta community in Gwaram local governmnt of Jigawa have appealed to the state government to come to their aid following the damage caused by flooding in the community. Spokesman of the community, Bilya Maruta made @Businessdayng

the appeal in Dutse, saying more than 100 houses have been destroyed in the flooding, with many farmlands washed away. According to Maruta, crops such as millet, maize, beans and guinea corn planted were completely washed away from the farms.

Wednesday 02 October 2019

BUSINESS DAY

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Wednesday 02 October 2019

BUSINESS DAY

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Wednesday 02 October 2019

BUSINESS DAY

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

Independence: Nigerian ports yearn for efficient modes of cargo evacuation 59 years after AMAKA ANAGOR-EWUZIE

ifty-nine years after Nigeria gained independence from the British colonial masters, the nation’s seaports still depend 100 percent on roads for the evacuation of export and import consignments to and fro the ports. By implication, over 95 percent of liquid and dry cargoes imported into or exported out of the country are moved by road using trucks and trailers with little and some cases, no utilisation of other modes of transportation that include railway and waterways. BusinessDay understands that due to poor evacuation of cargo from the port especially as a result of over reliance on road transportation, Nigerian ports have remained inefficient. Consequently, shippers presently pay dearly to not only transport their cargo but for demurrage due to delays in taking delivery of their cargoes. The delay was due to heavy congestion on

roads leading to seaports in the country including Apapa, Tin-Can Island, Onne, Warri and Calabar Ports. Surprisingly, it is only Apapa Port that has functional rail line, and also manages to move a little portion (about 20 containers weekly) of imports out of Apapa Port. Hadiza Bala Usman, managing director of the Nigerian Ports Authority (NPA), said Nigeria needed to con-

sider using the rail system to move containers. According to her, the Ministry of Transportation needed to provide clear timeline and percentages of cargoes that should be moved through the different nooses of transportation including inland waters, road and rail line. “To reduce the number of trucks and trailers on Nigerian roads, we need to

determine the percentages of cargoes from our ports to be apportioned to a particular transportation model because all cargoes cannot be moved by road,” she said. She further pointed out the need to determine that 30 percent of Nigerian cargoes must go through the rail, and commit about three to four years’ timeline to deploying the necessary resources towards building the needed

infrastructure. It is no doubt that one of the determinant factors for the relevance of ports is the speed and seamlessness, with which owners of cargo are able to move their consignments out of the ports. Meanwhile, Rotimi Amaechi, Minister of Transportation said at this year’s World Maritime Day that government planned to link the railway system to the seaports, as a way of integrating the maritime sector into the rail master structure. This, he said, would make movement of goods to and from the ports more effective. “We have put in place a 25-year modernisation programme for the rail system. With the master plan, we have taken rail from where the past government stopped into the seaports,” he said. The minister further said that the current Lagos-Kano rail line began from Ebute Metta but the present administration started another line from Ebute Metta to Apapa seaport. “While the rail line from Lagos to Calabar will link the

Calabar, Port Harcourt, and Onne seaports,” he said. For several years, shippers and other port industry stakeholders have received promises of connecting the ports by rail for effective cargo evacuation from past governments without actualisation. However, all hope is not lost as shippers believed that ensuring railway operations is the singular way to decongest access roads to ports in Lagos and Onne. “So long as we have all the cargo plying the roads, we will continue to have congestion. We need to understand that prioritising hinterland connection is paramount for any port to be operational and efficient,” said Usman. In addition to building rail network, Nigeria also need to utilise inland waters for cargo evacuation using barges, by ensuring that the Nigerian Inland Waterways Authority (NIWA) prioritises its operational capacity in dredging some of the river ports to ensure importers have alternative routes to move their cargoes.

Maritime sector needs to return over N300bn Relief as APM Terminals, LAWMA clear refuse in Apapa to Nigerian economy – Amaechi R … As 10 students win NIMASA educational grants @WMD

otimi Amaechi, Minister of Transportation, said the nation’s maritime industry, which is presently returning less than N100 billion to the Federal Government should be returning above N300 billion annually. To him, security infrastructure being built by the Federal Government called the Deep Blue Sea project would be a major economic boost that would enable it to make effective contribution to government revenue. Speaking with the media in Lagos during the World Maritime Day (WMD) celebration, Amaechi said the project aimed to secure the nation’s waters up and entire Gulf of Guinea to inspire greater investor’ confidence in the maritime sector. “With this, the revenue of agencies in the maritime sector will increase vis-à-vis that of the country,” he said. Presenting paper on the measures to tackle maritime

insecurity, Dakuku Peterside, director-general of the Nigerian Maritime Administration and Safety Agency (NIMASA) said in addition to land, air, and marine-based assets being acquired, the agency had built an intelligence gathering component for the execution of the Deep Blue project. The Deep Blue Project is a multipronged approach towards tackling insecurity on Nigerian waters and the entire Gulf of Guinea. It involves the acquisition of assets such as fast-intervention vessels, surveillance aircraft, and other facilities, including a command and control centre for data collection and information sharing that will serve the goals of targeted enforcement. The project also includes the training of personnel from the security services to man the assets. The objective is to build an integrated surveillance and security architecture that www.businessday.ng

will comprehensively combat maritime crimes in Nigeria. Meanwhile, in commemoration of the WMD, NIMASA awarded educational grants to 10 students, who excelled in an essay competition it organised. Toluwalope Ojewola, a student of the University of Ibadan, emerged overall winner of the essay competition, which had over 100 entries, and centered on the theme, “Empowering Women in the Maritime Community,” in line with the International Maritime Organisation (IMO) campaign focus of, “Supporting Gender Equality, Empowering Women” in maritime. Ojewola was presented with N500, 000 education grant, a laptop and a plaque; Blessing Omataye of the University of Benin came second while Alexander Chikodinaka Nwaegede from the University of Nigeria, Nsuka, came third. Both won educational grants and lap tops.

esidents and commuters in Apapa can now heave a sigh of relief as APM Terminals Apapa, in partnership with the Lagos State Waste Management Agency (LAWMA), embarked on a clean-up exercise to clear the heaps of refuse dumps littering the Apapa-Wharf Road and its environs. Speaking at the recent flagged off on Wharf Road, Martin Jacob, managing director of APM Terminals Apapa, said the initiative was part of the company’s 2019 ‘Go Green’ campaign, an annual programme that aims at creating awareness on environmental degradation and encouraging sustainable waste disposal. Martin charged port users to put an end to indiscriminate dumping of refuse on the port roads. “We can complain but nothing will change if people do not change their attitude. We need to focus on what to do to achieve a sustainable clean port environment. We, as a corporate organisation, will help to make sure that happens,” he said. Fumilayo Olotu, Apapa Port manager, who described the heaps of refuse in Apapa as an eyesore, said all hands must be on deck to restore the lost glory of the port city.

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L-R: Adele Owolabi, chairman, Apapa Local Government; Muhammed Abba-Kura, controller, Apapa Area Command of the Nigeria Customs Service; Ibrahim Odunboni, executive director, Lagos State Waste Management Agency (LAWMA); Fumilayo Olotu, Port manager, Lagos Port Complex, Apapa; Martin Jacob, managing director of APM Terminals Apapa, and staff of APM Terminals Apapa during a cleanup and refuse evacuation exercise along the Apapa-Wharf road organised by APM Terminals and LAWMA recently.

“Apapa used to be a place of pride in those days, so activities around the port community should not make us lose the heritage we had in the past. We must engage the truckers to ensure the heaps of refuse do not return,” she said. Adele Owolabi, chairman of Apapa Local Government, applauded APM Terminals for coming up with the initiative to clear the refuse dumps that have littered the ports environs for months. “It is a right step in the right direction to give back to the community by evacuating the refuse. It should be sus@Businessdayng

tainable and in sustaining it, there should be sensitisation and advocacy campaign to these truck drivers and motor boys against throwing wastes on the road,” she said. Ibrahim Ojuboni, executive director of LAWMA, who called for the sustainability of the clean-up exercise, also lauded APM Terminals for the initiative. He urged other corporate organisations to emulate the gesture. The theme of the 2019 APM Terminals “Go Green” campaign is “Building Partnerships for a Sustainable Future”.

Wednesday 02 October 2019

BUSINESS DAY

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

Operator seeks 30% tariff rebate as Calabar Port receives laden containers AMAKA ANAGOR-EWUZIE

hirteen years into concession, the Ecomarine Terminals Limited, the concessionaire in charge of cargo handling at the Calabar Port, has finally received its maiden container vessel. The berthing of MV Boreas, a vessel belonging to Marguisa Shipping Line, in Calabar Port signifies a milestone achieved through strategic marketing carried out by the terminal operator. The vessel, which has gross registered tonnage of 6,569 came with both laden and empty containers, and successfully anchored at ECM Terminals at about 13.27 hrs on Monday 23 September. Diran Akorede, general manager of ECM, said the berthing of the container vessel at the port was the crowning moment of the several efforts put into attracting

L-R: Rotimi Amaechi, minister of transportantion; Sabiu Zakari, permanent secretary, Federal Ministry of Transportation; Hadiza Bala Usman, MD NPA; and Dakuku Peterside, DG NIMASA at the celebration of 2019 world Maritime Day held

a liner service to Calabar Port. “In October last year, we had preliminary discussion with Marguisa representative on the possibility of commencing calls to Calabar. To make the call viable to Marguisa, we made several concessions on rates and co-opted other stakehold-

ers into the efforts followed with road shows to sensitise potential clients. The maiden call of the vessel was the outcome,” he said. He said the terminal has invested massively on container handling equipment in preparation for receipt of container vessels.

Akorede commended the Hadiza Bala Usman-led management of the NPA for the partnership given to the concessionaire over the years. He said Usman from inception had given priority attention to resolving some of the key challenges that have bedevilled the port. “We are ISO-certified and have well documented processes to ensure transparency and efficiency in our service delivery. Our systems are fully automated and the facility is fully ISPS compliant,” he said. On development in the terminal, he said the terminal operator had paved the stacking area, which has remained unutilised over the years. “We have been prepared from the inception to handle the discharge of cargo in the best professional manner. Our pact with Marguisa is to provide and ensure efficient service delivery, quick turnaround for vessels and an incentive scheme to support and make

their voyage profitable,” he stated. BusinessDay recalls that Calabar has suffered low patronage from container liners due to issues around draft limitations and insecurity. Currently, Calabar channel has a draft of 6.4 meters at high tide, but requires a complete dredging to the draft of 9.4 meters to attract regular and bigger tonnage. Akorede, who said the terminal was ready to receive more container vessels, enjoined the ports authority to introduce a more effective incentive scheme such as 30 percent rebate hitherto in place before the concession. He further called on the government to ensure quick completion of the road construction from Odukpani Junction through Ikot Ekpene to Aba, already awarded to Julius Berger to further facilitate patronage and ease evacuation of cargoes from Calabar.

LADOL to transform into sustainable industrial special economic zone in 2020 …Seeks unique business model for Nigerian market

he Lagos Deep Offshore Logistics Zone (LADOL) will in 2020 turn into a Sustainable Industrial Special Economic Zone after the launch of its circular economy next year. Upon the launch, part of the Zone will be dedicated to incubating and supporting Nigerian entrepreneurs, providing shared offices and workshops, as well as incubation of services. In addition, LADOL will be a platform that would be supporting the creation of new sustainable businesses that will deploy innovative solutions to today’s businesses from transport to agriculture and IT, said Amy

Jadesimi, managing director of LADOL. To benefit from this, she urged entrepreneurs to create new business models that will uniquely engineer the Nigerian market. Jadesimi, who stated this as a keynote speaker at IE Business School’s Digital Venture Day held recently in Lagos, highlighted the importance of indigenous Nigerian private sector in creating tens of millions of new jobs needed in Nigeria. She encouraged the audience to use the United Nations’ 17 Sustainable Development Goals as a guide to identifying business

opportunities in order to build their businesses. “We know from 2016 report of the Business and Sustainable Development Commission, ‘Better Business Better World’ that $12 trillion will be created if private sector pursues SDG, aligned and inspired business opportunities. Much of this market will be in high growth, low income countries like Nigeria,” she said. According to her, Nigeria’s demographic dividend, young population will drive global prosperity and peace, resulting to private sector growth. “With the right financing

model and intelligence, hard work, energy and ingenuity of Nigerian entrepreneurs, within a decade, Nigeria could be transformed. Sustainability equals profitability and Nigerian market is the perfect environment for new business model to flourish,”she said. Jadesimi commended the Central Bank of Nigeria (CBN) for its recent moves to increase financing flowing to the real private sector. She however said that there were more that still needed to be done to encourage banks to support the real private sector. “Nigeria is the largest under-

served market in the world. To ensure that the private sector can focus on locally conceived, manufactured and deployed value added solutions, we need to collaborate,” she said. According to her, sustainability involves building sharing economies and solutions through joint private sector lobbying of government and financial institutions. She however pointed out that indigenous Nigerian private sector that will generate the highest returns if they are sustainable, has long been ignored by the global financing community.

VESSELS EXPECTED AT LAGOS PILOTAGE DISTRICT SHIP

AGENT

PORT

TONNAGE/UNI

EXP

E. T. A

LENGHT

CARGO

APS APS

ENL ENL

4000MT 21,000

05/10/19 04/10/19

132M 164M

F/FISH G/CARGO

BLUESTAR

GDNL

44000MT

S/N

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GREEN BRAZIL TOP ELEGANCE CHARIANA L

FAN ZHOU 9 SEA LAVENDER FAIR MASTER JUMBO KINETIC CC JASPER SEASPAN LINGUE MERKUR FJORD JIN WANG LING DESERT GLORY CENGIZ BAY LILAC VICTORIA TONG JI MEN JADRANA HAMMONIA AMERICA SAFMARINE CHILKA MAERSK CALABAR KOTA SEMPENA KOTA SETIA ARUNA ISMAIL USMA

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BLUESTAR DAN.REF 758.611MT BLUESTAR GDNL 28,000MT BLUESTAR DAN.REF 5200MT BLUESTAR DAN.REF 5200MT CMA.CGM.NIG APMT 560FCL CMA.CGM.NIG APMT 520FCL CMA.CGM.NIG APMT 500FCL COSCO EKO 5303.76MT GOLDEN ABTL 42300MT GOLDEN ABTL 11,000MT GREENLINK SBM 59,957.168MT GMTS ENL 8428MT LANSAL APMT 850FCL MAERSK APMT 450FCL MAERSK APMT 390FCL MAERSK APMT 440FCL PIL APMT 560FCL PIL APMT 530FCL PLATINUM GDNL 45,000 WAPS PWA 20,000MT MOTOR VESSELS AWAITING BERTH AT LAGOS

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Wednesday 02 October 2019

BUSINESS DAY

BANKING Banking sector can boast of convenience, speed in service delivery after 50 years HOPE MOSES-ASHIKE

esterday marked 50 years of Nigeria’s independence with some positive stories as well as numerous challenges waiting for solutions Right from the British colonial administration, the banking system has gone through various stages of development, particularly with the advent of technology. No doubt, the advent of technology in the financial services sector has opened up new markets and introduce new products, services and efficient delivery channels for the banking industry. The Banking industry has evolved rapidly in the last decade. The country’s desire to enhance financial inclusion has made it compelling to leverage on technology to accelerate access to banking and other financial services. Consequently Nigerian banks have benefited immensely by adopting the latest technologies. Today, there is electronic banking, which has resulted in reducing costs of transactions and has helped generate revenue through various channels. Customers can carry out transactions seamlessly from the comfort of their homes and offices through various electronic banking channels such as Automated Teller Machines (ATMs), Point of Sales (PoS), internet banking, WhatsApp banking, and mobile banking, among others. More importantly, the industry has wit-

nessed reduction of queues in the banking halls to more personalized banking services. Indeed, the traditional roles of banks are now being performed by various technologyenabled providers of services, usually referred to as Fintechs. According to Sam Okojere, director, payments system department, Central Bank of Nigeria (CBN), Innovations in this industry are gradually changing the face of conventional

L-R: Gbolahan Joshua, executive director, operations and information, Fidelity Bank Plc; Mike Ogbalu III, chief executive officer, Verve International; Oremeyi Akah, chief operations officer, Interswitch; Mitchell Elegbe, group managing director/ chief executive officer, Interswitch; Chinyere Don-Okhuofu, deputy chief executive officer, sales Network, Interswitch, at the 10th anniversary celebration of Verve in Lagos recently.

UBA to give 20% discount on services, products at Trade Fair HOPE MOSES-ASHIKE & GBEMI FAMINU

he United Bank for Africa (UBA) as the headline partner of the 2019 Lagos International Trade Fair in collaboration with The Lagos Chamber of Commerce and Industry (LCCI) is set to provide discounted services to visitors and exhibitors at the annual Lagos International Trade Fair. Speaking to journalist at a press conference towards the trade fair, Tony Anele, UBA’s group head, consumer and retail banking stated that the bank, with its strategic reach across Africa and other major economies of the world was always on the lookout for partnership opportunities that would benefit the business environment and the economies of its areas of operation. “A branch will be available at the fair which will provide all the products and services the bank has to offer as well as simplifying payments with different currencies.” He said the bank will provide a discount of 20 percent on all its products and services for all the participants at the fair. According to him, the partnership would offer the bank the opportunity to showcase its array of products to its new customers, adding that the bank would set up stands at various points to serve its customers and attend to

banking as they provide more channels and ways of carrying out financial transactions. These are channels which can drive financial inclusion to meet the target set by National Financial Inclusion Strategy (NFIS) of 80 percent of bankable adults by 2020. The CBN recently introduced into the financial system, a Payments service banks (PSBs), which are specialised banks established to promote financial inclusion and

various concerns. He said “UBA has successfully put in place a solution that takes care of all the payment issues that we have within Africa. It was strategic that we were opening locations across different regions in Africa, operating different currencies therefore the backend currency exchange issue will be handled expertly despite regulatory challenges.” Gabriel Idahosa vice president of the LCCI, said the trade fair revolves around connecting and creating values for businesses as well as exhibitors. “UBA will be using this unique platform that is intended to grow both domestic and international trade, it further presents participants and visitors with opportunities to seal medium and top business deals,” Idahosa said. “UBA has always been on the lookout for partnership opportunities that will benefit the business environment and the economies where it operates.” The 33rd edition of the annual Trade Fair will commence from Friday the 1st of November to Sunday the 10th of November at the Tafawa Balewa Square, Lagos, in an exhibition space of about 40,000 square meters and 2,000 expected exhibitors out of which 200 are foreigners from about 16 countries. The fair is expected to provide an avenue for networking and other business opportunities that can boost business activities in Lagos and Nigeria. www.businessday.ng

enhance access to financial services for lowincome earners and unbanked segments of the society by leveraging on technology. PSBs are expected to leverage on technology, mobile and digital services to drive financial inclusion, especially in rural areas where access to brick and mortar financial services is almost non-existent. PSBs are also being set up to focus on high volume but low-value transactions by low-income households and small businesses. Uche Olowu, president/chairman of council, Charted Institute of Bankers of Nigeria (CIBN) said the increasing competition in the digitised banking environment would no longer be between banks but with nonbanking institutions. Fintech and big tech firms such as Google, Amazon, Facebook and Apple are now capturing more of the banking value chain. Furthermore, payment service banking is set to further disrupt the banking industry. For example, as at July 2019, telcos such as MTN and Airtel Nigeria had been granted licences by the Central Bank of Nigeria. PWC suggests that from 2025-2035, a market economy would readily exist without traditional banks. “We are investing and building our digital capabilities, and also actively seeking to collaborate with FinTech companies. Whether we compete or collaborate, we will be aggressively pursuing these digital opportunities to strengthen our traditional businesses, and going beyond being a bank to becoming a platform that enriches the lives of all the customers that it serves,” Segun Agbaje, managing director/CEO of GTBank said in April 2017.

Union Bank supports education sector with Edu360 2019

n line with its efforts to support education as a vital sector for Nigeria’s growth and development, Union Bank has announced the second edition of its annual education fair – Edu360. The three-day event themed, ‘Education Beyond Walls’ will take place at the Union Bank Sports Centre in Surulere, Lagos from Thursday, 24th to Saturday, 26th of October, 2019, and will attract audiences across the education ecosystem including government officials, educators, parents and students. Attendees will benefit from a robust programme lineup that includes talks, panel sessions, masterclasses, workshops and training sessions for teachers. There will also be immersive and interactive activities and learning sessions for students, including gaming classes, robotics and coding, acting clinics, and photography workshops. The focus of the annual conference is to facilitate critical engagement between key stakeholders in the sector, provide essential teacher training for public school teachers

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and expose students across all education cadres to experiential and creative learning opportunities. Speaking on the Edu360 initiative, the Chief Executive Officer of Union Bank, Emeka Emuwa, said: “Union Bank has been a leading advocate for education in Nigeria. Edu360 presents a platform to express our robust support for this key sector. Following the successful first edition last year, we realised that great ideas and collaboration are key to moving the education sector forward. We hope that the discussions and conversations at Edu360 2019 will unearth new ideas that will help build this very crucial sector.” Edu360 was established in 2018 by Union Bank as a platform to rapidly accelerate access, quality and learning outcomes for Nigerian children and youth. The inaugural event drew over 3,000 delegates. This year, the event is expected to attract 5,000 delegates and will feature an exhibition where service providers in the education sector will showcase their products and services.

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Wednesday 02 October 2019

BUSINESS DAY

PENSION today

In Association With

We are not scared of embracing technology- Premium Pensions MD Premium Pensions Limited, one of the leading Pension Fund Administrators(PFAs) in Nigeria with Asset Under Management (AUM ) slightly below N680 billion and about 700 customers, with two ISO certifications, last week embarked on a new phase of transformation. Umar Sanda Mairami, managing director/CEO of the PFA in an interview shared his vision, appetite for new technology and where the company is going in the next five years. Excerpts: make contributions, track their contributions, see their statements, apply for withdrawals and so and so forth. It’s a game changer in the industry. So, for us, this is a dream come through, and this is just the beginning. What we are doing now is raising the bar. And every effort we have put in here is based on the yearnings of our members, who are our contributors. So, what we have done is to prepare for that time when our membership will double, when our AUM will double so that we will continue to serve them well. How do these innovations take care of your incoming customers from the new launched micro pension scheme? The multichannel mobile App also has a platform for micro pensions on its own, such that you will be able to make registration, make contributions, track your accounts and also make withdrawals through the mobile App. It’s an all encompassing App. I think we have proven in the course of about 18 months now that we are not scared of embracing technology so as to make things easy for our clients. Just like I said, our ambition is to double our client base and we have prepared for it. In fact, we don’t necessarily need to double the workforce. For the micro pension scheme, yes, we have enrolled people, not just enrolment; we have started receiving contributions through several channels.

‘

Umar Sanda Mairami

Really, Premium Pensions is today not looking at only pension management; we are looking at a whole gamut of pension access. It is an App that will appeal to the young age, that is, people who are just starting work today and want to make savings for the future, as well as those who are already going into retirement. There is so much coming ahead from Premium Pensions and we believe that this logo will open up a new vista in the life of the company. This is a very bold statement, a statement about premium experience you can get from any of our channels – brick and mortar or electronic. To a large statement, we are also making a statement to say, you can actually serve yourself – people can open accounts,

Because we are able to understand that some people may not be privileged enough to use technology we still go out to the locations of our employers and administer those hard copy forms and do data recapturing

‘

Tell us why you are embarking on this transformation, and how this aligns with your history? aving made some remarkable achievements in the course of our history, as the third largest PFA in terms of AUM; as the PFA with the highest unit value for oldest fund, which is known as Fund 2 today, we think we should have a new beginning. In this new beginning, you will see that we are embracing technology, we are improving the skills of our people, we are also revamping our operations to support the strategic plans we have put in place, which is a five years strategic plan. So, the journey of where we are today started late last year when the management came out with a five years strategic plan, and the main objective of the entire strategy is to position the company in such a way that we stand out as far as the pension industry is concerned. Our main focus in the next five years is excellence in premium experience for our clients. Some of the things we have launched touch on this objective including our mobile App and new website which are all geared towards ensuring that our members get the premium experience. You have just unveiled a new logo, and a mobile App, what is the message? This new logo will make some very bold statements. It has minimal steps that actually portray the authenticity of Premium Pensions. The clean cut box that you have seen talks about the honesty of the brand. The fund establishes dominance, it’s a logo that say’s about its presence today, its reliability, its longevity and also the fact that we are premium. It is actually an opportunity to unveil a mobile App that is a leader in the industry today. It’s a mobile App that is used by five different set of people, so you have the employers who will use it; the employees who are our RSA holders; our agents will use them, our staff will use them and it is also a mobile App that is multichannel in nature. It’s a mobile App that can be used on smart phones, it can be used on USSD; You can go to our website and get access to it, it can enable people make referrals, earn points and redeem those points.

How prepared is Premium Pensions going to replicate these same services in other states of the federation that may not be like Lagos and Abuja in terms of technology, even in terms of staff knowledge of the different applications to be able to support clients around the localities? We are well aware of the challenges that some of states face in terms of technology. The use of technology does not mean we are not going to enhance our brick and mortar structures. We have a detailed programme for training and retraining of our staff on general customer service issues as well as on technical issues. So, for us, it’s something we have taken into consideration, technology is not going to replace one on one human interaction. There are some people who want to come to the office, there are some who want to sit in their homes and do everything from their phones. We are there physically; we are also there technologically, and our connectivity with all the branches has improved very reasonably. We are online real time with all our internal systems. How does this align with ongoing data recapturing being mandated by PenCom, in terms of helping to reach those that cannot be able to come to your office to recapture? The reality is that the mobile App has the capacity to do that. But even before the App, we do realise that some people will like to do things at their own convenience and we have an online version that when you log in you do your data recapturing. Because we are able to understand that some people may not be privileged enough to use technology we still go out to the locations of our employers and administer those hard copy forms and do data recapturing. Believe you me, we take technology seriously and at the moment we see that it’s giving us an edge. The reality is that the young graduate of today will rather do everything while they are on the street walking and doing everything in their phones. We have made that recognition and for the fact that the future belongs to them, we have to key in. So, all channels are open because we know that all fingers are not equal.

IS NOW RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State. Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@accesspfc.com Website: www.accesspfc.com

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This section is created to increase awareness and deepen knowledge about the Contributory Pension Scheme. If you have enquiries or contributions, send to this e-mail: accesspfcbusday@yahoo.com

Wednesday 02 October 2019

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Declining profitability, uncertain economic outlook worries African reinsurers Modestus Anaesoronye

frican reinsurers are witnessing pressure on profitability following declining rates and rising claims amidst a challenging business environment. Therefore the mood among Africa’s reinsurance executives has become more bearish as declining rates and rising claims weigh on the profitability of the African reinsurance markets with a current premium volume of roughly $ 7.5 billion. However, while Africa’s economies are still recovering from the commodity crisis of 2016, which highlighted the continent’s vulnerability to external shocks, executives are once again concerned about the current outlook in light of renewed economic and political uncertainties. This is the main outcome of the 4th edition of the Africa Reinsurance Pulse, which was published on Monday at the 24th African Reinsurance Forum in Tunis, Tunisia. However, the senior executives of Africa’s leading brokers and reinsurers interviewed also expect that the inflow of excess capacity from advanced markets into the continent has finally come to a standstill. In fact, insured values as well as premiums might benefit from the current economic growth and outgrow GDP. “The market assessment among Africa’s reinsurance executives have deteriorated after it had already been on a road to recovery” say Andreas Bollmann and Henner Alms, authors of the study at Schanz, Alms & Company. “While rates, terms and conditions and profitability are low, Africa’s economic growth has improved somewhat and may translate into volume growth. But executives fear the next crisis may be lurking around the corner as rising trade barriers and a slowdown in appetite for Africa’s commodities cloud the outlook.” 2018 has been a year of recovery. Africa’s GDP increased by an estimated 3.5 percent, roughly in line with the prior year, but trailing slightly below the global average of 3.6 percent and the emerging market average of

L-R: Rivers Khumalo, chief technology officer, FBNInsurance Limited; Elizabeth Agugoh, head, Marketing & Corporate Communications, FBNInsurance Limited; Olubukola Adebiyi, president, Jakin NGO; Dr. Adebiyi, board member, Jakin NGO; Juliet Ajiboye, head, Technical Operations, FBNInsurance Limited, at the 2019 Jakin NGO Dress-A-Child Project in commemoration of the International Literacy Day.

4.8 percent. Insurance premiums expanded by 4.9 percent, ahead of GDP. According to our assessment, reinsurance will have benefitted in line with insurance market growth, surpassing for the first time the $ 7.5 billion mark. Fundamentally, Africa’s underlying narrative based on population growth, infrastructure needs and an expanding middle class remains intact. In addition, in 2018 key primary insurance markets like South Africa or Nigeria returned to growth. With the enforcement of risk-based capital regimes and tighter capital requirements markets are seen to becoming more sophisticated. However, shortage in skilled labour has become a concern to all reinsurance executives as experienced talent is needed to advance risk management, product development or technology. The rise of protectionism is another worry as access to markets becomes more costly, while capacity for highly specialised risks remains a scarcity in some African markets. Africa’s low insurance penetration should increase as more insurable

Sigma Pensions MD to host master class at JAN’s 20th anniversary Modestus Anaesoronye

ave Uduanu, managing director/ CEO, Sigma Pensions has been slated to host a master class at the 20th Anniversary of Junior Achievement Nigeria (JAN) that will enlighten the youths on financial literacy. Uduanu who represents Sigma Pensions on the board of JAN will be holding a FIRE (Financial Independence, Retire Early) session as a spinoff of the events theme; ‘Creating an agenda for the youth and the future of Nigeria’ The 20th Anniversary celebration is slated to hold on October 4, 2019 at the Landmark Events Centre, Lagos with over 2000 young people and an array of seasoned professionals expected to be in attendance.

Uduanu also congratulated (JAN, on its 20th Anniversary and praised the organisation on its consistent role in delivering unique and experiential programs focused on preparing young people to succeed in a global economy through entrepreneurship, financial literacy and work readiness. He also reiterated Sigma Pensions’ commitment to supporting JAN activities in the coming years, he said: “We have partnered with JAN because of their consistency, determination and tenacity in their vision to improve the lives of Nigerian youths and the society through innovative initiatives. On the topic he would be discussing, he said: “Financial literacy is a major indicator of the state of a society, it is important to inculcate in our youth the tenets of financial management in order to ensure that they are adequately prepared for a life after work. www.businessday.ng

values come onto the market. Instead, the continent’s average insurance penetration rate has declined in the last ten years from 3.26 percent in 2008 to 2.98 percent in 2018. Although improvements may come from the expansion of Africa’s insurers and reinsurers into lines of business that are seen as growth drivers, namely infrastructure and agricultural insurance, rising trade barriers and overregulation affect access to business, increase cost and hamper innovation. Finally, rising losses from natural catastrophes and climate change steadily alter Last year’s recovery in rates was short lived. Close to three quarters of interviewees perceive rates as low or average as markets suffer from a lack in technical pricing and poor data quality. Rates also suffer from additional capacity created by regulatory action. As supervisors increase their solvency requirements, reinsurers raise capital and deploy the additional funds to write more business. Profitability – historically a strength of the African reinsurance

markets – is regarded as low by almost 60% of interviewees as rising claims, declining rates and increasing costs are taking their toll. Due to the negative legacy from recent losses, improvements will take time. The inflow of reinsurance capacity, however, seems to have come to a standstill. While some capacity had been hit by poorly performing markets and in response retreated, it has been replenished by a return of international capital, trying to capitalise on a hardening of rates as well as local and regional players seeking to deploy their funds. The split of business between international and African reinsurers is expected to tilt toward the continent’s players. While international capacity will remain stable, local and regional capacity is on the rise as African markets continue to launch national reinsurers. In addition, while protectionist measures increase the cost of doing business, local reinsurers seek to compensate for their loss in profitability and therefore further strive for top-line growth. Reinsurance exposure is expected to outgrow GDP growth. Values are up due to unfavourable exchange rates developments for imports as well as claims inflation in health insurance. Executives also assume that premiums will grow in line or ahead of GDP, which across Africa will rise by 3.5%. However, market participants also voiced their concern that insurance is still not innovative enough to capitalise on the opportunities posed by technology and in the modernisation of Africa’s societies and economies. The domestication of reinsurance premiums or the rise in protectionism remains the main concern for Africa’s reinsurers. The market players ponder strategies to adapt to the new market realities. Apart from contemplating the cost of setting up offices in certain jurisdictions, they vow to strengthen their access to further business by improving their services and product proposition and by gradually upgrading their financial security rating. In addition – as a gateway to further markets and risks – they consider strategic partnerships, pools or mechanisms of premium exchanges with other local or international reinsurers.

Anchor Insurance sponsors NAFEST Edo 2019

he Management of Anchor Insurance Company Limited has said that following its passionate concern to ensure the Nigerian culture does not die, it is sponsoring the National Festival of Arts and Culture otherwise christened NAFEST Edo 2019 being hosted by Edo State in October. This is just as the company recently won two major awards in recognition of its sterling position and contribution to the nation’s insurance industry. Ebose Augustine, managing director/ CEO of the underwriting company who disclosed this during a chat with some media hands in Lagos explained that “as a corporate citizen with high respect for social responsibility, we see it as an honour on us to support events of this sort which aim at re-

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storing and keeping our culture as a people.” According to him, “this support is one of our ways of giving back to the society as it is the society that has ensured our continued success through their patronage. It is, therefore, not out of place to give the support we could to ensure the success of the festival.” He explained that “as a people, we are fast losing our culture to Western ways. Any race without a culture is a lost race. It is our passionate resolve at Anchor Insurance to be part of any programme that will help to promote and ensure the Nigerian diverse cultures do not go into extinction.” In another development, the Company has been decorated with the “Customer Service Brand of the Year 2018” and “Fastest Growing Insurance Brand in Nigeria” awards.

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Wednesday 02 October 2019

BUSINESS DAY

insurance today E-mail: insurancetoday@businessdayonline.com

Possible risks affecting financial inclusion in Nigerian micro-insurance market

Pius Apere

its political muscle and/or will toenforce it in order to allow for a level playing field. The above asymmetric operational guidelines would also limit the microinsurers’ volume of sales as a result of competition from the conventional insurers, leading to their inability to recoup sales expenses, low profitability and insolvency. This would also discourage external investors to apply for micro-insurance licence. Risk Mitigation - The regulator can increase the number of micro-insurers by downscaling the un-recapitalized conventional insurers under the new capital regime to register as National Micro-insurers to serve the low-income segments. These insurers would leverage more on their existing IT infrastructure, quality staff, clientele and higher capital base. Risk of Inadequate Capital to Write Business There is usually a regulatory require-

‘

The regulator can increase the number of microinsurers by downscaling the un-recapitalized conventional insurers under the new capital regime to register as National Micro-insurers to serve the low-income segments

‘

Introduction he financial sector (including the insurance industry) is one of the key drivers of any economy across the world, as the sector provides a solid framework in accelerating a sustainable economicgrowth thereby impacting direct benefits to the poor leading to poverty reduction and financial inclusion. For instance, without insurance, savings/loan schemes, Federal Government social empowerment programmes etc. for the poor cannot prevent them falling back into poverty in times of financial crisis. Insurance can also protect those that have risen above the poverty level against unforeseen events that may cause them to fall into poverty again. Thus, insurance can ensure a solid foundation on which poverty alleviation is built to keep the individual out of poverty. In spite of the critical rolesof insurance sector in the economy, available statistics have shown that the sector is underperforming in the implementation of the National Financial Inclusion Strategy (NFIS) in Nigeriadue to several challenges facing the sector.The abysmally low levels of insurance penetration and actual financial inclusion target achieved at less than 1% and 4% respectively in a country of about 200 million people shows that the insurance sector’s potential is largely untapped. This narrative can only be changed by deepening the development of the microinsurance market. The insurance regulator, NAICOM, has issued micro-insurance guidelines (“GUIDELINES”) in January 2018 with the aim of deepening insurance penetration and achieving the required financial inclusion target. However, the effective implementation ofthe micro-insurance agenda in its entirety has some challenges and/or risks and the ways to mitigate these risks are highlighted below. Risk of limited Number of Microinsurance service providers T h e re g u l a t o r h a s p re s c r i b e d a limited scope of micro-insurance business,as stated in Appendix II of the GUIDELINES,that a micro-insurer is allowed to only underwrite business with sum insured of not more than N2m per person per insurer.The above is a very good idea but it has implications in terms of interpretation, pricing and enforcement.If the foregoing is only applicable to the micro-insurers while the conventional insurersare still allowed to underwrite business with sum insured of less than N2m, then there is likely to be apathy among the conventional insurers toapply for a national micro-insurer licence as permitted by NAICOM. Thus, the above would lead to limited number of micro-insurers. It is worthy to note that, in practice, allconventional insurerscurrently have significant proportion of business with less than N2min their insurance portfolios.If the right interpretation ofthe limited scope isalsoto ring-fence the micro-insurance business byrestricting the conventional insurers from underwriting business of less than N2m, then the regulator shouldalso be able to exercise

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ment for long term insurance underwriters to set aside money (free capital or free assets) when writing a new policy in order to meet the initial capital strain as required immediately afterthe payment of the first premium. The initial capital strain is the mathematical reserves plus any required solvency capital less the initial net cash outflow (i.e. first premium less initial commission and expenses). The tiered based minimum capital requirements for micro-insurers as provided in the GUIDELINES is an indication that the micro-insurers are more likely to have the challenge of inadequate capital to write the desired level of new business volume than the conventional insurers. In the same vein, customers would prefer topurchase insurance fromNationalMicro-Insurers than Unit Micro-insurers due to potential risk of failure to meet claims payment by the latter due to its limited capital base, a scenario that will also create no level playing field amongst micro-insurers. Risk Mitigation – Regulator may reconsider the minimum capital base for Micro-Insurers after careful evaluation of the practical and operational constraints. New business risks A micro-insurer will need to ensure that the capital and administrative requirements of writing new business are within the financial resources available to it. Thus, an inappropriately high volume of new business could lead to the available resources becoming inadequate. On the other hand, an inappropriately low volume of new business arising from a newly introduced product line may pose a risk of not recovering the fixed development costs that will already have been incurred. Risk Mitigation–The new business capital strain can be controlled by appropriate product design. Mis-selling and reputational risk The target market lacks insurance

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information and understanding thereby opening the door for deliberate mis-selling by micro-insurer agents, striving to reach sales targets or higher commission levels, leading to reputational risk and increase in policy lapse rates. Risk Mitigation – Providing the agents with suitable and adequate training of the insurer’s products and good selling practices, including good, clear sales literature. Risk ofnot meeting ConsumerExpectations Micro-insurance consumers with their limited knowledge in insurance principles do not trust insurers and also so sceptical about paying premiums for an intangible insurance product with future benefits that may never be claimed. Many policyholders are unaware of the coverage, particularly when they are forced to purchase insurance when borrowing. On the other hand, there is potential for expecting more than is actually provided by limited benefits (e.g. the prescribed sum assured limit of N2 million). Risk Mitigation – By educating the target market to create awareness and overcoming its bias against insurance, a processwhich is costly and time consuming but itwould reducethe lapse rates. Operational Risk There may be lack of relevant and adequate data for adopting community or group pricing (as required by the GUIDELINES) to reflect the specific risks to the target market.The margins per policy are generally low due to the low premium/ benefit nature of micro-insurance and so micro-insurers need to aim for high sales volumes to be profitable. Micro-insurer needs innovative product design for its target market via research and Development (R & D) to differentiate itself from competitors.Micro-insurers may lack the necessary capital to invest heavily in good IT infrastructure for efficient record keeping relating to collection of premiums and claims management. The non-uniform corporate governance structure (in Appendix V of the GUIDELINES) for the senior Management team of the three categories of micro-insurerscould give investors and/ or consumers the expression that some micro-insurers may not be managed and/ or run properly for lack of adequatemanagement experience. Risk Mitigation – The use of mobile phone companies and direct online marketing to sell micro-insurance products would increase the insurance penetration and financial inclusion. Outsourcing some key operational functions such as actuarial and product development services. The above would create operational and marketing efficiency. Conclusion The process of managing the identified risks facing the tiered micro-insurers alongside the conventional insurers is akin to solving venn diagram problems, having considered the areas of differences and the commonalities existing between the key players in the insurance market. Contributed by Pius Apere, a PhD holder, Actuarial Scientist and Chartered Insurer

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Wednesday 02 October 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

The big idea: Bad behavior is preventable JAMES CAMPBELL QUICK AND M. ANN MCFADYEN

exual harassment is a form of dysfunctional behavior within the workplace — and a chronic phenomenon with a long history. Research indicates that more than 70% of women have experienced it on the job, but many incidents of it go unreported. The legal definition of sexual harassment is rarely understood, and men and women differ in their understanding of what constitutes it. Even the Equal Employment Opportunity Commission is frustrated. The EEOC has recognized sexual harassment as discrimination for more than four decades. Seven out of 10 companies have training to deter it. Yet in 2016 the EEOC concluded workplace harassment remains a continual problem and asked, “Why does so much harassment persist and take place in so many of our workplaces? And, most important of all, what can be done to prevent it? After 30 years — is there something we’ve been missing?” Evidence shows that sexual harassment is preventable. However, the EEOC’s recommended training guidelines need to change. New approaches must be explored. And they’re exactly what we’ve been working on. For insights, we turned to the three-stage life-history prevention surveillance model that public officials have long used to stave off health epidemics. We believe a similar data-based approach can effectively prevent harassment in the workplace. The model we’ve developed to help companies draws extensively from the public health one. One key to our model is a focus on high-risk employees. We estimate that 1% to 3% of individuals within an organization have the potential to become deviant, dysfunctional or dangerous. And while it’s difficult to screen out sexual harassers in the hiring process, it is possible to identify and address them within a work population before they pose a threat. The worst cases of sexual harassment rarely happen out of the blue. A chain of events or condi-

tions almost always precedes them. Our model addresses the three stages that generally occur as high-risk employees become sexual harassers: STAGE 1: At this stage organizations have risk factors for or conditions that are conducive to sexual harassment, such as a work environment with a very high male-to-female ratio or where positions of power and supervision are predominantly held by men. STAGE 2: Here we see low-intensity sexual harassment, such as conversations and language with sexual overtones. Dialogues usually aren’t seductive in nature, but under the surface they’re hostile, aimed at putting women down and keeping them “in their place.” Off-color stories and what some may consider “jokes” are also warning signs of an environment that may pave the way for higherintensity sexual harassment. STAGE 3: At this stage fullblown sexual assault happens. These incidents may well become federal legal cases. If employee behavior is allowed to reach this stage, it’s massively costly. U.S. organizations in particular have more at stake than their global counterparts, because they, not just the individuals involved, can be held responsible for workplace sexual harassment claims. Many people pay the price: Sexual harassment adversely affects not only the target but also the

aggressor, bystanders, customers, suppliers, contractors and other stakeholders. WHAT TO DO TO PREVENT SEXUAL HARASSMENT Our model offers a set of interventions for each of the three stages: — PRIMARY PREVENTION begins with a clear statement of policy banning all forms of sexual harassment, explicitly linked to mechanisms that will enforce compliance. Your human resources department should systematically screen the organization for early warning signs, such as violations of the code of conduct or prior incidents in people’s work histories. Primary prevention also includes comprehensive training and education at all levels of the hierarchy, but especially at the first line of supervision. As the EEOC states, middle managers and first-line supervisors, when trained correctly, can be an organization’s most valuable resource in stopping sexual harassment. So companies should teach them how to create a culture of respect in which power is used with restraint. And all managers and supervisors should observe their reports’ interactions with colleagues and flag anything that might require corrective action. — SECONDARY PREVENTION targets lower-intensity forms of sexual harassment, squelching it

before any serious harm has been done. Secondary prevention focuses on identifying and eliminating incivility and bullying. These behaviors often lead to higher absenteeism, tardiness, accidents and safety violations, so companies should monitor their data on these, as well as supervisor’s reports about peers and employees, for signs that people are not being treated respectfully. In an ideal world, all people associated with an organization — employees, supervisors, contractors and even customers and bystanders — would be comfortable reporting any unacceptable behavior they see in it. The organization’s responsibility is to provide an environment that makes them feel that way. An important step is setting up at least three safe channels for reporting harassment: one in the HR function, one in the legal function and one in an employee-wellness function. Trained professionals will need to be brought in to help diagnose, assess and triage cases of harassment. Providing direct feedback to offending individuals is critical. They should be reprimanded for deviating from the organization’s code of conduct but also be given the opportunity to apologize for their behavior and alter it. Individual training in interpersonal communication, both on how to respect others and how to clearly

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communicate personal boundaries, often can redress low-intensity incidents. The EEOC also suggests that bystander-intervention training can help prevent sexual harassment, and our review of the research supports that idea. Organization-wide civility training may also be an opportunity for combating sexual harassment, according to the EEOC. — TERTIARY INTERCESSION is needed when primary and secondary prevention fail, and an incident of high-intensity sexual harassment occurs. Companies should be prepared for the worst and act immediately to minimize any suffering or damage incurred, while also treating all involved fairly. We recommend a four-step approach: 1. CONTAINMENT: Restrain the dangerous individual engaged in harassment behavior. 2. CAREGIVING: Provide help to the targets of harassment and the people who’ve been exposed to it, such as witnesses or close colleagues of the target. 3. FORGIVENESS: This does not mean absolving the offender or forgetting what happened. It means forgiving people for allowing harassment to happen. Kim Cameron at the University of Michigan has written incisively about why forgiveness is essential to recovery after harm and damage have occurred at work. 4. RESILIENCE: The organization must bounce back from the tragedy of the incident. Sexual aggressors destroy lives, leaving long legacies of suffering. Yet sexual harassment in the workplace is an occupational health problem that does not occur in isolation. Rather, it’s generally a result of cumulative events and thus predictable and preventable. With proper surveillance and prevention mechanisms, workplace sexual harassment may be eliminated altogether.

• James Campbell Quick is a professor at the University of Texas at Arlington and the Alliance Manchester Business School at the University of Manchester. M. Ann McFadyen is an associate professor of strategic management at the University of Texas at Arlington College of Business.

Wednesday 02 October 2019

Harvard Business Review

BUSINESS DAY

MANAGEMENTDIGEST

Should new grads take any job or wait for the right one? JODI GLICKMAN

WORK VS. LIFE uisa Kloep is a 26-year-old newly minted graduate with a master’s degree in fashion and sales management. Like many of her peers, she is bright, talented and enthusiastic about her new career. She’s also unemployed and feeling dejected about the job search she started five months ago. For people like Luisa, it can be hard to know whether they should just take any job or wait for the right one. But maybe it’s not either/or. Instead of searching for the dream job, ask yourself: What can I do in the near term that will help me over time find the job I’m going to be excited about, engaged in and good at? Evaluate opportunities not based on whether they are “right” or “perfect” for your long-term goals but based on whether you’ll gain something now that will be useful later. Specifically, think about three criteria: — EXPERIENCE: It’s tempting to set your sights on the

“best” jobs or companies, but sometimes you can learn a lot in a role at any company. Ask yourself: What are you hoping to learn? What skills are you looking to gain? And don’t narrowly focus on the role you ultimately want. Think instead about the skills you’ll need to eventually fill those jobs. Similarly, if you want to run your own company

someday, then consider an apprenticeship role at a startup. Being a jack-of-all-trades and learning what it takes to get a venture off the ground matters more than the prestige of the founders or whether the company actually makes it to the next funding round. — CREDIBILITY: Of course, there are industries — say, lux-

ury fashion, consumer products or investment banking — where prestige matters. Luisa wanted to be a buyer, and only a buyer — until she realized that getting her foot in the door with any well-known retail or consumer brand could be her lucky break. She ultimately expanded her job search to include marketing and brand-management roles

with the top brands throughout Europe. She also broadened her search to include packaged-food companies. Soon after doing so, she called me excitedly to tell me she had found over 50 additional job openings. If credibility is what you’re after, then seeking a position with a tried-and-true company that other people will recognize can be helpful. — INCOME: Never underestimate the power of a paycheck. Do what it takes to duct-tape together an income while you search for the “right” job. Chances are that your career is going to be a series of twists and turns and highs and lows, all of which make it interesting, challenging and ultimately rewarding. Your career success will lie as much in the mistakes you make — a terrible first job, or the dream role you landed only to realize it wasn’t for you — as it does in the right choices you make along the way. Look for opportunities that give you experience, credibility or income, and have faith that you’ll find the right job (or it will find you) along the way.

• Jodi Glickman is the CEO of Great on the Job.

4 ways to manage an emotionally needy employee — DON’T ALLOW GOSSIP: The moment one team member’s imperfections become fair game for others to mock or gossip about, everyone’s are. This erodes trust and psychological safety faster than anything. If you encounter gossip, or if others approach you with genuine concerns, send them back to their needy colleague to address it directly. Offer them coaching on how to deliver feedback, and even rehearse the conversation with them. The best approach is to help an emotionally dependent team member discover how to identify and meet his own needs. If you can do this gracefully, you will help this person — and everyone around him.

RON CARUCCI

CONNECTING hese days, there’s lots of discussion about the importance of leaders creating psychologically safe work environments in which people can share their feelings. But what happens when someone takes that too far? A client of mine recently struggled with this. One of her most talented designers was comfortable admitting his insecurities to his team. But what began as a need for reassurance became an avalanche; the designer sought affirmation by talking about his work anxieties to such a degree that it alienated him from his peers. Behavioral science shows that the most talented people are often the most insecure. But you are not responsible for providing someone with bottomless support, especially when it lowers team morale. Resolve the issue by addressing it head on. Here are four steps you can take: — TEST THE PERSON’S AWARENESS: Emotionally needy people often don’t realize the degree to which they drain others. Their emotionality is the norm to them, so they may not observe that other people have different boundaries. To approach the is-

sue, start by scheduling a one-onone meeting. Use this time to ask the employee questions and gauge if he is aware of his behavior’s impact. Draw clear distinctions between which emotional expressions and needs are appropriate, which are problematic, and why. — BE DIRECT ABOUT YOUR EMOTIONAL BOUNDARIES: If your first conversation doesn’t go as planned, don’t abandon the issue. Set clear emotional boundaries during a private conversation. Without being harsh, judgmental www.businessday.ng

or dismissive, follow up by saying, “I’m not sure how else I can reassure you about the quality of your work. What I need you to do is reflect on why the reassurance I’ve offered hasn’t worked. I’d like you to be especially curious about where your need for extra reassurance is coming from so you can be more self-sufficient when you’re feeling insecure.” — TREAT NEEDY PEOPLE AS IF THEY ARE STRONG, NOT FRAGILE: Privately, tell the struggling employee that you want to

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build a team environment in which people can ask for what they need. Explain that needing occasional emotional reinforcement is perfectly normal, but that everyone is different, and there is a limit to what each person can bear. Use examples to demonstrate when you have experienced his behavior as burdensome, and encourage him to find healthier ways to get his needs met. This might mean turning to friends outside the workplace, or even a mental health professional. @Businessdayng

• Ron Carucci is a co-founder and managing partner at Navalent.

Wednesday 02 October 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

New BMW duo excites Banana Islanders in Lagos

Morocco to host UNWTO General Assembly in 2021

MIKE OCHONMA Transport Editor

MIKE OCHONMA

MW’s exclusive deale r s h i p i n Ni g e r i a ; Coscharis Motors has pulled back the covers off a new definition of automotive luxury following the public presentation of the sixth generation all-new BMW X7 SAV (Sport Activity Vehicle) and the X7 luxury sedan at the just concluded two-day Banana Island International Cultural Festival in Lagos. The BMW X7 blends presence, exclusivity and spaciousness with the versatile and agile driving properties customers would expect from a BMW Sports Activity Vehicle (SAV). The newest and largest model in the BMW X lineup uses outstanding powertrain options and chassis technology, plus generous levels of space in each of its three rows of seats, a luxurious ambience and advanced equipment features, to deliver unparalleled experiences for the driver and passengers. BMW’s new design language brings the modern elegance characteristic of the brand’s luxurysegment models to the exterior of the X7, and adds visual poise, assurance and an overriding sense of authority. It represents the next stage in the premium carmaker’s ongoing model offensive in the luxury segment. Following the launch of the duo, the X7 reveal is the very first in the Nigerian market, with the residents of Banana Island enjoying the privilege of being the first to view and host this model. Clearly, the BMW X7 and 7 series are both flagship in their own luxury SUV and sedan segments respectively. According to an obviously elated Cosmas Maduka, President/CEO, Coscharis Automotive group, who was physically present

at the event, ‘’We are glad to have this launch here given the global representation at this festival, which by extension, helps to cement the global feel and acceptance of these BMW brands’’. For the first time ever in the history of BMW, the BMW 7 series, which has remained a benchmark for luxury sedans, comes as a SAV (Sports Activity Vehicle) called the X7. The BMW X7 as the latest premium Sports Activity Vehicle is designed to reflect the personality and requirements of the owner. It not only adds a new top model to the X family, but also defines a progressive approach to luxury for the BMW brand. The X7 offers standard three row seating for 7 with optional second-row Captain’s chairs offering a more exclusive seating arrangement for 6 standard two-axle air suspension, 21-inch alloy wheels and advanced driver assistance systems ensures that the new

BMW X7 lives up to expectations of style, driver engagement, passenger comfort and all-weather and all-terrain capability. Cosmas Maduka stated that, while the enthusiastic audience are gathered to celebrate their various cultural diversities, that the BMW dealership is proud to reveal a unifying first ever BMW X7 and a new 7 Series. These vehicles are borderless on-road power, competency and capability. But to really appreciate these BMW vehicles, one needs to understand and appreciate the levels of refinement and innovation captured in them. Described by many car freaks as a piece of automotive craftsmanship that reflects a statement of the luxury class, the new BMW X7 sedan on its part is the elegant fusion of presence and personality. Despite its majestic appearance, it gives an impression of lightness and agility thanks to the

ingdom of Morocco has been officially chosen as the host of the 24th Session of the World Tourism Organization (UNWTO), to be held in 2021. At the conclusion of the 23rd General Assembly in St Petersburg, member states of the United Nations specialized agency for tourism, were asked to choose between Morocco, Kenya and the Philippines. The 24th Session of the General Assembly will be held in the city of Marrakesh in 2021, with the exact dates to be confirmed. All three member states had presented their candidatures over the preceding days, highlighting their commitment to accessibility and sustainability and for using tourism as a driver for job creation and economic growth for all. UNWTO General-Secretary Zurab Pololikashvili said: “I offer my warmest congratulations to Morocco. They are a long-standing ally of UNWTO and at this General Assembly they clearly demonstrated how the Kingdom has embraced tourism as a driver of positive change over the past few decades. Morocco also showed it has the infrastructure and the commitment necessary to host the most important high-level even for the global tourism sector. At the same time, I thank both Kenya and the Philippines for their candidatures. Both presented exceptionally strong cases.” For the first time at a UNWTO General Assembly, member states used an anonymous electronic voting system, with one vote per member state. This switch away from paper ballots brings UNWTO in line with other United Nations agencies, further emphasising the organization’s firm commitment to becoming an integral part of the wider UN system.

puristic design and athletic styling. At the same time, the considerable spaciousness of the interior offers a pioneering interplay of exclusivity, functionality and freedom and incomparable comfort all the way to the third row of seats. Charm is its essence. Elegance its character. The expansive exterior dimensions of the BMW X7 take luxury to a new level. At 203.3 inches in length, 78.7 inches wide and 71.1 inches tall, and with a wheelbase of 122.2 inches, the X7 displays harmonious proportions and establishes itself as the new head of the BMW X model family. In terms of power and performance, the new 2019 BMW X7 launches with a choice of two updated gasoline engines. Heading up the range is the BMW X7 xDrive50i, with an extensively updated 4.4-liter V8 engine. A 3.0-liter inline six-cylinder engine, found under the hood of the new BMW X7 xDrive40i rounds out the model line-up.

Car shoppers swoop on Germaine’s Toyota price slash MIKE OCHONMA

n a renewed fresh marketing strategy targeted at increasing its sales by 200 percent, Germaine auto dealership has lowered the retail price of the Toyota Yaris automatic transmission fabric seat from the previous N8.25m to N7.9m. Other models that have Toyota Conquest 1.6-litre automatic transmission fabric seat retailing for N10m as against the former N12m price tag. On the other hand, the Toyota Corolla 1.8-liter automatic transmission fabric seat previous retailing for N15.5m now goes for under the current promotional offer of N12.990m. While the Avensis automatic transmission fabric seat retailing for N21.5m before now goes for N15.5m under the present dispen-

sation, that higher version Avensis automatic transmission offered as leather seat now retails for N19.5m as against the previous N23.5m. Toyota Prado 2.7-liters, automatic, fabric seat is at the moment N33m as against normal showroom price of N38.5m. www.businessday.ng

Toyota Prado 2.7 automatic, leather seat retailing for N42.5m before is now N38m representing N7m difference. The Hilux 4-Wheel drive DC P SS Premium Package can now be purchased for N17.5m as against the shop price of N20m.

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Other promotional price slash are Toyota Hilux 4WD DC automatic, P SS Premium Pkg retailing for N21.7m before the promo can now be purchased for N19.5m, even as the Hiace highroof manual has its price dropped from N26m to N25.5m Similarly, the Hiace high roof price is now N25m as against its former price of N26m. Toyota Hilux 4WD manual was lowered by N1m difference from N18.8m to N17.8m while that of the Hilux 4WD Shell manual transmission current promotional price is N18.5m away from the previous showroom price of N19.5m. In a chat with BusinessDay, Sandra Prince-Ekwueme, customer service manager, Germaine Auto Centre while speaking on behalf of the dealership told our reporter that the campaign which started last month and now extended for another one month is @Businessdayng

special promotional sales package targeted at increasing the sales of the selected Toyota models by 200 percent. While she declined to disclose the level of the buying public response to this campaign, she simple said that the Germaine Toyota dealerships spread across the country have been been receiving enquiries from as ‘as many prospective customers’ as possible since the promotion started. Asked if the dealership have enough spare-parts inventory, the technical capacity and tools to take care of after sales service needs of its customers, Sandra Prince-Ekwueme answered in the affirmative, adding that Germaine Auto Centre is ever committed to ensure and enhance the satisfaction of its customers through quality after-sales service back-up at reduced cost.

Wednesday 02 October 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

plans quick services NRC shuts down Ijoko-Lagos train service Cars45 to stranded consumers

... to meet November standard gauge deadline

MIKE OCHONMA

MIKE OCHONMA Transport Editor

housands of passengers using the Ijoko to Lagos almost on daily basis have resorted to other means of transportation following the shut down of commercial activities on the train services along the corridor. The services will also affect the weekly Lagos-Kano passenger train services of 1200 passengers on a return trip. The stations along the corridor include Iganmu-Ebute Metta Junction, Yaba, Mushin, Oshodi, Shogunle Ikeja, Agege, Iju, Agbado, Itoki, Oposuru, Ijoko and Kajola. Jerry Oche, the Lagos rail district manager (RDM) of the Nigeria Railway Corporation (NRC) had in telephone conversation with BusinessDay few days ago said that, the NRC is suspending the daily operations of narrow gauge from Ijoko in Ogun to Ebute MetaApapa from Monday this week to fast track completion of the new standard gauge within deadline set by federal government. Mr Rotimi Amaechi, the Minister of Transportation, had on Monday announced November 2019 as deadline for completion of the project and commencement of Lagos – Ibadan standard gauge rail service.

According to NRC Lagos district manager, “We are shutting down our daily operations from Ijoko, Agbado, Agege Ikeja up to Ebute Metta and Apapa from Monday September 30 to November 16 this year. The development is going to last for six weeks to give room for contractor handling the Lagos-Ibadan Standard gauge to

meet up with the deadline scheduled for delivery’’. Jerry Oche disclosed that prior to the shut down of train services along the affected corridor, the Lagos district placed notices to that effect at the various NRC stations as well as advertorials on Traffic Radio and Bond FM

Nigeria’s minister of transportation Rotimi Amaechi had, while inspecting the project in company of the minister of state, transportation, Gbemi Saraki penultimate Monday said that the federal government planned to begin free ride on Lagos-Ibadan standard gauge rail line by November.

Boulos takes Clean-Up CSR to Badagry fishing community MIKE OCHONMA

oulos Enterprises Limited (BEL) in conjunction with Suzuki Motor Corporation, Japan, as part of its company’s corporate social responsibility (CSR) is once again canvassing for healthy and clean environment with a visit to the Gberefun riverine community in Badagry, Lagos state. This is the ninth edition of the exercise being embarked upon by the the company that has been in operation in Nigeria for over 40 years. In a statement signed by the management of BEL, this year’s beach clean up campaign last week during which period the company donated many clean-up items to the residents, fishermen and women of the Gberefu riverine community, BusinessDay was told told that, the move is aimed at improving the safety of the ecological system as well as reducing environmental pollution harmful to human existence which is the major reason that the initiative is being organised. Suzuki Marine has always aimed at providing customer satisfaction along with excitement on the water in a clean and healthy environment. It was a aresult of this that Suzuki marine distributor in the country that BEL, the franchisee organised the Beach-Clean-Up- Campaign at Ilaje 2, Gberefun, Badagry. It would be recalled that, in the past years, the corporate social responsibility exercise has been taken to other fishing communities

ar breakdowns won’t last for long” is the promise from Nigeria’s leading automotive trading platform, Cars45 as it introduces its Emergency Service. The Cars45 Emergency Service is set to deliver professional, quick-response services for stranded consumers at prompt notice. This service is aimed at bringing relief and comfort to road users on every journey providing roadside assistance coverage across issues that ranges from jump-starting a vehicle if the battery loses charge, replacing a flat tyre with a spare, delivering fuel to stranded vehicles, towing off disabled vehicles and lock-out services for keys that have been locked inside the vehicle. Making further clarifications, Oluseyi Folaranmi, vice president, customer and dealer experience, Oluseyi Folaranmi noted that this service is borne out of Cars45’s commitment to providing its valued customers with essential automotive services that make their lives easier and more productive. “The Emergency Service is testament to Cars45’s efforts at improving customer experience and bringing relief to road users on their journey. Our commitment is to consistently improve the nation’s automotive industry with extensive investment in developing solutions that make life better and delivers convenience to users on every trip’’. Known for bringing transparency to Nigeria’s marketplace for used vehicles, Cars45 has become synonymous with creating delightful consumer experiences by offering people a fast and convenient way to buy, sell or swap their cars. To enjoy this service, which is being piloted in the Ikoyi, Victoria Island and Lekki Phase 1 areas of Lagos, consumers should dial 09094545450 for roadside assistance.

FRSC debunks staff recruitment, replacement rumours

in parts of Lagos State. In 2018, the exercise was taken to the Inagbe Beach Resort on the Lagos Island to create cleanliness awareness among the reverine populace. Every year, the clean up campaign is carried by the staff of BEL in conjunction with the visited fishing communities in collaboration with the fishery department of the Lagos state ministry of agriculture, the ministry of environment and the general public around the reverine area where people enjoy boating and www.businessday.ng

fishing exercises for the propagation of a better sanitized community in order to ensure a healthier environment. The take-off in the five minutes boat ride by the staff of Boulos Enterprises Limited and BusinessDay reporter from the Badagry harbour point near the first one storey building located in Nigeria across the lagoon to the riverine Gberefu was an emotional reminder of the historic slave trade-off of Nigerians to the Western world during the

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colonial era. The Gberefu reverine community sandwiched between the Badagry lagoon and the Lagos Ocean presents a community of migrants from different ethnic nationalities and neighbouring countries that lives in make-shift bamboo shanties without electricity, no good portable water, without visible signs of government infrastructural development. Even some of the government’s institutions have been closed down. @Businessdayng

he management of the Federal Road Safety Corps (FRSC) said its attention has been drawn to a link circulated online that the Corps is carrying out another recruitment and replacement exercise, this is totally false. The Corps had recently concluded training of its personnel who have been commissioned as full time staff and deployed to various formations across the states of the Federation, including FCT. By this disclaimer, the general public have been warned to desist from patronising these online fraudsters who are bent on duping unsuspecting members of the public. FRSC said members of the public will be duly informed immediately the Corps commences recruitment into its services through appropriate media platforms including its social media handles.

Wednesday 02 October 2019

BUSINESS DAY

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Wednesday 02 October 2019

BUSINESS DAY

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Wednesday 02 October 2019

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Financial inclusion is not responsibility of financial institutions - Page Financials Stories by ENDURANCE OKAFOR

ccording to Pag e Fi na n cials, a company that provides financial services, the responsibility of financial inclusion is not on the shoulders of the financial institutions. “This is because they will go into it to make money but financial inclusion should be seen as a social service. Something financial institutions would invest in, like a Corporate Social Responsibility (CSR), “Segun Akintemi, CEO of Page Financials said. Expressing his worries over the approach to financial inclusion in Nigeria, the CEO suggested that “we need to go back to the framework of financial inclusion. We cannot succeed in it if we keep pursuing it to drive revenue.” Nigeria has a bank-led financial inclusion model and the latest figures by

L-R: Osita Maduagwu, Head Local Corporate, SunTrust Bank Nigeria Ltd; Ayo Babatunde, MD/CEO, SunTrust Bank Nigeria Ltd; Yewande Amusan, Director SunTrust Bank Nigeria Ltd; Olajumoke Alabi, Branch Manager SunTrust Bank Nigeria Ltd; Umar Dan-Umma, Executive Director SunTrust Bank Nigeria Ltd; and Temitope Adeyemi, Head Commercial Banking SunTrust Bank Nigeria Ltd at the recent commissioning of the Idumota branch in Lagos

EFInA put Nigeria’s financial inclusion rate at 63.2percent, meaning that as much 36.8 percent of adults still lack access. As at the time Nigeria was considering the optimal approach to take to leverage new, innovative technology to deliver financial services to its people, the Central Bank analysed in some

detail how to structure the guidelines and the regulatory environment to deliver the benefits on offer, without compromising the integrity of the financial system. “We need to go back and identify how we want to push financial inclusion but definitely; it is not a forte of financial institutions.”

The CEO added that the financial institutions can provide the enabling environment but it is almost like social services and until “we start treating it in such a way organizations are not looking at it to make money but encourage people into the inclusion net, it would be difficult for us to grow Financial inclusion.”

The Central Bank of Nigeria (CBN) plans to ensure that 80 percent of Nigerian adults are included in the financial net by the year 2020. The apex through its collaboration with industry stakeholders launched the National Financial Inclusion Strategy (NFIS) in January 2012 intending to achieve the set target. At the current levels, the apex bank would have to bridge the 16.8 percent inclusion gap in less than four months to achieve its 20 percent exclusion goal. In the quest to ensure it achieve its projection, the apex bank in October 2018; released exposure draft guideline in which it proposed Payment Service Banks (PSB) aimed at deepening access to financial services in a country that lags its African peers in inclusion rate. “PSB is supposed to largely gather deposits, they are not supposed to lend. So it is not a license appropriate for us as we

are largely lenders,” Akintemi told BusinessDay when he was asked if Page was interested in obtaining the PSB licence. On Wednesday 18th, September 2019 the Central Bank disclosed that it had given Approval -InPrinciple (AIP) to Hope, Money Master and 9PSB to operate as Payment Service Banks. PSB is a payment service initiative proposed by CBN in which Banking agents, Mobile Money Operators (MMOs), Retail chains (Supermarkets), Telecommunications companies (Telcos) who can meet regulatory requirements to operate under the structures and guideline specified by the apex bank. At least 30 business names have since applied for registration to obtain the payment service bank licence but since October last year, the regulator has not issued any of the applicants the ticket to provide financial services.

SunTrust Bank targets MSMEs for inclusion, opens new branch at Idumota I n the quest to provide financial service to micro, small and medium scale enterprises, SunTrust Bank Nigeria Ltd, a regional commercial bank has taken financial inclusion to the unbanked traders in Lagos state. The commercial bank disclosed that it is interested in onboarding informal businesses because they can galvanize the economy. “The focus of the bank is actually on MSMEs which means we start from micro to small and medium scale enterprises, we believe that is the sector that is going to galvanize the economy,” Ayo Babatunde, MD/ CEO, SunTrust Bank told

BusinessDay at the newly commissioned Idumota branch in Lagos Island. In his remarks, Babatunde revealed that the decision to open a new branch at the Idumota Market was born out of the fact that the strategic location is in the centre of Lagos and is home to many excluded businesses. “We are focusing on the market men and women because they are the most excluded from the financial sector. The MSMEs have some needs that they cannot get from other banks and so we are ready to let our customers bank on their terms. Whatever they need we are going to provide it for them,” Omotayo Idowu,

Business Development Manage, SunTrust Bank said. Assessing the creditworthiness of small businesses is one of the many challenges faced by MSMEs when they want to access credit for expansion, the World Bank’s 2017 report disclosed. According to the report: Assessment of the Shortfalls and Opportunities in Financing Micro, Small and Medium Enterprises in Emerging Markets, Nigerian MSMEs is estimated to be 37 million and are faced with a finance gap of $158.13 billion. The Washington-based financial institution, therefore, recommended the “use of alternative

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data in credit reporting” to enhance access to credit for MSMEs and individuals. With a headquarter in Lagos, SunTrust Bank is the “first full-fledged technology bank” and the first bank to receive a regional banking license from the Central Bank of Nigeria (CBN) since 2001. “For the number of years, I have been banking with the bank, I have only had reasons to rejoice for the services and products they have always made available to me. I encourage my colleagues in the market to come onboard and enjoy all that I have benefited from SunTrust,” Adeyemi Oladipo, an importer at the Idumota Market said.

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According to the commercial bank, it has a product; Smart 247 Account which offers doubles interest on savings with no account maintenance charges. This is as a result of the bank’s structure which is set up to completely impact lives, the bank revealed. “What this account allows you to do is that it is an account that operates like a Savings Account and at the same time like a Current Account. In a normal Current Account, you will get withdrawal charges, which you know as the maintenance charge but in the Smart 247 account, we have waved that for the customers,”Babtunde said. The CEO also disclosed @Businessdayng

that “in a normal Savings Account you get 3.86 percent of interest rate on the savings but we have raised that a little to say if you double your savings within a month, we can give you 7.77 percent savings rates.” As of 31 December 2018, SunTrust Bank had total assets of N43.967, 65.5 percent increased compared to the N26.56 billion it reported in the corresponding period of 2017. The bank maintains brick-and-mortar branches and automated teller machines in Lagos, Abuja, Uyo, and Port-Harcourt, although 90 percent of the bank’s customers transact business on digital platforms, without visiting any physical branch

Wednesday 02 October 2019

BUSINESS DAY

PRIVATEEQUITY &FUNDRAISING

Nigeria retains 8th spot on Africa’s most attractive investment destination MICHAEL ANI

igeria has retained 8th spot for the second consecutive time as having one of the most attractive investment destinations in the African continent, according to the latest report by Rand Merchant bank on “where to invest in Africa 2020”. This puts Africa’s largest economies behind other African countries including Egypt, Kenya and five others in terms of investment destinations. The report which delves deeper into the traditional and alternative sectors that are driving African economies to reach ever-higher levels of economic growth analysed 54 African economies according to their investment attractiveness alongside notable advancements in their operating environments. Nema RamkhelawanBhana, Co-author and Head of RMB Global markets Research, said “after nine years of publishing, we never fail to be both pleased and surprised by the extent of improvement in countries that are not necessarily perceived as strong investments destination”. Egypt led the pack of African countries, to take the number one spot on the list as being the most attractive country for investment destination, a position it has held for three straight years since 2017. Morocco came next, dis-

placing South Africa, to take the second step while South Africa came third, the report said. According to RMB, Egypt retained its position due to investment-related legal reforms that have caused strong improvement in the country’s business environment. Such reforms include the availability of increased availability of hard currency and greater exchange-rate stability and diversification policy that has led to a massive influx of Foreign Direct Investment (FDI). The country is also forecast to post growth above 4 per cent. The country is however faced with potential risk such as the depreciation of the Egyptian pound since its 2016 flotation, rendering hard-currency debt-servicing more difficult For Morocco, the country has witnessed investment drivers including enhanced operating environment since the “Arab Spring”; enhanced investment appeal through its reintegration into the AU and accession to the Economic Community of West African States (ECOWAS). A potential risk for the country includes its heavy dependence on European tourism, FDI and remittance inflows while the possible risk for the South African economy include subdued economic growth which might hinder the country’s overall scoring Kenya, Rwanda, Ghana and Cote Ivoire stood 4th, 5th, 6th and 7th respectively while Ethiopia and Tunisia

were ranked 9th and 10th, behind Nigeria. Nigeria slipped a step down the 6th spot in 2016 from 5th ranking in 2015, after its economy entered five quarters of negative contraction, following a collapse in crude oil prices that started in 2014. In 2017, the West African nation fell further below the ranking coming number 13, as the economy struggles to pick the remains from the recession that brought economic activities to its knees. As economic activities continue to rebound due to an uptick in crude oil prices and calmness in the oil-producing region of the state, Nigeria began to move up the in the investment ladder. In 2018, Nigeria was ranked 8th, with a score of 5.52, higher than the score of 5.32 in the previous year. “Nigeria jumped back into the top 10 due to improved macroeconomics, supported by recovering oil prices and production; second-largest market in Africa driven by a large population, domestic demand continues to rise, resources and favourable demographics attracting a strong flow of FDI,” according to RMB “Also, the country has witnessed easing liquidity crunch since 2017 on the back of a recovery in commodity prices and changes in FX regulations”. However growth in the economy continues to be constrained by weak policy environment and dire infrastructure and exposure

to global oil-price falls and disruptions to output resulting from instability in oil-producing regions, RMB noted. Africa’s largest economy appears to be regaining investors’ confidence in the investing landscape. Last week, the World Bank named Nigeria as one of the 20 countries that have recorded significant improvement in the ease of doing business ranking, set to be released in October this year. According to the Bank, Nigeria made starting a business easier by operationalizing a new electronic platform that integrates the tax authority and the Corporate Affairs Commission (CAC). Also, in Lagos, its commercial city, the World Bank noted that land administration was made more transparent following the digitisation of cadastral plans in a geographic information system while digital copies of cadastral plans are now easily obtainable. “The CAC also upgraded its name reservation platform and, in Kano, there is now an electronic platform for registering business premises online, eliminating the need to appear in person,” World Bank said in the report Friday. World Bank also noted that Nigeria improved in making electricity easier by allowing certified engineers to conduct inspections for new connections while initiatives also made commercial litigation of smaller cases more efficient.

Verod Capital acquires 100% stake Metropolitan Life Insurance from South African Momentum Metropolian Holdings MICHAEL ANI

erod Capital Management (Verod), has received regulatory approvals for its acquisition of 100 percent of the shareholding of Metropolitan Life Insurance Nigeria Limited from South African-based Momentum Metropolitan Holdings Limited. The transaction.which was for an undisclosed amount, would see Momentum Metropolitan exit the Nigerian market, in line with its articulated Reset and Grow strategy. The insurance sector in Nigeria as a whole is entering a new growth phase, with the recent announcement of increased minimum capital requirements by the industry regulator. This, in addition to various other initiatives being pursued by both regulators and industry participants, is expected to result in improved insurance penetration and performance in the sector. Having closely monitored these developments over the last several years, Verod sees significant opportunities within the sector and believes that this inflection point is the right time to enter the market and that Metropolitan Life Nigeria presents a solid platform for rapid growth. “Low levels of insurance penetration, even compared to other African economies, point to untapped opportunities within the sector,” said Eric Idiahi, Partner at Verod, pointing out that, “NAICOM, the insurance regulator, has made concerted efforts towards creating an enabling environment; we believe

that these actions, in addition to product innovation supported by increased public awareness and investments in technology-driven distribution channels, are the triggers that this sector needs to close the insurance penetration gap”. Metropolitan Life Nigeria is a life insurance company offering group life and credit life products to clients across the public and private spheres. Verod has plans for expansion and with their added expertise, anticipates growth in market-share in this sector. Momentum Metropolitan has been a major shareholder in Metropolitan Life Nigeria for the past 12 years and has steered the Company through various phases of its growth trajectory. Over the last three years, as the sole shareholder in the Company, the Momentum Metropolitan led Board has made some bold decisions with respect to risk management, underwriting practices and claims process that have positioned the Company on the right footing for future growth. In 2017, Momentum Metropolitan announced its intention to initiate an ongoing review of its African footprint. The company advanced this focus with the announcement of its Reset and Grow strategy in September 2018. The strategy includes an increased focus on successfully growing the core businesses in South Africa, ongoing review of African operations, as well as delivering and enhancing shareholder value in the countries in Africa where Momentum Metropolitan will maintain a market presence.

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: SAMUEL IDUH ) Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

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BUSINESS DAY

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BUSINESS DAY

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Teresa Ayanru, wife of pastor in charge of province 4 (PICP4), RCCG, Lagos, administering vaccine to the children during a medical outreach and commissioning of toilet and water supply project by Lagos Province 4 RCCG for New Kuchin Goro IDPs Camp in Abuja.

L-R: Oghogho Ayanru, PICP4 RCCG, Lagos; Agbolade Okenla, pastor in charge of RCCG City of David Abuja; Teresa Ayanru, wife of PICP4 RCCG Lagos; Supo Oluwasakin, assistant PICP4 RCCG Lagos; Dab Akpowa, CEO, Abuja Inquirer; Eno Abasi-Ilnogu, pastor RCCG, and Philemon Emmanuel, chairman, New Kuchin Goro IDPs Camp, during the commissioning of toilet and water supply project by Lagos Province 4 RCCG for New Kuchin Goro IDPs Camp in Abuja.

RCCG brings Independence cheers to IDPs in Abuja SOLOMON AYADO, Abuja

he Redeemed Christian Church of God (RCCG), Lagos Province 4, on Tuesday provided succour to the internally displaced persons (IDPs) in Abuja, the Federal Capital Territory (FCT), and offered free medical services to ameliorate their health challenges. The church donated toilets, boreholes and other items worth millions of naira to alleviate the suffering of the IDPs. More than 3,000 persons including men, women and children who were displaced by the dastardly attacks by Boko Haram and herdsmen across the country are taking refuge in a temporary camp located in New Kuchigoro, near Games Village in the FCT. The displaced persons lack basic amenities and their living condition is seriously deplorable. They are affected by varied diseases and sicknesses. Disturbed by the poor living condition of the IDPs, the

RCCG has intervened and ensured that the vulnerable persons are given adequate healthcare services. At Kuchigoro on Tuesday, the Provincial Pastor in charge of RCCG Lagos Province 4, Pastor Oghogho Ayanru, accompanied by his wife, Pastor Teresa and other members of the church, performed the commissioning of the school, toilets and borehole projects executed and freely donated to the IDPs. Pastor Ayanru explained that the projects were part of corporate social responsibility of the church to improve the lives of the displaced persons. He said the IDPs were devastated and the Church was apt to show that God has not forgotten them. “These projects are executed and freely donated to the IDPs to let them know that God has not forgotten them and this is to also make sure they join the Nigerian project,” Ayanru explained. “Sometimes the displaced persons are left out and we just have to assist them to be

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part of the Nigerian project. This is because of the love of God and care for humanity. “One of our members from Abuja came to Lagos, after putting up a school, and told us that the IDPs camp was in need of toilets and portable water and that is why we executed these projects,” Ayanru explained. He further urged government to do more and proffer better ways of ensuring that the displaced persons are not abandoned to suffer in misery. Speaking to newsmen, Dr. John Odoko, the medical team leader, said more than 3,000 of the IDPs had contracted varied diseases and that the team provided free drugs and other medical services to them. “We came here with expectation to offer free medical treatment to about 500 persons but so far, about 3,000 are being treated at the moment. This is to make sure that their unhealthy conditions are properly catered for,” Idoko said.

L-R: Loretta Unuane, RCCG pastor; Eno Abasi-Ilnogu, RCCG pastor, and Teresa Ayanru, wife of PICP4 RCCG, Lagos, administering vaccine to the children.

L-R: Enoch Yohanna, school coordinator, New Kuchin Goro IDPs Camp; Supo Oluwasakin, assistant PICP4 RCCG Lagos; Oghogho Ayanru, PICP4 RCCG; Philemon Emmanuel, chairman, New Kuchin Goro IDPs Camp, and Agbolade Okenla, pastor in charge of RCCG City of David Abuja. Pics by Tunde Adeniyi.

DSS re-arrests Maina, to hand him over to EFCC

he Department of State Services (DSS) has rearrested Abdulrasheed Maina, chairman of defunct Pension Reform Task Team, and is expected to hand him over to the Economic and Financial Crimes Commission (EFCC) this week. Maina, who had been on the wanted list of the EFCC for the past four years for N2.1 billion pension fraud, was apprehended by the DSS operatives shortly after entering the country from his Dubai base. The EFCC confirmed on Tuesday that the former director, Human Resources Department, Ministry of Interior, would soon be handed over to the anti-graft agency for interrogation and arraignment for pension fraud. “I can confirm that Maina

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is still with the DSS, but we are expecting them to hand him over to us soon. No date has been fixed yet, but he may be transferred to us this week for prosecution,” according to the source. Maina had been charged alongside a former head of service, Steve Oronsaye, Osarenkhoe Afe, Fredrick Hamilton and Global Services before a Federal High Court on a 24-count bordering on procurement, fraud and obtaining by false pretence in

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July 2015, but he absconded from the country shortly after. According to sources, Maina had been visiting the country regularly from his base in Dubai despite being under surveillance and on the watchlist of security agencies. He subsequently met with the Attorney-General of the Federation and Minister of Justice, Abubakar Malami, in Dubai in 2016, during which he was reportedly assured of his safety in Nigeria.

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I, formerly known and addressed as Miss Adedoyin Olufumilola Okusanya now wish to be known and addressed as Mrs. Adedoyin Olufumilola Noutouglo. All Former documents remain valid. General public please take note.

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Wednesday 02 October 2019

BUSINESS DAY

news Nigeria’s next biggest earner... Continued from page 2

particularly the youths, and technology. The event had the theme ‘Securing the nation’. Soludo explained that the country’s next biggest earner would be its human capital, arguing, however, that the country would not start exporting illiterates. “What is fundamentally wrong with Nigeria is that we have implemented all kinds of plans, all designed to diversify the economy. But we are still tied to the life-support of the oil sector, without plans for its booming population,” Soludo said. “Is Nigeria preparing enough to welcome its 400 million population in the next 20 years or its 800 million citizens in 40 years’ time?” he asked. “Hence, those who have something to offer, especially the youths, must stand up to be counted.” Soludo, who spoke alongside other renowned economists including Bismark Rewane, CEO, Financial Derivatives Company (FDC) and member of the Doyin Salami-led Economic Advisory Council, noted that state governments have to sit up in generating their revenues internally as the Federal Government is cashstrapped and cannot even cater for its own finances. “Let Zamfara keep their gold and pay taxes to the government. Let Kaduna and Kogi keep their solid minerals. Most states have their own resources. Concentrating power in Abuja won’t help us develop

our resources,” he noted. According to him, a post-oil economy requires that agents maximise their fullest potentials which would require a national rather than a federal response. “What we need is a new national business model. You are designing good ideas and good plans without the underlying infrastructure to carry those ideas forward,” he said. Soludo said institutions are major drivers of economic transformation of any country but, sadly, that of Nigeria is either obsolete or inappropriate and so need “fundamental overhaul”. “The institutions and systems that we have are for a bungalow. And the new economy that we want to build is a 100-storey building but the world is not waiting for Nigeria.” While electric cars are fast replacing petrol cars, Nigerians are still buying petrol stations,” Soludo said. Peter Obi, People’s Democratic Party’s vice-presidential candidate in the 2019 general elections, said Nigeria needs to do something very quickly and drastically on its present security situation which is the number one job of any government. Obi noted that three major factors affecting the growth of Nigeria are security, education and the economy with emphasis on solving the current underemployment and unemployment situation.

•Continues online at www.businessday.ng

9.47m registered vehicles in Nigeria... Continued from page 2 beginning today. Ilori said the association would from October 2, 2019 (today) deploy a team of 33 persons, known as Insurance Squad, who would be kitted to move around all parts of Lagos State to educate the public on the benefits of possessing genuine motor insurance covers. She stated that the association desires to put the slogan, ‘Wetin U Carry’, on the lips of everybody. She said the slogan is not meant to punish motorists for not having insurance, but to enable them check by themselves whether what they have as insurance is genuine or not. Ilori maintained that the campaign is not geared towards enforcement, but to let people understand that they can have genuine policies that could give them rest of mind in times of incidence. She said the campaign would be driven through

different platforms, such as billboard advertorials, media and digital and that the pilot scheme would commence from Lagos and later extended to other states. “We are going to be seen on the road from October 2, and we are deploying personnel we call Insurance Squad. We have engaged 33 people of them,” she said. “The plan is to cover the entire Lagos State, over a period of one month. They would be kitted and interact on a friendly manner with motorists, telling tell the nature of their insurance whether it is genuine or about to expire. Details of the policies would be derived from the USSD code *556*11#,” she said. Whilst the campaign runs, Ilori said, the association would also launch a unified platform that would enable people buy insurance with ease. “The platform would have an application that

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

L-R: Michael Wilkerson, chairman, Atlas Mara/ CEO, Fairfax Africa; David Bohigian, acting president/CEO, OPIC; Emeka Emuwa, CEO, Union Bank, and Bob Diamond, founder, Atlas Mara/CEO, Atlas Merchant Capital, at a ceremony to sign an agreement.

CBN increases banks minimum loan - deposit ratio... Continued from page 1

of the banks have strengthened their risk management framework; this would help them be in a better position to streamline lending to these sectors,” Nnebue said. He further noted that the new LDR target would not impact negatively on the shares of the banks, adding that banks are not new to this new lending directive by the CBN. The new policy geared towards driving risk asset creation could potentially result in NGN860.49 billion in loans created at the top end of the range, given the new 150.0 percent weightings for exposures to the SMEs, retail, mortgages and consumer credit, Cordros Securities said in a report. “While banks could potentially shed deposits to reduce this figure, we don’t see this as a strategy that will be pursued, rather we expect banks to re-categorise loans that fit into the retail and consumer credit segments as well as grow loans to these segments, thereby significantly reducing the amount

of credit that would need to be created,” the report said. The financial regulator is determined to ramp up growth in Africa’s largest economy on the back of continued sluggish expansion in Nigeria’s aggregate economic activities since its emergence from a recession in the second quarter of 2017. The economy grew 1.94 percent in the second quarter of this year from a revised 2.10 percent in the previous quarter, casting a shadow on the International Monetary Fund’s annual growth forecast of 2.3 percent for the country. According to the circular, failure to meet the minimum LDR before the end of 2019 would result in a levy of additional Cash Reserve Requirement equal to 50 percent of the lending shortfall implied by the target LDR. This implies any bank that fails to maintain the specified LDR would risk being required to park more of their excess funds with the CBN where it would not earn much in interest and could not be used to pur-

Buhari still stuck in the past – Experts

2017 to diversify Nigeria’s economy, which plunged into a recession when oil prices slumped in 2016. “Pursuant to these reforms, the economy has recovered and we have had nine successive quarters of growth since our exit from recession,” Buhari said. He also noted that Nigeria’s exchange rate in the last three years has remained stable, with robust reserves of US$42.5 billion, up from US$23 billion in October 2016. “To a very large extent they have been able to achieve macroeconomic stability since 2016, although growth remains weak and we have not been generating enough jobs which have affected income level,” Omotola Abimbola, an analyst at Lagos-based Chapel Hill Denham, said. Moody’s, an international ratings agency, has described the country growing slower

loans and vice versa. The CBN noted that gross credit of the banking sector rose from N15.56 trillion as at end-May 2019 to N16.39 trillion as at September 26, 2019, translating to N829.40 billion or 5.33 percent increase within the period. “In order to sustain the momentum and in line with the provision of our earlier letter, the minimum LDR target for all Deposit Money Banks (DMBs) is hereby reviewed upwards from 60 percent to 65 percent,” the circular noted. Jerry Nnebue, banking analyst at CardinalStone, noted that most banks are in a comfortable position to meet this demand with the exception of maybe one or two that still need to do more. Nnebue said the big question is the strength of the banks’ risk management framework to be able to deal with the sectors they are expected to lend to. “Banks have learnt their lessons from the period of high assets quality issue. Most

Continued from page 1

impress experts who say the narrative has remained the same for Nigeria where the president remains stuck in the past. Among other things, the president said his administration inherited a skewed economy but has learnt from past leaderships and is making headway in steering the economy in the right direction, evidenced by growth seen since the 2016 recession and other measures, but experts are not as enthusiastic. “ It is a shame that five years as president, Buhari is still blaming past administrations,” said Bongo Adi, a senior lecturer at Lagos Business School. “Five times he has said the same thing; five times things have gotten worse.” Boniface Chizea, MD and

CEO of BIC Consultancy Services, said there were challenges in the economy that could not be denied, although efforts are being made to address them. “The president should not be talking about past administrations anymore because this is his second term,” Chizea said. “If we keep looking behind, we get stuck in the past.” Chizea called for more effort towards implementation of the various plans the country has. The president had in his speech said the previous governments abandoned the residual investment-driven non-oil sector which contributed 40 percent of Nigeria’s Gross Domestic Product and employed millions. To address the imbalance, Buhari said his government launched the Economic Recovery and Growth Plan in

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chase Federal Government securities such as bonds and treasury bills. In recent times, the trend of non-performing loans (NPL) has been positive, as banking industry NPLs declined from 14.8 percent in full year 2018 to 9.6 percent as of June 2019. The CBN directed the lenders to continue to strengthen their risk management practices particularly with regard to their lending operations. Abimbola Omotola, analyst at Chapel Hill Denham, noted that banks need to be careful on the potential impact this could have on their asset quality, recalling that the last financial crisis in the banking sector happened not too long ago. “The memory is still fresh and the weak macro backdrop is a major concern,” Omotola said. The apex bank further noted that it would continue to review developments in the market with a view to facilitating greater investment in the real sector of the Nigerian economy whilst promoting a safe, sound and resilient financial system. than its population since 2016 as stuck in a low-growth cycle. In terms of achieving diversification, Johnson Chukwu, CEO of Lagos-based Cowry Asset Management, said Nigeria has not made significant progress in years as statistics provided by the presidency have been the same in Nigeria for years. “One is hoping that by highlighting those concerns, the president would do the needful to change the structure of oil contribution to its revenue by growing the non-oil sector and improving the value chain there,” Chukwu said. David Oke, a senior lecturer in the Department of Economics, University of Lagos, said the move from oil to agriculture would not be enough to stimulate growth as the commodities earned less foreign exchange in the international market.

•Continues online at www.businessday.ng

Wednesday 02 October 2019

BUSINESS DAY

CORPORATE GOVERNANCE

Boardroom diversity: Navigating the 21st century market OLAYIMIKA PHILLIPS

s the 21st century market is diverse, so must the board of companies aiming to serve these markets. This is particularly important when considered against the backdrop of the constant flow of innovations spurred by technological advancements. Rather sadly, most companies have, been slow to integrate change and diversity into their corporate structure, priding themselves in rote processes, and systems, justifying the resistance to change on slavish loyalty to the past. The truth however is that technology and innovation have come to stay not as visitors but permanent residents in the global economy and its steady march is now at the weakened doors of precedents – to fight is futile, to be flexible and tactical is wisdom. Oftentimes, companies struggle with a weak response to changing market conditions amongst other organizational challenges, most of which have now necessitated the need to leverage on diverse insights and perspectives through multifaceted lenses including age, gender, background etc. The board is responsible for amongst other functions: formulating strategies to guide the activities and foster effective management of the company; monitoring the activities of the organisation to ensure they are in alignment with its underlying principles, objects and values. As a result of the ever-dynamic nature of businesses particularly in the 21st century, it is imperative for companies to maintain a flexible approach by constantly evaluating the constitution of its board, leadership structure

and strategy. This is particularly important as we live in a virtually borderless, post-industrial age, driven by technological innovation, where companies face the risk of organizational atrophy for continuously clutching to the straws of the past by adopting analogue solutions to digital problems. In the maiden edition of this series, I had emphasized the need for an experienced and tech-savvy board. However, it is equally important to ensure a hybrid of experience and innovation in the selection of board members. Recommended Approach Much importance is attached to the qualities of individuals who constitute the board of directors of companies. This is because, these individuals are pivotal to the success or otherwise of these companies. In selecting members of the board, a key consider-

ation for most companies is the experiential value of the potential board member. The general trend in these parts is appointment by reference to age, with the belief that age is a true determinant of experience and technical expertise. Whilst this belief may be true in some industries in the past, the stark commercial realities of the 21st century market calls for a fundamental shift in this regard. The business world has become unrelentingly disruptive, as established belief and practice are now struggling to catch up with neverending innovations. The tides of civilization are sweeping in the direction of technology, and the population of most countries, especially developing ones, is abundantly comprised of technocentric youths. Presently, breakthroughs and the pace of development are set by young people, adding incredible

“Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, characterized the initial corporate response to his invention this way: But it was filmless photography, so management’s reaction was, ‘that’s cute— but don’t tell anyone about it.’ Kodak management’s inability to see digital photography as a disruptive technology, represented the wake of its downfall.” … The New York Times (5/2/2008)

value to the future of companies, through innovative and disruptive approaches. This has necessitated the push for the inclusion of millennials on the boards of companies, since board appointments are usually made to afford the Company the expertise and business experience of the individual elects. Unfortunately, the current global picture in this regard shows exactly what age diversity does not look like. The market is becoming increasingly diversified in product and people. As these markets expand, their potential customer base grows younger and younger—it is simply good business sense to have board members who can relate to this massive pool. It must be noted however that there is no merit in appointing a young person just to satisfy an “age quota”; a potential addition to the board must possess a demonstrable threshold of meaningful experience and quality of character expected of a director. It is generally assumed that older and more established directors regularly come up with fresh ideas; however, a younger director, unhindered by age induced biases, may share fresh perspectives to issues that may not have hitherto been considered due to the generational gap. Furthermore, experience has evinced that new ideas from the younger generation incorporated in board discussions would surely be a company asset, as exemplified by the comprehensive transformation experienced by the Fashion mogul, Gucci under the management of Mario Bizarri as a result of the incorporation of millennials into the decision-making process of the company. Rather sadly, while board rejuvenation with fresh drive

and attitude is constantly preached and applauded theoretically, being a proposition that looks good and resonates with most of the population; statistics on boards members’ ages has shown little progress. The general perception on board membership is a set of relatively old persons. Conclusion On a comparative note, incorporating diversity into positions of governance is a growing trend, even more notable within newly elected government administrations in Nigeria, evidenced by the appointment of commissioners within the age brackets of 25 and 28 years. This in itself represents a leaf to be borrowed by corporates in their governance structure. Relatedly, the lessons from the Kodak story are quite instructive. Although, companies more often than not are aware of the disruptive forces affecting their industry and divert sufficient resources towards expanding the frontiers in emerging markets, they nonetheless, sometimes fail to see the self-created enemy, not at the gate, but in the boardroom: lack of diversity.

Olayimika is a Partner in the law firm of Olaniwun Ajayi LP and has over 34 years of professional experience. She specializes in corporate governance, providing pragmatic solutions to the diverse challenges which confront corporates at different growth stages and serves on the board of several companies (listed and privately held).”

Wednesday 02 October 2019

BUSINESS DAY

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Wednesday 02 October 2019

news BusinessDay deepens sports penetration with launch of MatchCenter.ng Anthony Nlebem & Desmond Okon

L-R: Adelowo Adesola, vice president, Banana Island Property Owners/Residents’ Association (BIPORAL); Alexandra Herr, deputy consul general, Consulate General of the Federal Republic of Germany in Lagos; Cosmas Maduka, president/CEO, Coscharis Group, and Abiona Babarinde, group general manager, marketing and corporate communications, Coscharis Group, at the launch of the new BMW X7 and 7 series, during the 2019 Banana Island cultural festival in Lagos. Pic by Olawale Amoo

E-payment transactions hit N40.48trn in Q2 - NBS OLUFIKAYO OWOEYE

s the race for a cashless economy heats up, a total of 711.29 million transactions valued at N40.48 trillion were recorded on electronic payment channels within the nation’s banking sector within the months of April to June, representing the second quarter (Q2) of the year. Data released by the Nigerian Bureau of Statistics (NBS) show that NIBSS Instant Payments (NIP), an account-number based online-real-time Inter-Bank payment solution, was the preferred funds transfer platform within the period as it recorded the highest volume transaction at 271.34 million valued at N25.18 trillion.

A breakdown shows that in the month of April, a total of 87.94 million transactions valued at N8.27 trillion were carried out using NIP. In May, a total of 95.98 million transactions valued at N9.03 trillion were carried out while in June, 87.42 million transactions valued at N7.86 trillion were carried out. Volume of transactions via the Automated Teller Machine (ATM) stood at 221.65 million valued at N1.69 trillion, while total volume in April stood at 75.04 million valued at N575.86 billion. For the month of May, a total of 75.43 million transactions were carried out valued at N580.86 billion and June had 71.18 million volume transaction valued at N542.43 billion.

Welfare of Nigerians tops agenda, as Buhari visits South Africa Tony Ailemen, Abuja

elfare of Nigerians living in South Africa is expected to top agenda of President Muhammadu Buhari’s engagement in the country during his three-day official visit that starts today. The President is expected to depart Abuja on a three-day state visit to South Africa, following an invitation by President Cyril Ramaphosa. A statement by presidential spokesman, Garba Shehu, notes that the President will use the visit to discuss welfare of Nigerians and find common grounds for building harmonious relations with their host. Relationship between Nigeria and South Africa has been largely affected by the years of xenophobic attacks. The visit comes against the background of recent xenophobic attacks, which forced the evacuation of hundreds of Nigerians and the exchange of visits by Special Envoys of Presidents Buhari and Ramaphosa. While in South Africa, the Nigerian leader is also expected to engage Nigerians in town hall meetings, with a view to sharing in their experiences and reas-

suring them of Nigerian government’s commitment to working for the protection of their lives and property and promoting peaceful co-existence. President Buhari and his host will preside over the South Africa/ Nigeria Bi-National Commission, during which a progress report will be presented. At the end of the meeting, both leaders will sign a joint communiqué. The President and his delegation including Nigerian business representatives will also participate at a South Africa-Nigeria Business Forum with their host counterparts. President Buhari will be accompanied on the visit by Governor Abdullahi Ganduje of Kano State, Governor Simon Lalong of Plateau State and Governor David Umahi of Ebonyi State. Others are: Minister of Foreign Affairs, Geoffrey Onyeama; Minister of Defence, Bashir Magashi, Minister of Power, Saleh Mamman; Minister of Interior, Rauf Aregbesola; Minister of Mines and Steel Development, Olamilekan Adegbite; Minister of Police Affairs, Maigari Dingyadi, and Minister of State, Industry, Trade and Investment, Mariam Katagum. www.businessday.ng

Point-of-Sale terminals also recorded huge volume of transaction at 103.93 million valued at N749.81 billion. Volume transaction in April via the POS stood at 33.36 million valued at N246.09 billion, the volume increased in May to 35.46 million valued at N257.73 billion, the volume, however, decreased marginally to 35.09 million valued at N254.99 billion. The rapid mobile penetration has seen banks customers conduct their transaction using mobile payment applications. Within the second quarter, the volume of transaction stood at 63.30 million valued at N1.15 trillion. Volume of transaction via website platform stood at 27.59 million valued at N116.25 billion.

Volume of transaction through Remita, an e-payment platform that helps individuals and organisations to easily receive and make payments across all banks, from anywhere and at any time stood at 11.04 million valued at N4.87 trillion. The new policy direction of the CBN is to drive the economy towards a cashless economy with the introduction of a 3 percent processing fees on withdrawals and 2 percent for deposits of amounts above N500,000 for individual accounts. Similarly, corporate accounts will attract 5 percent processing fees for withdrawals and 3 percent processing fee for lodgements of amounts above N3 million.

HealthPlus congratulates pharmacists on World Pharmacists Day 2019

e a l t h P l u s P h a rmacy, Nigeria’s first integrative pharmacy and the fastest growing pharmacy in West Africa, congratulates pharmacists all over on World Pharmacists Day 2019. In line with the theme for this year’s World Pharmacists Day - “Safe and effective medicines for all,” Bukky George, founder/ CEO of HealthPlus Pharmacy, believes that “pharmacists play an important role in safeguarding patient health through improving the use of medicines and reducing medication errors. Pharmacists use their knowledge, expertise and experience to ensure that people get the best from their medicines.” This is why at HealthPlus Pharmacy, we recruit, train and retain the best pharmacists enabling us to keep to our brand promise of helping people achieve optimum health and vitality. To better serve you, our

Allen Avenue branch, Ikeja operates 24 hours a day and seven days a week. Also, we recently launched healthplus.com.ng, our e-commerce platform, to ensure everyone in Lagos has access to quality medicines including prescription medicines with the click of a button. According to Moses Mogbolu, head of marketing and communications at HealthPlus Pharmacy, “regular health checks and screenings save lives and prevent untimely deaths. That is why, HealthPlus Pharmacy offers free lifesaving services like blood pressure check, asthma support service, stop smoking service, sexual health service, weight loss service, travel health service, minor ailments service, medicines use review and expert pharmacist advice. “We encourage everyone to visit any of our 60 branches for a free health check. Love life, Feel Great,” he said.

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s sports, particularly football, continues to attract huge investments, Nigeria’s leading business newspaper, BusinessDay Media has launched a new sports website - MatchCenter. ng - to satisfy the thirst and yearning of sports enthusiasts constantly seeking top-notch and in-depth sports information. MatchCenter is an online football platform that does not only provide data, analysis and editorial news, but also brings up-to-date live scores, betting tips, predictions covering the relevant events across over 20 sports events in the world. Described as a one-stopshop for football lovers, the website is user interface friendly that gives the ability to compare and contrast the statistics of your favourite teams or individual players. Also catering for the needs of punters to improve their chances of smiling to the bank, the site provides betting tips and predictions regularly with the use of an automated artificial intelligence (AI). It was learnt that the AI system uses a unique algorithm to present betters with awesome betting signals to

help improve their bankroll and successful betting tips. Speaking at the launch on Monday, Frank Aigbogun, publisher of BusinessDay Newspapers, said his interest in compelling statistics, which now characterise and colour sound sports debates, sparked the thoughts and plans that gave rise to the MatchCentre. According to Aigbogun, the site feeds essentially from content provided by Opta (a British sports analytics company based in the United Kingdom), as his organisation has rights for the Nigerian and Ghanaian markets. “MatchCenter.ng will be an open website,” he said. “We have called you here to show you an exciting beginning of a platform, supporting and feeding of sports and soccer. I do hope that at some points down the road we will not just be talking about Real Madrid and Atletico Madrid; we will be talking about Nigerian soccer as well, because there is immense value that is available there,” Aigbogun said. He added that the site also served as a veritable source for information and data for analysts and journalists, as it would help the work that they do.

Lagos investigates disease outbreak at Queen’s College, others … as 89 students affected JOSHUA BASSEY

agos State government has launched an investigation into a fresh outbreak of a flu-like illness among students of Queen’s College and other schools in the state. About 89 students are said to be affected by the illness and receiving medical treatment. The state commissioner for health, Akin Abayomi, said officials of state epidemiology team, primary health care services and environmental health department of Lagos Mainland Local Government constituted by the Ministry of Health had been dispatched to the school to unravel the cause of the illnesses. Abayomi, while reviewing preliminary reports of the investigations conducted by the team, explained that the surveillance team identified what appeared to be a sporadic increase in upper respiratory tract infections characterised by cough, catarrh, fever and weakness across some schools. “The team has since visited Queen’s College and investigations are ongoing. Findings, according to the review of health records in the school sick bay, revealed that 89 students presented to the clinic with influenza like illnesses,” he said. He said a walk through inspection to other facilities in the school revealed that environmental sanitation and water @Businessdayng

supply were optimal but could be improved. The commissioner however noted that the incidence was not an outbreak of any sort but excess number of cases that needed to be investigated. He revealed that nasal swab samples would be collected from pupils for confirmation of the cause of the illness. “As we await comprehensive report of the investigation being conducted, I would like to appeal to stakeholders of Queen’s College, other affected schools and residents of Lagos State to remain calm and ensure strict adherence to personal and environmental hygiene at all times. “I assure you that the situation is under control and seems to be subsiding. We will give necessary updates as the assessment and investigation progresses,” he said. He advised schools in Lagos either day or boarding to adopt basic precautionary measures against diseases and illnesses by teaching and ensuring good hand washing practices, promoting personal hygiene and providing adequate hand washing points within the school premises. “They must also commence and continue to raise awareness about respiratory etiquette such as covering of mouth with clean hands or handkerchiefs when coughing or sneezing, and washing hands immediately after.

Wednesday 02 October 2019

BUSINESS DAY

news Digitisation supports banking supervision, regulatory compliance - CBN SEGUN ADAMS

entral Bank of Nigeria (CBN) says digitisation supports effective supervision of the financial system, data access and management. Aisha Ahmad, CBN deputy governor, Financial System Stability and chairman, FITC Board, disclosed this during the opening of the 2019 CBN/FITC Continuous Education Programme for Directors of Banks and Other Financial Institutions held in Lagos. The deputy governor was represented by the director, Banking Supervision Department, CBN, Ahmad Abdullahi at the event. Speaking on the theme: “Digital Transformation - Repositioning Financial Institutions: Perspectives and Imperatives for the Board” she said the world is experiencing a digital revolution and that digitisation is also supporting risk identification, regulatory compliance and enhancing sectoral performance.” In his opening remarks, Tunji Ajiboye, acting managing director/CEO, FITC, said financial institutions were recognising the importance of technology and must respond to digital transformation. He said the competition facing banks was enormous as financial technology firms and even telecommunication companies are beginning to offer some bank-related services.

Ajiboye said: “Telcos are giving banks a run for their money. Hence, Banks need to be proactive in recognising the impact of digitisation on their services and overall operations. It is important to understand and constantly discuss how technology is transforming the banking landscape”. FITC is already incorporating technology in the delivery of its training, consulting and research services to the industry, he said. He said the programme, which is FITC’s 35th edition and the 14th in collaboration with the CBN has demonstrated the readiness and commitment of the FITC board to continually upgrade the competencies and capacity of financial institutions to deliver and meet customers expectations. He said banks had to embrace technology if they want to remain competitive while also advising financial institutions’ boards to understand the impact of digital transformation in their books and their disruptive tendencies in their organisations. The onus is on the board and management of the Financial Institutions to be more proactive in understanding digital services and the impact they can have on their organisation by ensuring that everyone in their organisations understands the role of digitisation in today’s banking services, he said.

OPPO A Series 2020 with improved 14% energy efficiency targets mid-level smartphone users FRANK ELEANYA

radually, OPPO, a global smartphone brand, is inching closer to etch its name on the global map as one of the top 10 manufacturers with the most energy efficient mobile devices. Aside long-lasting battery attraction, the latest A Series 2020 it recently launched in different parts of the world, including Lagos, is also the company’s best shot at the mid-level smartphone market segment. The competition to get the most from the vibrant, relentlessly mobile and aestheticsdriven young consumers in the smartphone market is a real one and OPPO’s new gadgets accentuate what is possible in the future of mobile devices. The OPPO A Series comes in two variants, the A9 2020 and A5 2020. Nengi Akinola, OPPO’s marketing manager in Nigeria, says the inspiration for the name OPPO A Series 2020 of the two handsets is in celebration of the beginning of a new decade and commemoration of the success of the A series over the past 10 years. The new name also reflects the company’s vision for the coming 10 years. “It highlights the brand’s latest technologies, stunning design, superb photography, powerful performance and perfect tuning to the needs of young people. “With an all-purpose

48MP quad camera riding on a 5,000mAh ultra battery, the OPPO A Series 2020 redefines creativity and gives users time - more than 19 hours - to enjoy their entertainment,” Akinola states. The OPPO A9 2020, in particular, features a multipurpose Quad Camera setup with a 48MP Main Camera, 8MP Ultra-Wide Lens, 2MP Mono Lens, and 2MP Portrait Lens. The OPPO A5 2020 also features a multipurpose Quad Camera but with a 12MP Main Camera. However, users of both phones are able to take pictures and videos from different angles and scenarios, plus an Ultra Night Mode 2.0 among others. The A9 2020 selfie feature automatically identifies skin tone, age, gender, and skin color. It is also able to separate users for customized beautification. An all-new algorithm for smoothing out blemishes on the skin and sharper features create a make-up free look, allowing users to embrace a better version of themselves. The OPPO A9 2020 in Marine Green or Space Purple with 8GB RAM and 128GB ROM will be available on the 15th of October, 2019 in Nigeria, to retail at N89,900. The price and availability of the OPPO A5 2020 in Mirror Black or Dazzling White with 3GB RAM/64GB ROM and 4GB RAM/123GB will be announced later. www.businessday.ng

L-R: Gbolahan Joshua, ED/chief operations and information, Fidelity Bank plc; Mike Ogbalu III, CEO, Verve; Oremeyi Akah, chief core operations officer, Interswitch; Mitchell Elegbe, GMD/ founder, Interswitch Group, and Chinyere Don-Okhuofu, divisional CEO, Interswitch networks, during the Verve @ 10 Media parley in Lagos. Pic by Pius Okeosisi

Nigeria eyes $2.3bn from ICT, movies on CBN’s creative industry park … Lagos allocates 40 acres of land around National Theatre HOPE MOSES-ASHIKE

igeria could earn $2.3 billion from Information and Communication Technology (ICT) and the movie industry over the next five years following plans by the Central Bank of Nigeria (CBN) and the Bankers’ Committee to establish a creative industry park at the National Theatre, Iganmu, Lagos. Godwin Emefiele, governor of the CBN, said on Monday that with the approval of President Muhammadu Buhari, the Federal Government had handed over the National Theatre to the CBN and the Bankers’ Committee for the development of a creative industry hub. Speaking at a Creative Nigeria Summit in Lagos, Emefiele said Babajide Sanwo-Olu, governor of Lagos State, was supporting the development

with the allocation of additional 40 acres of land around the National Theatre and that banks would take over on Wednesday. While the park could result in potential Gross Domestic Product (GDP) gains of close to $2 billion from ICT with creation of 150,000 skilled and unskilled jobs, the movie industry is expected to generate over $300 million revenue from production and distribution of Nigerian movies at cinema locations at home and abroad as well as the creation of over 200,000 direct and indirect jobs. Also, the creative industry park would take the large chunk of $12.7 billion share of the market in the music and textile sub-sector. Consequently, the initiative over the next five years will enable young Nigerians to capture significant market share of the $10.7 billion music industry. Nigeria spends over $2 billion on imported textiles, in-

cluding machine-made clothes imported from Asia, which copy popular Nigerian designs. Over the next five years, the park will help support 10,000 young Nigerians with improved design skills, while creating over 100,000 direct and indirect jobs in the CTG industry. “Our goal through the establishment of these parks is to create an environment where startups and existing businesses can be incubated and rewarded for their creativity,” Emefiele said. So far, he said the CBN and the Bankers’ Committee intend to support this creative venture with N22 billion of initial funds. The movie industry’s contribution to the GDP is expected to rise from 1 percent to 3 percent over the next years. “We intend to support the development of over 50 additional cinemas from our current capacity of 48 cinemas nationwide. The cost structure of these

cinemas will be lean in order to make movies affordable to a large section of Nigerians,” he said. The music industry would also create over 500,000 direct and indirect jobs. Over 50,000 Nigerians are expected to benefit from the ICT centre, which will result in creating over 25,000 software engineers. Emefiele was concerned that despite Nigeria’s large population, the growth of the creative industries in the country has been limited by the lack of widely accessible shopping platforms, smuggling of goods, piracy, as well as lack of digital payment options. He promised to curb the worrying phenomenon of piracy of movies and music by supporting the development of digital content and widely accessible platforms under which every Nigerian can purchase or rent movies/music via their mobile phones.

No sign of some projects awarded by NDDC since 2012 in Edo, says House Ad-hoc C’ttee ... as state seeks compensation for victims of flooding caused by commission’s sub-standard

eader of the House of Representatives Ad-Hoc Committee on NDDC Abandoned Projects in Edo State, Sergius Ogun, has expressed disappointment with the number of the commission’s abandoned projects in the state, noting that some projects awarded since 2012 cannot be accounted for anywhere in the state. Ogun, who said this when the House Ad-Hoc committee conducted on-the-spot assessment of the abandoned projects in the state in the company of Governor Godwin Obaseki, said, “It is obvious that NDDC has not partnered with the state government. We are talking about projects awarded by NDDC in 2012. Seven years after, we cannot see any visible projects. These are

some of the things we will take back to Abuja.” Governor Obaseki, on his part, demanded compensation for residents in Apostolic Street, off Sakponba Road, who were affected by flooding caused by shoddy road project executed by the NDDC contractors in the area. After inspecting the impact of the flooding on Apostolic Street, Obaseki said the NDDC and the contractor responsible for project would have to compensate the victims whose properties were damaged by the flood. He noted, “The contractor did the asphalt work on the road without taking into consideration the fact that there were manholes to channel water in the area. When the community advised the contractor

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not to block the manholes, he disregarded the complaints and blocked them. You can see the devastation that has caused? “We are holding the NDDC and the contractor liable and we will take legal actions to ensure they compensate the victims affected.” When the entourage inspected the ongoing BeninAbraka Road project, Obaseki berated the NDDC for not fulfilling its part of the tripartite agreement it entered with the Edo State Government and Edo State Oil and Gas Development Commission (EDSOPADEC) on the repair of the BeninAbraka Road. He explained that the NDDC was supposed to contribute 40 percent, while the state government and its agency would contribute the remaining 60 @Businessdayng

percent to the project, but the commission reneged on the agreement. The governor added that the state government had commenced work on the road, which he assured would be completed with or without NDDC’s counterpart fund, noting that NDDC is grossly mismanaged. The governor said the commission claimed it spent N20 billion on emergency projects in Edo State without paying its counterpart fund for the BeninAbraka Road. The Edo State director of the NDDC, Gbubemi Ogor, said sanctions would be meted out to erring contractors and ensure close collaboration with the state government, adding that “just as the governor has said, there is a need for us to sit up.”

42 BUSINESS DAY

Wednesday 02 October 2019

news BusinessDay deepens sports penetration with launch of MatchCenter.ng Anthony Nlebem & Desmond Okon

E-payment transactions hit N40.48trn in Q2 - NBS OLUFIKAYO OWOEYE

Welfare of Nigerians tops agenda, as Buhari visits South Africa Tony Ailemen, Abuja

HealthPlus congratulates pharmacists on World Pharmacists Day 2019

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Lagos investigates disease outbreak at Queen’s College, others … as 89 students affected JOSHUA BASSEY

Wednesday 02 October 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

JAMES KYNGE, NICOLLE LIU AND ALICE WOODHOUSE IN HONG KONG

ong Kong police shot a protester as violent clashes erupted across the Asian financial hub on Tuesday, sullying China’s attempts to project a strong and unified image to the world on the 70th anniversary of Communist party rule. Video footage showed a police officer shooting the 18-year-old in the chest with a pistol at point blank range — the first time anyone has been shot in four months of often violent demonstrations in the city — during a running battle between police and protesters. The man, who was identified as a high school student, was taken to hospital, where staff said his condition was critical. Hong Kong police commissioner Stephen Lo said at a late night press conference that the officer who fired the shot acted in a “sensible and lawful” manner because he was facing a life-threatening situation. He added that protester had been placed under arrest for assaulting a police officer. Mr Lo added that 25 police had been injured. The shooting came on one of the most violent days yet in the wave of protests that have hit the territory, which returned to Beijing’s rule in 1997, with clashes still under way late on Tuesday evening. Financial Times journalists witnessed another protester being beaten unconscious by police in a separate clash. The city’s Hospital Authority said it had treated 66 people aged

Hong Kong protester shot as violent clashes escalate

Show of defiance in Asian financial hub on 70th anniversary of communist rule in China

11 to 75 years old, including two who were in critical condition. Authorities also released photographs of a police officer who had been attacked with a corrosive liquid, the skin on his chest and arms covered in welts. “I’m ready to die for the move-

US president asked Australia PM for help in probe into Mueller inquiry

Paul Donovan was put on leave in June for comments on swine fever

senior economist at UBS who was suspended after he made controversial remarks relating to a bout of swine fever in China is returning to work, according to two people familiar with the matter. Paul Donovan, chief economist at UBS Global Wealth Management, was placed on leave in June after he said that the outbreak of the disease only “matters if you are a Chinese pig” or “if you like eating pork in China”. A spokesperson for UBS confirmed that Mr Donovan was scheduled to return to work on Wednesday. His tongue-in-cheek remarks provoked outrage in China, after a rival bank and some news outlets falsely claimed that he was being racist, owing to the insulting nature of the word “pig” in the country, where it connotes laziness and stupidity. In fact, Mr Donovan, who has worked at UBS since 1992, was trying to make the point that the outbreak of swine flu in the region did not have broader implica-

tions for world pork prices, and was therefore of chief concern to the animals themselves and local consumers of the meat. The Chinese Securities Association of Hong Kong also sent a letter to UBS demanding that Mr Donovan be dismissed. Mr Donovan made the remarks in a podcast and they were later summarised in a note that was sent to some UBS clients. His reinstatement comes as companies operating in China scramble to respond to pressure from Beijing, which is pushing them to take a hard line against employees that are perceived to have insulted the country, as well as those deemed to be supportive of the protests in Hong Kong. UBS conducted a review that concluded that Mr Donovan’s remarks caused unnecessary offence, according to one of the people. The review also trawled his previous output and concluded that it was an isolated incident, they added. The bank is planning to resume production of Mr Donovan’s daily audio comment within the coming weeks, they said. www.businessday.ng

malls and a number of metro stations closed on what is normally a busy public holiday. The measures highlight the significant economic cost the protests have caused the city since they began four months ago. “The so-called National Day is a day for mourning. We are mourn-

Mitch McConnell to hold Senate trial if Donald Trump impeached by House

UBS top economist reinstated after ‘pig’ row suspension DAVID CROW IN LONDON

ment, I’m not afraid,” said a 15-year-old student who gave his name as Xiu. “If my death would mean Hong Kong got freedom and genuine democracy, then it would be worth it.” Hong Kong began the day in lockdown, with almost 30 shopping

ing those who sacrificed for democracy in China . . . it’s 70 years of suppression,” said Lee Cheuk-yan, a former legislator and democracy activist, marching in one of the city’s biggest shopping districts that is usually flooded with mainland Chinese tourists. But as crowds of demonstrators fought police, threw petrol bombs and smashed public property in Hong Kong, Beijing staged its biggest ever military parade in a move intended to project an aura of confidence and power to its people and to the wider world. “Unity is iron, unity is steel, unity is strength,” said Xi Jinping, China’s president, in a speech delivered to a huge banquet on the eve of the national day celebrations in Beijing that was attended by Carrie Lam, Hong Kong’s beleaguered chief executive. The parade unveiled startling advances in China’s weapons arsenal, including the Dongfeng 41 missile, which analysts said was capable of hitting any target in the US, carrying up to 10 nuclear warheads and travelling at 25 times the speed of sound. An estimated 15,000 troops, 160 warplanes and 580 tanks also took part in the parade.

DEMETRI SEVASTOPULO IN WASHINGTON AND PRIMROSE RIORDAN IN HONG KONG

itch McConnell, the Republican Senate majority leader, said he would hold a trial in the Senate if the House of Representatives voted to impeach President Donald Trump. “I would have no choice but to take it up,” Mr McConnell said. “How long you’re on it is a whole different matter, but I would have no choice . . . based on a Senate rule.” Mr McConnell spoke as the House conducted an impeachment inquiry sparked by a whistleblower’s complaint about a July 25 phone call in which Mr Trump pressed the Ukrainian president Volodymyr Zelensky to investigate Joe Biden, the former US vice-president running for the Democratic presidential nomination in 2020. Under the US constitution, Mr Trump would be removed from office if he is impeached by the House and convicted by the Senate. The White House and other government departments came under further scrutiny on Monday following reports that officials had

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restricted access to the transcript of a call between Mr Trump and Scott Morrison, the Australian prime minister. Mr Trump said William Barr, US attorney-general, needed Australia’s help in a review the president hopes will discredit Robert Mueller’s investigation into Russian meddling in the 2016 US election. Mr Morrison offered Canberra’s assistance in the call weeks before the Australian leader visited the US last month, according to a person with direct knowledge of the situation. Joe Hockey, Australia’s ambassador to the US, also wrote to Mr Barr in May to say his country would support the White House probe. “The Australian government has always been ready to assist and co-operate with efforts that help shed further light on the matters under investigation,” an Australian government spokesman said when asked about the phone call. “The PM confirmed this readiness once again in conversation with the president.” The phone call was first reported by the New York Times. The US justice department did not respond to a request for comment. Stephanie Grisham, White @Businessdayng

House press secretary, said: “We don’t comment on how classified information is handled.” The Washington Post reported that Mr Barr met foreign intelligence officials — from the UK, Australia and Italy — to gather material for the inquiry. US media also reported that Mike Pompeo, secretary of state, was one of the US officials who was listening on the line when Mr Trump spoke with his Ukrainian counterpart on July 25. The House intelligence committee has subpoenaed Mr Pompeo for documents related to its impeachment inquiry. A spokesman for the House panel declined to say how it would handle the revelations about Mr Barr. The House intelligence committee on Monday also issued a subpoena for Rudy Giuliani, the former New York mayor and personal lawyer for Mr Trump, to produce documents in the case. In a letter to Mr Giuliani, Adam Schiff, the committee’s Democratic chairman, said it was conducting “an investigation of credible allegations that you acted as an agent of the president in a scheme to advance his personal political interests by abusing the power of the office of the president”.

Wednesday 02 October 2019

BUSINESS DAY

NATIONAL NEWS

Fed wrestles with role of regulation in repo squeeze Breakdown in overnight lending exacerbated by banks’ preference for reserves BRENDAN GREELEY IN WASHINGTON AND LAURA NOONAN, JOE RENNISON, ROBERT ARMSTRONG AND COLBY SMITH IN NEW YORK

he Federal Reserve is looking at whether regulation played a role in the sudden rise in short-term interest rates that rocked markets last month, when the largest US banks, despite being flush with cash reserves, did not lend them out overnight as expected. The central bank has indicated that it is focused on the concentration of reserves among a few banks and said it will consider the question at its next monetary policy meeting on October 29-30. According to policymakers, traders and bank executives, that concentration contributed to the rise in two ways. Larger banks have to meet higher regulatory standards for cash, particularly for same-day liquidity that only reserves can provide. And larger banks have different strategies for their own reserve holdings, which may not include lending them out overnight. In a speech on Friday, Patrick Harker, president of the Philadelphia Fed, said that some pipes in financial markets “might be rusty — or clogged”, and added that it was “worth asking if regulation might be contributing to any erosion or blockage that might exist”. Fed data show large banks are keeping a disproportionate amount in reserves, relative to their assets. The 25 largest US banks held an average of 8 per cent of their total assets in reserves at the end of the second quarter, versus 6 per cent for all other banks. Meanwhile, the four largest US banks — JPMorgan Chase, Bank of America, Citigroup and Wells Fargo — together held $377bn in cash reserves at the end of the second quarter this year, far more than the remaining 21 banks in the top 25. Since the financial crisis, large banks have been obliged to meet a liquidity coverage ratio (LCR) — a portion of high-quality assets such as cash reserves and Treasuries that can be sold quickly to keep the lights on for a month in a crisis. But regulations also require them to track intraday liquidity — cash they can immediately access — which does not include Treasuries. This additional requirement can vary depending on their business models, which in turn inform supervisors’ and examiners’ bankspecific demands. Executives at several large banks say this puts a de facto premium on reserves that varies by bank. “The [one-day] liquidity requirement is massive,” said a managing director at a bank on Wall Street. “There is no way banks can hold anything but cash for that.” The Federal Open Market

Committee has been working for several years to define “ample” reserves — enough so that banks will lend them overnight as a release valve to prevent rates from going too high. Banks currently hold $1.3tn in reserves at the Fed. In surveys, most recently in February, bank officers had shared their own “lowest comfortable level” of reserves. Using their responses, the New York Fed estimated a systemwide lowest comfortable level of between $800bn and $900bn. But that estimate came with a warning. In a speech this year, Lorie Logan, interim manager of the Fed’s securities portfolio and a senior vice-president at the New York Fed, flagged the possibility that if reserves are not distributed efficiently among banks, that lowest comfortable level could be higher than the survey estimates. Mary Daly, president of the San Francisco Fed, suggested bank officer surveys might have limitations as predictors. “People tell you what they’re willing to do,” she told the Financial Times, “but then when it really comes to it, they want to do something different.” Reserves at large banks have varied over time, suggesting that reserve levels — and willingness to lend them — reflect not just regulatory compliance, but also business decisions. “We have plenty of liquidity,” said the chief financial officer of a top-10 US bank. “We are just choosing not to lend it out overnight to hedge funds.” A 2019 paper from economists at the Fed found that more cautious banks held more reserves, but holdings also differed according to “differing business models, products and services, and unobservable, internal operating procedures”. “If you had a simple model and you could predict that every institution would behave exactly the same, it’d be much easier to pick a number of ample reserves,” said Ms Daly. “But when institutions have different strategies for different reasons, you have to uncover what those strategies are, and how responsive those strategies are to demand.” Second-quarter data from the four largest reserve holders show Wells Fargo held 39 per cent of its high-quality liquid assets in reserves. JPMorgan held 22 per cent, Bank of America held 15 per cent and Citigroup 14 per cent. “If you have a very large concentration in a few institutions and you lose one or two on any day, then you are losing a major portion of your funding,” said Jim Tabacchi, chief executive at South Street Securities, a broker dealer active in short-term debt markets. “Rates have to skyrocket. It’s simple math.” www.businessday.ng

Elizabeth Warren has made breaking up big technology groups a key campaign promise. Mark Zuckerberg, Facebook’s chief, intends to fight moves to break up his company © Getty

Mark Zuckerberg vows to fight Warren plan to break up Big Tech

Facebook chief says presidential candidate’s proposal poses an ‘existential’ threat KIRAN STACEY IN WASHINGTON

ark Zuckerberg has promised to “go to the mat and fight” Elizabeth Warren over her pledge to break up Facebook and other large technology companies if she becomes president, warning that such a plan would pose an “existential” threat to the company. Mr Zuckerberg made the remarks in July during an open staff meeting at which the Facebook chief executive spoke candidly about a range of political issues confronting the company. They were recorded by someone attending the meeting and published on Tuesday by The Verge website. The recordings show the level of unease caused by Ms Warren’s promise to break up Google, Facebook and Amazon if she wins the 2020 presidential election.

Mr Zuckerberg said: “You have someone like Elizabeth Warren who thinks that the right answer is to break up the companies. “If she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge. And does that still suck for us? Yeah. I mean, I don’t want to have a major lawsuit against our own government . . . “But look, at the end of the day, if someone’s going to try to threaten something that existential, you go to the mat and you fight.” Ms Warren responded on Tuesday shortly after the recordings were published, tweeting: “What would really ‘suck’ is if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anti-competitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy.” She then reposted her plan to

break up large technology companies, which proposes appointing regulators that are committed to undoing Facebook’s mergers with WhatsApp and Instagram. She said she would also seek to unpick Amazon’s acquisitions of Whole Foods and Zappos, as well as Google’s purchases of Waze, Nest and DoubleClick. Large technology companies have become the target of a host of potential antitrust challenges. The Federal Trade Commission and Department of Justice have launched their own probes into various companies, including Facebook, Amazon, Apple and Google, while state attorneys-general are also looking specifically at Facebook and Google. Until recently, Ms Warren’s plans have not seemed to pose an immediate threat as she had trailed well behind Joe Biden in the race to become the Democratic candidate at next year’s presidential election.

US and North Korea to resume negotiations over denuclearisation Talks planned despite increasing scepticism about Pyongyang’s intentions PRIMROSE RIORDAN IN HONG KONG AND SONG JUNG-A IN SEOUL

he US and North Korea plan to resume negotiations over Pyongyang’s nuclear programme this weekend, in the first direct discussions over denuclearisation between the sides since the failed Hanoi summit between Donald Trump and Kim Jong Un this year. Choe Son Hui, Pyongyang’s first vice-minister of foreign affairs, said she hoped the exchange would “accelerate the positive development” of the relationship. Mr Trump and Mr Kim last met briefly at the demilitarised zone dividing the Korean peninsula in late June, the first time a sitting US president had visited the line divid-

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ing North and South Korea. The encounter saw both sides pledge to resume talks within weeks but there has been little progress. Mr Trump met Moon Jae-in, South Korea’s president, at the UN General Assembly in New York last month, rekindling hopes that the talks would resume. Seoul has been pushing for negotiations to restart and welcomed the plan to revive discussions. A spokeswoman for the presidential office said Seoul “is looking forward to seeing the actual progress toward complete denuclearisation and permanent peace regime on the Korean Peninsula at an early stage”. Talks have stalled since the Hanoi summit between Mr Trump and Mr Kim in February, their second face-to-face meeting after the pair held a historic meeting in Singapore last year. @Businessdayng

North Korea said it was willing to restart talks with the US in early September, but hours later began testing weapons, which was described by analysts as a negotiating tactic. Since May, Pyongyang has undertaken short-range missile and rocket tests, raising fears of a return to military provocation. The announcement comes against a backdrop of increasing scepticism about North Korea’s intentions. Analysts said the two sides would struggle to work out a road map towards denuclearisation amid a lack of mutual trust. “There are much lower expectations for North Korea’s denuclearisation now than last year as we are watching the same old movie again,” said Lee Seong-hyon, a researcher at the Sejong Institute, a think-tank.

Wednesday 02 October 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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Workers must be at the heart of company priorities A judge’s manifesto for fairer and more sustainable capitalism LEO STRINE

he US corporate governance system has lost sight of its purpose. Companies have become more responsive to the immediate desires of the stock market but are failing to move quickly toward sustainable business practices, adequately invest in human capital and, most importantly, fairly share gains from corporate profits with the workers who create them. The disjunction comes at a time when many American workers have become forced capitalists. Tax rules demand that employees saving for retirement or education put their money into equity and bond mutual funds in 401(k) and 529 plans. These long-term savings objectives should align well with running sustainable, responsible businesses. Diversified worker-investors do not benefit when some companies offload the costs of their activities, such as pollution and carbon emissions, on to everyone else. As human beings who consume products, and depend on good jobs, they suffer when companies harm the environment, defraud or injure consumers and move production overseas. Critically, 99 per cent of Americans owe most of their wealth to their jobs. As a result, the vast majority of investors need companies to do business in a way that provides Americans with access to good jobs, sustainable wage growth and a fair share of the profits that businesses generate. Yet our corporate governance system has increasingly failed to deliver. From the late 1940s to the early 1970s, workers and investors did share in the wealth generated by a strong, growing economy. But since then that social compact has frayed: worker productivity has risen by about 70 per cent, but hourly pay has grown by only 12 per cent.

Meanwhile, corporate profits have hit record highs. US workers are more educated, more skilled and do more to create corporate profits, but they share far less in the fruits of that labour. The Business Roundtable, made up of top chief executives and institutional investors such as Vanguard and BlackRock now acknowledge that we need to make our capitalist system work better for the many. But scepticism rightly exists over whether this woke talk will be backed up by real action. Here are some concrete steps that could make a difference. Workers must be given far more priority by companies. We should appoint board committees focused on fair treatment of company employees and those who work for its subcontractors. Business leaders must also support sensible labour law reforms giving unions a fairer opportunity to represent and bargain for their workers. We must make it easier to hold companies accountable by requiring better disclosure of how they treat workers and whether they operate in an ethical, sustainable, environmentally responsible manner. But companies cannot act more responsibly without the support of the institutional investors who control worker-investors’ capital and thus more than 75 per cent of corporate shares. Some big money managers are starting to consider environmental, social, and governance factors. That is not enough. Institutional investors should be focused on EESG, adding an “E” for the interests of company employees. They should align their voting policies with the interests of worker-investors who need not just sustainable corporate profits but also good jobs, clean air and safe products. It makes no sense to require companies to disclose their EESG performance unless institutional investors also have to do so.

Novartis and Microsoft join forces to develop drugs using AI Five-year agreement is one of the most expansive tie-ups between big pharma and big tech SARAH NEVILLE AND RICHARD WATERS

ovartis and Microsoft are joining forces to apply artificial intelligence to some of the most intractable problems in healthcare, in one of the most expansive tie-ups so far between big pharma and big tech. Under one part of the five-year agreement, which will be reviewed annually, Microsoft will work on new tools intended to make it easier to apply AI to all areas of the Swiss pharmaceutical company’s business, from finance to manufacturing. A second part of the work will focus on using deep learning — the technique that has brought the biggest recent advances in AI — to improve the speed and precision with which it develops new medicines. Vas Narasimhan, Novartis chief executive, suggested that AI could hold particular promise in the field of personalised medicine, helping to identify subgroups of patients most likely to benefit from new treatments. The pharma industry, initially

slow to recognise the potential of digital technologies, has been picking up the pace in recent years, with companies ranging from GlaxoSmithKline to Sanofi exploring how big data can accelerate R&D. Novartis grasped the possibilities earlier than many of its rivals and Mr Narasimhan, who took the helm almost two years ago, has set an ambition to turn it into a data science company. He said it had pooled its internal information into three large data “lakes”, overcoming the barriers that often make it hard to combine different data sets, and employs about 800 data scientists and bio-statisticians. Mr Narasimhan said he hoped the collaboration with Microsoft would set his company apart from rivals. “My aspiration is to lead in the space,” he said, laying out a vision in which AI would power research, development, manufacturing, finance, sales and marketing and procurement. “If we can scale the technology across the value chain of the company, that will, I hope, lead to a significant differentiation over time.” www.businessday.ng

Pierre-Olivier Bouée, Credit Suisse’s COO, submitted his resignation after the bank’s board heard details of a surveillance operation he ordered against Credit Suisse’s outgoing head of wealth management, Iqbal Khan

Credit Suisse rocked by suicide as spy scandal deepens Bank’s chief operating officer also steps down over surveillance of outgoing head of wealth management SAM JONES IN ZURICH, DAVID CROW IN LONDON, AND DANIEL SHANE IN HONG KONG

redit Suisse was shaken by the apparent suicide of a security consultant involved in a corporate espionage scandal that also led to the resignation of its chief operating officer on Tuesday. The suicide of the consultant, who acted as a middle man between Credit Suisse and a private investigation firm, puts further pressure on the Zurich-based lender as it battles its worst reputational scandal in years. Pierre-Olivier Bouée, Credit Suisse’s COO, submitted his resignation after the bank’s board heard details of a surveillance operation he ordered against Credit Suisse’s outgoing head of wealth management, Iqbal Khan. The bank’s head of security, Remo Boccali, has also resigned. Neither party will receive a pay-off, the bank said. In a hastily arranged press conference, Urs Rohner, Credit Suisse’s chairman, said: “It was wrong to order the surveillance. The measures taken did not represent our

standards. Those responsible for the observation should not be employed by the group.” He added: “The reputation of our bank has suffered . . . I would like to apologise on behalf of Credit Suisse to our excellent employees, our shareholders, and to Iqbal Khan and his family for the consequences.” Mr Rohner said that an independent investigation by law firm Homburger had concluded that Mr Bouée had acted alone in ordering the surveillance and that Tidjane Thiam, the bank’s chief executive, was not involved. He added that he did not want to pre-empt an official investigation by Zürich’s public prosecutor, which was opened following a complaint by Mr Khan, but said that Homburger’s investigation concluded that Mr Thiam “neither gave the order, nor was he aware of it”. “We strongly reject any assertions that call into question the integrity of our CEO,” Mr Rohner added. Mr Rohner said that it was “with great sadness” that the bank had learned of the death of a security expert who worked with Credit Suisse, who was reported to have committed

suicide. The security expert acted as a middle man between the bank and Investigo, the private investigation firm, according to one person briefed on the arrangement. “We express our deep condolences. Out of respect to the relatives we will not comment further on this matter,” he added. Asked whether Credit Suisse was in any way responsible for the person’s death, Mr Rohner replied: “We are greatly saddened.” Zurich’s cantonal prosecutor said the death was the subject of its inquiries. Based on current evidence, the incident was being treated as a suicide, a spokesperson told the Financial Times. The prosecutor’s office said its investigations into potential criminal offences by those who ordered the surveillance against Mr Khan were still ongoing. It declined to comment on whether Credit Suisse was the focus of its investigation. The bank began its surveillance of Mr Khan last month because of fears that he was preparing to poach bankers and clients to bolster the fortunes of rival UBS, where he started work on Tuesday.

Insulin maker Novo Nordisk walks moral tightrope Danish pharma group has faced criticism in the US over its pricing SARAH NEVILLE

his article is part of an FT series examining the risks and trade-offs companies face when they try to define a broader purpose for their business. At the Centre for Diabetes in Copenhagen, a cooking class with a difference is under way. Everyone chopping and mixing under the watchful eye of nutritionist Line Fransen Moth is living with type-two diabetes. Helping to prepare a meal of fish, root vegetables and naan bread, Jan Schnohr, a 69-year-old retired electrical engineer, joked that he does not know how the group will “survive” a

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lower-meat diet, but said the centre’s staff have given him valuable insights into how to manage his condition. The free sessions are not the fruits of the famously beneficent Scandinavian welfare state, however. They are part of Cities Changing Diabetes, a global programme to limit the scourge of a disease that affects more than 420m people worldwide, in which Novo Nordisk, the world’s biggest insulin maker, has been a driving force alongside academic, clinical and government partners. On the face of it, the kitchen scene presents a paradox. The better people with diabetes such as Mr Schnohr can manage their condition, or even overcome it altogether through a healthier @Businessdayng

lifestyle, the less demand for Novo Nordisk’s signature products. But the company has spent almost a century straddling the sensitive line between making money for its shareholders and fulfilling the mission of its founders, who first ordained in 1924 that any profits should be used for scientific and humanitarian purposes. That mission was formalised for a new generation in 1989 when the Novo Nordisk Foundation was established. It owns all the company’s A shares, and controls 76.2 per cent of the votes, granting it an ironclad majority at annual general meetings, and distributes funds to support scientific, humanitarian and social causes.

Wednesday 02 October 2019

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POLITICS & POLICY Buhari’s Independence broadcast is insult to Nigerians - PDP SOLOMON AYADO, Abuja

h e P e o p l e ’s Democratic Party (PDP) has said that President Muhammadu Buhari’s Independence Day broadcast was simply an insult on the psyche of Nigerians. Specifically, it said the broadcast was a mockery on the nation’s integrity as an independent state. Buhari had, in his independence speech, addressed the nation and, among other things, said he inherited a skewed economy, barely five years into his administration. But according to PDP, the speech was completely unpresidential, lacking in patriotic stance and is replete with manifest of inconsistencies, contradictions, paradoxes and false performance claims. In a statement by Kola Ologbondiyan, national publicity secretary of the party, on Tuesday, the party said the broadcast further confirmed that the country is in wrong hands. “The PDP notes that

R-L: Charles Soludo, a former governor, Central Bank of Nigeria; Babajide Sanwo-Olu, Lagos State governor; Poju Oyemade, convener, The Platform Nigeria and senior pastor, Covenant Christian Centre, and Peter Obi, a former governor of Anambra State, during The Platform Nigeria at the Covenant Place, Iganmu, Lagos, yesterday.

President Buhari, in his recorded address, failed to forcefully address the key issues of freedom, social justice, constitutional order, separation of powers, rule of law, human rights, credible elections, national cohesion, accountability and trans-

parency in government; the very fundamentals of an independent state, because his administration had violated them all. “The party regretted that President Buhari had no forceful reassurances on the challenge of escalated insecurity under his

watch; he had no clear-cut and operable blueprint to revamp our economy, which his administration wrecked in a period of four years, resulting in so much hardship and despondency that Nigerians now resort to suicide and slavery abroad as options.

“Our party notes that this address further exposes that the Buhari Presidency is not interested in nation building; that it is completely disconnected from the people and remains insensitive to the plights of Nigerians,” it stated. The party further posited that the President only succeeded in further demonstrating that his administration is, indeed, in no position to deliver a credible, acceptable and satisfactory independence address. “This is so because under the Buhari Presidency, our nation has experienced the worst form of division, deprivation, human rights abuse, constitutional violations, disregard to rule of law, electoral malpractices, disobedience to court order, disrespect for separation of powers and curtailing of press freedom.” The PDP further laments that due to “the incompetence and legitimacy challenges confronting the Buhari Presidency, our nation is losing her

voice and due regard in the international arena; as the administration has remained lacking in the required capacity and boldness to forcefully engage other world leaders on critical issues. “The dearth in foreign direct investment and the inhuman treatments being meted out on our citizens in countries where we were once held in very high esteem, are some of the injuries our nation is suffering under the Buhari administration.” Describing it as depressive, PDP said, “While other leaders motivate their citizens on their independence, President Buhari presented uninspiring claims which, according to the party, is propaganda and empty promises. “The PDP however, urges Nigerians not to despair but keep hope alive as we collectively await the Supreme Court to deliver justice and retrieve our stolen Presidential mandate, so that the nation will have a leadership that it truly deserves at this point in our national history.”

Ishaku says Nigeria has not achieved much at 59

Buhari’s independence speech a disappointment - Afenifere

NATHANIEL GBAORON, Jalingo

ove r n o r Da r i u s Ishaku of Taraba State on Tuesday said Nigeria did not achieve the desired development at 59 years of its existence as an independent nation. Ishaku disclosed this at a media briefing to mark the independence anniversary. “Yes, we are 59 years old, but I don’t think we are 59 years mature; it is both sweet and ugly. “It is sweet because we have Independence, but ugly because we have not been able to utilise the 59 years to take the country to an enviable position. It’s a shame that Nigeria as the giant of Africa is still lagging behind. I visited Rwanda and I was amazed at their development in the healthcare sector alone. “Here we are being called the giant of Africa, but are just a sitting giant. A lot still need to be done, we need to change our thinking, work hard in education, health

and power among others,” he said. “If we can improve on power alone, the multiplying effects will be tremendous, because, power drives the economic and social life of a country,” he said. Ishaku, who won his reelection case at the governorship tribunal in Abuja, recently returned to Taraba on Monday where he was received by his supporters. While thanking the people of Taraba for voting for him in their large numbers, Ishaku commended the judiciary for their upright judgment in the case against him by Prof. Sani Yahaya of the All Progressives Congress (APC).

INIOBONG IWOK

an-Yoruba sociocultural organisation, Afenifere, has expressed disappointment with President Muhammadu Buhari’s Tuesday independence day broadcast to Nigerians, saying that the message does not address the current challenges bedeviling the country. The group said the President’s continued silence on burning issues plaguing the country had become worrisome; stressing that he should have used the occasion to disclose how they would be tackled. President Buhari, who assumed a second term in office in May after winning a disputed presidential election, has come under increased attacks among some sections of Nigerians over his administration’s failure to initiate meaningful economic policies to get millions of Nigerians out of poverty. His administration has also been criticised for fail-

President Muhammadu Buhar

ing to tackle widespread kidnapping, banditry and killings which have worsened security situation across the country. But reacting to the President’s Independence Day broadcast to Nigerians in an interview with BusinessDay, Tuesday, Publicity Secretary of Afenifere, Yinka Odumakin, noted that there was a deliberate neglect of salient issues plaguing the country in the speech. According to him, “Bu-

hari’s speech was just about what he is planning to do and the usually corruption talk that we have been hearing. “But you expect an Independence Day speech to address the challenges facing the country. Today, there is division within Nigeria and it is affecting our nationhood, but these issues were neglected,” Odumakin said. Speaking further, Odumakin, equally faulted

the empowerment programmes unfolded by the President, describing it as diversionary. “ Today, if anybody thinks the empowerment programmes Buhari is talking about would take Nigeria out of precipice such person is joking; it is a waste of time. The speech is silent on what the country needs and how he is going to tackle the several issues plaguing the country,” Odumakin added.

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Tuesday 01 October 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 30 September 2019

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

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Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 273,698.24 7.70 0.65 261 50,416,132 UNITED BANK FOR AFRICA PLC 210,326.44 6.15 -0.81 120 3,239,618 ZENITH BANK PLC 587,114.43 18.70 1.08 213 4,732,174 594 58,387,924 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 197,424.11 5.50 -0.91 230 21,211,941 230 21,211,941 824 79,599,865 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,656,263.95 130.50 -4.04 109 1,182,761 109 1,182,761 109 1,182,761 BUILDING MATERIALS DANGOTE CEMENT PLC 2,581,636.87 151.50 0.53 76 78,925 LAFARGE AFRICA PLC. 256,113.95 15.90 -0.62 60 504,296 136 583,221 136 583,221 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 326,586.73 555.00 -0.29 49 127,479 49 127,479 49 127,479 1,118 81,493,326 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 1 75 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 13,074.52 4.90 - 0 0 1 75 1 75 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 1 75 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 52,417.35 54.95 - 39 160,701 PRESCO PLC 40,350.00 40.35 - 10 13,440 49 174,141 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 1 500,000 1 500,000 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,290.00 0.43 -8.51 6 630,000 6 630,000 56 1,304,141 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 688.30 0.26 - 7 124,708 JOHN HOLT PLC. 214.03 0.55 -9.84 2 250,450 S C O A NIG. PLC. 1,903.99 2.93 - 1 100 TRANSNATIONAL CORPORATION OF NIGERIA PLC 41,460.95 1.02 1.96 68 7,185,732 U A C N PLC. 21,609.72 7.50 -1.96 88 1,911,949 166 9,472,939 166 9,472,939 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 3 4,500 ROADS NIG PLC. 165.00 6.60 - 0 0 3 4,500 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,728.32 1.05 -9.48 44 3,006,315 44 3,006,315 47 3,010,815 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 9,003.92 1.15 - 16 210,668 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 74,473.02 34.00 - 41 115,947 INTERNATIONAL BREWERIES PLC. 108,307.86 12.60 - 7 21,945 NIGERIAN BREW. PLC. 419,837.36 52.50 - 49 117,927 113 466,487 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 115,000.00 23.00 2.68 76 1,598,010 DANGOTE SUGAR REFINERY PLC 130,800.00 10.90 - 64 98,441 FLOUR MILLS NIG. PLC. 58,635.43 14.30 2.14 58 743,996 HONEYWELL FLOUR MILL PLC 7,533.69 0.95 - 20 581,110 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 1,000 NASCON ALLIED INDUSTRIES PLC 35,502.47 13.40 -2.19 10 168,392 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 229 3,190,949 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 19,627.21 10.45 - 18 13,144 NESTLE NIGERIA PLC. 1,105,676.21 1,394.90 3.71 87 296,667 105 309,811 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,878.29 3.90 - 6 88,705 6 88,705 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 27,793.34 7.00 - 13 123,915 UNILEVER NIGERIA PLC. 153,391.64 26.70 -7.93 18 279,137 31 403,052 484 4,459,004 BANKING ECOBANK TRANSNATIONAL INCORPORATED 147,713.89 8.05 -9.55 30 550,417 FIDELITY BANK PLC 49,257.15 1.70 -1.18 46 835,442 GUARANTY TRUST BANK PLC. 859,390.43 29.20 5.80 266 58,493,182 JAIZ BANK PLC 13,258.91 0.45 2.27 12 1,173,702 STERLING BANK PLC. 57,580.84 2.00 - 26 810,032 UNION BANK NIG.PLC. 203,845.27 7.00 - 12 171,823 7,364.28 0.63 - 9 250,761 UNITY BANK PLC WEMA BANK PLC. 22,758.93 0.59 -3.28 16 891,281 417 63,176,640 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,573.93 0.66 1.54 16 1,446,946 AXAMANSARD INSURANCE PLC 17,430.00 1.66 -2.35 11 374,860 CONSOLIDATED HALLMARK INSURANCE PLC 2,276.40 0.28 -6.67 1 200,000 CONTINENTAL REINSURANCE PLC 21,471.58 2.07 9.52 10 845,000 CORNERSTONE INSURANCE PLC 6,186.39 0.42 - 6 86,377 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 7.14 12 1,579,048 LAW UNION AND ROCK INS. PLC. 1,675.57 0.39 - 2 40,490 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 1 1,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 0 0 NEM INSURANCE PLC 12,145.16 2.30 - 3 19,696 NIGER INSURANCE PLC 1,547.90 0.20 - 1 6,415 PRESTIGE ASSURANCE PLC 2,637.45 0.49 - 1 4,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 138,600 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,550.13 0.34 2.94 25 2,649,662 90 7,392,094

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BUSINESS DAY Wednesday 02 October 2019 www.businessday.ng

The limits of the pursuit of profit

Companies are trying to define a broader purpose for their business but the exercise is fraught with risks Andrew Hill in London

n February 2016, Emmanuel Faber, chief executive of Danone, put a radical proposal to the French food multinational’s senior US executives at a meeting in White Plains, New York. Against the grain of agricultural production in the US, where the vast majority is genetically modified, Mr Faber proposed shifting about half Danone’s products — representing some $1bn of yoghurt sales — to non-GMO ingredients. He argued that this was an important change that would improve soil health and biodiversity. The reaction from Mr Faber’s lieutenants was immediate: impossible. One said it could only happen if the group imported the nonGMO feed for dairy cattle from Russia. As they went to work, though, the executives started to change their gloomy prognosis about how long such a shift would take. “Three weeks later, it was 10 years. Two months later, it was five years. Finally, it was two years — and we did it in two years,” says Mr Faber, in an interview at the group’s Paris headquarters. The pledge triggered vocal protests from some US farm and dairy groups. It did not harm sales. Despite a price rise, the children’s yoghurt brand Danimals, now certified as containing only non-GMO ingredients, has increased its US market share from 30 to 40 per cent. Danone’s shift on GMO might be dismissed by some as a marketing gimmick and criticised by others as an exercise in managerial self-indulgence. But it is one sign of a powerful shift in the way that large companies think about their purpose and their responsibilities — and an example of the challenges companies face in managing that shift. For 40 or more years, corporate boardrooms latched on to the doctrine that economist Milton Friedman had laid out in a 1970 article with the blunt title “The Social Responsibility of Business is to Increase its Profits”. That approach was supercharged in the 1980s and 1990s by the ratcheting up of sharebased executive rewards. But the tide is beginning to change. In August, the Business Roundtable, the influential US business group, amended its two decade-old declaration that “corporations exist principally to serve their shareholders”. The Roundtable said: “While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders” — customers, employees, suppliers, communities and — last in the list — shareholders. Advocates for the idea that companies should adopt a broader purpose argue that the global fi-

nancial crisis laid bare the limits of pursuit of profit for its own sake. What was once a nice-to-have addition — often tidied away and kept in a box labelled “corporate social responsibility” — is now a must-have, they say. Businesses that combine profit with a wider purpose will benefit from the reinforced commitment of employees and customers. Those that fail to do so will not survive to become the companies of the future. Sarah Kaplan of Toronto’s Rotman School of Management says: “Companies are increasingly a positive force for society and, as people see their governments let them down, [they] see companies replacing that role.” As for “the idea that shareholder value is the only way”, she says it “is just a consensus”, in the same way the more socially responsible postwar model was once a consensus. Mr Faber, 55, exudes enthusiasm for the wider purpose of his company. He has set an objective to turn Danone into a “B Corp”, a business which voluntarily adopts broader societal goals but submits its social and environmental performance, transparency and accountability to third-party certification. Mr Faber says from the 1980s the economy, “instead of serving people, started to really serve finance and all the processes — the governance, the incentives, the stock options, the compensation committees, the independent boards — went in the same direction”. But catering to multiple stakeholders is a “super-delicate balance”, he adds. “What keeps me awake at night is the pace of change. Are we changing too fast? Or not fast enough? And where?” Not everyone believes he is getting that balance correct. One of the main criticisms of the stakeholder approach is that it can allow executives to set their own criteria for success and let them off the hook for poor financial performance. Danone already faces investor scrutiny for distracting itself from more profitable business. Jefferies’ sector analyst Martin Deboo summed up the doubts in a note about the French company published last October. “We worry that a too-obsessive pursuit of purpose-driven benefits and brand-as-social-advocate might blind Danone to the value of more mundane, but potentially broader, consumer appeals,” he wrote. “It is shareholders, not other stakeholders, who are most in need of convincing with regard to Danone’s good intentions.” A variety of factors is driving companies towards asserting a broader purpose. One is a desire to offset a lack of trust in business that has lingered well beyond the end of the financial crisis. Another is the realisation that job hunters — par-

ticularly younger candidates — will shun employers that cannot prove they have a positive, and sincerely held, purpose. The growing appetite of some investors to back companies that are improving their performance on environmental, social and governance (ESG) measures provides another impulse to change. Finally, there is pure self-interest: as critics pointed out, the BRT statement and other initiatives could be merely a way of seeing off the threat of new legislation and regulation. Corporate advocates say that they are tackling the risks that unbridled growth might pose to the very communities that buy their products. Roberto Marques is chairman of Natura & Co, the Brazilian cos-

you are not a successful company.” Still, setting a broader purpose is fraught with risk and you do not have to be a sceptic to see them. Ioannis Ioannou, strategy and entrepreneurship professor at London Business School, researches the impact of sustainability projects on corporate value. He says purpose is “something to excite people at the level of the individual, rather than at the level of the organisation”. An organisation could have a guiding mission that was morally objectionable, he says: “The mafia has a purpose: it’s very unifying, it’s very effective and it’s lasted for a long time . . . Do we want to go to a moral or ethical sphere which veers into a philosophical question of what is a bad or a good purpose for our organisation?”

Danone chief executive Emmanuel Faber metics company that also owns The Body Shop and Aesop and is in the process of acquiring Avon of the US. From its foundation, Natura has aimed to satisfy a “triple bottom line” of social, environmental and financial outcomes, sometimes paraphrased as “people, planet and profit”. Among other initiatives, it sources sustainable ingredients in the Amazon rainforest, simultaneously preserving some 18,000 sq km against development and supporting small farmers. Natura’s quarterly analyst calls sound little different from a million other listed companies. Mr Marques says that should not come as a surprise: “We do care about short-term results because I don’t think companies can be relevant if

Prof Ioannou’s latest research, with George Serafeim of Harvard Business School, shows the adoption of common sustainability practices is increasingly a survival issue. “The ones that fall behind in adopting best practices are the ones whose performance gets hit in the long run,” he says. Chief executives face the threat that if they fail — or if they only apply a veneer of stakeholder concern — they will be accused of “purpose-washing”, leading to further cynicism about their motives. One way to survive, according to Ms Kaplan, is for companies that have already pursued the business case for responsible action, to “innovate around trade-offs”. One example is how Nike, attacked over

its suppliers’ working conditions in the 1990s, not only improved standards but developed an entirely new manufacturing process to take pressure off the old supply chain. The US sportswear company’s Flyknit “woven” shoe was one result. Similarly, in the face of a recent consumer boycott in Morocco, Danone started selling its pasteurised fresh milk at cost. It also introduced higher-margin products, such as semi-skimmed milk in affordable sachets, cereal yoghurt and regional and seasonal desserts. As Danone found in Morocco, size and a high profile can make any company, purpose-led or not, a bigger target. When the possibility of acquiring Avon was raised in Natura’s boardroom, it ignited a fierce debate about the risks of greater complexity and a mismatch of cultures. Mr Marques quotes Anita Roddick, the late founder of Body Shop, who was insistent that “the world doesn’t need another big company”. But he also says increased scale will help Natura “make sure that our narrative is heard by more people in more households”. This is a common justification heard from big companies. Referring to the non-GMO initiative, Danone’s Mr Faber says: “See how many $10m start-ups you have to add up if you want to move $1bn of sales in two years. This is what big brands can do and these super-nice start-ups can’t.” Particularly in the US, there is intense scepticism about the growing focus on goals other than profit. In a speech in June, Hester Peirce, a Republican appointee to the US Securities and Exchange Commission, compared critical ESG ratings to the “A” — for adultery — that moralistic authorities forced her namesake Hester Prynne to wear in The Scarlet Letter, Nathaniel Hawthorne’s classic novel. ESG raters, Ms Peirce said, also attach labels “based on incomplete information, public shaming and shunning wrapped in moral rhetoric preached with cold-hearted, self-righteous oblivion to the consequences, which ultimately fall on real people”. Her criticism goes to the heart of one of the snags in assessing different stakeholders’ priorities — the difficulty of gauging nonfinancial commitments with the same accuracy and consistency as financial measures. Cultural differences also make it hard to apply a one-size-fits-all approach to the pursuit of profit with purpose. Japanese companies have long professed to a strong sense of corporate mission and long-termism, to such a degree that they sometimes use it to cover up lacklustre short-term results. US and UK companies generally face the opposite charge, that they sacrifice long-range goals for the next quarter’s targets.

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