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Buhari sides with private sector, declines assent to housing bill A I

ExxonMobil’s potential $3bn Nigeria asset sale opens opportunity for indigenous firms

LOLADE AKINMURELE, Lagos & OWEDE AGBAJILEKE, Abuja

n a rare show of harmony with the private sector, Nigerian President Muhammadu Buhari has declined to assent to a controversial Housing Fund Bill that mandatorily dips hands into the pockets of private companies as a means of providing additional

sources of financing for housing development in Africa’s most populous nation. In a letter to the National Assembly, President Buhari said he declined assent to the Bill because the various levies imposed on Nigerians will not only be “disruptive and punitive” to industries and other sectors of the Nigerian economy but will also have a negative impact on

Nigerian workers. Although the President declined assent to the Bill on March 19, it was received at the office of the President of the Senate on March 28, 2019. Nigerian workers, pension fund administrators, commercial and mortgage banks, cement makers, insurance companies and the private sector in general would be heaving a sigh of relief

after Buhari rejected the controversial Bill. “The Bill was always going to be dead on arrival because there was no way regulators from the Central Bank or PENCOM would approve for banks and PFAs and insurance companies to contribute 10 percent of their profit before tax to a welfarist scheme Continues on page 38

STEPHEN ONYEKWELU & DIPO OLADEHINDE

merican multinational oil and gas corporation, ExxonMobil, has joined the league of multinational oil companies divesting from Nigerian assets and the company’s looming plan to sell its oil and gas assets comes across as mixed blessings for the economy. According to sources, ExxonMobil is weighing the possibility of selling its stakes in Oil Mining Leases (OML) 66, 68, 70 and 104 Continues on page 38

Inside Wema Bank pays first dividend in 14yrs as profits rise 59% to N4.8bn P. 2 20 Nigerians await execution in Saudi Arabia for drug offences - FG P. 39

L-R: Yomi Onifade, executive director, technical, AXA Mansard Insurance plc; Rasaq Salami, deputy director, NAICOM; Kunle Ahmed, chief executive officer, AXA Mansard Insurance plc; Yetunde Ilori, director-general, Nigerian Insurers Association (NIA), and Fatai Adesina Adegbenro, executive secretary, NCRIB, at the premiere of the AXA Life TVC.

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Wema Bank pays first dividend in 14yrs as profits rise 59% to N4.8bn ENDURANCE OKAFOR

espite the challenging macro-environment, Wema Bank delivered modest improvement at the end of the 2018 FY. The bank is also recommending to its shareholders a dividend payment for the first time in 14 years. The bank recommends a dividend of 3 kobo per share in line with the Boardapproved dividend policy. The group recorded gross earnings of N71.53 billion, a 9.6 percent increase over the 2017 figure; profit before tax (PBT) of N4.8 billion which represents a 59 percent growth over the N3.01 billion reported in 2017, and profit after tax (PAT) of N3.33 billion (N2.26 billion in FY 2017). This growth resulted from an 8.59 percent increase in interest income and a 13.95 percent increase in noninterest income. The bank continues to improve on its deposit mobilisation while at the same time working down its cost of funds. ALAT (Nigeria’s first fully digital bank) launched in May 2017 has improved the bank’s retail liabilities and customer base; the bank now onboards over 1,000 new customers daily on the digital platform and continues to grow its partnership profiles. The digital bank continued to receive several accolades in 2018,

including the World Finance Awards for Most Innovative Bank Africa and the Asian Banker Awards for Best Digital Bank Africa. “Our vision is to get ALAT to become the premier digital platform in Nigeria. This will be driven by our expertise in the digital space and our retail partnerships,” said Ademola Adebise, Wema Bank managing director/CEO. The bank recorded other notable achievements during the year. It successfully raised Tier-2 capital of N17 billion and retained its investment grade ratings from Fitch, GCR and Agusto. Established in 1945, Wema Bank is Nigeria’s longest-surviving indigenous bank. Wema Bank offers a range of retail and SME banking, corporate banking, treasury, trade services and financial advisory to its numerous customers. In 2009, the bank initiated a strategic repositioning exercise which culminated in a decision to operate as a commercial bank with regional authorisation in SouthSouth Nigeria, South-West Nigeria, Lagos and Abuja in 2011.Pursuant to meeting the Central Bank of Nigeria requirements, the bank was granted a banking licence with national authorisation in 2015. Wema Bank operates a network of over 150 branches and service stations backed by a robust ICT platform across Nigeria.

Manufacturing sector attracts most pioneer tax holiday in one year ... as Dangote Cement tops the list ENDURANCE OKAFOR

he incentive to encourage local manufacturing in Nigeria is evident in the tax holiday granted to the sector in the past one year. Figures from the Nigerian Investment Promotion Commission (NIPC) show that out of the 39 companies that have been granted tax holiday since August 2017, when the suspension on tax holiday was lifted, 19 manufacturing companies have had their application for Pioneer Status Incentive (PSI) approved. A tax holiday is a temporary reduction or elimination of a tax, and it could include income, property, sales, VAT, and other taxes. According to the most recent data by the NIPC as analysed by BusinessDay for the period ended Q4 2018 (01 October to 31 December, 2018), four manufacturing companies were each granted tax holiday for the duration of three years. The companies include Lafarge Cement plc (UNICEM), Hayat Kimya Nigeria Limited, NFE Industries Limited, and Fidson Healthcare plc. The aforementioned companies have their operations across cement manufacturing industry, wire rods & iron bars, pharmaceutical and tissue paper. Ayodeji Ebo, managing director, Afrinvest Securities Limited, said if the manufacturing sector is getting more tax holiday, it is consistent with the strategy of the Muhammadu Buhari administration as it is one of the agenda of the government to grow the non-oil sector. “It is just to further support the manufacturing sector amid the high

operating cost, which is in terms of infrastructure, unavailability of steady power supply, and lack of easy access to distribute their products and as such it is one of the initiatives to encourage the companies,” Ebo said. NIPC is an agency of the Federal Government established to encourage, promote and coordinate investments in Nigeria. On August 7, 2017, the Federal Government lifted the administrative suspension on the PSI scheme which grants companies three to five years tax holiday. While the incentive has been in place since 1971, it was suspended in 2015 by the then minister of finance, Ngozi OkonjoIweala, based on perceived abuse and revenue leakages. Thus, in compliance with the requirements of the Industrial Development (Income Tax Relief) Act Cap I7, Laws of the Federation of Nigeria 2004 and the Pioneer Status (Delegation of Certain Statutory Functions) Order of 2017, NIPC has the mandate to provide details of Pioneer Status Incentive. “Tax holiday to the sector is an incentive to the various companies who invest more heavily in the industry and also employ more labour,” Ayo Akinwunmi, head of research, FSDH Merchant Bank. Analysis of the quarterly report by the commission revealed that in the period under review from Q4 2017 to Q4 2018, the manufacturing sector attracted the most credit holiday in Q3 2018 when seven companies’ applications for PSI were approved.

•Continues online at www.businessday.ng

L-R: Janet Agun, company secretary; Okey Nwuke, director; Ebenezer Olufowose, group managing director; Biodun Arokodare, chairman; Ojinika Olaghere, director, and Felix Johnson, managing director, all of First Ally Asset Management, at the recent signing ceremony of the First Ally Asset Management Money Market Fund.

Nigeria’s weak growth weighing down Africa’s economic performance, says AfDB …cautions on external debt at 23.6% of GDP ONYINYE NWACHUKWU & CYNTHIA EGBOBOH, Abuja

igeria’s weak economic growth is weighing down not just West Africa but the entire continent’s performance, Africa Development Bank (AfDB) said in its 2019 Economic Outlook for Africa and West Africa launched in Abuja on Tuesday. The bank acknowledged that economic activities in Africa are largely driven by activities in the continent’s largest economy which had seen a rebound after a difficult 2016 recession, but is even more worried that growth remains fragile. Nigeria’s economy advanced 2.4 percent year-on-year in the last quarter of 2018, following a 1.8 percent expansion in the previous quarter, beating market expectations of 2.1 percent. The growth was the highest rate since the third quarter of 2015, as the non-oil sector increased further and

the oil sector contracted less. The National Bureau of Statistics reported an annual 1.9 percent expansion for 2018, up from 0.83 percent in 2017. “Africa’s growth pattern mimics that of Nigeria,” said Ebrima Faal, senior director, Nigeria country department, in his opening speech at the launch. Amidst many global and regional risks, Africa has continued to show growth resilience and remains the second-fastest region in the world, after East Asia, according to the report. Africa’s GDP expanded by 3.5 percent in 2018 and is projected at 4 percent in 2019 and 4.1 percent in 2020. This is, however, higher than projections from some emerging markets and developing economies. In 2016, Africa grew at 2.1 percent, and about 3.5 percent in 2017. But without incorporating Nigeria’s figures, the continent grew by as much as 3 percent in 2016; about 3.8 percent in 2017; 3.4 percent in

2018; and is expected to expand by about 4.2 percent in 2019, and then 4.5 percent in 2020. “Nevertheless, there are also many and persistent challenges and the pattern of growth has not been transformative enough. This is a challenge we need to confront with fervent vigour,” Faal said. The report identifies major challenges to growth prospects to include low commodity prices, shrinking agricultural output, and Ebola crisis which some, however, say had a minimal impact. There are also the issues of insecurity as well as currency depreciation. “Shocks from reduced commodity prices and tighter global financial conditions, which are exacerbated by underlying domestic pressures arising from policy uncertainties, adverse weather conditions and security challenges, have all continued to weigh down on the economies of Africa,” Faal said. The AfDB in its second report

Continues on page 38

Nigeria raked in N2.30trn in taxes, royalties from Shell in 2018 …firm spent N1.63trn on in-country projects

ISAAC ANYAOGU & STEPHEN ONYEKWELU

oyal Dutch Shell paid the Nigerian government the sum of $6.30 billion (N2.30 trillion) in taxes, royalties, fees and bonuses last year, the company said in published disclosures made to governments around the world where it has production. According to the document sent to BusinessDay, prepared in accordance with The Reports on Payments to Governments Regulations 2014 as enacted in the UK in December 2014 and as amended in December 2015, Shell paid $1,286,152,191 to the Federal Government through the Federal Inland Revenue Service (FIRS) as taxes in 2018. In 2017, the Anglo-Dutch oil major had paid $4.32 billion (N1.557trn)

to the Federal Government of Nigeria. “The increase in payment for 2018 is due either to larger volumes or higher prices. But in this case the major factor will be higher prices given that they picked in 2018,” Israel Aye, legal expert, oil and gas, at Lagosbased Primera Africa Legals, said. The company further paid the Department of Petroleum Resources (DPR) $358,161,091 in royalties, and $895,062,325 as fees. In total, the amount paid to the upstream regulatory agency in Nigeria was $1,253,223,416. The Nigerian National Petroleum Corporation (NNPC) received $3.776 billion as production entitlements in 2018, compared to the sum of $3.197 billion for production entitlements Shell paid the NNPC in 2017. “This report includes payments to governments made by Royal Dutch

Shell plc and its subsidiary undertakings. Payments made by entities over which Shell has joint control are excluded from this report,” the company said. According to the company, payments it made to governments from activities involving the exploration, prospection, discovery, development and extraction of minerals, oil and natural gas deposits or other materials (extractive activities) are disclosed in the report. “It excludes payments related to refining, natural gas liquefaction or gas-to-liquids activities. For a fully integrated project, which does not have an interim contractual cut-off point where a value can be attached or ascribed separately to the extractive activities and to other processing activities, payments to governments

Continues on page 38

Wednesday 03 April 2019

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Wednesday 03 April 2019

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Wednesday 03 April 2019

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Entrepreneurship: Ideas precede capital Small Business handbook

Emeka Osuji

ntrepreneurship is driven as much by the desire to make a living as it is by the desire to make a life. Probably more by the later desire – to make a life is to find a purpose for life and if possible to leave a legacy. Every successful entrepreneur began as a one man business entity. So don’t worry about how or where the story begins – in a garage, as many did of in disused car on the street corner. Just be sure to have clearly visualize the end. Again, be sure you have a man or woman with a yearning for a sense of purpose in life. This quest for a purpose in life is mostly behind some of the seemingly bizarre decisions that people make, which others find very hard to understand. How, for instance would 5000 supposedly sane people apply to join Ernest Shackleton and Edward Wilson in December 1902, on an expedition called Endurance, to the South Pole, with doubtful chance of survival. The South Pole is the southernmost point on the surface of the earth. It lies on the freezing Antarctica; on the opposite side of this planet, from the North Pole.Whatever their reason, it

is that same line of thought that must have been behind the decision of the over 200,000 people who applied to join a Dutch company, Mars One, on its planned trip to Mars where it hopes to create a human settlement by 2023.Two men and two women were to be sent first and four more every two years. Adventurers and entrepreneurs are kindred spirits. The same motivation drives all these enthusiasts to embark on these adventures – the quest for a purpose in life. Was it possible for any of the enthusiasts that applied to partake in these adventures to determine whether they will survive? The answer is no. There is no formula to success. So it is also impossible to say who would succeed or fail as an entrepreneur. At best we can look back at some of the key qualities of successful entrepreneurs. They are all people of big dreams and their dreams are not hazy. These people are driven by a clear vision of where they want to go. They think success all the time, which presupposes that they are positive thinkers. Pessimists have little room in this place. Successful entrepreneurs are men and women of faith. Truly, we can’t do much if we have no final resting place or solution to questions we cannot answer. The solution to things that appear to have no solution is faith in the almighty. Those who have no faith in the supernatural end their search for answers at the feet of canal men and matter. People of faith leave room for more – they go to the one that made heaven and earth. Faith according to Vusi Thembekwayo,a public speaking champion, is the ability to see the invisible; believe in the impossible and

trust in the unknown. In the Christian theology, faith is even more powerfully defined as the substance of things hoped for and the evidence of things not seen. Actually, it is often the case that those who visualize themselves signing autographs to a crowd of fans are those that actually get to do so. Successful entrepreneurs have many good things going for them. They decide when to work and where to work. They make their own vacation schedules and choose the place to take the vacation. Generally, they are people with deep passion – passion to succeed, live well, leave a legacy or sell what they created for cash. Great success comes when one is practically consumed by what they do. Any other thing is prodding along and no major achievement comes from merely prodding along. They love what they do and the “just do it” spirit of Nike is fully resident in every successful entrepreneur. But more important, entrepreneurs do not play to the gallery or pretend to be what they are not. They harness their strengths and recognize their weak points. The conventional wisdom is that one needs to have money in order to start a business. This seems to say that the money comes before the business idea - basically like saying that it takes money to make money. This principle presupposes that those that do not have money may not make any head way in business. That is not what successful entrepreneurs believe. Instead, they put ideas ahead of finance. In my limited experience as an entrepreneur, I recall what we did as young men in the 1990s, when we tried to create institutions. First, some of us agreed and declared the

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...it is true that a good business idea will always attract cash

90s as “Our Decade of Enterprise”. We believed it was our time to take risks and see how far we could go. The economy was fairly stable and the liberalization and decontrol policies of the then federal government created many investment opportunities for enterprising young people. We developed various business ideas; we did the feasibility reports and branded ourselves as “Ideas Men”. We told the rich men around that we have no money but were full of sound ideas. We showed them proofs. Somehow, it wasn’t difficult to convince investors at the time. Perhaps, integrity had not completely left the land in those days. So they believed us and I dare say, rightly too, because most of us did not disappoint. Although many of the small businesses died, it wasn’t for lack of capacity or integrity. The political turmoil created by the June 12 election annulment and the subsequent tussle between Aare M. K. O. Abiola and Sani Abacha pulled the rug off the feet of many. We were young, well-educated and well-trained. The money men of the time were glad to find young men who had bright ideas and were ready to leave their good jobs to try business. So we went out to find the cash and we found a lot of it. That was how some of today’s public limited companies were founded in the little shops of young men in the late 80s and early 90s. So it is true that a good business idea will always attract cash, because we even had to pick and choose which investors to accept or reject. Dr Emeka Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

Surviving R Kelly and the Harvey Weinstein Scandal: the media as a tool for social change Mayowa Owojaiye

he signs were all around us. The first hint was when he called himself the Pied Piper. But in the mellifluous sound of his songs, we passed over this important message as part of his art. Then he returned with an explicit alarm of how he was ‘Stuck in the Closet’, and ‘Bump and Grind’; when he said “my mind is telling me no…” but again, we were too busy with the episodic tension and vocals and overlooked the crimes he was pointing to in the closet. Robert Kelly’s art, life and vocals constantly mocked his listeners, revealing something that always evaded the most morally alert lovers of his songs. That is the reason why the recent docuseries on DStv’s Crime +Investigation channel called Surviving R Kelly left many in shock. Now we find ourselves in the same condition as a betrayed wife who just discovered her husband had been having a go at the maid for a long time right under her nose. We travel back to his lyrics to find signs we overlooked and gasp as we recollect them all. The Surviving R Kelly documentary which is based on R Kelly’s amorous exploits with young girls, and his eccentric preference for keeping comprehensive records of these forbidden encounters with teenagers, chronicles alleged victims’ accounts of their experiences with Mr Kelly. Most of the accounts so far are horrendous, tragic, painful and utterly sad. According to Lizzette Martinez who met Kelly when she was 17 at a party, “I remember

he took me up to the room, it was just a blur… it was my first sexual experience and I didn’t think it would be that way. Sex with him felt not natural”. From the account of Andrea Kelly, R Kelly’s former wife, we see a man who has perfected the art of divide and rule for the purpose of stifling the women whom he kept as sex slaves. He controlled the lives of these women, starting with minute details like what they wore, to whom they spoke to and how to sexually respond to him, effectively creating a dependency structure around him. Most of his victims were underaged, hungry for mentorship and guidance, in their quest for fame and fortune in the music scene. Mr Kelly milked their naiveté for his sexual gains, left them used, battered and ashamed, with only a few lucky enough to pick up the pieces of their lives and fight back. “He liked high school girls. He could influence them more, they were more impressionable. He tries to slide into that space where girls don’t know better yet” says Mikki Kendall, who saw him at Kenwood Academy High School where he frequently hung around years after he dropped out from the same school. Jovante Cunningham, one of Mr Kelly’s backup singers, recalls him sexually violating one of her young friends in the studio: “[It] was during the recording of ‘Slow Dance’ the remix. He had one of my teenage friends in the booth with him, bent over. And we were all right there … None of us was of age.” Notwithstanding his harem of women, R Kelly’s wife was not spared the brutality of his dark side. In her testimony for the Surviving R Kelly series, Andrea Kelly who spent thirteen years with Mr Kelly, ten out of which she was married to him, narrated how she was locked

up in the house, tied up in uncomfortable positions and barred from speaking to anyone during his tour. She managed to summon up the courage to leave Mr Kelly with their three children when things got out of hand. On February 22, 2019, Kelly was indicted on 10 counts of aggravated criminal sexual abuse and was released on bail on the 25th after a fan posted his $100,000 bond. These revelations about R Kelly are disturbing but become increasingly worrisome when we flip the channel only to be greeted by another documentary shining the spotlight on Harvey Weinstein, another sexual predator. Harvey Weinstein, on his part, allegedly sexually assaulted employees of the Weinstein Company as well as actresses signed on to movies he produced. He threatened the careers of women who failed to do his bidding. Many victims have narrated how he persistently demanded sex and later forced them to sign morally reprehensible non-disclosure agreements to perpetuate the silence. One striking case in point is that of a German actress, Emma Loman, who is suing Weinstein for alleged rape. In October 2017, The New York Times and The New Yorker reported that dozens of women accused Weinstein of rape, sexual assault and sexual abuse over a period of at least 30 years. More than 80 women in the film industry have since accused Weinstein of such acts. The Weinstein documentary which features many former Weinstein employees, a number of whom quit their jobs rather than protest, is a sad reminder of the difficulty many women face in the hands of powerful men. Harvey Weinstein’s predatory behaviour also raises moral questions about the tepid

response to sexual assault by unaffected bystanders who quit their jobs when they found out about Weinstein’s’ behaviour, rather than speak to break the cult of silence. Both documentaries are a referendum on decades of sexual abuse against women and the accompanying silence. The fear of what people will think of victims kept them cocooned in their pain. It is on this note that DSTV must be commended for airing these documentaries and for using their powerful platform to give voice to victims who have endured years of silence, in an entertainment industry that was a fealty system that protected powerful men. It is also a warning to other predators that it is no longer business as usual. The complicity of the entertainment industry is most pronounced in the wake of 2002 accusations against R Kelly bordering on child pornography. He was later acquitted of all charges in 2008 because the girl in the said pornography video failed to testify. No one probed further into the case but instead welcomed and celebrated Mr Kelly’s victory. Like one of the alleged victims of Mr Kelly’s predatory behaviour, Cunningham, rightly stated, ‘Robert destroyed a lot of people. People are still suffering behind things that went on 20 years ago’. Therefore, these documentaries provide some kind of closure for those who still feel haunted by both men’s reprehensible behaviour. At the same time, it is a warning to the vulnerable to be wary of R Kelly, while the wheels of justice grind slowly towards serving him his just desserts. Owojaiye is a communications specialist and wrote from Lagos

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Dapo Akande

“

atch for us the foxes, the little foxes that ruin the vineyards, our vineyards that are in the bloom”. What significance do you attach to this biblical verse? The meaning I take from this verse of the scriptures is that it’s the so-called little things, little omissions, little errors, little reversals in civility that rob one of character, that lead to the decline and sad collapse of a society and not necessarily the big and obvious infractions. One such wily fox that scurries ever so destructively around our society, subtly but mercilessly decimating its very fabric, is the pervasive lack of Manners. The gradual erosion of common courtesies has made its own unwanted contribution to the malaise we all face in our nation today. What is the definition of Manners? Amongst countless definitions there’s one that simply says Manners are ways of showing kindness, respect and consideration towards others. Someone who is ill-mannered spares little or no thought for the feelings of others. By nature such a person tends to be very self-centered. “Manners are a sensitive awareness of the feelings of others. If you have that awareness, you have good manners” – Emily Post The Nigerian society is doing very poorly and cannot by any stretch of the imagination be rated a success as it stands right now. Like one of my egbons, some may go as far as calling it a broken nation. For a society to succeed, there must exist some values and moral

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The little foxes Character Matters with Daps

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codes of behaviour that the generality of the populace believe in enough to live by. Unfortunately, we have over time relegated those codes to the back seat, while a more aggressive, more primitive code of survival of the strongest or toughest or boldest or most cunning, (which to be sincere is actually instinctive to human nature but had hitherto been tamed by the advent of civility) has now all but taken over. Though this may sound a little melodramatic, I think it’s pertinent to ask if we’re gradually returning to the Stone Age? Our hope is that the younger generation, through the right teachings, guidance and deliberate enlightenment programs will be convinced to take up the mantle of restoring the dignity that once personified our dear nation. One employable method I would suggest in an effort to accomplish this would be to return us to a time of politeness, good manners, civility, virtue and respect for our fellow men. Enough of running roughshod over people’s sensibilities by failing to offer the most basic courtesies in everyday interactions and this brings me to those simple but ageless words, Please, Thank You and Sorry. The importance of saying these words cannot be overemphasized. To say your Please and Thank You’s requires a degree of humility which can never go amiss and it also nurtures a heart of gratitude in the person who develops the habit of saying it. You inadvertently acknowledge that someone has done you a good turn which they may not have been obliged to do. It serves to redirect your focus from self to another. Last but not least, it begets respect for others and their interests. “No duty is more urgent than that of returning. Thanks” – James Allen. When thanksgiving becomes an integral part of one’s life, one’s attitude towards life will certainly change. Such a person is bound to become more positive, more gracious, more loving and more humble. He or she will not only appreciate God the more but will also appreciate others. Mundane but kind gestures that others extend to you

like keeping the door open for you to also pass through or giving you the right of way on the road would not go unnoticed but would be acknowledged and subsequently appreciated(Manners, Neighbourly love and gratitude). Isn’t it just so annoying when you kindly give someone the right of way on the road and the beneficiary is just too conceited to offer the slightest word or gesture of appreciation? That just says it all. Too many of us have this terrible misconception that the whole world revolves around us. Climbing off your high horse to apologise when you’re so clearly in the wrong is a clear demonstration of good manners just as it reveals an apparent respect for the feelings of others. Time without number, I would arrive back home only to find that a thoughtless visitor of one of our neighbours has parked in front of my gate, preventing me from entering my compound and totally disregarding the very bold “No Parking” sign. There was a time it took us about fifteen minutes to locate the culprit because the gate man had no idea which compound he entered. He eventually sauntered out and entered his vehicle without offering a single word of apology. Whatever inconvenience I may have suffered from being kept waiting, for him it was neither here nor there. Sounds familiar? I’m very sure it does. Yes, the majority of us may not like this either but I don’t want us to stop at just being averse to it. My mission is to convince you that it’s a problem we need to do something about as a people even if it’s just for the sake of our children. They say it may prove difficult to bend a crayfish without breaking it and so the jury is still out on whether it’s a little late to significantly change the mindset of our generation who are already so stuck in their ways but there is still plenty of hope for our children’s generation. We can begin to instill these virtues in them henceforth. If we can do this, the benefits to society will be so glaring by the time they come of age. “Train up a child in the way he

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Climbing off your high horse to apologise when you’re so clearly in the wrong is a clear demonstration of good manners just as it reveals an apparent respect for the feelings of others

should go and when he is old he will not depart from it ” – Proverbs 22:6 Punctuality is a virtue often overlooked as a hallmark of good Manners. An individual who is punctual to meet with me when I set an appointment respects the irrefutable fact that my time is my time. It is universally accepted that the one thing that can never be regained once lost is time, so what gives anyone the right to deny me of it or to deny you of it? Numerous crucial appointments and potentially life changing opportunities are lost on a daily basis by those who have been kept waiting by others. The knock on effect of tardiness is endless but unfortunately it has become so ingrained in our culture that we have even gone on to rationalise it by giving it a name, African Timing. All are guilty of it; government officials(serial late comers), the young, school authorities at school events, those about to wed on their wedding day and just about everybody. The few exceptions may be the much older generation and orthodox churches who generally tend to have a more disciplined approach to life. My late father being one that readily comes to mind. It really shouldn’t come to us as a surprise that as these basic courtesies gradually disappear in our society, so have those values that we hitherto held so dearly; Manners, Integrity, Neighbourly love, Discipline, and the common good notion of Success. Quote: I’m just saying we can all work on our Manners. We can say Please and Thank you. We can be Punctual. We can just be nicer to one another. It’s something we have in our power to do. It reminds me of that Margaret Mead quote, ” Never doubt that a small group of thoughtful committed citizens can change the world. Indeed, it’s the only thing that ever has.” Changing the nation...one mind at a time 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

Deepening town and gown with professors of practice Tunji Olaopa

rom time to time, universities roll outnew and newly minted sets of professors into the academic world. From the sciences to the humanities, the professors and associate professors are, by their appointment, handed significant responsibilities that surpass the euphoria of scaling the often tough assessment standards that universities typically have in place to ensure that their crop of professors and top academics have global academic status. This, of course, is to be expected. Professorship is not just a title that one bandies about for social recognition. It carries a weight that goes beyond its honorific essence. There is more. Being a university professor also possesses a generational responsibility. This comes with the urgent need to reach very deep into the minds of the younger generation with the educational substance of eternal value (of knowl-

edge) that is required for them to live a good life. Condoleezza Rice, the American former secretary of state, beautifully expresses the profound joy that comes with being such a professor: “I’m a very happy university professor... the best thing about being a university professor is that you see young people as they’re being shaped and molded toward their own future, and you have a chance to be a part of that.” This is a most beautiful joy that carries a very deep burden of academic mentorship. This piece, which continues the conversation we had after my inaugural lecture of the Lead City University, Ibadan on the 21st of November, 2018, is just to initiate a trajectory of discourse that I think can enable us rethink the deeper inflections of the professorship and the university. A university, by its very stature, is a critical point of institutional reform and experimentation that ensures that ideas, insights and paradigms are mixed and fused together in dazzling and creative manners that challenges traditions and orthodoxies. A university is a laboratory of ideas and innovative thinking. Ultimately, rethinking the relevance of the university challenges the concept of a professorship. The current understanding of a professor, as a purveyor of received knowledge, has endured for many decades. From its 14th century etymology, it refers to someone who professes a particular branch of knowledge in the sciences or the humanities. The trajectory of the meaning eventually stretched to mean the highest post-doctoral academic rank that a uni-

versity teacher could attain after some productive number of years. However, while this rank has persisted in this traditional form in Africa, it has had to undergo critical re-assessment in North America, for example. And this re-assessment of the tradition was facilitated by foundational reflections on the essence of the university and the responsibilities of the professors within the mission statement of a university. Let me mention two significant features of European universities and pedagogical orientations. First, there is a clear distinction between a teaching professor and a research professor. Underlying this distinction is the attention that a university must give to quality, first, and division of labor, second. A research professor, for instance, would not be burdened by the same teaching load that will attach to the task of a teaching professor. Grading or promoting a teaching professor would not be on the same research capacity that attends a research professor. The impacts of both on the student’s intellectual formation are different and unique. American universities also feature the endowed professorship or chair. This has several advantages. One, since the chair or professorship is endowed, the salaries and emolument of the professor is paid directly from an endowment. This allows the university to redirect the salary of the professor to some other administrative issues. But more important is the fact that the endowment is awarded to an excellent faculty member who has

distinguished him or herself in a specific field. An endowed professorship allows a university to attract top scholars from other universities. The most fundamental of the professorial and pedagogical reform in the western higher education framework is the establishment of the professorship of practice. This is critically different from the tradition of an honorary professorship. In an honorary, unlike the traditional, professor is not burdened by the responsibility of teaching or research. It is essentially an award that recognizes unique individuals whose lives represent excellence and other scholarly virtues. An honorary degree holder adds his or her illustrious profile to the status of the university itself. On the contrary, a professorship of practice,as distinct from honorary professor, hinges on the urgency of unraveling the dynamics of the relationship between scholarship and existential and professional realities for the students. Curriculum and its pedagogical implications, that is, are dynamics that are meant to expose the students to the critical relationship between ideas and their practical and existential dynamics and relevance. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng

Prof. Tunji Olaopa is the Executive Vice-Chairman, Ibadan School of Government & Public Policy – ISGPP, Ibadan tolaopa2003@gmail.com, tolaopa@isgpp.com.ng

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Wednesday 03 April 2019

Private sector is the future of Nigeria

t has been estimated, and even the government affirmed it in its Economic Recovery and Growth Plan (ERGP) that for Nigeria to close its infrastructure gap and bring itself up to the international benchmark for infrastructure stock, it needs to spend as much as $3 trillion in the next 30 years and majority of this money is expected to come from the private sector. As in many other growth and development indices, Nigeria lags behind many countries of the world in its infrastructure stock. The international benchmark for infrastructure stock as a percentage of GDP is 70 percent, but Nigeria currently stands at below 30 percent. This realisation that both the government and the private sector must contribute their quota towards building Nigeria’s infrastructure is now mainstream and all progressive governments are designing policies to ensure a robust public-private partnership where the private sector can invest massively in infrastructure. But not so with the Nigerian government. This is a country where the

president came out to say mattersof-factly that he does not trust individuals in the private sector. In his words: “We are averse to an economic team with private sector members” because such persons “frequently steer government policy to suit their narrow interests rather than the overall national interest”. Buttressing the president’s position further, the media adviser to the vice president, Laolu Akande further explained that the presidency considers economic management as purely “a government affairs”. The position of the presidency is not surprising. In a way, it reflects the president’s ideological position which is yet to change since 1985 when he was removed from power. The president is a staunch believer in a state-controlled economy and a closed state-centric policy process. His aversion for the private sector is classic and he considers private sector players as greedy, selfish, and inherently incapable of working with the government towards the development of the state. We recall that since 2003 when Buhari began his quest for public office, he has always voiced his opposition to the surrendering of the “commanding heights of the

economy” to the private sector and specifically, the privatisation of the largely inefficient and wasteful State Owned Enterprises that became established conduits for the siphoning of public revenues. This can be seen in how the president talks about the privatised SOEs in very nostalgic tones and never fails to excoriate past administrations for mortgaging Nigeria’s common patrimony to private and selfish individuals. That explains the president’s push, on coming to power, to claw back the economy from the private sector, re-establish state dominance and control over the economy and position the state as the largest player in the Nigerian economy. Despite the huge cost of subsidising imported petrol – about $3.9 yearly – and despite the fact that government is facing a severe revenue crisis and cash crunch, it has still refused to deregulate the downstream sector of the oil industry and allow market forces to determine the price of the product. This thinking by the president is deleterious to the Nigerian economy and will set the country back several decades if nothing is done

to convince the president to abandon his outdated socialist ideology and allow the private sector to dictate the pace of the economy, albeit with government providing solid regulation to prevent the manipulation and abuse of the market by greedy forces. The reality now is that government alone does not have the resources to provide the scale of infrastructure required by a 21st century society. But rather than develop a comprehensive PPP model to ensure the smooth participation of the private sector, the government, rather prefers to go borrowing, at exorbitant interest rates, to provide some infrastructure. But no amount of borrowing can plug the infrastructure hole in the country. There is just no running away from the reality that the government must partner the private sector to provide modern and world class infrastructure. We urge the president and his minders to rethink its strategy. Private capital has alternative uses and many countries are competing for them. The sooner we cosy up to the private sector, develop an attractive PPP model to convince willing investors to want to invest in the country, the better for us.

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COMPANIES & MARKETS

BUSINESS DAY

Fidson bottom-line shrinks on borrowing costs despite biggest revenue in 5-years Pg. 15

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

FINANCIAL SERVICES

Custodian Investment’s profit hits N7.11bn as earnings surge most in 2 years …firm recommends 35 kobo final dividend for 2018 financial year OLUWASEGUN OLAKOYENIKAN

ross earnings of Custodian Investment Plc, one of Nigeria’s leading non-bank financial institutions by market capitalisation, grew the most in since 2016 to deliver N7.11 billion after-tax profit in the 2018 financial year. An analysis of the company’s audited financial results for the year shows strong financial performance across all business lines, confirming the resilience of the company’s business model. Custodian’s turnover rose to N50.21 billion from N43.05 recorded in the previous year. This is the highest earnings recorded by the firm within the last six years, according to available data. The company shrugged off increased operating expenses to shore up its net income to N15.92 billion from N13.06 billion, thanks to increases on its gross premium income, profit on investment contracts, fees and commission income as well as retainership and

professional income. Gross premium income from the insurance subsidiaries was up by 14.8 percent to N36.72 billion in 2018 from N31.99 billion reported in 2017. Likewise, fees and commission rose by 18.6 percent to N4.05 billion from N3.41 billion, while retainership and professional income grew from N1.6 billion to N14.38 billion. Proceeds from its investment in fixed income securities which returned 16 percent more interest compared with the previous year, interest incomes

received on call and deposit accounts, and loans to its employees also contributed to the firm’s 21.9 percent growth in net income for the review year. Custodian’s management showed efficiency in managing the firm’s resources as key portability ratio improved in the year. Operating margin stood at 31.71 percent, implying that for every N100 realised in 2018 as revenue, it retained N31.71, which is an improvement when compared with N30 held in 2017. Despite increased man-

agement expenses, fair value and net realised losses which show challenging business environment, the N15.92 billion net income supported the financial institution, making it stay afloat with a pre-tax profit N9.5 billion, a 6.36 percent surge from N8.93 billion achieved a year earlier. Custodian Investment was not spared in the higher income tax expense paid by most companies operating with it under the same segment in the financial services sector as it almost doubled its 2017 income

tax payment. The firm paid N2.38 billion on taxation in 2018, the highest in the last five years, as against N1.61 billion expended in 2017. That weighed on Custodian’s profit after tax, pushing it from N7.32 billion in 2017 down to N7.11 billion at the end of the 2018 financial year. Total assets remained strong at N98.12 billion, representing more than 21 percent increase from its asset value of N80.56 billion in the previous year. Similarly, the firm continued to grow its shareholders’ equity steadily since 2010 to N41.49 billion from N36.71 billion delivered in 2017. The marginal decline in profit did not deter the company from rewarding its shareholders in line with its tradition as the Board of Directors recommended, subject to shareholders’ approval at the upcoming Annual General Meeting, the payment of a final dividend of 35 kobo. The proposed dividend pay-out is in addition to the 10 kobo interim dividend that was previously paid to its shareholders, thereby making it a total dividend of

45 kobo per ordinary share of 50 kobo to be paid out of the results achieved in 2018. Speaking on the performance for the year, Custodian’s managing director, Wole Oshin, expressed satisfaction with the result. He said considering the operational headwinds of the year 2018, he remained optimistic that the company would continue to thrive in all sectors in which it operates. Oshin noted that the company would be guided by its vision to always exceed stakeholders’ expectations in the delivery of services to its esteemed clients, observance of high corporate governance standards and the recruitment and retention of highly skilled personnel while leveraging on innovation and bespoke technology for excellence. Custodian Investment Plc was incorporated on August 22, 1991, and listed on the Nigerian Stock Exchange (NSE) on June 12, 2007. It has investments in life and non-life insurance, pension fund administration, trusteeship and property holding businesses.

OIL AND GAS

MRS Oil records first loss in seven years on lowered tax credit ISRAEL ODUBOLA

RS Oil Niger ia Plc, a Lagosbased oil marketing company, posted N1.26 billion losses after taxation for the period ended December 31, 2018, its first losses since 2012, driven by a huge decline in income tax credit. Although the oil firm posted N996.6 million losses before taxation in FY 2017, it still recorded an after-tax profit of N1.38 billion, thanks to N2.38 billion tax credit received. However, the reverse is the case in FY 2018. The company reported N1.43 billion and N1.26 billion losses before and after taxation in FY 2018, triggered by 93 percent decline in income tax credit to N162.51 million compared with N2.38 billion earned in the previous period, culminating to N4.15 loss per

share in the review period. Revenue for FY 2018 stood at N89.5 billion, indicating a 16.37 percent decline over N107.09 billion earned in the previous period. Analysis of revenue by category revealed that proceeds from all products dip in the review period. Receipts from Premium Motor Spirit (PMS) dip 0.9 percent, Aviation Turbine Kerosene (ATK) down by 30.8 percent, and that of Automotive Gas Oil, lubricants & greases and Dual Purpose Kerosene (DPK) slumped by 44 percent, 17 percent, and 43 percent respectively. Proceeds realized from other sources in FY 2018 grew in triple-digit to N375.2 million from N150.9 million in FY 2017, buoyed by a big increase in income on storage services. The company posted no substantial improvement in cost efficiency as cost-ofsales to revenue ratio, which measures the efficiency of

sales operations, worsened to 95 percent in FY 2018 compared with 92 percent in the previous period. Moreover, total expenses (selling, distribution & administration), declined 10 percent to N6.26 billion in the review period as against N7.01 billion in FY 2017. Meanwhile, Chris Okorie, Group Executive Director of MRS Holding, joined the Board of MRS Oil Nigeria Plc, as Director, following the Board’s approval at its meeting on Thursday, March 28, 2019. The new Director has more than 16 years’ experience in Total Nigeria Plc, where he held the position of Strategy Manager and Project Leader among other responsibilities. Total assets of the oil marketer were down by N2.2 billion to N54.3 billion in the review period compared with N58.5 billion in FY 2017. Total eq-

uity slumped 10 percent to N20.7 billion in FY 2018, while total liabilities reduced by single-digit to N33.5 billion. MRS has been trading

flat at N20.85 per share on the Lagos bourse close to two months, losing 19 percent year-to-date, and its one-year return down by 26 percent.

The company distributes and markets refined petroleum products and fuels, and also blends lubricants and manufacturing greases.

L-R : Joba Oloba, co- founder, The Nest Innovation Park; Seun Awojobi, co- founder; Ronke Azeez, former senior adviser to Lagos State governor on Lagos Eko Project; Adebiyi Mabadeje, former commissioner for science and technology, Lagos State and Peter Ogedengbe, co- founder during the launch of The Nest Innovation Park in Yaba, Lagos . Pic by Pius Okeosisi

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: David Ogar

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Wednesday 03 April 2019

COMPANIES & MARKETS FINANCIAL SERVICES

United Capital records marginal growth in 2018 Full Year, remains hopeful for 2019 GBEMI FAMINU

nited Capital, One of Nigeria’s top players in the investment industry hosted its Annual General Meeting for the year 2019 in Lagos recently. While engaging its shareholders and auditors, the group disclosed its financial performance for the full year 2018 as well as its prospects for the year 2019. The Chairman of the board of United Capital Chika-Mordi while speaking at the AGM disclosed that “United Capital made good progress in its financial performance for 2018. The Group generated gross earnings of N9.3bn and ProfitBefore-Tax of N6.2bn, despite the challenging macro-economic and operating conditions”. “This year, we switched to the IFRS 9 standards which led to a 6% decline in shareholders’ funds. Total assets improved from N136.5bn to N148.7bn due to growth in funds management, which is a reflection of our commitment to deliver value at all times.” Mordi added. He stated that the performance of the financial markets was broadly bearish

in 2018, due to the increased local political tension, interest rate hikes by the US Fed and a spike in the US treasury yields but affirmed that “Despite the challenging operating global and local environment, we continue to strive hard to deliver on our set goals and are optimistic that we will further improve in 2019”. The Group CEO of United Capital, Peter Ashade while speaking on the group’s outlook for the year 2019 said “Beyond our primary mandate of providing financial and investment solutions, we are also an agent for economic development. We are committed to collaborating with agencies such as Bank of Industry and other DFIs towards promoting development initiatives of the Federal Government as we seek to accelerate Nigeria’s economic growth and recovery”. Businessday’s analysis of the company’s financials for the full year 2018 showed that the United capital group’s gross earnings experienced marginal growth by 3.37 percent having had N8.91 billion in 2017 and N9.25 billion in 2018. The group’s profit before tax grew by 12.72 percent recording N6.2 billion in 2018 as against the N5.5 billion recorded in 2017. Furthermore, the group’s

L:R: Onari Georgewill, winner, All Expense Paid Trip To UEFA Champions League 2019 Semi-Final; senior brand manager, Heineken; Mfon Bassey, sports analyst; Charles Anazodo, corporate affairs director; Sade Morgan, Nigerian artiste; Dare Art Alade, and Stephanie Coker, media personality, at the unveiling of the UEFA Champions League Tour Ambassador, Puyol.

total assets grew by 8.82 percent to N148 billion in 2018 while its total liabilities grew by 10 percent to N132 billion in 2018. While the group recorded growth it also recorded some losses as well. The group’s total comprehensive income for the year experienced a decline by

COMPANY RELEASE

NSE announces additional listing of Access Bank shares OLUFIKAYO OWOEYE

ollowing the Court Sanction of the Scheme of Merger between Access Bank Plc. and Diamond Bank Plc, the Nigerian Stock Exchange has announced the listing of 6 billion ordinary shares of 50 Kobo each of Access Bank Plc. resulting from the Scheme, while the entire 23billion ordinary shares of Diamond Bank Plc were delisted from the daily official list of the exchange on Monday. This new listing brings the total issued and fully paid up shares of Access Bank Plc to 35billion from 28billion ordinary shares. The two banks announced their merger plans following the signing of the Memorandum of Agreement and announcement of headline terms, in December 2018 which valued Diamond Bank at approximately $200 million.

Based on the agreement reached by the boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of two new Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the implementation date. Access Bank launched its new corporate logo earlier this week, the new brand identity, fuses together the best of Access Bank and Diamond Bank. The diamond shape is fused into the three chevrons, which radiate in all directions to create layers around a core. The use of the diamond colour palette was further emphasised with the dominance of green in its retail application, ensuring continuity for retail customers, while the dominant orange in the corporate application

provides the same sense of familiarity to Access Bank’s customers. Chief Executive Officer, Access Bank, Herbert Wigwe said Access Bank will leverage on its strong track record of acquisition and integration. Noting that Access and Diamond have complementary operations and similar values, and a merger with Diamond Bank, with its leadership in digital and mobile-led retail banking, could accelerate Access Bank’s strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion. “Access has a strong financial profile with attractive returns and a robust capital position. We believe that this platform, together with the two banks’ shared focus on innovation, financial inclusion, and sustainability, can bring benefits to Access and Diamond customers, staff and shareholders,” he said

21.8 percent having had N5.5 billion in 2017 and N4.36 billion in 2018. Furthermore, the group’s profit for the year experienced a 0.68 percent decline from N4.36 billion in 2017 to N4.33 billion in 2018. Its total shareholders’ fund as well dropped by 6.25 percent

in 2018 to 15.8 billion. Giving the External Auditors report on behalf of Deloitte & Touche, Yetunde Odetayo, FCA stated that United Capital for the full year 2018 kept the proper books of account and aligned with the provisions of the Companies and allied mat-

ters act as well as the financial reporting council act. Chairman of the Statutory Audit Committee, Paul Olele said the accounting and reporting policies of the company were consistent with legal requirements and ethical practices.

APPOINTMENT

UAC confirms Folasope as Group MD GBEMI FAMINU

AC of Nigeria Plc, one of Nigeria’s leading brands in the manufacturing and fast moving consumer goods industry has recently announced some effected changes in its administrative structure. In a public statement sent to the Nigerian stock exchange (NSE), the company stated that “the board of directors of UAC of Nigeria PLC is pleased to announce the appointment of Mr Folasope Babasola Aiyesimoju as the company’s Group Managing Director/CEO” According to the statement signed by the company’s Legal Adviser, Godwin Samuel, the will assume the position from Monday, April 1, 2019. Preceding the confirmation of this appointment, Omolara Elemide was the acting group managing director of the company from January 2019 upon the retirement of Abdul

Akhor Bello as the group managing director in January 2019. It can be recalled that earlier in March, the board appointed Ibikunle Ibiyinka Oriola as Group Finance Director of the company. Speaking on the new appointment of the GMD, chairman of the board Dan Agbor said the action signifies the company’s ambitions and the board’s determination to accelerate the process of change within the group. The recently appointed GMD according to the public statement is a finance professional with experience from corporate finance, principal investing and private equity. He is the founder of Themis Capital Management which is an investment firm focused on concentrating capital and talent on high potential opportunities in sub-Saharan Africa and is also the co-founder and Non-Executive Director of Foodpro Limited, a nutritional snacks business

focused on edible nuts. His wealth of work experience is garnered from various companies including investment companies like Kohlberg Kravis Roberts, Ocean and Oil Holdings, ARM Investment Managers and Standard Bank Group. Since 2018, he has been the director of UACN Property Development Company Plc as well as a member of the governance and remuneration committee of the board. FolaSOPE has a B.Sc (Hons) in estate management from the University Of Lagos as well as a certificate of excellence in real estate development and finance giving him the permission to use the CFA designation in 2006. UAC of Nigeria Plc is involved in various activities in the production and supply chain of goods, and services which include production and sale of consumer goods, aesthetic products as well as the provision of logistics services and real estate.

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BUSINESS DAY

Business Event

PHARMACEUTICALS

Fidson bottom-line shrinks on borrowing costs despite biggest revenue in 5-years SEGUN ADAMS

idson Healthcare has announced below-par earnings for the period ended 31, December 2018 as the company’s bottom-line failed to impress in spite of its 2018 revenue figures, the biggest in the last half-decade period. The company reported that its Profit After Tax (PAT) slumped to a loss of N97.45 million in full-year 2018 although it was profitable in the preceding year. The performance saw profit more-than halve on the back of a increase in cost of sales for the period and a surge in the company’s finance cost especially. Fidson is currently taking remedial actions to replace expensive debt in its capital structure. Precisely, the drug maker is raising N3.0 billion through

a Rights issue of 750,000,000 ordinary shares of 50 kobo each at N4.00 per share. According to information on the company’s website, the Rights ratio is 1 new ordinary share for every 2 ordinary shares held by shareholders whose names appeared in the register of members of the company as at close of business on December 28, 2018. Fi d s o n say s t h e f u n d would enable it to pay part of its outstanding obligations, reduce finance cost and provide working capital. The Acceptance list opened Wednesday, March 6, 2019, and closes Tuesday, April 9, 2019. Revenue of the healthcare company rose 15 percent to N16.23billion, as against N14.06 billion posted for 2017 full year period. In spite of a double-digit growth rate, growth slowed in 2018 compared to 84 percent noted in 2017 when the fig-

ures crossed ten billion mark for the first time in 5- years. A break-down of the business segments show that revenue from Over-the-counter products fell year on year by 2.62 percent but accounted for 44 percent or N7.06 billion of total revenue, while Ethical products accounted for 56 percent, soaring 36 percent to N9.1 billion in 2018. Revenue from Consumer products segment fell 25 percent to N78.49 million in 2018 compared to N104.72 million in 2017 comparable period. Gross Profit fell 11.68 percent to N6.32 billion on the heels of a 44 percent spike in the cost of sales for 2018 to N9.91 billion. Even though operating income grew and selling and distribution expense fell, a rise in administrative expense coupled with the trim in gross profit saw operating profit decrease year on year by 20 percent to N2.05 billion in 2018.

L-R: Lawal Gwandu; director water supply, Rural Water Supply and Sanitation Agency (RUWASSA Kebbi); Suleiman Shindi, executive chairman, Danko Wasagu LGA, Kebbi State; Demmo Ibrahim, territory manager, Sokoto/Kebbi Guinness Nigeria; Adamu Shehu, assistant director, ministry of water resources and rural development, Kebbi; Ibrahim Aliyu Bilo, principal tech. officer, ministry of water resources and rural development; Dan Baba Abubakar, Danko Wasagu, water, sanitation and hygiene (WASH) coordinator, at the commissioning of the Solar Powered water facility in D’Ka Community, Danko Wasagu area of Kebbi State donated by Guinness Nigeria in partnership with WaterAid as part of its ‘Water of Life’ project.

TECHNOLOGY

Chams’ profit hits 5-year high DAVID IBIDAPO

hams plc saw its profit rebound from a 3-year consecutive loss streak as the company hit a 5-year high profit level on a surge in its revenue for the period 2018. As released on the Nigeria Stock Exchange (NSE) market, profit after tax for the period surged 130 percent from a loss of N1.26 billion in 2017 to settle at a profit of N380.14 million in 2018. Profit was boosted by a surge in revenue and operating income for the period. Meanwhile, Chams plc was able to cut significantly its expenses. Revenue surged by 54 per-

cent to N3.012 billion in 2018 against N1.95 billion recorded in 2017. This was largely contributed to by BVN sales and maintenance which saw proceed increase by 89 percent to N1.02 billion from N540.81 million, which accounted for 34 percent of total revenue for the period. Five-year revenue trend shows that 2018 revenue is the highest level since 2015. However, over the last five years, revenue has declined annually at an average of 6 percent. Meanwhile, total expenses during the period declined by 38 percent to N1.3 billion in 2018 against N2.12 billion in 2017. Administrative expenses decline by 38 percent to N1.31

billion while interest expense on loans and overdraft reduced by 34 percent to N15.7 million in the period under review. Chams Plc provides integrate identity management systems and verification platforms in Nigeria. The company operates in three segments: Identity Management and Solutions; Payments, Collections, and Transactional Systems; and ICT Training. The Identity Management and Solutions segment provides identification solutions for corporations, educational bodies, and government. Shares of Chams plc has remained flat at N0.20 year to date with a market capitalization of N939.21 million.

OIL AND GAS

Global Spectrum profit soars 5-fold on asset revaluation SEGUN ADAMS

lobal Spectrum Energy, an oil and gas company listed on the Nigerian Stock Exchange (NSE), has announced its biggest profit since 2014, as surplus on asset revaluation accounted for a five-fold increase in profit compared to its 2017 figures. The Oil and Gas Company which offers services in complimentary Maritime Security, Logistics, Energy and Engineering services saw its revenue grow 72 percent to N1.87 billion in 2018 compared to N1.09, the year before. For the year, Global Spectrum Energy’s operating cost (OPEX) rose significantly to N1.41 billion from N682.69 million owing to increased expenditure on direct materials and

vessel cost, as well as an upsurge in wages, equipment hiring and other items. Despite a triple-digit rise in OPEX, Gross profit rose 15 percent year on year to N466.52 million compared to N408.36 million in the comparable period of 2017. Global Spectrum Energy shrugged off a 26 percent growth in administrative expenses to record N596 million, its biggest profit in 5-years, which was propelled by a revaluation surplus of N386.34 million. Tax expenses fell 48 percent to N47.93 percent in 2018 as against N93.91 paid in the preceding period. The decline in income tax further boosted the company’s full year earnings year on year by 396 percent to N547.995 million in 2018.

Consequently, net margin rose to 29.27 percent in 2018 from 10.12 percent in the previous year, an indication of the efficiency of the oil company in managing its costs to retain net income from its revenue. Earnings Per Share (basic and diluted) rose to N68.50 kobo in the review period from N13.81 in 2017. Compared to 2017 figures, shareholders equity for Global Spectrum Energy rose to N2.21 billion from N1.65billion as retained earnings increased by 44.3 percent to N1.81 billion in 2018. Shares of Global Spectrum Energy has remained at N5.75 per share, its 52-week low since the September last year after it plunged 9.45 percent from its 52week high.

L-R: Felix Awogu, general manager, Super Sport West Africa; Emmanuel Oriakhi, marketing director, NB Plc; Jay Jay Okocha, Nigerian former professional footballer, and Amaju Pinnick, president of The Nigerian Football Federation, at the Star Lager jersey unveil for the unmissable match.

L-R: Osita Aboloma, director-general, Standard organization of Nigeria (SON);Senator Sam Egwu, chairman Senate committee on industry oversight, and Barnabas Gemade, during a courtesy visit of senate committee on industry oversight to Standard organization of Nigeria(SON) Laboratory complex in ogba Lagos.

L-R: Kolawole Ogunwumi, marketing manager, Telco West Africa, Redington Apple Business; Gift Moses Eluwah, store manager, Slot Systems Limited, Citymall, Ikeja; Fayaz Ahammed, sales head, retail, Nigeria, Redington-Apple Business, and Niyi Adeleke, assistant head, enforcement unit, National Lottery Regulatory Commission, at the 3rd SLOT-Phone-aCar Raffle Draw in Lagos. Pic Olawale Amoo

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How agritech start-ups connect smallholder farmers with investors Stories by Josephine Okojie

uwon Gbolade a 45 years old farmer in Lagos, Nigeria’s commercial nerve centre, farms rice, soybeans and maize on 20 hectares of land yet he has never been to a farm. G b o l a d e ha s n o p ra c t i c a l knowledge about farming and does not understand the fundamentals of agriculture yet he harvest tons of crops yearly and makes over N500, 000 from farming each year. Th i s i s a s a re su l t o f t h e investments Gbolade made in the agricultural sector through a digital platform which connects farm sponsors with real farmers. “I am a farmer but have never visited any farmland and lack the practical knowledge,” Gbolade said with excitement in his voice. “I make returns between 6 to 25 percent and within a 3-9 months period, depending on what farm type I choose,” he added with a big smile on his face. Not only is the business very profitable but also helping Nigeria meets its funding needs to boost food production and ensure food security. Ahmed Yakubu, an engineer with a top engineering firm in the country is also a farmer by proxy. “I have been into farming since 2016 and the journey has been exciting and rewarding. I have a 10 tons rice farm in Kebbi and I have never been to kebbi state before,” Yakubu told BusinessDay.

“I could have these farms through my investments in Thrive Agric- a company that connects sponsors to farmers. The returns have been excellent,” he added. Just like Gbolade and Yakubu are leveraging on the farming opportunities the likes of Growsel, Thrive Agric, and Farmcrowdy are providing to create wealth and improve their income. The likes of fintech organisations such as Farmcrowdy, Thrive Agric, Pork Money and Growsel are firms

behind the initiative which is reshaping the way people participate in farming and food production using their online platform to invest. The organisations function through their various platforms and trains farmers in smart farming techniques as well as supplying them with inputs and technical support to boost their output. The opportunity has allowed many Nigerians who do not want to be involved in the farming own a farm and venture into agribusiness.

“Farmcrowdy has recorded close to 1,000 unique farm sponsors, aggregated a combined 4,000 acres of farmland in Nigeria for farming purpose and grown over 150,000 organic chickens to date,” Onyeka Akumah, co-founder and CEO, Farmcrowdy said recently during the firm’s first annual anniversary in Lagos. Helping smallholder farmers with finance Over the years, lack of finance has remained one of the major factors

bedeviling the country’s agricultural sector and this impediment has continued to prevent farmers from investing in basic inputs, such as quality seeds, fertilizers and smallscale irrigation facilities among others needed to raise productivity and generate sustainable income. But all that is fast changing owing to the new league of proxy farmers in the country. “Despite contributing about 30percent to Nigeria’s GDP and 70percent to the country’s labour force, most farmers in Nigeria are still entangle in poverty, a problem that basically stems from a lack of funds to access modern farm inputs, which in turn drastically reduces their output,” Jerry Oche, CEO, Growsel said in a statement. “To change this for farmers and ensure they have the required finance to expand their production areas and boost productivity, we create a meeting point for farmers and farm sponsors who are willing to invest,” Oche said. According to experts, such financing models to farmers will increase private capital investment in the country’s primary agriculture and integrate poorer sections of the population into a sustainable process of economic growth and development. In turn, this will reduce poverty by providing jobs directly and indirectly that will serve as a stimulus to the Nigerian economy and agricultural sector.

Lagos, Eti-Oni collaborate to host maiden edition of Eko Chocolate Show

n a bid to develop Nigeria’s cocoa industry and fully exploit the potential of the entire value chain to achieve a robust and sustainable cocoa economy, the Lagos state government in partnership w ith the Eti-O ni Development Group is set to host the maiden edition of the ‘Eko Chocolate Show’. The main objective of the show is to create awareness to develop the cocoa culture in the country that will build bridges between production and consumption as well as change Nigeria’s cocoa narrative from extractive position to an integrated one with extensive value-add for shared purposes. “We need to create a culture that understands chocolate because cocoa is a strategic crop that has built several economies of the world,” Dokun Thompson, the Olooni of Eti-Oni and the founder of the Eti-Oni Development Group of Company said during a press briefing. “Eko Chocolate show will help deepen the chocolate culture and showcase what’s on offer at home

and abroad to a wide and diverse audience who want to keep abreast of what is going on in the chocolate and culinary space around the world. “Just as we have the Switzerland chocolate and Dutch chocolate, we are bringing in the Nigerian chocolate to the world,” Thompson said. He appreciated the Lagos state government for giving them the platform to launch the Nigerian chocolate and other sponsors for the event for their support. Sp e a k i n g a l s o d u r i n g t h e briefing, Olayiwole Onasanya, permanent secretary of the Ministry of Agriculture said that the state’s collaboration with the Et-Oni Development Group is a step in the right direction that shows the state’s continuous commitment to the sector. “Since the state has a comparative advantage in the downstream sector of cocoa production it is our pleasure to support the eko chocolate crusade,” Onasanya who was represented by Aramide Granzalo, director of agric, Lagos

State Ministry of Agric. Said. According to the organisers, the eko chocolate show will create opportunities for chocolate makers, chocolatiers and chefs, as well as e quipment and access or y manufacturers, restaurants, dessert and pastry chefs, ingredient

suppliers, cosmetics experts, branding and packaging companies. The media and others who use cocoa as the main ingredient or part of their finished products to show case to about 5000 expected visitors in a fun filled and entertaining environment, the organisers say.

L-R: Shobanjo Olushina, assistant director, Ministry of Agric; Aramide Granzalo, director of Agriculture, Ministry of Agric; Dokun Thompson, the Olooni of Eti-Oni; Yetunde Isi Adegbite, strategy and corporate affairs executive, Eti-Oni Development Group and Princess Odiakosa, creative director and chocolatier, Kalabari Geeko Chocolate displaying the Nigerian Chocolate to be launched at the Eko Chocolate Show in Lagos recently.

Yetunde Isi Adegbite, strategy and corporate affairs executive, Eti-Oni Development Group said “eko chocolate show will help encourage and attract investments into the country to enhance cocoa production while adding value locally that can add an additional $2 billion to the country’s cocoa economy.” She stated that Lagos and Osun states will benefit immensely from the eko chocolate show as several job opportunities will be created from the several businesses from cocoa production, chocolate making, retail business opportunities, warehousing, logistics, branding, packaging, tourism, etc and at the same time boost the country’s export drive. The eko chocolate show is scheduled to take place in Lagos on Sunday 14th April, 2019 at Oriental Hotel, Lagos. The show will bring together i nv e s t o r s, p a r t n e r s, e x p e r t s, manufacturers, entrepreneurs, traders and buyers and all stakeholders along the supply chain of cocoa and chocolate.

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UN calls for development of rural areas to attain SDGs, improve nutrition Josephine Okojie

he International Food Policy Research Institute (IFPRI), a United Nation agency has called for an urgent need to develop rural communities, create strong policies and institutions to attain the targets of the Sustainable Development Goals (SDGs). The international agency said in its recently released 2019 Global Food Policy Report (GFPR) that the current deepening cycle of hunger and malnutrition, persistent poverty and limited economic opportunities as well as environmental degradation, rural areas have continued to be in a state of crisis in many parts of the globe. IFPRI stated that the situation is threatening to slow the progress towards the SDGs and global climate targets as well as improving food and nutrition, it says in the report. “Revitalizing rural areas can stimulate economic

growth and begin to address the crises in developing countries, and also tackle challenges holding back achievement of the SDGs and climate goals by 2030,” said Shenggen Fan, director general, IFPRI. “Rural revitalization is timely, achievable, and, most important, critical to ending hunger and malnutrition in just over a decade,” said Fan. According to the report, rural areas remain underserved compared to urban areas and face a wide

array of challenges across the globe, as a result rural areas struggle with acute shortage of jobs for the growing youth populations in Africa. To o v e r c o m e t h e s e challenges, the report calls for rural revitalisation, highlighting policies, institutions, and investments that can transform rural areas into vibrant and healthy places to live, work and raise families. A majority of the world’s poor live in rural areas and accounts for 45.3 percent of

NASS partners IAR&T to train 120 youths in maize production Akinremi Feyisipo, Ibadan

n a bid to stem the rate of unemployment rate in the South West region, the National Assembly committees on Agriculture in collaboration with the Institute of Agricultural Research and Training (IAR&T), has trained no fewer than one hundred and twenty youths in maize production. The youths from the six Southwest states of Oyo, Osun, Ogun, Lagos, Ekiti and Ondo, at the training were the provided with starter parks which included; seeds, fertiliser and some agro-chemicals. James Adediran, executive director of IAR&T, during the opening of the training which was organised by the Senate and House of Representatives committees on agriculture in conjunction with IAR&T said that the training was organised in order to complement the efforts of the present government to use the agricultural sector to generate employment. “It gives me pleasure to welcome you to this training workshop organized by Olusola Olojede & Co in conjunction with Bora Agro Nigeria limited on maize value chain under

the joint sponsorship of the committees on agriculture of the senate and the house of representatives,” Adediran, a professor at the training held at the IAR&T Ibadan said. “We will all recall that following the economic recession of 2016, the economic recovery growth plan have targeted economic diversification as a way of widening the revenue base of the country. In this regard, the agricultural sector has been identified as a sector with high potential in the speedy realisation of this noble objective. “It is therefore the intention of government to continue to use the sector to generate employment for our able bodied youth. The crop subsector of the agricultural sector is endowed with a lot of enterprise; however, the maize enterprise has for decade’s demonstrated unending potential in addressing household food security and industrial growth. “Not only is the crop strategic to attainment of food security, but its importance in the industrial sector has continued to increase with growth with livestock, breweries, starch and breakfast meal industries.

“However, it is also known that the enterprise is also responsive to soil fertility depletion, incidence of pests and diseases. This therefore suggests that profitable maize production should take place in adequate consideration of these factors. “The IAR&T has developed many high yielding and disease resistant maize varieties adaptable to South West agroecologies in particular and beyond. Kindly permit me to list some of these maize varieties; ART 98 SW6, ART 98 SW1, BR992B DMR-SR-Y, BR 992B DMR-SR, ILE-1-OB, DMR LSR-Y, DMR ESR-Y among others. According to him, these are indication to complementary improved cultural practices targeted at greater yield. The institute has been deploying these technologies for decades and has played prominent role in the maize industry over years. Saka Olaide, deputy director of the institute, who coordinated the training said, “We are all aware of t h e s o c i a l p ro b l e m t hat we have been having on youth unemployment and government has emphasized that all economic blueprint shall targeted towards engaging our youths.

the world’s total population as well as 70 percent of the world’s extremely poor, the report says. The global poverty rate in rural areas is currently 17 percent, more than double the urban poverty rate of 7 percent. “Rural transformation requires a holistic economic approach to connect rural and urban economies,” said Achim Steiner, administrator, United Nations Development Programme and co-author of the lead chapter in the report.

“Strengthening these connections can spur growth and diversification in the farm and non-farm sectors, closing socio-economic and quality-of-life gaps between urban and rural areas,” said Steiner. The report emphasises that rural areas could become premiere hubs of innovations in just under a decade. It recommends revitalising rural areas with a focus on five building blocks which are; creating farm and non-farm rural

employment opportunities, achieving gender equality, addressing environmental challenges, improving access to energy and investing in good governance. Job creation is critical to reducing poverty in rural areas, especially in the rural areas of Sub Saharan Africa, where poverty is high and youth populations are large. Policies that encourage investments in rural transport networks, telecommunications, and human capital in African countries can prepare rural youth for new jobs in rural and urban areas, and bridge rural-urban gap, according to the report. “Rapid urbanization in Africa is creating new opportunities for rural transformation and revitalization, mainly due to growing demand for food in urban areas, and investments in new staple food processing technologies as seen in the case of Ghana, Mali, Tanzania and Senegal,” said Ousmane Badiane, director for Africa, IFPRI and co-author of the report chapter on Africa.

Aremu canvases irrigation system for Nigeria SIKIRAT SHEHU, Ilorin

deniyi Saheed Aremu, managing director, L ower Niger River Basin Development Authority has canvassed advocated for irrigation farming towards ensuring sustainable food production in Nigeria. Speaking at the opening ceremony of a weeklong training and capacity building on irrigation farming organised by the Federal Ministr y of Wa t e r R e s o u r c e s a n d Lower Niger River Basin Development Authority, Aremu noted that owing to the rapidly population growth, the country can no longer depend on rainfed agriculture. “We have the water, land and manpower to ensure all year round farming activities and in line with the next level action plan of the federal government we are poised to ensure that Nigerians get involved in irrigation farming.” According to him, this will increase productivity as farmers will no longer be

seasonal farmers but will be able to cultivate all through the year. Aremu explained that the Lower Niger River Basin Development Authority is moving towards automated irrigation farming. “The world is evolving and there is need for us to also evolve. In developed societies automated i r r igat i o n i s t h e n o r m whereby in the comfort of your room you can activate your irrigation facilities and that is where we are looking at the Lower Niger River Basin Development Authority. We are actually moving from manual to automated irrigation,” he said. Earlier, the Principal Consultant, Magic Touch Business Solution Limited praised the federal government through the Federal Ministry of Wa t e r R e s o u r c e s a n d th e L ow er Nig er R iver Basin Development Authority for efforts towards ensuring “water res ource management, sustainable food production, employment and better livelihood of

the people as well as the general development of the agricultural sector in diversification of the Nigerian oil economy.” While stressing the need for irrigation farming to sustainable food production in the country the consultant said, “Irrigation had been an important part of the agricultural intensification process and has historically played an important role in transforming agriculture around the world. And one of the best ways of ensuring good security in any nation is to ensure the availability of food all year round which is mainly possible through irrigation farming system.” In his vote of thanks, O l ab i s i Aw o n i y i , c h i e f agric officer- commercial agriculture and training at Lower Niger River Basin Development Authority, said agriculture is faced with differs challenges and therefore for the country to attain the desired food security irrigation farming is a must as it would help in places where there is shortage of rain fall and/or drought.

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Diamond PFC strengthens industry financial inclusion awareness campaign …educates students on how to learn, earn, save and invest

iamond Pension Fund Custodian (DPFC), a leading pension fund custodian in Nigeria has strengthened the pension industry awareness campaign on financial inclusion, as part of the activities to mark the Global Money Week. DPFC took the campaign to Victoria Island Senior Secondary School in Victoria Island Lagos, where in an interactive session with the students and teachers, provided enlightenment on how to learn, earn and save money. Chinedu Ekeocha, Managing Director/CEO of the Diamond PFC represented by Tonie Nwume, Head, Marketing & Relationship Management of the Company said the 25th –29thMarch every year has been set aside as Global Money Week (GMW), and the pension industry regulator, PenCom is committed to mentoring and sensitizing the young population on how to become responsible economic citizens as well as save for retirement. He stated that Diamond PFC as an operator in the pension industry by this programme is partnering with the Commission, by educating the children and youth on the various financial services available, enhancing their awareness of economic rights, and empowering them to build their assets, invest in the future, save for retirement and ultimately break the cycle of poverty. Ekeocha said “The GMW is an initiative of Child and Youth Finance International (CYFI), an international Non-Governmental Organization (NGO), committed to providing access to financial services for children and youth. He said, “In Nigeria, the 2019 GMW with the theme “Learn, Earn & Save”, is commemorated with the school mentorship programme, and this activity is to encourage youths and children to learn about money, savings,

creating livelihoods, gaining employment and becoming entrepreneurs.” According to him, the message to the children was that they should pay attention to learning, earning a decent livelihood and saving for retirement, stating that the future of pension in Nigeria is great because the space is expanding to cover more contributors. The awareness session looked at several areas including meaning of money, currency, financial literacy, managing money, savings, banking as well as retirement. Diamond Pension Fund Custodian Limited (DiamondPFC) is a wholly owned subsidiary of Diamond Bank, and one of the Four Pension Fund Custodians licensed by the National Pension Commission (PenCom). It was incorporated on September 13, 2005 to provide custodial services in accordance with the Pension Reform Act 2004. DiamondPFC commenced custodial operations in March 2006. Its mission is to provide pension custodial services of international standard through well motivated and trained personnel thereby ensuring good returns for all our stakeholders. The company’s guiding principle is to promote culture of integrity and professionalism, provide clear understanding of service requirements of our clients; invest in providing excellent working environment for our people; provide technology-driven approach to customer services, as well as ensure commitment to global best practices. The Company has a workforce that is highly experienced and skilled in Custody and Financial services and operations, having executed a Technical Assistance agreement with a leading organization in Custody business in Europe to provide capacity building among its team members thereby ensuring global best practices in custody services and operations.

Diamond Pension Fund Custodians (DPFC) with staff and students of Victoria Senior Secondary School, Victoria Island during the ‘Global Money Week’ held at the school premises in Lagos

RC634453

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

This section is created to increase awarness and deepen knowledge about the contributory pension scheme. If you have enquiries or contributions, send to this e-mail: diamondpfcbusday@yahoo.com

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IFRS 9 adoption will not have significant negative impact on insurers - NAICOM Modestus Anaesoronye

he adoption of IFRS 9 in insurance industry will not have any significant negative impact on the bottom-line, the industry regulator, National Insurance Commission (NAICOM) has said The Commission also said it has created the enabling environment, including technical capacity and time to ensure smooth transition to the new accounting standards, while also stating that it is not meant for only insurance companies, it is for all players in the financial services sector. These were remarks during a one day seminar organized for Insurance journalist by NAICOM on implementation and adoption of IFRS 9 in the insurance industry. Barineka Thompson, director, Inspectorate, NAICOM giving details of IFRS 9 and what the Commission is doing and what they are expecting from insurers, said the implementation of the standard will have no significant negative effect on insurance companies, adding that the impact of IFRS 9 is mostly felt and will be felt by banks whose portfolio are predominantly debt portfolio or debt instruments. “We are not expecting significant or negative impact on the insurers because if you go through the books of insurance companies you will see that the investments that is related to debt nature are mostly in company instruments, Government bonds etc, so it’s not like they are

L-R: Kenneth Egwu, head, Lagos Control Office; Barineka Thompson, director, Inspectorate; Sunday Thomas, deputy Commissioner for Insurance, Technical; and Rasaaq Salami, deputy director, commissioner’s office, all of the National Insurance Commission (NAICOM) during a seminar for Insurance Journalist in Lagos.

given personal loans to individual or corporate bodies which is the job or transaction of banks. “It is not that we are saying that there was no form of impact or loss by the reason of classification and measurement modeling, what we are saying is that they are insignificant,” he said. On the financial account submission date extension, he explain that the insurance companies should be given more time because the insurance business and accounting are peculiar, that is why it has taken the IASB over 15 years to come out with an accounting system or acceptable model for insurance. “We have to take time to make sure we understand what it really means and how to implement. Decision process and points and number of things we need to put in place are not things expected of people

in other sectors. “These are not expected in other sectors in financial system and that is why International Accounting Standard (IAS) thought it wise to bring those options so the insurance companies will take time to ensure its well implemented” he said. He insisted that the IFRS did not originated or facilitated by NAICOM as it isn’t made for insurance companies alone but for all financial services sectors Sunday Thomas, deputy commissioner for Insurance, Technical in his opening remark earlier said a Commission, we have tried as much as possible to make it a lot easy for the market and our doors are well open for people who may want to make enquiries. “It is also important for us to mention here that while pursuing the implementation of FIRS

Nine, we are learning from the gaps that have been existed and by the time we get to the adoption of IFRS 17 which has given us a longer period for adoption which is 2022, we would have been able to perfect the act so that there will be a seamless flow via the market. He noted that since 2008 world financial crisis, relevant institutions and regulators have been concerned about accounting for transactions within the financial services. As a result of that so many financial accounting boards have come up with some standards that will be simple for a layman’s understanding and comparability of financial statements through the adoption of those standards. “Of course, as far as insurance industry is concerned, remember the adoption of IFRS four some years back and now with

the setting of new standards IFRS Nine which essentially relates to classification and measurement of financial instruments. “As far as the transition is concerned, these are areas of concern and these are things that we need to understand. Of course, beyond the classifications and measurements of financial instruments, hedging is part of the things that has been dealt with in FIRS Nine. “What we have done as regulator of financial services sector was first and foremost to issue the guideline, for the implementation of FIRS Nine, that we have sent to the market requesting for views and opinion from them. “We have engaged the Chief Financial Officers (CFO) of all the companies where the Director, Inspectorate, addressed them. Thereafter, we have invited the companies on

one on one basis, where companies were requested to let us know how far they have gone with the implementation and what their challenges were and each company was asked to give a presentation on the extent of their implementation. “In house, as a Commission, we are repositioning for enhanced efficiency because we believe that there is nothing that is static. This we do in order to meet the challenges of the market. We will continue to look at our system and those things we need to move, we will definitely move them to their proper places so that we will be able to meet the challenges of the market.” He said because of the late adoption the NAICOM has reached out to other sister regulators such as the Security and Exchange Commission (SEC), and the Nigeria Stock Exchange (NSE) to grant all the quoted insurance companies a month period of grace for filling their financial results. This, according to him is due to late adoption of the International Financial Reporting Standard (IFRS) which supposed to have taken effect since 2018. “We recognize the late adoption of IFRS Nine; I called it late adoption because IFRS Nine supposed to have commenced since 2018. “Because of late adoption, we have reached out to sister regulators, such as Security and Exchange Commission (SEC) and the Stock Exchange Commission (NSE) to grant our regulated entities what we called Regulatory Forbearance with regards to late submission of returns.

Lasaco, Linkage give investor’s highest dividend returns in insurance sector IFEANYI JOHN

ncome investors looking for yearly cash flow from investment vehicles look to companies with a steady dividend payout policy and hope to buy into these companies cheap. In the insurance sector, Lasaco and Linkage Assurance have the highest dividend returns when compared to

the price they currently sell for on the local bourse. Lasaco, at its current price of N0.31 and a last reported dividend of 4 kobo, ranks as the best insurance stock for income investors with a dividend yield of 12.9 percent. In a market with an average dividend yield of 5 to 6 percent and inflation of 11.31 percent, such yields are impressive and deserve a second look.

Dividend yield measures how much cash flow you as an investor get for every Naira invested in a stock, besides measuring what percentage of return a company pays out in form of dividend. The insurance indexes is home to several companies selling below one naira and thus have higher chances of significant price appreciation. With this in mind, the dividend yield of such

companies is an added advantage to the high possibility of capital appreciation. It could also be a guarantee against the volatility of such stock priced. Linkage Assurance is the next best deal for investors looking at the insurance index as its dividend yield is 9.09 percent. Other companies with close yields are Mutual Benefits Assurance (8.33%), Law Union and

Rock (7.84%), CRe (7.33%), AIICO (6.67%), Custodian Investments (6.67%) and NEM with 4.35 percent. Compared to the broad equities market, only a few companies are selling at prices that allow for a dividend yield greater than inflation and such companies are Zenith Bank with 13.02 percent dividend yield and GlaxoSmithKline who paid special dividends of N7.1

naira for every ordinary share and put their dividend yield at 69.44 percent as at the close of market on Monday. While high dividend yields are attractive, they may come at the cost of growth potential. Every naira a company is paying in dividends to its shareholders is a naira that company is not reinvesting to grow and generate capital gains.

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Benefits of insurance, actually for the living …as AXA Mansard breaks new Life TVC Stories by Modestus Anaesoronye

new television commercial launched weekend by Axa Mansard Insurance Plc has changed the narrative, bringing to the fore that insurance is not for death, but actually for the living. The commercial tries to paint a picture of a family that has taken necessary financial planning steps, meaning that the bread winner can actually go about his or her businesses with peace of mind. That, with or without his presence the family can get adequate healthcare, children can continue their education, there will be something to fall back in retirement, and that life on its own could be simply ‘complete’. Kunle Ahmed, managing director/CEO Axa Mansard Plc, speaking at the media launch of its new ‘Life TVC Premiere’ said over the years, the company has remained committed to ensuring customer satisfaction. “ We w a n t t o s t a y through to our customers in their journey to life”. He said the company wants to provide good healthcare through Axa

Mansard Health; we want to provide insurance through our Axa Mansard Insurance and we want to provide pensions through our pension subsidiary, AXA Mansard Pensions. Ahmed said what the company has done with the new TVC is part of the drive to increase insurance awareness, penetration, which will in the long run add to insurance industry contribution to the GDP. Rasaq Salami, deputy director, NAICOM speaking on role of insurance in the economic development of Nigeria said this cannot be over emphasized when you look what it does in the life of individuals, corporates or governments. He cited the recent collapse of buildings in Lagos, stating that people and victims could have been better compensated if there was insurance, rather than government bearing the cost, which at the end of the day may not really cover their losses. He commended the TVC, stating that it was not difficult for him to approve because it was a unique way to bring out the benefits of insurance to consumers without talking about catastrophe, as has been the case. Yetunde Ilori, director general, Nigerian Insurers Association (NIA) speaking on role of insurance as well

as, said insurance gives you rest of mind to venture into new businesses and risks, that in the event of the unexpected you are protected. She stated further that efforts must be geared towards emphasizing the benefits that people get from taking up insurance policies. Fatai Adegnenro, executive secretary of the Nigerian Council of Registered Insurance Brokers (NCRIB)

speaking on the benefits of life insurance said, it’s a protection mechanism for you and your beneficiaries. “It is actually for you. It gives you rest of mind, you can fall back on your policy when you are down, it could be used as collateral for loan to finance your business. In the event the unexpected happening, it enables the dependants to continue to live the life they

have been used to.” Nimi Akinkugbe, founder and CEO, Bestman Games and author of MoneyMatters, said “For me insurance is absolutely a necessity, unfortunately in this part of the world people don’t appreciate the need.” Advising consumers, she said in taking up insurance, you should be mindful of the choice of company, so that at the end you can always make your claim.

Akinkugbe also emphasized the need for consumers of insurance to ensure regular payment of premiums, as this is critical in keeping to the term of the contract. While urging insurers to look critically on reforming its policy documents, particularly small prints which scare many consumers away, she said “Life is the greatest asset you have, so insure it.

L-R: Maureen Ada-Leonard, education chairperson, PILA; Ugochi Odemelam, executive director, Marketing & Business Development, Sovereign Trust Insurance Plc; Olaotan Soyinka, MD/CEO, Sovereign Trust Insurance Plc and Ose Oluyanwo, president, Professional Insurance Ladies Association, PILA, during the courtesy visit of the Association to the Management of Sovereign Trust Insurance Plc at its Corporate Head Office in Lagos.

AIICO gets recertified for ISO 22301 by the British Standards Institute

2019 Pan African Re/Insurance Journalism Awards winners honoured in Mauritius

eading Pan African Reinsurance firm, Continental Reinsurance Plc has announced winners of the 2019 Pan African Re/Insurance Journalism Awards at its annual 6th CEO Summit in Mauritius. Patrick Alushula, a Kenyan Business Journalist from Nation Media Group bagged the Overall Award, Pan African Journalist of the Year. His article titled ‘Despite low uptake, funeral cover can’t be buried away’ also emerged the Best Re/Insurance Print Article. In his article, Patrick explored how insurance cover can support bereaved families by helping them lessen financial burden associated with funerals. The Overall Award was selected from Best Re/Insurance Print Article, Best Re/ Insurance Online Article and Best Re/Insurance French Article categories. Katya Stead, a South Af-

IICO Insurance Plc has been recertified for the 2nd consecutive time for ISO 22301 by the renowned British Standards Institute, the global topmost ISO certification institution. AIICO was the first Insurance Company in Africa to bag the certification in 2013.The purpose of the certification is to ensure that all risks to the business and the realization of its objectives are adequately catered for. ISO 22301 specifies the requirements for a management system to protect against, reduce the likelihood of, and ensure an organization recovers from disruptive incidents. AIICO underwent its second recertification audit process in 2019, scaling through without non-

Edwin Igbiti, MD/CEO, AIICO

conformities. This shows that AIICO has continued to embed the Business Continuity Management System within its processes, ensuring that the resilience of its services is maintained and improved on. The success of this recertification is indicative of Management’s commitment to ensure continuity in delivery value to its customers, shareholders

and all other stakeholders. AIICO Insurance Plc., a leading composite insurer in Nigeria, commenced operations in 1963. AIICO provides life insurance, health insurance, general insurance, wealth management and pension management services as a means to create and protect wealth for individuals, families and corporate customers.

rican Journalist who writes for Commercial Risk Africa won the Best Re/Insurance Online Article award. Her article ‘Banking the change: How insurers in banking will change insurance too, looks at how African insurers like discovery are taking on the banking sector and the ways in which this will change not only banking, but also Africa’s insurance narrative. For the French category, Sara Bar-arhout, Economie Entreprises, Morocco emerged the winner for the Best Re/Insurance French Article award.I n her article, titled TRC et RCD, Jackpot Du Secteur?, Sara explains the issues and motivations behind making mandatory, two insurance contracts to cover two construction sites, the TRC (All Construction Risks) and the RCD (Decennial Civil Liability) in Morocco. This year’s edition received a total of 66 entries (58 English & 6 French)

from 14 African Countries. Commenting on the entries, Michael Wilson, chief judge of the 2019 Awards noted: ‘‘Each year, the entries achieve a higher standard, and always cast an interesting view over a wealth of insurance stories. This year was no exception.’’ Speaking at the Awards Ceremony, Femi Oyetunji, group managing director/ CEO, Continental Reinsurance Plc said: ‘‘I am proud to note that the quality of entries submitted improve in every edition. This is a demonstration that our efforts to encourage insurance reporting are bearing fruit. My appreciation goes to the entire panel for sparing time to read, assess and evaluate the entries. And Congratulations to the winners and all the 2019 edition, and to all those who participated in the awards. We will be looking forward to your entries in the 2020 edition.’’

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Wednesday 03 April 2019

ManagementDigest

The Big Idea: ‘Stop thinking about consent: It isn’t possible and it isn’t right’ (Part 1) For a philosopher, Helen Nissenbaum is a surprisingly active participant in shaping how we collect, use and protect personal data. Nissenbaum, who earned her Ph.D. from Stanford, is a professor of information science at Cornell Tech, New York City, where she focuses on the intersection of politics, ethics and values in technology and digital media — the hard stuff. Her framework for understanding digital privacy has deeply influenced realworld policy. In addition to several books and countless papers, she’s also coauthored privacy plug-ins for web browsers including TrackMeNot, AdNauseum and Adnostic. Nissenbaum views these pieces of code as small efforts at rationalizing a marketplace where opaque consent agreements give consumers little bargaining power against data collectors as they extract as much information, and value from this information, as they can. Meanwhile, these practices offer an indefinite value proposition to consumers while compromising the integrity of digital media, social institutions and individual security. HBR senior editor Scott Berinato spoke with Nissenbaum about the concept of consent, a good definition of privacy and why privacy is a moral issue. The following excerpts from their conversation have been edited for clarity and length. CRUMMY CONSENT

ou often sound frustrated when you talk about the idea of consent as a privacy mechanism. Why? Oh, it’s just such a [long pause] — look, the operationalization of consent is just so, so crummy. For example, as part of GDPR, we’re now constantly seeing pop-ups that say, “Hey, we use cookies — click here.” This doesn’t help. You have no idea what you’re doing, what you’re consenting to. A meaningful choice would be, say, “I’m OK that you’re using cookies to track me” or “I don’t want to be tracked but still want to enjoy the service” or “It’s fine to use cookies for this particular transaction, but throw

properties, and a particular cancer treatment. Returning for consent may impose obstacles that are impossible to overcome. But on the other hand, what exactly does it mean to grant consent no matter what uses may come up in the future? Think about a surgeon explaining a procedure to a patient in great medical detail and then asking, “Are you OK with this?” We kid ourselves if we believe that consent is all that stands in the way of surgery and outcome. Most of us say OK not because we deeply grasp the details and ramifications but because we trust the institutions that educate and train surgeons, the integrity of the medical domain, and — at worst — the self-interest of the hospitals and surgeons wishing for positive acclaim and to avoid being sued. It’s not that we don’t know what consent means; it’s that getting to a point where we understand the true sense of what consent means is impossible. unnecessary data out and never share it with others.” But none of these choices are provided. In what sense is this a matter of choosing (versus mere picking)? The farce of consent as currently deployed is probably doing more harm as it gives the misimpression of meaningful control that we are guiltily ceding because we are too ignorant to do otherwise and are impatient for, or need, the proffered service. There is a strong sense that consent is still fundamental to respecting people’s privacy. In some cases, yes, consent is essential. But what we have today is not really consent. It still feels pretty clear-cut to me. I chose to check the box. Think of it this way. If I ask you for your ZIP code, and you agree to give it to me, what have you consented to? I’ve agreed to let you use my ZIP code for some purpose, maybe marketing. Maybe. But did you consent to share your ZIP code with me, or did you consent to targeted marketing? I can combine your ZIP code with other information I have about you to infer your name and precise address and phone number. Did you consent to that? Would you? I may be able to build a financial profile of you based on

your community. Did you consent to be part of that? I can target political ads at your neighbors based on what you tell me. Did you consent to that? The calculus is getting more complicated. Especially in translating meaningful natural language terms into representations of these terms in a machine. You get a pop-up that asks if it’s OK to collect location data. What is location data? On your device, location may be operationalized in a certain way, for example, with GPS latitude and longitude. But there are many other ways I can infer your location. Location can be obtained through an IP address. Or when you’re searching for the arrival time of a flight and you’ve been discussing this flight from Paris. You text a friend, “I’ll pick you up at Terminal A at 3.” There’s no geographic tracking here. Have you consented to turning over this location data? Are you consenting to location or GPS coordinate? You might think that consumers and machines (in this case, the device or app) mean the same thing by location — namely, GPS coordinates, which are so precise. Not the case. In a research project, I (with colleagues) discovered that people

are far less bothered about sharing latitude and longitude than about sharing location data such as “at the hospital” or “in X store” that has semantic content. And when you tell subjects what can be inferred from location data, they get even more freaked out. So just asking for consent to acquire location isn’t providing the details people need to make an informed choice. So consumers don’t know what they’re consenting to, data collectors can’t say for sure how they’ll use the information, and the two sides may not see eye to eye on what they’re actually agreeing to share. Now this all sounds intractable. Even if you tried to create totally transparent consent, you couldn’t. Well-meaning companies don’t know everything that happens with the data they collect, particularly those that have succumbed, against their better judgment, to the pressures of online tracking and behavioral targeting. They don’t know where the data is going or how it will be utilized. It’s an ever-changing landscape. On the one hand, requiring consent for every use isn’t reasonable and may prevent as many good outcomes as bad ones. Imagine if new science suggests a connection between a property, or cluster of

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I hear the passion in your voice. A: Stop thinking about consent! It isn’t possible, and it isn’t right. I respectfully but strongly disagree with my colleagues who believe that incremental improvement in consent mechanisms is the solution. My position is not that modeling “true” consent in this age of digital technologies is hard or even impossible, but that in the end, it’s simply not a measure of privacy! Take the Cambridge Analytica case. Very enlightened people complained, “Facebook shared the information without consent.” But was it really about consent? Based on all our behaviors, all the time, I promise you, if they had sought consent, they’d have gotten it. That’s not what outraged us. What outraged us was what Cambridge Analytica was doing, and has done, to democratic institutions and the fact that Facebook was so craven they didn’t care. Consent wouldn’t have mattered; it would have easily been attained. We need to focus on approaches — “postconsent” approaches — that still rely on consent but not only on consent. Once we admit that consent is an inappropriate safeguard, we can ask, “Where do we go from here? How does a society address privacy and data collection?”

Wednesday 03 April 2019

Harvard Business Review

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ManagementDigest

The Big Idea: ‘Stop thinking about consent: It isn’t possible and it isn’t right’ (Part 2) For a philosopher, Helen Nissenbaum is a surprisingly active participant in shaping how we collect, use and protect personal data. Nissenbaum, who earned her Ph.D. from Stanford, is a professor of information science at Cornell Tech, New York City, where she focuses on the intersection of politics, ethics and values in technology and digital media — the hard stuff. Her framework for understanding digital privacy has deeply influenced real-world policy. In addition to several books and countless papers, she’s also co-authored privacy plug-ins for web browsers including TrackMeNot, AdNauseum and Adnostic. Nissenbaum views these pieces of code as small efforts at rationalizing a marketplace where opaque consent agreements give consumers little bargaining power against data collectors as they extract as much information, and value from this information, as they can. Meanwhile, these practices offer an indefinite value proposition to consumers while compromising the integrity of digital media, social institutions and individual security. HBR senior editor Scott Berinato spoke with Nissenbaum about the concept of consent, a good definition of privacy and why privacy is a moral issue. The following excerpts from their conversation have been edited for clarity and length. CONTEXT AND DATAFLOWS Where do we go from here? If consent doesn’t work, what does? n my work, I support a view of privacy as a balanced value. Yes, privacy promotes the interests of data subjects — note “interests,” not only “expressed preferences.” But we must go beyond the interests of data subjects and consider the spread of interests across other affected parties, which may be in conflict. Some economists would say an interest-based analysis is enough. But I take it one step further and look at the implications beyond individuals and individual stakeholders. Following George Mason University professor Pris Regan, we cannot ignore privacy’s societal value. The right conception of privacy understands the role privacy plays in promoting societal values, such as education, justice, liberty, autonomy and so forth. And finally, privacy promotes contextual or institutional values. Individual consent may be a mechanism for expressed preferences, and may even be a mechanism for promoting interests, but it cannot ignore the critical role privacy plays in judiciously constraining dataflows to promote societal and contextual (or domain-specific) values.

You’ve used the term “dataflows” a couple of times. I

always thought of privacy as a transaction between the owner of the information and those who want access to it. Do you think of it differently? My definition of privacy is “an appropriate flow of information” (or “data,” if you prefer). If you imagine a river, you can think about ways in which we can shape its flow. We can pause, dam or divert it with different means and for different reasons. Scott, you asked for my phone number, and I gave it to you. Even in that simple transaction there was a flow of data about me to you. It was a flow that was, in this instance, constrained by consent, because you were polite enough to ask. I realize you could have gotten my number by some other means, and that may or may not have been wrong (for example, violating privacy), but the dataflow would have been different. And, I should say, I expected you would not share my phone number with others not because there’s a law preventing this or because I said so, but because there’s an implicit understanding — a norm, if you will — of confidentiality. One could venture further and speculate that, in these circumstances and in the capacities in which both of us are acting, such behaviors are important for promoting trust and expressing respect. For different dataflows there are different constraints. When a judge requests information, it’s actually a command. Or when filing a tax return, you are required by law to provide various fields of information. You don’t decide to do those transactions; they’re required. The IRS, likewise, is constrained in what it can do — as we know, it is bound to not release this information except under extremely limited conditions. Sherlock Holmes acquired data with no transaction at all. He just used inference. That’s a different flow, and one that’s becoming more important for us to evaluate as machine learning begins to infer our personal data. For the theory of contextual integrity, which I’ve just described in very general terms, information flows are primitive — they are the basic building

block for privacy. Specifically, the theory posits five parameters to describe the flow in order to properly assess whether the flows in question threaten privacy. (These parameters are sender, recipient, subject, information type and transmission principle.) Briefly, according to the theory of contextual integrity, appropriate information flows conform to legitimate informational norms. The theory presumptively favors entrenched norms — basically, reflecting what most people expect — but in light of so many changes and challenges from digital technologies, it allows for norms to change — sometimes slowly, other times rapidly — not because these changes are foisted upon us by tech companies, but because they promote interests and values. And the appropriate constraint depends on the context? Sometimes you dam it, sometimes you divert it, sometimes you let it flow freely? Yes. That’s it. Privacy requires appropriate constraints on dataflows, typically between the data subject and the party who is collecting the data. But these constraints may also apply on flows between third parties, data collectors and others, where the data subject is not directly party to them. Thus, the IRS may not share a candidate’s information with a political opponent, but a teacher is obliged to inform a parent about a 10-year-old student’s academic performance (whether or not the kid desires that). Appropriate flow is the be-all and end-all. I’ve always thought that a good definition of privacy was one that was about the right to selectively reveal oneself as one sees fit. What matters is that the individual retains the right to it. No! No! I don’t believe what’s worthy of protection is fundamentally based on only the individual’s preferences or interests. The meaning of privacy I want to defend isn’t just about what I want as a user, consumer, citizen, family member, etc. Yes, perhaps

in certain kinds of relationships, your definition works. In a friendship or with other social acquaintances, for example, one chooses what information to reveal or not. In a job interview, although the candidate may be allowed the choice to reveal certain information like religious affiliation, this may not be so for information such as past work experiences. But in my view, the basic assumption that privacy is always about the right of an individual to selectively reveal gets us off on the wrong foot. I can imagine cases where you think it’s OK for people to be profiled with or without consent and whether or not it is strictly in their interests, not because we are trading privacy for other values, but because a right to privacy is one that is already bounded, or balanced. PRIVACY AND THE GREATER GOOD Is privacy a moral issue to you? Are some data-collection practices just wrong despite their value or our consent to them? Yes, privacy is a value that carries moral weight, but allow me to split your question into two. First, “yes” to the question about whether some data-collection practices are wrong even if data subjects consent. One only needs to scan the innumerable “privacy” policies each of us encounters and to which we implicitly consent to know this. Regulators turn a blind eye because even if there are small harms and indignities for data subjects, they have been persuaded by the much larger benefits to business. That is, the benefits outweigh the costs, even if not evenly spread. But, there are deeper reasons, some extremely difficult. The analogy with environmental conservation can help. Imagine that I own forested land and a paper company offers to purchase and harvest the trees. Treating this as a business proposition I may decide it’s a good deal. But if one takes into consideration the future costs, the external costs, all those things that affect not just the two parties in question, then chopping down that forest is a problem. I don’t think even a hard-nosed economist would dismiss such considerations; presumably one can perform a rigorous economic analysis that accounts for future and external costs. With respect to privacy, tough questions to confront include what to do when individuals consent to share but in so doing they compromise others who are connected with them in certain ways, whether in social networks, common genetics or merely in shared profiles. Are there cases where you think policies around privacy should be focused on the greater good, not just protecting the individual? For sure. Some economists would look at a social media platform and say, “Yay for people who ex-

tract value where others couldn’t,” and leave it at that. But once society understands that the policies we have in place create systematic imbalances, and may even undermine critical societal institutions, the situation calls for recalibration. Presently we accept that social media platforms have the right to own an individual’s data based purely on the fact that the individual utilizes that platform, but we need to scrutinize this assumption. There is so much untapped value, as well as potential for societal harm. We need to rejigger social policy to achieve a better distribution of the benefits while minimizing harms. Do you mean so that everyone, not just those who collect data, can access the data’s value? Like sharing medical data for better public health. Yes. That’s one of my favorite examples, actually. Insurance companies receive highly detailed, highly structured data about patients. By law in the United States, they have access to and rights over this huge repository. There is a lot of value in it. Now imagine if we created forged policy that allows other parties access to that information provided they are able to extract value for society — that is, in the public interest: better pricing, better disease surveillance, greater understanding of treatment to prognosis, whatever. Such access may not benefit insurance companies, and they may simply prefer not to provide it, but it would be good for society. At the present time we allow insurance companies sole discretion over who gets access to that data and the same for several other parties who dominate the “datasphere.” The opportunity costs are staggering. I’m not saying these societal benefits are easy to unlock. These are challenges that we haven’t confronted before in precisely this form. But they’re also the hard challenges that we need to face. It’s time to stop bashing our heads against a brick wall figuring out how to perfect a consent mechanism when the productive approach is articulating appropriate constraints on dataflow that distributes costs and benefits fairly and promotes the purposes and values of social domains: health, democracy, education, commerce, friends and family, and so on.

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Wednesday 03 April 2019

Maritime e-Commerce

Nigeria loses 80% fishing capacity in two WACT acquires reach stacker, more terminal trucks at Onne Port years over security concern, pollution amaka Anagor-Ewuzie

… As Ghanaian fishing industry booms

amaka Anagor-Ewuzie

igeria has lost about 80 percent of her fishing industry capacity to neighbouring countries in the Gulf of Guinea region following the persistent threat of maritime security concern, low policing of inland waters and constant pollution of waters, maritime experts say. According to them, Nigeria’s fishing capacity has reduced as the number of fishing trawlers operating on the nation’s waters dropped from 125 trawlers to 25. Kunle Folarin, chairman of Port Consultative Council (PCC), said the development means investment and capacity in the nation’s fishing industry has also dropped. Folarin spoke during the quarterly business roundtable organised by MMS Plus Newspapers on ‘Economic Outlook: Quarterly Verdict’ with the theme “Post-Election Economy: Exploring Strategies for Growth.” Folarin, who pointed at maritime security threats as the fundamental reason fishing capacity in Nigeria dropped, said Nigeria has the longest coastline in the Gulf of Guinea that is over 9,000 nautical miles, which is potential for economic growth. He also blamed low surveillance on Nigerian waters, saying it has made foreign vessels to have a field day while fishing on Nigerian waters. “Policing Nigerian maritime environment has been an issue between Nigerian Navy

Source: Nigeria’s Maritime Industry Forecast (2019-2020)

and the Nigerian Maritime Administration and Safety Agency (NIMASA). This has become a serious policy issue that government should address,” Folarin said. He further disclosed that shipping companies have increased shipping freight to Nigeria by 30 percent due to the problem of maritime security. He listed Fairway buoy, Brass entrance, and Bonny as the places where the heaviest pirate attacks take place in Nigeria. “The plural effects of maritime security include cost addition on shippers and rise in prices of imported goods and services.” In an interview with BusinessDay, Jonathan Nicol, president of Lagos Shippers Association, said that SouthSouth region in Nigeria does a lot of fishing but the oil has become a curse to people in that region because of the

pollution on the oceans and streams. Nicol said fishes caught in that region become so contaminated that it’s now difficult to export to them international markets. He further disclosed that Niger-Delta region has a lot of lobsters that are usually rejected when exported to Europe due to the impact of pollution. “We have a government that encourages the production of about 3million barrels of crude oil per day without any concern about pollution. This cannot happen in places like America, England and even Ghana.” “Ghana is allowed to fish internationally because their waters are not polluted. Savannah used to be a popular fishing company in Nigeria but we hardly hear of them anymore due to piracy and when fishing companies catch fish in Ghanaian wa-

ters, they will be able to export them,” he said. Continuing, Nicol said: “No one is fishing on our waters anymore but you can fish in Ghana water even though, Ghanaians do not like it when foreigners try to fish in their territorial waters. Ghana fishing industry is booming. Sometimes the Chinese will bring 40 fishing vessels on their waters and most of them will come back with big catch after which they will all go back to sea.” Nicol further added that Ghana is presently supporting their seafarers with jobs created in the fishing aspect of maritime business while Nigeria on the other hand, does not have the vessel to support and preserve her seafarers. “We do not have jobs for them. So, the system is dead. I don’t know how the government will resuscitate the maritime sector.”

he West Africa Cont a i n e r Te r m i n a l (WACT), Onne Port, Rivers State, has acquired additional reach stacker and two terminal trucks to boost efficiency and cargo handling operation. This brings to six, the number of trucks acquired by WACT this year, with four previously acquired in February 2019. Speaking at the commissioning, Aamir Mirza, managing director of WACT, said four more trucks are expected to arrive the terminal in May 2019, bringing the total to 10 this year. Mirza said the company has so far invested $2.5 million in the provision of equipment and the development of facilities at the terminal, adding that the new trucks will improve the level of service and develop the capability of the terminal to handle increasing container volumes. “The trucks are purpose built for terminal operations

and can easily maneuver inside the terminal. In February, we brought four trucks and now, we have brought two more trucks and four more are on the way. We have bought a third reach stacker, which is used for handling containers and loading them from the port. “With all this equipment coming in, we are confident that our services will continue to improve. The stakeholders are already acknowledging the presence of the equipment and we do this for the customers to bring more business to Onne Port,” he said. He said, “We thank our customers for their continued support. I can assure you that there is a lot of investment that has been planned and we will continue to keep you informed as the equipment arrives.” Yohana Izam, port manager of Onne Port, who congratulated WACT for its strong commitment to efficiency and top customer service, said it will help their business and improve overall port performance.

R-L: Aamir Mirza, managing director, WACT; Atiku Buhari, deputy controller, enforcement, Port Harcourt 2 Area Command, Nigeria Customs Service, Onne, and Mike Ebeatu, chairman, Association of Nigerian Licensed Customs Agent (ANLCA), Onne Free Zone Chpater, at the commissioning of new terminal trucks and reach stacker acquired by WACT at Onne Port.

Wednesday 03 April 2019

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NPA shows renewed effort to decongest Apapa through revival of Eastern Ports With mind set on ameliorating the ordeals importers and exporters, businesses, motorists, residents, port users and other commuters pass through while commuting on daily basis to Apapa port city, the management of the Nigerian Ports Authority (NPA) recently renewed efforts towards reviving the Eastern Ports in order to divert traffic to those ports, writes AMAKA ANAGOR-EWUZIE.

fter the concession of cargo handling operations of the seaport in 2006 (13 years back) to private terminal operators, cargo throughput in the nation’s port more than doubled, and over 70 percent of this volume is today imported and exported through Apapa and Tin-Can Island Ports, both situated 10 minutes apart each other in Apapa metropolis, Lagos. Consequently, as volume grew to peak in 2014 (five years back) entrance into Apapa port city became a hard nut to crack as importers and service providers including other road users, started facing serious man-hour loss and additional costs due to delays experienced on transit over persistent traffic gridlock bedevilling the port city. Findings show that recurring gridlock in and out of Apapa poses a serious threat to smooth movement of goods, and it also increases cost of doing business as importers experience delay over late resumption and examination of cargo by officers of the Nigeria Customs Service (NCS) and delay during the movement of cleared cargo from ports to importers’ warehouse, all due to the traffic situation. Statistically, Apapa and Tin-Can Island Ports handle close to 70 percent of the entire Nigerian import cargo, due to their advantage location, high level of efficiency and availability of modern port infrastructure. Obviously, apart from the Onne Port, most of the other Eastern ports including Warri, Calabar and Rivers Ports, are nearly lying idle. This is partly because the channels into these ports need to be dredged, other facilities need to be upgraded and incentives provided to enable shippers consider these ports as choice destination for their consignments and attract more oceangoing vessels to call at their quay walls. BusinessDay search reveals that after concession of the ports, the Federal Government withdrew the

30 percent incentive granted to vessels calling at Eastern ports before concession. This is why unconfirmed source said while $4,000 and $4,500 stands for freight charges on (one by 20ft and one by 40ft containers) coming to Lagos, an additional surcharge is imposed on importers to enable vessels call Eastern Ports. This increased the freight on containers destined to the Eastern ports to over $5,000 and $5,500 for one by 20ft and one by 40ft containers. For Iheanacho Ebubeogu, general manager, Security of the NPA, government agencies operating in the nation’s seaport must review tariff and charges on ships calling ports in the Eastern part of the country with imported cargo by at least 30 percent. He said the rebate will encourage effective utilisation because if cost differential between Lagos and Eastern ports is down by 30 percent, importers will be attracted to use the ports. “When I mean review of tariff across board, NPA tariff has to come down, NIMASA should review their Coastal and Inland Shipping (Cabotage) tariff, Customs tariff should come down so that people can be motivated. I do not want us to think that addressing security alone will achieve this,” he said. To address s e cur ity challenges facing the port, Ebubeogu said, there is need for synergy between NPA and other security agencies to ensure comfort to shipping and prevent host communities from interfering with shipping through piracy and other related crimes. The National Bureau of Statistics (NBS) report stated that a total of 71,903,266 metric tonnes of cargo was recorded at all Nigerian ports in 2017 as against 70,819,092 cargo traffic in 2016. It further stated that 43,019,889 of the cargo traffic were inwards while 28,883,377 were outward. A breakdown shows that while Apapa Port recorded about 18,909,238 metric tonnes of import

Hadiza Bala-Usman

and export cargo in 2017; 15,520,925 metric tonnes were recorded in Tin-Can Island Port; 3,462,425 metric tonnes were recorded in Rivers Port; 1,947,347 metric tonnes of import cargo recorded in Onne Port; 2,159,099 metric tonnes of import and export cargo handled in Calabar Port, and 4,514,481 metric tonnes of import cargo were handled in Delta (Warri) port within the period under review. Apart from shallow channels, which make it impossible for bigger vessels to access Eastern ports, dilapidated port infrastructure is another major problem. While the Calabar Port suffers from shallow draught, the Onne Port is contending with insecurity such as pirate attacks and sea-robbery among others. Other challenges include deplorable berths, dearth of finger mooring jetties

to berth NPA crafts, lack of operational vehicles and fire hydrants at quays. Also, cargo handling equipment and the port quays areas are also insufficient to facilitate trade efficiently. Also, the recurring high siltation at the Calabar Port impedes safe navigation of vessels and the Port Harcourt Port is seriously suffering from persistent pirate attacks, which made the port unattractive for foreign shipping lines. D eter mine d to turn things around by bringing port services closer to shippers in the commercial cities in the East and some part of the North, such as Onitsha, Nnewi and Aba, among others, the NPA management recently announced that it was working with professionals in the maritime sector to make the Eastern ports attractive for business. Already in 2018, the NPA

‘‘

In the face of shallow draught; the NPA has been encouraging shipping companies to use Flat Bottom Vessels (FBV) to attract more cargoes to the port in Warri

commenced the dredging of Warri port at the cost of $44.861 million (N16.150 billion). The dredging project has since been completed and it was said that vessels have started calling at the port. Few months back, the NPA concessioned the Old Warri Port to the Ocean and Cargo Terminal Services Ltd after a competitive bid worth $100.78 million, to run the port for 25 years. Warri terminal is a multipurpose terminal which is designed to handle all kinds of cargoes. It will handle containers, general cargoes and any other kind of cargoes from all over the world including wet cargoes. It has the capacity to accommodate 12,000 Twenty-foot Equivalent Units (TEUs) of container and warehouse capacity of about 4000sqm. “BPE, NPA and other relevant government agencies should look forward to an efficient port management system when we formally take over the control of the terminal while the clients are in for an unparalleled customer-focused service delivery that will put them at the heart of our operations. We will also adhere strictly to the terms of the concession agreement too,” assured Adekunle Oyinloye, group managing director of SIFAX Group, the lead partner in the consortium setting up Ocean and Cargo Terminal Services Ltd. The concession exercise was well commended by the people of Warri as Ogiame Ikenwoli, Olu of Warri, pledged his support for the Ocean and Cargo Terminal Services Limited as the company formally takes possession. “It has always been my wish that the port is fully utilised. Warri is now ready for business and economic growth. The relative peace that the town had enjoyed in the last few years is a pointer to the readiness of all stakeholders to move Warri towards economic development and social integration. I want to urge the company to take advantage of the peaceful environment to positively affect the host

communities especially in the area of job creation,” he said. Also, in the face of shallow draught; the NPA has been encouraging shipping companies to use Flat Bottom Vessels (FBV) to attract more cargoes to the port in Warri. Last year, the NPA deployed equipment worth over $30 million in Onne Port, Rivers State. They include six pilot cutters, tug boats and 17 meter offshore patrol boats, and they were deployed to make the port attractive and stem the cycle of criminalities within and around the port. Hadiza Bala-Usman, managing director of the NPA, said the measure was taken to boost efficiency, security and make the port attractive for business as Onne Port Complex remains one of the key ports under the NPA. Val Orhobabhor, a Warribased Customs broker and former National Financial Secretary of the Association of Nigeria Licensed Customs Agents (ANLCA), said the dredging project at Warri channel had been completed. Olayiwola Shittu, former president of Association of Nigerian Licensed Customs Agents (ANLCA), who commended the NPA for repositioning the port for greater efficiency, urged other stakeholders to collaborate with the NPA in its efforts to make the port a hub of maritime activities. While Felix Abraham, a stakeholder said the deployment of the equipment to Onne has assisted the port in taking its rightful position as hub for the East and Central Africa sub-regions in oil and gas and has an advantage of accessibility and proximity to commercial centres in the East. “Activities such as pipe coating, waste treatment and boat building are provided by companies located in Onne. The port is highly industrialised with modern facilities and equipment that can stand the test of time anywhere in the world,” he added.

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Wednesday 03 April 2019

INTERVIEW

‘Renewable energy is best alternative source to tackle Nigeria’s massive energy deficit’ ZOLA Electric is strategically positioned to provide solutions to the power sector problems in Nigeria. In this interview with KELECHI EWUZIE, Bill Lenihan, Chief Executive Officer, explains the power solutions they offer customers and their future plans to ensure 24- hour reliable power supply. Excerpts: ZOLA Electric is entering into Nigeria at a time when we have issues with energy access. What solutions are you offering and what are the implications to Nigeria? think the problem in Nigeria is that there is not enough production and distribution of power for the population in the country. I think Nigeria is a perfect example of a country where there is massive energy deficit. Everybody living in Nigeria has this issue; every business has this issue. So, the question is what happens when people are having problem with energy or what happens where that exists? It means people have to come up with their own energy. It means if you are a household, you are probably buying kerosene to light up a lantern or you get solar battery to attend to your power needs, but if you are urban, you are either thinking of buying diesel generator or a lead acid inverter system. The energy crisis also forces you to change appliances constantly, or sometimes force you to do an upgrade. Beyond that, you also have these alternative sources causing health hazards and noise pollution. In a nutshell, I would say that you have a system that is unreliable, expensive and hard on your life. So, for us, that is the problem we have come to solve. At ZOLA Electric, our mission is to deliver 24-hour power to anyone, anywhere. Our product offerings such as Infinity and Flex allow us to do that and these products are tied towards meeting that need. This system has been designed to provide solar storage that looks like computer such that the computer allows you to optimise production and discharge system. With such a solution which has something similar to a computer attached to it, you can actually pay over the phone or through refinancing. Let me also add that the product is more marginal. Whenever you need more energy, the product allows you to get more energy without affecting the existing system which is different from what you have in the market today. If you want to generate more power, the solution can help you. It is smart and comes at low cost. If your energy needs are more powerful, say you run a business or factory, even though you have small power needs but rely on the grid, there is a product designed for that purpose and it is called Infinity, which better serves that need. Only recently, we announced that we would be bringing the product into the market. Now, think of Infinity like a smart

because it is huge and urban but we realised that it is a city that harbours every type of person, business. So, if you are really going to solve the energy problem holistically, Lagos is a place to start with.

Bill Lenihan

grid in the home. It is a product that is also connected to all other energy sources; it is connected to the grid, connected to e-solar. The first thing it does is that it optimises the ecosystem to deliver 24-hour power at reliable low cost. How does it work? It does it in a subtle way. What it does is that it optimises your accessories such that you get a 24-hour power in an affordable way. Also, it is modular. As soon as you need more energy, you get it and it is done in a very seamless fashion that is cost-effective. Here, the existing system stays intact; you are not changing it. It is a system that allows you to manage power usage using your phone app. It allows you to manage your energy provision in a very simple way on your phone. You can make it smarter so that it optimises better. You can pay for it using your phone and we would offer that service under a 5-year service agreement. Within the five years, if there are any issues, we would fix it for you. From Flex to Infinity in emerging markets like Nigeria, we are offering a primary power source, unlike what you have presently where everything you do to get power involves back-up which is unreliable and expensive. Our products are more reliable, cheaper and easy to use. For us, we believe that is the best way to solve the problem of energy access in Nigeria. When developing the products, you had Lagos in mind. What informed that and why are you interested in the Lagos market? Lagos, like Nigeria, is the epicenter of the energy access crisis across the globe. There is not one person,

or business in Nigeria, that is not confronted with this crisis. Unfortunately, Lagos is one large city that has suffered much energy crisis, considering its huge location of businesses and massive population. With what is on ground, the problem is only going to get worse. We talked about Nigeria for a number of years in every of our board meetings. In the last two or three years, we have been asking what do we do about Nigeria. We were never ready to provide products that we can tailor towards Nigeria until we came up with Infinity. Also, we never had a business model that was built towards Nigeria. But in the last two years, we have placed our focus on what the problem is in Nigeria as far as energy access crisis is concerned. Our focus on Lagos was not only

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Lagos, like Nigeria, is the epicenter of the energy access crisis across the globe

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How do you intend to deploy the solution especially to those who are not within Lagos? What is the capacity and cost of these solutions in terms of megawatt? I think you are right by saying that Lagos still has better access compared with states in Nigeria. But let me say that because you are connected to the grid does not mean you have reliable energy source. We view Lagos as a market opportunity for us because everybody there has some form of energy challenge. So, for us, how we launch in other parts of Africa where we have presence is the same way in which we would launch across Nigeria. We are kick-starting in Lagos and thereafter we would broaden our presence in Nigeria. We would launch in Lagos and have some centres that would allow us to sell to you whatever your need is, wherever you are. Nigeria is a massive market. Lagos is a massive market. We start from regions and grow from there. Take for instance, in Tanzania, we started from the capital city and moved to the regions and that is the strategy we would be adopting in Nigeria. Let me correct the notion that that there are similar solutions being offered in Nigeria. I don’t think there is any one that offers our kind of solution. Currently, what we have in Nigeria is a situation whereby some companies provide solar panel with battery but I don’t think there is anyone that offers our solution. In this case, you can buy solar or battery but you cannot buy a solution. In the solution we are providing, you are buying a primary energy source that can manage your ecosystem as far as energy is concerned. It is marginal and can grow with you. It is smart, connected and reliable. This is what differentiates these products in Nigeria’s marketplace today. With respect to the question on capacity, I think there is a reason why it is called infinity. It is modular and scalable. You can expand it to whatever you want to. Are you looking at working with the Federal Government to assist individuals generate electricity and take it back to the grid and consequently get compensated for it? We have 200, 000 solar energy devices across Africa. We will soon have solar energy devices that are smart and connected. There is an opportunity

for us to work together and we would both benefit. There is an opportunity to provide great services to the grid. We can provide local production, local storage and local control. We will provide such services and the consumers get compensated. Once there is an ecosystem to manage such transactions, we are ready. Yes, we are absolutely open to such an opportunity that rewards consumers while also improving distribution of power in the country Considering the level of income disparities in Nigeria in relation to the price, do you think the product is pocket-friendly and affordable? I think the answer is yes. I do believe the product is pocket- friendly and affordable. For us, we develop a product line that meets energy use need with an affordable price point, although it may not be easy to find an entry point in terms of pricing in this energy ladder. It is not a one-size-fits all kind of pricing for the solutions. Everything is basically dependent on what you need. We have developed it in such a way that consumers can use their savings to purchase the solution. It is not something that is far beyond reach for electricity consumers. So, as we speak, we already have some local partners such as banks who have shown interest in making the payment a lot easier for those who want to buy the solution. What is the volume of investment we are looking at with the introduction of these solutions into Nigeria or how much is ZOLA Electric spending to facilitate this solution in Nigeria? Having established a strong presence in Africa, what I can say is that we are investing hugely in this market because we have we have pretty strong investors involved in this. We have Helios capital, which is arguably the largest private equity firm in Africa. Our second-largest shareholder is Tesla. We also have GDO, the largest electricity generator in the world- a French utility. We have Total- one of the major energy companies in the world. In a nutshell, we have strong investors with deep pockets but they are also smarter. They are interested in things that will deliver right returns, grow and be successful. My belief is that if we can execute and prove that we have the best solution, they would be more interested in putting additional capital. Conservatively, I can say that we are looking at investing billions of dollars in Nigeria. We have a solution that works and we believe we would improve the energy market in Nigeria.

Wednesday 03 April 2019

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BUSINESS DAY

‘CMSL moves 10,838 TEUs in barges since inception in one year’ Pg 31

N9.6m Chinese Changan CS75 stirs SUV segment MIKE OCHONMA mikeochonma@gmail.com

…As Baxolile Msomi becomes Communications and PR Manager

hangan automakers, last week unveiled one of its most celebrated sport utility vehicles, the CS75, and thereby extending its growing accomplishment of the brand that formerly entered the local market three years ago. Riding on the heels of the CS35, the Changan brand under the Stallion automobile franchise-ship may have finally come to stay, having steadily been appealing to local sports utility vehicles enthusiasts. Also adding that the vehicle is assembled in Nigeria by Nigerians, Sengar said the CS75 is competitively priced when compared to segment rivals including B-segment SUVs like Hyundai Tucson, GS4, Nissan Qashqai and others. Nicely and aggressively designed, the Changan CS75 crossover demonstrates the aura of an imposing SUV with the trappings of opulence, set apart by ample room, comfort, smooth ride, useful kits and striking ambience. Manufactured by Changan Automobile, one of China’s leading automobile manufacturers, with extensive investment in advanced research and innovative technologies, it brings to bare the company’s 157year experience in manufacturing. The urban-styled and functionally imbued CS75, no doubt, stands head-to-shoulder with other brands, wielding a characteristically frontend and chunky single-slat grille that assertively profiles the company’s name to grab the attention of vehicle enthusiasts. The rear end of this SUV similarly gets a distinguishing tailgate spoiler and a diffuser that exhibits a sporty character; incorporating Light Emitting Diodes (LED) taillights with brushed aluminum trim on the front and rear bumpers as well as chromeplated elements and electroplated exterior trim pieces. There is though a hint of the

JLR SA/SSA announces new public relations team

Range Rover, its Chinese makers are quick to say: “It is our aspiration to become a global top-10 manufacturer within five years,” and they don’t seem to be leaving any stone unturned to accomplish this objective. Vijay Sengar, head of sales and marketing said at a media preview of the vehicle in Lagos that, the company is delighted that the brand has validated the quality, aesthetics and sturdiness of Changan line of automobiles, barely three years after its was introduction into the country. The CS75 also ensures driving comfort with a relaxing driver’s space elevated above the world outside with a 2,700mm wheel-base, that guarantees infinite view of the horizon. Cooling the large five-seat cabin is done within seconds as a result of the intuitively styled airconditional system. Other eye-catching features include blind-spot monitoring, keyless entry, push button start, trunk soft curtain, intelligent visible parking assist system, comprehensive six-

airbag and very light multifunctional electric power steering, which makes getting in and out of tight spots an easy task. Couple with these attractions are electronic stability control, front fog lamps, shark-fin antenna, panoramic electronic sunroof, leather seats, electronic parking brake (with auto-hold function) and rear parking sensors with a pretty sharp reversing camera. Others are remote control system, built-in hard disk music player, iPod music play, ISOFIX, six-speaker audio system (with USB and AUX), rear a/c vent, in-call Bluetooth, 225 / 65 / R17 wheel and tyre assembly and an anti-theft alarm system. In the area of safety, the body is made of high strength steel with four-wheel disc brake system equipped with Bosch ninth ABS and BAS as well as energy absorbing steering column. These are in addition to cruise control, six parking sensor and tyre pressure monitoring system. Currently rated one of the safest

SUVs in China, the automaker said the vehicle recently scored 59 points out of 62 available in the ChineseNew Car Assessment Programme (C-NCAP.) C-NCAP is a strict and comprehensive evaluation aimed at reducing harm and loss in traffic accidents. Quite unlike Chinese engineered automobiles, the CS75 demonstrates unprecedented finesse in its well-built interior, using acoustics and padded materials on the door cards to numb road noise, while also ensuring the fit and finish is of a high standard. This is in addition to the all wrapped in leather seats with nice stiches, a multifunctional leather steering wheel (that fits perfectly in the hand), which both add visual flair that makes the car very attractive and comfortable. Test drivers say the CS75 has lots of premium sensation comparable to racing cars especially when viewed against its sturdy suspension system and nicely seamed seats, using fine visible threads.

aguar Land Rover (JLR) South Africa and sub-Sahara Africa has announced new additions to its PR team with Baxolile Msomi becoming the new Communications and PR Manager, and Tina PienaarSmit announced as the new PR and Sponsorship Specialist. The changes will be effective from 1 April. Tina Pienaar-Smit has been a proud JLR employee as Sponsorship Manager for nearly 11 years, and in that time, has been instrumental in leading numerous projects including sponsorships for the Jaguar Simola Hillclimb, Springbok and Stormers Rugby, two Rugby World Cup campaigns in 2011 and 2015, the Absa Cape Epic and the award-winning Two Icons Tour. Tina will take over the day-to-day public relations operations from Izak Louw, who will return to his other passion, Product and Pricing after making a tremendous contribution to the PR team in the last year. Izak has put his extensive product knowledge to use with swift responses to technical queries, regular media liaisons and successful media launches of the Jaguar E-PACE and I-PACE. Izak has been a key component of the communications team as JLR embarks on an exciting new era of electrification, with his efforts helping to pave the way for the roll out of current and future technologies for both brands. Tina is looking forward to continuing the relationships Izak has built. Any regular media queries, proposals or big ideas previously fielded by Izak can now be directed toward Tina. Baxolile Msomi has worked in the motor industry for six years and has been with JLR as Communications Manager since 2015. Baxolile will now be responsible for the strategic direction of brand communication as well as public relations for JLR South Africa and sub-Sahara Africa, reporting to Lisa Mallett, the marketing director.

Uber, AXA Mansard, security experts brainstorm …To share safety tips for driver-partners

river-partners registered on the Uber app, recently had the opportunity of engaging with law enforcement officials, health and safety organizations, and members of the local Uber team at a workshop geared towards improving safety and security on trips. The sessions highlighted different topics like where to obtain original vehicle registration details, how to minimize risks and prevent potential accidents while driving, improving wellbeing and stress management for driver-partners, and a thorough run-through of Uber’s in-app safety features. According to Lola Kassim, general manager, West Africa, Uber; “At Uber, we are committed to safety and are always working to build a better experience for driver-partners. It made sense for us to collaborate with relevant safety and security experts, and organizations like AXA Mansard to organize a workshop that provides

L-R: Aboyeji Olabode; Team Lead, Liability & Casualty AXA Mansard, Lola Kassim; General Manager West Africa, Uber, Mercy Akande; Female Driver-Partner on Uber, and O’Yoma Ukueku; Greenlight Operations Manager West Africa, Uber at the Safety Workshop held at the Uber Greenlight Hub in Lagos.

driver-partners with relevant and useful safety tips’’. The driver safety tips are designed to help driver-partners feel empowered to be safe and help them make safe decisions before, during, and after every ride.”

Speaking on the safety workshop, O’Yoma Ukueku; Greenlight Operations Manager for West Africa said: “At Uber, we’re constantly working to help make cities safer, and that includes listening to those who protect and serve our communities every day’’.

The workshop was designed to give driver-partners access to knowledge and information facilitated by subject matter experts on a wide variety of subjects that are critical to safety while on trips. As safety is a critical pillar to the management and staff at Uber, the operators are striving to ensure that driver-partners have access to information that improves the quality and safety of rides. The safety workshop is part of a week-long Safety-Week initiative organized by Uber as a way of amplifying and re-iterating its ‘Safety Never Stops’ narrative of making rides safer and more secure for driver-partners and riders. Sessions at the safety workshop were facilitated by safety and security experts and a specialized local team from AXA Mansard. Uber recently announced its new Safety Toolkit which began a phased roll out to over 13400 active riders and over 9,000 active drivers across Nigeria. The toolkit will introduce new

innovative features such as a driver in-app emergency button and speed alerts, which aim to raise the bar on safety, and increase transparency, accountability and peace of mind for all users. Uber’s mission is to help people get a ride at the push of a button - everywhere and for everyone. It started in 2009 to solve a simple problem - how do you get a ride at the touch of a button? Eight years and over five billion trips later, we’ve started tackling an even greater challenge: reducing congestion and pollution in our cities by getting more people into fewer cars. Uber is available in thirteen cities in Sub-Saharan Africa of Cape Town, Durban, Joburg, Pretoria and Port Elizabeth all in South Africa. Other cities where Uber has presence are Nairobi, Mombasa, Lagos, Abuja, Kampala, Accra, Kumasi and Dar es Salaam. Over all, its network is available in over 600 cities in over 75 countries spanning 6 continents.

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Inside-story of Toyota and logo design cues

fuel-efficient trucks, cars, and SUVs. It is also the second most profitable company in Japan, coming in just behind fellow Japanese car manufacturer Mitsubishi. What role, though, did Toyota’s logo play in the company’s success, and how did it come about? The History of Logo The first logo for Toyota came about as the result of a public competition. It was also during this competition that the name “Toyota” was suggested to replace the name “Toyoda”. The company went with the results of competition, changing their name to Toyota and choosing a blue and red, diamond shaped emblem as

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According to Toyota, designers spent five years developing the new logo in order to ensure that the design would be wellaccepted in all of the company’s many international markets the company’s very first logo. This logo served the company until 1989, when Toyota unveiled a new logo in order to commemorate the 50th anniversary of the company. This new logo featured three separate ovals combined together and is the logo still used by the company to this day. According to Toyota, designers spent five years developing the new logo in order to ensure that the design would be well-accepted in all of the company’s many international markets. Toyota debuted the new logo on their luxury vehicle, the Celsior, in October of 1989. Shortly thereafter, the new logo was found on every Toyota vehicle in production. Design Elements of Logo The Toyota logo may appear relatively simplistic at first glance, however, it contains several interesting and unique design elements. To see the meaning behind the Toyota logo, one need look no further than Toyota’s own explanation:

The two perpendicular ovals inside the larger oval represent the heart of the customer and the heart of the company. They are overlapped to represent a mutually beneficial relationship and trust between each other. The overlapping of the two perpendicular ovals inside the outer oval symbolize “T” for Toyota, as well as a steering wheel, representing the vehicle itself. The outer oval symbolizes the world embracing Toyota. Each oval is contoured with different stroke thicknesses, similar to the “brush” art known in Japanese culture.” In addition to this, Toyota set out to design a logo that would be immediately recognizable and announce the presence of a Toyota vehicle on the road. To do this, Toyota designed the logo to look the same when viewed normally and when viewed inversed (as it would be when viewed through a rear-view mirror). This is an especially impressive feat when considering all the other messages the logo manages to incorporate. Even today, the Toyota logo stands unparalleled as one of the most complexly designed logos in the automotive industry, and Toyota is a great example of a company that has placed an immense amount of importance on their logo design. Popularity of Logo D e s p i t e a l l i t s s u c c e s s e s, throughout the histor y of the Toyota logo the emblem has never generated quite the same level of popularity as the Ford and Chevrolet logos, though perhaps it is a bit unfair to compare the popularity of the Toyota logo to two competitors as steeped in tradition and national appeal as Ford and Chevy. Though there might not be nearly as many shirts and hats displaying the Toyota logo, the design has still accomplished all of its intended purposes. Toyota managed to design a simple logo with a complex message. They also managed to design a logo that would be recognizable and appealing in all of the many countries they sell vehicles in. Lastly, one great testament to the popularity of the Toyota logo and importance the company places on it is the entire pages dedicated to the logo’s design and history on Toyota’s website. A visit to these pages leaves no doubt about the pride Toyota has for their logo and is another great example of the value a good logo design can have.

Wednesday 03 April 2019

Autoparts makers to network at BKG motorfair exhibition

MIKE OCHONMA mikeochonma@gmail.com any automobile f re a k s ov e r t h e years, both from within Nigeria and outside the country have a deep affection and feeling of nostalgia for the Toyota brand. In Nigeria today, a casual census on the road today shows that for every 10 vehicles that passes on traffic or parked in a lot, at least not less than six of them bear the Toyota insignia. One of the top automotive manufacturers in the world, Toyota has been selling a wide range of vehicles since the company was founded in 1939. The Japanese car manufacturer sold over 8.5 million vehicles in 2016 and netted over $2.3 billion. This piece of article will be looking at the history of Toyota, the design elements of their famous logo, and the role the logo has played in the company’s astounding success. Origins of Toyota. For all their success in the automobile industry, Toyota didn’t start out selling vehicles. At least, the company that Toyota was a subsidiary of did not. Instead, the company then known as Toyoda Automatic Loom Works started out selling textiles and automatic looms. In the early 1930s, however, the Japanese government began urging Toyoda to expand into automobile production in order to supply the nation’s ongoing war with China. Kiichiro Toyoda, the son of the company’s founder, traveled to Europe to investigate the intricacies of automobile production, and in 1934 the company produced its first Type A engine. One year later, Toyoda was manufacturing its first vehicle, the Model AA passenger car. Shortly thereafter, the automobile manufacturing wing of Toyoda Automatic Loom Works became its own company, which was named Toyota. The explanation behind the change in just a single letter was the fact that, in the Japanese spelling of the word, the new name consisted of eight strokes- a lucky number in Eastern culture. During the Second World War, Toyota dedicated all of its efforts to manufacturing simple trucks to be used by the Japanese military. Allied forces recognized the contribution Toyota was making to the Japanese war effort and scheduled a bombing raid on their factories that would have likely crippled the young company. However, in a stroke of good fortune for Toyota, the war ended before the raid could be carried out. With the war over, though, Toyota still faced many challenges. The Japanese economy was crippled, and Toyota spent several years on the brink of bankruptcy. In spite of this, the company held on and slowly began to expand. By the end of the 1960s, Toyota had exported its one-millionth automobile. Today, Toyota has carved out a large share of the global automobile market by selling affordable,

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feanyi Agwu, managing director of BKG Exhibitions and chairman, organising committee of the 2019 Lagos Motorfair has expressed hope that the autoparts expo segment of this year’s event will serve as a platform for both the foreign auto spare parts makers and the its Nigeria autoparts distributors. While reviewing the response of participants in the autoparts expo since it started, Agwu said that, the segment is doing well. According to him, ‘’We are looking at involving a lot countries in West and Central Africa in the edition. This we have kick-started by extending invites to players in the autoparts business in those countries to visit the fair’’. The plan according to him is to use the Nigerian autoparts markets as the hub of the sectors business in Africa, with the intention of making players from the other countries to be buying from the home markets. He expressed hope that in no distant future, it will become a big event spreading to other countries

in the continent. Nigeria has the resources and capacity to play such a role and it will be a very big disservice to the country and its people if another African country does this ahead of Nigeria. The BKG boss disclosed that, in conjunction with some foreign partners, the organisers have reached out to many of such companies and happily the response has been tremendous as a lot of them are expected. ‘’Our intention in bringing them is to enable Nigerians and neighbouring West Africans engaged in auto spare business work out rewarding and lasting business relationships with the main companies engaged in the manufacture of auto spare parts’’. Agwu said. From May 7-12, 2019, at the Federal Palace Hotel, Victoria Island, Lagos, venue of the event; each of those days that the fair will last is loaded with activities and events that will make this edition remarkably rewarding to the exhibitors, visitors and other stakeholders, he concluded.

Fuel saving measures in real-world driving conditions (1)

ith the rate of traffic on most Nigerian roads, it is increasingly very necessary for drivers to moderate their driving habits if they are to get the best from their vehicle’s rate of fuel consumption. It is against this view that a compilation of fuel-saving tips that collected over the past few years, from the insane to the impractical to the ones so obvious has become very necessary. And here’s our pick of the 10 most practical fuel-saving tips, things you can do in your daily driving - without having to re-invent your entire lifestyle and that, taken together, can significantly reduce your monthly fuel bill.

All engines have a sweet spot, where they run most efficiently - usually just below the torque peak, which you can look up in the owner’s manual. Accelerate gently until you reach that sweet spot, and then change gears. If your car has a gear-change indicator, that’s exactly what it will tell you to do On a car with an automatic gearbox, you may have to learn some fancy right-foot moves to keep the revs in the most efficient part of their range, but if your car has drive modes, that’s what the ‘economy’ setting is programmed to do. Use it.

Keep it smooth Fast pull-offs from standstill will dramatically increase your consumption while a light right foot is your budget’s best friend. Keep your speed as steady as possible while cruising and lift your foot early for stops rather than braking as late as possible.

Not too fast, not too slow Air resistance rises as the square of velocity (that’s a law of nature), so at 110km/h your car is using 15 percent more fuel than it would at 100km/h and 25 percent more than it would at 90km/h - bearing in mind that driving at 90km/h in the fast lane of a 120km/h highway will make you a danger both to yourself and other motorists. Lower speed isn’t always on your side, as consumption dramatically increases below 50km/h.

Find your car’s sweet spot Conventional thinking says to change up as quickly as possible when accelerating, to keep the engine revs down - but this can cause the engine to labour, sending expensive unburnt fuel down the exhaust pipe.

Pace yourself in traffic Rather than using the brakes to burn momentum and then burning fuel to get it back, use that momentum to your advantage. Easing off the throttle when there’s a red light ahead means it’s more likely to turn green before you get there.

Wednesday 03 April 2019

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BUSINESS DAY

Local and global rail news as it breaks

‘CRSL moves 10,838 TEUs in barges since inception in one year’ World rail freight news round-up For every business enterprise, there are always risks and challenges from the beginning. Some will succeed, some will collapse like pack of cards, while others will continue to navigate through until it achieves the desired objective, the later is the story of the Edeme Kelikume’s led-Connect Rail Services Limited, (CRSL). In this interview with MIKE OCHONMA, BusinessDay’s Transport Editor, ODIETTE EFE, Director, Strategic Planning and Growth Initiatives at CRSL said that, though there have been many challenges since one year ago when CRSL kicked off movement of containers in barges exactly one year ago, there are still opportunities for growth and expansion.

ow has it been for Connect Rail Services moving containers to and from the Apapa port complex to the Ikorodu Lighter terminal in the past one year. Like every other business, it has been a steady increase in the learning curve, quite difficult in the beginning, but CRSL has grown in experience and expertise in the industry. CRSL is now a leading service provider in moving containers in and out of Apapa by barge. What kind of relationship exists between the NPA management, the Customs and CRSL A cordial one, the Nigerian Ports Authority (NPA) and the Nigerian Customs Service ( NCS) have been very supportive to CRSL Barge operations right from the inception. The NPA has especially been proactive in supporting the development of the nascent barging services industry with a view to accelerating its growth in driving exports logistics and port decongestion. How did CRSL source the barges and are the number of barges enough CRSL currently runs a “lease to buy” barge asset partnership Model with a number of private operators in order to meet up with its demand. As demand grows, we intend to add more barges to our fleet. Highlight the numerous challenges confronting your operations We have major challenges which includes that, the limited number of windows available to barge operators by the terminals is currently a constraint on our operations. We need the Port Terminals to create dedicated export windows to receive export laden barges. The dedicated windows will catalyze the increaseduse of the terminal for exports and further drive the growth of the non-oil sector of the Nigerian economy. We are also appealing to the NPA to engages with the Port terminals to create more export windows to support the

ithuanian Railways a n d L I N E K A have signed a letter of intent for the joint development of intermodal projects.Advanced World Transport has signed a contract for three Siemens Vectron multisystem locomotives.Rail Cargo Group CEO Clemens Först ceremonially attached the first SmartCargo telematics device to a Transant wagon. On March 26 Norfolk Southern held a groundbreaking ceremony for new headquarters at Atlanta in Georgia. Davies Turner says it has seen a 195% increase in bookings for its Express China Rail weekly lessthan-container-load service. BLS Cargo has called for better co-ordination of engineering works on the trans-Alpine corridors. BLS Cargo has called for better co-ordination of engineering works on the trans-Alpine corridors to avoid disruption to freight traffic. It said this should include the avoidance of major

year, with a second batch of 132 next year. PKP Cargo company Advanced World Transport announced on March 27 that it had signed a contract for three Siemens Vectron multi-system locomotives, which will be equipped for use in the Czech Republic, Slovakia, Poland, Austria, Germany, Hungary, Slovenia and Croatia. Rail Cargo Group CEO Clemens Först ceremonially attached the first SmartCargo telematics device to a Transant wagon on March 15. ‘For our customers, this means comprehensive information throughout the entire transport process’, he said. Rail Cargo Group and its technology partner A1 plan to fit 13 700 wagons with the position, motion and shock detection sensors by the end of 2020. Bratislava-based inland shipping, port and logistics compnay Slovenská Plavba a Prístavy has taken delivery of the first of five Siemens Vectron multi-voltage electric locos it has ordered.

closures before the December 2020 completion of work to clear the Gotthard corridor for 4 m high traffic, so that it can be used as a diversionary route. Lithuanian Railways and the LINEKA association of 60 freight forwarders have signed a letter of intent for the joint development of intermodal projects in the Baltic States and Poland and to promote rail freight links to central Europe. On March 26 Norfolk Southern held a groundbreaking ceremony for the building at Atlanta in Georgia which will become its new headquarters following the planned relocation from Norfolk, Virginia in Q3 2021. Atlanta-based Cousins Properties will oversee construction of the two office towers. CRRC Yangtze has signed a contract to supply 264 coal hopper wagons to Aurizon. An initial batch of 132 of the 1 067 mm gauge wagons is to be delivered to Australia by the end of the

SPaP is the official keeper, but it is not a licenced operator and so the locos will be used by other members of its parent group Budamar Logistics. On March 26 PKP Cargo signed a 368m zloty contract co-financed by the EU for Tatravagónka to supply 936 container wagons in 2019-22. Lineas Intermodal is now operating three trains per week carrying containers from Vercruyssen‘s 3MCT terminal at Westdorpe in the Netherlands for export via the ports of Antwerpen and Zeebrugge in Belgium. ‘The delivery of containers by inland shipping is at times highly susceptible to congestion on the waterfront of the large terminals at the Deurganck dock’, said Dirk Vercruyssen of Vlaeynatie. ‘In addition, we try to avoid road transport as much as possible due to traffic congestion. An efficient rail connection proved the better solution.’

Odiette Efe

non-oil sector especially as the Federal Government’s reforms and investment in Agriculture, Manufacturing and Agro-processing industries continue to yield results. The return of import container empties is also a major challenge hampering our ability to serve importers seamlessly. The Port terminals currently do not provide enough windows for the return of empty containers leading to the clients incurring huge demurrage charges. There is also no equity and transparency in the process of allocating slots and this has to be addressed. An open and transparent system that shows window allocation to all port users and allocate based on TEU we believe will better serve all users.

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As at the end of February 2019, CRSL has moved a total of 10,838 TEUs since inception. , 4,181 TEUs for imports and 6,657 TEUs for exports

Is CRSL facilities overstretched by the scarcity of barges. And how are these problems being addressed No. I don’t think that Connect Rail Services facilities are over stretched. Are there opportunities for new players to join the business Yes, there is. We are very open to partnering with interested investors and strategic players looking to expand into this space. Opportunities exist in equipment leasing, terminal development and operations, warehousing, on-demand logistics technology venture development, cold-chain logistics etc. How many containers have CRSL moved since inception? What is the volume of containers being moved out to the Apapa port and the number it is bringing into the port for export. As at the end of February 2019, CRSL has moved a total of 10,838 TEUs since inception. , 4,181 TEUs for imports and 6,657 TEUs for exports. Twenty-foot equivalent unit (often TEU) is an inexact unit of cargo capacity often used to describe the capacity of container ships and container.

32 BUSINESS DAY Financial Inclusion www.businessday.ng

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Wednesday 03 April 2019

& INNOVATION

‘PSBs will complement banks in driving financial inclusion’ Uche Uzoebo is the Head, Agency & Merchant Services, and Financial Inclusion at Diamond Bank. In this interview with BusinessDay’s Endurance Okafor, she shares insight on how the payment service banks are going help achieve the Central Bank of Nigeria’s 80% inclusion target, the challenges and projections for the country’s inclusion rate. Excerpts: Tell us about yourself and what you have done in the financial inclusion space. y name is Uche; a mother, a wife who made a switch from studying Microbiology in school to working in the financial sector. My career in the banking industry started over 15 years ago, where I have been a problem solver in the financial services industry spanning across sales and marketing, personal banking, commercial banking, Corporate banking and then to Product Management, payments and collections, acquiring business and Ebanking. I currently focus on developing structures, strategic partnerships and providing solutions that grant, improve/expand access to financial services to micro, small and medium enterprises and the underbanked which has brought millions of previously excluded individuals into the financial system.

Nigeria’s bank-le d financial inclusion model seems not to be driving the country’s inclusion rate as much as expected. What do you think has been the problem? One key issue would be banks having the passion and vision to drive financial inclusion aside the efforts of the central bank. Initially banks were only focusing

on core banking and they were not addressing the grassroots because when you talk about financial inclusion, you are referring to the set of people who do not have any form of financial facilities around them- the unbanked, the un-served and underserved. The objective of having the financial inclusion strategy is to get these underserved and excluded into the financial cycle. But the strategy for banks was a bit different initially. However in 2012, Diamond bank started driving financial inclusion through its retail banking, which was not just because of the regulatory but because we saw that the huge potential yet to be tapped in that space. Now that CBN has decided to give PSB licence to Telcos and other businesses to operate in the financial space, how do you see this driving financial inclusion? For me it is a good idea because we really need to walk the talk. With that the PSBs will complement what the banks are doing in driving inclusion rate because the truth is that the banks cannot drive financial inclusion alone so with the Telcos coming on board, we will be able to reach even the last mile and offer these financial services to them. So, I think it is a great idea. Should the banks be scared? No because the Telcos are complimenting

Uche Uzoebo

the banks. Like in Kenya, the mobile money company, Safaricom is bigger than some banks in the country; will this be the same in Nigeria? Well, not necessarily, as I see the telcos complementing the banks in driving Financial Inclusion. What are the likely problems PSB may have in Nigeria? Limited access to mobile technology- Accessibility to internet and network technology in rural areas is limited. lliteracy- Alarge population of rural dwellers are illiterate and may not want to take advantage of the PSB scheme.

High capital requirement – The high capital income for PSB is N5 billion to establish and operate a PSB, this appears prohibitive as there are other cheaper financial inclusion initiatives already on ground for financial inclusion that investors find more attractive. You said PSBs will complement the banks, in what specific areas do you see them collaborating? For the collaboration, let me make reference to Diamond Bank partnership with MTN. We collaborated with them to roll out Diamond Y’hello account, which is a real bank account with about 11.2million customers. So we were able to on-board people in the remote areas, the un-

derserved, and people that ordinarily do not have bank accounts were able to own one without having to visit a physical bank. This was made possible with just their MTN line and dialling *710# they can open a real bank account. That was how we were able to achieve it in some communities, local government areas and in the rural areas, because those locations are where you have a huge percentage of the excluded. So, this collaboration gave us mileage in the financial inclusion space to be able to give life to those that ordinarily did not know that they will be able to achieve much. We were able to include them, as they were able to save, buy airtime and carry out transfers. Financial inclusion analysts have said that Nigeria is peculiar and as such needs a special model. They also claim that the Telco-led financial inclusion model may not be the best way for the country. What is your take on this? Bangladesh has a bank-led model of financial inclusion, Kenya has Telco-led; Brazil has a combination of both bank and telco. I see Nigeria having a combination of the banks and telcos. The truth is that the Nigerian government and the government of other countries are not the same, so we don’t also have the same basis for judgment. Most times when we

want to talk about financial inclusion, we would want to compare Kenya and Nigeria. I wouldn’t make such a comparison because there are lots of strategies in Kenya that they have gotten right that we are yet to achieve; when we talk about security in Nigeria it is not the same in Kenya. When you go to that country you will see people in the remote areas carrying out transactions through mobile money and several agents are championing those transactions, but in Nigeria, there are some locations you cannot get to because of security challenges. But can we get to the level where Kenya is? Yes. Will it just be only Telco-led? Maybe not; it is going to be a combination of both banks and Telcos. Do you see the 80% inclusion target achievable by 2020? It is possible because, with the introduction of Shared Agent Network Expansion Facilities (SANEF) which is working with the super agents to build the agent network to 500,000 by the year 2020, I believe we will achieve the target and have more people financially included, and these 500,000 agents will be responsible for including and rendering services to the grass roots. The good thing is that most bank CEOs are in support of SANEF initiative and they would want it to succeed.

MTN highlight company’s efforts to deepen digital and financial inclusion

s part of efforts to enhance digital inclusion, in 2018, the company started executing its dual-data strategy aimed at enhancing digital inclusion. This was disclosed in the integrated and sustainability report released recently by MTN Group dated for the period ending 31 December 2018. The report highlights how the group creates value and cited the six distinct growth opportunities the company is pursuing across the voice, data, digital, fintech, enterprise and whole-

sale markets. The integrated report is MTN’s primary communication to stakeholders and aims to enable them to make an informed assessment of MTN’s performance and prospects. “As MTN, we are focused on solutions to enhance digital and financial inclusion and transform societies. We firmly believe that technology and connectivity can provide transformative solutions to some of the world’s complex challenges,” Rob Shuter, MTN’s group president and CEO said.

He added that, “In 2018 we unpacked what is really needed to connect people

digitally and partnered with stakeholders who share our belief, that everyone

deserves the benefits of a modern connected life.” Other key highlights in the publication include the expansion of active data users by 10 million to 79 million. The company pointed the growth in MTN Mobile Money users to 27 million, with services revenues of approximately R8bn as part of its efforts to drive financial inclusion. In 2019, the company will continue implementing its CHASE framework to accelerate internet adoption by addressing issues related to quality coverage, handset availability,

affordability, services and education to bring new opportunities to people previously excluded from the digital world. MTN will also extend initiatives to make smartphones more accessible and affordable, mainly through the launch of its low-cost 3G smart-feature phone, priced at approximately US$25. MTN also plans to launch Mobile Money in South Africa, Nigeria, Afghanistan and Sudan and launch an advanced instant messaging and communications platform.

Wednesday 03 April 2019

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PRIVATEEQUITY & FUNDRAISING

Venture Capital’s spend on African tech start-ups more than doubled to $1.163Bn in 2018 …as Kenya, Nigeria lead peers MICHAEL ANI

here appears to be an increased attractiveness of African entrepreneurs investing in start-ups and their ability to transform the continent into a global powerhouse. A total of $1.163 billion in Venture Capital funding was raised by 146 African tech start-up companies through 164 rounds in 2018, with many of these deals in Kenya and Nigeria, compared to other African peer countries, according to a report by Partech Africa—a French venture capital (VC) firm. This figure represents a 108 per cent increase from the $560million start-up deals tracked by the firm a year before. The report — which was published by Partech Africa Fund general partners Cyril Collon and Tidjane Dème — covers equity deals and funding rounds valued at between $200 000 and $100 million. Also, the data only captured deals that are were sealed in the Tech & Digital spaces that excluded any form of grants, awards, prizes, debt, loans, Initial Coin Offering (ICO), nonequity assistance and Mergers & Acquisition “It’s quite simply astonishing. When we started our journey to create the Partech Africa Fund in 2015, we had anticipated the $1 billion mark to be broken by 2020. We are now already 2 years ahead of our projections,” says Collon. In terms of a country-specific destination for these deals, Kenya took the lead in start-ups’ funding, with a total number of 44 deals that attracted $348million in value. Nigeria, Africa’s biggest oil producer followed closely, attracting

about $306 million in funding with 26 deals while South Africa slowed down compared to Kenya and Nigeria, with $250million in funding over 37 deals. The three countries received 78 per cent of the total funding with Egypt close behind, an exact repeat of 2017. “In the rest of Africa, there were 19 countries with at least one equity tech deal above US$ 200K this year, compared to 13 countries in 2017. So, it is clear that the rest of the continent is actually growing as fast as the top 3 markets and now attracts decent attention. It’s important to note though that Egypt takes the lead here with 19 deals, nearly catching up with South Africa inactivity,” Collon said. Regarding French-speaking Africa, Senegal confirms itself as the leading hub with $22 million

raised in 4 deals. Tanzania received $75 million in start-ups’ funding while Rwandan start-ups secured $19 million. Only $2 million was invested in the startups’ sector in Uganda. In a statement on its website, Partech said the report tracks both disclosed and undisclosed equity deals involving African tech and digital start-ups. The report’s authors note that an African start-up is defined as a company with its “primary market being in Africa itself” and is “not based on the headquarters’ location or the country of incorporation.” The authors however, make no reference to the company’s age, in defining what constitutes tech start-ups or not. In explaining how they gathered the data, Partech said it had ac-

cessed information on undisclosed deals “thanks to our relationship with the ecosystem and entrepreneurs.” The report does not take into account grants, awards, prizes, debt, loans, initial coin offerings, non-equity assistance and merger and acquisition deals. Partech’s report found that at least 33 per cent of total funding raised by African tech start-ups last year was in the fintech sector, with a total of 42 deals accounting for $379-million. The report places the various tech verticals into three groups, namely: financial inclusion, B2B and tech adoption and online and mobile consumer services. In all, according to the study, the financial inclusion sector — encompassing fintech, insurtech and off-grid tech — attracted 50 per cent of total investments at

$582-million over 64 deals. Thus, while the B2B and tech adoption sector — which comprises enterprise, connectivity and hardware, as well as marketing tech verticals — brought in 30.4 per cent of total investment at $335-million across 55 deals. Commenting in the same statement, Dème said B2B models are naturally attractive for entrepreneurs. “At a time where monetisation is at the heart of the challenges, enterprise clients can pay and enable to present unit economics that can converge more quickly than B2C models. Of course, this is reassuring the investors,” he explained. Online and mobile consumer services accounted for 19.6 per cent of total funding raised, at $228-million across 45 deals. This includes $31.8-million raised across three deals in the edtech sector and $18-million raised over seven transactions in the healthtech sector. The report further highlights three important trends that have helped in boosting investors’ confidence in the potential of African start-ups. Among these include, the massive number of Series A & B stage start-ups attracting about 70 rounds of deals, worth a total of $482 Million. Furthermore, the rise of large venture growth deals, with 14 rounds totalling $602 Million and lastly, a good number of Private Equity investors (TPG, Helios, Goldman Sachs, Carlyle, etc.) as well as major Corporate players (Naspers, Paypal, Pernod Ricard) who are now joining the game earlier, investing in early and growth stage tickets in African tech start-ups.

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: OGAR DAVID ) 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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Wednesday 03 April 2019

Live @ The Exchanges Market Statistics as at Tuesday 02 April 2019

Top Gainers/Losers as at Tuesday 02 April 2019 LOSERS

GAINERS Company

Closing

Change

NESTLE

N1450

N1400

-50

0.8

BETAGLAS

N64.8

N58.35

-6.45

N46.25

0.2

N63

N56.9

-6.1

VOLUME (Numbers)

N2.06

N2.26

0.2

UNILEVER

N39

N35.7

-3.3

VALUE (N billion)

N2.22

N2.33

0.11

N27.7

N24.95

-2.75

Closing

Change

ANGCEM

N191

N193

DANGSUGAR

N14.2

N15

N46.05

IKEJAHOTEL

NEM

STANBIC

Company

ASI (Points)

Opening

30,226.77

DEALS (Numbers)

4,018.00 376,947,303.00

MARKET CAP (N Trn

4.536 10.648

Investors lose N169bn as bearish sentiment persists on Nigerian Bourse Stories by Iheanyi Nwachukwu

nvestors at the Nigerian stock market booked additional loss of approximately N169billion at the close of trading on Tuesday April 2, 2019 as investors continued their wait-andsee approach on Custom Street. Only 10 stocks gained as against 28 losers. The Nigerian Stock Exchange (NSE) All-Share Index (ASI) decreased by 0.99percent. The Year-to-

Date (YtD) returns stood at -3.88percent. The All Share Index closed at 30,226.77 points as against the preceding day close of 30,527.50 points while Market Capitalisation closed at N11.353 trillion against the preceding day close of N11.522 trillion. Nestle Nigeria Plc booked the highest loss after its share price dropped from N1450 to N1400, losing N50 or 3.45percent. It w a s f o l l o w e d by B e t a G l a s s Pl c w h i c h declined from N64.8 to N58.35, losing N6.45 or

9.95percent. Niger ian B re w e r i e s Pl c d i p p e d from N63 to N56.9, losing N6.1 or 9.68percent ; Unilever Nigeria Plc decline d from N39 to N35.7, losing N3.3 or 8.46percent; while Forte Oil Plc was down from N27.7 to N24.95, shedding N2.75 or 9.93percent. On the gainers table, Dangote Cement Plc advanced most, from N191 to N193, adding N2 or 1.05percent. Dangote Sugar Refinery Plc followed after its share price rallied from N14.2 to N15, up by 80kobo or 5.63percent; while Stanbic

IBTC Holdings Plc advanced from N46.05 to N46.25, up by 20kobo or 0.43percent. The volume of stocks traded decreased by 78.14percent, from 1724.09million to 376.94million, while the total value of stocks traded increased by 23.32percent, f ro m N 3 . 6 7 b i l l i o n t o N4.53billion in 4,018 deals. The Financial Services sector led the activity chart with 311.50million shares exchanged for N2.555 billion; followed by Consumer Goods with 23.69million shares traded for N1.77billion.

Global market indicators FTSE 100 Index 7,391.12GBP +73.74+1.01% S&P 500 Index 2,864.48USD -2.71-0.09% Generic 1st ‘DM’ Future 26,145.00USD -113.00-0.43%

Deutsche Boerse AG German Stock Index DAX 11,754.79EUR +72.80+0.62% Nikkei 225 21,505.31JPY -3.72-0.02% Shanghai Stock Exchange Composite Index 3,176.82CNY +6.46+0.20%

Sterling Bank grows profit by 14.9%

he 2018 earnings results released last Friday to the Nigerian Stock Exchange (NSE) affirmed the potency of Sterling Bank Plc’s medium to long-term strategy. The bank was able to sustain double-digit growth seen across its top and bottomline figures in full year 2017. The lender, recently named the most Innovative Bank of the Year by the Central Bank (CBN) and Nigeria Inter-Bank Settlement System (NIBSS) reported a profit after tax (PAT) of N9.2billion on gross earnings of N152.2 billion for the financial year ended December 31, 2018 compared with a net profit of N8 billion on gross earnings of N133.4 billion in the corresponding period of 2017. This represents an increase of 14.9 percent in net profit and 14 percent in gross earnings. Commenting on the financial performance, Abubakar Suleiman, Chief Executive Officer of the bank said, “Our 2018 performance

demonstrated our commitment to the race we set out on at the beginning of the year. We continued to identify more with our strategic pillars - agility, digitisation and specialisation – enabling us to set the stage for positive and sustainable growth across the business. Our investments in people and technology platforms drove significant traction in the retail and consumer segment, in line with our medium to long term goals. Overall, the Bank delivered a 14.9 percent growth in profit after tax to N9.2 billion.” Reflecting on key performance drivers during the financial year, Abubakar disclosed that consumer loans were up 108.3 percent driven by SPECTA - Nigeria’s leading lending digital platform. He added that mobile channel usage grew over 80 percent following the launch of Sterling OnePay, an omnichannel mobile banking platform as transaction volumes doubled on the instant payment platform.

Chams bounces back with 130% increase in profit after tax

T L-R: Greg Jobome, executive director, risk management division/chief risk officer, Access Bank Plc; Omobolanle Victor-Laniyan, head, sustainability, Access Bank Plc; Roosevelt Ogbonna, group deputy managing director; Herbert Wigwe, GMD/CEO, Access Bank Plc; Kaodi Ugoji, associate executive director, corporate development, FMDQ OTC Securities Exchange, and Olukemi Awodein, managing director, Chapel Hill Denham Advisory Limited, during the Listing ceremony for the pioneer climate bond certified N15bn Green Bond by Access Bank PLC at FMDQ’s Exchange Place in Lagos. Pic by Olawale Amoo

Access Bank’s Scheme Shares not yet available for trade on NSE

he Nigerian Stock Exchange (NSE) on Tuesday April 2 said that due to certain operational reasons, Access Bank Scheme shares which resulted from the merger between Access Bank Plc and Diamond Bank Plc were not available for trading on Tuesday April 2, 2019. In a noted signed by

Elizabeth Ekpo for Head, Listings Regulation Department, the Exchange regretted any inconvenience caused the holders of the affected shares. “The Exchange is working assiduously with Central Securities Clearing System (CSCS) and the Registrar to the company to produce a swift resolution and will be providing further updates as soon as we

can.” The NSE had on Monday April 1, 2019 listed Access Bank Plc’s 6,617,253,991 Ordinary Shares of 50 kobo each which resulted from a Scheme of Merger Between Access Bank Plc and Diamond Bank Plc (Scheme Shares), while the entire 23,160,388,968 ordinary shares of Diamond Bank Plc were on

the same day delisted from the Daily Official List of The Exchange. With the listing of the additional 6,617,253,991 ordinary shares arising from the Scheme, the total issued and fully paid up shares of Access Bank Plc has increase from 28,927,971,631 ordinary shares to 35,545,225,622 ordinary shares of 50 Kobo each.

he strategic restructuring of a frontline identity management and transaction provider, Chams Plc has begun to pay off with its N380million after tax profit in December, 2018, an increase of 130 percent as against N1.27 billion loss in the preceding year. The company’s Earnings Per Share (EPS) stood at 7Kobo in the review period, Total Assets amounted to N5.25billion, compared with N4.77billion in 2017, 10 percent growth while total liabilities reduced by 14 percent, to N3.60billion from N4.20billion in 2017, due to internal efficiency. Chams had in 2018 restructured its operations for global competitiveness, including a change in business model, placing premium on identity management and introduction of innovative products and services. Commenting on the historic performance, Chams’ Group Managing Director and Chief Executive Officer, Femi, Williams ascribed it to the positive effects of the management’s determination to revamp the compa-

ny’s operations for enhanced profitability in other performance indicators. “This result is a testament to the group’s dedication to revamping the fortune of the company, coming from a loss position to record this impressive performance is the first step in our arsenal of strategies lined up for deployment this year. As can be seen from the result we recorded a growth of 54% in Revenue Year- on-Year, while we grew Profit before Tax by 124%. I would like to assure all our investors and shareholders that we would not rest on our oars as we would keep firing from all cylinders in order to maintain and surpass this performance by the end of the fiscal year 2019. Williams stated further that “This performance was the result of the group’s doggedness and the pragmatic approach we have adopted in tackling the array of issues that have plagued us and our industry for a long time now. This result is the first of many of its kind, and the group is committed to delivering optimum values to its stakeholders.”

Wednesday 03 April 2019

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BOOK REVIEW

Pat Utomi’s Why Not, a call to retrieve Nigeria from decline DANIEL OBI

Mansur Ahmed

is a gift which comes with duties and responsibilities. “To challenge the culture that has crippled a country of promise is a moral imperative of citizenship,” the author argues. On this continuous rape, Utomi, who has played many roles as a politician, lecturer, public relations icon and entrepreneur, lays blames on the doorsteps of students who have stopped being the conscience of society as their protest culture used to make them. “Same will go to religious leaders who have neither spoken truth to power nor inspired their congregations to resist the new slavery with the same perseverance as Williams Wilberforce fought for the abolition of the old slave trade. Even much bigger blame will go to the business community who take cover in feigned neutrality to collaborate with whoever is in power and quietly fund them against the people’s will,” Utomi says in the book.

“That Nigerian civil society and media are yet to comprehend the depths to which their politics have fallen fully and to fashion a fight back to rescue the Nigerian people is probably the big question for now in Nigeria,” he says. He further writes that the trouble with democracy in Nigeria though is that the institutions are weak, the actors prone to impunity in their con-

‘

duct with the rule of law counting for little. In those circumstances, the kind of interventions from these foreign agencies remains largely cosmetic. Chapter titles in Why Not speak to the issues the book covers. The book begins with Chapter one, ‘A haunting metaphor’. The other chapters are ‘Back to the beginning’, ‘Greed and fetish ways versus issues and fixing problems’, ‘The Complicit

Across the country, governors are raping their states and then deciding who will continue the rape, often on their behalf, when term limits stop their direct romp

‘

igeria appears to be on a decline in many facets as virtually all socio-economic indices are in negative. In mid-2018, Brookings Institution ranked Nigeria as having the highest number of people in extreme poverty. At the end of May 2018, the report said Nigeria had about 87 million people in extreme poverty, compared with India’s 73 million, with six people crossing into extreme poverty every minute. This is in spite of abundant resources in the country. Last month, a report by Steve Hanke, an economist from John Hopkins University in Baltimore, United States, ranked Nigeria as the 6th most miserable country in the world. The Misery Index was calculated using economic indices including unemployment, inflation and bank lending rates. In his latest book, Why Not : Citizenship, State Capture, Creeping Fascism, and Criminal Hijack of Politics in Nigeria, Pat Utomi, who has played many roles in Nigeria’s public space, takes the entire 218 pages to really whinge at the sordid state of the Nigerian socio-economic landscape. He does not fail to point accusing fingers at politicians whom he says are raping the state and the electorate who are imprudently cheering while the rape act is going on. “The trouble with Nigeria was clearly gang rape of a loving mother by her own children. While some were central to the sordid act, others were cheering and jeering even as a compassionate mother who sacrificed it all for her children was raped into a coma,” Utomi laments in the book. He links the motive for the rape to craze for personal wealth instead of wealth creation which has driven most people in the political class to run Nigeria to the brink of anarchy, shame her before the nations as the misery and poverty capital of the world and cripple her as central residence of people most desperate to escape their conditions by illegal migration. According to the author, across the country, governors are raping their states and then deciding who will continue the rape, often on their behalf, when term limits stop their direct romp. Today, there is total pursuit for private gain rather than common good of the people and the book, Why Not, is a clarion call on Nigerians who have given up and who feebly and grudgingly say, why bother? The book recognises that citizenship

Middle and A few good men’. Others are ‘The Gideon Project: Finding grass and its roots’, ‘A path from serfdom’, ‘Reclaiming a lost but blessed land’ and ‘Why and Why Not’. The book which is written to provoke interest and further discussions on the degenerating state of Nigeria in the face of abundance of both human and material resources is a wake-up call on Nigerians to embrace ‘Why Not’ instead of ‘Why Bother’ in Nigerian political issues and participation. For instance, in Chapter 4, entitled ‘The Complicit Middle’, Utomi explicitly tells the middle class that they are also to be held accountable on the rot and decay in the system. “When the roll call for the blame on how the promise of Nigeria was squandered comes up, the fault will not be limited to the tropical gangsters and other champions of state capture. The shame cards will also go to the intellectuals that forgot the duty that comes with what James Macgregor Burns calls, moral authority which in turn comes with the role of the intellectual in leadership,” he argues. The book laments the apathy and dysfunction roles of the middle class in Nigeria. As SMEs are fundamental to economic growth, reports have also alluded to the pivotal role of middle class to societies’ growth as the middle class propels economic growth. But in the book, Utomi regrets that the Nigerian middle class is passive rather than active on the issues that propel societal growth and economic development. In this middle class are the intellectuals, students, religious leaders, and the business community. Utomi calls for a reform in the middle-class attitude “which sees politics as the arena for only people pursuing their narrow self-interest”. “This same attitude believes that politicians should be mocked, poked fun at and generally dismissed as having no redemptive value. The result is that the typical Nigerian youth of today feels hopeless and wants out,” he says in the book. The book, written from deep insight by a political player who has seen it all, speaks to the heart of deprived, weak, downtrodden and voiceless Nigerians who want Nigeria retrieved but are asking ‘Why bother’ since they are overshadowed with and held under democracy-clothed dictatorship. This book by a courageous Nigerian icon is interesting as it aligns with its philosophy of re-building Nigeria for better tomorrow. It provides the reader with a vivid picture of the rape and hijack of the system to the detriment of the Nigerian populace.

Wednesday 03 April 2019

BUSINESS DAY

38 BUSINESS DAY NEWS

C002D5556

Buhari sides with private sector declines... Continued from page 1

that lacked transparency,” a Lagos-

based pension fund manager told BusinessDay. “Buhari has done the right thing to ignore the Bill,” the person who did not want to be named, as he isn’t authorised to speak on behalf of his company, said. The broader implications of passing the Bill, which required companies to contribute 10 percent of their Profit Before Tax while workers committed 2.5 percent of monthly income to the housing fund, also means that the Nigerian economy, still licking its wounds from a contraction in 2016, may have dodged a bullet, private sector players told BusinessDay in previous interviews on the subject. The Bill quietly made it through the National Assembly in 2018 and was only forwarded to the Presidency this year, according to an exclusive report by Business Day. The news caught many private sector players unaware even as lobby

groups were thrown into confusion. Since the report, the private sector has organised series of protests to ensure the Bill is stopped in its tracks. Thoseeffortshavenowprovedsuccessful with President Buhari declining to give his nod, much to the relief of many. “We are pleased to inform you that the President upheld our protest by declining assent to the Bill as advised,” said Timothy Olawale, director-general, Nigeria Employers’ Consultative Association (NECA), an umbrella organisation of employers in the Organised Private Sector. “The Bill has been returned to the National Assembly for amendment of the contentious provisions,” Olawale said in a note to NECA members, Tuesday. The Nigerian Economic Summit Group (NESG) also partook in protests against the Bill. Laoye Jaiyeoba, CEO of the private sector think-tank, said last month that members were engaging with the Presidency to avert approval of the Bill.

The so-called National Housing Fund (Establishment) Bill, 2018 was secretly passed by the Senate on November 6, 2018, following its passage by the House of Representatives on July 17, 2018. Widespread condemnations trailed the provisions of the Bill, which some private companies and workers widely regarded as an unjust extortion. The failings of the former National Housing Fund and the track record of similar funds managed by government cast a cloud over how efficiently the new Fund will be managed and the chances that it achieves the primary objective for which it was created. The huge burden it threatened to put on Nigerians and companies was a tough pill to swallow. According to Sections 4, 5, and 6 of the Bill, some of the levies imposed on Nigerians include 2.5 percent monthly deduction from workers’ salaries and 2.5 percent of the ex-factory price before transportation cost of each manufactured or imported 50kg bag of cement or equivalent in bulk.

The Bill, however, provided that the cement levy may extend to other products not stated in the document, as the Bill provides that the President, by an executive order, could add, delete, amend or substitute consumer goods, services or products and approve rates for the levy as and when he thinks fit in the circumstance. Industry players, who were worried that the provisions of the Bill regarding the 10 percent of PBT contributions from PFAs and banks and insurance companies overrule carefully-crafted regulatory guidelines that guarantee the safety of depositors’ funds sitting in the banks

Wednesday 03 April 2019

and pension funds, were critical of the Bill and warned it would have dire consequences on the economy and investor confidence. Buhari shared similar sentiments. “The provision of Section 6(5) of the Bill in relation to Pension Reform Act and real estate investments thereunder may undermine the administration of the pension industry by the National Pension Commission and adversely affect the safeguards that protect the pension industry against unreasonable investments risks,” he said in the letter titled ‘Presidential decision to decline assent to the National Housing Fund, 2018’.

Nigeria raked in N2.30trn in taxes, royalties... Continued from page 2

will not be artificially split but disclosed in full,” it said. Shell also spent a total of $4.53 billion (N1.63 trillion) on projects which comprised production entitlements, taxes and royalties. The projects included PSC 1993 (OPL209), PSC 1993 (OPL212/OML118, OPL219/ OML135), SPDC East, SPDC Shallow Water and SPDC West. However, Shell is not having an easy ride in Nigeria because while Nigeria’s African peers are creating opportunities for investment dollars, Nigeria is building a barricade. Last month, Shell said that Nigeria’s claims that it was owed billions in taxes could delay the development of 180,000 barrels per day

Bonga South West oil field. Andy Brown, Shell’s head of upstream, told Reuters on the sidelines of the International Petroleum Week conference that the claims dealing with production sharing contracts (PSCs) terms lacked merit. BusinessDay’s analysis shows that it would be difficult to find worse royalty terms than Nigeria’s PSCs which gifted oil companies zero royalty in water depths below 1,000 metres where the bulk of Nigeria’s deepwater finds have been located, but banking on successfully plugging a 14-year revenue gap in one fell swoop and unilaterally is comforting delusion. Yet, there is a yawning need to review Nigeria’s obsolete fiscal terms.

Nigeria’s weak growth weighing down... Continued from page 2

L-R: Hakeem Muri-Okunola, head of service, Lagos State; Akinyemi Ashade, commissioner for finance, representing Lagos State governor; Yetunde Odejare, permanent secretary, office of the deputy governor, representing Lagos State deputy governor; Abayomi Kadiri, permanent secretary, Ministry of Economic Planning and Budget, and Ibironke Sodeinde, special adviser, Lagos State Resilience Office, at the inauguration of Lagos State Resilience Office/Resilient Lagos Week (RLW 2019), with the theme “RESILIENT LAGOS 2030.2050.2070” in Lagos, yesterday. Pic by David Apara

ExxonMobil’s potential $3bn Nigeria asset... Continued from page 1

with a total production capacity

of 120,000 barrels per day as at 2017, which might provide an opportunity for indigenous companies who have purchased assets worth billions from firms such as Eni, Shell, Chevron and Total in the past five years. ExxonMobil is one of the largest oil and gas producers in Nigeria, with 106 operated platforms. Its oil output in the West African country reached 225,000 barrels per day (bpd) in 2017. Exxon officials have held talks in recent weeks with several Nigerian companies to gauge their interest in the fields, according to reports. One source said Exxon was soon due to open a “data room”, which would provide technical information on the fields, such as seismic and production details in Nigeria. International Oil Companies (IOCs) account for more than 70 percent of the nation’s daily crude production. Naturally, a wave of divestment of oil and gas assets previously held by these IOCs will no doubt ignite interest from different stakeholders in the Nigerian oil and gas industry. “They are mostly shallow water oil assets and indigenous players such as First E&P Ltd may be interested buyers. But I also think government will keep a close eye on the deal to avoid it going sour like the ones Oando got into,” said Wumi Iledare, professor of petroleum economics at the University of Ibadan’s Centre for Petroleum, Energy Economics and Law.

Another industry source who chose to be anonymous said other indigenous oil and gas companies capable of acquiring and developing those oil assets include Seplat plc, Lekoil and Aiteo. But Lekoil’s books are not looking so good at the moment. “And what can also happen is that some of the indigenous players may acquire the assets and look for a foreign company able and willing to develop and produce the oil assets. This is called rent seeking,” the industry source told BusinessDay. Stakeholdersbelievethatmajorityof theindigenousplayerswiththecapacity and balance sheet to attract financing will be gearing up to participate in the long-rumoureddivestmentwhichmay have become a reality today. “One of the key things we have targeted with our current capital structure and our balance sheet is to, at a very short notice, be able to participate in any acquisition opportunities,” Austin Avuru, CEO of Seplat, said at the firm’s ‘Facts behind the Figures’ presentation at the Nigerian Stock Exchange recently. Ademola Henry, team leader at the Facility for Oil Sector Transformation (FOSTER), said beyond the question of who is buying the assets, there is need to take a critical look at what Nigeria is not doing right that is scaring away investors and reducing foreign direct investment (FDI). “We need to ensure we send the right signals out,” Henry told BusinessDay. However, the IOCs’ attempt to sell

their assets to local companies has not alwaysbeensmooth,particularlywhere bureaucracy, difficult operating or security conditions feature prominently. Government’s recent directive regarding the transfer of operatorship of OML 11 from Shell to Nigerian Petroleum Development Company (NPDC) Ltd generated a lot of ripples intheindustrybecauseNPDCwasseen as unfit to develop and produce the oil fields. Besides, NPDC already has 32 prolific oil fields in the Niger Delta. Buoyed by high oil price and the needtoboostlocalcontentinthenation’s oilindustry,manybanksdoledoutloans to indigenous players for the acquisition of assets being divested by IOCs such as Royal Dutch Shell, Chevron and Total. Between 2010 and 2018, a number of indigenous companies including Starcrest Energy, Aiteo, Oando, Seplat, Eroton, First E&P, Neconde, Midwestern, Notore Lekoil, PanOcean, Newcross and Shoreline threw in billion-dollar cheques in their scramble for assets divested by major multinational oil firms which have recorded mixed performance. Seplat Petroleum Development Company plc successfully bought assets such as OMLs 4, 38 and 41 which were producing 15,000 barrels per day (bpd) but are today producing 80,000 bpd. Oando Energy Resources, a subsidiaryofOandoplc,incurreda$2.5billion debt after the 2014 acquisition of oil and gas assets from U.S. giant ConocoPhillips, while Seven Energy, a Nigerian company founded in 2004, ran into troubledwatersafterseveraldefaultson its debt servicing obligations.

on West Africa Economic Outlook projects that regional growth would average about 3.6 percent in 2019 and 2020, based on gradual recovery of commodity prices, especially gold, cocoa, cashew nut, iron ore and oil, as well as improved production. “Nigeria’s dominance in the region continues to overshadow other smaller economies and determines the economic performance of the region. The good news is that Nigeria has recovered from the last recession. This will have positive spillovers for the region’s growth trajectory over the short to medium term, particularly with the successful conduct of the 2019 general elections,” Faal said. The report further finds that countries in the West Africa Economic and Monetary Union (WAEMU) enjoy relatively low inflation, mainly due to the peg of their currency to the euro, but that non-WAEMU countries continue to struggle with macroeconomic instability, seen in high inflation and large fiscal deficits and rising debt. The AfDB is particularly worried that high external debt which rose to 23.6 percent of GDP at the end of February 2019 remains a major concern in the West Africa region and that debt service has been a major issue confronting most countries there. “Average external debt is rising in the region and has almost doubled over the past six years to 23.6 percent of GDP at the end of February 2019 compared with 13.5 percent in 2013; this has increased the burden of servicing the debt,” Faal said. Anthony Simpasa, lead economist, Nigeria country department, in his presentation advised that African countries must now be prudent in their spending and ensure that debt when incurred is used for productive investments to avoid falling into debt traps. “As interest rates rises, debt ser-

vice rate rises also, so we encourage prudence in future borrowings,” he said. Speaking on the level of unemployment, Simpasa said industrialisation and manufacturing sectors offer great potential for job creation, calling them pillars on which job creation can be anchored in Africa. James Wahome, lead economist, West Africa regional department, said that there is need for countries’ policymakers to focus on building productive capacity and ensure enhanced consistency between natural and regional policies. “All countries should accelerate consultation with respect to the Africa continental free trade area and promote development of the regional industrial cluster on economic zone,” Wahome said. He added that the progress recorded in some countries of the region remains insufficient in addressing the developmental challenges of the region, adding that debt servicing of West African countries poses a major challenge. Zainab Ahmed, minister of finance, said the report notes that dependency on a few export commodities to spur growth and vulnerability in commodity prices has impeded most African economies from sustaining growth. “Nigeria has emerged strongly from the unfortunate economic recession of 2016. The recession highlighted the vulnerability of the economy to over-dependency on oil as major source of revenue and foreign exchange. The problem of price volatility was compounded by incessant attacks on oil facilities, resulting in reduced oil production,” she said. Mamood Isah, permanent secretary, representing the minister, said that apart from the massive support for agricultural transformation, Nigerian government is also committed to the accelerated growth of the manufacturing sector.

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Ugochukwu assumes office as TEF CEO … as former CEO joins Foundation’s advisory board

F Bolanle Ambode, wife of the governor of Lagos State and chairman, Committee of Wives of Lagos State Officials (COWLSO) (2nd r); Ibijoke Sanwo-Olu, wife of the governor-elect (m); Ademuyiwa Eniayewun, MD, Lagos Island Maternity (l); Abdulrasheed Lawal (2nd l), and Shola Pitan (r), during the inspection and handing-over of 32 neo-natal Incubators and six birthing suites to General Hospitals in the state by COWLSO as part of its annual health intervention project for 2019, at Lagos Island Maternity, yesterday.

Remove ‘non-operational aircraft’ from MMIA airside, FAAN urges airline operators IFEOMA OKEKE

he Federal Airports Authority of Nigeria (FAAN) has called on airline operators to remove all aircraft currently not operational at the Murtala Muhammed International Airport (MMIA) to make space for other operating aircraft. This plea is coming at a time the authority has consistently complained over lack of parking space at the airport, as passenger traffic and aircraft movement continue to increase. Speaking at a press conference Tuesday at MMIA, Shina Aba, regional manager, FAAN, and terminal manager, MMIA Ikeja, Lagos, said Lagos airport was built 40 years ago and since then, there had been no major structural change at the airport amid rapid growth in passenger and aircraft movement.

Aba said the airport now had space and capacity constraint, making it almost impossible to continue accommodating unserviceable aircraft and ‘aircraft on ground’ (serviceable but are currently not operating). “Currently, there are 32 international airlines operating in MMIA, while eight passenger and cargo aircraft operate from the General Aviation Terminal (GAT). There is only one airside and we use the same manual. “From MMIA alone, there are currently 272 aircraft movement (departure and arrival) every day, as against eight international flights that operated at the airport in 1979, when the airport commenced operations. Also in 1979, MMIA operated just two cargo flights a week but today the airport processes 30 cargo flights in one week,” she explained. Operators have refused

to take out their aircraft-onground and unserviceable aircraft because they do not pay for parking space, and FAAN may not be able to remove these airplanes by themselves without the approval of the operators, she said. FAAN has consistently appealed to the operators to move these aircraft to airports that have less traffic such as Port Harcourt, Ilorin and Akure airports, among others, at no cost for parking. While some operators are in talks with FAAN to move the aircraft out, some other operators have raised fears concerning the security of their aircraft when they are moved outside the airport, she said. She said while FAAN was making plans to expand MMIA airport, airline operators would be required to comply with the rules and make parking space available for operational aircraft. “We will need to review

our bye-laws to ensure operators don’t park aircraft endlessly. We are working on the expansion of the apron. An expansion work was going on at the cargo section of the airport but the contractors stopped work at some point. “When we finish expanding the airport, we will be able to accommodate additional eight aircraft at MMIA, including wide and medium bodied aircraft,” she disclosed. FAAN unofficially complained to journalists that Air Peace had earlier brought Boeing 777 and parked them at the airport, but Chris Iwarah, head of communication of Air Peace, said the agency was aware that the aircraft were being prepared for international operations and were going through procedures with the Nigerian Civil Aviation Authority (NCAA) before they would be inducted as part of Air Peace fleet for international service.

20 Nigerians await execution in Saudi Arabia for drug offences - FG … Condemns hanging of a Nigerian on Monday … indicts airlines TONY AILEMEN, Abuja

he Federal Government on Tuesday described the hanging of a Nigerian woman by Saudi Arabian government as pathetic, tragic and sad, even as it says another 20 are on death row in that country. Saudi Arabia’s interior ministry had issued a statement saying two Pakistani men, a Yemeni man, and a Nigerian woman were executed on Monday for trafficking in drugs. The execution brings to 53 the number of people put to death this year, while the latest execution brings to

8 the number of Nigerians killed so far in that country. Abike Dabiri-Erewa, senior special assistant to the President on Diaspora, while condemning the killing of Nigerians by the Saudi government, however, warned Nigerians against involvement in drug trafficking. Dabiri-Erewa said there were evidences to prove cases of airlines working handin-hand with drug syndicates to put drugs in the bags of unsuspecting pilgrims. According to Dabiri-Erewa, “So, we have had cases where truly they didn’t commit the offence. We have appealed to the Saudi Authorities to make the tri-

als fair, open and ensure that justice is done. Even if you are going to die, you will know that you die for an offence you committed. “In particular and this is a fact, Ethiopian Airlines and Egyptian Airlines, there is always cases of when you get there you see something in your bag. So, it is now mandatory for these airlines and for all those travelling to ensure that you identify your bags before you board. That has helped. “It is important that if you are going to Saudi Arabia with any of these airlines, you identify your bags. We have had cases where you just get to Saudi Arabia and

somebody will knock on your door that something was found in your bag. It is mandatory for these airlines to screen these bags before you board the passengers. “The case of Saudi Arabia is particularly worrisome because maybe, some of them did not commit the crime. One Nigerian was freed not too long ago because of the intervention of our mission in Jeddah, which turned out that he actually did not carry the drug. The embassy fully intervened and he was freed. There is one that has a court case and the embassy is fully involved and hopefully he too will be freed.

ormer director of partnerships and evaluation, Tony Elumelu Foundation (TEF), Ifeyinwa Ugochukwu, on April 1 assumed office as the Foundation’s CEO, becoming the third CEO and the first African CEO of the Foundation. The Foundation, an African philanthropy committed to empowering African entrepreneurs, last December announced Ugochukwu’s new appointment as CEO and the transition of her predecessor, Parminder Vir, to the Advisory Board of the Foundation. In her role, Ugochukwu will focus on scaling the impact of the 10-year $100 million Tony Elumelu Entrepreneurship Programme and strengthening relationships between African and the global entrepreneurship ecosystem, to empower African entrepreneurs with the result of creating jobs and wealth on the continent. She will also take re-

sponsibility for positioning TEFConnect, the digital networking platform for African entrepreneurs, as the go-to hub for forging business relationships, sharing experiences and distributing knowledge across Africa. “We are confident that Ifeyinwa is the right person to launch the Foundation into its new growth phase,” Tony Elumelu, founder, TEF, said on behalf of the Board of Trustees. “Her appointment as CEO strengthens our resolve to scale the impact of our commitment and unlock opportunities in the entrepreneurship ecosystem across the continent. I have always said that no one but us will develop the African continent, and this is a further demonstration of this resolve,” Elumelu said. Ugochukwu brings almost two decades of corporate experience, including her most recent role as the director of partnerships and evaluation, to her new position.

ICPC partners PTAD to curb pension fraud FELIX OMOHOMHION, Abuja

ndependent Corrupt Practices and Other Related Offences Commission (ICPC) has declared the commission’s willingness to partner the Pension Transitional Arrangement Directorate (PTAD) to curtail the activities of pension fraudsters. Chairman of the commission, Bolaji Owasanoye, disclosed this while speaking during a courtesy call by the executive secretary of PTAD, Sharon Ikeazor, at the ICPC headquarters in Abuja. The ICPC chairman said one of the innovations of the commission since his assumption of of-

CHANGE OF NAME

I, formerly known and addressed as Miss Esejowho Asebake Lauretha now wish to be known and addressed as Mrs Otameh Asebake Lauretha. All former documents remain valid. General Public please take note.

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fice was placing information on the commission’s website to serve as guide to the public on the kind of matters that should be reported to it. According to Owasanoye, this flows from the fact that some of the issues that are supposed to be handled by PTAD come to the commission. He said by putting information out on its website such information go to PTAD directly via a link to their website.

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I, formerly known and addressed as Miss Folashade Adegbembo now wish to be known and addressed as Mrs Folashade Oluwakemi Bassey. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Miss. Olayinka Bolanle Damilola now wish to be known and addressed as Mrs. Adedulu Bolanle Damilola. All former documents remain valid. General Public please take note.

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Wednesday 03 April 2019

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CBN rate cut targets lending, banks unlikely to pass benefits to customers Stories by Hope Moses-Ashike

o doubt, intention of the Central Bank of Nigeria (CBN) has been to have a lower interest-rate environment that can spur lending to the real sector of the economy, which could consequently reflect in growth of the economy. In view of this, after holding its Monetary Policy Rate (MPR), which is the rate used to determine bank lending rates and the cost of credit for borrowers, at a record high of 14 per cent since July 2016, the Apex bank last week dropped the rate to 13.50 percent. When asked if this marked the beginning of the Monetary Policy Committee’s rate-cutting cycle, Godwin Emefiele, governor of the CBN, said “I have not said so. I have only said it is a signal.” “We will continue to do

what we are doing that is keeping our friends happy, keeping everybody happy. We are saying, ‘let’s move on higher pedestrian and see whether this will take us to aggressive growth trajectory that we desired for Nigeria,’ ” Emefiele explained. The clamour by the private sector for a relaxation of the tight monetary policy stance was addressed last week Tuesday, after the MPC announced a 50 basis point cut in the policy rate, to 13.50 percent. However, some financial analysts have opined that the rate cut will not have a significant impact on lending to the real sector as banks are unlikely to pass the benefits to customers. “There are clear limits to the impact of this first change in the policy rate since July 2016. The impact would have been greater if the MPC had cut the cash reserve requirement (CRR) ratio: only one member voted this way, and we note

Godwin Emefiele, CBN governor

there is lingering suspicion in the committee that such a cut does not feed into loan book growth,” analysts at FBNQuest said. “The banks are unlikely to pass the full benefit onto their customers. More

broadly, the transmission mechanism to real economy and market rates is weak. For the latter, the tracking of the CBN’s management of its open market operations will be more fruitful. We do not see much of a spill over from

Heritage Bank promotes financial inclusion on global money week

eritage Bank Plc has joined the world to mark the Global Money Week (GMW) with series of educational programmes targeted at tutoring children on the importance of financial literacy, whilst promoting savings, drive financial inclusion, invariably helping them gain a higher standard of life and attain secured economy. For the sixth year running, the Bank has successfully commemorated the Central Bank of Nigeria’s Financial Literacy Day, which is part of the activity to mark the GMW scheduled this year from 25th to 31st March. During this year’s Global Money Week with the theme: “Learn. Save. Earn,” the CBN mandated all banks to adopt schools to commemorate Financial Literacy Day, which

is scheduled for 28th March. The central bank directed Heritage Bank to adopt schools in seven states: Osun, Bauchi, Kebbi, Niger, Enugu, Delta and Ekiti for Financial Literacy workshops. Students and teachers were taught several concepts including: the role and management of money, needs and wants, benefit of budgeting, spending and savings. Others include savings with a financial institution, the basics of financial education and Heritage Bank savings product for young persons (Bud Account). Addressing some of the participants, Ifie Sekibo, managing director/CEO, reiterated the importance for young Nigerians to be financially and economically equipped for the development of the nation.

According to him, Nigerian youths and those around the world need to be fortified economically via financial literacy knowledge acquisition, which will aid them in learning, saving and earning money wisely. In line with its mission to create, preserve and transfer wealth across generations, Sekibo said Heritage Bank developed the HB Bud Savings Account to help its customers to create wealth for the children and provide them a future of financial independence. “As a bank committed to creating, preserving and transferring wealth from one generation to the next, we have consistently maintained our position as the leading brand in financial inclusion initiatives by leveraging on CBN’s mandate to impact schools

the easing to the exchange rate,” they added. The regulator however, retained asymmetric corridor around the MPR at +2%/-5%; Cash Reserve Requirement (CRR) at 22.5 percent and Liquidity Ratio at 30 percent. “As a matter of fact, if you go through the trend the banks have started dropping their rates somewhat marginally. In this case I will say that we are following them; that is why we say we are signalling. I am sure in the subsequent time you will eventually see that this will permeate the entire banking system and people will be able to see the positive impact,” Emefiele said. “The reduction in MPR by 50 basis points signals the CBN’s desire to relax monetary policy to support economic growth. Obviously, it is a right response to the declining inflationary pressure and the relative stability in exchange rate which have

Keystone Bank appoints Sule as acting MD as Ohiwerei resigns

K Ifie Sekibo, MD/CEO, Heritage Bank

across the geopolitical zones and improve financial inclusion,” the MD reiterated. According to him, opening a savings account for a child is one of the best ways to introduce him/her to that concept of saving at an early age.

prevailed for quite some time”, Uche Uwaleke, professor of finance and capital markets, chair, banking and finance department, Nasarawa State University Keffi, Nasarawa State, said. Meanwhile, the Lagos Chamber of Commerce and Industry has commended the CBN for the rate cut. Muda Yusuf, director-General of the LCCI, said in a statement that “We acknowledge that this reduction is not materially significant, but it has a symbolic and signalling value. It is gratifying to note the shift in policy focus by the Central Bank of Nigeria from stability to growth.” “We expect that other monetary instruments will be adjusted over time. Economic policies are typically characterised by trade-offs. Policy choices are driven by what is the utmost economic objective at a given point in time. The priority at this time is to stimulate growth”, Yusuf said.

eystone Bank Limited has appointed Abubakar Danlami Sule as acting managing director/CEO, following the resignation of Obeahon Ohiwerei from office. The appointment of Sule’s is subject to approval by the Central Bank of Nigeria (CBN). A statement from the Bank disclosed that Ohiwerei is leaving to pursue other personal interests. The statement further added that the board recognized and appreciated Obeahon’s immense contributions to the growth of Keystone Bank and the visibility the bank had attained as a brand in the past eighteen months. Sule is a graduate of Ahmadu Bello University, Zaria

with degree in accounting. He is a Fellow of the Institute of Chartered Accountants of Nigeria; an honourary member of the Chartered Institute of Bankers of Nigeria; a governing member of the Chartered Institute of Bankers of Nigeria; and an Alumni of both the INSEAD (France) and Wharton Business School in Pennsylvania, USA. He was until his appointment as acting MD/CEO, the deputy managing director of the Bank Sule has over 29 years of cutting-edge banking experience with competences in corporate banking, operations, treasury management, credit structuring, corporate planning, as well as possession of very strong relationship management skills.

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What does it take to gain financial freedom?

n commemoration of the 2019 global money week, ‘Debola Osibogun, president, Consumer Awareness and Financial Enlightenment Initiative focuses her financial education on ‘How To Gain Financial Freedom – For The Youth, Before They Go Head Long Into Aso-Ebi And Designer-Crazy’. In the words of Robert Kiyosaki, a personal finance guru, you must know the difference between an asset and a liability, and buy assets…Rich people acquire assets while Poor and middle-class people acquire liabilities, but they think they are assets. When Robert published his best-selling book Rich Dad, Poor Dad, he declared that most of the things average people regard as assets, including personal homes were liabilities, arguing that ONLY investments that brings one extra income should be termed an asset. It is often argued that one of the failures of formal education is that it never prepares anyone for mastery over personal finance, even though money plays a pivotal role in our lives. It then suffices to say that for one to gain financial freedom, a personal effort is required to learn the rudiments of personal finance. Attaining financial freedom first starts with seeing the big picture about life. Planning for the future, knowing that young age is fleeting, and that responsibilities will grow as one grows into adulthood and that a good portion of one’s earnings needs to be set aside for retirement age when active work ceases. But being young also carries endless possibilities, creativity, curiosity, energy, impatience and guts. It is much like life as an adult - just more intense. Everything comes in brighter colors, maybe more contrasting colors, though. As a youth on the journey to financial freedom, here are a few key factors that ensures one gains financial freedom; Start NOW The right time is now, today is your day of salvation, says a popular scripture. And as a Chinese proverb goes, the best time to plant a tree is twenty years ago, the best next time is now. The reason to start now is because you have one of the biggest ingredients required to grow money -TIME. Having time on your side means having a longer period of being able to save money to invest and a longer period of being able to find investments that can increase in value quite nicely over time. There is a reason that compounding - the ability to grow an investment by

reinvesting the earnings was referred to by Albert Einstein as “the eighth wonder of the world.” The magic of compounding allows investors to generate wealth over time, and requires only two things: the reinvestment of earnings and time. The longer money is put to work, the more wealth it can generate in the future. The world’s 3rd richest man, according to Forbes 2018 ranking, Warren Buffet started investing at a tender age of eleven, and he never looked back. Today he is worth over eighty-five billion dollars ($85bn). Learn all you can about various investment options; short term investments like savings account, money market funds, fixed deposits, etc.… and long-term investments like Mutual funds, bonds and debentures, life insurance policies, real estates, equity markets etc. even acquiring skills on how to run a successful business as an Entrepreneur. Create your own ‘LUCK’ “Diligence is the mother of good luck.” - Benjamin Franklin In the age of instant coffee and instant noodles, many of today’s youth have only one idea of luck- winning the big money lottery. It is not difficult to decipher when you consider the tremendous amount of time and resources they pour into reality TV shows that promise big money wins, even with no show of any career skills-set, like the Big Brother Reality Show. Others use every money they receive to place bets at sports betting houses at street corners. But according to CNBC, a financial media company, Lottery winners are more likely to declare bankruptcy within three to five years than the average American. Studies found that instead of getting people out of financial trouble, winning the lottery got people into more trouble, since bankruptcy rates soared for lottery winners three to five years after winning. Some even resort to illegal means popularly called yahoo-yahoo by defrauding rich American/Europeans through online communications. This instant gratification seeking life is attributable to the ‘entitlement mentality’ that pervades the minds of millennials today. When it comes to financial freedom, there are few true overnight successes. Behind what looks like sudden success is often years of work, trial and error, and failures. But the harder you work, the more good ideas and chances you may make for yourself. And being a youth gives one enough time to recover from failures and

keep pushing. ‘The harder I work, the luckier I get’ - This quote about the relationship between work and luck comes from famous film producer Samuel Goldwyn. You need to apply Benjamin Franklin’s advice to create your own luck, put diligence to your work or business and never settle for a mediocre output. Do everything it takes to move yourself forward. Have a financial plan If you want to build a great structure, you first have a design and a plan. Same way it is with having a great financial future. Many people think that financial plans are only for people with so much money, they don’t know what to do with it. But, a comprehensive financial plan can benefit people at all income levels. It helps you to start making smart financial decisions very early in life. Creating a financial plan helps you see the big picture and set long and short-term life goals, a crucial step in mapping out your financial future. When you have a financial plan, it’s easier to make financial decisions and stay on track to meet your goals. The sooner you start making smart decisions, the sooner you know where you want to go, and if you have a plan to get there, the more likely you are to attain it. If you start in your youth, you don’t need to have millions to start saving. The longer you wait, the more you must save to make that goal, this is because the more time investments have to grow, the less money an individual need to put away to achieve the same returns as someone who gave their money less time to grow. A typical financial plan helps to first outline where you stand right now, that’s your current situation. The second contains your top financial goals, or where you

want to go. The third is a simple net worth statement. The fourth lists the steps you must take to achieve your goals. It includes your income and expenses, an overview of your debts/obligations, a section on retirement planning, and a section on estate planning. Finally, the fifth section is usually a separate document, your Investment Policy Statement, which lays out how your portfolio is to be invested. This process of establishing goals, gathering and assessing personal financial data and coming up with specific recommendations designed to help you achieve your financial goals is the heart of a financial plan. Preparing a financial plan is active stewardship that pays off over time. Those who prepare a financial plan can reasonably expect to achieve higher levels of future income and net worth than if no financial plan is prepared. As a man sows, so shall he reap. In summary, the financial plan addresses the following important questions: “What are your longterm financial goals?” “Where are you now financially and where will you likely be in the future?” “What do you need to do to achieve your financial goals?” Pay Yourself first The Philosophy of paying yourself first, as a sure path to financial freedom is elaborately explained in George Clason’s classic book on personal finance- The Richest man in Babylon, written over a century ago. It’s message still holds true today despite how the world has changed within the period. Most people start spending money immediately it enters their hands/accountfashion accessories, mobile and home gadgets, utilities, rent, cars, etc. is always top of their mind. It’s only when they are done with all these,

that they look at what is left and how to save it, but we all know that most times, there’s nothing left rather there may be need to even borrow to complete the payments. This scenario is the typical paying yourself last scenario. It’s the single reason why many employees live from paycheck to paycheck, irrespective of the amount earned, as expenditure always expand to meet income. Many of us are well acquainted with the Biblical Tithe concept- giving 10% of your income to the Priest. Paying yourself first follows the same concept- taking out a fixed percentage of your income, say 10% immediately the money comes in, and setting it aside in a savings/ investment account before expenditures. That’s how to start the journey of financial growth. This practice will help you to manage expenditures and grow your investment funds. Let’s say your take home pay is N100,000 a month. If you pay yourself first with N10,000 monthly, in a year’s time that will amount to N120,000 which can be invested in a money market instrument. In doing this, you must be disciplined enough to avoid poor people’s habit of dipping into savings to pay bills. Ensure that the money is not easily accessible, and resist the urge to use it for anything else other than the targeted investment. Even if you’re already in debt, structure your expenditures to fit it as you ride the pressure, once your debts are cleared, the habit would have stuck. The good thing about paying yourself first is that it’s addictive. Once you get used to the idea and start seeing your savings/investment increase gradually, the more you save, the more you want to save. Budgeting Now that you have start-

ed paying yourself first with the 10% of your monthly income, the temptation will be to spend the remaining 90% on any and everything that catches your fancy, right? Not quite. Gaining financial freedom requires understanding of how much you spend and what exactly you spend on. “Budget” is not a thing that comes natural to most young people but it is a crucial tool for mastering your finances. Budgeting is the process of creating a plan to spend your money. It is simply balancing your expenses with your income. If they don’t balance and you spend more than you make, you will have a problem. Many people don’t realize that they spend more than they earn and slowly sink deeper into debt every year. If you don’t have enough money to do everything you would like to do, then you can use this planning process to prioritize your spending and focus your money on the things that are most important to you. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. If someone comes up with a big party idea in the middle of the month and requires you to splurge on a new set of Aso-Ebi which is not on your budget list for the month, you already know what to do. Another critical process is writing down your daily expenses in a notepad. This is called tracking your cash flow, and it can give you a sense of control and confidence that makes it easier to make financial changes in your life. Get a notepad and start writing down everything you spend money on. Most people dread the idea of taking a close look at their expenditures but don’t put it off. Your findings at the end of the month when you review the list will surprise you. You will discover that you probably spend more on items that you shouldn’t, or that you pay too much for items that have better costeffective alternatives. This can help to save more as you cut down on those unnecessary items. Successfully managing cash flow is your key to financial control. It will give you an awareness that has more long-term value than anything you can invest in, buy or sell, better, or bigger, or both. That’s thinking big, and I’m no stranger to that concept and you shouldn’t be either. I’ve had enough success to know that it works.

42 BUSINESS DAY NEWS Senate to pass 2019 budget April 16 OWEDE AGBAJILEKE, Abuja

he Nigerian Senate says it would pass the 2019 budget by April 16. Specifically, the Senate urged sub-committees to the Appropriation Committee to submit their reports by Friday this week, even as the Appropriation panel was mandated to submit its report from April 9 to 11, 2019. Senate President Bukola Saraki, who announced this at Tuesday plenary, also adjourned plenary to April 9 to enable relevant committees complete budget defence sessions with Ministries, Departments and Agencies. Speaking after the vice chairman of the Appropriations Committee, Sunny Ogbuoji (APC, Ebonyi) disclosed on the floor that less than 10 committees had submitted their reports, Saraki revealed that the report would be considered by next week and passed on April 16. “Let us agree that they will submit by Friday. We will suspend plenary just for a week till 9th (of April). We should be able to reconvene here by Tuesday and lay the report by 9th, 10th and 11th of April. And pass this budget by the 16th. Because we have the Easter break coming as well. We don’t have that luxury of time,” Saraki said. The Senate President also told lawmakers that any subcommittee that failed to submit its report to the Appropriations Committee by Friday, the Appropriations panel would be empowered to present the submission of the Executive. It would be recalled that President Buhari had submitted the N8.83 trillion 2019 budget to a joint session of the National Assembly on December 19, 2018.

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ice chancellor of Edo University, Iyamho, Emmanuel Aluyor, says the institution has designed and fabricated a 2000-litre unit capacity of bio-digester as a pilot for practical demonstration. Aluyor said this at the 2nd Federal University of Petroleum Resources, Effurun Higher Education Partnership for Sub-Saharan Africa (FUPRE-HEP SSA) knowledge sharing workshop on Sustainable Solutions for Multiscale Biogas Utility as an alternative energy resource, held at Edo University, Iyamho. He said the 2,000 litres unit capacity bio-digester, which was the university grant through the FUPRE/EUI -HEP-SSA was in fulfilment of

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Wednesday 03 April 2019

Reforms: Edo, firm strategise on poverty reduction, capacity building

FIRS targets N750bn from 55,000 tax defaulters

do State acting governor, Philip Shaibu, says the state government is willing to partner credible organisations in her quest to stem poverty, groom local capacity and engender sustainable development. The acting governor said this at a meeting with a delegation from the London Professional Training Centre (LPTC), who was on a courtesy visit to the Government House, Benin City, the Edo State capital. Shaibu restated the state government’s commitment to grooming its youth population as a human resource asset, and expressed readiness to work with organisations whose goals aligned with the government’s vision. According to Shaibu, “We are keen on grooming our youths to become skilled, highly-sought-after assets across the world. So, we want to equip them with requisite skills for employability. This is why we are open to collaborations that would contribute positively to the state and in the long run, improve productivity.” Leader of the delegation, Malvis Humphrey, said the LPTC aimed to identify areas of need in the society and proffer possible solutions. He said the organisation was keen on exploring models that could help in reducing poverty in developing countries, particularly Nigeria. “Our target in Nigeria is to see how to reduce the poverty rate in the country,” he said. The LPTC will be opening a training centre for nurses in Edo State, to help train them for professional certification, he said.

JAMES KWEN, Abuja

… Budget: FG tasks NNPC on production of 2.3mbpd

ederal Inland Revenue Service (FIRS) hopes to pull in about N750 billion from about 55,000 defaulting taxpayers, Tunde Fowler, executive chairman, FIRS, said Tuesday in Abuja. Fowler told the House of Representatives joint committees on Finance, Appropriations, Aids, Loans and Debt Management, Legislative Budget and Research and National Planning and Economic Development on the 2019/2021 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), that the substitution led to recovery of N23.25 billion. He restated that the 85 percent of VAT collected goes to state governments. “From the Bank Accounts

the town-and-gown event to showcase biogas technology within the host community. The vice chancellor, who declared the workshop open, said FUPRE as Hub university, was in collaboration with Edo University, Iyamho, Brunel University, London, UK, and other designated universities and corporate bodies to develop and sustain capacity towards a successful implementation of the project “Biogas for Sustainable Energy and Off-Grid Power.” Aluyor, represented by the deputy vice chancellor, Steve Omodia, said as one of the Hub institutions, the university expected that the HEP-SSA Hub and spoke institutions would meet to share knowledge on sustainable solutions for Multiscale Biogas utility as an alternative energy resource in Nigeria as well as to

substitution exercise, we used banking information to bring non-compliant taxpayers with N1 billion and above turnover to comply. It has so far resulted in the recovery of N23.35 billion. The exercise has been extended to cover those with turnover of N100 million and above. “To date, about 500 of them have come forward and they have paid and we have collected in the region of about N24 billion. We believe we should be able to go through the 55,000 before the middle of this year, which will be the middle of this year, 30th June 30th. “In terms of estimates, which we should be able to be able to generate from this exercise alone, that will be about N750 billion.” In order to shore up revenue to fuel the budget, the Federal Government has tasked the Nigerian Nation-

al Petroleum Corporation (NNPC) to take all possible measures to achieve the targeted oil production of 2.3 million barrels per day (mbpd). This is as key assumptions and micro-framework for the 2019 budget are based on the projection of 2.3mbpd oil production, oil price benchmark of $60 per barrel, exchange rate of N305 to a dollar, 9.98 inflation rate, 119,28 trillion nominal consumption, 139.65 trillion nominal GDP and 3.01 percent GDP growth rate. Ben Akabueze, directorgeneral, Budget Office of the Federation, released these figures Tuesday at a public hearing on the Medium Term Expenditure Framework (MTEF) held by the House of Representatives Joint Committee on Finance, Appropriation, Aids, Loans and Debt Man-

agement led by Babangida Ibrahim. Akabueze said having emerged from recession in the second quarter of 2017, Nigeria was expected to continue to experience growth from 0.8% in 2017 to 2.1% in 2018 and 3.01% in 2019. On the 2018 performance, Akabueze said, “As at the end of 2018, Federal Government aggregate revenue was N3.96 trillion, which is 55 percent of the budget and which is higher than the 2017 revenue.” The breakdown, according to the director-general, was: “Oil revenue (N2.32trn – 77% of budget and 64% higher than 2017); Company Income Tax (CIT) of N637, 25 billion (80% of budget and 1.7% higher than 2017) and Customs Collection of N303,91 billion (94% of budget and 16% higher than 2017).

L-R: Simidele Onabajo, deputy director/technical assistant, National Agency for Food, Drug Administration and Control (NAFDAC); Mosumola Samuel, head, Customer Feedback and Collaboration, Standards Organisation of Nigeria (SON); Babatunde Ruwase, president, Lagos Chamber of Commerce and Industry (LCCI); Toki Mabogunje, deputy president, LCCI, and Suzie Onwuka, head, Lagos Office, Consumer Protection Council (CPC), during the LCCI Roundtable on Regulatory Environment in Lagos, yesterday.

Edo University fabricates 2,000 litres unit of bio-digester IDRIS UMAR MOMOH & CHURCHILL OKORO

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evaluate all available terms, outcomes and options regarding the FUPRE/EUI-HEPSSA project. The university is poised to be a major contractor in the advancement of knowledge and understanding for the benefit of the social, cultural and economic needs of the people of Edo State in particular and Nigeria in general, he said. He further added that the university had departed from the knowledge-based curriculum to competency-based curriculum with the inclusion of entrepreneurial studies in all programmes. The vice chancellor, however, called for a collaborative research that would spur universities to actions and produce better alternatives for technological development of the country.

Nigeria must focus on jobs, wealth creation through revival of industrial bases - experts AMAKA ANAGOR-EWUZIE

s 60 percent of Nigeria’s population is said to fall within the productivity age, there is need for the newly elected government to focus on post-election policies that will drive massive jobs and wealth creation in the country, experts say. The government also needs to invest in achieving success in the education sector and concentrating on skill acquisition and capacity development among Nigerian youths to achieve the optimal level of employability in the country, they further say. “Presently, Nigeria operates only about 5 percent of her post-independence manufacturing sector as many locally owed manufacturing firms have closed shop,”

Kunle Folarin, chairman, Port Consultative Council (PCC), said at the maiden quarter business roundtable organised by MMS Plus Newspapers in Lagos recently. Folarin, who spoke on ‘Economic Outlook: Quarterly Verdict’ with the theme “Post Election Economy: Exploring Strategies for Growth, said Nigeria could only achieve the desired industrial growth if the government focus on reviving the comatose industrial basis. “Before independence, Nigeria had over 40 textile factories and many boat building yards. We used to have plantations in the East, palm kernel plantation in Delta region and rubber plantations in other parts of the country, but today we do not have any. There should be linkage between agriculture and those

industries that we want to grow,” he said. According to Folarin, there should be investment in real sector, agriculture and commerce, and others to grow the economy, as Nigerians need incentive driven monetary policies for the agricultural sector. He stated that investors such as farmers need about 6 percent lending rate to enable them manage risk, urging government to engage in port reform and introduction of local participation policies to encourage more Nigerians to invest in development of sectors like maritime/shipping. Meanwhile, Ime Udoma, CEO, Quiet Dimensions Limited, advised the Federal Government to strengthen the commercial banks by allowing some public sector funds to be domiciled in them.

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Portfolio inflows to emerging markets hit 3-month low in March ISRAEL ODUBOLA

P Anant Rao (m), group executive, digital and consumer banking, United Bank for Africa (UBA), with the 2019 UBA Campus Ambassadors, during their Unveiling at the UBA head office in Lagos.

What poor access to clean water, decent toilets means to hard-to-reach communities CHUKA UROKO

ccess to clean water, decent toilets and good hygiene are still a huge challenge to many Nigerians and, according to environmental health activists, poor access to these basic needs of man has grave implications to communities, especially those that are hardto-reach. Many communities in Nigeria are hard-to-reach for reasons of being riverine or uphill, and people in such communities account for a significant percentage of the country’s total population. Therefore, for people in these communities, poor access to clean water, decent toilets and good hygiene means lost education, lost opportunities and hundreds of lost lives each year. Available statistics paints a scary picture of Nigeria in relation to access to water, decent toilets and good hy-

giene. The statistics estimates that 67 percent of the Nigerian population does not have basic sanitation; 26 percent practices open defecation; 33 percent is without clean water while 87 percent does not have basic hygiene facilities. “Sub-Saharan Africa ranks lowest in the world for access to improved drinking water and sanitation. This is linked to the region’s under-five mortality rate which is one of the highest in the world,” notes WaterAid, international not-for-profit organisation working to make clean water, decent toilets and good hygiene normal for everyone, everywhere within a generation. The organisation, which works in 34 countries to change the lives of the poorest and most marginalised people, notes further that around 60,000 children under the age of five in Nigeria die from diseases caused by the nation’s poor levels of access to water,

sanitation and hygiene. The organisation, in a statement obtained by BusinessDay in Lagos, advised that, in order to ensure improved access, human right to water must take priority ahead of other competing demands otherwise the unserved populations might be left behind in the race to get clean water to everyone, everywhere by 2030. Unsustainable production of products for export, combined with consumers’ increasing desire for waterintensive products, may leave poor communities struggling to access clean water which is why ChiChi Aniagolu-Okoye, country director, WaterAid Nigeria, warns that “while exports of food and goods are important sources of income, production must be made sustainable, and industrial and agricultural use of water should not be prioritised over people’s ability to get water for their basic needs.”

Lagos builds more capacity against environmental challenges JOSHUA BASSEY, FRANK UZUEGBUNAM & JOHN SALAU

gainst the increasing threats to human existence from climate change related risks, Lagos State government is taking proactive approach to adapt the city vulnerabilities and what could possibly be the after effect. The government, in response to the various environmental challenges in the state towards building a mega city, on Tuesday, inaugurated the Lagos State Resilience Office (LASRO). When a city responds to shock or stress without actually being weighed down with its impact, it is said to have built resilience against the shock and stress as a result of climate change. Hence, the Lagos State gov-

ernment, in its effort towards a resilience Lagos is celebrating the Resilient Lagos Week (RLW 2019) with the theme, ‘Resilient Lagos 2030.2050.2070.’ Akinwunmi Ambode, the state governor, said government efforts and investment in infrastructure development in creating opportunities for Lagosians were recognised by the Rockefeller Foundation. “Selection of Lagos State in the 100 resilience cities network is an impetus for the state to receive support for a better Lagos today, tomorrow, and for the future generation to come,” Ambode said. According to Ambode, the setting up of the LASRO is with the mandate of making Lagos better. “As a government we will focus on the opportunities that Lagos offers while we will also

continue to explore creative means similar to this in addressing our challenges,” the governor said. Represented by Akinyemi Ashade, the state commissioner for finance said, globalisation, urbanisation, and climate change were driving the global future in which cities need to adapt, reflect and be responsive. “We believe that the 100 resilience cities programme and the city resilience framework will amplify the qualities and capabilities the state will need in an increasingly unpredictable future. We believe resilience Lagos is the answer,” he said. Simon Gusah, the chief resilience officer for Lagos, said the resilience office was a multi-disciplinary interministerial group of professionals from the Lagos State government.

All Seasons Zenith clinches Nestle multi-million media business account DANIEL OBI

estle Nigeria has appointed All Seasons Zenith as its Media Agency of Record. The announcement was made recently after a pitch process involving two other media buying agencies in Nigeria. Uwem Afanide, the chief operations officer of All Seasons Zenith, says in a statement, “The pitch process was very transparent and well-coordinated by the regional procurement and marketing teams of Nestle. The timelines were very tight and we had to work day and night to deliver on the various aspects of the pitch.” Updating his staff members on the outcome of the pitch process, Afanide states: “We proudly announced the addition of Nestle Nigeria to the family of All Seasons Zenith.” He congratulates everyone, especially the team that worked tirelessly during the pitch process while charging them to deliver on the business. “To win is a stepping stone. We have to deliver on our promises to Nestle as well as strive for more,” he charges. Speaking further on the offerings the agency will bring to the brand, Afanide says All Seasons Zenith will deliver a differentiated, processed driven and transparent approach to media planning and buying to Nestle Nigeria. “We are the ROI agency and it’s simple. Everything we do is about delivering profitable top-line growth for our clients, by supporting them in finding new opportunities – challenging briefs, acting as consultants, and using insights to deliver growth right across the customer journey,” he says.

ortfolio inflows to emerging markets were down to their lowest level in three months since the start of the year at $25 billion in March 2019, data from the Institute of International Finance (IIF) show. This implies that portfolio into the emerging market space reduced by a fifth from $31.2 billion reported in February to $25 billion in the third month of 2019. Emerging stocks and bonds attracted positive but modest residents and nonresidents inflows in March, after a strong performance

in January and February (with inflows of $52.6bn and $31.2bn). Analysts at IIF position that positive catalysts driving the region are dovish shift from the United States’ Central Bank, Federal Reserve, and constructive trade talks between the world’s biggest economies. “Many Emerging Markets currencies have fallen sharply this year, failing to benefit from the more constructive backdrop,” the analysts state. Debt inflows into the emerging market space dropped by $6 million to $17.6 billion in March compared with $18.2 billion in the previous month.

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Erdogan scrambles to reassure investors after shock poll defeat Election loss was in large part a rejection of Turkish president’s approach and disdain for markets DELPHINE STRAUSS

here is no let up in sight for the Turkish lira, after a rare election defeat for the ruling AK party dealt a heavy blow to President Recep Tayyip Erdogan’s authority. The loss of the capital Ankara and the disputed outcome in Istanbul were in large part a rejection of Mr Erdogan’s approach to economic management. The president has pursued a populist agenda while thumbing his nose at investors, resulting in a deep recession, double-digit inflation and mounting unemployment. Mr Erdogan quickly sought to regain the trust of voters and investors by promising “strong” reforms in line with free-market principles. But the fear is that he will once again fall back on stopgap measures aimed at boosting growth, rather than tackling the difficult reforms needed to steer the economy towards a sustainable recovery. “In the short run, you can put sticking plasters on. In the long run, unless you fix the fundamentals . . . there will be more and more episodes of nastiness,” said Gabriel Sterne, head of global macro research at Oxford Economics, the consultancy. The lira recovered from losses in early trading on Monday but it remains fragile. Even with the benchmark interest rate set at a punitive 24 per cent, the authori-

ties resorted to covert interventions in currency markets and a form of backdoor currency controls — with Turkish banks seemingly told to temporarily starve the London market of lira liquidity — to hold the currency steady in the run-up to Sunday’s vote. The claim was denied by the Turkish Banking Association, but the government cannot afford to alienate investors further. With net foreign exchange reserves below $30bn, the country lacks the firepower to fight off any concerted run on its currency. Moreover, it is reliant on foreign capital to roll over the $177bn of external debt that is due to mature within the next year — most of it owed by banks. Turkish policymakers have little room for manoeuvre. They have to keep interest rates high to prevent another steep fall in the lira, which has stabilised recently but lost almost 30 per cent of its value against the dollar in the past year. Many companies who have borrowed heavily in dollars are already struggling and a fresh depreciation could trigger a wave of bankruptcies, with risks to the stability of the banking sector. “It is a confidence game,” said Christian Keller, economist at Barclays. “So long as the banks can roll over [foreign currency debts], they can muddle through.” But he said this would only be possible “if people feel the financial sector concerns are manageable. This depends on the lira and on growth. It is all interlinked.”

UK MPs urge break-up of Big Four accountancy firms Select committee says radical move needed to avoid repeat of recent auditing failures MADISON MARRIAGE

ritain’s largest accounting firms should be broken up to avoid a repeat of a string of serious audit failures that have deeply undermined public confidence in the profession, a crossparty committee of MPs has urged. The competition regulator should choose the most extreme option available to it, a full-scale break-up of the Big Four, when it publishes its final proposals on the audit market in a few weeks, the House of Commons business, energy and industrial strategy select committee said on Tuesday. This would go much further than the Competition and Markets Authority’s initial proposals outlined in December. These called for an “operational” break-up of the Big Four — KPMG, EY, PwC and Deloitte — that would force the firms legally to separate their audit staff from the rest of their businesses. The select committee launched an inquiry into the future of audit in November on the back of mounting concerns about a string of high-profile accounting scandals at companies including contractor Carillion, retailer BHS and bakery Patisserie Valerie. They also examined fears that the dominance of the Big Four, which audit 97 per cent of Britain’s 350 largest listed companies, has

created an oligopoly, undermining the need to provide high-quality audits. Rachel Reeves, the Labour MP who chairs the committee, said change in the market was “long overdue”. “The ‘Big Four’s dominance has fostered a precarious market which shuts out challengers and delivers audits which investors and the public cannot rely on,” she said. “For the big firms, audits seem too often to be the route to milking the cash cow of consultancy business . . . Splitting audit from nonaudit business would be a big step [towards] boosting the culture of challenge needed to deliver highquality audits.” The big flaw: how to solve the auditing crisis at the Big Four The committee also recommended radical changes to the way auditors and companies in the UK operate in order to improve public confidence in business. These include capping the number of large listed companies in any sector each Big Four firm is permitted to audit, forcing large companies to change auditor every seven years rather than once every two decades and requiring auditors to report on companies’ pay policies, gender pay gaps and payment practices to suppliers, as well as how they investigated potential fraud at the companies they audit.

How might Mr Erdogan respond? His default reaction to defeat or threats to his rule is to hit back with extreme aggression © AFP

For market confidence to return, an essential first step would be greater transparency. Investors complain that it is increasingly difficult to assess the true extent of Turkey’s problems. Although government debt is still low by emerging markets standards, no one knows the extent of off-balance-sheet liabilities — in particular, guarantees given to the grand infrastructure projects Mr Erdogan has championed. Berat Albayrak, finance minister, has pledged to hit fiscal targets but his plans are premised on GDP growth of 2.3 per cent. The govern-

ment claims the economy is growing again, after falling into recession halfway through last year, but the IMF and other forecasters expect a deeper contraction over the course of 2019. Investors say they no longer trust official data on the level of non-performing loans. Moody’s, the rating agency, said on Monday that an unexplained drop in foreign exchange reserves in March — assumed to be the result of intervention to support the lira — called into question the central bank’s transparency and independence. Larry Brainard, emerging mar-

kets economist at consultancy TS Lombard, drew a comparison with Argentina, which last year ran into similar financing difficulties, but has since managed to stabilise the peso after calling in the IMF. “It was horrendous in Argentina, too, but they made all the numbers public. The IMF brings transparency,” he said. By contrast, Mr Brainard added, Turkey was currently “uninvestable”. To make his economic plans credible, Mr Albayrak would therefore need to set more realistic fiscal targets, after admitting that growth was unlikely to bounce back quickly.

US development finance must have a domestic imperative Mobilising domestic capital is key to the USDFC’s long-term sustainability AUBREY HRUBY

early two-thirds of global growth came from emerging markets over the past 15 years; by 2022, emerging economies will deliver two-thirds of global gross domestic product. Last year, six of the world’s 10 fastest growing economies were in Africa. Whatever the appeal of the US market, it is a competitive necessity that US companies and investors continue to expand and seize opportunities in fast-growing markets such as those in Asia and Africa. Last October, the Trump administration dramatically increased the capacity of the Overseas Private Investment Corporation to support private-sector-led development and US firm success. The bipartisan Build Act supersized OPIC by creating the new US International Development Finance Corporation with a $60bn budget and equity investing power. The DFC will soon become operational and begin looking for additional investment opportunities abroad. Yet, the success of this new era in US international development finance in emerging markets will not be determined outside the US, but within it. While, by mandate, the DFC must operate internationally, it must also embrace a domes-

tic imperative to actively mobilise institutional capital and better support US investors who venture into new markets. This will require the DFC to address key data, network, visibility and structural gaps that have historically handicapped US investment in the emerging world. To effectively assess and manage risk, US firms and funds are heavily data dependent. Accurately assessing consumer demand in African markets, for example, is no easy feat in countries without reliable census data or national identity programmes. While there are innovative companies such as Fraym and Asoko working to address the data gap, US government agencies and multilateral institutions have data assets that could be packaged and pushed out to prospective investors through a central portal. The Millennium Challenge Corporation, for example, collects valuable market data during the economic constraints assessment phase of compact development. This could be added to the country and trade data housed in the Commerce Department, project assessments in the US Trade and Development Agency, and market reports in USAID and the World Bank. The DFC could partner with USAID to create an office of project promotion that would facilitate the collection and synthesis of

data from an investor perspective on projects in sectors of US competitive advantage. The data could be accessed via a portal by state offices of international trade, business associations and investors, and used as part of DFC roadshows to major US cities. In addition to data, US investors often lack the trusted relationships and networks needed for business success in emerging markets. Emerging market investors ranked under-developed fund networks as the second most likely factor that would deter them from investing in a given region. The MiDA initiative organised by the National Association of Securities Professionals and supported by USAID is a great model that the DFC could build on and replicate in other regions to address this network gap. MiDA coordinates visits to African markets and connects US institutional investors, such as New York Common Fund and Chicago Teachers’ Pension Fund, to African infrastructure project developers and potential African institutional co-investors. The DFC could work with USAID to deepen the network-building value of MiDA and tie it into future business and investment forums such as the US-Africa Business Summit and the African Growth and Opportunity Act Forum.

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NATIONAL NEWS

FT Saudi women cook up a revolution in restaurant trade

Malaysia hits out at US and China behaviour in trade war Trade minister urges countries to ‘stop thinking of themselves’ as tension hits other countries

Government reforms open way for female entrepreneurs in highly conservative society

JAMES POLITI AND STEFANIA PALMA

AHMED AL OMRAN

nce Ramah Nassief and her business partner had decided on green marble for the table tops in their new vegetarian restaurant, a trip to the all-male marble factory was required. “The minute we walked in, people were looking at us like we were aliens,” she said, describing how they stood out as the only women. “We are there arguing and fighting for prices, but sometimes you feel like it’s a bit of a struggle to just put your foot down and make them listen to you. They are not used to dealing with women.” In a conservative society where women have traditionally faced severe restrictions in their daily lives, Ms Nassief and others like her are making waves. With the blessing of the kingdom’s rulers, they are breaking into the food business and putting themselves at the vanguard of a workplace revolution. Behind it is Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler, whose leadership is seen by many as paradoxical. On one hand, Riyadh has jailed some of the kingdom’s most prominent female activists in a crackdown on dissent and seen its reputation battered by the killing of journalist Jamal Khashoggi. On the other, it has made getting more women into the workforce a priority as it seeks to create private sector jobs as part of sweeping social and economic reforms. About 200,000 women graduate from university every year, according to the education ministry statistics. But female employees make up less than 20 per cent of the labour pool, and nearly one-third of women who want to work are unemployed. The government has identified the food industry as one sector where there is potential for change with a recent survey by a local business group revealing that 87 per cent of restaurant and café staff are foreign. In February, the government announced plans to double the number of Saudis in the sector by adding 50,000 citizens by 2023 — and it will not be able to do that without women. Some female entrepreneurs in Riyadh and Jeddah are breaking new ground in more ways than one as they become part of a phenomenon more familiar on American city streets: food trucks. The women-run mobile kitchens were unthinkable a few years ago in a country that only lifted its ban on female driving last summer. But young Saudis have quickly latched on to the trend, following the trucks on social media to track their locations and find out what is on their menus. One of them goes by the name Razi’s Truck, a hard-to-miss vehicle painted pastel pink and garlanded with bright lights powered by a small generator (when it is not on the road) in the coastal city of Jeddah. Bashayer Bahurmoz, a 26-yearold accounting graduate, operates the truck with a friend who came up with the idea of selling mini pancakes covered with toppings like Nutella and pistachios, a dessert that she used to make at home for her family.

Wednesday 03 April 2019

Michel Barnier: ‘To be clear, during any long extension there will be no renegotiation of the Brexit withdrawal agreement, no, never’ © Reuters

Barnier warns no-deal Brexit is becoming increasingly likely EU chief negotiator says ‘strong justification’ is needed from UK for a long extension JIM BRUNSDEN

ichel Barnier, the EU’s chief Brexit negotiator, has warned that a no-deal outcome “becomes day after day more likely” as he said that a “strong justification” would be needed from the UK for a long extension of the exit process. Mr Barnier told an event in Brussels on Tuesday that a long extension could impair “the EU’s decision-making autonomy”, by handing Britain a role in choosing the next set of leaders of the EU institutions. The comments make clear that Theresa May will need to present a definite plan to EU leaders on how Britain will proceed should she fail to win parliamentary backing for her exit deal in the coming days. Mr Barnier said that he felt EU leaders would be willing to grant the UK a short further Brexit delay if Mrs May managed to win parliamentary support for her exit deal but needed more time to complete ratification. He also said the bloc stood ready to amend the political declaration on future relations that forms part of Mrs May’s deal, saying it could be changed to clearly state that the two sides wanted a customs union or Norway-style relationship. But he stressed that the UK’s withdrawal treaty — the product

of two years of negotiation — could not be renegotiated and must form part of any exit deal. “The only way to avoid a no-deal Brexit is and will be through a positive majority [in favour of a deal],” he said. Mr Barnier underlined that a long extension “has a cost, not only for EU businesses . . . it has a cost also for the UK”. He said such a move would be a “prolongation of uncertainty” that would be damaging for the business environment. There was no clarity at this stage on what the UK would use a long extension for, Mr Barnier said. “Is it for a new referendum, is it for snap elections? . . . I don’t know . . . but my role and responsibility is to say that there is a cost.” EU leaders would want an explanation, he said, adding that Britain must take part in May’s EU elections if it wished to stay after May 22. “We do not need a long extension for negotiation,” he said. “To be clear, during any long extension there will be no renegotiation of the Brexit withdrawal agreement, no, never. “And during a long extension there will be no negotiation about the future relations . . . It is as simple as that,” he added. Mr Barnier underlined that for any future relationship talks to take place in a no-deal scenario Britain must respect its financial obligations to the EU and uphold

EU citizens’ rights. Reacting to remarks by JeanClaude Juncker, the president of the European Commission, who said the EU had run out of patience, Mr Barnier said: We still have a bit of patience. Perhaps [the UK] may ask us to amend the political declaration. This can be done in a period of days and weeks. I really hope that we won’t just abandon all the work that’s been done.” Turning to the question of the Irish backstop, Mr Barnier stressed the need to find “operational solutions” in the event of a no-deal Brexit, warning that there could be no exemptions from regulatory and customs checks on imported goods. Brussels and Dublin are looking at “where we can implement the checks, the necessary checks that will protect the single market, our single market”, he said. Mr Barnier added that checks were needed to safeguard food security, prevent dangerous goods from entering the single market and protect public finances from customs fraud. The same regime of controls must be applied “everywhere” at the EU’s external borders, he said. “So we are working with Irish government on a unilateral basis in case of no deal to know where we can implement these checks to protect the Irish and the European markets.”

MTN, StarTimes partner to offer subscribers special bundle for StarTimes ON

tarTimes Nigeria has partnered MTN, a telecommunication company to offer mobile internet subscribers on the network a special data bundle for StarTimes ON mobile app. With the video Streaming bundles on StarTimes “ON” App, MTN subscribers can now enjoy unlimited entertainment and video on demand (VOD) service at a cheaper data price than any other network in Nigeria. “With a data bundle of N150, subscribers can enjoy up to 60 minutes of streaming time on StarTimes ON by simply sending ST1 via SMS to 131 while for N400,

customer gets up to 180 minutes of streaming time by sending ST3 via SMS to 131,” said Abiodun Ajayi, the general manager, data and devices, MTN Nigeria, while speaking on the new development. Tony Tuo, the OTT director at StarTimes Nigeria, said that all MTN subscribers would also enjoy five premium channels that offer news, music, religion, movies and other entertainment content for free on StarTimes ON, a service which users of other networks have to pay to gain access. “StarTimes ON cur rently boasts of 3.5 million users in Ni-

geria and over 12 million across Africa, making its partnership with MTN the latest in an industry where it has become a common trend for telecoms and video operators to partner towards an effective delivery in a market where VOD and live streaming is on the rise,” said Tuo. StarTimes ON has more than 70 channels with over 40 of them free to users. There are 40+ selfowned channels, with more than 100 hours of programming each day in sports, news, movies, music, Telenovela and Bollywood content, religion and general entertainment.

alaysia’s trade minister made a blunt appeal for the US and China to feel a greater sense of “global responsibility” and “stop thinking only of themselves” as they try to reach an agreement to end their bitter trade war. Darell Leiking told the Financial Times that the outcome of the negotiations between Washington and Beijing would “affect everyone” and there were already worrying signs of a slowdown in business due to the tension between the world’s two biggest economies. On Wednesday, Liu He, China’s vice-premier, was due to attend a new round of talks in Washington with Robert Lighthizer, the US trade representative, and Steven Mnuchin, the US Treasury secretary. If an agreement were finalised, it could pave the way for President Donald Trump and Xi Jinping, his Chinese counterpart, to sign the deal later this month. But officials involved in the talks have warned that the discussions could still drag on for weeks or months or collapse altogether, leading to further escalation. “I hope our friends can find a way to resolve the matter — at least for now,” Mr Leiking told the Financial Times as he visited the US capital for meetings with senior Trump administration officials, including Mr Lighthizer. “America and China have remained very close to us, and we would not like to see them end up with more problems.” The Malaysian trade minister said that while the two countries were so dominant they could “dictate” the terms of the world economy, their fortunes and power still depended on economic interactions with smaller states. “Everyone contributed towards making America into a big trading nation, and everyone contributed as well to making China a big trading nation — they benefited a lot from this,” Mr Leiking said. “When they make a decision they have to make a decision considering all other nations as well.” Mr Leiking’s comments highlight the nervousness with which smaller countries with strong commercial ties to both China and the US are watching the trade talks. While some, including Malaysia, have hoped to see some benefit from the trade war as US importers look to shift part of their Asian supply chains away from China, the overall impact has been challenging. “People have stopped doing some business, people have reserved a lot of business. I think people are a little bit more cautious, and that’s a problem — you tend to slow down,” Mr Leiking said. The Malaysian government of Mahathir Mohamad has been locked in its own negotiations with Beijing over a number of infrastructure projects sponsored by China through the Belt and Road Initiative. Mr Mahathir, who became prime minister for a second time last May, has challenged the costs of the investments such as a flagship railway line along the country’s east coast, leading some analysts and officials to believe Malaysia was turning its back on the BRI.

Wednesday 03 April 2019

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Walgreens slashes earnings outlook after ‘most difficult quarter’ Drugstore company warns on tough industry conditions and continued UK weakness PAN KWAN YUK

algreens Boots Alliance dramatically slashed its fullyear profit outlook on Tuesday as it warned that tough industry conditions and continued weakness in its UK business have resulted in its “most difficult quarter” to date. The company, which operates Duane Reade and its namesake stores in the US and Boots in the UK, said it now expects adjusted profits for the fiscal 2019 year to be flat from the previous year at constant currency — a sharp climbdown from its previous guidance for a 7 to 12 per cent increase. The surprise profit warning sent shares tumbling more than 13 per cent in early trading and putting the stock on track for its biggest one day drop since August 2014. “The market challenges and macro trends we have been discussing for some time accelerated, resulting in the most difficult quarter we have had since the formation of Walgreens Boots Alliance,” said chief executive Stefano Pessina. “During the quarter, we saw significant reimbursement pressure, compounded by lower generic deflation, as well as continued consumer market challenges in the US and UK. While we had begun initiatives to address these trends, our response was not rapid enough given market conditions, resulting in a disappointing quarter that did not meet our expectations,” Mr. Pessina said. Like other US drugstore chains, Walgreens is being hit on multiple fronts. While the company is filling more prescriptions at its pharmacy counters, it is making less money on them with falling reimbursement rates and cheaper generics drug prices cutting into its profit margins. The challenges were underscored by Walgreens’ fiscal second-quarter

results. While prescription sales in its US stores rose 9.8 per cent in the three months to end of February, gross profit at the pharmacies fell 3.2 per cent. At the so-called front end of its stores, where it sells general merchandise like toothbrush and beauty products, sales are being pressured by Amazon online and speciality brick and mortar players like Ulta and Sephora. Like-for-like retail sales at its US stores fell 3.8 per cent during the quarter. Meanwhile, Walgreens said the UK remains “a challenging market”. Its international business — which consists mainly of the Boots pharmacy chain in the UK — saw sales drop 7.1 per cent year-on-year to $3.1bn as weak sales were further compounded by the slide in the value of the pound against the greenback. Sterling’s fall, as a result of the Brexit uncertainty, means Walgreens’ UK earnings are now worth significantly less in dollar terms. “This was truly a terrible print, as most metrics missed materially,” said analysts at Evercore. “The deterioration in US pharmacy is particularly concerning, especially in light of CVS’s recent challenges.” Overall sales rose 4.5 per cent to $34.5bn in the three months to end of February, largely due to the addition of 1,651 Rite Aid stores it bought last year. Net income was 14 per cent lower at $1.1bn. Stripping out oneoff charges related to the previous year’s tax gains and restructuring, adjusted earnings was $1.64 per share, below the $1.72 a share the market had expected. In December the company unveiled a $1bn cost cutting programme in response to the headwinds it was facing. The group said on Tuesday that it now expects to save more than $1.5bn. Shares in Walgreens were 13 per cent lower at $55.50. Rival CVS was also knocked lower and was trading down 3.3 per cent.

Music industry records 10% sales growth Market expands for fourth straight year as revenues boom in Asia and Latin America NIC FILDES

he music industry’s global recovery picked up pace last year, with sales rising almost 10 per cent as a boom in Latin America and Asia helped offset stagnation in Europe. Revenues grew 9.7 per cent worldwide to $19.1bn, the International Federation of the Phonographic Industry said on Tuesday, up from a rise of 7.4 per cent in 2017. That marks the fourth consecutive year of growth, continuing a recovery from a 15-year decline when the industry struggled to adapt its business model in the early stages of the online era. The European market was virtually flat, with sales rising just 0.1 per cent having grown 4.3 per cent in 2017 and 9.1 per cent in 2016. The slowdown was led by a near 10 per cent fall in Germany, where streaming failed to counterbalance a decline in sales of physical formats, mostly CDs. The German drop was so pronounced that the UK, where sales

grew 3.1 per cent, overtook it as Europe’s biggest music market and the world number three, behind only the US and Japan. Frances Moore, chief executive of the IFPI, said the European performance varied from country to country and that the market should recover next year. Other parts of the world enjoyed a much stronger performance, with sales surging by 17 per cent in Latin America, led by Brazil and Mexico, 14 per cent in North America and 12 per cent in Asia and Australasia. Stu Bondell, head of business and legal affairs for Sony Music’s international arm, said the challenge for large music companies was to move more consumers in “high potential” markets such as China and Latin America to subscription services and to turn successful songs in those markets into global hits. “For the first time in history you can say a hit could come from anywhere,” he said. North American and British acts including Drake, Ed Sheeran,

Eminem and Lady Gaga remained among the most popular in the world in 2018 but other markets started to shine. Chinese singer Tia Ray had the seventh-biggest selling single of the year, while South Korean boy band BTS had two of the three biggest-selling albums. Johnny Hallyday, who died in December 2017, had the world’s fifth-biggest selling album led by strong sales in France. The music sector’s recovery continues to be driven by streaming, which grew by 34 per cent and now accounts for 47 per cent of the industry’s global revenues. Sales by paid-for services including Spotify, Apple Music and Deezer increased 33 per cent last year, with 255m users worldwide now paying for a music subscription. That offset the continued decline in older formats, with revenue from physical music sales dropping 10 per cent — almost twice as fast as in 2017. Sales from music downloads, once the lifeblood of digital music, fell 21 per cent.

Bonmarche set for reunion with Peacocks after Philip Day bid

Stocks falter as data-driven rally fades

Clothing retailer latest to be taken over by larger rival as high street suffers

MICHAEL HUNTER AND ALICE WOODHOUSE

onmarché is set to become the latest small listed retailer to be taken over by a larger rival after retail entrepreneur Philip Day snapped up more than half the shares and made a cutprice bid for the remainder. Spectre Holdings, a vehicle controlled by Dubai-based Mr Day, acquired 52 per cent of Bonmarché’s shares from a subsidiary of private equity group Sun Capital at 11.445p a share, a discount of 36 per cent to the previous day’s close. The acquisition triggered a mandatory offer for the rest of the shares, and prompted a 22 per cent drop in Bonmarché’s share price. Mr Day, who made his fortune with Edinburgh Woollen Mill, also controls Peacocks, another value retailer that owned Bonmarché until it went into administration in 2012. No talks were held with the

omentum from positive economic data ebbed on global stock markets, although European bourses stayed positive while Wall Street’s S&P 500 slipped from a six-month high. With investors remaining on watch for clear signs of an improvement in trade relations between Washington and Beijing, uncertainty around Brexit lingered as a risk factor faced by global markets. The pound was 0.4 per cent weaker at $1.3047 after the UK parliament failed once again to reach a consensus for an alternative to Theresa May’s Brexit deal with just 11 days to go until the UK is set to leave the EU. Companies earning revenue abroad, flattered by a weaker pound, helped the FTSE 100 outperform with a 1

per cent rise. The mid-cap FTSE 250, which is more exposed to the domestic UK economy, rose just 0.2 per cent. The wider mood remained cautiously optimistic after a stronger run over the previous session, when numbers from the US manufacturing sector added to strong data from China, soothing the worst of the fears about the impact of the trade war between the countries. The Europe-wide Stoxx 600 gained 0.3 per cent with Frankfurt’s Xetra Dax 30 up 0.6 per cent. The S&P 500 slipped 0.1 per cent, having risen by over 1 per cent over the previous session. China’s CSI 300 slipped back from its highest reading for 2019 by 0.1 per cent, while the Hang Seng in Hong Kong added 0.2 per cent, hovering at a nine-month high.

JONATHAN ELEY

Wakefield-based company’s management, led by chief executive Helen Connolly, in advance of the raid, and Bonmarché has urged its shareholders to ignore the bid. Spectre said it would delist the shares if it secured more than 75 per cent of the company. It also planned to restrict capital spending, reduce head office costs and review stores and ranges. There would be “a material reduction” in headcount, it warned. Bonmarché, which sells womenswear from more than 300 stores and concessions, floated on the Alternative Investment Market at 200p a share in 2013, and moved to a full listing two years later. However, trading deteriorated last year, leading to a warning in December that conditions on high streets were “significantly worse” than during the global financial crisis in 2008/2009. Last month, the company warned that pretax losses for this year would be

larger than expected after sales weakened further during March. Its shares have fallen by more than 83 per cent over the past year, including Tuesday’s fall. Other smaller quoted retailers have also found life increasingly tough as consumer sentiment has weakened and discounting has become more prevalent. Glasgowbased Quiz, a clothing brand that sells online, through its own store estate and in department store concessions, issued a profit warning last October and has fired off two more so far in 2019. Its shares are down 89 per cent since it floated on Aim in 2017. Last month athleisure and footwear specialist Footasylum, which had also warned on profits several times over the past year, agreed to a takeover by larger rival JD Sports. The 82.5p bid price was a 77 per cent premium to the market, but still half the 164p at which it floated in November 2017.

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Wednesday 03 April 2019

ANALYSIS Andreessen Horowitz rides the wave of Silicon Valley IPOs Venture capital firm’s co-founders feel vindicated after gatecrashing investment world RICHARD WATERS decade after gatecrashing Silicon Valley’s most exclusive party, Ben Horowitz is sounding vindicated. The venture capital firm he set up with Netscape co-founder Marc Andreessen has long drawn detractors — not least over what rivals claimed was a willingness to bid up the valuations of the most promising early-stage tech start-ups to uneconomic levels. After the stock market debut of ride-hailing company Lyft at the end of last week, Mr Horowitz was ready with a response: “It doesn’t look that way in retrospect, now does it.” The IPO turned his firm’s investment, estimated at around $100m, into a holding worth more than $1bn, even after a 12 per cent share price drop on Monday. “It’s not easy to make $900m,” he added. Andreessen Horowitz has never been too concerned about antago-

A © FT montage; Getty Images. A US Marine in an M1 Abrams tank during the Trident Juncture military exercise in Norway last November

Nato at 70: Europe fears tensions will outlast Trump

As the military alliance celebrates its anniversary, America’s commitment is being questioned MICHAEL PEEL AND AIME WILLIAMS

hen Nato celebrated its 50th anniversary at a 1999 summit in Washington, President Bill Clinton sought to assure America’s allies that the end of the cold war would not reduce its commitment to the region. Citing Theodore Roosevelt, he said there was no doubt that the US would continue to play a “great part in the world . . . The only question is whether we will play it well or ill”. At the time, European leaders could afford to smile at the reference. But as Nato prepares to celebrate its 70th anniversary in Washington this week, the ambivalence of Mr Clinton’s remark seems charged. The commemoration of the 29-member bloc has turned into a public test of the tensions tearing at the transatlantic relationship since Donald Trump took office. For some European politicians, the president’s sometimes scathing views of their continent are not a blip, but a reflection of a gradual withering of Washington’s commitment to the alliance. “The 70th anniversary should be a reason for celebration and reminding everybody of Nato’s great historic successes, but nobody is doing that,” says Heinrich Brauss, a former assistant secretary-general of the western alliance and now a senior assistant fellow at the German Council on Foreign Relations think-tank. “Everybody is concerned about Nato’s current shape, about the future and about the changing transatlantic partnership — and rightly so.” The big question for the European countries that dominate Nato numerically — if not militarily — is whether what one analyst dubs the “transatlantic distancing” will reverse after Mr Trump leaves office, or widen further. The president has flayed allies over military spending and pan-EU defence projects. He has also pulled the US out of an atomic weapons control treaty with Russia and a nuclear accord with Iran, actions many Europeans see as having a potential direct impact on security. Some in Europe already view Mr Trump’s approach to the relationship as part of a lasting change in the way Washington views the world. European leaders see a growing preoccupation with China and great power competition — and a belief that the US military should deploy more sparingly and Europe should take on more responsibility, albeit on Washington’s terms. The European anxiety about the bond with the US has grown since Mr Trump took office. Angela Merkel, the German chancellor and a frequent target of the

president, acknowledged last year that transatlantic ties were “under strong pressure”. During a visit to Washington last month Florence Parly, France’s defence minister, said Europeans feared the US commitment to defend them was wavering and warned that other powers including China were trying to split the continent. “The transatlantic relationship is changing: it’s a transition that started before Trump’s presidency and will continue after,” says Sophia Besch, a research fellow at the Centre for European Reform. “His approach that the US gains nothing from alliances is something that is specific to him. But the shift of interest to Asia and a general reluctance to get involved militarily because of the experience of forever wars has shaped the thinking of the next generation of American leaders.” One sign of the rift between Washington and European capitals since Mr Trump took office is that Nato member country leaders will not be at the 70th birthday celebrations — unlike the 60th anniversary in France and Germany attended by President Barack Obama in 2009. The alliance’s heads of state or government are not due to meet until a December event in London. Some diplomats already view that event with trepidation after Mr Trump criticised European countries over their military spending at a fiery summit in Brussels in July last year. Mr Trump has also unnerved allies with mixed messages on Nato that have varied from support to outright hostility. On the presidential campaign trail, he branded the organisation “obsolete”. Last year he appeared to question the alliance’s foundational principle of collective defence, saying he would be uncomfortable sending US troops to defend Montenegro because the country was “very aggressive”. The host for the week’s anniversary meeting will instead be Mike Pompeo, secretary of state — though the shadow of his boss in the White House nearby will loom large. “The whole thing is really weird,” says Thomas Wright, director of the Center on the United States and Europe at the Brookings Institution. “They’re not including the president of the US because they’re frightened of him and they’re trying to act like everything is normal, but it’s not. “The elephant in the room — or besides the room — is Trump. Everyone will be monitoring their phones to see if there’s a tweet from across the road.” Nato and Jens Stoltenberg, its secretary-general who will meet Mr Trump on Tuesday, have grown

used to managing the US leader. Mr Stoltenberg, a former Norwegian prime minister, has praised the president for helping push other alliance members towards a target to spend the equivalent of 2 per cent of their gross domestic product on their militaries. In a rare moment of bipartisan consensus, Congress has backed Nato, following reports that Mr Trump told aides and officials that he would like to withdraw from the alliance. In January, the House passed a bill by 357 votes to 22 reiterating US support for Nato and preventing federal funds from being used to leave it. Jim Risch, Republican chair of the senate foreign relations committee, says there is “zero appetite” in Congress for leaving Nato. “Hardly anyone on Capitol Hill agrees with the president, and that’s the silver lining to this cloud,” says Nicholas Burns, a Harvard professor and former top state department official. Yet for many politicians and observers in Europe, the patch-up job by Congress over Nato cannot hide a deeper security schism. Bruno Tertrais, deputy director of the Paris-based Foundation for Strategic Research think-tank, says what is “troubling” is that since Mr Trump arrived, both sides in the transatlantic relationship have started to question old assumptions that they share values and interests. “Nato is doing fine for now,” Mr Tertrais says in a forthcoming paper for the Nato Defense College. “But the Atlantic alliance remains in trouble.” For some Europeans, the present difficulties mark a belated awakening to strategic realities that have been evident since the end of the cold war. Nathalie Tocci, director of the Rome-based Institute of International Affairs, says the failure to respond sooner was “our big moment of hubris”. “We felt there was no need,” says Ms Tocci, an adviser on the EU’s global strategy. “It was the end of history, for us as well as the US. We didn’t realise — because we felt there was no need to realise anything.” Many of the criticisms of the transatlantic relationship articulated by Mr Trump are not new — even if pretending that they are suits his self-image. US presidents from both parties have long called for Europe to spend more on their militaries — and many Europeans acknowledge the need to do so, given that only six countries other than the US hit the 2 per cent of GDP target last year. “That’s not [just] Trump,” says Dan Fried, formerly a top official in the administrations of Bill Clinton and George W Bush. “That’s been the US position for decades”.

line when the entrepreneurs with the best new business ideas are looking to raise money. That gives established firms with the strongest brands and personal networks a big edge. Andreessen Horowitz has been aggressive in its marketing — something previously unheard in the VC world — and cast itself as the champion of the entrepreneur. That came easily to the abrasive Mr Andreessen, who co-founded Netscape and whose first experience in business was an all-out fight with Microsoft at the height of its power. The quieter Mr Horowitz also worked at Netscape and the two went on to found one of the first cloud computing companies before selling it to Hewlett-Packard. According to Mr Horowitz, the firm was built on what its founders had learnt themselves as customers of the VC industry. For instance, it hired its own recruiters, marketing experts and others to support the founders

Ben Horowitz, left, and Marc Andreessen, co-founders of the venture capital fund, are likely to see big payouts from investments in companies including Lyft, Slack, Airbnb and Pinterest © FT montage; Bloomberg

nising others in the clubby world of venture capital. Breaking into a narrow sphere where personal networking is key and returns are disproportionately concentrated in a small number of the most successful firms was never going to be easy. “People are always going to bark at us because we’re always beating them,” Mr Horowitz said. “When you get beaten by the same people over and over again, you talk smack. But that’s OK, that’s just the name of the game.” The firm has had big “exits” from its investments before, notably last year’s sale of code sharing site GitHub to Microsoft, bringing it about $1bn worth of Microsoft stock (like all VCs, it also has had its share of disappointments, among them one-time internet stars such as coupon marketing site Groupon, gaming company Zynga and Foursquare, the location-sharing app, that never lived up to the hopes). But in the round of big tech initial public offerings that is expected to follow Lyft, Andreessen Horowitz stands to come out as one of the main winners. It was an early investor in several, leading the second, or “B” rounds, of financing for business messaging service Slack, social media site Pinterest, and PagerDuty, a business software company in which it holds a stake worth up to $250m, based on the indicated IPO pricing. It also led the B round for accommodation-booking site Airbnb, which has also been eyeing a stock market listing, though not before next year. The IPOs are the culmination of a campaign by Andreessen Horowitz to break into the A-list of VC firms. As a recently appointed partner at another top Silicon Valley investment firm explained, the only sure route to superior returns in VC is to be first in

it backed, replacing the informal networks of personal contacts other firms relied on. His own book The Hard Things About Hard Things on the challenges of starting a business based on his experience is often cited by tech founders as an inspiration. “We really moved the model into the future, and we’re the best at it,” he said. If that kind of self assurance has antagonised rivals, critics also accuse the firm of making unrealistic promises to win over entrepreneurs. Mr Andreessen, for instance, once said the firm was happy to hold on to stock in its private companies for 15 years or more — much longer than most VC firms are set up to do. “In general, venture capitalists are pushing for an earlier IPO than the founders of the company,” said Jay Ritter, an IPO expert at the University of Florida. Mr Horowitz denied that Andreessen Horowitz had made exaggerated claims. “The promise wasn’t that we’d hold the stock,” he said. “The promise was, ‘We’re going to help you run your company and we’re going to give you a network that makes you powerful enough to do so’.” He also argued that the latest generation of tech companies have been staying private longer as “a direct result of a set of regulations that were put in place between 1997-2004”,which made it less attractive to be public. For the investors who backed the handful of big winners from the latest cycle of tech start-ups, the delayed IPOs could now bring big returns. “From a purely selfish standpoint it’s great when they take a long time because they build so much value in the private markets, and that’s great for us,” said Mr Horowitz. But he called it a “tragedy” for the markets as a whole.

WEST AFRICA

ENERGY intelligence oil

gas

power

Wednesday 03 April 2019

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OIL

Ghana: Aker Energy submits $4.4bn integrated plan for offshore DWT/ CTP block Page 52

GAS

Source: www.spglobal.com

Mozambique: Mozambique to establish sovereign wealth fund to govern gas revenue Page 53

Debrief

Dangote refinery leads Africa’s $30bn downstream investment push FRANK UZUEGBUNAM

Market Insight

Oil posts biggest quarterly rise since 2009 on OPEC cuts, sanctions

Page 57

OPEC weekly basket price DAY

PRICE

29/3/19

67.33

28/3/19

66.38

27/3/19

67.15

26/3/19

67.03

25/3/19

66.19 Source: OPEC

angote’s 650,000 barrels per day refining project in Nigeria, which is expected to start up in late 2022 is leading the charge for $30 billion investment push in Africa’s logistics, distribution, storage terminals, import facilities and retail marketing of the downstream sector. Other projects can be found in Egypt, Algeria, Côte d’Ivoire, South Africa, Morocco, Uganda and Angola according to African Refiners and Distributors Association (ARA). Africa’s largest refiner, Egyptian General Petroleum Corporation (EGPC) outlined a massive investment programme for its 8 refineries in addition to the imminent start-up of the privately financed $4.5 billion project at the Egyptian Refining Company. Algeria has also been investing heavily in upgrading its refining system, while the Uganda refinery is fast progressing. Abdourahmane Cissé, Côte

d’Ivoire energy minister, during the recent ARA conference in Cape Town presented a-€600 million new finance package for the SIR refinery in Abidjan and announced the planning for upgrades to meet the ARA’s AFRI-4 specifications which will guarantee unified product standard across the region, ease of intraregional petroleum product trade, reduction in bulk transportation costs and optimisation of regional infrastructure. The existence of a fragmented petroleum products market within Africa with different product specifications, sulphur content and emission requirements remains a huge stumbling block to accessing the benefits that can accrue from intra-regional trade in the sector. Africa’s demand for gasoline and diesel is expected to increase by about 4 percent a year. This is far above the projected overall global energy demand projected to increase at 1.3 percent a year as a result of increases in energy efficiency according to BP’s Global Energy Outlook. Analysts are particularly

bullish on the continent’s oil retail and storage sector, saying population growth will support rising demand, but they remain wary of how government policies could blunt this effect. “The main challenge is the government’s potential ability to damage the sector through subsidies or poor regulation. Subsidies have generally reduced, and we support this move,” Paul Eardley-Taylor, Standard Bank’s head of oil and gas for Southern Africa, said. The continent as a whole has struggled to keep up with the rest of the world in terms of refining capacity. Delays to projects and the lack of committed financing has stifled progress in the past, but the investment environment now looks more favorable. Africa’s population and economic output is set to boom in the coming decades, supporting energy demand, while elsewhere in the world energy demand is maturing. In 2017, ARA confirmed its commitment to the 2020 clean fuel policy, which outlined a plan for vehicle emission con-

trols and standards to achieve all the benefits of clean air quality. However, facing the reality of the 2020 objective, countries should consider a time-limited waiver allowing refineries to meet the clean fuel specification requirement at a later date where clear finance and action plans have been communicated,” the association had said in a statement. ARA further noted that, with the difficulty in raising the required funds for large capital investments, refineries must rigorously evaluate the financial return on such investments, the benefits of clean fuels on air quality and public health and the benefits of a refinery over a product import terminal as determined by the Wood MacKenzie study undertaken on behalf of the ARA in 2014. Nigeria’s Anibor Kragha replaced outgoing ARA president Hilaire Kaboré of Burkina Faso to become the ARA president for 2019/20. Kragha said he is “looking forward to strengthening the ARA to assist its members, both refiners and distributors, to respond to the rapid growth in African demand”.

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for a floating production, storage and offloading vessel (FPSO) as a center for processing and exporting of crude oil, with a subsea production system (SPS). The field development will comprise of up to 26 subsea wells, including 14 advanced, horizontal oil producers and 12 injectors with alternating water and gas injection (WAG), and the use of multiphase pumps as artificial lift, to

Wednesday 27 March 2019

oil

Ghana: Aker Energy submits $4.4bn integrated plan for offshore DWT/CTP block orwegian oil company, Aker Energy, said it has submitted an Integrated Plan of Development and Operations (PDO) to Ghanaian authorities for a $4.4 billion plan for developing the Deepwater Tano/Cape Three Points (DWT/CTP) block offshore Ghana. The block’s Pecan field, located about 115 kilometers off the West African country in ultra-deep waters ranging from 2,400 to 2,700 meters, is estimated to hold 334 million barrels of oil, with estimated plateau production of 110,000 barrels of oil per day over 25 years, Aker Energy said. “After tremendous teamwork and strong collaboration with partners and Ghanaian authorities, we have submitted a comprehensive plan of development and operation. The plan will, once approved, ensure an efficient development and production of the Pecan field and further optimisation of the DWT/CTP petroleum resources in a way that will deliver value to the people of Ghana and to us and our partners,” says Jan Arve Haugan, Chief Executive Officer at Aker Energy. Aker’s Pecan plan calls

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maximize oil production. Aker Energy, which is planning an Initial Public Offering to raise funds for the project, said total capital expenditure for the development is estimated to be $4.4 billion, excluding the charter rate for a leased FPSO. The operator is evaluating offers from leasing contractors to supply a conversion hull FPSO, and has reportedly received

offers from Modec, SBM, Yinson and Bumi Armada, according to reports. The plan for development and operations (PDO) was submitted to Ghanaian authorities and upon approval, the partners will work toward a final investment decision (FID). It is estimated that first oil from the Pecan field will come in 2022, 35 months after the FID is made.

Brief Africa: African downstream buoyed by $30 billion investment

frica’s downstream sector has seen an injection of $30 billion in investment, as the continent is one of the few regions where oil demand is expected to grow steadily for the next two decades, the African Refiners and Distributors Association (ARA) said. This investment is most evident in countries such as Nigeria, South Africa, Morocco and Angola, the ARA said in a statement after the conclusion of its annual event in Cape Town. Large refining projects include the 650,000 b/d Dangote refinery in Nigeria, which is expected to start up in late 2022, along with a big push in the Egyptian and Algerian refining sector, the ARA noted. Besides refining, a lot of capital has been invested in logistics, distribution, storage terminals, import facilities and retail marketing, the refining association said. Delegates and speakers at the conference stressed the critical need to create the right regulatory structures that will satisfy the massive requirement for finance to meet Africa’s growing oil demand. Some analysts are particularly bullish on the continent’s oil retail and

storage sector, saying population growth will support rising demand, but they remain wary of how government policies could blunt this effect. “The main challenge is the government’s potential ability to damage the sector through subsidies or poor regulation. Subsidies have generally reduced, and we support this move,” Standard Bank’s head of oil and gas for Southern Africa, Paul Eardley-Taylor, said. The continent as a whole has struggled to keep up with the rest of the world in terms of refining capacity. Delays to projects and the lack of committed financing has stifled progress in the past, but the investment environment now looks more favorable. Africa’s population and economic output is set to boom in the coming decades, supporting energy demand, while elsewhere in the world energy demand is maturing.

Angola: Sonangol takes possession of Drillship

ngola’s national oil company Sonangol recently took possession of the first of its two drillships built by a Korean shipyard firm, signaling the start of the implementation of its regeneration program that include investment in deep and ultra-deep water drilling and offshore marginal areas. The delivery of Libonogos, the drillship built by Korean shipyard Daewoo Shipbuilding Marine Engineering, is a clear indication that Sonangol and Angola are ready for the next round of campaigns to woo additional investments especially from Angolan, African and in-

ternational independents that have either been missing in action or put brakes to their operations in the country’s offshore market. The new seventh-generation drillship, christened March 21 in Busan, is capable of operating in deep, ultra-deep and pre-salt waters and will be available to carry out national and international work, Sonangol said. “Having now in our hands a drill rig, whose specifications allow us to overcome the challenges of the new exploration and production frontiers, Sonangol increases the range of integrated services of the primary chain,

reducing dependence on external availability in the fulfillment of the exploration work programs,” Carlos Saturnino, Sonangol president said. Libongos, along with sister ship Quenguela currently under construction at DSME and expected for delivery in the first half of 2019, will be among four drillships operated by Sonadrill, an Angola-focused joint venture between Sonangol and drilling contractor Seadrill. Seadrill announced in February that it will manage and operate the four vessels on behalf of Sonadrill for an initial term of five years.

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gas Brief Algeria: Fresh political uncertainty in Algeria focuses European gas attention

he already fragile political stability in Algeria, a key gas supplier to southern Europe, is again at risk after the country’s army chief of staff called for the removal of ailing President Abdelaziz Bouteflika. Algeria supplied some 33 Bcm of gas to Europe by pipeline last year and also shipped some 15 Bcm of LNG, mostly to European markets, meaning any disruption to deliveries would be a serious concern for the European market. The move by General

Ahmed Gaid Salah, who called for the application of Article 102 of the Algerian constitution which could force the president to resign if it is shown he is unfit to rule, may have contributed to a small spike in European gas prices, according to traders. Others played down the late jump in the gas prices, pointing to other factors such as a colder weather outlook and low wind. “Maybe someone is betting to a geopolitical risk in Algeria, but at the moment I cannot see this risk,” an Italian trader said. The declaration by the army chief was the latest twist in a saga that has led to mass protests against the president’s continued rule and the prevailing risk of disruption to Algeria’s mainstay energy exports. The country remains politically paralyzed, with Bouteflika agreeing not to stand for a fifth term as president, but then postponing the April 18 election and not setting a new date. Protests also continue against Bouteflika’s 20-year rule.

While Gen. Gaid Salah’s intervention could help to usher in a new era of Algerian politics, uncertainty is bound to remain as Algiers enters uncharted territory. “The evolving political situation in Algeria could well influence market sentiment and price movements on the European hubs in the next couple of weeks as the country supplies around 10 percent of total EU gas demand,” Greg Molnar, gas analyst at the International Energy Agency, said. While some traders played down the Algeria

risk, the news was still the focus of attention among market participants. Gas exports by pipeline from Algeria to southern Europe have dropped to an average of 34 million cu m/d since early March on low European demand and contractual arrangements between stateowned Sonatrach and its southern European buyers. Algerian gas supplies to Spain and Italy were as high as 78 million cu m/d in late February, but exports have dropped, especially to Italy, at the start of March, according to data from S&P Global Platts Analytics. Algeria’s oil-indexed gas contracts are currently well out of the money compared with European hubs, as the bearish trend in European gas prices shows no sign of letting up. Sonatrach vice president Ahmed El-Hachemi Mazighi said earlier that its European pipeline customers had “dramatically” reduced their monthly, weekly and daily gas orders so far in 2019 due to mild weather reducing demand.

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BUSINESS DAY

Mozambique: Mozambique to establish sovereign wealth fund to govern gas revenue

ozamb i q u e ’s governm e n t plans to establish a sovereign wealth fund to manage income from future gas production, President Filipe Nyusi said. The state will also allocate a fixed portion of revenue to the state budget to fund infrastructure development, poverty reduction and economic diversification, Nyusi said in the capital, Maputo. Companies including Eni SpA and Anadarko Petroleum Corp. are developing gas discovered nine years ago in deep waters off the coast of Mozambique, one of the world’s poorest countries. The southeast African nation holds 100 Tcf of proven natural-gas reserves, the third-biggest in Africa, according to the Energy Information Administra-

tion. “Savings will serve as a cushion when gas prices are low,” Nyusi said. The state should manage the

funds to avoid effects like Dutch Disease, he said, referring to the phenomenon in which a commodity boom makes a

country’s currency more expensive and its other goods less competitive. According to Nyusi, it is estimated that the Rovuma basin, where Anadarko and other operators are present, may contain 270 Tcf of natural gas. If confirmed, the deposit would be the biggest in Africa. Anadarko is planning to make a final investment decision on a $20-billion project in Mozambique, including an onshore liquefied natural gas processing facility, by June. ExxonMobil Corp. plans to make a decision on an even bigger LNG project in the same area by the end of the year. Anadarko and Exxon’s projects will be the biggest private investments in Africa, according to Standard Bank Group, a Johannesburg-based lender.

LNG Market: Vitol’s head of LNG expects supply shutdowns due to market glut

itol Group’s head of liquefied natural gas trading, Pablo Galante Escobar, said that the outlook was bleak for LNG in the short term due to an “incredibly” oversupplied market, which would lead to some output shutdowns. “We had record imports of LNG into Europe. Three years ago we saw 63

cargoes in one month, in March we see 125 cargoes, April and May we expect 150 and 170 cargoes. This is really unprecedented,” Escobar, told the FT Commodities Global Summit in Switzerland. “We said before that we expect a battle between the US LNG and Russian pipelines. We believe that is happening now but it is being joined by LNG

from the Middle East, Africa that is not finding the homes in Pakistan, Bangladesh or China, where the winter was mild but there are other factors, such as excess production.” This week, spot prices for LNG cargoes to be delivered into northeast Asia in May fell to a nearly three-year low of $4.30 per million British thermal

units (mmBtu) as buyers are shunning cargoes and re-directing them to Europe, trade sources said. In Europe, the Dutch front-month gas price is trading at around $4.90 per mmBtu, with prices holding a premium over Asia. Lower-than-expected LNG demand and a drop in prices in Asia have made Europe a top destination for LNG produced in the Atlantic basin since October, a drastic change from previous years. A number of Asian companies, including South Korea’s KOGAS and China’s PetroChina having been selling cargoes from their US and Russian offtake, respectively, to Europe in the past several months. Several trade sources said that prices would need to go down by around $1 per mmBtu to cause shutdowns, but admitted that the costs for delivery from the United States to Europe look “not very healthy.”

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Wednesday 03 April 2019

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power

DRC: Green mini-grid programme to reduce energy poverty

he African Development Bank’s board has approved a $20 million facility to the Democratic Republic of Congo (DRC), to support renewable-based, minigrid solutions to the offgrid cities of Isiro, Bumba and Genema. According to the development bank, the green mini-grid programme will serve as the pilot to an innovative private-led electrification approach to deploy renewable-

based mini-grid solutions in the central African nation. Upon completion, the envisioned minigrids that range from 3 to 10MW will directly connect 21,200 households and 2,100 SMEs, and public buildings, benefitting at least 150,000 people. With limited grid coverage, around 10 percent nationally, many Congolese rely on kerosene or diesel fuel for their lamps, cookers and electricity generators.

Less than 1 percent of rural and 35 percent of urban areas have access to electricity from the national grid. Amadou Hott, the Bank’s Vice-President for Power, Energy, Climate Change and Green Growth said the Bank’s financial support to the DRC’s off-grid electricity programme would transform the country’s energy sector and deliver high development impact. He observed that

while helping to eradicate the use of diesel fuel in the target communities, the programme will also foster the country’s transition to low-carbon growth. “The innovative scheme under this programme is also expected to demonstrate viability for private sector led mini-grid financing, which will open up a market for mini-grid investment in sub-Saharan Africa. We hope to replicate the same model once this pilot demonstrates success,” Hott said. The bank’s financing will complement the UK’s Department for International Developmentbacked Essor - Access to Electricity (A2E) initiative, which is a technical assistance programme that supports the Government-led mini-grid auction and project preparation. The DFID support seeks to promote the proliferation of private-led green mini-grid projects in the DRC. The bank will provide a blend of private and concessional resources notably from the Green Climate Fund (GCF) and other development partners to the sponsors/consortia that will be selected in the auction process.

Report: Switchgear monitoring system market to reach 7.83 percent by 2023

he switchgear monitoring system market is projected to reach $2 billion by 2023 from an estimated $1.4 billion in 2018, at a CAGR of 7.83 percent. Growing investments in renewable energy and demand for safe and secure electrical distribution systems have increased the demand for switchgear monitoring system. However, high cost of monitoring devices and stringent regulations for SF6 switchgears could act as a restraint for the market, this is according to Research and Markets. The gas insulated switchgear (GIS) segment is expected to hold the largest market share in 2018 and is projected to be the fastest growing segment during the forecast period. The components are mainly used in industrial areas to fulfill high-energy demands through a spacesaving design of minimum cost. GISs are deployed in various industries, serving different needs at varying voltage levels. Many developed countries have

also started improving their T&D network to ensure safety and security with the help of switchgear monitoring system. The hardware segment is expected to hold the largest market share during the forecast period because these devices can be controlled or automated from the control room by the control system/ software, and are essential in monitoring operations. Asia Pacific is expected to hold the largest market for hardware with rapid adoption in countries such as China and India. The utilities segment, by end-user, held the largest market share in 2018 and is estimated to be the fastest growing segment during the forecast period because the utilities segment is responsible for the generation, transmission, and distribution of electricity. The European region is expected to be the second fastest growing market for switchgear monitoring system by 2023. The European power generation, transmission, and distribution systems are comparatively mature.

Report: Shell working to become world’s top electricity producer

oyal Dutch Shell could ramp up acquisitions of electricity producers to achieve its target of becoming the world’s biggest power company by the 2030s, according to analysis by Sanford C. Bernstein Ltd. To become the biggest low-carbon electricity provider, the company must produce 214 terawatt-hours of clean power every year by 2035, the analysis shows. That is 11 percent more than Egypt, a country of nearly 100 million people, generated last year, according to

data from BP. Shell could achieve that through organic growth, ultimately managing 61 gigawatts of power capacity, said Bernstein. However, it will probably want to move even faster and expand acquisitions of electricity producers, a strategy that has already divided investors. “Shell wants electricity to be the fourth pillar of their business, alongside oil, gas and chemicals,” analysts including Oswald Clint said in the report. “In much the same way they dominate the value chain in oil and gas, they want to

do the same in electricity.” The Anglo-Dutch major made an aggressive move into the UK retail power market this month by offering one of the cheapest tariffs available and supplying its 700,000 customers with power entirely from renewable energy. A key challenge to the company’s plan to become the world’s biggest power company is the fact that Shell has pledged to cut its carbon footprint in half by 2050. This means most of the capacity it adds to its portfolio must come from wind and solar

power. Currently, Shell manages 10 gigawatts of electricity in the US and only a third of that comes from renewables. To reach the 61-gigawatt target, calculated by Bernstein, the company needs to add 3 gigawatts of clean capacity each year. That is affordable within Shell’s current “new energies” budget of $1 billion to $2 billion a year, Bernstein said. However, the company will probably want its clean-power capacity to grow faster than that, Clint said by phone.

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BUSINESS DAY

POLICY Why Canadian Overseas Petroleum remains committed to Nigeria assets WEST AFRICA

ENERGY intelligence

DIPO OLADEHINDE

ondon stock exchange listed Canadian Overseas Petroleum Limited (COPL) focused on sub-Sahara Africa said it has announced plans to submit not less than three appraisal wells in key Nigeria offshore oil assets OPL 226. The oil and gas exploration and development company focused on sub-Sahara Africa said it is on track to bring four appraisal wells onto production at a forecast initial production rate of 6,000 barrels of oil per day to 10,000 by the end of 2020.

Arthur Millholland, CEO of Canadian Overseas Petroleum Limited said the company is well placed in the development of our strategically important Nigerian asset as it look to commence drilling of the appraisal wells later this year which is a key step to enable COPL to become a successful mid-tier oil and gas company. The company expects the performance bond to be in place to the satisfaction of the regulatory authorities in the coming weeks, at which point activities on OPL 226 can be commenced in earnest. “Over the last year we have been focused on securing the required contracts and regula-

tory approvals for OPL 226, raising the necessary funds for the expanded and accelerated program of the asset, while at the same time sourcing contractors and suppliers to perform the drilling, logistics and supplies needed to enable production,” Millholland said. Canadian Overseas Petroleum also secured a $7 million performance bond from a Nigerian bank which will allow it to start work at its OPL 226 license offshore Nigeria which will meet the principal condition of the 24-month extension of Phase 1 till October 2020. Security for the Performance Bond will be provided by COPL’s affiliate ShoreCan.

“We look to the future with confidence given the imminent commencement of operations and the recent evaluation of our Nigerian asset’s resources,” CEO of Canadian Overseas Petroleum Limited said. Canadian Overseas Petroleum also noted it has secured a term sheet of up to $50 million into the company’s subsidiary ShoreCan from The Mauritius Commercial Bank Limited and Trafigura while also continuing discussions with potential contractors and suppliers about the appraisal well and several other wells. Canadian Overseas Petroleum said a “large international offshore provider” has ap-

proached the company to bid for the other appraisal wells, with discussions ongoing. COPL said it is in talks with “certain shareholders and other organizations” to obtain the necessary funding. In March, the company’s Nigerian Affiliate signed a nonbinding letter of intent with an offshore drilling contractor for a new build high spec jack-up drilling rig. The rig is currently undergoing testing and final inspections before its acceptance by the contractor. Successful completion of these tests is one of the affiliates’ conditions in moving forward in the contracting process.

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WEST AFRICA

ENERGY intelligence Brief South African energy minister defends oil deal with South Sudan

eff Radebe, South Africa’s energy minister, has rebuffed criticism against an oil deal with South Sudan, saying South Africa must do what is right to meet its energy needs. “South Africa is a net importer of crude oil and it has always been our strategy to source oil and gas for our domestic use, both internationally and where possible within our own territory,” the minister said. He was responding to a report which exposed “a dodgy oil deal” worth 1 billion US dollars with South Sudan, which claimed that Radebe’s team “splurges millions in pursuit of energy venture in South Sudan.” “In all my pronouncements, including those to Parliament, on the issue of high oil prices, I have been transparent on the department’s engagements with my counterparts on the continent,” Radebe said. This is to bolster South Africa’s position with regards to access to crude oil, to ensure self-sufficiency as well as to find ways of mitigating fuel price fluctuations in the long term, he said. “As government we would want to get to a situation in which the prices of

nificant oil producer with estimated reserves of 3.5 billion barrels of crude oil. It also has 3 trillion cubic feet of natural gas in its estimated reserves. The country’s reserves are ranked third largest on the African continent after Nigeria and Angola. As a land-locked country, South Sudan is dependent on a pipeline passing through Sudan so as to get its oil to the market. The project incurs significant logistical costs. It is envisaged that a joint investment project will assist South Sudan in finding an additional export route and in turn, bring strategic oil reserves to other markets including South Africa. Toward the end of 2018, South Sudan invited South Africa to consider participation in the oil and gas sector in that country, according to Radebe. Such participation can only be done through a government-to-government agreement, Radebe said, adding that in the conclusion of a memorandum of understanding (MOU) between the two countries, all the constitutional and legal processes undertaken have to involve the Department of International Relations and Cooperation and the

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Wednesday 03 April 2019

finance people appointments

General Electric appoints Sulemana Abubakar as Ghana CEO

eneral Electric has announced the appointment of Sulemana Abubakar as the Chief Executive Officer for GE Ghana. In this position, Abu will play a pivotal role in steering the next phase of strategy and growth for GE in Ghana. Based in Accra, Abubakar will lead the development of diverse programs with public and private sector projects and partnerships in Ghana. “We believe that the appointment of Abubakar is a further step in making our Africa vision a reality. We are also glad to bring on board someone with the experience and passion required to drive our growth in this region,” Farid Fezoua, President and CEO, General Electric Africa, said while reiterating GE’s commitment to work together with governments and private sector in order to develop public private partnerships and sustainable outcome-based

solutions. Abubakar joined General Electric in 2004 and brings on board more than 27 years of experience in establishing and directing global project

teams, including planning and deploying business systems in the pharmaceutical and banking sectors and across both developed and developing markets. He holds a

BS in Civil Engineering from Kwame Nkrumah University of Science & Technology and an MBA from Imperial College, University of London. Abubakar will continue to be based in Ghana and will be a part of the Africa Leadership Team. “I am very excited to take on this role leading GE’s growth in Ghana. We see enormous opportunities for GE. I look forward to working with our business leaders, colleagues and customers to ensure GE’s continued growth and success in Ghana” said Sulemana Abubakar. Partnership with Governments and local companies form a very important part of GE’s growth in Ghana and across the continent. Through these collaborations, GE has made significant investments to develop infrastructure projects, including sustainable energy solutions, provision of state-of-the-art oil & gas infrastructure as well as improve access to quality healthcare.

BP expands program to lure mid-career talent

fuel compare favourably with those of oil producing countries,” said Radebe. South Africa’s involvement in various parts of the continent including South Sudan is informed by this strategy, he said. South Sudan is a sig-

Presidency. The Presidential Minute empowering the minister of energy to sign the MOU on behalf of the South African government was duly authorized; without this, an MOU can never be concluded, Radebe explained.

P PLC is expanding a program to lure experienced professionals back into the workforce for full-time and projectbased roles. Initially a Chicagobased program that BP piloted in 2017 with Chicago-based start-up The Mom Project, the recently re-booted BP Returnship Program targets women and men who stepped out of the workforce for family or personal reasons and wish to return to work. BP contends that the paid sixto nine-month full-time internship program offers the company access to a broader set of potential employees whose outlook and backgrounds may differ from those in their typical interview talent pool. “The BP Returnship Program is an extensive, structured program com-

prised of a curated track across various work teams that focuses on a series of project-based assignments to provide returning professionals with robust, comprehensive learning experiences,” said Christine Taktajian, BP recruiting lead. BP is currently offering its Returnship Program to nine individuals in its refining, US pipeline and

logistics, refining technology and engineering, marketing, sales and finance units in Chicago and Naperville, Ill., Whiting, Ind. and La Palma, Calif. The Mom Project continues to support the initiative by structuring the program and sourcing candidates. “We found great success partnering with The Mom Project for our first contingent in The BP Re-

turnship Program,” noted Brian Zellner, a BP human resources manager who developed the initiative with Taktajian. “The launch program served as a basis for our company to find new and unique talent, with our goal to increase diverse thought and talent among our workforce. With the second team, we hope to expand the program further within BP and continue to serve as a leader in diversity and inclusion in the oil/gas industry.” Taktajian said that the initiative addresses changes taking place in the workforce. “We created the program at BP because we realized that in today’s competitive market, a growing number of professionals no longer have the traditional cookie-cutter career paths,” she noted.

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marketinsight

more-active June contract settled up 48 cents at $67.58 a barrel. US West Texas Intermediate (WTI) futures rose 84 cents, or 1.42 percent, to $60.14 a barrel, and posted a rise of 32 percent in the January-March period. For the two benchmarks, the quarterly rise was the biggest since the second quarter of 2009, when both gained about 40 percent. US sanctions on Iran and Venezuela have boosted prices this year. Wash-

hauling to far-away buyers. Throughout its transit from pipes to tanks and onto vessels, foreign compounds from other fuel or chemicals for cleaning tanks or stabilizing material can leach into the supply and foul up refining equipment. While crude passes through a similar chain in the Middle East too, the risk of impurities is lower because each oil vari-

ENERGY intelligence

ington is keen to see that Malaysia, Singapore and others are fully aware of illicit Iranian oil shipments and the tactics Iran uses to evade sanctions. Sigal Mandelker, undersecretary of the Treasury for Terrorism and Financial Intelligence, told reporters in Singapore that the United States had placed additional “intense pressure” on Iran. Meanwhile, the United States has instructed oil trading houses and refiners

to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published US sanctions, three sources familiar with the matter said. Also lifting prices this year has been a deal between the Organization of the Petroleum Exporting Countries and allies such as Russia to cut output by around 1.2 million barrels per day, which officially started in January. The producer countries are to meet in June, but some cracks are emerging. OPEC leader Saudi Arabia is struggling to convince Russia to stay much longer in the pact, and Moscow may agree only to a threemonth extension, three sources familiar with the matter said. The market has also been supported by slower output growth in the United States, where production has steadied since mid-February. The US government reported that domestic output in the world’s top crude producer edged lower in January to 11.87 million bpd.

Asian buyers rejected US shale oil due to impurities ome Asian crude buyers are rejecting US shale oil due to impurities. As various types of crude pass through the supply chain from inland shale fields spanning Texas to North Dakota, they risk picking up impurities before reaching Asia, the world’s biggest oil-consuming region. Specifically, refiners are worried about the presence of problematic metals as well as a class of chemical compounds known as oxygenates, which can affect the quality and type of fuel they produce. Two refiners in South Korea, the top buyer of US seaborne supply, have rejected cargoes in recent months due to contamination that makes processing difficult. Growing North American output from dozens of fields pushes everything from highly-volatile oil to sticky residue through shared tributaries and trunk pipes. Smaller carriers then take cargoes from shallow-water ports to giant supertankers in the Gulf of Mexico for

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WEST AFRICA

Oil posts biggest quarterly rise since 2009 on OPEC cuts, sanctions il prices rose about 1 percent, posting their biggest quarterly rise in a decade, as US sanctions against Iran and Venezuela as well as OPEC-led supply cuts overshadowed concerns over a slowing global economy. The May Brent crude oil futures contract gained 57 cents, or 0.84 percent, to settle at $68.39 a barrel, marking a first-quarter gain of 27 percent. The

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ety typically has its own designated infrastructure. In the case of American condensates, a type of ultra-light oil pumped in shale fields, cargoes can get pollutants such as “oxygenates, metals and cleaning agents,” said Sebastien Bariller, senior vice president at South Korea’s Hanwha Total Petrochemical Co. That is causing un-

certainty around US oil quality, unlike purchases from the Middle East, where quality is stable, he said. The two South Korean refiners, SK Innovation Co. and Hyundai Oilbank Co., turned away their purchased shipments of Eagle Ford crude that were due to arrive in January and February due to quality issues.

OPEC Flakes Trump calls for OPEC to boost oil production, says price too high

S President Donald Trump has called for the Organization of the Petroleum Exporting Countries (OPEC) to boost oil production to lower the price of the commodity. “Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!” Trump wrote in a post on Twitter. Immediately following Trump’s tweet, US crude oil futures fell by more than $1 to $58.33 a barrel and Brent futures were down by more than $1 to a session low of $66.76 per barrel. Crude oil prices have risen this year amid supply cuts by OPEC as well as US sanctions on OPEC member countries Venezuela and Iran. The drop in production has led to a tightening of oil inventories. But analysts have warned oil prices would be higher by now if not for a spreading economic slowdown expected to soon start hitting fuel con-

sumption. It is the second time this year that Trump has taken to Twitter to urge the cartel to backtrack on its current policy of cutting production. Unlike last year, when Trump’s attacks triggered a swift Uturn in Saudi oil policy, the group has so far ignored his calls. Earlier this month, Saudi Arabia led the Organization of Petroleum Exporting Countries and their allies to reaffirm their commitment to output cuts, but conceded they should defer until June the decision on whether to extend the curbs.

OPEC+ compliance remains intact despite dwindling US market share

PEC exports to the US are likely to continue trending downwards, according to the majority of energy executives polled in a Gulf Intelligence GIQ survey. OPEC crude exports to the US fell to a 5-year low in January while US stockpiles climbed to 3.6 million barrels in February, according to the US Energy Information Administration (EIA). US production has increased a staggering 140 percent since 2008. Some analysts forecast that the country could be a net exporter of crude and refined products by as soon as 2020. US output hit 12 million b/d in February, contrary to previous expectations that this level would not be reached until the second half of the year. Saudi Arabia, the largest oil producer within OPEC, has seen its crude exports to the US drop steadily over recent years, from 1.361 million b/d in 2012 to 949,000 b/d by 2017 and to about 500,000 b/d by the end of last year. The US has in fact been importing less crude oil

altogether, not just less OPEC crude, from 262.8 million b/d per month at the start of 2017 to 226.6 million in October 2018, the last month for which there is data, according to the EIA. Despite the loss of US market share, however, OPEC and its coalition of non-OPEC producers, including Russia, have continued with their strong commitment to comply to the output cut deal agreed to in December, namely to trim production collectively by 1.2 million b/d through to at least June 2019. The agreement by the group of 25 producers, known as OPEC +, follows two years of cuts of 1.8 million b/d, which succeeded in reversing a 3-year oil price slide and restored a certain amount of stability to the market.

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talking points

Thailand’s planned 2.7 GW floating solar farm highlights Nigeria’s lag STEPHEN ONYEKWELU

hailand is boosting its share of clean energy and has planned to build the world’s largest floating solar farms to power Southeast Asia’s second-biggest economy as Nigeria struggles to keep its dams functional. Thailand’s state-run Electricity Generating Authority of Thailand (EGAT) will float 16 solar farms with a combined capacity of more than 2.7 gigawatts in nine of its hydroelectric dam reservoirs by 2037. Several of the proposed projects are more than double the size of the world’s floating system now and the venture dwarfs the 1.3 gigawatts of generation installed globally as of October, 2018. Eight of EGAT’s 16 planned floating plants would be larger than what is now the world’s biggest, a 150-megawatt system floating above a collapsed coal mine in China. Thailand’s biggest will be the

325-MW farm at Sirikit Dam in northern Thailand, scheduled to be completed in 2035. The hydro and solar power will work in synergy in this project and use existing assets and resources. But Nigeria, Africa’s most populous nation has been unable to build and operate simple dams. The Okere George Dam in Iseyin, Oyo State is a textbook example of how successive governments in Nigeria have managed dams. Turbines for the dam were bought in 1982 but 35 years later the equipment procured with public funds for such a critical economic lies waste. Work on the dam began in 1977, with a plan to generate 3,750 megawatts of hydro-power and irrigate about 2.8 million hectares of farmland. Only the Federal Government can give an account of how much money has been sunk into this corruption cesspool. Oyo State alone has a total of 22 dams, second to Kano State, where 23 dams are domiciled. While Nigeria struggles to build and

maintain dams, Thailand is making an ambitious bet on floating solar, which tends to be more expensive than the groundmounted units that dominate the sector. When EGAT builds all its proposed projects, the company says floating solar will account for one tenth of the country’s clean energy sources, compared to just 1 percent of global solar capacity by 2050, according to BloombergNEF. “As the cost of solar equipment comes down, many developers are looking at water with grid connection,” said Jenny Chase, head of solar analysis for BloombergNEF in London. “This seems to be a great combination of long-term and well-structured planning, with individual projects identified already.” Locating the plants at existing hydropower reservoirs means the utility will not need to spend as much on infrastructure tying it into the grid and the system will improve the overall output of the hydropower plants, according to Thepparat Theppitak, deputy governor of the utility. In the future, the company will also use lithium-ion bat-

teries to store electricity produced by the floating plants. Thailand has been moving towards generating more electricity from renewable sources in recent years. It has set the goal that renewable energy will make up 27 percent of overall capacity by 2037, according to its latest power development plan. The bidding for the first floating solar project will begin in two months and will be open to international companies, Thepparat said, with the budget set at 2 billion baht ($63 million) for a 45 megawatt farm at Sirindhorn Dam in northeast Thailand. That plant is expected to come online next year. Floating systems are considered about 18 percent more expensive than landbased ones because of the need for floats, moorings, and more resilient electrical components, according to the World Bank. However, the projects bypass land use in forests and farmlands and water can also help to cool the solar panels, increasing the efficiency by 10 percent.

BUSINESS DAY

Wednesday 03 April 2019

CITYFile Customs seizes rice, items worth N460m AMAKA ANAGOR-EWUZIE

omptroller-General’s Strike Force of the Nigeria Customs Service (NCS) has intercepted items including 6,102 bags, equivalent to over 10 trailers of 50kg foreign parboiled rice with Duty Paid Value (DPV) of N460.8 million. Four suspects have also been arrested in connection with the seizures. Their offences range from false declaration to outright prohibition. Abdullahi Kirawa, national coordinator of the strike force told journalists in Lagos that the seizures were made between January 1 and March 30, 2019 in zone A, which covers south-western Nigeria. He listed other seizures to include 304 cartons of adulterated jewellery worth N36.5 million (declared as bead mold), a unit each of Toyota Avalon (N2.5 million) and MAN Diesel truck (N8.5 million), 1698 pieces of used tyres (N8.5 million), and 952 cartons of rubber footwear and 140 cartons of rubber soles worth N13.4 million. According to him, another 400 cartons of HP Desktop and Monitor worth N55.4 million, 562 bags of 1kg Indian Rice and 50 bags of 1kg salt worth N59.9 million, bales of new and old jeans trousers, shirts, ladies’ gowns, 2019 Batch “A” Corps members participating, during the skills acquisition training, at NYSC Temporary Orientation Camp in Amada, Akko belts and handbags, and bales of upholstery materials, among others. Local Government Area of Gombe State. NAN Kirawa lamented that due to ignorance and unnecessary risk, importers lose millions of naira to outright seizure of non-contrabands over false declaration, rather than honest declaration and payment of right duties. “By paying the right duties, we are not only helping ourselves but others by ensuring job creation and employment for our teeming youths; curbing of crime, as people will be gainfully employed, and there will be no idle mind, and government gets the required revenue to pursue its programmes,” Kirawa said.

Why Lagos is encouraging plea bargain - Official

JOSHUA BASSEY

agos State government has identified prison congestion and its socioeconomic impact on inmates and the society, as a major reason why it is prioritising and encouraging the option of plea bargain in the administration of criminal justice system in the state. In the last two years, a total of 230 applications for plea bargain agreement had been received by the state, an indication that the option is being embraced by litigants. Nigerian prisons apart from remaining in neglected state and lacking modern necessary facilities are populated by awaiting trial inmates, some of whom have spent more than 20 years on the awaiting trial list. Adeniji Kazeem, the attorney-general and commissioner for justice, Lagos State, disclosed in a keynote address at a Rule of Law and Anti Corruption (RoLAC) workshop organised for judiciary correspondents in Lagos, on Monday. Plea bargain is a negotiated agreement in which a defendant to a crime pleads guilty to

a lesser offence for some concession by the prosecution. The attorney-general represented by Olubunmi Olugasa, a special assistant to the director of public prosecution, said: “The plea bargain programme is one that the state takes a lot of interest in because, when you talk about prison decongestion, we know that Lagos State is one of the states with the highest level of congestion. “The reason for that is not far-fetched; the state is so populated and the likelihood of having a high crime rate cannot be done away with, and that is why, looking at all these factors, the state decided to enhance the plea bargain programme. “In line with this, the plea bargain manual is already going to be released very soon in partnership with RoLAC. “In the administration of criminal justice law, we will discover that the provision of plea bargain has been there for a while, but gradually, the idea takes time to be implemented, and overtime you discover that the society in Lagos is gradually becoming our bane.

“Each aspect of the society has to be carried along and that is why magistrates have been trained, prosecutors have been trained, some public defenders have been trained and members of the Nigerian Bar Association (NBA),” he said “So far, we have had about 230 applications coming into Lagos in the last two years, and from our records here, about 80 have become the judgment of the court. “Our aim and desire is that at the end of this programme, we will have a clearer understanding and better evaluation of the concept and hopefully, we will all be on the same page in moving the criminal justice system in Lagos forward,” According to Kazeem, Lagos is currently embarking on a review of its laws to make the system better. “In addition to this, the state is also reviewing both criminal laws and the administration of criminal justice law which is ongoing right now and I am sure when the appropriate time arises, all of us will be part of that process,” said Kazeem.

Residents groan as water scarcity hits Lokoja ... sachet water producers increase price

cute water scarcity has hit Lokoja, the Kogi State capital, and its environs following the shutdown of the Greater Lokoja water treatment plant by the state government since March 27. The waterworks built at a cost of N12 billion has the capacity to treat and reticulate 600 million litres of water per day to residents of Lokoja and its environs. Checks around some areas of the town on Monday showed both residential and commercial premises are affected by the water scarcity. Also affected is the production and distribution of sachet (pure water) as many of the manufacturers used to source their water from

the public waterworks. Many of the manufacturers have closed shops while few still in production have increased the price from N100 per bag to N120 per bag. The development has forced some residents to patronise commercial water hawkers popularly called Mairuwa, even as a cart of 12 cans of 25-litre volume which, before now, sold for N300, has risen up to N350. However, people living in native areas of Kabawa, Madabo, Augwar Kura, Cantonment, Old Market and others are source water directly from River Niger. Speaking on the development, the public relations officer in the state ministry of water

resources, Musa Usman, said that the water treatment plant was shut down as a result of electro-mechanical problems. According to him, four of the six heavy high lift pumps at the plant are down while there is also a major burst on the main supply line. He said that qualified technicians from the ministry and the waterworks have been directed to address the problem at water treatment plant. When asked when normal water supply would be restored, Usman said it was difficult to give a specific date but assured the problem would be solved, as the government has released adequate funds for the operation and maintenance of the water plant.

2 charged with forcing house help to swallow iron

n Ikeja Chief Magistrate Court ordered that a prophet and prophetess, who allegedly forced a 16-year-old domestic staff to swallow an iron cross for “spiritual cleansing” be remanded in prisons. The police charged Kehinde Salami, 25, and Yetunde Akinol, 42, who reside in IfakoIjaiye in Lagos, with four counts of conspiracy, breach of peace, false pretenses and attempted murder. The defendants pleaded not guilty to the charges, but admitted that they gave the complainant an iron cross to swallow for “deliverance from witchcraft”. The chief magistrate, T.A. Ojo, ordered that they be remanded in Kirikiri Prison, pending the fulfillment of their bail conditions. Ojo admitted each of the defendants to bail in the sum of N200,000 each. She also ordered that the case file be duplicated and sent to the Department of Public Prosecution (DPP), for advice, and adjourned the case until April 30. The prosecutor, Kenrich Nomayo, told the court on Monday that the defendants attempted to kill the domestic staff by forcing her to swallow an iron cross against her wish. Nomayo alleged that the defendants committed the offence on March 24 at about 4 p.m., at their residence. “The defendants conducted themselves in a manner likely to cause a breach of peace; they claimed that the complainant is a witch. The defendants gave the complainant an iron cross to swallow on the pretext to deliver her from witchcraft, a representation they both knew to be false. “As we speak, we do not know the state of the complainant health as she is still receiving treatment at an undisclosed the hospital,’’ he said. The offence, he said, contravened the provisions of sections 168, 208, 314 and 411 of the Criminal Laws of Lagos State, 2015 (Revised). Conspiracy offence stipulates two years imprisonment, while false pretense attracts 15year jail term and attempted murder prescribes life imprisonment if convicted. NAN

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BUSINESS DAY

Live @ the Stock exchange Prices for Securities Traded as of Tuesday 02 April 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 231,043.97 6.50 -0.77 179 28,274,533 UNITED BANK FOR AFRICA PLC 256,495.66 7.50 -2.60 371 41,327,818 668,745.32 21.30 -2.74 374 31,987,504 ZENITH BANK PLC 924 101,589,855 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 283,572.81 7.90 -1.25 215 15,310,859 215 15,310,859 1,139 116,900,714 BUILDING MATERIALS DANGOTE CEMENT PLC 3,288,817.93 193.00 1.05 41 547,040 196,515.11 12.20 - 62 221,544 LAFARGE AFRICA PLC. 103 768,584 103 768,584 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 347,182.29 590.00 - 4 1,500 4 1,500 4 1,500 1,246 117,670,798 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 11,300.89 45.20 - 1 9,753 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 1 9,753 1 9,753 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 9,753 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 2,000 76,312.80 80.00 - 12 2,177 OKOMU OIL PALM PLC. PRESCO PLC 62,750.00 62.75 - 7 7,475 20 11,652 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,710.00 0.57 -9.52 9 723,610 9 723,610 29 735,262 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 820.66 0.31 - 4 255,743 JOHN HOLT PLC. 202.36 0.52 - 0 0 1,903.99 2.93 - 1 462 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 48,371.11 1.19 -1.65 78 6,412,930 22,041.92 7.65 -0.65 79 1,939,333 U A C N PLC. 162 8,608,468 162 8,608,468 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 - 6 2,858 165.00 6.60 - 0 0 ROADS NIG PLC. 6 2,858 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,313.34 1.66 - 11 114,687 11 114,687 17 117,545 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 10,334.94 1.32 -8.97 12 344,520 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 136,789.41 62.45 - 40 28,559 INTERNATIONAL BREWERIES PLC. 223,492.41 26.00 - 7 8,390 NIGERIAN BREW. PLC. 455,023.73 56.90 -9.68 211 13,648,281 270 14,029,750 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 45,000.00 9.00 -2.17 164 6,015,493 DANGOTE SUGAR REFINERY PLC 180,000.00 15.00 5.63 40 670,878 FLOUR MILLS NIG. PLC. 71,961.66 17.55 -2.50 41 139,455 HONEYWELL FLOUR MILL PLC 9,199.03 1.16 -3.33 33 992,267 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 155 NASCON ALLIED INDUSTRIES PLC 52,988.77 20.00 - 35 635,098 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 314 8,453,346 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,782.02 10.00 - 27 120,276 NESTLE NIGERIA PLC. 1,109,718.75 1,400.00 -3.45 53 623,479 80 743,755 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,465.51 3.57 -9.62 14 179,741 14 179,741 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 38,910.68 9.80 - 27 63,505 UNILEVER NIGERIA PLC. 205,096.69 35.70 -8.46 34 221,689 61 285,194 739 23,691,786 BANKING ECOBANK TRANSNATIONAL INCORPORATED 229,369.39 12.50 -1.96 43 2,229,367 FIDELITY BANK PLC 52,444.38 1.81 -4.74 256 37,651,954 GUARANTY TRUST BANK PLC. 1,059,522.45 36.00 0.14 237 19,946,408 JAIZ BANK PLC 14,437.48 0.49 -5.77 25 2,864,232 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 68,809.10 2.39 -0.42 84 41,401,542 UNION BANK NIG.PLC. 193,653.01 6.65 - 20 42,653 UNITY BANK PLC 10,052.83 0.86 -1.15 14 347,359 WEMA BANK PLC. 29,702.34 0.77 10.00 72 9,514,958 751 113,998,473 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,920.45 0.71 - 11 311,855 AXAMANSARD INSURANCE PLC 23,100.00 2.20 - 5 106,350 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 1 1,000,000 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 10 992,312 GOLDLINK INSURANCE PLC 2,001.98 0.44 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,050.56 0.28 - 5 165,191 LAW UNION AND ROCK INS. PLC. 2,191.13 0.51 - 4 42,178 LINKAGE ASSURANCE PLC 4,400.00 0.55 - 3 13,140 MUTUAL BENEFITS ASSURANCE PLC. 1,600.00 0.20 - 14 2,835,200 NEM INSURANCE PLC 12,303.57 2.33 4.95 17 397,013 NIGER INSURANCE PLC 1,547.90 0.20 -4.76 9 484,384 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 0 0 REGENCY ASSURANCE PLC 1,667.19 0.25 -8.00 7 8,155,980 SOVEREIGN TRUST INSURANCE PLC 1,834.98 0.22 10.00 8 1,003,622 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 1 1,000,000 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 5,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 200 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 3 100,000 WAPIC INSURANCE PLC 5,353.10 0.40 - 26 1,950,062 126 18,562,487 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,407.09 1.49 - 4 14,500 4 14,500

MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,922.05 1.42 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,660.00 3.83 0.79 76 1,835,065 CUSTODIAN INVESTMENT PLC 36,173.46 6.15 0.82 15 393,935 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 37,625.15 1.90 1.06 111 53,884,249 ROYAL EXCHANGE PLC. 1,492.16 0.29 - 3 14,681 473,625.57 46.25 0.43 28 4,211,227 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 17,100.00 2.85 - 82 1,679,400 315 62,018,557 1,196 194,594,017 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 959.35 0.27 - 12 671,500 12 671,500 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,425.00 4.95 - 1 5,000 GLAXO SMITHKLINE CONSUMER NIG. PLC. 12,138.15 10.15 - 25 38,672 3,968.04 2.30 - 7 67,689 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,177.48 0.62 - 10 261,459 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 1 100 44 372,920 56 1,044,420 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 1,000 NCR (NIGERIA) PLC. 648.00 6.00 - 3 1,555 381.11 0.77 - 2 3,438 TRIPPLE GEE AND COMPANY PLC. 6 5,993 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 -4.76 18 18,388,448 E-TRANZACT INTERNATIONAL PLC 11,088.00 2.64 - 0 0 18 18,388,448 24 18,394,441 BUILDING MATERIALS BERGER PAINTS PLC 2,622.90 9.05 - 26 66,360 CAP PLC 26,180.00 37.40 - 9 33,871 235,925.84 17.95 - 27 130,435 CEMENT CO. OF NORTH.NIG. PLC FIRST ALUMINIUM NIGERIA PLC 633.11 0.30 - 3 174,552 286.87 0.54 -8.47 5 199,798 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 5 320 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 75 605,336 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,346.51 1.90 - 15 221,589 15 221,589 PACKAGING/CONTAINERS BETA GLASS PLC. 29,173.37 58.35 -9.95 16 269,643 GREIF NIGERIA PLC 388.02 9.10 - 0 0 16 269,643 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 106 1,096,568 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 2 52 2 52 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 29,500 1 29,500 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 50.60 0.23 - 1 200 1 200 4 29,752 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 0 0 0 0 INTEGRATED OIL AND GAS SERVICES OANDO PLC 58,427.64 4.70 -7.84 145 3,155,822 145 3,155,822 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,185.96 178.00 - 20 7,151 CONOIL PLC 15,960.90 23.00 - 7 7,940 ETERNA PLC. 6,259.89 4.80 - 24 148,240 FORTE OIL PLC. 32,496.90 24.95 -9.93 53 454,958 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 6 7,534 TOTAL NIGERIA PLC. 66,546.28 196.00 - 19 11,433 129 637,256 274 3,793,078 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 376.43 0.32 - 2 3,360 2 3,360 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 3 29,000 TRANS-NATIONWIDE EXPRESS PLC. 323.50 0.69 - 2 2,812 5 31,812 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 4,698.08 2.26 9.71 19 1,207,060 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 2 5,905 21 1,212,965 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 199.58 0.33 - 1 30,000 LEARN AFRICA PLC 1,026.03 1.33 - 3 3,000 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 780.85 1.81 -0.55 10 749,860 14 782,860 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 878.58 0.53 - 0 0 0 0 SPECIALTY INTERLINKED TECHNOLOGIES PLC 766.91 3.24 - 0 0

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Opinion

Economic crisis: Urgent need for a team & plan

Franklin Ngwu

ith the elections over, it is imperative that all efforts are galvanized and utilized to rescue our nation and economy in crisis. As an economist and teacher, a good assessment of all the socio-economic variables clearly reveal that we are in a wrong and appalling direction. Not only are we in a crisis, we are in a serious one that will get worse if urgent steps are not taken. While our total debt has skyrocketed to about N22.43 trillion from N12.12 trillion in June 2015 when PMB took over, there is no significant infrastructural development with about 22million Nigerians currently unemployed. Not only is FDI rapidly decreasing, our foreign exchange management remains blurred and open to manipulation and abuse. As we lament our sad emergence as the poverty capital of the world, we have added another negative laurel as the 6th most miserable country in the world with life expectancy at just

55 years. Regrettably and as a friend cautioned, even the 55 years life expectancy will reduce if the increasing insecurity especially the pervasive kidnapping, killing and violent clashes between herdsmen and farmers are not urgently curtailed. With such multitude of socioeconomic problems, the government in their actions and inactions surprisingly behaves as if the economy is in a ‘steady state of growth’ with little or nothing to worry about. There seems to be increasing absence or limited appreciation of the enormity of the problems. And as such, the required innovation and urgency to robustly galvanize the other tiers of government and the private sector to attract high FDI flows seems to be lacking. There is no other place that this absence of creativity is apparent than in our budget financing since 2016. It has been borrowing and borrowing and borrowing! And for the 2019 budget, it is still more borrowing! More borrowing for an economy that uses about a quarter of her entire budget for debt servicing! A country that has used over N5 trillion to service her N22triilion debt since 2016 in addition to another N2.14 trillion for the same debt service in 2019. By the end of 2019, Nigeria would have spent over N7 trillion naira for debt service alone. As we spent only N943 billion for debt service in 2015 in comparison with N2.14 trillion to be used this year, it seems that all that is being done by PMB’s team to fund government activities is just to

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With the way we are borrowing, it seems that other suggestions on how to diversify the economy and raise revenue as indicated in the Economic Recovery and Growth Plan (EPRG) are proving unachievable

borrow and borrow and borrow as if the money will not be repaid! With the way we are borrowing, it seems that other suggestions on how to diversify the economy and raise revenue as indicated in the Economic Recovery and Growth Plan (EPRG) are proving unachievable. Given the current disappointing economic outcomes, it is clear that the EPRG is not meeting the expected targets in the five key areas: stabilizing the macroeconomic environment; achieving agricultural and food security; improving transportation infrastructure; ensuring energy sufficiency and driving industrialization. This, we cautioned, will be the case as the EPRG did not take into proper cognizance of our socio-economic, cultural and political institutional peculiarities. As the EPRG has somehow mutated into Next Level, it is pertinent that a deep and critical review of our economy is urgently undertaken if we are serious to avoid worsening economic crisis and imminent recession. A key prerequisite is the need for PMB to quickly announce his new economic team that will take Nigeria to the Next Level. While I am aware that there is an existing one, our economic realities do not suggest that they have done a good job and as such there is need for a rethink of the members. A particular mistake that must be corrected is the need to add many erudite and tested economists. An economic team populated mainly by

lawyers, accountants and other noneconomists cannot and will not be in a position to properly articulate robust monetary, fiscal and supply-side economic policies to rescue Nigeria. In line with the concept of forward guidance, as the CBN governor is the head of a key policy front of the government- the monetary policy, it is important that the renewal or nonrenewal of his second term is clearly addressed. This will help to manage the uncertainty and risk emanating from the lack of clarity on his continued stay in office. Confirming that his tenure will be renewed will help the private sector and the economy know that his monetary policy stance will be maintained and as such plan accordingly. If his tenure will not be renewed, then his replacement should be announced and the person expectedly should outline his/ her monetary policy orientation to enable for adjustment in case it will be different from the current one. It should be appreciated that we are already in the second quarter of the year and further delays in these key policy areas such as the CBN governor, economic team and economic policy of the government will only escalate our dire economic situation to nobody’s advantage. Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- fngwu@lbs.edu.ng

Nigeria’s 2019 election outcome: Class war or regional conflict? (2) Bongonomics

Bongo Adi How Nigeria voted in the presidential elections he geopolitical or regional voting pattern was clearly exhibited in the elections. The North East and North West voted overwhelmingly for the APC. Whereas the South East and South South did same for the PDP. But although the APC had majority of votes in South West and North Central, the margins of win were significantly more suppressed. The PDP was able to pry Oyo out of the grips of APC in the North West and Lagos was evenly split between the 2 parties. When it is disaggregated further, we see that out of the 19 states won by the APC in the presidential election, 12 of these states currently have the highest poverty level and lowest income per capita in Nigeria. The 10 poorest states in Nigeria have a combined average poverty rate of 83% — almost double the national average. The average headcount poverty rate, that is, the number of people who live below a dollar a day as a proportion of the population among the APC winning states, is 59% (including Lagos). When we exclude Lagos, the average poverty

rate in APC winning states comes to 61.3% — which is significantly above the national poverty rate of 54% that makes the country the “poverty capital” of the world. The average income per capita in those states won by APC is $1,545. When we exclude Lagos, it drops further to $1,353. On the other hand, the average income per capita in those states won by the PDP is $2,585 - a thousand dollar difference! With Lagos, the Internally Generated Revenue (IGR) of states won by the APC sums up to N493b. If we exclude Lagos, it drops to N209.54b. The states won by the PDP on the other hand, have a combined average poverty rate of 37% which is significantly lower than the 59% for APC states, including Lagos and 61% excluding Lagos. The IGR of states where PDP won is N350b, which is again significantly higher than the IGR of APC states. What does the results Say? Of the five states with the highest inflation rates including, Bayelsa (13.3%), Zamfara (13.2), Kogi (13.2), Ekiti (13.2) and Jigawa (13.1), PDP won just Bayelsa. PDP also won four out of the five states with the highest unemployment rates including Rivers (42%), Akwa-Ibom (37), Bayelsa (30), Imo (30), Kaduna (29). When paired against WAEC scores, we observe that the states which have consistently recorded the highest scores in the exam over the past 5 years including Abia (1), Anambra (2), Edo (3), Rivers (4), Imo (5), Lagos

(6), Bayelsa (7), Delta (8), Enugu (9), Ebonyi (10) all went to PDP — except Lagos — in the presidential elections. The elections in general did not spring much surprises as everything turned out as many predicted. While the voting pattern pretty much reinforce a sense of deja vu, it is also the case that it manifests a tinge of class division. The voting pattern is suggestive of a new class dimension caught between the elites (mostly south) and the masses (mostly north). It seems that the more informed, more rational voting elites, preponderantly in the South made a conscious choice for the PDP whereas the masses of the North largely responded to herd behavior, obeying the dictates of political patrons who determined for them whom to vote. It appears that the PDP and Atiku had a good showing in areas where commercial activity is high relative to the APC. One interpretation could be that the business class have a preference for Atiku who appears to be more market friendly and liberal economic leaning. This class of voters seem to have voted with their heads and minds rather than their hearts and emotions. However, the election in these areas was marred by low voter turnout. But no one doubts the relatively richer south voted massively for the PDP as evidenced by the data. On the contrary, Buhari swept areas with high poverty concentration and relatively lower educational attainment going by WAEC performance over the past five years. This segment can be

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The voting pattern is suggestive of a new class dimension caught between the elites (mostly south) and the masses (mostly north)

said to be dominated by the masses whose voting decisions may not be fully rational and may therefore be considered as overwhelmed with emotions. Pummeled by poverty, inequality, poor educational outcomes and social unrest, the North massively voted for the APC. It also appears that the socialist rhetoric propagated through the oftrepeated mantra of fighting corruption and the other sly manouvre of sharing money in the guise of soft loans, distributed through open markets in the country, predisposed this class of voters to vote for the ruling party. A recent paper calls attention to the “dangers of using socialist rhetoric and envy politics as a tool of governance.” It continues: ”the politics of populism and envy may be very good at winning elections, but they clearly are not good at running successful economies.” While acknowledging that Nigeria’s election has always been marred by ethno-religious antagonisms — which largely coincides with regional segmentations, it is also worthwhile to pause to appreciate the emerging class conflict that seems to pitch the masses against the elites. Class conflict has always been an issue in modern society since the days of Karl Marx, but its recrudescence in contemporary Nigeria is drawing fuel from the nihilistic politics of scape-goating and finger-pointing that treats opposition as conviction and the unrepentant proclivity to weaponizing poverty. Dr Adi is a Senior Economics faculty at the Lagos Business School

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