Businessday 03 jul 2018 by BusinessDay

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news you can trust I **TUESDAY 03 JULY 2018 I vol. 15, no 88 I N300

Sell

$-N 359.00 362.00 £-N 475.00 483.00 €-N 412.00 420.00

Foreign Exchange Market

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BD INVESTIGATIVE SERIES

Millions of smallholder palm oil farmers trapped as mills run dry

smugglers, huge debts compound woes

ODINAKA ANUDU

mall-scale palm oil millers in southeastern Nigeria are largely stranded after paying hundreds of millions of naira to the old Ada-

palm for the supply of oil palm fruits, also known as fresh fruit bunches (FFBs), but did not get what they paid for more than three years after, BusinessDay investigation shows. Adapalm, managed by Imo State government prior to No-

vember 2011, was handed over to Roche Group through a private –public partnership by Rochas Okorocha, Imo State governor. The company inherited hundreds of millions of naira in obligations to small-scale millers, who had paid the old Adapalm

for the supply of FFBs, which were raw materials for them, BusinessDay found. Many small-scale millers had no plantations, so they relied on Adapalm for the supply of oil palm fruits, paying through designated agents. Roche Group came in with a promise to fulfil the earlier agreements between the old Adapalm Continues on page 38

Brewers’ market share to change as Golden Guinea returns

Court declares Dasuki detention illegal, orders FG to release ex-NSA Felix Omohomhion, Abuja

Federal High Court Abuja on Monday, declared the continued detention of former National Security Adviser (NSA), Col. Sambo Dasuki, retd, as illegal, even as it ordered the Federal Government to release him forthwith, with bail granted in the sum of N200m and two sureties

Continues on page 38

Inside See Donald Duke Interview

...core investor targets 1.15m bottles per day

Iheanyi Nwachukwu, Umuahia he market share structure of major brewers in Nigeria is about to change particular those controlling the Eastern States following next month’s re-entry

Continues on page 38

Pgs. 20-23

World Cup Result Brazil 2 - Mexico Belgium 3 - Japan

0 2

L-R: President Muhammadu Buhari; President Emmanuel Macron of France and President Mohammed Ould Abdel Aziz of Mauritania, during a bilateral meeting at a sideline event of the AU Summit in Mauritania, yesterday. NAN

MARKETS

Offshore sell off, FG issuance seen taking yields to 15% P. 2

Presco, Oando, NEM Insurance record highest earnings growth in past 5 years Emeka Ucheaga & David Ibidapo

espite the difficult business operating environment in the last five years in Nigeria a few companies have managed to record astronomical profit growth against all odds. BusinessDay analysis revealed that Presco led the way among all other pub-

licly traded companies in profit growth performance between 2013 and 2017. Presco recorded an annual average earnings growth of 108.77 percent to become the fastest growing company on the Nigerian Stock Exchange according to data compiled from Bloomberg. Presco recorded a spike in earnings in 2016 and 2017 which were largely

attributed to the revaluation of their biological assets. Surprisingly behind Presco was Oando which recovered in 2017 from the astronomical losses of more than N192 billion recorded between 2014 and 2015 to become the second best performing publicly listed company by earnings growth. Between 2013 and 2017, Oando

recorded an annual average earnings growth of 77.19 percent as company profits grew from N1.41 billion in 2013 to N13.94 billion in 2017. Earnings grew as much as 293 percent between 2016 and 2017 at Oando which helped the firm shoot up to second place in the profit growth leaders table. Insurance companies were not far behind as NEM Insur-

ance and Linkage Assurance recorded net earnings growth of 62.80 percent and 62.54 percent respectively over the last 5 years. While NEM insurance had recorded consistent growth in profit over the years, Linkage Assurance earnings were mostly flattish between 2013 and 2016 but Continues on page 38

2 BUSINESS DAY NEWS

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Nigeria June PMI below neutral at 49.8% - FBNQuest ENDURANCE OKAFOR

igeria’s Purchasing Managers Index (PMI) rose very marginally from 49.2 percent in May to 49.8 percent in June 2018, as reported by FBNQuest Research. The research arm of the FBN holdings, in its headline PMI reading said most respondents, although a decreasing proportion, reported no change across the sub-indices. “Our trigger questions show that seasonal effects (the rainy season) appear to have kicked in. Generally, logistics issues arise during the rainy season as manufacturers experience challenges with transporting their inputs for production as well as finished goods to consumers,” FBNQuest said in its report. A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and any reading below 50 points indicates that it is generally contracting. According to the Central Bank of Nigeria (CBN), the Manufacturing PMI Report on businesses is based on survey responses, indicating the changes in the level of business activities in the current month compared with the preceding month. Meanwhile, in an earlier report by CBN last week Friday, 29 June 2018, Nigeria’s Purchasing Managers Index (PMI) expanded marginally in the month of June to 57.0 percent. This was 0.5 percentage points higher than the 56.5 percent reported for May. According to the figures by the apex bank, the index expansion in June indicates fifteenth consecutive month of expansion in the manufacturing sector. The index for the month under review also grew at a faster rate when compared to the index in the previous month, as compiled from the CBN website. The index performance in the 6th month of the year 2018 was linked to improved dollar liquidity and greater availability of raw materials, as the Central Bank

of Nigeria (CBN) has continued to periodically inject dollar into the FX market. This has made the naira relatively stable in the H1 of this year, analysts noted. A PMI is a simple exercise. A selection of companies are asked their view each month on core variables in their business. The respondent, who is characteristically the purchasing manager in a larger firm, has three possible replies: better, unchanged or worse than the previous month. According to the standard methodology, 50 marks a neutral reading and anything higher suggests that the manufacturing economy is expanding. Readings should be released at the very beginning of the new month, subject to public holidays. FBNQuest said the five variables considered in turning out their report were; output, employment, new orders, delivery times from suppliers and stocks of purchases. They have equal weightings in their index, they stated. “Our reports cover a representative sample of the sector with large, medium-sized and small firms. Any broad economic conclusions on the basis of our reports need to be tentative because we are operating in a near statistical void,”FBNQuest said. In addition, FBNQuest said similar to previous months, consumer demand remained soft and manufacturers uncertain about consumption patterns, this was despite the obvious easing of inflationary pressures, as household demand is subdued. Meanwhile, the rate at which the prices of goods and services increased in Nigeria moderated to 11.61 percent in May 2018, amid base effect, declining petrol prices and stable exchange rate, the lowest inflation rate in more than two years since March 2016. This was 0.87 percent points less than 12.48 percent reported in April 2018. The Consumer Price Index (CPI) which measures inflation eased for the sixteenth consecutive months since January 2017, as gathered from the National Bureau of Statistics (NBS) figures.

Saraki’s Chief of Staff resigns from APC OWEDE AGBAJILEKE, Abuja

even months to the 2019 general elections, Chief of Staff to Senate President Bukola Saraki, Hakeem Baba-Ahmed, has dumped the All Progressives Congress (APC). Addressing a press conference in Kaduna on Monday, BabaAhmed, who was appointed by Saraki in 2017, said he took the decision after due consultation with members of his Akida faction of APC in Kaduna. While saying that he has sent a letter of resignation from governing party to the party chairman in his ward, he maintained that the party has performed woefully. He, however, said he would not join another political party. His words: “This statement is to inform the public of my resignation from APC. I have sent a formal letter to this effect to chairman of my ward.

“This has been a very difficult decision, to leave a party I helped to form and made my humble contributions to put in power. “After three years, however, I need to say that the APC has grossly under-performed and has forfeited any claim to my loyalty and continue membership. “I do not believe in all concience, that it should be trusted and encouraged to continue to govern our great country beyond 2019. I am not leaving to join another party. This is my decision and mine alone. It has nothing to do with the president of the senate Abubakar Bukola Saraki. It’s a decision taken after due consultations with Akida Group, a group that has predated my appointment as chief of staff to the President of the Senate. “I will remain active in politics, as this is the main avenue for salvaging our nation from rising insecurity, poverty and bitter divisions,” he said.

Tuesday 03 July 2018

Offshore sell off, FG issuance seen taking yields to 15% Endurance Okafor & Oghogho Edosomwan

ell off by investors in response to rising U.S yields, federal government issuance and repatriation by investors ahead of forthcoming elections are combining to send yields higher and analysts see it hitting 15 percent. Last week, performance in the T-Bills market was bearish, as a result average rates across all tenors advanced 20basis points (bps) to close at 12.40 percent. Major selloffs were recorded across the short – 5-July-2018 (+64bps), medium – 6-Sep-18 (+13bps) and long term- 3-Jan-18 (+34bps) maturities. “The bearish run in the bonds market was sustained last week following selloffs by local and offshore investors. Consequently, yields advanced 13bps W-o-W. Local Pension Administrators were the majority players in the bonds market last week with major

selloffs witnessed across the Mar2027 and Jul-2034 instruments,” Investment firm Afrinvest said in a note to clients. “In the near term, we expect a sustenance in the bearish sentiment leading to an appreciation in yields in the bonds market. This is against the backdrop of Federal Government’s need to fund the 2018 budget as well as continued sell-offs by offshore investors ahead of 2019 general elections.” Nigeria 2018 budget has deficit of about N1.95 trillion, of which the financing plan of the budget, as articulated in the budget document includes the sum of N1.64 trillion of borrowing, made up of N793 billion domestic debt and N849 billion foreign debt. “Bond yields have inched up from early May yield-lows on recent selling by local and foreign investors and are now look closer to neutral historical levels. Although further decline in inflation, likely MPR cuts this year and

muted bond supply could support the long end of the curve, we think renewed significant duration gains will be constrained by the more subdued pension fund bid for bonds, the absence of GBI-EM inclusion and limited potential for yield downside at the short end,” Samir Gadio, Head, Africa Strategy, FICC Research at Standard Chartered Bank told BusinessDay in an email response. Wale Okunriboye, Head, Investment Research at Sigma Pensions cited two major drivers of fixed income yield in the past few weeks; “First, it is offshore driven, as foreign investors are repatriating from Nigeria ahead of the election. Another leg is the Selloff seen across emerging and frontier market globally in response to rising US yield. We are already in Q3 and closer to the elections in 2019, if they really want to exit Nigeria, they will do that now.” Continues on wwwbusinessday online.com

L-R: Yinka Sanni, chief executive, Stanbic IBTC Holdings plc; Basil Omiyi , chairman, Stanbic IBTC Holdings plc; Sola David-Borha , chief executive, Africa Regions, Standard Bank Group, and Christos Gianopoulos, chief executive officer, PZ Cussons plc, during the 2018 Standard Bank Trans-Regional Conference in Lagos, yesterday. Pic by Pius Okeosisi

GE to provide 200 wagons, 10 locos for narrow gauge lines MIKE OCHONMA

…in Nigeria next week for talks with NRC

he Managing Director of the Nigeria Railway Corporation (NRC), Fidet Okhria yesterday said the track engineers from U.S industrial firm General Electric (GE) would arrive Nigeria next week. While briefing newsmen in Lagos, he explained that the company would provide 200 new wagons and 10 locomotives to improve the operation of the narrow gauge lines. According to the managing director, “GE will come and fix 10 out of the 25 locomotives owned by the Nigeria Railway Corporation that are not working. We hope that during the process of closing up at the final concessioning, all these would make the Nigeria Railways move better, more reliable and meet up with its responsibilities, that is why we have the interim phase. We are planning it so that we have a winwin situation for Nigerian people as well as the consortiums.” In order not to be grounded, the managing director said that NRC has an arrangement where

the consortium will come in with their track engineering experts and work with its men to fix some parts that are very bad for the track while another company will provide about 200 new wagons and 10 locomotives although additional 15 is being sought for to run the Eastern line. The federal government through the NRC is also working on the individual agreements. This is because the consortium needs to be informed of where there is problem that needs to be solved. ‘’We can’t say from Kano to Lagos or Port Harcourt to Maiduguri, they are all bad. We know where it is very critical, that is why they will be working with us, where any time there is rainfall, we cannot go through because of wash-out, we have identified those areas, so also we have arranged with the GE’’. In addition, the engineers and employees of NRC would also be working with concessioners during the period so that there will be transfer of knowledge.

Okhiria disclosed that, the management is working towards getting serious and committed people within its team that would be working with GE in the workshop while they are here. As a precautionary measure, the NRC said it has what it called standby letter of credit that if the concession doesn’t work and may be the NRC have taken those assets that would come in, they are going to remain in Nigeria and they would have what to fall back on. The managing director restated calls on petroleum marketers to consider movement of their products by rail, saying this remains the safest means of conveying the product which would also free the highways and minimize accidents by tankers. He noted that the NRC is ready to allow the oil marketers provide their tank wagons even though the Corporation has also procured 40 tank wagons for the purpose. “Rail is the safest way to go,” the managing director concluded.

Tuesday 03 July 2018

BUSINESS DAY

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NEWS Apapa: Motorists face more challenges as repair work on bridge drags CHUKA UROKO

radually but steadily, traffic gridlock is returning to Apapa with the attendant challenges to motorists following the slow pace of repair work on the outbound lane of the Ijora-Apapa bridge, being undertaken by the German construction firm, Julius Berger. The outbound lane of the bridge has been closed to motorists for over a month now, forcing all motorists, including trailers and tankers, going out of the port city to use either the narrow road through Leventis or MarineRroad through Point Road. The closure of the bridge has only aggravated the difficulty in access to the ports caused by the reconstruction of the 2-kilometre Apapa-Wharf Road by the trio of Dangote Group, Nigeria Flour Mill and Nigeria Ports Authority (NPA). When BusinessDay visited the bridge where repair work was ongoing, it was learnt that the repair work that has to be done was not only enormous but also technical as it involves breaking open and reconstructing the part of the bridge that has already caved in. “It may take three to four months for us to complete the repair work because this is going to stretch almost a kilometre of the bridge,” the engineers

on site who did not want to be named, explained. The Ijora Bridge, built over 40 years ago, has almost collapsed completely because, according to Babatunde Fashola, minister for Power, Works and Housing, the bridge had not seen any form of maintenance all these years. Until lately, about four months ago, when a ‘vacate the bridge’ order was given by the Navy in collaboration with the Lagos State government, trailers and tankers were packed permanently on this bridge, adding to the wear and tear that have been the lot of the bridge over the years. Engineers, both structural and civil, had warned that parking heavy duty vehicles such as tankers and trailers on bridges for months as seen in Apapa, has adverse impact on the integrity and structural stability of those bridges with the risk of failure or total collapse if such activity is not checked. Gabriel Ojo, a civil engineer at Sanni, Ojo & Partners Consulting Limited, says though it is most unlikely that the bridges structure and integrity will be adversely affected from the point of view of overload from the ‘empty’ trucks, many of those trucks are not in perfect condition. “And because many of them are not in perfect condition”, he

explained in an email response to a question, “many of them are likely to have oils, including petrol, diesel, engine oil, brake oil etc, dripping on the bridges; these oils are organic solvents that naturally dissolve the asphalt topping and cause the bridges topping and the decks to deteriorate very fast.” Femi Akintunde, a structural engineer and GMD/CEO, AMFacilities, affirms, stressing however that heavy-duty trucks packed at close proximity to one another and in static condition over a long period of time have adverse impact on the bridges. “What this implies is that the combined weight of the vehicles packed in this condition will be far more than what the bridge was designed to carry under normal condition,” he says. Asked why the repair work was delaying, the engineers reasons that it could be related to funding. “The payment for the repair is broken down into three parts, the mobilisation fee which comes when the contract is awarded to enable the company move to site; the second payment is made when the work is done to a certain stage. If that is not paid, it usually delays the completion period of the work,” the engineers disclose. The final payment is made when the work is completed, they say.

Tuesday 03 July 2018

NMRC plans to increase debt size to N444bn HOPE MOSES-ASHIKE

igeria Mortgage Ref i na n c e C o mp a ny (NMRC) plans to triple the size of its debt programme to N440 billion from N140 billion, the state-backed mortgage agency said on Monday. Consequently, the mortgage agency seeks the approval of shareholders ahead of the annual general meeting scheduled for July this year. The debt programme is expected to be raise through the

issuance on non-convertible loans, notes bonds, and or any other instruments whether by way of public offering, private placement, book building process, reverse call enquiry, or any other method or combination of methods, in such tranches, series or proportions and at such dates, coupon or interest rates within such maturity periods and upon such terms and conditions as may be determined by the board of directors and subject to obtaining the requisite approvals of the

regulatory authority. Nigeria set up a mortgagebacked guarantee company in 2014, partly with World Bank aid, in an effort to boost lending through the creation of a secondary housing market, which is virtually non-existent in Africa’s most populous nation. NMRC said the notes could be issued through nonconvertible loans and bonds, either through public offering, private placement or a book-building process, it said in a notice to members.

Adult learners hail Obaseki’s sustenance of adult literacy programme

dults enrolled in literacy programmes in Edo State have lauded the Governor Godwin Obasekiled administration for sustaining the adult literacy and nonformal education schemes, noting that the programme has afforded hitherto disadvantaged adults opportunity for a second chance at life. They disclose this during the monthly monitoring and supervisory routine of the Agency for Adult and NonFormal Education (AANFE) at Adult Literacy and Skills Acquisition Centres in the state. Esosa Imaraibe (Mrs), an adult student at the Fabiyi Akpata Centre, one of the adult literacy facilities, applauded the governor for the decision to sustain the programme,

noting that she could now read and write after enrolling at the centre. “We are grateful to the governor for this initiative. This has given people like me hope so that we can get another chance at learning how to read and write and contribute to the development of the society. At Izevbigie Learning Centre, Ruth Onozie (Mrs), another student, said enrolling in the programme had afforded her opportunity to learn new things, as she was now better positioned to articulate her thoughts in English language. “I could hardly recognise the alphabets when I started, but now I can read and write, even two-letter words,” she said. A Director in AANFE, L.I

Momoh, said the department had a mandate to eradicate illiteracy and expose Edo people to adult education through the state-owned adult literacy centres, which are in every local government area in the state. “The centres have facilitators, who take the learners through the rudiments of basic education with the aim of ensuring the ability of reading and writing,” he said. At some of the centres visited, the teachers were seen teaching the adult learners who were listening with rapt attention. The AANFE came into existence in 1988 with the mandate to eradicate illiteracy from Edo State and is a department in the State’s Ministry of Education.

Tuesday 03 July 2018

BUSINESS DAY

6 BUSINESS DAY NEWS Cooperatives’ investments in Lagos hit N152bn JOSHUA BASSEY

umulativeinvestments of cooperative societies in the Lagos economy have hit N152

billion. The rising investments have been aided by an equally increasing number of registered cooperative societies in the state, which currently stands at 1,045 up from about 674, as 371 of the cooperative societies were registered within the last three years. Olayinka Oladunjoye, Lagos State commissioner for commerce, industry and cooperatives, who confirmed the figures to BusinessDay, said the increasing investments by the cooperatives were a direct result of government’s decision three years ago to realign cooperative societies, to aid their contribution to the Gross Domestic Product (GDP) of Lagos State, as well as create more job opportunities. “Three years ago, the administration of Governor Akinwunmi Ambode realigned the

cooperatives department, hitherto domiciled in the ministry of agriculture, to the ministry of commerce and industry. “That decision was to fully unleash the economic potentials of the cooperative sub-sector for increased contributions to the state’s economy. The general objective of this realignment is to deploy cooperative principles towards the establishment of viable and profitable enterprises. “Today, our concerted efforts to turn the cooperative movement into an instrument of economic growth and business prosperity is yielding bountiful dividends as cooperatives’ investments in the state economy have risen to 152 billion naira in the last three years,” she said. Meanwhile, existing cooperative societies in the state are joining their counterparts elsewhere to mark this year’s International Day of Cooperatives. The event is marked globally on first Saturday of July every year. This year’s celebration with the theme ‘sustainable consumption and production,’ is

being organised by the ministry in collaboration with Lagos State Cooperative Federation (LASCOFED). It is essentially at increasing awareness on the cooperatives, their mode of operations and to highlight the complementary goals and objectives of the United Nations and the international co-operative movement. The event would see officials of government and LASCOFED visit homes and orphanage and also feature quiz competition for cooperative multipurpose unions and cooperative schools’ club members, raffle draw, exhibition of products of some cooperative societies. “The celebration underscores the contributions of the cooperative movement to the resolution of some of the major problems being addressed by the United Nations; and finally the cooperative day strengthens and extends partnerships between International Co-operative Movement and other actors,” the commissioner said.

OBJ, others canvass integrity in national transformation … say corruption is major impediment to nation’s development MICHEAL ANI

ormer President Olusegun Obasanjo, among other stakeholders last week, clamoured on the need for Nigerians to uphold integrity in every quarters and sphere of life, saying it is the major drive of a nation’s transformation process. Obasanjo, who made this call at the sixth annual Christopher Kolade lecture on Business Integrity held in Lagos, cited several inspirational scriptures from the Bible, precisely Proverbs 29 vs. 2, which says that ‘when the righteous are in authority, the people rejoice; but when the wicked man rules, the people groans.’ According to Obasanjo, integrity means doing the right thing and upholding what is seen as being morally right even as no one is watching while producing

goods, or offering services. However, it is evident that in reality most countries fail to follow laid down rules in their day-to-day transactions. He noted that corruption had been seen to be a major impediment to doing business with integrity in the country, and if not checked would cause a 30 percent loss of the country’s Gross Domestic Product, according to a report by PricewaterhouseCoopers(PWC) “The negative consequences of corruption in business are so many ranging from poor investment to rising poverty, infrastructural decay, institutional inefficiency and a wide range of socio economic crisis. “More recently, a survey done by PWC on the impact of corruption on the Nigerian economy and sent to the vice president shows that corruption in Nigeria

will cost up to 30 percent of GDP locked up by 2030 if not properly checked. This cost was valued at N1,000 per person in 2014 and estimated at nearly N2,000 per person in 2030,” he said. The former president explained that transformation before now was measured as an increase in GDP, but today emphasis is on the content of the GDP alongside other indicators of life which includes maternal mortality, Infant mortality, employment opportunities, housing, water supply, electricity, life expectancy to mention but a few. Transformation does not come accidentally but requires the efforts from all quarters, both the leaders and the led for it to happen, OBJ said and as such, those who substitute mediocrity for excellence in whatever they do, always live to regret their actions sooner than later.

Reps confirm recovery of over N.4bn import duty waiver KEHINDE AKINTOLA, Abuja

acts have emerged that Federal Government has recovered over N400 million accruing from import duty waivers from some private companies operating in the country. Meanwhile, the House of Representatives Committee on Customs chaired by Abiodun Faleke mandated to investigate the waivers, has threatened to issue bench warrant against 26 companies that failed to submit relevant documents. While giving update on the investigative hearing, Faleke, who confirmed the non-appearance of the 26 companies, pledged the Committee’s support for the antigraft war of President Muhammadu Buhari’s administration. According to Faleke, representatives of some the indicted firms who appeared before the House committee at an investigative hearing admitted their guilt and agreed to pay the duty on the

imported items. “You recall the House in plenary on December 9, 2017, mandated the committee to investigate these alleged infractions of import procedures leading to monumental loss of revenue to the nation. “As you can see, we are not only concerned about how appropriated funds are utilized, but we are backing the government’s anti-corruption war by action of our own. “We’ve gone out of our way to be revenue earners for the government and l can confidently inform you that companies that abused import duty waivers granted them have paid over N400 million into government coffers,” Faleke noted. He however noted that, the committee has summoned additional 41 companies to appear in relation to the import duty waiver abuse and 26 so far are yet to appear. He warned that all the com-

panies invited are expected to appear on the date allotted to them unfailingly or risk sanctions by the House committee by next week Wednesday. Another lawmaker who was privy to the activities of the Committee accused some of the companies that failed to appear had enjoyed customs waivers worth several billions of naira, of importing far and above what is required for the waivers they benefitted. “A particular company imported tiles for over ten hectares of land in the name of building a five star hotel and so many infractions that the Customs Committee has unearthed since the investigative hearing started in March. “We also discovered that most of the erring companies have too many things to hide and the committee members have all vowed to unravel all those involved and dig deeper into the probe,” the source said.

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Tuesday 03 Jujy 2018

Tuesday 03 July 2018

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NEWS

BUSINESS DAY

IOCs defy minister, NNPC directives to start Infrastructural decay, security concerns remain work on multi-billion-dollar deepwater projects biggest setback to 24-hour port operations … insist on commercially viable fiscal terms OLUSOLA BELLO

nternational oil companies (IOCs) have defied the directive the minister of state for petroleum resources, Emmanuel Ibe Kachikwu, gave that they should start work on the deepwater projects. A source privy to the recent meetings held between the companies and the Nigerian National Petroleum Corporation (NNPC) and the stakeholders in the deepwater projects says the meeting ended in a deadlock as the companies insisted they cannot start works without a fiscal regime commercially viable to all parties. More also, the oil companies are said to have told the NNPC that except the Petroleum Industry Bill was passed and they see what the fiscal terms were like, they will not be ready to do anything. According to them, the current fiscal regime as it is contained in the PIB document, which the National Assembly has been holding series of public hearing on, is not completed it will not be acceptable to them to start work on the deepwater projects.

The source says whatever the minister or NNPC may say on the Final Investment Decision (FID) on the deepwater projects will not hold until there is a fiscal regime every stakeholder is comfortable with. “It must make the projects commercially viable, if not nothing would happen. We are not saying the government should not review the fiscal terms, but it should not be done in a way that the operators would not see a reasonable return on their investments,” the source says. Some of the projects awaiting final investment decisions are 140,000bpd Bosi project; 110,000bpd Uge project; 100,000bpd Nsiko deepwater project; 225,000bpd Bonga Southwest-Aparo project, and 120,000bpd Zabazaba-Etan project. The projects, estimated at over $23.5 billion, were programmed to meet the yearnings of the government to boost it oil reserve to about 40 billion barrels and a 4 million barrels daily production. FID is the final decision of the Capital Investment Decision (CID) as a part of the long-term corporate finance decisions based on key

criteria to manage company’s assets and capital structure. It is the point at which contracts for all major equipment can be placed, allowing procurement and construction to proceed and engineering to be completed. Bank Anthony Okoroafor, chairman, Petroleum Technology Association, has consistently urged the Federal Government and the National Assembly to step up their games in respect of the PIB to boost activities in exploration and production profile. Kachikwu had described the delay in signing the FID as a major concern to the Federal Government, saying: “You don’t make a $10 billion investment by just walking through it like a tiny door. You have to understand your policy; you have to get your investors lined up; you have to be sure of your renewals. “The terms have to be right. It is important that those terms are looked at, to ensure the federation is getting what it is supposed to get. So, a lot of that is going on. It takes an average of two to three years really to run through these things before you then come to the crucibles of FID.”

AMAKA ANAGOR-EWUZIE

he decay of infrastructure, especially the deplorable port access roads, and security concerns have been identified as the greatest challenge facing 24-hour port operations. BusinessDay understands that the bad state of the roads has made it near impossible for port operators and security agencies involved in cargo clearance at ports to report early to their offices, and for cargo owners to take delivery of their consignments due to difficulties in moving cargoes in and out of the ports. Recall that the Executive Order on Ease of Doing Business at the ports signed in May 2017 by Vice President Yemi Osinbajo mandated Customs, the Nigerian Ports Authority (NPA), service providers and other government agencies to work 24-hours round-theclock in order to facilitate ease and faster cargo clearance at the ports. According to the Vice President’s directive, 24-hour port operation is aimed at eliminating the negative effects, which non-clearance of goods on weekends and public holidays, has on cost of doing business at ports. Musa Baba Abdulahi, area controller of Tin-Can Island Port

Command of the Nigeria Customs Service (NCS), confirmed that the poor implementation of the Federal Government Executive Order on 24-hour operations at the ports in Lagos was due to the dilapidated infrastructure around the ports. Abdulahi, who told BusinessDay that the command had since commenced roundthe-clock operation at the port, also listed security concern around the port environment, bad state of the road and lack of power supply among the challenges hindering the effective implementation of 24-hour port operations. “We operate 24 hours. Our officers work on Saturday and Sunday but there is this issue of infrastructure too, because trade facilitation is not about Customs procedure alone. For example, what has Customs got to do with lighting of the port? If we ask an agent to come to the port at nights to take delivery of his or her cargo, when there is no electricity, what do we do?” he questioned. He pointed out that challenges around 24-hour port operation were beyond Customs but the impression has been that whatever has to do with the port is Customs responsibility. In area of cargo examination, he said that Customs does not do physical examination

alone but in collaboration with other government agencies and most times Customs may be ready but others may not be. “Once the agent submits his declaration, it assesses automatically and the duty payable is there. The next thing is selectivity either for physical examination or for scanning. If, it is for physical examination, it would be scheduled, all other agencies are supposed to be part of the examination and as soon as that is done, the cargo would be released,” he said. Confirming this, Musa Jubrin, Customs area controller of the Apapa Area Command, said the command in line with the Executive Order on 24 hours port operations was operating round-the-clock. He however noted that one of the challenges the command was faced with was the poor state of the port access road, which has made movement of goods in and out of the port difficult for port users. “We operate round-theclock. If, anybody wants to take his consignment at nights, he or she can come but the roads are so terrible and most importers do not want to take their goods through this kind of road in the night for security reasons. So, people are careful and they always avoid nights,” he said.

Glo unveils 5 more winners in GO RUSSIA promo

French President inaugurates new Alliance Francaise office Complex in Lagos

L-R: Chris Ejik, chairman, Chris Ejik International; Yusuf Abubakar, chairman, Kaduna Electric; Chris Ugbo, managing director/chief executive officer, Niger Delta Power Holding Company (NDPHC); Barth Nnaji, former minister of power; Idris Mohammed, recipient of the top 50 in the World, who have contributed to promotion of power projects in Africa, and U.G. Mohammed, managing director/chief executive officer, Transmission Company of Nigeria (TCN), at the ongoing Africa Energy Forum (AEF), at Beachcomber Hotel, Paradise, Mauritius.

Tanker fire: Victims’ families submit reference samples at DNA centre JOSHUA BASSEY

amilies of victims burnt beyond recognition in last Thursday’s petroleum tanker fire on Otedola Bridge, on Lagos-Ibadan Expressway, have started submitting reference samples at the Lagos DNA and Forensic Centre towards claiming the corpses of their loved ones. This is happening as the Lagos State government and police command are partnering to bring the driver and owner of the ill-fated tanker to justice. At least, 12 people died in the tanker explosion while 45 vehicles were burnt in what had been blamed on road unworthiness of the

truck. Adeniji Kazeem, the Lagos State commissioner for justice, who confirmed the submission of the reference samples by the affected families, said it was to enable government match the dead with the families they belong, to avoid releasing corpses to wrong families. “I can confirm that today (Monday), families who lost their loved ones to the accident have started reporting at the Lagos State DNA Forensic Centre for submission of reference samples that would be used to identify victims,” Kazeem said. Also speaking on what is being done since the accident happened,

Edgal Imohimi, the Commissioner of Police in charge of Lagos command, said the owner of the truck and the driver would be prosecuted. The police chief, who briefed journalists alongside heads of othersecurityagenciesinthestate, after a security council meeting chaired by Governor Akinwunmi Ambode on Monday, said investigation was still ongoing. “Investigation into the matter is in top gear. I have received a letter from the office of the attorney-general and commissioner for justice which states clearly charges which we are going to prefer against the driver and the owner of that tanker. “Henceforth, we are using this

opportunity to call on all tanker drivers, all lorry drivers, all owners of such articulated vehicles to please submit those vehicles for Vehicle Inspection Office (VIO) test; they must go through the entire hub and get the Ministry of Transportation (MOT) Certificate of Road Worthiness. We will not allow such vehicles which obviously pose serious danger to other road users on our roads,” Imohimi added. He security agencies have been directed to intensify enforcement of relevant laws, especially the Lagos Road Traffic Law, with the view to ensuring that the roads and highways in the State were safe for commuters to ply without any danger.

n continuation of its consumer-loyalty promotion tagged GO RUSSIA, National Telecommunication Company, Globacom, on Saturday unveiled another set of five winners who departed the country for Russia in the evening after a send-off ceremony at the Mike Adenuga Headquarters of Globacom, Lagos. The lucky winners include Aseruoma Glory Aworiwo from Delta State, Ajayi Odunayo Felix from Oyo State, Ojokojo Ernest Paul from Delta State, Izuchukwu Kizito Alih from Enugu State and Oladele Oluseyi Adetokunbo from Osun State. Globacom in a statement in Lagos on Saturday stated that, with the new set of five winners departing on Saturday evening, a total of 17 winners have so far gone on the all-expense paid trip to Russia out of the 22 lucky winners that will eventually benefit from the promo. The company added that “12 subscribers have returned from Russia after visits to different monuments, tourist attractions and historical sites where they were treated to delightful experiences in Russia”. At the send-off ceremony on Saturday for the new set of winners, the company congratulated them for emerging winners in the promo and also commended them for being loyal to the network over the years. Globacom advised them to represent Nigeria and the Glo brand well in the east European nation. The company said that the remaining set of five winners would be unveiled next week after the last draw.

ll roads lead to Ikoyi, Lagos on Wednesday as French President, Emmanuel Macron, inaugurates the brand new Alliance Francaise complex. President Macron will arrive in Lagos on Tuesday on a visit to Nigeria and the commissioning of new edifice which will serve as the Alliance Francaise’s headquarters in Nigeria is one of the activities lined up exclusively for the visit. The new complex which is located on no.9 Osborne Road, Ikoyi, Lagos will be inaugurated by 9 a.m in a ceremony that will be attended crème de la crème, including top government officials, captains of industry French Ambassador to Nigeria, Denys Gauer and members of the diplomatic community. An international organization that aims to promote French language and culture around the world, the Alliance Francaise, is a French language and cultural centre with over ten associations across the country located in Lagos, Maiduguri, Owerri and Port Harcourt. Others are Enugu, Ibadan, Ilorin, Jos, Kano, Kaduna. The new palatial edifice of Alliance Francaise in Ikoyi is an Architectural masterpieces that will serve as centre of excellence for teaching of French and making French culture and the culture of French speaking countries better known and Fostering cultural diversity through the promotion of all cultures in Nigeria.

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Tuesday 03 July 2018

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Bloodletting & the pursuit of vanity in Nigeria

MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

fter my articles titled “ Fulani Herdsmen Militancy: International help now indicated” in January this year and “Serious challenges confronting PMB’s 3-point agenda” in February I was not planning to comment any longer on the despicable daily killing of Nigerians in the middle belt of Nigeria and elsewhere. Since it looked like the government felt it was doing well in running a country where life has become nasty, brutish and short and the citizens seem to have resigned to their fate, I felt it was a waste of my time commenting on the matter. Last October when 20 people were killed in Plateau, the President issued a statement which stated “that this madness has gone too far”. From all indications the madness just seems to be forming and may just be getting started on its journey! But try as hard as I could, the humanity in me would not allow, the mind of Christ constrains me. Last week news broke of how a contingent of Fulani militia carried out a-seven hour coordinated and simultaneous operations across three local government areas in Plateau StateBassa, Bokkos and Mangu and when they were done, about 200 Nigerians had been despatched to gruesome and untimely death. Among them were children and pregnant women. Pictures of infants and children who had deep knife cuts and bled to death and mass of murdered men and women arranged like sardines assaulted my sanity and I cried: What kind of wickedness is this? What kind of hatred will lead to this? Which kind of government is this that

has repeatedly failed to perform its primary role of protecting its citizens? My pain was worsened by the realization that it is the poor and their families that are the victims of this man’s inhumanity to man and crass failure of government to protect the poor. Perhaps that’s why the problem persists. The day notable Nigerians or their family members are killed in this uncontrolled and seemly uncontrollable carnage across the nation. I bet a more determined action will be taken. Meanwhile we return to our now familiar past time of paying condolence visits and commiserating with the dead. Thereafter we issue platitudes and lame declarations: “The perpetrators will be arrested. Government shall leave no stone unturned”. We then turn into our cars or jets and wait for the next strike and government officials will return to go through the same rituals. Are we beyond shame in this country? When can a man resign from a job and declare that this is beyond him? Very nauseating to live in this kind of country where human savagery has returned in full force and trust in government to protect lives has waned. A few weeks ago, Abdulaziz Yari, Governor of Zamfara state whose citizens have faced continuous assault by bands of blood-thirsty militia shocked the nation. He resigned as the chief security officer of his state. That was a very courageous thing to do, but it was only symbolic, to send a strong message to the federal government that he was tired of playing the ostrich. After every attack with its resultant carnage, he would receive assurance from the federal government and the security agencies which they control, first that the perpetrators would be arrested and prosecuted, and second, that everything would be done to ensure there was no further attack and then, the very next day, a worse attack would happen and the ritual would be repeated. The security chiefs will visit and order new formations and deployment and just by the side of the new deployment, the attackers would drive in, kill the citizens of Zamfara and leave. When interrogated, the

Are we beyond shame in this country? When can a man resign from a job and declare that this is beyond him? Very nauseating to live in this kind of country where human savagery has returned in full force and trust in government to protect lives has waned security commanders would complain of insufficient equipment and poor welfare. Governor Yari will then deploy the resources of the people of Zamfara meant for education or healthcare to buy patrol vehicles, sundry equipment and provide welfare for the forces. Then after this, a new attack occurs and nothing changes. When he tries to direct the security officers on what to do, they say they are waiting to hear from Abuja! The man who has long been frustrated by seeing his people killed like chicken everyday and yet he could not effectively stop the killing even while decorated with the title of ‘Chief Security Officer’ for his state, simply lost his cool, put politics away, forgot about party loyalty and announced his symbolic resignation. I salute his courage for knowing when to separate governance from politics. Contrast this with Simon Bako Lalong, the Governor of Plateau State where the massacre took place last week. May be I should have said where the latest massacre took place, because everybody except perhaps Lalong and his irk who believe that party loyalty must transcend good governance and that personality cult worship must undermine confronting chronic poor performance, knows that Plateau state was where this cattle

herdsmen militancy started and when the right statistics are taken, Plateau state has suffered the highest casualty and loss of property than any other state in the region. Yet this man had the presence (or is it absence?) of mind to mock and blame Samuel Ortom, blaming the Fulani militia attacks on Benue on Governor Ortom’s anti-open grazing bill. Last week when our President, who has become condoler-in-chief visited Plateau, Lalong wasted precious moments playing politics. Hear him: “Mr President, your government has made it clear and you have eloquently stated that you will continue to protect and preserve the sanctity of life. Agents of destabilization are however hell bent on making nonsense of the success you have achieved in dealing with internal security threats to our corporate existence as a nation....As a rescue administration of the All Progressive Congress government, which you lead, we wish to assure you that we stand with you, shoulder to shoulder in your efforts to solve the myriad of challenges confronting us as a nation, in your quest to bequeath to posterity a stable virile nation” Very good campaign speech, politically correct. But how will that assuage the bleeding and mourning citizens of Plateau state who have been so systematically decimated and subdued over many years. The more important question is, how will blaming the so called agents of destabilization stop the next attacks, which may happen even as we are writing or reading this? Lalong was looking for agents of destabilization when the Miyetti Allah Cattle Breeders Association of Nigeria (MACBAN) had often justified the attacks as reprisals for stealing cows, killing a Fulani herdsman or for the effrontery to enact anti grazing bills. Rather than join Governor Ortom in insisting that those who have confessed to being accessories to the crimes should be arrested and prosecuted, he was speaking in parables. As long as leaders like Lalong continue to play politics with the lives of their citizens to assure their re-election or to remain good boys, the longer it will take to bring this ‘madness’ to an end. Lalong and members of his’ rescue administration’ should support the import of Governor

Yari’s action-major restructuring of the country to allow federating units have power and resources to protect their people. Gaskiya! As Plateau was boiling and bleeding with several innocent souls killed, many injured, many families grieving, Nigerians hurried from their offices to go home and watch the World Cup match between Nigeria and Argentina. No thoughts for the killed, no feelings for the bereaved. I was amazed. Neither the Super Eagles nor their handlers thought this was a national calamity that they should have observed some reverence for. The rest of us who were eager and excited to go and watch the match, spared no thoughts for the bereaved families. What a country! Injury to one should be injury to all. May be if the super Eagles had beaten Argentina, there would have been wide celebrations across the nation without caring a hoot about the hundreds of fellow countrymen & women grieving on the plateau and elsewhere. God dey sha! I do not know what will happen to sufficiently shock Nigerians to reject this daily massacre of fellow Nigerians. Thank God for Oby Ezekwesili who marched alone to Aso Rock gates to register her repulsion. Indeed the behaviour of most Nigerians last week helped to explain to me what happened to us in Biafra during the war. Biafran children and pregnant women were being killed by Nigerian Airforce bombs in market places, and many people went about their businesses, playing and watching football matches, attending Owambe parties in Lagos, Ibadan, Kaduna & Kano! Nobody paid attention to what was being done to force the Igbo back to Nigeria. It took the lives of about 3 million people. Today it may seem to be the turn of the middle belt and many of us are keeping quiet, feeling unconcerned or seeking to be politically correct. The God of Justice rules in all the earth. Vengeance is His and He will recompense for the poor and mistreated peoples of this country!

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[#StopTheKillings] Can Lake Chad be saved?

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

ost Africans probably sometimes just wonder what the fuss about climate change is all about. The planet is getting hotter. So what? What difference does it make to their daily lives? It has always been hot here anyway. What difference would a one to two degrees increase in the temperature make to a people mostly preoccupied with getting their daily bread. Mention the

Paris Accord, and some sentiments would probably be jealousy towards the African officials who got to participate in the negotiations while relaxing in the fabled city of love, as opposed to delight at the many laudable measures towards saving the planet in the agreement. But if you start the conversation from the increasing examples of the palpable negative effects of climate change like drought, floods, famine, and so on, on the continent, everyone’s antenna would probably suddenly shoot up. A striking example is the drying up of Lake Chad in West Africa; which has had debilitating effects on the bordering countries: Cameroon, Central African Republic, Chad, Niger, and Nigeria and a few further afield like Libya, Sudan and Algeria. Erstwhile fishermen have had to make do with less or simply change their vocation. Farmers who relied on the lake for natural irrigation of their farms have also suffered ill fortune. Expectedly, as misery tends to beget more misery,

criminals and terrorists have stepped in to fill the vacuum. The costs to lives and livelihoods of the more than 90 percent depletion of the Lake Chad over the past five decades is almost unimaginable. But not until the insecurity it engendered began to make life difficult in much distant lands from the banks of the lake did the authorities in the environs begin to take proper notice. Not that action to save the lake was not taken hitherto. After all, the Lake Chad Basin Commission was established in 1964, more than five decades ago. But with myriad killings from terrorist groups in Nigeria, Niger and elsewhere going on unabated, the authorities had little choice, it seems, but to begin to address not just the symptoms of growing insecurity in their domains but the root causes as well. Most recently, the efforts towards saving Lake Chad is encapsulated in “The Abuja Declaration” adopted at the International Conference on Lake Chad in late February in the Nigerian capital, Abuja. Highlights of The Abuja Declaration revolve around

restoration of the lake, resolution of the security issues emanating from its drying up, and funding for the initiatives towards its restoration. The most important and perhaps the most difficult is the “Inter Basin Water Transfer” (IBWT) project for bringing the lake back to its earlier much buoyant levels. Incidentally, the $14.5 billion IBWT project was first mooted in the 1960s. Considering how little progress has been made since then speaks to the difficulty of the endeavour. The plan entails diverting water from the Congo River more than a thousand kilometres away into Chari River, which feeds Lake Chad. Transferring water from the Congo-OubanguiSangha Basin to the Lake Chad Basin would also have benefits for the communities in between. The feeder dam to be built in Palambo in the Central African Republic (CAR) is expected to generate at least 700MW of electricity, for instance. The dredging of the Oubangui River in the CAR would also allow ships to transport goods from what is ordinarily a

landlocked country. And expectedly, irrigation, drought mitigation and desertification control would be added benefits. It begs the question then of how the longsuffering project would be able to break the seeming jinx on it this time around. On the face of it, the right measures are being put in place. A $50 billion Lake Chad Fund under the auspices of the African Development Bank is refreshingly assuring, for instance. Still, the participating countries have strained finances. With their authorities barely able to address burgeoning infrastructural deficits inland, the Lake Chad issue may become another African project that is never lacking in passionate backers with shallow pockets. Still, one should be hopeful. • An edited version of these thoughts was published in my Forbes Africa magazine column in June 2018

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Tuesday 03 July 2018

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MA JOHNSON Johnson is a marine project management consultant and Chartered Engineer. He is a Fellow of the Institute of Marine Engineering, Science and Technology, UK.

“However beautiful a strategy, you should occasionally look at the results.” - Sir Winston Churchill

he mode of survival of the people is supposed to be at the heart of any national development strategy. But what do we find? We find out that most nations build their survival on specific beliefs about the future. Those at the helm of affairs think that if they marshal out their strategy properly, they would be on the path to development. But the future is highly unpredictable. The unpredictability of the future makes some nations fail despite their strategies. Worse, the requirements of a quantum leap in development recorded by many advanced countries demand implementing strategy in ways that make it possible to adjust should the future not turnout as expected. So what happens as a consequence of failure to adapt to new strategies in the face of failure of policy objectives? Michael E Rayner, a Canadian writer, says that strategies with the greatest possibility of success also have the

RASAK MUSBAU Musbau is of Features Unit, Lagos State Ministry of Information and Strategy, Alausa, Ikeja

espite efforts to prevent substance abuse and the laws that regulate drugs in the country, the use, misused and abuse of drugs is on the rise in Nigeria. Suddenly, the lists of drugs that youths now take has expanded and now include such substances as: Lipton soaked with regal gin, tramadol, codeine, dry pawpaw leaves, hypo in lacasera, tom tom in lacasera, spirogyra, rephnol, gum, 10 days urine and methylated spirit in codeine. Others are methylated spirit in coke, dry plantain leaves, cannabis (marijuana) in regal gin, burnt tyres and burnt bitumen among others. Considering simultaneous rise in crime and social problems affecting the entire country, the new wave of drug abuse has really become a bigger problem, and experts rightly believe the problem is grossly underestimated. Even in the absence of statistics and the recent investigative documentary by BBC on illicit drug deals in Nigeria, observation of happenings on the streets and reported cases of drug usage by school children will reveal that young people today are exposed earlier than ever to drugs. It is now beyond, “taking drugs off the

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When will the poor be glad? greater possibility of failure. This, according to the Canadian writer, is referred to as “strategic paradox.” Resolving this paradox requires a new way of thinking about strategy and uncertainty. That is why this writer shares Winston Churchill’s sentiments expressed in the above quote that a strategist must constantly appraise the end state of his or her strategy. If strategies adopted to implement policies are not providing results, there are always alternatives. Nations should seek alternatives to policies and implementation strategies that are not providing desired results. Nigeria cannot hide from the problem of povertyit is seen everywhere. May be only a few of those in government, and perhaps, some of their paid lackeys will say there is no poverty. Once in the corridor of power, government officials will come to a woolly deduction that Nigeria is doing well. It has recently been published by the Brooklyn Institute that “Nigeria has become the poverty capital of the world.” This report is not novel because about two years ago, the National Bureau of Statistics (NBS) released a report that 60 percent of Nigerians live in absolute poverty. Then, the NBS report wasn’t given much attention, maybe because the present administration has just started panel beating a seriously damaged economy. What is novel in the Brooklyn’s report is that Nigeria has overtaken India with people living in extreme poverty in the world. Extreme poverty is “poverty that kills,” meaning that households cannot meet their basic needs for survival regularly. Those in the category of extreme poverty

Nigeria cannot hide from the problem of povertyit is seen everywhere. May be only a few of those in government, and perhaps, some of their paid lackeys will say there is no poverty. Once in the corridor of power, government officials will come to a woolly deduction that Nigeria is doing well. are chronically undernourished, unable to access healthcare, lacking safe drinking water and sanitation, unable to afford education for some or all of their children, and perhaps, lacking shelter and basic articles of clothing such as shoes. One should pray not to be in the category of almost 87 million people living in extreme poverty in Nigeria as compared to India’s 73 million. What’s more, extreme poverty in Nigeria is reported to be growing by six people every minute, while that of India continues to fall. Do Nigerians ask a simple question: Why do we have millions of people still living in extreme poverty after several poverty alleviation programs of successive governments? All governments known to this writer since the 1970s have one poverty alleviation program or the

other. You will recall National Poverty Eradication Program (NAPEP), Seven-Point Agenda, Better Life for Rural Women, National Economic Empowerment and Development Strategy (NEEDS), Rural Electrification Scheme and Operation Feed the Nation (OFN) and a host of others. These programs work while those who designed them are in office. When they leave office, their poverty alleviation programs follow them out of office. There is lack of succession planning while some governments watch their poverty alleviation programs die prematurely to give birth to another with different strategic focus. The current administration of the All People Congress (APC) has the NPower, the MSME Clinic, Market Moni and others. To ensure there is economic growth, the APC government released the Economic Recovery and Growth Plan (ERGP). The Vice President, Yemi Osinbajo, is seen moving from one state to the other, marketing the government’s poverty alleviation programs. Who knows what will happen when this administration leaves office. Will there be another plan by those succeeding it? This writer believes that there are alternatives to any poverty alleviation plans or programs that are not working. But the inability to lift more citizens out of poverty through these numerous programs is an indictment on successive governments at local, state and federal levels. One may argue that the federal government is trying regarding poverty alleviation. The “killer” of all the efforts so far is the uncontrolled rise in population. Yet, those in the

government have not considered it imperative to address the issue of overpopulation. How will Nigeria meet the Sustainable Development Goals (SDGs) target of eliminating poverty by 2030? Nigeria is still an import dependent economy. Minimum wage is still N18,000 as it was in 2011. Nigeria’s rising debt profile is reported to have failed to boost economic growth. Economic growth is sluggish but population growth is increasing. Funds released to many federal lawmakers are not used to provide constituency projects. When constituency projects are executed by federal lawmakers, some are a caricature of what was nominated for in the budget. So there is exodus of the jobless from rural areas to urban areas. The implication is increased crime rate in urban areas and genocide in rural areas. When all these issues are analyzed, one is compelled to ask: When will the poor living in Nigeria be glad in the midst of abundant resources? Those living in extreme poverty need transformation through compassion, while good intentions are to be transformed into actions that make lasting difference. It’s time for local, states, and federal governments to fight poverty in a way that demonstrates what the country stands for, and not only what it stands against. When the government keeps investing in infrastructure and neglecting its own people in education and healthcare, the rank and file of the poor keeps increasing. Nigeria is in a dilemma. It should invest in its people to reduce poverty.

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Nigeria and new wave of drug abuse streets”, but ‘’off the schools as well’’. Or, what do we think of such recent reported case of a Junior Secondary School student in Ohafia, Arochukwu local government area of Abia state who was reported to have died after he allegedly took ten tablets of tramadol tablets? He purportedly took the tablets to enhance his performance during his school’s inter-house sports competition where he was billed to compete. He could, however, not live to see the event as he died shortly after taking the drugs. On March 2, 2018, a father and his son were arrested by the Lagos Police Command (Rapid Response Squad) for selling tramadol and other hard drugs to primary and secondary school pupils in Itire area of Lagos. The arrest was effected after officials of the Office of Education and Quality Assurance, Lagos State alerted officers of the Rapid Response Squad about the incident. Their arrest was necessitated after officials of the Ministry of Education learned that students in the area were exhibiting a strange attitude. There are several other cases relating to use of tramadol by students across the country. We have had cases of boys using it to enhance sexual performance, including raping of female col-

leagues to sign off the end of their secondary school years after WAEC final papers. Perhaps, more horrifying is the rate at which drug abuse has broken gender, class and religious barrier and is threatening a generation of young ladies. Surprisingly, the presumed modestly dressed Northern Nigerian women are not an exemption. There is no need to pretend, the potential for increase in drug abuse is apparent. Cultism and gang violence have permeated schools from secondary, if not primary schools, to higher institution. Do we also need to put into debate whether Boko Haram and killer herdsmen are induced by drug or not? From time immemorial, the use of drugs has always been an inseparable part of occultism and youth in tertiary institutions are deeply involved in this harmful practice. The criminal activities of drug users are now becoming too frequent for comfort. At most of the dark spots in major cities, banned drugs are regularly and defiantly being used. To worsen the situation, some of drug users operate like cults, carving out territories of influence where they intimidate, rape and rob innocent residents at will. It is important to also illustrate what drugs do to the body and minds of the users from public health perspective. For instance,

some of the drugs especially marijuana is toxic and can lead to cancer. The negative effects also include confusion, acute panic reactions, anxiety attacks, fear and loss of self-control. Chronic marijuana users may develop a motivational syndrome characterized by passivity, decreased motivation, and preoccupation with taking drugs. Like alcoholic intoxication, marijuana intoxication impairs judgment, comprehension, memory, speech, and problem-solving abilities. Meanwhile, the reality in Nigeria today is that abusers are not limited to street urchins, bus conductors as well as okada riders as many still assume. Youths from with respectable upbringing are now quite involved. There is, nevertheless, need for change of attitudes and campaign against the substances. Knowledge of communication for development should make us to understand that all drug addicts are not necessarily criminals and should not be addressed and relate with as such. Some are misguided teenagers who have made wrong choices. Here, the suggestion is that we should have separate messages and approaches targeting soft to extremely potent drugs with evil effects of all professionally communicated by experts in behavioural change communica-

tion field. Secondly, tackling drug problem needs a multi-sectorial approach. We are all in the same boat. Families, educational institutions, traditional body, religious organisations, the public and the private sectors should work together to fight this menace. Though our children spend more time in the schools, it is advisable for parents to keep the lines of communication open with their children and teach them spirituality, and responsibility in a positive home atmosphere. Yes, creating positive home atmosphere that prevent youths from taking to drug is sacrosanct as drug addiction is a chronic relapsing disease. Rather than going on social media to abuse political opponents of using tramadol or codeine for expressing views contrary to ours, it will be more beneficial to be illustrating what those drugs can do to body and minds of young users. They need to be educated that it is a choice that could eventually land them in jail or destroy their personalities, and their inter-personal relationships. Note: the rest of this article continues in the online edition of Business Day @ https://businessdayonline.com/

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Frank Aigbogun EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, SALES AND MARKETING Kola Garuba EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

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Tuesday 03 July 2018

Adding value to Nigerian agriculture

n various pronouncements, the Federal Government of President Muhammadu Buhari has projected itself as focused on the primacy of the development of agriculture. It makes the case with multiple claims of successes in crop production, often citing rice as number one. The evidence says otherwise. The Summit of Northern Groups in a communique on March 24, 2018, following a meeting at Arewa House, Kaduna disputed the claims of success in agriculture. The sixteen groups stated, among other things, “Agriculture shows limited glimpses of recovery, but almost entirely through efforts of peasants and antiquated processes.”The National Bureau of Statistics states that“the agricultural sector in the first quarter of 2018 grew by 3.00% (year-on-year) in real terms, a decrease by 0.38% points from the corresponding period of 2017 and also a decrease by 1.23% points from the preceding quarter”. The contribution of agriculture to GDP also declined from 26.13% to 21.65% in Q4 2017. It fell by 3.0 per cent in 2018 compared to 4.2 percent in Q4 2017.

Beyond the issues of claims that cannot stand scrutiny, agriculture must be a critical success factor for Nigeria. The country must devise policies and actions to increase productivity in this vital area. BusinessDay recommends that adding value to agriculture should be the policy direction and focus of the government to make up for lost ground and realise its potential. Agriculture is a sector of prime importance in every economy. Its economic contributions flow from being a source of livelihood to the majority of workers to serving as a primary source for food and nutrition. The agricultural sector held sway in Nigeria from pre-independence, independence up to the end of the civil war. Its contribution to GDP averaged 57% and fetched 64.5% of exports. Oil took over in 1970, and the country’s focus shifted off the farms. Nigeria’s Top 5 agricultural products are cassava, yam, maize, sorghum and millet. The principal exports are cocoa, oil seeds and oleaginous fruits, fruits and nuts, milk, cream and milk products and spices. In turn, the country imports fish, wheat sugar, molasses and honey, milk cream and milk products, fixed vegetables, fat and oil. Our agricultural production is characterised by low yields and

growth mainly through expansion of land. Productivity suffers from the absence of the application of technology. The Agriculture Promotion Policy (APP) of the Federal Government focuses on resolving food production shortages and improving output quantity. The Economic Recovery and Growth Programme pushes this by specifying targets. It projects self-sufficiency in tomato paste in 2017, rice in 2018 and wheat in 2019. Nigeria needs more than buzz on agriculture. There must be a focused effort to enhance the value chain by moving into processing, marketing and other value-adding activities. The business of agriculture involves farming, supplies and inputs, finance, markets and marketing, storage, logistics and processing. Nigeria still plays mainly in farming, a low returns area. Nigeria is currently the sixth largest producer of cocoa, but the country processes only 30% of the 248, 000 tonnes of cocoa beans it generates. Experts say increased concentration on processing, creating and building brands, and other activities in the value chain would increase production by at least 70%. Ghana invested in better processing and moved up the ladder as global number two from the fourth position.

Research and development is necessary to increase the value of our foods. In the 80s and 90s, Nigerian firms such as Guinness and Nigerian Breweries invested in alternatives to barley while Cadbury Nigeria built a patented cereal conversion plant to convert sorghum for use in the production of Bournvita and its confectioneries. Greater collaboration is needed between industry and research. Agriculture also needs the enabling environment of macroeconomic stability, controlled inflation and peace and public order. It requires stable exchange rates based on market fundamentals to enable the purchase of inputs. Infrastructure is critical. We expect that given the challenge of desertification and the search for land and water by herdsmen, the government would invest considerably in irrigation, roads and expansion of water routes. The Federal Ministry of Agriculture and Rural Development committed to pursuing enabling legislation to boost domestic content for food so that there would be 10% cassava flour substitution for wheat in bread and blending of 10% ethanol with petrol. It has not happened three years later. So much to do in adding value to agriculture. Time is running out.

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Tuesday 03 July 2018

BUSINESS

COMPANIES & MARKETS

DAY

SAHCOL gets contract to handle Air Namibia as Camair-co returns

Pg. 14

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

11 Plc shareholders get 800k dividend …as firm urges for industry deregulation OLALEKAN IPELE

ormer Mobil Oil Nigeria Plc) 11 Plc has approved for payment N2.6 billion as dividend translating to 800 kobo per share for its teeming shareholders for the financial year ended 31 December 2017. Ramesh Kansagra, chairman of the Company said “I thank you all for recognizing and acknowledging our efforts in 2017, the positive year we saw a result of huge effort towards enhancing sales and marketing to bring further awareness to our products and services as far as the public is concerned” The company’s profit dropped marginally by 1.4 percent from N15.5 billion it posted in 2016 to N15.3 billion in 2017. However, financial sales revenue grew significantly to N125.26 billion in 2017, up by 33 percent from the N94.11 billion recorded in 2016. Shareholders lauded the company’s giant strides but expressed concern over the marginal decline in profit, a matter which Ramesh ascribed to the hard hurdles of

operating in the industry. He said, “as regards reduction in profitability, I will like distinguish shareholders to be aware that the cost of oil product business in Nigeria is essentially government regulated” “We all were expecting the government to deregulate but

instead of deregulating, not only have they continued to regulate, they set the price at which we can sell our products and also the price at which we buy” “This is where the problem is. The government has not very largely allowed private enterprise to thrive in this

investments in the industry. When this is not the case, investments are stifled and that is why we will prefer a deregulated environment” “Ultimately, the government will be the one to decided the state of the industry and this will be with regards to political considerations but as

L-R: Lanre Ibrahim, customer service manager, 11Plc; Seun Oke distributor business manager; Steve Ezendiokwere, head lubes sales and marketing; Abiola Philips, tricycle winner; Tunji Oyebanji managing director/ CEO, 11Plc, and Amaju Ayomike head public & government affairs, during the Peel and Win Promo for Mobil Super 1000 4litre lubricant raffle draws held in Ibadan recently.

EFInA, CcHub hold FinTech roundtable to expand foreign collaboration

nhancing Financial Innovation & Access (EFInA), Nigeria’s leading financial sector development organisation, and CcHub, hosted FinTech roundtable session with the Lord Mayor of the City of London, Alderman Charles Bowman, financial sector regulators and financial technology (FinTech) companies and other stakeholders, last week. As part of its mission to promote financial inclusion in Nigeria, EFInA desires to improve the existing infrastructure in the financial sector so that FinTechs can play an increasing role in the efficient delivery of financial services to the under banked in Nigeria. Giving the welcome address, EFInA board chair, Segun Akerele, emphasised the importance of the company’s partnership with the Department for International Development (DFID) and Bill & Melinda Gates Foundation, while identifying foreign collaborations and regulatory principles that could catalyse

industry; private enterprises have very little money to make in the sale of oil products” On his part, the managing director of the company, Adetunji Oyebanji said “we as a company will prefer a deregulated environment because that augurs better for competition, innovation and

and accelerate local growth in the financial service sector. Furthermore, he said the difficulties associated with access to financial services had led to a large population of unbanked adults, and encouraged FinTechs and financial service providers to develop more innovative financial inclusive products. He also appealed to regulators to take lessons from the UK’s regulatory principles. Speaking at the event, the Lord Mayor of the City of London, Alderman Charles Bowman, highlighted the need to promote bilateral ties between Nigeria and the UK and also establish a business of trust between the two countries. “This roundtable session will help to work out different modes of collaboration, provide reassurance for Nigeria as an international FinTech hub of the future, and also identifying the opportunities for growth in our countries. In addition, we intend to build on this opportunity to support and promote innovation in financial and

professional services,” the Lord Mayor said. During a presentation on ‘Financial Inclusion, The Regulatory Landscape and Opportunities for FinTechs to promote Financial Inclusion in Nigeria,’ the e-Payment specialist for EFInA, Folasade Agbejule, said, “EFInA’s mission is to spur growth in the financial development sector by providing grants to financial services operators through the Innovation Fund. “EFInA targets the economically deprived population by sharing risks with Financial Service Providers (FSPs) through its Technical Assistance Grant and the Innovation Grant subsidies to the amount of $250,000 and $2,000,000, respectively.” Tunji Elesho, managing partner, CcHub Growth Capital Fund, commenced the roundtable discussion by saying, “Our goal today is to explore the immense opportunities for growth in Nigeria’s FinTech ecosystem and that way, allow users improve their lives and take control of their financial situation.”

an economic entity, we at 11 PLC will prefer a deregulated environment where business can thrive” “Even though investment levels have been ramped up significantly, we are laying foundations in all aspects of business for a greater tomorrow. We are currently upgrading our PMS storage capacity with additional tankage of 15,000 MT.” “A new ATK tank with a 20,000 MT capacity is also being constructed. We are installing three additional pipelines for PMS, ATK and LPG respectively. We have expanded our lubricant warehouse storage capacity by 780 square meters” Oyebanji concluded. The company urged shareholders to put measures in place to ensure the of transfer rights to their next of kin or relations as this will curb rampant unclaimed dividend. The company’s name was changed to 11 PLC on the 8th of August last year but is still trading with the Mobil brand as the distributor of Mobil products in Nigeria and has signed agreements with Exxon Mobil to cover both lubricant and fuel sales in the country.

Unity Bank to reward over 3,000 customers in Season 2 Promo HOPE MOSES-ASHIKE

nity Bank Plc, one of the leading drivers in e-payment system, has flagged off the Season 2 Unity Verve for Value Promo offer, which will give out cash prizes and other material rewards to customers and verve card holders of the Bank. The Season 2 offer is a set of incentives that have been packaged as a reward scheme for deserving customers and active users of the verve debit card on electronic platforms such as POS and WEB. A statement from the Bank quoted the managing director/CEO, Unity Bank Plc, Tomi Somefun, to have said that the Season 2 promo offer is aimed at spreading out the benefits of the scheme to bring more verve card holders into the reward net. She stated that from July to December, 2018 scheduled for the duration of the promo, as much as 300

Unity Bank verve cards holders (ie 50 winners monthly) will receive cash gifts while 3,000 customers (ie 500 card holders monthly) will receive airtime top-up. To qualify for the promo, Verve Card holders are required to transact on POS and Web channels to accumulate transaction counts, volume and value. At the end of every month, 50 customers with highest number of transactions will enjoy reward of N5, 000 worth of cash, while another 500 will be rewarded with airtime top up. Also speaking on the promo, the General Manager, Product and Channels, Unity Bank Plc, Bonaventure E. Okhaimo urged customers, old and new, to take advantage of the offer and participate actively, adding that the Season 2 Unity Verve for Value Promo is well thought out to promote consumer lifestyle and e-commerce experience by encouraging customers’ uptake to transact more on the POS and

Web channels. He said that “apart from the Season 2 reward promo, the Bank is interested in the customers accessing wide-ranging electronic solutions that will give them control, convenience and product experience as more and more Verve card holders make purchases on PoS and Web”. According to him, Unity Bank is committed to ensuring ease, convenience and security in banking transactions for all its customers and its Verve Card holders which is accepted for payment for goods and services. Okhaimo said that the promo gives Verve Card holders the benefits of using their cards and getting rewarded for their commitment and patronage. He further assured Cards holders that Verve Cards are very secure as cardholders are protected against fraud by providing two-factor authentication platform to help guard them across channels.

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Tuesday 03 July 2018

COMPANIES & MARKETS

SAHCOL gets contract to handle Air Namibia as Camair-co returns IFEOMA OKEKE

k y w a y Av i a t i o n Handling Company Limited (SAHCOL) has been awarded the contract to provide Aviation Ground Handling services to Air Namibia at the Murtala Muhammed International Airport, Lagos. The new contract will see SAHCOL providing unequalled Passenger, Ramp and Cargo Handling Services to the Airline from Friday, the 29th of June, 2018. Air Namibia which is wholly owned by the Namibian Government is the National Airline of the Republic of Namibia. The airline whose flights will be originating from Windhoek, Namibia will be operating three flights weekly to Lagos, Nigeria. The choice of SAHCOL

as a preferred ground handling partner by Air Namibia is a further proof that SAHCOL is the handler of choice, providing excellent and dedicated ground handling services to its clients, hence setting the pace in aviation ground handling business in Nigeria, in terms of innovation and efficient customer service. SAHCOL is reputed to provide safe and expedient aviation ground handling services in line with global best practices, to the delight and satisfaction of her increasing list of customers on both the domestic and international fronts.. Meanwhile, Camair-Co, a flag carrier of Cameroun, which ceased flights to Lagos in 2016, has returned to the Lagos route, retaining SAHCOL as ground handling partner to its three times weekly flights.

Oluwatosin Dokunmu

L-R: Abubakar Lawal, group managing director, GTI Capital Limited; Kenneth Amaeshi, guest speaker and director, sustainable business initiative, University of Edinburg Business School, and Martin Ike-Muonso, chief economist and head of corporate transformation, GTI Capital Limited, at the Finance and Investment Dialogue on Prospects for sustainable finance and Investment in Nigeria organised by GTI in collaboration with Business AM at the weekend in Lagos

Heritage Bank partners NEFF on prevention of e-fraud

eritage Bank Plc has partnered with the Nigeria Electronic Fraud Forum (NEFF) on the prevention of fraud in the Nigerian banking system. Ifie Sekibo, MD/CEO of the bank said at unveiling of the 2017 NEFF annual report in Lagos that the bank was very proud of successes recorded by the forum, remarking that the advent of the forum has undoubtedly created revolutionary effect in the conception of banking services in the industry. Sekibo who was represented by Ike Williams, executive director, Services and CIO of Heritage

Bank said financial institutions in the country had exploited these successes to introduce innovative banking products, especially e-products. He said Heritage Bank would continue to support the forum and advised NEFF not to rest on its oars. The Heritage Bank helmsman also commended Adebayo Adelabu, the out-going deputy governor of the Central Bank of Nigeria (CBN), operations as an exceptional leader who made invaluable contributions to the success of the forum, remarking that it will be difficult for any to surpass the achievements he recorded for the forum.

While unveiling the NEFF 2017 annual report, titled “Tightening the Belt of e-fraud Prevention: A 4 sided approach,” Adelabu, noted that in an environment that has witnessed fast-paced growth in both volume and value of electronic transactions, it would not be out of the ordinary if fraud attempts are also on the increase. Adelabu who was represented by Tokunbo Martins, director of other Financial Institutions Department of the CBN added that a true test of resilience security and strength of a payments system is where losses were minimized, and measures taken to learn from those losses

to forestall a recurrence. According to him, in the last six years of the forum existence, NEFF has consistently acted as a catalyst in the formulation of cohesive and effective fraud and risk management strategies. He said the forum has contributed to a year on year reduction in actual losses from e-fraud as reported by the Nigeria InterBank Settlement System Plc (NIBBS), which accounted for the 25.71 percent in actual loss value in 2017 when compared to actual loss figures for 2016. Adelabu also commended NEFF for its decision to focus on fraud mitigation by engaging all stakeholders from bank-

ing, other eco system players, law enforcement agencies and telecommunication operators which has been put together to form the acronym BELT, from which collaboration should be tightened always. In her contribution, Christabel Onyejekwe, executive director, Technology & Operations, NIBBS, said the organization has been adding value to the eco-system through the deployment of electronic banking and formulation of measures to monitor fraud. She said NIBBS would continue to collaborate with other stakeholders in the continued effort to reduce efraud in the system.

CCECC must give opportunity to qualified Nigerians on rail projects MIKE OCHONMA

igeria’s Transport Minister, Rotimi Amaechi has expressed concern over the technical competence and academic qualification of workers employed by the Chinese Civil Engineering Construction Company (CCECC); the contractors working on the Lagos-Ibadan standard gauge rail project. The minister expressed displeasure when one of the Nigerian site workers could not provide answers to some

of the technical details of job being carried out at Omisanusi community in Ogun State. As a result of the minster’s displeasure, he has directed that he must see the qualification and credentials of some of the Nigerian workers, especially site supervisors and engineers during his next inspection tour of the project next month. He advised the CCECC to as a matter of priority ensure that Nigerian workers must be constantly trained on the job as a way of skills transfer. Briefing newsmen at the end of the stakeholders meeting held in Ibadan, Oyo State, the

Halogen seeks NPF’s collaboration to deepen Nigerians security

transport minister disclosed that the contractors have started laying the tracks. According to the him, ‘’ If you ask me if am impressed with the laying, the answer is no. We agreed at 11 kilometers, they have done only three. They have apologized and said that at the next meeting which would take place on the 25 of July, they would have done more than 10 kilometers. Amaechi said the reason for the snail speed is the rain. It is slowing down the civil works. But they are trying to manage the situation until the dry weather comes.

The minister further said that the capacity is that CCECC can lay that 10 kilometers in one day. It is the civil works that is the problem, adding that it is not the laying of the tracks, but it is how to manage the civil works under the current situation of weather challengeds and they are working towards that. On the challenges posed by the infrastructures hindering progress of work on the Lagos end, Amaechi said he is impressed with the Lagos State Water Corporation. ‘’We set up a committee headed by the chairman of Nigeria Railway Corporation

and we put all the engineers in that committee and asked them to find solutions to those problems that we have identified and the committee has done well’’. ‘’If you remember we said we have a challenge of 24 kilometers of water pipes in Lagos and the man consistently argued at the meeting that we can’t say that until we go to the site. He went with his team and found out that we have only two kilometers of pipe on our right of way. Those challenges actually exist but not on our right of way. They exist on LAMATA right of way’’. The minister said.

n a bid to further deepen the security of the country, the Halogen Group has opened up her arms to the Nigerian Police Force (NPF) in partnership to harness the private sector success in efficient security. Security has been a national issue with crimes being committed on a daily basis. Despite the NPF’s proactive and reactive strategies in combating traditional and contemporary crimes, policing is still not as efficient as it is meant to be in the country. ACP Patrick Atayero, who represented the AIG of Police Zone 2, Adamu Ibrahim at the one-day workshop organised by the Academy arm of Halogen Group on “Crime Prevention and Community Safety” identified some of the challenges hindering efficient policing in the country. Lack of resources, inadequacy of data and information on crimes, underequipped forcemen, insufficient technology were a few of the threats hindering efficient policing as identified by him. He further commented that, “ideally, every state in Nigeria should have a functioning forensic laboratory staffed by competent individuals, maybe not necessarily by police officers in uniform, maybe civilians who are trained to help us process what we’ve gathered from crime scenes to the laboratories which we can use for successful investigation” In the course of the workshop, ACP Atayero revealed that the force was open for partnership and collaboration with the private sector in ensuring efficient policing in the country. Halogen Group, a private security firm is found to have led the private security industry in the call for a partnership with the Police Force. Wale Olaoye, the GMD Halogen Group, reiterated the need for the NPF to partner with the private security industry for an inclusive effort to deepen the security of lives and properties of Nigerians. “This is a very little drop in where we are headed. It is just a little drop in what we believe will be a long journey perhaps and I will also see to where we need to get policing to in our country, everybody has to play their parts and no matter how little it is, a journey of a thousand miles start by one little step” Wale Olaoye said at the event held in Lagos

Tuesday 03 July 2018

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BUSINESS DAY

COMPANIES & MARKETS Stanbic IBTC Pension Managers sheds light on multi-fund Investment structure Modestus Anaesoronye

he multi-fund investment structure in the pension industry, taking effect from July 1, 2018, resonated at a preretirement seminar organized by Stanbic IBTC Pension Managers Limited in Lagos, during which the leading Pension Fund Administrator (PFA) provided deeper insights on the workings of the scheme. Eric Fajemisin, Chief Executive, Stanbic IBTC Pension Managers Limited, speaking at the event on Thursday June 28, 2018, stated that the new structure replaces the previous “one-size-fits-all” arrangement that puts all active contributors into one Retirement Savings Account (RSA) Fund for purposes of investment. He said the new structure would resolve the challenge of asset-liability risk management faced by the operators. By aligning the age and risk profile of RSA holders to match the four funds under the scheme, contributors would have a better chance to earn improved returns on their investments in proportion to their risk appetites. The different categories of the multi-funds structure are Fund 1, Fund 2, Fund 3 and Fund 4. Fund I is targeted at people of 49 years and below who in the quest for higher returns are willing to take more risks. Fund 2 is aimed at people who are aged 49 years and below and still working but are satisfied with moderate returns and levels of risks. Fund 3 targets people 50 years and above but still working and have very low risk appetite. In Fund 4 are retirees who have the lowest risk profile of all categories.

Fajemisin said even though an individual may be retired, his/her money should continue to work for the person. As today’s people live much longer and enjoy healthier lives, meaning that the time spent in retirement is much longer, there is the need to plan for a comfortable life in retirement. Planning for retirement, he said, should commence from the first day an individual starts working. This decision may seem disheartening at the onset, but with the help of an experienced pension professional, the process is made easy. As retirement approaches, the individual will not encounter the usual apprehension associated with retirement from work. As people head towards retirement, a decision about the type of life they wish to live in retirement should not be made from the hip, but rather through a well-structured financial planning process. The process, he said, should commence from the day one takes on a first job and involves setting aside part of current income into a retirement savings account. The Stanbic IBTC helmsman outlined three crucial considerations which everyone must give a thought to for a secured future. The first is that since no one will care more about another individual’s retirement investments, the individual should educate himself about the process. The second thought is that when making retirement investments, the assistance of a professional should be sought. The third thought is even when the individual may have stopped working for money; the money should never stop working hard for him.

“This seminar, besides celebrating all of you that will soon transit from contributors to retired clients of Stanbic IBTC Pension Managers Limited, also provides an opportunity to address the concerns or anxieties you might have as retirement draws close,” he said, Other issues that were examined include preparation for retirement; accessing retirement benefits; health at retirement and investment opportunities post-retirement. The pre-retirement forum, which the firm launched four years ago, is part of initiatives aimed at encouraging retirement planning amongst Nigerian workers and employers. The event had over 700 participants in attendance. A similar session has held in Port Harcourt while another is scheduled for, Abuja and other cities this year. Head, Business Development, Stanbic IBTC Pension Managers Limited, Nike Bajomo, assured that the company remains committed to rendering impeccable service to its clientele. “We make a promise to our clients: that they will retire very well. It is a promise we always keep. That explains why we are represented in virtually every part of Nigeria. Retirement is a time to rest and enjoy the fruits of your labour. At Stanbic Bank Pension Managers, we help you to achieve just that,” said Bajomo. Stanbic IBTC Pension Managers Limited, she added, has over 1.6 million RSA holders nationwide, with assets under management in excess of N2 trillion. It pays approximately N1.3 billion to over 37,000 retirees monthly and over N279 billion has been paid to retirees since the PFA commenced operations in 2006, Bajomo added.

Business Event

L-R: Julius Oyeleke, head, quality assurance Sidmach Technologies; Oluseyi Odusanya, head, education strategic business unit, Sidmach Technologies; Jordan Belmonte, educations program manager, Microsoft, and Olayemi Oladiran, Head, Sales & Marketing, Sidmach Technologies, at the recently concluded event Digital Transformation in Education in Lagos.

L-R: Amaka Onyemelukwe, public affairs and communications manager, Coca-Cola Nigeria; Sade Morgan, legal, public affairs and communications director, Nigerian Bottling Company Limited (NBC), and Barnabas Eke, regional public affairs and communication manager (East/Central), Nigerian Bottling Company Limited, at the Mid-Year Media Parley organized by NBC held in Lagos.

New CEO to take over at Wema Bank ABIMBOLA HASSAN

ema Bank is changing its leadership as Segun Oloketuyi, its outgoing CEO begins his terminal leave next month. In his place, Ademola Adebise, has been announced as the new CEO, an elevation from his current function as deputy managing director. Segun Oloketuyi served for nine years as CEO of the company since 2009 when he took office, with a task to return Wema bank to glory after the 2008 banking crisis which saw the collapse of banking institutions during that period. Ademola Adebise, the newly appointed CEO, has been part

of the bank’s executive management team since the transformation program began in 2009 and has played a pivotal role in the execution of the Strategic turn around programme for the Bank. In a report filed with the NSE by Wema bank, Adebise is said to have over 28 years experience in the banking industry which is inclusive of his 4 years in management consulting, and has worked in various capacities in Information Technology, Financial Control & Strategic Planning, Treasury, Corporate Banking, Risk Management and Performance Management. Before joining Wema Bank, Adebise was Head, Finance & Performance Management Practice at Accenture (Lagos

Office) where he led various projects for banks in Business Process Re-engineering, Information Technology and Risk Management. He is an alumnus of the Advanced Management Program (AMP) of the Harvard Business School and a Bachelor’s degree holder in Computer Science from the University of Lagos. He obtained a Master’s degree in Business Administration (MBA) from the Lagos Business School The Wema bank board says it is confident that the appointment of Adebise, will lead to the continued transformation and growth of the Bank, particularly as the Bank positions itself as a market leader in Nigeria’s retail banking segment through technology and innovation.

L-R: Azwianewi Mbedzi, vice consul, political, South Africa Consulate General; Ibiyemi Odusi, country manager, Nigeria, RwandAir; Mark Loxely, general manager, Southern Sun Ikoyi, Lagos, and Dave Obray, at the Southern Sun Ikoyi annual cocktail for client in Lagos. Pic by Olawale Amoo

Ojokojo Ernest Paul from Delta State, Aseruoma Glory Aworiwo also from Delta State, Ajayi Odunayo Felix from Oyo State, Oladele Oluseyi Adetokunbo from Osun State and Izuchukwu Kizito Alih from Enugu State, all winners in the Glo GO RUSSIA promo during their sent forth by Globacom in Lagos on Saturday.

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Tuesday 03 July 2018

Energy Report Oil & Gas

Power

Renewables

Environment

H1review: Oil companies in cautious optimism over sustainability of prices increase

At the national level even though there has been increase in the price of crude oil there have not been many activities as far as exploration is concerned. It has been at the lowest ebb if at all there was any. All the companies are into production and not exploration activities. They are depleting without replacing the resource Destruction of evacuation and export facilities are still happening but not in the magnitude of the previous years. The force majeure de-

clared on shipments of Bonny Light crude oil still remains in force following the shutting down of Nembe Trunk pipeline. About 195,000 barrels per day of crude is being shut –in. The terminal is third largest crude oil stream, behind Forcados and Qua Iboe, and the country is being denied the revenue coming from this terminal. Trans Forcados pipeline had its own share of vandalisation or shut- in. This happened shortly after communities around the pipeline protested asking for reinstatement of the contractor that was protecting the facility but was later sacked. Shortly after this there was a reported case of rupture on the pipeline and it took about two weeks to fix. Consequence upon this, there was a shortfall of about 250,000 barrels per day in the country daily production. Crude oil theft though not on the increase, it is still rampant and it does appear that the oil companies have learnt how to live with it and managed their ways out of the problems. It must also be said that security has improved and helped to reduce the crime.

There is also no major oil found in the first half of this year. The Petroleum Industry Governance Bill was passed and transmitted to the president who is yet to sign it, while works are still ongoing on the other parts of the PIB. Anxiety has reduced on PIB despite all the challenges of sustainability and unemployment in the industry. One other remarkable thing that happened was the agreement between the oil and gas industry operators and the government through the Nigerian National Petroleum Corporation NNPC and the Nigerian Content Monitoring Development Board NCMDB to reduce the contracting circle in the industry to about six months. It was also within this period under review that the minister of state for petroleum resource, Ibe Emmanuel Kachikwu and Maikanti Baru , managing director of NNPC engaged themselves in a war of words over the$25 billion contract saga. The contract for Ajaokuta,Kaduna- Kano gas pipeline was also awarded to three contractors to construct.

He maintained that the corporation’s foray into the inland basins was to expand its exploration footprint with a view to improving the nation’s oil and gas reserves, increase oil and gas production and spinoff socio-economic activities across the country. According to him, NNPC through its relevant subsidiaries is currently engaged in aggressive exploration campaign at most inland basins with a view to discovering new oil and gas reserves that will boost oil and gas production and the extended economic benefits to the people within those basins and the nation at large. According to him, he said, NNPC, as the concessionaire of all the blocks in these basins, is committed to working with all stakeholders around the Bida basin and beyond to advance the current efforts to

fruition and thereafter follow all the laid down regulations for reporting such discoveries. “It is our utmost desire that the success of the ongoing exploration campaign in the Inland Basins will usher in a new Nigeria. A new Nigeria with balanced resources distribution; diverse economic activities and sustained energy security as we move towards the industrialised economy we all desire,” the GMD said. He applauded President Muhammadu Buhari for giving the corporation the mandate and all the necessary support and encouragement to lead a renewed search for oil in the inland basins, adding that the Niger State Government has been very helpful towards the cause of securing Nigeria’s energy future as exemplified by its support for the NNPC

exploration activities in the Bida basin. He also commended the Ibrahim Badamasi Babangida University with respect to the studies carried out on the characterisation of the Bida basin, stressing that the studies would help NNPC in the ongoing exploration activities in the basin. According to him, the corporation would from time-totime engage the University for further support in areas relating to the ongoing exploration in Bida basin. “Ours is a symbiotic collaborative relationship with this ivory tower,” he concluded. The State G overnor, Abubakar Yahaya Bello, expressed gratitude to the NNPC for engaging the University on the basin exploration, saying that the GMD deserves the recognition bestowed on him by the university.

OLUSOLA BELLO

he last six months of 2018 have been greeted with cautious optimism as operators in the oil and gas industry were not too sure of the sustainability of the upward increase of the price of crude and this did not enable them to venture into serious investment globally. However, the first half of this year witnessed some significant activities that have tremendous impact in the industry globally. This necessitated some intense negotiations among the Organisation of Petroleum Exporting Countries (OPEC) and non OPEC members that are bent on influencing the way forward in the global crude oil market. While some OPEC members led by Saudi Arabia were interested in increasing global crude oil production so as to bring the price to reasonable level that would not hurt the Asian economies which are the major buyers of the commodity to fuel their economies. Some others

were insistent that they must wait till December this year which was when both OPEC and non OPEC members had initially agreed that to review production cut group eventually agreed to pump one million barrels of crude oil into the market. This is believed would help douse the tension in the global market However this did not help in stemming down the price as it hit $80 per barrel for week ending 29 June. Another significant thing that happened which would also be a long lasting impact

on the global oil market was the withdrawal of the United States of America from the Iran nuclear deal and it order that all companies relating with Iran should with draw the relationship or face sanctions. There is of cause, the Venezuelan crisis which has made its oil production to have shrunk to such a level that the country has ran into economic crisis. The combination of these crisis are going to reduce the crude oil supply to the Global market and also raise the price of crude oil.

No oil is found yet in Bida basin- NNPC

aikanti Baru, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), has said that the speculations that oil has been found in commercial quantity in the Bida Basin should be discountenanced, stressing that the search for oil in the basin is still ongoing. He made this submission while delivering his acceptance speech during his conferment with the fellowship award by the Ibrahim Badamasi Babangida (IBB) University, Lapai at the weekend. Speaking on the topic: “The Role of Inland Basins in Unlocking the Socio-Economic Benefits of a New Nigeria”, he said that NNPC is desirous to discover oil and gas in the frontier basins,

stressing however that the corporation was currently at the fourth, out of ten intensive stages, of determining if hydrocarbon has been generated in the basin. The NNPC helmsman averred that upon completion of determination of hydrocarbon generated, the corporation would initiate another six stages of integration of the studies to identify positive hydrocarbon anomalies, acquisition of 2D seismic data over anomalies, acquisition of 3D seismic data to validate identified structures, drilling of exploration wells, drilling of appraisal wells and evaluation of the engineering and economic parameters required. He emphasis ed that NNPC recognised that the Bida basin exploration was in the fourth stage of these activities, adding that it is

important to state that efforts have not advanced to the level of declaring discoveries, talk-less of claiming that the oil and gas present is in commercial quantities. “It is also imperative to state that even after commercial discovery of hydrocarbons, it is pertinent that pronouncements be made only after due validation of claims by the Industry Regulator - the Department of Petroleum Resources (DPR),” Baru advised. He expressed the hope that with the clarity provided, all claims and counter claims in respect of the Bida basin hydrocarbon discoveries would be given the befitting rest they deserve, advising that until the conclusion of the current NNPC-led efforts or any other ones in that respect, all claims should be discountenanced.

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

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378; +234-8036534708

Tuesday 03 July 2018

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BUSINESS DAY

Energy Report

Nigeria has fierce sunshine, wobbly solar energy development …as Total, BP bet big on alternative energy STEPHEN ONYEKWELU

rench and British energy companies Total and British Petroleum (BP) Plc are betting and investing big in solar technology; Nigeria harvests little of her fierce sunshine. Integrated oil companies are facing rising pressure from investors and activists to prepare for a future with declining fossil fuel demand. BP has focused its efforts on making small investments in various clean technologies rather than undertaking a major shift in capital allocation, like it did about a decade ago when it re-branded its company “Beyond Petroleum.” There are numerous energy resources renewable energy types in Nigeria. Despite the abundance of these energy sources in Nigeria, an estimation of about 60 percent of the populace has access to the national grid. A better mix of energy sources could be palliative to Nigeria energy problem.

Therefore, utilizing and implementing renewable energy (Solar Photovoltaic, Hydro and Biomass) resources, which are readily available in remote mountainous and riverine areas could help augment power generation and reduce energy crisis to some extent. “Some of the challenges in implementing renewable energy in these remote areas particularly and Nigeria in general are policy and regula-

tion, finance and market size, technology background, educational and institutional organization and socio-cultural behaviour of the inhabitants” Kenneth E. Okedu, Department of Electrical Engineering, College of Engineering, University of Port Harcourt, Nigeria stated in the research paper titled “Renewable Energy in Nigeria: The Challenges and Opportunities in Mountainous and Riverine Regions.”

Across the Atlantic Ocean, Total, on the #PlaceAuSoleil initiative platform, announced 10 Giga Watts (GW) plans. #PlaceAuSoleil initiative is a new plan of France’s government to speed up photovoltaic (PV) development, and to make surfaces for large-scale solar plants available. The new package of measures includes doubling the volume of tenders for PV projects on agricultural land

and increasing by 50 percent the volume of tenders for rooftop PV. More details on how Total’s plan will be implemented were not provided. Several other announcements, however, were made during the event: Jean-Bernard Levy, EDF’s CEO, reiterated that the company will implement its 30 GW plan to “help France reduce its gap in terms of PV development. French retail groups Auchan and Carrefour have promised to install 60 hectares, 20 hectares of solar panels, respectively, at their facilities in the country, while two more retailers, Magasins U and Les Mosquetaires, have committed to 50 hectares each. BP Plc plans to acquire the United Kingdom’s (U.K.) largest electric vehicle charging company, the latest in a string of acquisitions by major oil companies in the growing market for greener transport. The British oil major entered into an agreement to buy Chargemaster, which has 6,500 charging points across the U.K. It didn’t disclose

terms of the deal, but BP has previously said it plans to spend about $500 million a year on clean energy. Customers will see the new chargers in its forecourts over the next 12 months. “Combining BP’s and Chargemaster’s complementary expertise, experience and assets is an important step towards offering fast and ultra-fast charging at BP sites across the U.K.,” said Tufan Erginbilgic, chief executive, BP downstream. “And to BP becoming the leading provider of energy to low carbon vehicles, on the road or at home.” The firm has acknowledged it moved too soon into the nascent market back then, but now sees significant growth in alternative energy. BP estimates there will be 12 million electric vehicles on U.K. roads in 2040, up from just 135,000 on U.K. roads last year: less than 0.1 percent of the total, according to government data. Access to convenient and fast chargers will be key to increased adoption of the technology, the company said.

BUSINESS DAY

Tuesday 03 July 2018

African countries’ early exit from W/Cup Consumers win N3m underscores continent’s struggling position in Indomie contest … African teams need to understand referee’s disposition Stories by Daniel Obi Media Business Editor

erception of rest of the world is that Africa is a struggling continent but constricted by a lot of factors which have remained daunting. This position has manifested in various sectors including health, agriculture and sports. It is therefore not surprising that with over 70 per cent arable land, still the continent is said to be spending over $40 billion annually on food imports. Medical tourism alone costs the continent about $1billion yearly, according to the World Bank. At the on-going World Cup competition in Russia, all participating African countries, Egypt, Tunisia, Morocco, Nigeria and Senegal crashed out of the competition in the first round. When Senegal took on Colombia on June 28, commentators never failed to remind listeners that Senegal is an African nation and it was the last hope of Africa, but it has crashed out after losing 0-1. The emphasis and reference on African nation by these commentators is a

t a party in April 2007 former students of social work from the University of Applied Science in Berlin came together talking about their fields of interest. They decided to bring people together with a basic social concept; sharing a meal. Sharing and eating fruits and vegetables together soon transformed into International Fruit Day which is celebrated July 1st every year. The apple is considered to be one of the healthiest and the most versatile fruits. This marvellous fruit is extremely rich in important antioxidants, flavonoids, and dietary fibre. As one of the most consumed fruits in the world, apples are continuously being praised as a “miracle food”. In fact, apples were ranked first in Medical News Today’s feature article about the top ten healthy foods, helping to reduce the risk of developing cancer, hypertension, diabetes and heart disease. Apple juice, is also one of the favourite drinks for

strong indication that these African countries are bonded by similar cultural identity and the same level of economic development. Senegal was the last African country to be ousted from the World tournament. This means all the five African representatives at the 2018 World Cup unfortunately failed to advance from the group stage. Though some African countries such as Nigeria, Senegal and Ghana have advanced beyond first round in previous W/Cup tournament but looking at early ouster in the 2018 W/Cup, Akonte Ekine, CEO of Absolute Public Relations firm based in Lagos said “Our continent is

known to be what it is. The perception is that we are struggling and this was seen in the early exit in the W/Cup” In a chat with BBC, according to a report, Didier Drogba, who believed that ”Africa is going to be successful one day advised that the continent needs to think again how it will approach these big competitions,” . It is true that African teams did not do badly in the competition, showing strong contest but African countries participating in such intercontinental competitions need to understand referees disposition as this counts in the competition. For instance, Cuneyt Cakir, the Turkish national who

was the referee in Nigeria- Argentina match failed to award to Nigeria clear penalties when Iheanacho was kicked on the head and when Argentine player handled the ball in the 18 meter box. The referee also failed to send Mascherano out, who was bleeding in the face, for treatment. On the implications of early exit of African nations, Akonte immediately noted the instant cut in advertising spend by corporates and low patronage at drinking bars, and viewing centres. “The result of the match which was not favourable to Nigeria has resulted in cut in advert spending and low attendance to drinking bars and viewing centres”, he said. Jenkins Alumona, the CEO of Strategic Outcomes firm and football enthusiast who was in Russia to support Super Eagles predicted that Nigeria lose to Argentina, would mean negative outcome for businesses. It will mean “serious losses to media businesses from advertising revenues to newspaper sales. Campaigns will come to a premature end and there will be revenue loses across many media platforms. “Pay TV businesses will also be impacted negatively as subscriptions may not be renewed”, Jenkins said.

ndomie brand has rewarded online sensation, David B-Online, from Lagos with N1 million grand prize in “My Indomie My Remix” Video Contest where ace musicians: Sound Sultan and Vector the Viper acted as judges for the final round. According to a statement, the N1 million cheque was presented to him at Indomie head office in Lagos alongside other 28 winners who won cash prizes of N500, 000, N200, 000 and N50, 000. The promo, which started barely a month ago, only required consumers to create their own original and creative version of the #MyIndomieMyStyle theme song while cleverly infusing one or more packs of any of the Indomie flavours. They had to then upload on social media with the hashtag #MyIndomieMyRemix or #MyIndomieMyStyle and get followers to like, comment and share the video link. Speaking at the prize presentation ceremony, the Group Public Relations and Event Manager, Ashiwaju Temitope, said, “We are celebrating creativity and rewarding originality. As a brand we are constantly searching for creative ways of expression and more excit-

ing ways to reach out to our consumers.” He also stated that the Indomie brand was committed to “putting its customers first, because Indomie consumers aren’t just ordinary consumers, but brand ambassadors, and they should be treated as such”. Ashiwaju restated the company’s commitment to continue to reward and give back to its loyal consumers. This competition comes after the launch of the “My Indomie My Style” campaign and the endorsement of ex Big Brother Naija Housemate, Chef Miyonse as brand ambassador. The grand prize winner expressed his appreciation to Indomie, saying that the brand has made him the happiest man on earth and that the prize of N1 million will go a long way in his future endeavours.

International Fruit Day: La Casera underscores milestones in Nigerian market many people. With the socioeconomic climate in Nigeria, methods must be adopted for consumers to continue enjoying the great taste and benefit of apple through the provision of real apple juice in various products like Carbonated Soft Drinks (CSDs). This challenge was taken on by The La Casera Company, makers of La Casera Apple drink. Interestingly, the La Casera brand was the first to introduce PET bottles in Nigeria, thus making it accessible and accepted by all. Consumers therefore experienced a new found love in the brand La Casera, because of its convenience of consumption as an ‘on-the-go’ Soft Drink, thereby changing the landscape of the entire

soft drink industry in Nigeria. These unique qualities of the La Casera brand challenged two other Soft Drink giants to follow suit in 2004; 4 years after the birth of La Casera. The competition was on and consumers still attached their loyalty to La Casera which contained real apple juice, as against the other flavour filled brands which dominated the market prior to its entry. The brand recently introduced its ‘Full Option’ range of SKUs giving consumers the options of 60cl, 50cl and 35cl. While hundreds of products are launched yearly, only a few often survive competition due to taste appeal, quality and brand loyalty. Market and health analysts have questioned the qual-

ity standards of many of the products in the Nigerian market. Hence, Nigerians refer to The National Agency for Food and Drug Administration and Control (NAFDAC), and

Standards Organisation of Nigeria (SON) as the lead safety authorities in Nigeria, whose certification can be taken as a final arbiter for any product’s safety concerns. According to a report made

public after a routine laboratory analysis of La Casera Apple drink, NAFDAC declared that “La Casera Apple drink ingredients conformed to laid down specifications and regulations.SON and the Manufacturers Association of Nigeria (MAN) have also commended the company on its adherence to safety and health guidelines for beverage production. La Casera Apple drink which has an undeniably attractive golden colour and refreshing taste, has no doubt earned its seal of quality in the Nigerian CSD landscape . La Casera is synonymous with “Great Apple Taste” for many consumers and that’s because La Casera Apple drink is carefully made with real fruit juice.

Tuesday 03 July 2018

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BUSINESS DAY

Marketing&Pr ‘Fueltrax solution allows vessel owners gain control over fuel management’ C & I Leasing Nigeria in partnership with Fueltrax, a nautical control solution company based in Houston, Texas, USA last week organised a one-day conference for ship vessel owners to explain the importance and benefits of the fueltrax solution to their operation. Fueltrax which started operation 15 years ago has in the last 30 months installed about 80 solutions in Nigerian vessels. The solution which provides tamperprove data through satellite, supports offshore industry. The system ensures transparency and accountability in vessel and fuel management and allows the IOCs and vessel owners to monitor vessel usage, engine performance and manner of fuel consumption. In the end it assists in efficient operation of the vessels, cost reduction and fuel consumption reduction of upto 12 percent depending on other variables. Victoria Cantu, sales and marketing manager of Fueltrax explains further to BusinessDay the working of the solution. Excerpts. Originally what informed the invention of this solution? irst, our goal is to help to solve the challenges of fuel and vessel management in the offshore industry. We have been doing this business in the last 15 years. Recently, we have concentrated our efforts to help solve those challenges in Nigeria. There was an inland marine company, called Kirby Inland Marine and that company came to Anthony George, the inventor of this solution in 2003 to ask for a way of monitoring fuel in his vessels. George built a control system in the fuel but the client needed the system on the board so that he can take decisions based on the information. This is where he started building fueltrax. This is where the electronic fuel monitoring industry started. 2004 was when the first fueltrax was installed. How does the solution work? All the information comes to us directly from the clients - the vessel owners, the IOCs and other fuel stakeholders. They are the ones that come to us to tell us what they want. We then get their input on how to build the system. Everything we do therefore is through the collaborative effort. We will like to consider ourselves as fuel control systems experts. We know how to control the systems. We also know the fuel quality, quantity and how to interpret the data for decision making by the vessel owners. They are the experts in operating the vessels and they know

Victoria Cantu

what they need to operate better. So, we seek their guidance all the time to make necessary adjustments. What value do the solutions therefore bring to vessel owners and to the IOCs? The vessel owners are gaining great control over the fuel management. Before electronic fuel management came into existence, the

vessel owners were using manual method of collecting information and this was inaccurate and difficult to analyse. Having instantaneous monitoring system, visualising all the data makes it easy for vessel owners to make decisions goings forward. These benefits are to IOCs and to the vessel owners. The great thing about the system is that

it brings transparency to the operation. It is more clear about what is happening to the fuel, how it is being utilised. Averagely, what percentage cost of fuel can the system save? For instance, Exxonmobil which has installed the operation said it is utilising one third less of its total operation cost with the same fleet. That is impressive figure that is interesting. That specific example was a specific case study where we help an operator change how the vessel was running based on the information we were receiving from Fueltrax. What is the cost of installing the solution on vessels? The cost varies and this depends on the measurement formula that the vessel owner wants. We can measure main engines or do a combination with other demands but it depends on how large the system is and how large the installation is. On average, it is between $100,000 and $150,000. But if the vessel owners need more components, that may cost more. You have come to create awareness in Nigeria, so what are your expectations? The marketing in Nigeria has taken off. The marketing we are doing in Nigeria is focussed on the needs in the market for the clients. What the vessel owners are asking is how they will benefit from Fueltrax. So our focus now is explaining to the vessel owners on how the system is beneficial on having the system on board. On potential of sales, there are many offshore operators in the world, but

I cannot immediately figure out how many of that are in Nigeria, but I know that as fuel monitoring continues to expand, we will definitely make great impact in the market. Do you have local partners or are you selling directly to vessel owners? We have local partners but the partnerships vary. Currently we are selling directly from our Houston office but we are working to open our local affiliate office to represent us. Our partners will also help in installation services. Beyond that we will look for partners that will help to introduce us to new clients and assist to open doors of opportunities in the market. How can a nation like Nigeria benefit from this solution? I understand that the operators in Nigeria have a joint partnership with government. What this means therefore is that when the operators are saving fuel and cutting their operating expenditure, the Nigerian communities and organisations are also seeing those savings. When Exxonmobil saves one third of its operating cost, this translates to the nation. You are saving on fuel and other operating cost, hopefully those savings would be reinvested into further development. What we are saying is that if you have a large fleet operating for at least six months, you can see upto 10 percent savings across the spectrum. This can come from a variety of methods. You can use the Fueltrax data to change operation, to run the vessels more efficiently.

Digital development seminar in Beijing underlines Africa-China growing relationship

he annual African Digital TV Development Seminar, a strategic think-tank for stakeholders in the African broadcasting industry organized by StarTimes Group has ended with participants underscoring the growing Africa –China relationship. The Deputy Director of the State Council Information Office of China, Guo Weimin, according to a statement told participants that China continues to foster the growth of the media in Africa as part of the development strategies for Africa in the overall China-Africa Cooperation. He noted that this year is very important for the relations between China and Africa, with a lot of highlevel exchanges happening, adding that the China-Africa relationship

has now entered an all-time high as a result of promising progress in partnerships. On his path,, the Minister of Communication and Media of the Democratic Republic of Congo Lambert Mende Omalanga hailed

StarTimes for the level of progress achieved so far in actualizing digital broadcasting in Africa, noting that the pace of progress should be increased by governments in Africa, to enable the total digitalization of broadcasting in Africa within the

shortest possible time.. While declaring the seminar open, Pang Xinxing, the President of StarTimes group emphasized on this new stage of development for China-Africa radio and television cooperation: “In order to adapt to the requirements of media development under the Internet environment, StarTimes developed a content distribution platform based on its own network and content resources and strong R&D capacities. We are very pleased to be at the forefront of helping Africa gradually make a transition to a modern and intelligent society.” The 8th edition of the Seminar which commenced on June 28, 2018, according to the statement recorded a landmark in attendance

with over 400 delegates, dignitaries, heads of broadcasting corporations and guests from 48 African and Asian countries, with a focus on reviewing trends, developments and cooperation towards digitalizing broadcasting in Africa, as well as OTT industry which is upgrading African television landscape The First African Digital TV Development Seminar was hosted by StarTimes in 2011. Since then, the seminar has been a much-discussed phenomenon in Africa’s television industry and an important platform for delegates from various countries to share their experiences and suggestions on the promotion of digital migration in Africa, thus making StarTimes a thought leader in digital broadcasting in Africa.

BUSINESS DAY

Tuesday 03 July 2018

INTERVIEW

Personalising governance responsible for

Donald Duke, a former governor of Cross River State, who has just declared his intention to contest the 2019 presi and ZEBULON AGOMUO, shared his experiences in government; his role in the Sani Abacha policy formulation C and his motivation to aspire to lead Nigeria. He sounded a note of warning that except Nigeria takes practical a In the General Abdulsalami Abubakar regime, you were quite central in shaping economic policy in the National Economic Intelligence Committe e that you b elonge d, which was a very strong group then. This is 20 years or more. Can you compare policy formulation then and now? started under General Sani Abacha. I got there in 1995. Let me start from Abacha’s time; policy was decided on a whim. We used to budget about 1.5 or 2billion dollars for Paris Club debt repayment and at the time the minister of finance had the leverage to determine among the creditors whom to service; so, it became a racket. If I owed you money, let’s say, I owed you N50million for 30 years; one day somebody would just show up and say, you know you’re being owed N50 million by Nigeria; if you are ready to give up N25million, I would give you the balance of N25 million. And you have nothing to lose; after all, you had written off the debt; so that was what was going on. So, we decided that the money should go straight to the Paris Club and let them pay their members and not some individuals deciding who to pay the money; on individual’s credit. At that time, policy was just taken at whim; there were no meetings where you sit down, discuss and interface. Nothing like that. Abacha particularly depended a lot on NEIC, primarily because of Professor Aluko; he found him a very straightforward and honest person. Literally, every memo that came to council would first come to us in NEIC to take position and make recommendations. So, when it goes to the council, it’s really our recommendations that would count; but you allowed the minister to present his memo. We used to attend Council because we were of course members of the National Economic Council too. There was nothing consistent. For instance, you sit and you are discussing fertilizer and you find out that fertilizer is not getting to the farmers, and you say, let’s stop it. Nothing consistent. That’s why I said policy was being decided at whim. Then the level of sycophancy was absolutely stunning. In Abacha’s time it was pure sycophancy because he would hire and fire at will. Abdulsalami was in a hurry to

meet the transition programme and leave. So, with the military it is pay as you go; there’s no depth; no rule in anything. The civilians are better. Obasanjo came in trying to understand the process. In his first four years, he came in with the same mindset that he could direct governors who were elected; he could direct the National Assembly and also policy-wise he could do same. He fell out with a number of governors on that score. You know, the N’Abba time at the National Assembly, it was horror. You know, at a point they tried to impeach him. So, he learned the hard way that the democratic system of government is a government of compromise. It was designed to forestall the occurrence of dictatorship; so you have the legislative house that has almost equal powers with the executive; the Constitution also recognises that work has to be done; so it gives you a veto authority and that could be checked also by the judiciary. It took him a while to learn all these. I remember at a council meeting; he wanted to pass some order or some law; but he knew that if it got to the National Assembly, it was dead on arrival. He was instrumental in removing one Senate President or the other. You know, the eight years we were there; we had five Senate presidents. Each South Eastern state produced one Senate president, starting from Enwerem to Okadigbo, Anyim, to Wabara and then to Nnamani. The executive was behind all these. So, going through them to pass laws was tedious. It was a lesson to him. To be fair to him, he learnt pretty fast. In his second term he started changing. I can see the challenges that Buhari has; he is back to where Obasanjo was at the beginning; where he couldn’t understand who are these boys? It’s a mental thing. In Jonathan or Umaru Yar’Adua’s time, it was a lot better; you had David Mark spend eight years as Senate president and Aminu Tambuwal was also the speaker for eight years. Even though they did not agree in all things ; it was stable and there was consultation. Umaru Yar’Adua and Jonathan did not have this backdrop of the military, so it was easier for them to operate. Obasanjo learnt it pretty late in the day; that you have to give and take; old habits die hard.

Donald Duke

That’s why you find today that not much has happened. If there was better rapport between the National Assembly and the Executive; the PIB would have been passed long, long ago. The economy you and other folks in NEIC were planning on and projecting, is that what we have today? No. You know, the first term of Obasanjo; he came in not knowing many people; so, he brought his old-school guards – Adamu Ciroma, Sunday Afolabi, the people he knew. He had been out of the radar for a while, so he was very suspicious of young; up-coming youths, the group he called ‘yuppies’ but he also found out that after four years, those folks just didn’t know what time of day was. These people had left into retirement at 79 and you bring them back, 20 years after. But in his second term, he

recruited young folks. A lot of the young people were brought on board. We opened up and there was a discernable growth in the economy. If there was a desire for third term, it was on the back of that. That story of third term will one day be told who played what role and all that. You know, when things fail, people duck. A lot of people who are ducking today championed that cause. The premise for those who were clamouring for third term was ‘we cannot afford to change the rider of the saddle now because things are going well’. The sad thing to that is that no one is indispensable. Every leader assuming office tries to identify and groom successor because one day your time will come to an end. This is the major problem we have as a country. Each time we go back to the drawing board; we try to start all over again; it really hampers our progress as a people.

One of your signature projects while you were governor of Cross River State was the Tinapa, which was expected to generate some billions of naira to the state, annually. But that dream appears dead as Tinapa has been moribund for many years; how do you feel about its present state? Let me tell about Cross River so you can understand where I was coming from. Here is a state; 3 million people; 23,000sqkm landmass. We are technically not an oil producing state. We are the end of Nigeria. In fact, I usually say that we are the end of the ECOWAS. After you leave Calabar, you enter Central Africa. My desire was to diversify economy and the dream was to be totally independent of the Federation Account. We have very arable land in Cross River; there is absolutely nothing you cannot grow in Cross River. Even before our campaign, looking for office opportunity, we had a SWOT analysis of the state. When you go for your low hanging fruit, you go for what you have a com-

Tuesday 03 July 2018

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BUSINESS DAY

r abandoned projects in Nigeria - Duke

idential election, on a yet-to-be-disclosed platform, in this exclusive interview with ANTHONY OSAE-BROWN Committee (National Economic Intelligence Committee), his economic direction as governor for eight years and conscious steps to plan for tomorrow, the future could be bleak with escalating population. Excerpts:

parative advantage in. Our comparative advantage as we saw it at that time was agriculture because we had a very arable land. We focused on cassava; we are the largest producer of cassava and oil palm. We are the largest producer of oil palm today; we are also the largest producer of banana and plantain. Most of the plantain you find going to the North is from Cross River. We used to be the first producer of cocoa, but we are now number two after Ondo. So, we focused on that; but that was Ok for the rural areas, but the urban areas, we are not industrialised; they are purely civil service-oriented. They all work in the public sector. So, we asked ourselves ‘what can we do?’ Two things – we can attract investments; after Obajana, we have the second largest cement plant in Nigeria – UNICEM; it is in Cross River; we attracted Flour Mills at a time. It is a 5 million per annum mill. Then we looked at tourism. It was such novel concept; people that were there were wondering; what do you mean by

tourism? Because when you say tourism, you are expected to see white feet on the ground. But we say no; let’s get traffic to come to Cross River. Things were so bad that even though we were called part of the NDDC states, we were only getting N198,000 (One hundred and ninety-eight thousand naira a month) as derivation. We need to put that in context. I remember going to President Obasanjo and said to him, when we divided the assets between Cross River and Akwa Ibom; it was 45-55 percent. And if you look at the totality of the asset; the oil receipt was part of the asset which we got 45 percent of it, when we were getting N198, 000 a month; Akwa Ibom was getting N5 billion. This is 2000, 2001 – N5 billion was different from N5 billion of today; it was good money. So, I told Obasanjo that it was not fair; seeing that Cross River has 45 and Akwa Ibom 55 percent getting only N198,000? How come this asset is now treated this way? Besides, the principle of derivation is to assuage the effect of production; so whenever there was a spill for instance, Cross River suffers more than Akwa Ibom. In fact, the last Mobil spill, we were by far adversely affected; the effect was by far, in terms of effect, it was 70:30 against us. It was that observation and complaint that gave rise to what we have now – because Akwa Ibom State under Governor Attah went to court, and Federal Government also went to court to get an interpretation. So, it was after the determination and interpretation that Cross River went from N198,000 a month to N250 million on the average. So, it just reinforces how fragile our state was and we needed to do something. If you said you wanted to industrialise, that would take a long time; so what are the quick fixes? One thing we don’t appreciate is that tourism is a big industry; but it is not a top down industry but a bottom up. Top down industries are like oil where the royalties are paid to the Federal Government. In tourism, the money is made by the people and government has its money from taxes. So the success of the government is the disposable income available to the people, which is good. So, we noted our various sites – Obudu. That’s how we developed the Ranch to a world

class resort. We became the 4th busiest airport in Nigeria after Lagos, Abuja and Port Harcourt. We had nine flights in and out a day. Now Tinapa would have been an icing on the cake. The concept was very simple. It was not the nomenclature of the building; it was the fact that there’s a free zone. It was not impeded; anything can come in. No duties are paid. Once the purchases are within one thousand dollars, you don’t pay duties. The effect of that is to drive patronage and traffic. If I can go to Calabar and buy a good cheap bag instead of having to go to Dubai and because I can’t buy more than 1000-dollar bag, am going to bring four or five other people. The good thing is you will fill all my hotels; you would use the vehicles, restaurants and when you have a society where foodery is working, farmers also enjoy; there are linkages in all these. The essence is to bring traffic because ordinarily, you will not go to Calabar. It is not like Benin that you stop over if you are going to other places or Kaduna; if you are going to Kano. No; there’s no other important stop after Calabar that you can use Calabar as a transit; Benin is a transitory place. If you are going to the Eastern part of the country, you pass Benin; if you are going to the North; you pass through it. So, we had to create a reason for people to want to go to Calabar; so that was the essence of the tourism thing. Even in Obudu, a few things we have there, we were already successful. There was hardly any bank that won’t have its AGM in Calabar. We would promote and give them some discounts when they come in. If you look at the Carnival, for instance, which at the time, at the peak; over a million people were coming there. They are not foreigners; they are Nigerians and Nigerians living abroad whether they are from Cross River State or not. When they come to Nigeria, they just want to experience what the carnival is all about, and invariably they go to the Ranch. We had three flights a week going to the Ranch. On one occasion; I had gone to the Ranch but could not get a room even as a governor. I had to squat with the general manager of the restaurant. We were the only state that had internal flights. People in Calabar would say ‘I want to go and spend my weekend in Ogoja’ for in-

stance; they would fly to Obudu and 30 minutes they are in Ogoja. So, there was activity. It was all about activity. If you stop people from going to London today; it becomes less appealing. London depends on traffic. That’s why Heathrow and the airport are very important to them. Dubai also is conceived purely on traffic. Las Vegas was conceived purely on traffic. Atlantic City was built on traffic; to get the traffic from New York because New Jersey was a poor city, how

do we attract this excess money from New York to come to this area? So, we are not doing anything new. Now, if Tinapa had been allowed to work that would have been a lot of traffic. KPMG conservatively said we should expect 3 million visitors annually; this is KPMG report. Three million visitors annually; each spending a hundred thousand naira (N100,000), that would have Continues on page 22

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INTERVIEW

Tuesday 03 July 2018

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BUSINESS DAY

Personalising governance responsible for abandoned projects in Nigeria - Duke Donald Duke, a former governor of Cross River State, who has just declared his intention to contest the 2019 presidential election, on a yet-to-be-disclosed platform, in this exclusive interview with ANTHONY OSAE-BROWN and ZEBULON AGOMUO, shared his experiences in government; his role in the Sani Abacha policy formulation Committee (National Economic Intelligence Committee), his economic direction as governor for eight years and his motivation to aspire to lead Nigeria. He sounded a note of warning that except Nigeria takes practical and conscious steps to plan for tomorrow, the future could be bleak with escalating population. Excerpts: In the General Abdulsalami Abubakar regime, you were quite central in shaping economic policy in the National Economic Intelligence Committe e that you b elonge d, which was a very strong group then. This is 20 years or more. Can you compare policy formulation then and now? started under General Sani Abacha. I got there in 1995. Let me start from Abacha’s time; policy was decided on a whim. We used to budget about 1.5 or 2billion dollars for Paris Club debt repayment and at the time the minister of finance had the leverage to determine among the creditors whom to service; so, it became a racket. If I owed you money, let’s say, I owed you N50million for 30 years; one day somebody would just show up and say, you know you’re being owed N50 million by Nigeria; if you are ready to give up N25million, I would give you the balance of N25 million. And you have nothing to lose; after all, you had written off the debt; so that was what was going on. So, we decided that the money should go straight to the Paris Club and let them pay their members and not some individuals deciding who to pay the money; on individual’s credit. At that time, policy was just taken at whim; there were no meetings where you sit down, discuss and interface. Nothing like that. Abacha particularly depended a lot on NEIC, primarily because of Professor Aluko; he found him a very straightforward and honest person. Literally, every memo that came to council would first come to us in NEIC to take position and make recommendations. So, when it goes to the council, it’s really our recommendations that would count; but you allowed the minister to present his memo. We used to attend Council because we were of course members of the National Economic Council too. There was nothing consistent. For instance, you sit and you are discussing fertilizer and you find out that fertilizer is not getting to the farmers, and you say, let’s stop it. Nothing consistent. That’s why I said policy was being decided at whim. Then the level of sycophancy was absolutely stunning. In Abacha’s time it was pure sycophancy because he would hire and fire at will. Abdulsalami was in a hurry to

Donald Duke

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Tuesday 03 July 2018

INTERVIEW

‘Discontent in Nigeria triggered by economic dislocation’ Continued from page 21

been N300 billion annually just coming into Calabar economy. Now a good chunk of that would also visit the Ranch. So, if you take the multiplier effect of N300 billion, may be times three or times four, over a trillion naira would have been circulating in the state’s economy. So, there’s a lot of potential in the hospitality industry. Unfortunately, the problem with governments in Nigeria is very, very personal. The head of state or governor appropriates the authority. For instance, when Umaru Yar’Adua was in hospital, sick, the budget had to go to Saudi Arabia to be signed but he had a bonafide vice president. So when you leave office; the man who comes after you will say ‘that’s your own, let me do my own’. Now, we are shift workers in government. Governance is shift. If the next shift comes and starts from the foundation, you will never finish this property. But if they start from where you stopped; if there are things to correct, they correct as they go along; not to abandon the thing and start again. Now, unfortunately, my immediate successor, who was actually a part of the dream fell into that trap and abandoned the Tinapa project; and even when he was building what he called his legacy project which was the Convention Centre; I said to him, you need Tinapa to drive the Convention Centre; nobody is going to come because you have huge halls; but if they know they can get deals like shopping, buying stuff and all that, they will come; but they don’t see the larger picture. The Chinese plan 50 years; they have only done 30 years and see where they are. They sat down and reasoned that ‘we can’t be so many people with such an ancient civilisation and be subservient in the world. We need to take the bull by the horns; so they did it. Tinapa has become a world for abandonment; it is something in our DNA. Look at Ajaokuta, which was N8 billion; it is such a strategic project that could have aided the economy of this country; we still import a lot of steel; but we left it derelict after spending all that money. There are several Tinapas dotted around Nigeria. In Lagos, don’t forget that Mobolaji Johnson built the incinerators but they were abandoned when he left; we wanted to do metro line but we cancelled it and paid compensation much more than the project would have cost. So it is the appropriation of governance; you don’t see yourself as a caretaker but as an owner; so even when you aspire for an of-

Donald Duke

fice, they get so upset that you have the temerity to aspire for this ‘my God-given gift’. It is expressed in many ways. So, that’s the summary of Tinapa. Now you have such pain in your heart having seen such projects go moribund and other instances you have cited; what would you do differently if you get elected as president of Nigeria? First of all, it is to dialogue with ourselves in the political space. We all want to look at ‘my glory, my glory’. But our glory should be the wellbeing of our people. We need to talk to them. Tinapa is just one. At the last count; I am not sure of the figure; am told that projects worth over N23 trillion are abandoned in Nigeria; probably more; I am sure that those who came out with this did not even go to the local government level. So, it is something we need to lock ourselves, may be, inside the Conference Hall in Abuja; all local government chairmen and their vice; all governors and their deputies, and executives, and say to ourselves, ‘look what can we start with?’ We can’t continue this way. That’s one. You can’t by legislation change anything; you have to appeal to them; but as a government we also have to look at the strategic ones that we can quickly revamp. It is not only morally and financially suicidal that we abandoned Ajaokuta. We need it for our industrialisation. We are talking of having rail here and there and we are going to import all the rail lines and slippers when we can make

them here. We have gas and the fundamental for steel is power, yet we are flaring the gas here. It doesn’t add up. So, you would start by dialogue; so that the people can build consensus and decide how to move forward. Now, can you be a bit more specific. Can you help us look at key areas where you think things are wrong; that maybe, will be your focus for your first 30, 60 or 90 days? Our credit policy. You can’t have a country that is aspiring to grow and like I have said in other fo-

‘I am not sure of the figure; am told that projects worth over N23 trillion are abandoned in Nigeria; probably more’ rum that Nigeria has to grow 15 percent non-oil sector for consecutive 10 years to recalibrate the country because in another 10 years our population will be 230 million; our GDP today is under 500 billion dollars; we need to be a 2.5 trillion-dollar economy to sustain this sort of population; so that you don’t have all this restiveness – Boko Haram, herdsmen crisis; mili-

tancy – it is purely economic. We did something in Cross River when we wanted to build the water scheme. They were going to use mechanical diggers to put the pipelines all over; I called the contractor and said to him, you are not going to spend all this money and people won’t feel it; so, we are going to get people to dig the trenches for you to pass the pipelines; he said no; it would take too long; but I insisted and say I am the client, it is either you do what I want or… So, he agreed. I tell you, for the 12 months that the programme was going on there was no reported crime in Calabar. So, you find that a lot of the discontent in Nigeria is triggered by economic dislocation; people have no stake in this country. So you need to get people to see themselves as stakeholders in this country. One of the facts is the credit system; you and I can’t get to the banks today reasonably and say we want to do something. If you wanted to start a press today, you can’t try it because of the interest rate. The interest rates are so high that you can’t try it. But banks are declaring profits that don’t make sense. They are making profit of almost 2 billion dollars per annum, after tax, in an economy that does not function; you ask yourself, how? So, you’ve got to address it. Now, they may not want to hear it, but there was a time when we were growing faster when we had a regulated financial sector than today. You’ve got to address the fi-

nancials. Then you look for quick wins; folks may tell you power, that power is a great mitigant and I agree; but you can’t continue to do the same thing over the years and continue to get the same result which is not a progressive result and you continue to do it. But here you continue to flare gas; it has reduced now, but at a time we used to flare about 2.5 billion cubit gas a day which is equivalent to 25 million litres of diesel. If you spent 5 billion dollars which you can afford and build pipelines five thousand kilometer – a million dollar for a kilometer; so five thousand kilometres of pipelines throughout the country, you would have made gas available throughout Nigeria. By extension, you would have succeeded in addressing the power problem. Part of the problems in the North East is that the area which used to be one of the world’s largest cotton belts is no longer producing cotton. Adamawa and Taraba used to compete with Mississippi; we had textile industries in those areas, but as long as we allowed cheap imports from emerging China and South East Asia and India to come in, our local factories could not compete; and as long as they could not compete, they shut down, when they shut down cotton growing ebbed in Adamawa. That’s the genesis of all these Boko Haram crises; because Borno and all those areas were cotton belt. So agriculture and industries are related. One must be there to drive the other. You cannot develop industries because of the high interest the banks are charging. Some of the companies that claim they produce locally here import and repackage. They can’t compete. Why? The reason is simple; if they were to manufacture it from scratch here, they can’t compete because you have opened up your market for all sorts of things to come in. Even in the United States, they are kicking against such a thing. US is saying, no more of such things. We must insist on reciprocal tariff; you just can’t bring in anything anyhow. Nigeria has become a vast dumping ground. We have no reciprocal trading. For instance, Thailand, we are buying about 2 or 3 trillion-dollar worth of rice, they didn’t even have an embassy in Nigeria. To go to Thailand, you have to go London to get the visa; with all that volume of rice we buy and the amount of money involved they didn’t even consider us worthy to have their embassy here. They opened it a year or two ago. Another big issue is that we buy so much wheat from America. Many Nigerians eat bread every morning and other wheat-related

Tuesday 03 July 2018

products, but the basic raw material for bread is wheat, and it is imported; can you sustain a country like that? What is the quid pro quo in that? Ok, if we are going to buy that volume of wheat from America, come and develop our rice industry or something that would also help us. There must be some sense in our trading. If you take South Africa, that’s a mature economy, but they have a problem. The problem is that there are no markets around them for their products. Nigeria is a great market for them; a huge consumer market for their products. But there must be some reciprocity. We give them areas that they need to develop for us by virtue of our heavy patronage for their products. We can demand that reciprocity from South Africa. But the bottom-line is creating jobs for our people. The level of disenchantment is too high. And there are quick fixes- we have 20 million housing shortage in Nigeria. It is a big challenge, but also an opportunity. The Navy in Calabar has a beautiful barracks they built, using laterite- nice, clean, and neat. This is Nigerian Navy, and they built 100 units at an average price of N2million per unit. They built these 100 units in 6months, and it could have been shorter, but you know Calabar rains all the time. So, using that you can actually do up to two million units nationwide, that would absorb 15 to 20 million people. That would even start off its own industry because that would take care of the carpentry; the masonry, the ceramic industry, and all the input would be local. So, there are opportunities; the critical thing is to come up with a system that enables entrepreneurship and productivity. There are so many young people today; for instance who want to do so many things but they can’t; they are handicapped. Right now, some young people leverage on what I call a ‘goodwill economy’, but it shouldn’t be so. Every day, we all get text messages from people requesting for all manner of financial favours. You go to a ministry for instance, you see a man, who is employed greeting you so often and you know he is begging for money. That’s now brings me to the issue of corruption. There are two types of corruption- corruption of need and corruption of greed. The corruption of need is based on the fact that the take home pay of a man does not take him home. So, he is going to use his office to generate money. And in the corruption pyramid, that’s the bulk, but the corruption of greed is a smaller segment. I would like you to speak on three things, education reform; healthcare, and youth unemployment. How are you going to tackle them if elected president? I have dealt with youth unem-

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ployment. You need to get them start their own businesses; the way to go is entrepreneurship, and people have to think outside the box and create their own businesses. On education, our educational system still belongs to the past; our teaching methods have not changed. You can have a graduate in mechanical engineering that has not seen an engine before, it is all theory. I would readily want to adopt the German system which is tied onto industry. So, part of your schooling, at least, at the tertiary level is tied on to a practical experience and that counts as much as your theory. We need to reform and rebrand our educational system. But it is also a system that can create a lot of jobs because I would want to see a system where for the first 18 years of your life, you acquire a skill; it could be as menial as gardening or as sophisticated as IT. But you have acquired a skill; so if you want to go to the university thereafter, that’s another thing. But to make that work, you have to fund the system. You can’t charge fees and still make education compulsory, but we can afford it. In building more schools; we had a system in Cross River where each school had 30 students in a class, three arms in a class; that’s 90; six classes, that’s 540 students. So, each school had only 540 students which was a manageable number. So we found out that we needed to build 200 new schools to accommodate more students and we were in the process. If you make teaching rewarding, a lot of graduates will go into it; even if for the first five years after leaving school. At that time we took the teachers off the tax net and we were paying them extra N10,000 (Ten thousand naira) for those in the urban areas, and N15,000 (Fifteen thousand naira) for those in the rural areas. We relocated all the civil servants who were idling in other areas into the teaching cadre. But there was also a caveat to that; every two years they had to do a qualifying exam to make sure they are up to the task. University of Ibadan (UI) was handling that. And again, if a school says more than 20 percent

failed in a particular course, such teacher loses his job. You can mark their contributions; they just don’t get all this money. But, you must make teaching rewarding. We also absorbed a lot of youth unemployment. A lot of graduates working the streets doing nothing; you absorb them into the system and give them three months’ short course. Then you time their performance. If you know you are teaching and you are sure of having a basic lifestyle, there’s a limit to what you would want to involve yourself in. If you look at even our tertiary education, we had the leadership of World Council of Surgeons here last year; we had a medical mission in Calabar and Lagos (LUTH and University of Calabar Teaching Hospital) he said the method they were using in those hospitals were the method they used in the ‘60s in the Western world; in other words, we have not evolved; we are still doing what we used to do in the past. Surgeries that we would do for 45 minutes, they would do for five, six minutes. They will tell you that it is dangerous putting someone under anesthesia for so long. He watched a surgery that went on for three hours in LUTH and said in the States that would have been 15 minutes. Quite a lot of people pass on under anesthesia. We need to prepare ourselves for modern technology. We need to have primary health centres in every ward in this country depending

BUSINESS DAY

on the population of the ward. So a place like Agege, Alimosho and Mushin in Lagos may have three, four primary healthcare centres. They may have two doctors, five nurses- the doctors may have to do shift- to take care of the small things that affect the people. The centres take care of things like typhoid, malaria and all that. They don’t take care of big issues. At this stage of our development, we should be able to have local pharmaceutical companies that can provide malaria drugs- talking of public health. Every four months, the government gives you free malaria drug to reduce incidence of malaria occurrence. You know that in the North, in the hot season between June and September, they have Cerebrospinal meningitis. When we were in school; I went to school in Sokoto, they would give you a preventive drug. So, the good thing about this is, if I give you a concession to provide malaria drug, you have started a factory on that score because you are going to provide malaria drug for 200 million people every year. You have started a big, big industry on that line alone. Today, if you come up with that policy they would go and buy from China. Why would I go and buy from China when you can take a Nigerian who is into pharmaceutical and build that? Once you have a primary healthcare centre in every political ward; one or two general hospitals in every local government; then you are building up. You have your tertiary; your specialist hospitals, but you can’t have them enough. It is not just having specialist doctors here and there, yes you need them, but handling the basis. Ransome-Kuti got it right but continuity is also the problem. They abandoned it when he left. By now, that system would have been well-entrenched and established throughout Nigeria. There’s a movement or silent revolution in Nigeria we hear; the youth feel, perhaps, understandably quite disenfranchised; they don’t see a future or hope; so there is this mobilisation attempt to get the youth galvanised by your group. So

‘There’s huge youth disenchantment in the polity. Most of these folks that shout about next election do not even have voters’ cards’

we would like to get some understanding as to where we are; how many people have so far registered? Again, do you have any confidence that the next election would be fairly won and lost? Let me take the first one. You may be referring to the Coalition for Nigeria Movement, 3million people registered, but I have to update that figure. But once it transited toward a political party, I think that figure ebbed a bit. What was it all about? It was actually to encourage youth participation. There’s huge youth disenchantment in the polity. Most of these folks that shout about next election do not even have voters’ cards. I have addressed various youth fora where I asked ‘how many people here have voters’ cards?’ On the average it is 20 to 25 percent that put up their hands. In some places, it was pathetic, because some people were giving all manner of excuses. The truth is that they don’t believe that their votes will count; so why bother. But ask them how many of them have sim cards, some of them would put their hands and legs up. So, you have got to get them to appreciate that it matters. It is better now, though, than four years ago; but it could be a lot better. The second leg of your question, will the votes count? Again, it depends on participation. Election malpractices exist where there is a vacuum. If you go to a polling booth that has 500 names and only 20 showed up; there are 480 names to play with there. They will thumb-print everything, you go to court if you have the resources to go and fight ; because your opponent would be declared governor or whatever, so the state would now defend him, while you use your own money and go to court and bring some experts. If you look at Mimiko election, for instance, they had to go and bring an expert from another country to come and look at the thumbprints, etc. So, how many people can afford that? It is tied up to participation. The system is more mature now than it was in 1999. So, on what platform are you coming up? Since elections are not tomorrow, there is no urgency. There is no urgency because, there’s a move to organise the opposition and I don’t want to preempt that move. There’s a lot of discussion going on now within the opposition. There are 68 parties in Nigeria; two known and 66 not really known. So, there’s a move to pull them together. Whether they would succeed or not, I don’t know. But in the next one month or so, it would be clearer. So, announcing the party now…; I think we should wait for another one month.

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INSIGHT

OPEC redeems global oil market through innovative cooperation BASHIR IBRAHIM HASSAN “Cooperation for a Sustainable Future” was the theme of the 7th International Seminar of the Organization of Petroleum Exporting Countries (OPEC) held from 20-21 June 2018 at the Hofburg Palace in Vienna, Austria. This report puts in perspective the significance of the theme and the foci of the other two meetings that followed -- that of the 174th meeting of the OPEC Conference and the 4th OPEC and Non-OPEC ministerial meeting on the 23rd June 2018.

PEC’s commitment is to help alleviate the suffering of billions of people of the world from energy poverty. This commitment was highlighted in the welcome address by the Secretary General to the delegates of the 7th OPEC seminar in the following words: “This essential fuel will no doubt be vital to future generations. We should not forget that today around 3 billion do not have clean fuels for cooking, and 1.1 billion have no access to electricity, something that all of us here take for granted. When we start up our cars, switch on a light, turn on our mobile phones, we need to recognize that these everyday things are still unknown to billions of people across the world who continue to suffer from energy poverty. It is a universal obligation to address this major challenge in the energy transition. The future of oil and mankind are inextricably linked.” The seminar, which was attended by around 900 delegates, reinforced OPEC’s long-standing commitment to securing and stabilizing the oil market with a view to supporting a healthy global economy. And, above all, the seminar and the other two meetings highlighted the need for continuous promotion of cooperation and dialogue with all oil industry stakeholders, including producers and consumers. In a nutshell, the three events tried, with much success, to showcase the achievements of not only OPEC activities and contributions to redeeming the global oil market but, more significantly, the success of the Declaration of Cooperation between OPEC and Non-OPEC countries in bringing stability to the marketplace since 2016. The Declaration of Cooperation constitutes an unprecedented milestone in the history OPEC. For the first time ever, its memberscoordinated with 11 non-OPEC oilproducing countries in a concerted effort to accelerate the stabilization of the global oil market through voluntary production adjustments, which amounted to approximately 1.8 million barrels per day. This was intended to reduce the oversupply and increase oil prices, since oil production and exports are the backbone of most OPEC nations’ economies. The cuts from both OPEC

Mohammed Sanusi Barkindo, OPEC secretary general

and non-OPEC nations provided some relief, with oil prices enjoying a boost above USD 50 after many years of grappling with lower prices. The latest price figures, according OPEC monthly oil market report, in May, the OPEC Reference Basket (ORB) increased by about 8.5% above the previous month of April, settling at $74.11/b. Year-to-date in May, the ORB value was 31.7% higher at $67.48/b, compared to the same period in 2017. What is more significant is not just the rise in the oil price but the spirit of cooperation this declaration engendered. The Declaration was an outcome of the Joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on 10 December 2016 and was effective for an initial period of six months. The Second Joint OPECNon-OPEC Producing Countries’ Ministerial Meeting held on 25 May 2017 decided to extend the voluntary production adjustments for another nine months commencing 1 July 2017. The sustainable oil market stability sought by the Declaration is in the interest of producers, consumers, investors and the global economy at large. At the third joint OPEC-NonOPEC Producing Countries’ Ministerial Meeting, held on 30 November 2017, it was agreed to amend the Declaration of Cooperation to take effect for the entirety of 2018. The 4th meetings have just been concluded in Vienna. The core principles of transparency, equity and fairness, which have underpinned the Declaration of Cooperation, infused all aspects of OPEC’s interactions with its nonOPEC oil producing partners across all levels. It is significant to note that more than 60% of oil and 80% of gas production comes from non-OPEC nations. However, it is OPEC that is driving the global oil market activities in a cooperative and coordinated manner. Its over 50 years of existence

has given the OPEC the requisite experience to provide this leadership. This renewed vigour of OPEC in the global oil market is coming at a time when a Nigerian is the head of the OPEC Secretariat as the Secretary General, in the person of Mohammad Sunusi Barkindo, a former group managing director of the Nigerian National Petroleum Corporation (NNPC). The Secretariat is the executive arm of the OPEC responsible for the implementation of all the resolutions passed by the Conference and carries out all decisions made by the Board of Governors. The Secretary General is the organisation’s Chief Executive Officer. Well, Barkindo is neither new to the oil sector nor new to the OPEC family on the global scene. The graduate of Political Science from Ahmadu Bello University, who holds a PGD in Petroleum Economy

The core principles of transparency, equity and fairness, which have underpinned the Declaration of Cooperation, infused all aspects of OPEC’s interactions with its non-OPEC oil producing partners across all levels

from Oxford University and an MBA (Finance & Banking) from Washington University, started his career with Nigerian Mining Corporation in 1982. In the 1980s he held positions of special assistant to Minister of Mines, Power & Steel and that of Petroleum. However from 1992 he joined the mainstream Nigerian National Petroleum Corporation (NNPC) and spent the next 24 years in various capacities that culminated in his ascending to the covet position of the Group Managing Director of NNPC. Barkindo’s relationship with the OPEC family started much earlier in his career. From 1986-2010 he has been among the Nigeria delegates to the OPEC conference. Within this period he represented Nigeria on OPEC’s Economic Commission Board (ECB) and at some point chaired the ECB in acting capacity. He was also at one time Nigeria’s Governor for OPEC. He was the fourth Nigerian to hold the position of the Secretary General of the OPEC. The first was Chief Michael O Feyide (1975-76); followed by Dr. Rilwanu Lukman, who assumed the position 10 years after Chief Feyide. Dr. Lukman had the rare opportunity of serving in that capacity twice -- 1986-88 and 1995-2000. The third Nigerian to occupy the position was Dr. Edmund M. Daukoru in 2006. Essentially it was the quest for resource control that gave birth to OPEC in 1960. Five countries, Saudi Arabia, Iran, Iraq, Kuwait and Venezuela established the organization in order to give member countries more control over their resources; to have larger access to global markets; and to reduce the influence of multinational companies in the oil sector at that point in time. Expectedly, challenging the status quo was not a smooth sail. Arm twisting, name-calling (such as labeling the organization as a cartel) and

all other tactics have been applied to curtail the association. 58 years today, OPEC has not only waxed stronger but has become global oil market influencer. As of 2016, OPEC controlled more than 80% of the world’s proven crude oil reserves, with roughly 65% in the Middle East. These reserves account for more than 1.2 trillion barrels of crude oil. Moreover, member countries produce more than 33 million barrels of crude oil a day, nearly 40% of global supply. From the five founding members, OPEC is today a consortium of 15 petroleum producing countries if one discounts Indonesia that withdrew its membership recently. The remaining 10 member countries are Libya, Qatar, United Arab Emirate, Gabon, Nigeria, Algeria, Congo, Equatorial Guinea, Equador and Angola. In its almost six decades of existence, OPEC has lived up its mission statement “to coordinate and unify petroleum policies of its member countries and ensure the stabilization of oil markets in order to secure an efficient, economic, and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.” The intervention coordinated by OPEC under the Declaration of Cooperation protocol was to stabilize the global overproduction that led to a drop in the oil prices by some 65% off of the 2014 highs. OPEC initially attempted to allow the market to rebalance itself, which led to further declines in oil prices and an increase in global crude stocks. This goes to show that OPEC is not only capable of balancing the markets, but also exerting significant influence on global petroleum markets at critical junctures to drive the price of oil up or down. Such other periods in the past include the following: • The supply glut and subsequent price crash of the late 1980s • Growing hostilities in the Middle East in the early 1990s • The economic decline of Asia in the late 1990s • The financial crisis and oil price crash in late 2008 More Non-OPEC countries continue to recognize the importance of the Declaration of Cooperation as an innovative forum and are joining the fold. The latest countries and institutions to join include Chad, Egypt, Uganda, South Africa; as well as African Petroleum Producers Association. However, some analyst believes OPEC’s impact on the oil market is threatened by competition from the renewable energy sector, notably solar and wind power, which has been gaining ground recently due to changes in global energy policy and advancements in “green” technology. But OPEC seems not be scared. If anything, it sees it as its own obligation to help alleviate the suffering of billions of people of the world from energy poverty.

BDTECH

BUSINESS DAY

Tuesday 03 July 2018

In association with

SAS urges businesses to leverage artificial intelligence for future expansion Stories by JUMOKE AKIYODE-LAWANSON

ith rapid changes in business environments as a result of technology, businesses are under pressure to not only comply with constantly changing regulations but also to modernise their processes and systems. The purpose is to help reduce compliance costs, improve efficiency and effectiveness, stay competitive and drive innovation whilst looking for better ways to serve their customers. Against this backdrop, businesses will become more successful based on how they use data, analytics and collaboration in the new analytics economy. SAS, a trusted analytics powerhouse for organisations seeking immediate value from their data has therfore called on businesses to leverage artificial intelligence (AI) for expansion of their operations. At a recently held workshop tagged ‘Road to Digital Transforma-

L-R: Babalola Oladoku; sales manager, SAS West Africa, Desan Naidoo; vice president, SAS Africa, Neil Harbison; artist and co-founder of the Cyborg Foundation, Vijayne Govender; marketing content & communications lead, SAS Africa, Prenton Chetty; senior manager, advanced analytics, Nedbank and Larry Orimoloye; senior business solutions manager, advanced analytics & AI, SAS, at the SAS Road to Digital Transformation and Artificial Intelligence Workshop in Lagos recently.

tion and Artificial Intelligence”, the company highlighted the importance of digitalisation and the need for businesses to adequately prepare for the data driven future. According to SAS, the use of artificial intelligence in creating business solutions would help busi-

nesses take proper advantage of the large amount of data available to them. Stating the importance for businesses to leverage on data, Desan Naidoo, vice president, SAS Africa said; ‘What is allowing new organisations to emerge is the ability for

them to leverage data collaboration and timeliness, which is now key to the emergence of analytics.’ Naidoo added that there is need to democratize analytics which means making analytics available to everyone. Neil Harbisson, artist and cofounder of the Cyborg Foundation in his keynote speech said; ‘I think we would start seeing how in the next couple of years the internet would not only be used as a tool or a communication system but as a sense.’ Speaking on the possibilities of technology Harbisson said ‘when you merge with technology you could reveal realities that already exist. We would see technology being created in the future focused on revealing realities that already exists.’ According to him, “humans have limited number of sensors, but if we merge with technology, we could have more sensors that will enable us understand and unfold the real beauty of nature. We can add new senses and additional or-

gans to extend our bodies’ capacity to experience the world. We can, in effect, redesign ourselves. Our current evolutionary step is to merge with technology and take an active part in the birth of our future selves. I work with artificial senses, which I call AS.” Also speaking at the event, Larry Orimoloye, senior business solutions manager - advanced analytics & AI at SAS explained that; ‘artificial intelligence could be personalised to a particular business situation within an organisation. SAS has through the use of artificial intelligence worked on several projects which include cancer detection, performance assessments in sports, customer evaluation amongst others.’ Orimoloye added that artificial intelligence is the science of training systems to emulate human tasks through learning and automation. SAS has their software installed in more than 83,000 businesses, government and university sites in 148 countries, with a client base comprising of at least 96 of the top 100 fortune 500 companies.

World’s first wearable ECG monitor can significantly lower the risk of heart disease …As HeartBit teams up with IBM on fitness technology

eople exercise to get their blood pumping, but it’s easy to overdo it. HeartBit recognised a gap in the market for a wearable electrocardiogram (ECG) device that monitors the heart’s stress levels. To make its vision a reality, HeartBit embraced IBM Cloud™ and Watson technologies, enabling fitness plans tailored to users’ unique physiology and external conditions. For a long and healthy life, it’s vital to get – and stay – fit, but the thin line between working out safely and stressing out your heart isn’t always clear. HeartBit, a Hungarian start-up says it saw an opportunity to capitalise on the thriving wearable technology market while providing unprecedented insight into heart health. Optimising user’s approach to exercise Most existing activity trackers only

record users’ pulse rate. HeartBit aimed to take real-time heart monitoring to the next level through a wearable ECG device. By measuring electrical signals produced by your heart each time it beats, an ECG can detect signs of arrhythmia, atrial fibrillation and other potential anomalies. Through HeartBit, the company wanted to alert wearers to warning signs immediately and, over the long-term, build ECG profiles of users to help them optimise their approach to exercise. George Kozmann Jr., CEO of HeartBit, says: ‘The road to fitness is different for every person: it can depend on their unique physiology, preferences and the conditions in which they’re exercising. We wanted to tap into a growing enthusiasm for running and other cardio exercise by empowering people to work out safely – achieving their fitness goals

while protecting their most important organ.’ To fulfill this vision, HeartBit needed a technology platform capable of processing the 10,000 data points per second it planned to collect and storing them securely. The company also wanted to take advantage of machine learning to enable personalized recommendations. Kozmann Jr. comments: ‘We are a start-up with a big vision, so we needed a vendor that could guide us through infrastructure design and support us as we took our solution worldwide. With IBM Cloud services we can scale easily and economically, removing barriers to expansion so we can turn HeartBit into a big player in the wearable technology market.’ Making every beat count By addressing a gap in the marketplace, HeartBit anticipates significant sales within 12 months of

launching its new device. The solution will help users keep their cardiac health within the optimal range, so that they can realise fitness goals faster without incurring any harm. It can draw attention to risk factors that signal cardiac events, providing a record of ECG data that can be shared with medical professionals. And for customers with existing health problems, the device could accelerate rehabilitation. ‘Powered by IBM technology, HeartBit will help users get fit safely and effectively,’ explains George Kozmann Jr. ‘It meets a wide range of use cases, and we see the potential for many more. We expect to sell tens of thousands of units within year one.’ Working with IBM enables short time-to-market for HeartBit solutions, helping the company move fast on the opportunity ahead of compet-

itors. Through the IBM Cloud, HeartBit gains cost-effective access to an extensive choice of enterprise-class data science tools. Kozmann Jr says: ‘It’s essential that we bring HeartBit to market rapidly and efficiently and joining forces with IBM is making that happen. As a new brand, it’s a huge benefit that we can align ourselves with the IBM reputation for excellence.’ As sales ramp up, HeartBit can draw on the seamless scalability and international resources of IBM Cloud solutions to drive company growth. According to Kozmann, ‘IBM has data centers all over the world, which will provide the ideal support as we put our international growth strategy into action. With IBM Cloud services we can scale easily and economically, removing barriers to expansion so we can turn HeartBit into a big player in the wearable technology market.’

BUSINESS DAY

Tuesday 03 July 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Why collaboration, policy harmonisation, skill acquisitions are crucial for a digital economy

in foreign direct investment over the last 15 years. Such investments ininfrastructure has created an ICT backbone that powers various critical sectors of the economy such as Banking, E-commerce, Insurance, and Oil & Gas. He advocated the need for all stakeholders to strengthen the technology and innovation ecosystem by supporting the development of innovation hubs in partnership with the private sector. ‘This conference provides the opportunity to jump start the critical game-changing steps needed to make Nigeria’s objectives a reality in digital economy. Beyond this conference, we must work to strengthen relationships and knowledge management platforms towards building the bet-

ter and more digital future that we seek.’ Shittu said. Digitisation, widespread adoption of digital technologies and applications by corporates, government and consumers, is beneficial for an emerging economy like Nigeria. Speaking at the event, Tank Li, managing director of Huawei Technologies Nigeria, stated that a robust ICT infrastructure is the bedrock for digital transformation in Nigeria, and to unleash digitaleconomy potential in the country, issues of availability and affordability need to be addressed. ‘In order to foster digital transformation of the economy, policies and programs to increase ICT infrastructure and ensure wide-spread coverage both in urban and rural areas should be prioritised to make voice and data services available; At the same time, strategic measures of infrastructure sharing, investmentfriendly regulatory framework and preferential taxation policies are needed to reduce sites acquisition and broadband deployment costs in order to bring down the cost for users to really encourage application of ICT across the industries and the whole society.’ Li said. The conclusive take out from the conference was a call for a framework and policies from the government that will foster broadband Infrastructure development in Nigeria to help stimulate GDP growth. As well as a need to continue to collaborate with private sector and foreign investors that help to drive innovation for scaling ICT in Nigeria.

innovation hubs are unarguably the shortest cut to job creation, bridging of the gap between the developed and developing world and to economic diversification. We are already feeling the impact of your work and I will say more power to your elbow.’ Moolman stated that the company has defined various touch points to grow the potentials of innovative hubs in the country. These include, the immersion of the MTN Nigeria Graduate Development Trainees in the Nigerian innovation hub with a view to keeping them abreast of local trends through structured visit, participation in hackathons and projects, and leverage of the innovation hub for ideation, concept testing, go-to-market validation and technical feedback.

During the visits, the hubs showcased some of their achievements, various ongoing projects and their challenges. They noted the assistance they have so far received from government and corporate bodies but appealed for increased support so as to enable them to contribute optimally to the economic development of the country. The Nigerian innovation market is one of the fastest growing in the sub-region with over 55 active technology hubs. These include incubators, accelerators, co-working spaces, fab labs, makerspaces, and other innovation centres. The strategic importance of these hubs have been validated by the visit some of the global technology icons like Mark Zuckerberg of Facebook and Sundar Pichai of Google.

JUMOKE AKIYODE-LAWANSON

ey information and communication technology (ICT) stakeholders and experts stress that the role of broadband development in stimulating economic growth, policy harmonisation for enhancing ICT infrastructure and attracting both foreign and local investments, as well as human resource development are paramount to Nigeria’s move to truly achieve a digital economy. The policy makers, stakeholders and IT experts came up with this unanimous agreement at a one-day conference themed; ‘Africa-China Cooperation in ICT and Digital Economy’, organised by the NigerianInstitute of International Affairs in collaboration with the embassy of the People’s Republic of China in Nigeria and Huawei Technologies Company (Nigeria) Limited. With huge growth potentials from technology, it has become important for Nigeria’s ICT sector to come with ideas on how to tap into its human capital by investing a great deal in skills acquisition while also paying attention to policy harmonisation and strategic collaborations with already technologically advanced economies of the world. According to a study by PWC, constrained digital economies can potentially realise a 0.5 percent increase in GDP per capita for every 10 percent increase in digitisation. The study also highlights that digitisation also has a significant impact on job creation in the overall

L-R Felicia Onwuegbuchelam; director consumer affairs bureau, Nigerian Communications Commission (NCC), Sunday Dare; executive commissioner stakeholders management, NCC, Umar Garba Danbatta; executive vice chairman/CEO NCC, Josephine Amuwa; director, policy competition and economic analysis NCC, Felicia N. Monye; department of commercial and property law, University Of Nigeria Nsukka, Enugu campus, during the telecom consumer parliament which held at the NAF conference centre in Abuja at the weekend.

economy: an increase of 10 percent in digitisation reduces a nation’s unemployment rate by 0.84 percent. In his opening remarks, Lanre Osibona, special advisor on ICT to Yemi Osinbajo, the vice president of Nigeria, stated that there is an urgent need to overcome challenges facing the nation to leveraging ICT to fuel the fourth industrial revolution that brings about digital economy. ‘Africa must develop its skills. We must know how to scale workforce and move away from business base outsourcing to knowledge base outsourcing. Data is the future and new hope. For us as a country we must invest heavily in capturing data,’ Osibona said. Also speaking at the confer-

ence, Zhon Pingjian, the ambassador of China to Nigeria, said that ‘China will continue to share its development opportunities with African countries and welcome them on board the train of China’s development.’ The conference featured discussions on policy issues with a view to propose a domestic approach to not only enhancing the strategic priority of ICT and penetration of fixed broadband, but also improvingconnectivity through cost-effective network deployment, and easing the development of local content such as e-commerce in accelerating economic growth. Adebayo Shittu, minister of communication, said Nigeria’s revolution in the ICT sector accounts for well over $32 billion

MTN pledges support for Nigeria’s tech space …pays visit to various innovation hubs in Lagos

nformation and Communications Technology giant, MTN Nigeria has pledged its unbridled support for Nigeria’s technology space and the building of a future enabled by technology. This was made evident by the visits to several technology hubs in Lagos of a high-powered delegate from the company led by Ferdi Moolman, the chief executive officer, Bayo Adekanbi, chief transformation officer, Adekunle Adebiyi, sales and distribution executive, and Esther Akinnukawe, human resource executive, on June 22, 2018. Ferdi Moolman confirmed that MTN will relentlessly assist hubs in Nigeria with the provision of test API/sandbox; provision of proof of concept support on relevant ideas and partnership on ideas for go-to-market commercialisation as part of its

BRIGHT strategy to grow digital platforms that can transform the lives of Nigerians. ‘I must say that we are impressed with what we have seen here today, and we are filled with optimism for the

future. I assure you of MTN’s commitment in the areas of technological and any other necessary support you could need to achieve full potentials,” Moolman said. He added that ‘technology

L-R: Ferdi Moolman; CEO MTN Nigeria, Ajibola Opeoluwa-Calebs; general manager, talent and development, MTN Nigeria, Adekunle Adebiyi; sales and distribution executive, MTN Nigeria, Esther Akinnukawe; human resource executive, MTN Nigeria, Damilola Teidi; director of incubation, CcHub Nigeria, and Bayo Adekanmbi; chief transformation officer, MTN Nigeria, during MTN Nigeria’s official visit to innovation hubs around Lagos recently.

Plans underway for the 2018 AFF Re:Code Nigeria Hackathon JUMOKE AKIYODE-LAWANSON

ata analysts, coding experts, software developers, tech enthusiasts and geeks from all over the country are gearing up for the second edition of the Africa Fintech Foundry (AFF) // Re:Code Nigeria Hackathon which is scheduled to hold from July 20 to 22, 2018, at the AFF building in Lagos. Following a successful first edition of its Fintech conference, AFF Disrupt 2017, the // Re:Code Nigeria Hackathon 2018 is set to begin a chain of disruptive events which is said to set the tone for the biggest Fintech event of the year and has been themed “2018 Data Hack.” According to its organisers, the overarching objective of this edition is to create innovative solutions in response to the distinct challenges faced in some of Nigeria’s leading sectors –Fast Moving Consumer Goods, Agriculture and the Financial Services ecosystem as a whole. Buoyed by the support of industry giants like such as Unilever, Dell, AFEX, Microsoft, IBM, SaS and the likes, the //Re:Code Hackathon take on some of the biggest challenges in the ecosystem which include (but not limited to): * How financial technology can address supply chain challenges (from finished goods to retail) in the FMCG sector * Leveraging big-data analytics, identity management and behavioural analysis to identify customers’ needs, providing investment advice and lending services * Financial Inclusion for the agricultural and related sectors with a focus on improving credit scoring and financing opportunities for small and medium scale operators //Re:Code Nigeria Hackathon 2018 aims to bring together multiple teams of talented developers, designers, problem-solvers, out-of-thebox thinkers, dreamers, doers, makers, and code magicians to solve these problems. Adeleke Adekoya, AFF’s business and digital solutions architect, believes that the 2018 edition will be far greater than its predecessor. ‘AFF remains fully committed to being at the forefront of the Fintech space in Nigeria and this edition of //Re:Code Nigeria Hackathon sets out to solve three of the biggest challenges the ecosystem is facing today. We have received enormous support from our partners and with the technology available for participants to explore and leverage, we strongly believe the prototypes from the Hackathon will be of the highest standard,’ Adekoya said.

BUSINESS DAY

Tuesday 03 July 2018

EDUCATION

Weekly insight on current and future trends in education

s youth unemployment continues to threaten the productivity level of Nigeria, improvement in soft skills has been identified as key advantage graduates need to remain competitive in the job market space. Amid the global competition for the few available jobs on ground, not a few industry experts have noted that if the undergraduates and recent graduates across the nation’s tertiary institutions are to land that dream job, extra efforts must be placed on soft skills while still in school. Industry experts in human resource management advise that students must invest in soft skills training because it provides the needed advantage in the global work space. They observe that in practice, more and more people are investing in their education but it will be nice to know that very few people are investing in development of soft skills. According to them, “So, in this current fast pace society that we find ourselves, pursuing a university degree is no longer enough. In fact, soft

otal exploration and production Nigeria Limited as part of its commitment to support the development of reading culture and future careers for students, over the weekend held an open day forum and reading event for students from selected schools in deepwater district in Lagos State. The programme is a strategic part of the Corporate Social Responsibility initiative of the company that provides a platform to afford students opportunity to plan their future careers by exposing them to industry activities

Primary/Secondary

Higher

Human Capital

‘Improvement in Soft skills to curb youth unemployment’ Stories by KELECHI EWUZIE skills are an added advantage for graduates willing to excel in their chosen careers”. Chinedu Duru, a human resource expert observe that Communication skills, Teamwork skills, problem solving skills, Technology skills, Management skills, Lifelong learning skills, Enterprise skills, planning and organisation skills are key employability skills which every undergraduate and graduate must possess to stand a chance in today ever competitive world. Duru said that University education and the state of vocational education is under a lot of stress, adding that emphasis is therefore for people to move towards technical education which those who are aware of the global economic crises has changed their curriculum

just to cope with the new realities. Lucky O. Idike, managing director, Eagle 8 Consulting observe that employability is about having the capability

to gain initial employment, maintain employment and obtain new employment if required. Idike opines that for the individual, employability

Total E&P commits to improve reading culture, careers prospect for students and professionals. Kenechi Esomeje, deputy general manager, public affairs and communication, Total E &P Nigeria Limited while speaking at the event said each the company open its doors to students from various secondary schools to give them a glimpse of the activities, ignite their interest in oil and gas and energy industry Esomeje said the open

day and reading events is designed to guide students through the process of making quality career decisions and expose them to the operations of the oil and gas industry. According to her, “We are combining today’s open day with our annual book reading event as part of our contribution to promoting the habit of reading as a way of life”. Commenting on the

L-R: Kofo Ati-John, General Manager Human Resources Deepwater; Ronke Soyombo, Representative of Lagos State Deputy Governor; Chinyere Amanchukwu, executive general manager administration Deepwater; Nkoyo Attah DMD, CSR partnerships, Florence Ilake, DGM Assets Operated by Others; SENPCo. at the 2018 Total Book Reading Forum.

theme of the programme, Read, Explain, Ask, Decide, she pointed out among the reasons why students should inculcate the culture of reading include; to gain knowledge, to build good communication skills , improve students imagination, improve ability to focus on task and its good for health. She further encourage the students to read wide, explain their ideas, ask questions, take bold decisions adding that creativity are important for adaptation survival in the ever changing world of today. Idiat Oluranti Adebule, deputy governor of Lagos State in her address at the programme observes that there is the need to inculcate in students the culture of reading early as reading remains the best way to expose them to different subjects. Adebule who was represented by Ronke Soyombo, deputy director general of education quality assurance in the ministry of education said the programme is good as it will enhance and promote education of children and build a better nation.

depends on: their assets in terms of the knowledge, skills and attitudes they possess; the way they use and deploy those assets; the way they present them

to employers; and crucially, the context within which they seek work. Figures from the National Bureau of Statistics indicate that an estimated 1.8 million graduates enter the job market yearly. Industry close watchers in the education sector said that to channel the human resources capability of this number of job seekers, there is the need for a more desirable and meaningful strategy to tackle the challenges facing the Nigerian university level of education, adding that reforms in that space should be approached in a more pragmatic manner that would ensure sustainability. Sunny Kuku is of the opinion that in a situation where the nation is grappling with youth unemployment, the jobs that are available can only be taken by people who have being properly groomed and have the right education.

ICT University sets up e-learning centre in Abia Poly GODFREY OFURUM, Aba

he ICT University Foundation, Louisiana, United States of America, has donated and installed e-learning computer systems in the ICT centre of the Abia State Polytechnic, Aba, in the first-phase of its collaboration with the institution. Consequently, Abia Poly students can now take lectures online from anywhere within the campus, whenever a lecturer is online-real-time. Another good thing about the system is that the lecture is recorded and left in the archive for 3 days, so students, who missed a class, can recall the lecture from the archive. Victor Mbarika, a professor and President, ICT University, Louisiana, while commissioning the e-learning management system, revealed that ICT University w ill provide technical support to Abia State Polytechnic, as well as training and retraining of staff and students of the institution. He stated that about 140 staff, including academic staff of the institution have already

been trained, stressing that training will continue. According to him, “Training has started and would continue. The beauty of the system is that it was built for the 3rd world countries. With a simple sim-card, students can access the system. Mbarika explained that the project was financed from contributions from several stakeholders in the United States, Europe and other parts of the world. In his words, “We have funding organisations that support us, to promote high quality education in the developing world, which is our mandate. “We have been mandated to develop 30 of this system in the developing world, in the next two years and Nigeria alone, has received 8 of the 30”. He also revealed that the e-books for Abia State Polytechnic have arrived, while the server is being installed. He stated that with the e-books, students and lecturers of the institution would have access to hundreds of thousands of textbooks to download. According to him, “They don’t need to enter this library to do that.

BUSINESS DAY

C002D5556

EDUCATION

Tuesday 03 July 2018

INSIGHT

Focus on special education: DOWN SYNDROME

Isaac Osae-Brown

own syndrome is categorised under the thirteen disability classifications in the United States. Children with Down syndrome have a developmental delay that causes them to learn at a slower pace than other typical children. Many children with intellectual disability need help with adaptive skills needed to work and socialise. Research reveals the etiology of Down syndrome and states that in every cell in the human body there is a nucleus, where genetic material is stored in genes. Genes carry the codes responsible for all of our inherited traits and are grouped along rod-like structures called chromosomes. Typically, the nucleus of each cell contains 23 pairs of chromosomes, half of which are inherited from each parent. Down syndrome occurs when an individual has a full or partial extra copy of chro-

mosome 21. This additional genetic material alters the course of development and causes the characteristics associated with Down syndrome. So in sum, Down syndrome is a genetic chromosome 21 disorder causing development and intellectual delays. A few of the common physical traits of Down syndrome are low muscle tone, small stature, an upward slant to the eyes, and a single deep crease across the center of the palm . Although each person with Down syndrome is a unique individual and may possess these characteristics to different degrees, or not at all. For centuries, people with Down syndrome have been alluded to in art, literature and science. It wasn’t until the late nineteenth century, however, that John Langdon Down, an English physician, published an accurate description of a person with Down syndrome. It was this scholarly work, published in 1866, that earned Down the recognition as the “father” of the syndrome. Although other people had previously recognised the characteristics of the syndrome, it was Down who described the condition as a distinct and separate entity.

In recent history, advances in medicine and science have enabled researchers to investigate the characteristics of people with Down syndrome. In 1959, the French physician Jérôme Lejeune identified Down syndrome as a chromosomal condition. Instead of the usual 46 chromosomes present in each cell, Lejeune observed 47 in the cells of individuals with Down syndrome. It was later determined that an extra partial or whole copy of chromosome 21 results in the characteristics associated with Down syndrome. In the year 2000, an international team of scientists successfully identified and catalogued each of the approximately 329 genes on chromosome 21. This accomplishment opened the door to great advances in Down syndrome research. Different Types of Down syndrome: Trisomy 21 (Nondisjunction). Down syndrome is usually caused by an error in cell division called “nondisjunction.” Nondisjunction results in an embryo with three copies of chromosome 21 instead of the usual two. Prior to or at conception, a pair of 21st chromosomes in either the sperm or the egg fails to separate. As the embryo

develops, the extra chromosome is replicated in every cell of the body. This type of Down syndrome, which accounts for 95% of cases, is called trisomy 21. Mosaicism (or mosaic Down syndrome) is diagnosed when there is a mixture of two types of cells, some containing the usual 46 chromosomes and some containing 47. Those cells with 47 chromosomes contain an extra chromosome 21. Mosaicism is the least common form of Down syndrome and accounts for only about 1 percent of all cases of Down syndrome. Research has indicated that individuals with mosaic Down syndrome may have fewer characteristics of Down syndrome than those with other types of Down syndrome. Translocation: In translocation, which accounts for about 4 percent of cases of Down syndrome, the total number of chromosomes in the cells remains 46; however, an additional full or partial copy of chromosome 21 attaches to another chromosome, usually chromosome 14. The presence of the extra full or partial chromosome 21 causes the characteristics of Down syndrome. There is no definitive scientific research that indicates that Down syndrome is

caused by environmental factors or the parents’ activities before or during pregnancy. The additional partial or full copy of the 21st chromosome which causes Down syndrome can originate from either the father or the mother. Approximately 5% of the cases have been traced to the father. All 3 types of Down syndrome are genetic conditions (relating to the genes), but only 1 percent of all cases of Down syndrome have a hereditary component (passed from parent to child through the genes). The diagnostic procedures available for prenatal diagnosis of Down syndrome are chorionic villus sampling (CVS) and amniocentesis. These procedures, which carry up to a 1 percent risk of causing a spontaneous termination (miscarriage), are nearly 100 percent accurate in diagnosing Down syndrome. Amniocentesis is usually performed in the second trimester between 15 and 20 weeks of gestation, CVS in the first trimester between 9 and 14 weeks. We may have students with this genetic disorder in our schools and pay little attention to their needs! The existing human traditions in Africa touches on the stigmatization linked with individuals with disabilities and

for that, the society at large pays little attention to create adequate support for children with disabilities. It is noted that to avoid the embarrassment and stigma associated with their children with disabilities, especially those with Down syndrome; parents of these children abandon their parental responsibilities and do nothing to educate these children. Research reveals that advancement in healthcare systems, computer technology, highly qualified education specialist and support providers have become effective components in playing important roles in adapting our environments for all individuals with disabilities including those with Down syndrome. It is our responsibility in Africa, to take an active role in building a safe and healthy environment for all individuals with Down syndrome to thrive and be self-determined to live independently. Isaac Osae-Brown works for the Compton Unified School District in California as an Education Specialist and a beginning Teacher Mentor. He is an advocate and a speaker for Special Education services in the United States and abroad. www.facebook.com/ inclusivemindset/

Corona school graduates tasked to be solution providers … hold 2018 valedictory service KELECHI EWUZIE

he 2018 graduating students of Corona Secondary School, Agbara, have been

tasked to leave their comfort zone and be solution providers in order to achieve greater success as they move into the larger society. Oluwatoyin Ogundipe, vice-chancellor, University

of Lagos and guest speaker at the 2018 valedictory ceremony, Corona School, Agbara, said the urged the students think, do more, learn to surround themselves with good people and should

L-R: Chinedum Oluwadamilola, principal, Corona Secondary School, Agbara; Adeyoyin Adesina, CEO, Corona School Trust Council; Oluwakorede Akande, 2018 Valedictorian; Amelia Dafeta, director of Education, Corona School Trust Council and Ebenezer Oniyide, executive chairman, Agbara/Igbesa L.C.D.A during presentation of gift to Akande at the graduation and Valedictory Ceremony of the Class of 2018 of Corona Secondary School, Agbara

learn to embrace challenge. Ogundipe while speaking on the topic “Nothing but the best “attributed the sterling performance and successes recorded by the students to perseverance, determination and commitment to learn. He tasked the students to always implement ideas coming into their minds, know their purpose and nurse it, adding that they should start thinking about their careers, increase the level of their awareness, exposure, consistently break new grounds and take risks. Ogundipe while highlighting what makes great men unique, said people often say “think outside the box” but when there is no box, you think wider and this makes you a unique being. “Be dedicated to whatever you are doing, practice as much as you can and have mental preparation. Also, it is important to decide on your success goal, don’t look at others and don’t run another person’s race,” he said. He further charged them to learn from their mistakes and never give up in life

even when they fail or fall. “Examine other people’s success and keep on learning because the journey is still very far. Don’t act alone, believe in yourself so that you can fulfil your goal,” he added. Chinedum Oluwadamilola, principal, Corona Secondary School, (CSS), Agbara, in her address at the event titled ‘The best is in you ‘said that given the practical, meaningful, invaluable and education that the students have received, they should find purpose in the insights they have gained a veritable arsenal of knowledge with which they must stride to face the challenges of the times. Oluwadamilola urged the graduating set to be worthy ambassadors of a school renowned for excellence, to go forth and blaze forth like stars that light the night. “As agents of transformation, be sure to lead lives worthy of emulation and in all your future endeavours, be guided by truth, go and accomplish the extraordinary for only the very best is good enough for you”. “See that the world

around you benefits from the holistic education you have received from Corona Secondary School that has provided you with your first steps in your remarkable journey to fulfilment and self-discovery. With this in mind, I challenge you to define your success, choose your path wisely and live up to your own measures with passion and commitment,” she said. She congratulate the graduating class for being the class that produced the first and only secondary students in Nigeria to pass the foundation level of ACCA. Oluwakorede Akande, the 2018 Valedictorian said he was able to maintain the lead due to hard work adding that Corona has had all round impact in his life. Akande advised the students to always give their best and never forget God. Highlight of the programme featured award of recognition to outstanding students while the duo of Anthony Ilobinso and Ademola Adelekan were bestowed with the outstanding teachers award of the 2018 set.

Tuesday 03 July 2018

C002D5556

BUSINESS DAY

In association with

REITs: Nigeria lags peers in market capitalisation, return on investment …market cap only $0.2bn as against S/Africa’s $19bn, Singapore’s $34bn … REITs have huge potential, opportuneities for valuers—Stanbic IBTC

Plumbing systems: Understanding the different types of valves

CHUKR UROKO

n matters of real estate, Nigeria lags behind generally when compared with other economies, including emerging economies, where markets are mature, investments are high and coordinated, and both macro-economic and regulatory environments are enabling and supportive . Besides coming last among its peers in ease of registering property, Nigeria also lags in the Real Estate Investment Trusts (REITs) business, especially in the level of investment, market capitalization and return on investment in that class of assets. Globally, REITs are similar in characteristics and these, according to Stanbic IBTC Capital Limited (SICL), include portfolio of quality income-producing assets, tax efficient investment vehicle, assets with stabilized cashflows, liquidity via stock exchange trading, deep investor pool , and strong regulation and market transparency. Though REITs started in 2007 in Nigeria, about six years before it started in South Africa in 2013, and about five years after it started in Singapore in 2002, there is no justification for the wide difference between the number of REITs in those countries and what obtains in Nigeria, the largest economy in Africa. Whereas Singapore has 37 REITs and South Africa has 29, Nigeria has only three REITs. US where it started in 1960 has 224 REITs while UK has 37. In terms of market capitalization, SICL in a paper it presented at Summit 2.0, a business conference organised by the Lagos State Branch of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), noted that as against US $1,000 billion, UK’s $73 billion, Singapore’s $34 billion, and South Africa’s $19 billion, Nigeria has a very insignificant $0.2 billion. Return on investment in

Infrastructure Maintenance With TUNDE OBILEYE

REITs in Nigeria is also far below what comes back to investors in this instrument in other economies. Despite its large-size market, return on investment in REITs in Nigeria is 7 percent as against 16 percent in Singapore, 15 percent in South Africa and 9 percent in Kenya. Nigeria’s back seat position in this market finds explanation easily in issues that are fundamentally wrong in the attempts to growth the market. There have, however, been vigorous attempts to grow this market as could be seen in the modest N2 billion Skye Shelter Fund floated in 2007. Others are Union Homes and Sun Trust which followed with N12 billion and N20 billion offerings respectively. UAC Property Development Company’s (UPDC’s) 2013 offering of N30 billion which declined to market cap of N26.7 billion in May 2017 is the largest and most successful offering so far. “There are, evidently, issues regarding the quality of assets available and concerns around the tax implications, amongst others”, says Ayo Ibaru, Director, Real Estate at Northcourt, suggesting that to reach performance levels of national economic significance, adjustments need to be made. SICL agrees, adding that

there is need to grow investorconfidence by ncreasing level of local investor familiarization with the real estate asset class; Standardising practice to increase institutional foreign portfolio investor pool. There is also need for market transparency which would involve increasing access to market information to both retail and institutional investors; improving visibility and transparency of financial reporting and tracking asset performance metrics. Regulatory policies have to be enhanced by regularly updating regulation in line with global best practice and ensuring favourable tax regime to attract more capital to the sector. SICL pointed out that estate surveyors and valuers have a role to play in growing this market which, it noted, has great potential and opportunities for them. “Valuers should be involved in embracing and establishing internationally acceptable valuation standards; recognising and enforcing the importance of valuation standards in successful real estate/REITs creation”, it advised. Valuers should be able to attracts investors by establishing sustainable investor confidence and continually attracting new class of investors. There should be transparency such that valuations would be

carried out in a detailed manner providing evidence, clear rationale and workings; valuation and data benchmarks will be established, among other roles. The opportunities for valuers in this market is quite encouraging. An estimated $2.0 to 2.5 billion was deployed to the Nigerian commercial real estate sector over the last 10 years while N54 –N72 billion is the estimated value of asset portfolio required for REIT creation in Nigeria. “These could more than double easily in the next 5-10 years”, SICL posited, adding that a typical REITs listing requires a portfolio of income-producing assets worth over N54 billion ($150 million) to N72 billion ($200 million). An established secondary market will catalyze investments in the primary markets while a bulk of the institutional capital for large scale commercial real estate development is from foreign institutional investors. The company believes that aligning the Nigerian regulatory environment to global standards would increase investor confidence and deepen the capital pool, hoping that upcoming enhancement to the REITs regulation would increase the activities in the REIT market and increase the demand for valuation services.

VC valves are primarily used for regulating or shutting off flow in a plumbing system and selecting the correct valve can be quite a task if understanding of the different types of valves is poor. This is as a result of the similar tasks that most of them perform. To know the correct valve to use requires an understanding of these valves, the best use of them and uniqueness of each one. Plumbing problems remain a major issue faced by facilities managers and users of buildings. An additional problem is finding a competent plumber to deal successfully with a problem when such occurs. Often times, a plumber recommends the wrong valve due to a lack of full understanding of the various valves and their uses in a plumbing system. There are many PVC valves notably ball valve, gate valve, check valve, butterfly valve and diaphragm valve. Ball valve: It is possibly one of the best examples of a shut off valve. It utilizes a spherical seating as a means to allow or stop flow. A hole is located in the center of the ball which allows fluid to pass through it whenever the handle is turned on. If the handle is turned off at 90 degrees, the fluid will hit the side of the ball (the solid side) and the fluid stop. It also utilizes rubber O-rings in order to make the seal tight. These O-rings can be made from many different types of rubber, depending on what temperatures and chemicals they will come in contact with. Check valve: Check valve is a regulatory valve because it controls the direction of flow. Common types of check valve are ball check valve and swing check valve. Ball check valve utilizes a ball to prevent backflow. A swing check valve utilizes a swing function to prevent

backflow. Instead of using handles to open or close, check valve is activated by water flowing either with or against it. Gate valve: Gate valve can function as regulatory valve and shut off valve. The valve utilizes a “gate” that controls flow. Whenever the gate is opened, it goes up into the upper section of the valve. A gate valve also utilizes hand wheel which makes it much easier to precisely control flow. Gate valve is easy to separate from a pipeline for repairs, cleaning, or maintenance. Diaphragm valve: A diaphragm valve is likely the least popular available but serves a unique purpose for flow control. It is categorized a regulatory valve because of its best value to limit pressure. This valve controls flow with a diaphragm that either rises or lowers for a small amount of fluid to pass through. Butterfly valve: A butterfly valve can perform as a regulatory or shut off valve. It has the ability to limit flow rather than being turned on or off if that is the objective. It can also perform the task of turning on or off a flow. However, the ball valve is a better shut-off valve than butterfly valve. The role of facilities managers is to ensure the proper type of valve is selected for a plumbing system that requires repair or maintenance. To do this, correct valve size should be known. The measurement will depend on pipe size, material and operating flow. A larger valve will be necessary if the target is a zero pressure drop. Understanding the function of each valve will help to determine which valve meets the requirement. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

BUSINESS DAY

Tuesday 03 July 2018

What FG’s N500bn intervention will mean for mortgage industry ENDURANCE OKAFOR

he inability of Nigeria’s mortgage industry to bridge the huge housing deficit may soon turn the corner following plans by the federal government to intervene through provision of fund for the next five years, industry experts have noted. Experts in the mortgage industry expect the N100billion annual fund intervention by the federal government to make housing more affordable and, in a long run, encourage Nigerians to take mortgage as a choice of raising fund for acquiring their homes. Abiodun Akanbi, Head Strategy at Infinity Trust Mortgage Bank, said the plan will bring about positive impact on the mortgage industry. “This is because the Federal Mortgage Bank of Nigeria (FMBN) through the National Housing Fund (NHF) scheme gives access to many Nigerians in obtaining mortgage owing to its single digit rate; so if funded, it will have the capacity more than it had been able to achieve,” Akanbi told BusinessDay in a phone response. Meanwhile, Nigeria’s mortgage to Gross Domestic Product (GDP) is one of the lowest in the world. Nigeria has its mortgage to GDP rate at about 0.5 percent; this obviously lags South Africa’s 30 percent, the U.S rate at 60 percent and that of the UK at 70 percent, as analysed from Akanbi’s figures. Yemi Stephens, Partner at Estate Links Limited, said the plan by the federal government is a welcome development, but stressed it was like a drop in an ocean considering the huge housing deficit faced by the country

with the largest population in Africa. The federal government plans to inject N500 billion ($1.4 billion) to the FMBN over the next five years in an effort to spur homeownership that has failed to take off in the country. With an estimated 50,000 registered mortgages, of which stateowned Federal Mortgage Bank of Nigeria accounts for 18,200,the housing problems in the country have been increasing owing to lack of proper land deeds, poverty and record high interest rates. The intervention by the government through the mortgage lender will therefore be targeted at addressing the housing issues in the country with a housing deficit of 17 million units, as the country is seeking to improve access to home loans. The FMBN is seeking to boost its capital from N5 billion at a rate of N100 billion a year. The lender is expecting proposals on its recapitalization, as well as a reorganization of its business, to be approved by all arms of government by the end of 2018, as the company’s current capital base is ‘grossly inadequate and it is therefore in the process of ensuring that the capital base be increased, as disclosed by Ahmed Dangiwa, MD of FMBN. On the challenges that may be encountered in the course of managing the fund, Stephens of Estate links said the problem would be managing the funds and ensuring that the low and medium income earners who actually need to access it in order to acquire a home are able to. “The targeted people that should access this fund may not be able to because they might bring different criteria which this class of Nigerians will not be able to meet and the same set

of people who have been accessing the funds in the past may still be the people that will get this one,” Stephens noted. Amid concerns that some contributors to the NHF have not been able to access loans, FMBN has assured Nigerians that the amendment of the enabling legislations in the scheme would make it more robust and beneficial. Accordingly, the bank explains that the objective is to expand its coverage to capture the potential 50 million-market sizes and contribute significantly to the target of creating one million new mortgages on an annual basis, while maintaining the single-digit interest rate. The lender also said the step will further reach the down-market beyond the lower medium income bracket; increase mortgage sector contribution to GDP, meet the changing mortgage landscape and remain relevant in the face of other mortgage

financing developments in the housing sector, as disclosed by Dangiwa during the Lagos Housing fair. Meanwhile, the House of Representatives, on Tuesday May 22, 2018, had asked the Federal Government to recapitalise FMBN to the tune of N500bn. The recommendation to recapitalise the bank was contained in the report of the House Committee on Housing, which lawmakers considered and approved as compiled on FMBN twitter handle. This was as a result of the failure of contributors to the Fund, including the Central Bank of Nigeria, commercial banks and insurance firms, to perform their duties. The committee recommended that such contributors should be compelled to provide funds for the FMBN as provided in the Act. Another recommendation of the committee was that FMBN be given necessary government support in

areas like guarantee, recapitalisation and allocations to empower the bank for maximum productivity. Meanwhile, the FMBN in the last one year said “we disbursed over N7.1billion housing loans to help 993 contributors to the National Housing Fund (NHF) achieve their dream of becoming homeowners.” Babatunde Fashola, minister of Power, Works and Housing, in March 2018, inaugurated a new governing board for both the Federal Housing Authority (FHA) and FMBN. The new board was inaugurated following direct order by President Muhammadu Buhari when it became obvious the low-cost lender was failing in its objective of ensuring the implementation of policies of government, with respect to public housing and mortgage financing in Nigeria. Other plans in the mortgage industry aimed at contributing to the growth of the industry include; partnership between Mortgage Warehouse Funding Limited (MWFL)-a special funding vehicle of the Nigeria Mortgage Refinance Company (NMRC)- and selected banks to provide mortgages to any client who is willing to buy houses from the MWFL’s pre-approved developers. This partnership will take care of supply by providing mortgages as an incentive to prospective homeowners. Another collaboration is the Public Private Partnership between the Federal Government of Nigeria and the private sector. It was implemented as a component of the Nigeria Housing Finance Programme initiated by the Federal Ministry of Finance (FMoF) in collaboration with the Central Bank of Nigeria (CBN), Federal Ministry of Lands, Housing & Urban Development (FMLHUD) and the World Bank/ International Finance Corporation (IFC).

Surveyors impact on society, economy fascinating—British Envoy … as Omotosho challenges professionals on service, innovation CHUKA UROKO

he British High Commissioner to Nigeria, Paul Arkwright, has noted that the significant impact surveyors have made on the society and the wider economy is fascinating. Arkwright, who was guest speaker at an event organized by the Royal Institution of Chartered Surveyors (RICS) Nigeria to mark the 150th anniversary of the institution in Lagos at

the weekend, commended the initiatives that were launched to celebrate the anniversary. The initiatives, tagged ‘cities for our future challenge’ were launched in partnership with the UK National Commission for the Association of Commonwealth Universities. The ‘pride in the profession’ initiatives showcase the significant and positive impact the surveyors have made to the society. The nominations, Arkwright said, were varied

L-R: Paul Arkwright, British High Commissioner to Nigeria; Emeka Eleh, former president, NIESV, and Jimmy Omotosho, chairman, RICs Nigeria, at the RICs 150th Anniversary celebration in Lagos at the weekend.

and covered the globe, but two were closer to home. The first was the rehabilitation of Ligali Ayorinde Street by a RICS fellow, Akinola Olawore, which was the first public-private intervention in Nigeria. ‘‘This led to significant economic growth in the neighbourhood with investments of over $600 million and $67million in commercial and residential properties respectively from upgrade of just one kilometre of road”, he said. The second initiative was the first valuation and identification of infrastructure assets in Lagos by RICS member, Jimmy Omotosho. “This valuation involved surveying 698 roads and bridges that covered a distance of 687km. The project enabled the government to make more informed decisions on future spending, and to be more transparent and accountable in the management of the state assets,’’ Arkwright said. He announced that RICS was offering an opportunity to win £50,000 by challenging young professionals, start-ups and students to use surveying, urban design, architecture or engineering to solve issues such as rapid urbanisation, climate change and resource scarcity, adding that a number of entries from sub-Saharan

Africa have made the shortlist of 48. He also expressed confidence that Nigeria and the UK can strengthen an already deep friendship and boost each other’s prosperity in the coming years. ‘‘2019 is a watershed year for both countries, with events early in the year defining the UK and Nigeria’s direction of travel into the next decade,’’ he said. Earlier in his opening speech, Yinka Omotosho, chairman, RICS Nigeria, had challenged young chartered surveyors in Nigeria on delivering surveying services with innovation and to international best practices in order to help build the country using its abundant resources to the benefit of succeeding generations of Nigerians. For more than 140 years, Omotosho recalled, RICS members had worked to ensure that whilst unlocking the inherent value held within the world’s physical assets and developing its potentials, they don’t spoil the planet for future generations. ‘‘Even in parts of the world where the term ‘chartered surveyors’ mean little, the high standards of its members speak volume,’’ he said. ‘‘They are viewed by major financial institutions and world governments as the ‘gold standards’ when it comes to professional regulations in the

property sector”, he added. According to him, the RICS Nigeria Group has been doing its best to advance the objectives of the institution by conducting assessments under set criteria and organising various continuing professional developments programmes. ‘‘The continuing professional development lecture series has become a regular ritual for the RICS Nigeria Group in fulfillment of the RICS requirement for continuous professional development,’’ he said. ‘‘It also provides a platform for the group to lend a voice to issues of professional and national discuss as it affects built environment, development of property market, the building and construction industry and the economy,’’ he said. The RICS chairman said wide-ranging programmes of activities are being implemented in the United Kingdom and RICS branches worldwide. ‘‘These activities are designed to celebrate the depth and breadth of the surveying profession, highlight its value to society and recognise its significant contribution to the global economy,’’ he said. ‘‘In 2018, RICS is not only celebrating past achievements, we are working to promote pride in the profession, inclusion and diversity, and to inspire the next generation,’’ he added.

Tuesday 03 July 2018

C002D5556

BUSINESS DAY

FEATURE When Educationists, industry players charted growth path for STEM education The 26th Career Counselling, Industry Awareness and Youth Empowerment Workshop organised by Lonadek Consultants provided a forum for discussion on policies and regulations that will promote Science, Technology, Engineering, and Mathematics (STEM) growth in Nigeria going forward. The ideas generated should be translated into concrete action, EWUZIE KELECHI reports.

hen the organisers of the Career Counselling, Industry Awareness and Youth Empowerment Workshop chose ‘Transforming Nigeria through STEM Education as the theme for this year’s event, it was not co-incidental. It was a calculated move to drive home the critical role of managers of the education sector in creating an investment environment as a necessary precondition for growth of STEM education. This is especially important because the current state of Science, Technology, Engineering, and Mathematics (STEM) education in Nigeria is far from encouraging. Traditional education system in Nigeria is failing, with STEM education being the worst hit. Students are largely uninspired to pursue their passion in STEM related fields, thereby leaving them unprepared for the opportunities and challenges of the 21st century world. And so, it was with this mindset that industry players, policymakers, regulators, and key education stakeholders converged at Yaba College of Technology Lagos recently to interact, deliberate and chart the way forward for promoting Science, Technology, Engineering, and Mathematics (STEM) education in Nigeria. This mindset also reflected in the choice of topics for the various presentations at the workshop, which included ‘Importance of STEM education in Nigeria’, ‘Youth in Leadership and Entrepreneurship in STEM’, among others. Judging by reports which indicate that Nigerian students rank low among students of both the industrialised and developing countries when it comes to achievement in Science Technology, Engineering and Mathematics (STEM) subjects in test scores and other assessments of academic achievement in both foundation and external examinations, the workshop indeed came in the nick of time as speaker after speaker at the event, in recognition of this worrying trend at the moment, outlined the role government and the different stakeholders can play in shoring up investment to boost the country’s STEM education. It is no gain saying the fact that an average Nigerian youth engages in social vices that adversely affect their educational career, selfdevelopment, realisation of their innate talents and socio-economic transformation of the country. The remote causes are not farfetched. Extreme poverty, poor standard of education and education facilities, peer pressure and societal influence, lack of educational guidance

and career counselling at the early stage and complacency on the part of the youths are the contending factors impeding our collective national growth and development. But for Nigeria to attract and sustain the needed investments in STEM education, the formulation of an education policy that is focused on STEM; less emphasis on certificates with more emphasis on skills and competence; collaboration between educational institutions and industries to determine the knowledge and skills students are expected to possess. We are living in extraordinary times, when technology is changing the way we do things. New breakthroughs in information technology, biotechnology, nanotechnology are changing, not only how the world is connected, but also how things are done; how we do business with each other in an ever shrinking global marketplace. Many professions are fast disappearing, and many new ones are springing up. Social media devices have practically turned the world to a global village. The impact of these is huge, and only those nations which recognise the possibilities and opportunities in the horizon will be in a position to dominate the world of the 21st century according to Olubunmi Obembe, who was the special guest at the workshop. He therefore called managers of the economy to save the future of the young and enterprising youths adding that a look at the achievement of Nigerians in the diaspora, alone

reiterate the enormous potential residing in Nigerians. “We must make the conditions right here at home. We must invest more in education. We must invest heavily in STEM, as a tool for national development,” he said. He observes that infrastructure is a major deficit in Nigeria. It is critical in science. We have people who schooled here and when they go out, they excel. Teachers need to be motivated so that they will be able to engage and guide students in STEM.” Ibilola Amao, convener of the workshop while tasking Federal Government to encourage the promotion of STEM role models,

As the key stakeholders all agreed, for the Nigeria to fully reap the benefits of the ideas generated and the knowledge shared during the course of the eight hours workshop, it would need to be translated into concrete action by all concerned

mentors and coaches, empower STEM teachers and lecturers, promote science projects, community development initiatives, as well as research and development said “The Vision 2020 Youth Empowerment and Restoration Initiative largely supports and underpins the Vision 2020 goals of Nigeria to become one of the 20 largest economies in the world, a significant player in the global economic and political arena through youth empowerment and industry awareness ,leadership ,entrepreneurial and vocational skills development” Amao stressed that by the year 2020, the project would have successfully impacted one hundred thousand youths across Nigeria with relevant skills, industry and professional awareness trainings. “In the long run, more youths would have been prepared to take up challenges in different spheres of our national development and add tremendous value.to the socioeconomic transformation drive of the nation,” she said. She further said that having identified the issues that underscored the slow progress of youth development in STEM and national development by extension, the project model offers a life line to the underprivileged youths through counselling and Industry Awareness Workshops in major cities across Nigeria. In his presentation at the workshop, Dayo Ilori, one of the speakers said entrepreneurship training in schools should be beyond acquisi-

tion of skills for small business. Ilori speaking on the topic: “Youth Leadership and Entrepreneurship in STEM”, said with much emphasis placed on entrepreneurship education by schools, there are still loopholes which have limited pupils mindset from the core relevance of entrepreneurship. According to him “A lot of schools have introduced entrepreneurship education but what exactly is being taught in the curriculum of entrepreneurship? What I see a lot of schools teach in that area is more like skills acquisition. “Entrepreneurship is beyond having a small business. This is what schools do, preparing students to own small business which eventually are not sustainable. Real entrepreneurship should be start-ups which can be scalable. Discussants during the panel session emphasised the need for government at all levels to give priority attention to the teaching of STEM to make our students globally competitive and the nation technologically relevant. They also canvassed greater attention on teachers to enhance the development of the sector. According to them, “Teachers must be empowered with the needed tools to be able to effectively train students on STEM education. Adding that investment in students without a measure of same in teachers would only amount to a waste of resources. Stakeholders at the workshop opine that no matter federal government huge investments in students, without a corresponding gesture to teachers, the nation cannot go far. Teachers are the bedrock of the society; they must be well trained to embrace technological education because you cannot give what you don’t have. With the quality of the discussions and deliberations and the valuable knowledge and information shared, there is no doubt that the 26th Career Counselling, Industry Awareness and Youth Empowerment Workshop was indeed plentiful harvest for all the participants as well States and federal government. As the key stakeholders all agreed, for the Nigeria to fully reap the benefits of the ideas generated and the knowledge shared during the course of the eight hours workshop, it would need to be translated into concrete action by all concerned, especially government and its policymakers. This is the only way to achieve the desired vision of the project which is passionate about the education and empowerment of youth in the country and identifying and developing those interested in learning global skills for success in STEM industries.

Tuesday 03 July 2018

BUSINESS DAY

THE BIG HEART DIGEST In association with Delta State Micro, Small and Medium Enterprises Developement Agency (DEMSMA)

Shimite extols Okowa’s passion for agric and made-in-Delta export drive

or almost three years, Shimite Belo, the Delta State Micro, Small and Me d i u m Ente rprise Development Agency (DEMSMA) has been driving a most difficult task: bottomup economic inclusion and upgrading that would lead to poverty alleviation. In this agric value chain has been found valuable. Belo has been interpreting Gov Okowa’s vision for agric and his passion for revival of home made products and likely export for made in Delta products. As the Governor returns to the people for renewal of mandate, he would point to the massive work done in entrepreneurship and wealth creation as a major achievement that the people cannot doubt. In this exclusive interview, Belo explains details. The role of DEMSMA in Okowa’s agric revolution Ours remains the same in every other thing we do. We ensure access to financial literacy through training. We ensure access to financial inclusion – dealing with Bank Verification Number (BVN) and the rest. We ensure people open their accounts. We ensure access to credit. We also ensure we do the loan recovery efforts. So, we ensure that you are capable and able to borrow, return and you understand the modalities of taking a loan or having a shared facility arrangement where we probably buy the equipment and then you will return the money for such. So, whether it be leasing or anything so long as there are going to be cash transactions involved, our role in the agricultural system is just to ensure access to credit at a rate that is a bit suitable for farmers. Deltans who would take the agric option are assured of markets We have an agricultural marketing committee where the Chief Job Creation Officer sits as the chairman and I am one of the members. The essence is that when we give people money, that is, when we give them loan and had done the trainings and all of that, sometimes, they cry that there is no market. They cry that there is nobody to buy their products. So, the state’s marketing committee has started working assiduously to find buyers and one of the

biggest products we are looking for market for, is garri and plantain flour. We’ve been able to identify a market in London and New York. One of them want to buy five containers, we already have the International Purchase Order (IPO). We also have others that want to buy one container in a month. With these, at least, we can help with market so that they don’t just sit down and say they are not getting market; or dash out what they have or sell it out at discounted rate. So, we’ve been able to find markets. We are also exploring markets for other products like palm oil and the rest but we want to taste training Deltans on how to export. This is something that the governor is passionate about – to ensure there is market. He’s also asked us to look at local markets – be it Shoprite, be it market in Lagos, Kano and other places, where our people can sell what they have so that they are no more crying that they don’t have market to sell their products or that their cassava is just spoiling etc. So, we want to put an end to all that. We have gone a bit far in that and hopefully, Deltans would now be enjoying from Delta State Government not just access to finance and training but access to market. We are going to be teaching some of them on how to get funds from NEXIM Bank for imports, exports, and domestic market and credit line. So, we are looking at that in terms of market and off-take. We are going to be training on that as we are teaching them how to sell their products, when to sell their products, helping them with the correct paper work. We are helping them with National Food and Drug Administration and Control (NAFDAC) through the ministry of commerce and industry, Standard Organization of Nigeria (SON) etc. In all the 25 local council areas of the state, DEMSMA has empowered 9,920 persons in 1,204 cooperatives, empowered with N1.466Bn. This is generally namely: school, agriculture, computer, trading, ice block, Keke NAPEP (tricycle) and all kinds of businesses. That’s what we have done till date. The rate of back pack of

Governor Okowa

the loans is very low. We have only been able to recover about N400 million. Before now, we were not recovering anything. In some states, they would look at our N400 million as something very good, as if we have done well but to us in Delta, His Excellency the governor will expect us to do more in terms of loan recovery. The people of Delta are just getting used to the fact that when you borrow loan you must pay back. That was not the mindset. So, slowly and surely, they are beginning to understand that funds must revolve. Monitor the success of the loans We’ve been monitoring the success of the loans. One of the things we have to do in our agency is that the jobs that are created from our interventions, we have to report them quarterly to the Chief Job Creation Officer of the state. All the Ministries, Departments and Agencies (MDAs) have to do that. So, when we pick a form and we go out, we ask them “How is your business doing; how many people did you have before you collected the loan and how many have you got since you were given the loan etc”.

Shimite Belo of DEMSMA

Prof Eric Eboh is the Chief Job Creation Officer not just only to give job numbers to Skills Training Entrepreneurship Programme (STEP) and Youth Agricultural Entrepreneurship Programme (YAGEP). He gives all the job numbers in the state because it is part of his jurisdiction. So, for all the jobs that are created from all the interventions, he had to send out forms to all of us. That’s why I said we separate YAGEP and STEP so that it doesn’t have to be duplication. Ass e ssment of G ov Okowa’s administration in terms of the agric revolution Generally, more people are farming under Okowa’s tenure. That is not contestable. Under Okowa, more people have gone back to farming. There is a lot more action in farming especially in the area of cassava. Stems are available for people to go and farm with Vitamin A. Some people who don’t even have government’s intervention have understood that it is better for them to go back to the farm. Even people that you never have seen on the farm, they are going there to see that some work is done. As you can see, we are now having to do with finding mar-

kets for products. It means that people are now producing. So, at the end of Okowa’s tenure, we would see certain products, not all. We would see production in cassava, especially cassava to starch and garri. We would see more production in plantain. We would see improved processing of oil. We would also see a bumber production in rice. These are the things I know Okowa would leave behind as his legacy at the end of his tenure because that’s where he is putting his money in. We have people growing a lot of things but a lot of monies we have given out is in rice treshing equipment etc. Sometimes, we have not given out micro-credit. We have given out small loans up to N23 million for people in processing. Since more people are now farming, we now need to have processing equipments. What Deltans would see at the end of Okowa’s tenure They will see rice and garri revolution in Okowa’s tenure. Joining in the call for people to go into agriculture I’m calling on Deltans to go into the value chain of agriculture, not just agriculture. There is packaging,

branding, lebelling, processing, production, marketing, negotiating in agriculture. There are so many aspects of agriculture. Some, you would not see soil and insect face to face but you’re also needed because now we have to bag our own rice because we are not importing. So, we have to go in, somebody has to design them. Somebody has to see that we are doing all the licensing and tagging. So, there are other aspects of agriculture. So while I’m joining them to say go back to agriculture, I’m not joining everybody to say go onto to the farm, because there are some places in agriculture that people are not touching in the state and I just want them to explore the value chain not just production and then processing. As for my agency, as far as we have enough funds, we will do the best we can. They said that we are coming out of recession. We believe that is the case but we don’t have money like before. With the little we have, we will support the people we can support. We can’t support everybody and nobody can. We will do the best we can as long as our money can afford.

Tuesday 03 July 2018

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TALKING POINTS Value Your High Performers 400%: A study published in Personnel Psychology found that highperforming employees deliver 400% more productivity than average employees. + When Nokia Ruled 2007: In 2007 Nokia reigned over the mobile market, Apple unveiled the iPhone and Google released its Android operating system. + Female Founders 11 million: According to a 2017 report from the U.S. Senate Committee on Small Business and Entrepreneurship, there are over 11 million women-owned American businesses today, up from 4 million in the 1980s. + Marketing Made Modern 50: Less than 50 years ago, the marketing department and profession as we know them did not exist. + The Optimal Meeting Size 5 to 8: The most productive meetings comprise between five and eight people, according to Robert Sutton, a professor at Stanford University, whose research concludes that the quality of discussions declines with more than eight people. +

Keeping an open mind when algorithms control what you read

Don’t Have One To-Do List — Have Three

retty much everything you see online, from search results to your Facebook feed, is generated by algorithms. This invisible code prioritizes information that it thinks you’ll like — which can turn your online experience into an echo chamber of identical opinions. How can you keep alg or ithms from p enning in your worldview? To start with, think about how dangerous it can be to see only things that you already agree with. Be skeptical of the veracity and compre-

hensiveness of your internet feeds. Make sure you’re reading widely about issues in the world, and deliberately follow people with views that differ from yours. By expanding what you read and pay attention to, you’ll force the algorithms to broaden their recommendations. And occasionally get off the radar, to see an unfiltered view of the web: Put your browser in incognito mode, or search anonymously using a search engine that doesn’t track you. (Adapted from “How to Think for Yourself When Algorithms Control What You Read,” by Marc Zao-Sanders.)

nothing can interrupt you

to-do list can help you stay organized and focused, but it can also become overwhelming when it gets too long and you’re not sure what to tackle next. Try keeping three lists — and a calendar. To start off, think about all of the tasks assigned to you. Which of them truly have to get done (chances are, some don’t)? And which are truly urgent? On the first to-do list, write down your projects that are important but aren’t time-sensitive. On the second, write the things that are important and need to get done today. The third list is a not-to-do list, to remind you which things aren’t worth your time and which can be done by someone else. Then use the calendar to block out time for each important task according to its deadline. Once you get control of your priorities, you’ll feel liberated to focus on what really matters to you. (Adapted from “Taming the Epic To-Do List,” by Allison Rimm.)

Try collaborating with your work rivals

Returning to work after a mental health leave Have one day a week when

Y things are fine now and I’m happy to be back to work.” Come up with a mantra to help you during the transition: “Take it a few hours at a time” or “Be compassionate to myself.” And rely on your support system — a family member, a close friend, a doctor or therapist, and perhaps a trusted colleague — and turn to them whenever you need encouragement. (Adapted from “When You Need to Take Time Off Work for Mental Health Reasons,” by Barbara Ricci.)

ou can’t do deep, creative work when meetings constantly disrupt your flow and hurt your productivity. To give yourself time and space to focus, have one day a week when nothing can interrupt you — no texts, no emails, no phone calls and absolutely no meetings. Block this day off on your calendar, and tell colleagues that you’ll be unreachable because you’re working on critical projects. Of course, something urgent may come up anyway, but try your best to keep the day from being compromised. Stick

to a simple rule: You can move your unreachable day around during a week — maybe it’s Wednesday one week and Thursday the next — but you can’t remove it from your calendar or push it to the following week. As you get into the routine of taking these days for focused work, it’ll be easier for you, and the people around you, to keep them sacred. (Adapted from “Why You Need an Untouchable Day Every Week,” by Neil Pasricha.)

n highly competitive organizations, employees are under constant pressure to outperform their colleagues. At stake are the best assignments and limited promotion opportunities. But this “healthy competition” can create a brutal culture, and may hold you back from performing at your best. Instead of trying to outdo your competitors at work, consider collaborating with them. Exchange knowledge, ideas and feedback so that you and others can learn from each other’s successes and failures. For example, if you got tough feedback about the way you handled a

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Tips & Talking Points

Harvard Business Review

f t e r you’ve taken time off from work for mental health reasons, returning to the office can be a challenge. How do you get back into the daily grind without compromising your health? First, consider whether you should initially go back full-time or part-time. Dealing with a mental illness can be exhausting, so give yourself the time you need. Next, weigh the pros and cons of being open about your situation. You may opt not to tell people exactly what you’re dealing with, but be prepared for their questions. A brief, simple narrative can help. You might say something like, “I took time off for health/personal reasons, but

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project, you might be tempted to keep it to yourself. But if you share with colleagues what you learned from the experience, they might reciprocate and share equally valuable information. Of course, opening up — and making yourself vulnerable — to competitors can be risky; you have to know who you can trust. But this kind of collaboration has much to offer you and your colleagues, not to mention the organization. (Adapted from “When It Pays to Collaborate with Competitors at Work,” by Daniel Reynolds and Doug Meyer.)

Politics & Policy

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2019: INEC raises alarm over increasing voter apathy ... Decries worsening insecurity, displacement women actively advocating for peaceful elections. The impact on voters’ turnout will also be considerable. ”In 2016 the commission conducted two by-elections here in Lagos which recorded very low voter turn-out, the Ifako-Ijaye federal constituency held in December 2016 and the Eti- Osa state constituency in September 2017; the voter turnout was 2.9 percent and 3.4 percent, respectively,” Mahmood said. Speaking further, Mahmood lamented the current security challenges bedevilling the country and the number of displaced individuals, hinting that the commission was strategising on modalities that would enable all internally displaced individuals to vote in the 2019 general election. The INEC Chairman said that the commission was working towards introducing electronic balloting in the electoral process in the country, stressing that it has increased the deployment

INIOBONG IWOK

s the 2019 general election approaches, the Independent National Electoral Commission (INEC) has raised the alarm over increasing voter apathy across the country. Chairman of INEC, Mahmood Yakubu, stated this in his address at a meeting with the business community held at Eko Hotel & Suites, Vitoria Island, Lagos, while speaking on the commission’s preparedness towards the elections, noting that recent byelection conducted by the commission in Lagos and other parts of the country had been marred by poor turnout of voters which had become worrisome, while seeking the support of the business community in the country through the education of voters towards the success of the 2019 general election. “You can imagine the impact of prominent businessmen and

Mahmood Yakubu

Atiku campaign office decries sale of PVCs by online portal INIOBONG IWOK

he campaign organisation of former Vice President Atiku Abubakar has raised the alarm over the sale of permanent voters cards on an online portal, alibaba.com. In a statement yesterday signed by the Director General of Atiku presidential Campaign organisation, Gbenga Daniel, it noted that the sales of the permanent voter cards (PVCs) on the portal was capable of undermining the electoral process and breaching national security, while urging immediate ceasation of such dangerous activity. “My attention has been drawn to an egregious breach of Nigeria’s electiral integrity and thus our national security, by the sale of Nigerian permanent voters cards on alibaba.com,” Daniel said. According to the campaign DG, “We are very concerned about this security breach because it threatens Nigeria’s desire to build strong institutions, like the Independent National Electoral Commission. A situation like this could lead to massive votebuying and thus thwart our efforts and

instead create strong men where we want to enable strength in institutions. “Permanent Voter Cards were used in the 2015 Nigerian elections and the alibaba platform was also in existence then, yet we did not have this breach. That precedence leads me to believe that if alibaba.com refuses to lend its platform to those unscrupulous elements who want to thwart Nigeria’s democracy, we would greatly increase the chances of a free and fair Nigerian election in 2019.” “Therefore, I appeal to you to use your good offices to permanently remove these items from alibaba. com. Furthermore, I do kindly ask you to consider sharing information with Nigeria’s security apparatus that may help expose any impropriety,” Daniel said. He noted that “The world is currently witnessing the unfolding of allegations, counter allegations and investigations into election meddling in the 2016 American Presidential elections. These occurrences have ensnared several technology, IT and social media platforms including Facebook, Cambridge Analytica and Twitter just to mention a few.

of personnel, logistics and the use of technology which had improved the credibility of elections in the country in recent times. “Security remains an issue in the country; we are facing new security challenges that require more imaginative response by the commission. Drawing from the experience of 2015 we task our state resident electoral commissioners, (RECs) nationwide to identify areas of population dislocation, particularly IDP camps, so that there would be appropriate response”. “The Commission will ultimately introduce electronic balloting which shall happen in a short period of time. The commission has improved the deployment of personnel for election; addressed some of the intractable challenges to the functionality of new technological innovations for elections and able to collate transmit declared election results more accurately and speedily,” he said.

PDP moves to woo voters, begins sensitisation tour in A/Ibom ANIEFIOK UDONQUAK, Uyo

head of the 2019 general elections, the Peoples Democratic Party (PDP), in Akwa Ibom State has begun a sensitisation tour of all the ten federal constituencies in the state in an effort to woo voters to enable it win the forthcoming polls. The party has remained in power since 1999 controlling all the 26 seats in the state assembly and electing all the three senators on the platform of the party. Ikot Abasi Local government area of the state was the first port of call for the Ikot Abasi/Mkpat Enin/ Eastern Obolo federal constituency in which Paul Ekpo, the party chairman repressed the readiness of party to consolidate its powerbase in the state. The tour which was planned to inaugurate local government area caucus for the federal constituency respectively, was also used to present the party’s register and membership cards for registration of new members and revalidation

of old members. Ekpo said the party is determined to rescue Nigeria adding that it has taken has taken steps to return power to the people by ensuring strict adherence to the zoning principles, to reinvigorate confidence and restore a sense of ownership of the party to the people. “The business of taking the party back to the people has become necessary because the party primaries and elections are closer. The only way we can rescue Nigeria is to return the party to the people and there must be synergy at various levels of the party for us to easily achieve this set goal,’’ he said. Ekpo, who acknowledged the hard work of the various groups including the women in total solidarity with Governor Udom Emmanuel and his re-election bid, however, noted that the party would not jettison its zoning and streamlining position which will give room for power balancing and political inclusion. He advised the party faithful to

ensure the presentation of candidates that will be able to win the general election for PDP. Recounting the party’s strides from inception, the State PDP Chairman said the tour was apt, timely and aimed at consolidating the party for the forthcoming general elections. On the recent killing in the middle belt of Nigeria, Ekpo who ordered for some minutes of silence in honour of the slain Nigerians by the herdsmen said that all Chapters of PDP in the country have hoisted its flags at half mast to mourn the victims of the herdsmen attack. The state chairman urged the newly inaugurated local government area caucuses to endeavour to enrol in the ongoing continuous voter registration exercise and also ensure they get same, maintaining that “It is your unit result that will promote you and the party.’’ Highpoint of the event was the presentation of party register and membership cards to the Chairmen of three chapters for onward distribution to new members.

Nigerian youths not ready for governance, need reorientation, says Activist INIOBONG IWOK

espite the recent signing of the ‘#NotTooYoungToRun’ bill into law by President Muhammadu Buhari, an activist, Idowu Omolegan, has said that Nigerian youths were not ready for leadership positions, stressing that they need a total reorientation. Omolegan stated this in an in-

terview with BusinessDay, while advocating for a value reorientation starting from primary schools across the country, adding that recent experience of youths who occupied public offices in Nigeria had shown that they were more corrupt than the older generation. Speaking further, the activist expressed fears for the future of the country, stressing that the monetisation of the electoral process in the

country had further encouraged fraudulent individuals into politics. “What we need is a total value reorientation for the youth, and this should be done starting from the primary school. But I can tell you that the youth are not ready for leadership position, they would be worse than the older generation. Do we have credible ones? I have not seen any,” he said. “Look at in the Senate, some if

them were drug barons before they found their way in the Senate; everybody has skeletons in their cupboard, but our youths are corrupt; Buhari recently described them as lazy and everybody was talking, but look at the ones that have held positions in the past; what was their record? These are the people you want to leave governance of the country in their hands,” Omolegan said. He said the ‘NotTooYoungToRun’

law may not achieve the much desired impact because of the ‘difficult’ political terrain in the country, which few youths could endure. “What has happened over the years is that the way we play politics here has encouraged fraudulent people and I can say that the ‘Not too young to run’ act would fail because of the obvious situation here which few youths can be involve,” he further said.

BUSINESS DAY

Tuesday 03 July 2018

Live @ The Stock Exchange Top Gainers/Losers as at MMonday 02 July 2018 GAINERS Company MOBIL

Market Statistics as at Monday 02 July 2018

LOSERS Opening

Closing

Change

Company

Closing

Change

ASI (Points)

7,946.92

DEALS (Numbers)

3,308.00

N183

N199.9

16.9

N229

N224.1

-4.9

N97.75

N99.05

1.3

N32.85

N29.65

-3.2

N32

N32.8

0.8

N114.2

N113.1

-1.1

VOLUME (Numbers)

JBERGER

N27.5

N28.05

0.55

GUARANTY

N40.5

N40

-0.5

VALUE (N billion)

CILEASING

N2.07

N2.27

0.2

ZENITHBANK

N25

N24.6

-0.4

MARKET CAP (N Trn

GUINNESS FLOURMILL

DANGCEM

Opening

Dangote Cement, Forte, Nigerian Breweries, others cause stock market to downtrend …as market sheds N120bn Stories by IHEANYI NWACHUKWU

igeria stocks tumbled on Monday as investors waved off stronger than expected first-half (H1) numbers and focused on fears of increasing political risks. The Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by 0.87percent, while the Yearto-Date (ytd) stood negative at 0.77percent. Only 16 stocks gained as against 20 losers. The stock market routed south despite that value stocks like GTBank Plc, Access Bank Plc, Lafarge Africa Plc, UACN Plc, Seplat Plc, among other companies have issued notices for their closed period ahead and board meetings which will be followed by the release of their H1 scorecards. Also, Flour Mills of Nigeria Plc in a dividend notice at the Nigerian bourse will be rewarding investors with N1

final dividend per share. The All Share Index closed at 37,946.92 points as against the preceding day close of 38,278.55 points while Market Capitalisation closed at N13.746 trillion against previous close of N13.866 trillion, a decline of N120billion. Despite their weakened sentiment indicator, Afrinvest research analysts expect sentiment in the domestic market to improve and remain upbeat this week, “thus buoying market per-

formance.” Dangote Cement led the losers table after its share price declined from N229 to N224.1, down by N4.9 or 2.14percent, Forte Oil Plc followed after its share price moved down from N32.85 to N29.65, down by N3.2 or 9.74percent. Nigerian Breweries Plc also lost, from N114.2 to N113.1, down by N1.1 or 0.96percent. GTBank Plc declined from N40.5 to N40, down by 50kobo or 1.23percent; while Zenith Bank Plc

declined from N25 to N24.6, losing 40kobo or 1.60percent. On the gainer table of 16 stocks, Mobil Nigeria Plc rallied most from N183 to N199.9, up by N16.9 or 9.23percent; followed by Guinness Nigeria Plc rose from N97.75 to N99.05, up by N1.3 or 1.33; while Flour Mills Nigeria Plc stock price rose from N32 to N32.8, up by 80 of 2.50percent. The volume of stocks traded decreased by 45.41percent, from 469.34million to 256.22million, while the total value of stocks traded decreased by 68.02percent, from N5.81billion to N1.860 billion in 3,308 deals. Sterling Bank Plc, FBN Holdings Plc, Wema Bank Plc, and United Bank for Africa Plc were actively traded stocks. In all, the Financial Services sector led Monday’s activity chart with 203.1million shares exchanged for N1.13billion; followed by Services with 13.04 million shares traded for N29million.

Union Bank launches youth mentorship project

s part of its Corporate Social Responsibility (CSR) initiatives, Union Bank has announced the launch of the We Lead Mentorship Project (WLMP), an 8-month youth mentorship programme, in Igbodo, Delta State. Sponsored by Union Bank and implemented by Rural Development and Reformation Foundation (RUDERF) in conjunction with the Igbodo Development Union (IDU), WLMP is a community based mentorship program that utilizes local human resources and trained mentors to build and strengthen community youths using a structured curriculum. The project is designed

to address societal issues ranging from illegal migration to violence, extremism and other vices. Another key part of the project is the establishment of a book club in the community to encourage a reading culture among Igbodo youths. At the end of the extensive project, the participants

are expected to have benefitted from mentorship, economic empowerment and leadership development opportunities. Speaking at the official launch of the project to an audience that included Ikechukwu Osedume, the Obi of Igbodo Kingdom among other dignitaries, Union Bank’s Head of Transformation, Joe Mbulu stated the need to harness the power of community-based mentors to raise young and purposeful leaders for global impact. He added: “Union Bank remains deeply committed to improving the lives of the youth of Nigeria. This is why we are investing in education, financial inclusion and talent development, all of which are

important pillars of our Corporate Social Responsibility strategy. We believe that the We Lead Mentorship programme and others such as this that we are investing in, will go a long way in making the lives of the youths in our communities better as they strive for a brighter future.” According to a statement by RUDERF, “The goal of the project is to enlighten and groom young people from Igbodo community to shun the appeal of illegal migration and channel their talents and focus towards selfdevelopment for leadership through mentorship and orientation initiatives specially designed to reduce the prevalent trend in several Nigerian communities.”

256,228,550.00 1.859 13.746

Standard Bank pioneers gamechanging African trade gathering

tandard Bank is escalating its highly successful transregional trade and business conferences into a broadly inclusive panAfrican initiative aimed at driving collective growth across the continent. Announcing that this year’s Trans Regional Conference is to be held in Lagos from 1 -4 July, Standard Bank will invite clients from across the continent to participate alongside key government officials, legislators, and representatives of regional growth and development bodies. Standard Bank has hosted two previous conferences in2016: in Accra focusing on West Africa, and in Nairobi focusing on East Africa. These separate gatherings brought together clients and key Standard Bank trade experts and client relationship managers from the countries in each of these regions. “Our previous conferences showed us the scale of the opportunity for growing intra-African trade, especially the potential for cross-border trade, to change the growth trajectory of the continent,” said Zweli Manyathi, Chief Executive PBB at Standard Bank. In addition to providing critical insight into how best to help clients leverage Africa’s full crossborder potential, “we also realized that increasing trade was a pan-African, and not just a regional opportunity, for the continent,” he added. Standard Bank’s broad and established footprint across the continent, as a universal financial organisation, its sector expertise and networked global capital market presence, including high level access to the Chinese banking system, means that, “gatherings of this nature can assemble, identify and unlock key intra-African trade and business opportunities – on a scale wide enough to transform Africa’s growth and development trajectory,” said Manyathi.

On average, regional trade accounts for about 50% of most regions’ trade flows. In Asia - the world’s fastest growing region - regional trade accounts for up to 70% of some countries’ trade flows. Since intra-regional trade in Africa currently accounts for only 12% of trade flows, Standard Bank has identified the rapid promotion of continentaltrade as a key priority in achieving the kind of growth that will transform the lives of ordinary Africans. If the continent can increase trade between African countries to the global average - that is from 12% to 50% - the continent will be far less reliant on global trade and investment for its own growth. This will also mean that, for the first time in history Africa will be able to set and drive its own investment and growth agenda – independently. By pioneering the dialogue across Africa’s broad trade, corporate and commercial ecosystem, facilitating partnerships for business development and boosting intra-Africa trade, Standard Bank hopes to build the foundations of sustainable long-term intraAfrican trade growth in sub-Saharan Africa. “An additional feature of this year’s conference will be a focus on leveraging Africa’s special relationship with China,” added Manyathi. The Industrial and Commercial Bank of China, the world’s largest bank, holds a 20% shareholding in Standard Bank, Africa’s largest bank. This critical institutional relationship has resulted in various initiatives across the continent - from Renminbi trading, to Africa-China business centers, and landmark deals – that collectively constitute Standard Bank’s AfricaChina trading corridor. Driving Africa’s growth means not only connecting Standard Bank clients to opportunities in Africa but also increasing general trade between African countries.

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Flour Mills’ leverage ratio Improves as profit spikes BALA AUGIE

lour Mills of Nigeria Plc is solvent and there are no threats to going concerns as the company’s debt has reduced, evidenced by improved leverage ratio (see Chart). An improvement in debt to equity ratio or gearing ratio makes it easy for the largest miller in Africa’s largest economy to obtain new loans to from banks to finance future projects. Analysts are upbeat that the right issue exercise embarked upon by the company will further result a reduction in solvency risk, bolster earnings, underpin working capital position and reduce borrowing costs. For the year ended March 31 2018, Flour Mills’ debt to equity ratio fell to 72.45 percent as against 151.65 percent recorded as at year ended March 2014. See Chart. This means the proportion of debt in the capital structure has reduced, paving the way further growth in profitability. Total debt (long and short term borrowing) fell to N109.11 billion in March 2018 from N125.05 billion as at year ended March 2014. Times coverage ratio stood at 1.48 times or 1.5 times operating profit, which means the company’s earnings before interest and tax can cover interest expenses. The ratio is an improvement from 0.404 times earnings in 2016. A times coverage ratio of 1.5 times is generally con-

sidered to be a bare minimum acceptable ratio for a company and the tipping point below which lenders will likely refuse to lend to the company more money, as the company’s risk for default maybe perceived to be too high. Flour Mills has been able to clear the backlog of dollar debt owed to suppliers or creditors as trade and other payables declined by 40 percent to N57 billion as at year ended March 2018 from N94.96 billion year ended March 2017, thanks to the relative stability in the foreign exchange market. The current liquidity position of consumer goods firms operating in the country has improved since the introduction of the new foreign exchange regime in June 2017. The combination of the foreign currency regime combined with a rebound in crude oil price and output helped the country exist its first recession in 25 years. The economy grew by 1.95 percent in the first quarter lifted by the oil sector. That was a slight dip from 2.11 percent year-on-year in the final quarter of 2017. The economy shrank 0.91 percent in the first quarter of 2017, according to the National Bureau of Statistics (NBS). Flour Mills’ sales hit an all time high of N542.67 billion in March 2018, from N301.94 billion it recorded in 2014. The growth at the top line (Sales) was largely driven by to growth in product mix and an increase in price of key product to compensate for higher production costs.

BD MARKETS + FINANCE (Business Team lead: PATRICK ATUANYA - Analysts: BALA AUGIE and LOLADE AKINMURELE)

The company has been able to manage direct cost attributable to projects as gross profit moved to N86.77 billion in year end March 2018 from N43.65 billion as at year end March 2017. Gross profit margin increased to 12.70 percent as at Year end March 2018 as against 11.51 percent as at Year ended March 2015, which means the firm has enough revenue left after deducting cost of goods sold. Ne t ma rg i n , a n o t h er measure of efficiency, moved to 2.51 percent in the period under review as against 1.68 percent as at year ended March 2017. This means the company has been able to turn each Naira invested in sales into higher profit. Earnings before interest and taxation (EBIT) increased to N48. 42 billion as at year ended March 2018 compared to N19.35 billion as at year ended March 2014. Valuation and Share Performance Flour Mills share price has gained 33.60 percent in the past one year, outperforming the Nigerian Stock Exchange All Share Index of 20.83 percent. It share price closed at N32.15 as at 2:00 pm as of Friday, valuing it at N131.21 billion. It has a price to earnings ratio of 6.68 times while its price to sales ratio stood at 0.15 times. The company has shares outstanding of 4.10 billion while total shareholders’ fund stood at N150.61 billion as at year ended March 2018. Historical Background Flour Mills of Nigeria Plc (FMN) was incorporated on 29th September 1960 as a private limited liability company converted to a public company in November 1978. The group is primarily engaged in flour milling; production of pasta, noodles, edible oil and refined sugar; production of livestock feeds; farming and other agro-allied activities; distribution and sales of fertilizer; manufacturing and marketing of laminated woven polypropylene sacks and flexible packaging materials.

Tuesday 03 July 2018

BUSINESS DAY

38 BUSINESS DAY NEWS

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Tuesday 03 July 2018

Brewers’ market share to change as Golden... Continued from page 1

of Golden Guinea Breweries Plc and the re-introduction of its brand of drinks.

L-R: Justina Lewa, company secretary and chief legal counsel, Sterling Bank plc; Damilola Adetunji, panellist, and Monday Ubani, principal partner, Ubani & Co, during the Nigerian Bar Association 12th Annual Business Law Conference in Abuja.

Millions of smallholder palm oil farmers... Continued from page 1

and smallholder millers. Sources told BusinessDay that the company made little progress in meeting the inherited obligations and left in 2016 when a new owner Imo VTU emerged. After taking over the management of Adapalm in 2017, Imo VTU is yet to listen to the complaint of small-scale millers who are heavily indebted by

former Adapalm, smallholder millers based in Ohaji/Egbema axis of Imo State said. Currently, Imo-VTU does not supply FFBs anymore because it does not even have enough for internal use, insiders told BusinessDay. “This has become a big challenge to communities in Ohaji/Egbema. In Umuagwo, a lot of youths and millers whose money are stuck in Adapalm are no longer in business,” a small-scale miller Lazarus Ifeanyi told BusinessDay. Jude Oparah, operations manager, Imo-VTU Oil Palm, told BusinessDay that the deal was not between Imo-VTU and smallscale millers. Apart from these debts, thousands of five-litre gallons of palm oil produced by small-scale millers in the country are stored in several warehouses today without buyers due to unbridled smuggling that has kept oil prices abysmally low. A five-gallon litre of palm oil is currently sold between N7,000 and N9,000. It is even significantly lower in Akwa Ibom and Cross River where prices are below N5,000. Companies using palm oil for manufacturing are increasingly turning their attention to smuggled palm oil because it is cheaper, but this has an adverse impact on millers, some of which

are shutting down. BusinessDay visited many palm oil millers in Imo, Anambra and Akwa Ibom and found that some of the plantation owners plant a specie of oil palm known as ’Dura’, which does not produce much oil. Only few have ‘Tenera’ specie which is more productive. For instance, while Dura produces 75 litres of oil at one press of a machine button (in 10 minutes), Tenera produces 125 litres, according to Benson Umeh, CEO of Daddy IK Palm Oil Mills, located in Umuagwo, Imo State. More so, many small-scale millers are still stuck in crude machines despite being responsible for 70 percent of output in the country. They are willing to buy motorised or mechanised tools and own their own plantations to guarantee regular supply of FFBs but are hindered by poor funding and absence of formal finance scheme. They claim that the Central Bank of Nigeria (CBN) promised to fund palm oil as part of its Anchor Borrowers Scheme but is reluctant because palm oil has a gestation period of five to seven years. “Each region has a flagship product. Cocoa is to the SouthWest what palm oil is to the SouthEast and South-South,” Remi Emeh, a miller and CEO of Remi Emeh Enterprises, said. “Palm oil is even more important than many crops, including rice, because nothing in it is lost. You get palm oil, palm wine, palm kernel oil, power, palm olein, stearin, technical palm oil, and many other things. So, we call on the government and the banks to provide cheap funds for this sector. We have the capacity to meet local demand here,” Emeh added.

Presco, Oando, NEM Insurance record highest... Continued from page 1

increased by 431 percent between 2016 and 2017 which helped propel Linkage Assurance to sit among the top 5 best performers on the earnings chart. Fidson Healthcare is the only healthcare company to make the top 10 best performers list. The company averaged an annual profit growth of 61.75 percent between 2013 and 2017, placing them com-

fortably in fifth position. Other companies who made the top 10 best performers in a descending order include Guinea Insurance, C&I Leasing, Capital hotel, Okomu oil and Dangote Sugar. The companies recorded an impressive annual average earnings growth between 37 and 58 percent. Interestingly, only 3 companies among the top 10 best performers are among the NSE 30 companies. The 3 three companies who made

Nigeria produces 900,000 metric tonnes (MT) to 1.3 million MT of palm oil, with national demand standing at 2.1 million MT. Large and established firms such as PZ Wilmar, Okomu and Presco cultivate about 400,000 hectares of land, while smallholders farm above 900,000, according to Henry Olatujoye, national president, National PalmProduce Association of Nigeria (NIPPAN). In Akwa Ibom State, particularly in Okim-Ejijor village, Ikom Local Government Area, oil palm plantation owners have a lot of FFBs but no buyers, prompting many of them to sell off their palm trees for less than N20, 000. The industry is disorganised, with a lot of middlemen and speculators buying when prices are low and selling when demand rises. Palm oil peak period is October to March. When BusinessDay visited Anambra/ Imo Produce Association at Ihiala, it found only few traders complaining of low patronage, saying that Kano traders no longer come to buy because they get smuggled Malaysian oil. Nobody was found at Uli Plam Produce Beach and no transaction was taking place when BusinessDay visited. However, Chinese investor Zhengzhou QI’E Grain and Oil Machinery Co Limited has approached the Oil Palm Growers Association of Nigeria (OPGAN) for partnership. Igwe Hilary-Uche, president of OPGAN, told BusinessDay exclusively that the company wants to provide hi-tech machineries to small-scale millers, provide funds and enter an off-taker agreement with them. “They are planning

to invest something around $10 million and wants to export palm oil from here,” Uche said. Five states have been picked for a pilot project: Anambra, Imo, Akwa Ibom, Cross River and Ogun, according to Uche.

the top 10 list are Presco (1st), Okomu Oil (9th) and Dangote Sugar (10th). Smaller sized firms outperformed the larger companies in earnings growth as these companies continue to grow their market share and increase their customer base unlike the more matured companies that find growing earnings at high double digits a daunting task considering that their markets are almost saturated and new customer acquisition is very difficult.

BusinessDay visited the brewery located on Aba Road, Afara Layout, Umuahia in Abia State for an on the spot assessment of various works ahead of its re-commissioning and products rollout anytime from August. The Nigerian brewery industry is dominated by three brewing giants that are subsidiaries of key global brands – Nigerian Breweries (Subsidiary of Netherlandsbased Heineken International), Guinness Nigeria (Subsidiary of Diageo, England), and SABMiller (Subsidiary of AB InBev, Belgium). Nigeria boasts of youthful population and the growing middleclass, potent factors that are propelling growth in the country’s brewery industry. Each of the three brewing giants has numerous brands that compete for consumers’ patronage in the market. Over the last five years, the brewery industry has revealed a somewhat zero-sum scenario as Nigerian Breweries (NB) continues to grow market share each year, while Guinness Plc (Guinness) records the opposite – a shrinking market share. SABMiller has however not relented in its effort to carve out a part of the market for itself in the increasingly competitive industry. Interestingly, Golden Guinea Breweries Plc said its newly installed equipment has capacity of producing 48,000 bottles per hour which represents 1.15million

bottles per day, saying it is twice the capacity of the old equipment which produced 24,000 bottles, and more than double that at Nigerian Breweries’ Ama, Enugu plant and SABMiller’s Intafact Beverages in Onitsha. Nigeria’s beer market has been rated one of the 10 fastest growing beer markets in the world. Nigerian Breweries has maintained its grip on the brewery sector in Nigeria, having grown its market share by close to 10 percentage points in 7 years as its market share rose from 62.96 percent in 2010 to 71.47 percent

in 2016, according to report by Businessday Research & Intelligence Unit (BRIU). The market share of Guinness dropped by 14 percentage points in 7 years, from 37.04 percent in 2010 to 23.23 percent in 2016. In an industry with an estimated turnover of N295billion, Guinness’ market loss appears to be NB’s gain as SABMiller mounts persistent challenge. Until recently, when the world’s largest brewers AB Inbev made an inroad into the breweries sector with an intent to leverage its financial and technical strength and exploit its brand equity to drag market share, many had wondered whether the country’s brewery industry was heading towards a monopoly. The latest in the interesting challenge line this year is the re-entry of Golden Guinea Breweries Plc. Continues on wwwbusinessday online.com

Court declares Dasuki detention illegal, ... Continued from page 1

in like sum. This will be the fifth time the detained former NS A to ex-President Goodluck Jonathan will be granted bail since he was detained in 2015. Before now, Dasuki had been granted bail by Justices Ademola Adeniyi (trd), Ahmed Mohammed, Hussein Baba-Yusuf and Peter Affen in various criminal charges both at the Federal High Court and the High Court of the Federal Capital Territory (FCT). The court, in a judgement that was delivered by Justice Ijeoma Ojukwu, held that FG failed to justify why it has kept Dasuki in custody of the Department of State Service, DSS, for over two and half years.Justice Ojukwu dismissed FG’s claim that the ex-NSA was being detained for the sake of national security and over alleged role he played in the illegal diversion of $2.1billion meant for the purchase of arms to fight against Boko Haram insurgents. “The allegation of money laundering does not ipso facto affect the national security,” Justice Ojukwu held, declaring the protracted detention of the ex-NSA since December 29, 2015, in disobedience to orders of various trial courts, as “an aberration of the rule of law.” The court held that FG’s action amounted to gross violation of Dasuki’s fundamental right to liberty, adding that “the period of detention of the Applicant has become unreasonable.”

It lambasted FG for relying on purported ongoing investigation to perpetually retain the ex-NSA in custody despite various court orders that gave him bail. Justice Ojukwu said Nigeria could not wish to be seen like other democratic nations when its government continues to shun the legal architecture, saying “democracy cannot function if respect for the rule of law is still tottering on one leg.” The court held that the burden of proving the legility of the detention of an accused person was on the detaining agency. It held that Dasuki’s likelihood of jumping bail was short-circuited by the fact that all his travelling documents were previously seized by the trial courts. Besides, Justice Ojukwu dismissed FG’s contention that the fundamental right enforcement suit the detained ex-NSA lodged before the court amounted to “forum shopping.” The court noted the FG had in its own affidavit, claimed that Dasuki’s detention was based on fresh allegations not connected with matters for which he was previously granted bail. It held that the instant case by Dasuki was distinct as it was based on his continued illegal detention without trial. Consequently, Justice Ojukwu granted fresh bail to the ex-NSA to the tune of N200million with two Continues on wwwbusinessday online.com

Tuesday 03 July 2018

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NEWS

hampering Not Too Young To Run BUSINESS DAYlaw 39

P. 4

in association with

Egypt to investigate team World Cupnational Result World Cup expenses Sweden 1 - S/ Korea 0

ANTHONY NLEBEM, Reporting from Moscow

Belgium 3

team in Russia, on charges of misuse of state funds, allocated for the national team’s stay in the Chechen capital Grozny,” the news portal quoted a spokesperson for the Prosecutor General’s Office as saying. The lawsuit, submitted to the Prosecutor General’s Office by Egyptian attorney Muhammed al-Nimr, states that “the EFA leadership misappropriated $1.8 million, allocated for Egypt’s stay at the training base in Grozny.” “At the same time, no fees were charged for Egypt’s stay, thanks to the support by Chechen leader Ramzan Kadyrov,” the document continues. The Egyptian team lost all the three World Cup group stage games - to Uruguay (0:1), Russia (1:3) and Saudi Arabia (1:2).

- Panama lawsuit, submitted to the Prosecutor England 2 Gen-- Tunisia eral’s Office, states

A L-R: Umar Musa Mustapha, 1st president, National Institute of Marketing of Nigeria; Tony Agenmonmen, president of the Institute; Vice President Yemi Osinbajo, and Femi Oyewole, 2nd vice-president of the institute, as the National Institute of Marketing of Nigeria paid a courtesy visit to Vice President Yemi Osinbajo, and presented to him the communique issued at the end of its last AGM, themed “Marketing Nigeria in Abuja.

Nigerian automotive sector receives boost as Edo hosts CEOs of BMW, Nissan, Toyota, Volkswagen, others

… as 36 CEOs of leading global auto brands arrive Benin Wednesday

fforts by the Godwin Obaseki-led administration to harness the vast economic opportunities in the global auto industry through the state’s economic diversification strategy have begun yielding result, as 36 CEOs of leading global auto brands and component suppliers, arrive Benin City on Wednesday. The high-profile meeting between the Edo State government and chief executives of German, Japanese, American, British and other European top-range car manufacturers will focus on the emerging investorfriendly climate in the state and how the companies can leverage the socio-economic offerings in the Benin Industrial Park by locating their assembly plants in the

facility. The 36 CEOs overseeing the Africa operations of their companies, include those of BMW, NISSAN, Toyota, Volkswagen, Ford, Bosch, Jaguar, and Deloitte, a consulting company, and Uber, among others. The governor said, “The one-day event will discuss our agenda for the auto sector and the opportunities we are creating for investors.” He added, “During the meeting, we will showcase the Edo State’s auto trading site on Sapele Road and the future trading site at the Industrial Park also on Sapele Road. “There will be a session to discuss government’s blueprint for the automotive sector which includes job creation for Edo people, the local sourcing of car components

amid an environment of high exchange rate regime and volatility, which have made local sourcing of components cost-effective.” The automotive investment forum follows a recent $500 million auto assembly plant deal with Chinese investors. The growing investor confidence in the state stems from market-oriented reform of the Obaseki administration, driving the industrialisation of the state. The governor explained that his administration was vigorously pursuing the goal to turn the state into an industrial hub and a major investment corridor by strengthening the state’s security architecture and reform of critical business-support institutions to improve the ease of doing business.

FG directs more local content impact on deepwater projects of IOCs OLUSOLA BELLO & HARRISON EDEH, Abuja

ederal Government has directed International Oil Companies (IOCs) in Nigeria to ensure that deepwater projects embark upon by their respective companies have more impact on local content to ensure more jobs in the oil and gas value chain for Nigerians. Speaking at the ongoing Nigerian Content Seminar in Abuja on Monday, with the theme: ‘Driving Nigeria’s Oil and Gas Industry towards Sustained Economic Development and Growth,’ Simbi Wabote, executive secretary, Nigerian Content Development and Monitoring Board (NCDMB), said the Federal Government was determined to advance domestication of local expertise in key areas of the oil and gas sector. According to Wabote, government has made lots of progress in local content development in the country since the Act came into effect in 2010. Listing some of the achievements harvested by the government as a result of the Local Content Development, he said, “We have engaged the

Nigerian National Petroleum Corporation on in-country capacity utilisation to prioritise in-country capacity utilisation as a way of patronising them, while complementing their efforts.” He remarked further that the Nigeria Local Content Development and Monitoring Board had also facilitated the promotion of local content industrial parks across the country, adding, “Work has commenced in two of the parks, one in Bayelsa and the other in Cross River State. Architectural and designer works are also ongoing in the parks in Akwa Ibom and Imo State.” Wabote also pointed out that the NCDMB had also made public lists of opportunities for local content, adding that the board was also planning local and international opportunity fair to showcase more opportunities for stakeholders’ participation in the country. Speaking further, he said the Research and Development fair organised in respect to innovative ways of driving the sector had yielded positive results in innovative push for local content participation in

the country. ”Other key projects such as the General Electric Project in Calabar, when completed will facilitate more local content participation in the country and ensure that major repairs of gas turbines and other key ancillary services are done incountry, to save costs and also provide more opportunities for the locals. Egina Oil and Gas project is already impacting the sector greatly, and impacting on the economy also,” he said. Nigeria it would be recalled is beginning to reap from the local content participation since the signing of the Nigerian Local Content Act. Until a few decades ago, the key players in almost all the key sectors of Nigeria’s Oil and Gas Industry were the IOCs. Mainly from exploration to production, refining and trading, the main actors were foreign multinationals. Industry stakeholders say Egina is already taking advantage of Nigeria’s local content law and participating deeply in the Total’s deep-water developments, which is the third project of its kind developed by Total in Nigeria, after Akpo and Usan.

FG reiterates MSMEs’ importance to national economy OWEDE AGBAJILEKE, Abuja

ederal Government has reiterated its commitment to promoting Micro, Small and Medium Enterprises (MSMEs) in the country. To this end, the government has indicated its interest to organise the maiden edition of the National Micro Small and Medium Enterprises (MSMEs) Awards. Tola Adekunle Johnson, special assistant to the Vice President on MSMEs who made the announcement at a press conference in Abuja on Monday, said the event would hold on August 2, 2018. The award, which he said, holding in Abuja, will be cash-backed and aimed at encouraging MSMEs in the country. According to Johnson, the award will be in 12 categories namely: MSME of the Year, Young MSME of the Year, Most Friendly MSME State, Excellence in Creative Arts, Excellence in Agriculture, Excellence in Manufacturing, Excellence in Manufacturing, Excellence in Technology Innovation and Excellence in Fashion and Style. Others are Excellence in Leather Works, Excellence Furniture and Wood Works, Excellence in Beauty, Wellness and Cosmetics as well as Excellence for Non-Profit Service to Humanity. He listed the criteria to include: outstanding business concept, locally produced goods, use of local technology, provision of conducive atmosphere for MSMEs to thrive among others. The nominations will commence from July 4 to 13, 2018, he said, pointing out that it would be national programme that would hold annually. He added that the Vice President has held discussions with over 300,000 MSMEs across 17 states of the Federation.

that “the EFA leadership misappropriated $1.8 million allocated for Egypt’s stay at the training base in Grozny.” Egyptian Prosecutor General Nabil Sadek on Saturday ordered to launch an investigation into possible inappropriate expenditures by the country’s football association during the 2018 FIFA World Cup in Russia, Erem News reported. “The Prosecutor General tasked the Cairo Prosecutor’s Office with launching an investigation against the Egyptian Football Association and the delegation that accompanied the national

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FG sacks Pinnick’s led NFF executive committee, endorses Giwa

inistry of Youth and Sports on Monday directed the Nigeria Football Federation (NFF) to comply with the judgment of the Supreme Court that set aside the election into the Executive Committee of the Federation held on September 30, 2014, according to a statement from Nneka Ikem Anibeze, special assistant on media to the minister of youths and sports, Solomon Dalung, on Monday in Abuja. According to the statement, the Supreme Court verdict restored the orders of the Federal High Court that set aside the purported election of the current Executive Committee of the NFF. The statement reported Dalung as saying that the directive followed a written notification from the Attorney-General of the Federation and minister of justice requesting the Federal Ministry of Youths and Sports to ensure compliance. “I have been directed to notify you of the Orders dated June 5th 2018 made by Honorable Justice M. H. Kurya, sitting at the Federal High Court Jos in respect of the above mentioned suit between Yahaya Adama Vs Aminu Maigari.” The order states that the elec-

tion of the NFF held on August 26, 2014 under the leadership of Chris Giwa be recognised pending the hearing and determination of the motion on notice filed in the case. The court order added that the purported ban of the Giwa-led Executive Committee, elected on Aug. 26, 2014 from football activities of the NFF was unconstitutional, null and void. “It is trite law that court orders are sacrosanct and any acts of disobedience to it constitute threat to the rule of law. “Consequent upon the above, you are hereby advised to comply with the orders of court made therein which for now, is the valid and binding order of court, in the absence of any other subsisting order or judgment to the contrary,’’ it read. Dalung, however, in the statement, directed the parties involved to comply with the order. “This is a court order and not from Dalung. I will not want to go to Kuje Prison because of disobedience of court orders. “Therefore, I hereby comply with the court orders of June 5, while Amaju Pinnick (NFF president) and others are also directed to comply with same.”

Neymar shines as Brazil beat Mexico for quarterfinals ticket

eymarscoredhis57thgoal for Brazil and grabbed an assist as they sealed their place in the quarter-finals after a 2-0 win over Mexico. Mexicans, who started with 39-year-old Rafael Marquez, madeagoodstartbutwereunable to convert their chances. The Selecao ended the half stronger with Neymar and Philippe Coutinho forcing Guillermo Ochoa into good saves. But the keeper could not do anything to prevent the PSG forward breaking the deadlock after backheeling the ball to Willian who flashed in a cross for him to

score from close range. The five-time World Cup winners went up a gear and dominated the rest of the game as the Mexicans tired with Willian and Neymar going close. Neymarcontinuedtobeinthe thick of action as he appeared to have his ankle trod on by Miguel Layun who was trying to retrieve the ball and was fortunate to escape a red card. And the former Barcelona man was involved in the second goal to seal victory, with his poke towards goal falling to substitute Robert Firmino to tap the ball into an empty net.

Tuesday 03 July 2018

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BUSINESS DAY

FINANCIAL TIMES Merkel faces migration showdown with coalition partners

Trade jitters spark broad gains for the US dollar Page A7

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World Business Newspaper

Dell in $22bn return to public market 5 years after going private Technology company has agreed to buy out its own tracking stock JAMES FONTANELLA-KHAN

ell has agreed to buy out its own tracking stock for $21.7bn in a move that will return the sprawling technology company back to public markets five years after its founder took it private. The deal announced on Monday will give Michael Dell and his financial partner Silver Lake, the tech-focused private equity group, greater control of VMware, the data centre company it already controls. By taking Dell back on to public markets — after a contentious $25bn buyout five years ago — one of the world’s largest tech companies will have the possibility to manage and reduce its large debt pile. Under the terms of the deal Dell will exchange each share of its “Class V” tracking stock for 1.3665 shares of

Dell Technologies Class C common stock, or at $109 in cash — up to and not exceeding $9bn worth of cash. The offer, which will give Class V shareholders between 20 and 30 per cent ownership of Dell, represents a 29 per cent premium to the closing price of the tracking stock before the announcement and values VMware equity at $48.4bn. “Unprecedented data growth is fuelling the digital era of IT, and we are uniquely positioned with our portfolio of technologies and services to enable the digital, IT, security and workforce transformations of our customers,” said Mr Dell, who currently controls 72 per cent of the company. “Most importantly, I remain deeply committed to this company and working with our world-class team to build the long-term value of Dell Technologies and its businesses.”

EU warns of $300bn hit to US over car import tariffs Brussels responds to Trump’s threat, warning of global retaliation and full-blown trade war JIM BRUNSDEN

onald Trump’s threat to hit car imports with punitive tariffs risks sparking global retaliation against as much as $300bn of US products, Brussels has warned. The warning is the first time that the European Commission, in a written submission to the US Department of Commerce seen by the Financial Times, has set out a detailed response to Mr Trump’s threat to slam punitive tariffs on imported vehicles, with EU capitals increasingly convinced that the unpredictable US president will act soon. Mr Trump on Sunday said that the EU was “as bad” as China when it came to the way European countries traded with the US. In an interview with Fox News he dismissed suggestions that his attacks on the EU were counterproductive and that he should instead strengthen relations with European countries to tackle the Chinese trade issue together. “The European Union is possibly as bad as China, just smaller . . . It is terrible what they do to us,” Mr Trump said, citing “the car situation”. Brussels said that an American investigation into whether foreign cars and parts posed a national security risk could plunge the global economy into a full-on trade war, harming employment in the US’s auto sector, which accounts for more than 4m jobs. In a sign of the EU’s exasperation at Mr Trump’s confrontational trade policy, which has already stoked ten-

sions over steel and aluminium, the document said the move “could result in yet another disregard of international law” by the US. It said imposing the car tariffs would not be accepted by the international community and would “damage further the reputation” of the US. Mr Trump said in a tweet last month that European car manufacturers faced punitive duties if barriers to US exports were “not soon broken down”. General Motors was on Friday the latest carmaker to warn against Mr Trump’s threatened car tariffs, saying it would raise the prices of its vehicles by thousands of dollars, undermine its competitiveness and lead to US job losses. BMW, the German carmaker that exports 70 per cent of vehicles from its largest plant in South Carolina, also warned that it could cut investment and jobs if the tariffs are imposed. This week global automakers warned that imposing the tariffs on car imports would raise prices of imported vehicles by up to $6,000 per car and lift prices of locally made cars. EU officials stressed that no decision had yet been made on how to retaliate. But the document warned that the EU and other major economies would be “likely” to apply countermeasures to “a significant volume of trade”, with as much as $294bn — accounting for 19 per cent of US goods exports in 2017 — potentially in the line of fire. The measures could apply Continues on page A2

China leads drop in global stocks on trade tensions European bourses endure testing start to the second half

ALISTAIR GRAY AND BARNEY JOPSON

hinese equities suffered one of their worst days of the year on Monday, leading a decline in Asian markets that rippled into Europe as trade war fears dominated the start of the second half. The CSI 300, a key index of big stocks listed in Shanghai and Shenzhen, closed down 2.9 per cent in its fifth-sharpest daily decline this year, according to Reuters data. Japanese and South Korea bourses both ended down more than 2 per cent, while the Europe-wide Stoxx 600 was almost 1 per cent weaker. The potential economic damage a global trade war would cause has shot to the top of investors’ concerns over the past month. On Sunday, the Financial Times reported that the European Commission warned that President Donald Trump’s threat to impose tariffs on car imports with tariffs risked global retaliation against as much as $300bn of US products.

“Asia has much to lose given that the US is the region’s biggest export market and that emerging market Asian economies are the largest exporters globally,” analysts at TD Securities noted. Although Asian markets endured the sharpest drops, European equities did not escape. France’s CAC 40 was 0.8 per cent lower in afternoon trading, Spain’s benchmark index, the Ibex 35, fell 0.7 per cent and Italy’s FTSE MIB dropped 0.9 per cent. Futures signal that the S&P 500 will fall 0.6 per cent when Wall Street opens. Meanwhile, oil was lower as Brent, the international benchmark, declined 1.2 per cent to less than $79 a barrel. The warning from Brussels was the first time the EU had set out a detailed response to Mr Trump’s threat to add tariffs on imported vehicles. Pressure on China’s bourses came alongside a further weakening in the renminbi, which in June had its worst month on record against the US dollar. By 4pm in Hong Kong the onshore ver-

sion of the currency, which trades within a 2 per cent band, had slipped 0.6 per cent to Rmb6.6335 against the dollar. Beneath the increasingly belligerent trade rhetoric between the US and China, there is also concern over signs that domestic demand in China is also slowing. A sharp drop in infrastructure spending is driving an overall decline in investment, which has led to weaker demand for outputs from China’s manufacturing sector. That was reflected on Monday in China’s government bond market, where the yield on the 10-year government benchmark slipped 1.5 basis points to 3.47, its lowest level since May 2017. “Adding to the anxiety over the trade dispute is concern at what China’s policy response will be. While an element of monetary easing is clearer for market participants to follow, a move toward managed currency weakness is a possibility, and one which could significantly complicate the picture,” said Koon Chow, strategist at UBP.

US drugmaker Pfizer raises prices on 100 products Increase contradicts Trump’s claims and threatens to fuel pharma backlash

DAVID CROW

fizer has raised the prices of 100 products just weeks after US president Donald Trump claimed the pharmaceuticals industry was about to implement “massive” voluntary reductions. In a move that threatens to fuel the backlash over the soaring cost of medicines in the US, Pfizer increased the price of some of its best-known drugs, including Viagra, the erectile dysfunction treatment, according to figures seen by the Financial Times. The increases were effective as of July 1 and in most cases were just over 9 per cent — well above the rate of inflation in the US, which is running at about 2 per cent. In remarks on May 30, Mr Trump said that “some of the big drug chains in two weeks [are] going to announce . . . voluntary massive drops in prices”. No such announcements have since transpired. Pfizer, the largest standalone drugmaker in the US, did decrease the prices of five products by between 16 and 44 per

cent, according to the figures. “The latest increases signal that it is ‘business as usual’ rather than the voluntary concessions that Trump indicated were coming,” said Michael Rea, chief executive of Rx Savings Solutions, which makes software that helps employers and health insurers lower the amount they spend on prescription drugs. The soaring cost of medicines in the US in recent years has sparked a public outcry and has become a big issue for Mr Trump, who last year accused the pharmaceutical industry of “getting away with murder”. It is the second time this year that Pfizer has hoisted the prices of lots of medicines. When accounting for a series of increases implemented in January, the price of some drugs has gone up by almost 20 per cent in 2018. For instance, the average wholesale price of a 100mg Viagra pill has gone from $73.85 at the start of this year to $88.45 as of July 1, an increase of 19.8 per cent. Although the erectile dysfunction treatment has faced competition from cheaper generic alternatives since December, some patients and doctors still

prefer the Pfizer version. The company’s website advises people to “ask for the original brand — the little blue pill” when visiting their physician. Chantix, a drug that helps people quit smoking, has gone up by 17 per cent this year, while a bottle of Xalatan eyedrops for glaucoma went from $89.38 to $107.05. Pfizer said: “The list price remains unchanged for the majority of our medicines. We are modifying prices for 10 per cent of our medicines, including some instances where we’re decreasing the price. “List prices do not reflect what most patients or insurance companies pay,” the company added, pointing out that the net price increase — which accounts for discounts and rebates — was expected to be in the “low single digits”. Pfizer said it recognised that rising “out-of-pocket” charges for patients were affecting the affordability of medicines, and said it was trying to ensure the discounts negotiated by insurers were passed on to patients. It said it had a range of financial assistance programmes for patients who struggled to afford their medicines.

BUSINESS DAY

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NATIONAL NEWS

Companies under strain from GDPR requests Businesses inundated with queries as people exercise new data rights ALIYA RAM AND HANNAH MURPHY

ust over a month after the EU introduced some of history’s toughest data protection rules, companies are being inundated with correspondence about their use of personal information, straining resources as they adapt to the

new regime. The General Data Protection Regulation, which came into effect across the EU in May, has radically reshaped how companies can collect, use and store personal information. With sweeping new rights for people to know how their data are used, and to decide whether it is

shared or deleted, businesses and regulators are being overwhelmed with complaints. Companies, which face fines of up to 4 per cent of global turnover or €20m, whichever is greater, if they fall foul of GDPR, have reported a sharp increase in questions from customers.

Facebook, which has also been hit by a damaging scandal about the leak of user data to Cambridge Analytica, said it had seen a three or fourfold increase in questions after the introduction of GDPR. “We saw a manyfold increase in contacts to my office,” said Stephen Deadman, Facebook’s data protec-

tion officer. “It spiked [after GDPR] and has halved on a weekly basis since; we’ll see whether it continues or stabilises.” Marriott, the hotel operator, has asked for extensions to the one-month response period. “We are in the process of reviewing a large volume of requests at this time and have invoked our right to extend the time period in which to respond as allowed under applicable law,” Marriott said.

Amazon delivery plan poses threat to US Postal Service growth

EU warns of $300bn hit to US over car import... Continued from page A1 “across sectors of the US economy”, the document said. The $300bn figure identified by the EU is roughly equivalent to the value of US imports of autos and parts, which last year hit $330bn. It would drop were the EU, or others, to only retaliate against part of the US tariffs, an approach that Brussels used last month to respond to US duties on the metals sector with tariffs imposed on products including Harley-Davidson motorcycles. EU trade officials have said that various options are being explored. The US commerce department announced in May that it was starting a so-called “Section 232” investigation into passenger vehicles and parts to see whether imports were eroding US industry to the point where they threatened the country’s “internal economy”, including the development of “cutting-edge technologies” and the preservation of a skilled workforce. Officials indicated at the time that the US was considering introducing 25 per cent tariffs, although Mr Trump’s tweet mentioned 20 per cent. This week global automakers warned that imposing the tariffs on car imports would raise prices of imported vehicles by up to $6,000 per car and lift prices of locally made cars. The commission document said that, according to its “internal analysis” and other expert studies, the tariffs would be an “own goal” for the US economy even before other economies retaliated. The interconnectedness of the car industry, and its high degree of regional specialisation, mean that imposing additional 25 per cent tariffs on imports would cause a hit to US gross domestic product “in the order of” $13bn-$14bn, according to the document. The paper, submitted by the EU’s representation in Washington, also underlines that EU-owned car companies account for more than a quarter of US car production, with plants “across the country, including in South Carolina, Alabama, Mississippi and Tennessee” — all strongly Republican states — and that the majority of this production was for export. “As markets would become fragmented, US costs would rise, US automobile exports would suffer, US consumers would pay higher prices, and jobs would be lost,” the document said. The EU has also firmly rejected Mr Trump’s use of national security arguments to justify restrictive trade measures, saying it has no basis in fact and risks undercutting the entire rules-based system of international trade. “This development harms trade, growth and jobs in the US and abroad, weakens the bonds with friends and allies, and shifts the attention away from the shared strategic challenges that genuinely threaten the marketbased western economic model,” the document said.

Tuesday 03 July 2018

Logistics spending spree aims to find other ways to get parcels quickly to customers SHANNON BOND

Merkel faces migration showdown with coalition partners Interior minister offers to resign and issues ultimatum to German chancellor GUY CHAZAN

he two parties embroiled in Germany’s escalating political crisis gave themselves one last chance to resolve their differences, agreeing to meet at 5pm Berlin time on Monday for talks that could seal the fate of Angela Merkel and her three-month-old coalition government. If the two fail to bury the hatchet, Horst Seehofer, interior minister and leader of Ms Merkel’s Bavarian sister party the CSU, has said he will resign, a move that would mark a historic rupture in the centre-right of German politics. After a stormy, eight-hour meeting of the CSU executive in Munich, Mr Seehofer said on Sunday night he was prepared to step down from both his posts but had offered last-ditch talks to Ms Merkel’s CDU “in the hope we can reach agreement”. He said the offer was a “concession” by him and the CSU to the chancellor. “Otherwise everything would have been final,” he said. At issue is a conflict between the two sister parties over migration policy, which has re-emerged as the most explosive issue in German politics. Mr Seehofer proposed last month that German border police be given the power to turn away refugees if they were already registered in other EU countries. Ms Merkel said such unilateral moves would lead to a cascade of border closures throughout the EU that would endanger the Schengen passport-free travel zone and threaten European unity. She also hinted that she would sack Mr Seehofer if he persisted with the policy over her objections. Ms Merkel pleaded for time to come up with a pan-European solution, and claimed that an EU summit in Brussels last week had done exactly that. EU leaders agreed on a package

of measures to crack down on illegal migration and address the problem of “secondary movements” of asylum seekers across internal EU borders — the issue at the heart of the CDU/ CSU spat. But the row between the two parties has deeper roots. Mr Seehofer and Ms Merkel have butted heads ever since the chancellor decided to leave Germany’s borders open at the height of the refugee crisis in September 2015, when tens of thousands of migrants were streaming into the country. Though they patched up their differences last year, they continue to hold wildly divergent views on an issue that has left a faultline through the heart of German politics and for the first time since the second world war allowed a far-right party — the antiestablishment Alternative for Germany — to win seats in the Bundestag. The disagreement between the two leaders threatens to shatter the CDU/ CSU alliance, a union that has formed the bedrock of German politics for nearly 70 years . A divorce could also lead to the collapse of Ms Merkel’s “grand coalition” government and throw the future of the EU’s longestserving leader into doubt. Sunday was a day of high drama in Munich, where the CSU party executive, which faces a challenge from AfD in October regional elections, came together to discuss the dispute over asylum policy. Mr Seehofer rejected the Brussels deal Ms Merkel had helped negotiate, saying it was “inadequate” and “not as effective” as his own policy proposal. He said a meeting he had held with Ms Merkel on Saturday evening was “futile and pointless”. But it became clear in the course of Sunday’s meeting that the CSU leader did not have the full support of the party executive, with many moderate

members praising the deal Ms Merkel brought home from Brussels and arguing against an escalation of the conflict with the CDU. According to German media, Mr Seehofer told participants he had three options: bow to Ms Merkel on asylum policy; go ahead with his plan for tougher border controls, knowing that it could blow up the CDU/CSU alliance; or resign as party chief and interior minister. He said he had chosen the third option. But CSU colleagues persuaded him to stay on and try one last time to resolve the party’s differences with Ms Merkel’s Christian Democratic Union. “Seehofer and the CSU manoeuvred themselves into a blind alley,” said Frank Decker, a political scientist at Bonn university. “In the end his only options were to move ahead with the border closure, and risk getting the sack, or resign.” It remains unclear whether a compromise is possible between CDU and CSU to defuse the crisis. On Sunday, a separate meeting of the CDU party executive threw its weight behind Ms Merkel and her EU summit deal. The battle lines appear to have been drawn. It is also unclear what would happen if Mr Seehofer did resign. The other CSU ministers in Ms Merkel’s cabinet would face pressure to quit in protest if he were sacked, but they might stay on if he steps down of his own accord. Earlier on Sunday, Ms Merkel had praised the deal negotiated in Brussels, saying it represented substantial progress on the migration issue. “Of course, we did not solve the problem, but I never promised anyone that we would,” Ms Merkel said in an interview on the ZDF, the television broadcaster. “But honestly, two weeks ago I wasn’t sure I would achieve what we just achieved.”

mazon’s plan to foster a network of small delivery businesses is set to exacerbate a slowdown in the growth of US Postal Service package delivery, analysts say. Package delivery is the fastest-growing part of USPS and is expected to overtake first-class mail as the largest contributor to revenue next year, according to research estimates from Cowen. But Amazon’s increasing need to put parcels in customers’ hands in a day or hours has sharpened its focus away from the post office. The changing dynamics come amid a review of the postal service’s finances ordered by President Donald Trump, a vocal Amazon critic. He has called for USPS, which lost $2.7bn in its latest fiscal year and which has not reported a profit in the past decade, to double the rates it charges the online retailer. Amazon and the postal service do not disclose the terms of their contract, but analysts believe it is profitable for USPS. The post office has been buoyed by an acceleration in the past few years in package shipping, thanks to the rise of ecommerce, which has mitigated a drop in total mail volume. Cowen projects USPS’s share of Amazon deliveries will drop to 45 per cent in 2023 from 63 per cent in 2015. That will be driven by a shift in packages toward independent courier companies and, increasingly, deliveries made by Amazon itself and by individuals and small businesses working directly for Amazon. “We’re already seeing a massive deceleration in volume growth” of USPS parcels, said John Blackledge, a Cowen analyst. Increases slowed from 26 per cent in 2015 to 15 per cent last year. Amazon said its moves were meant to complement, not replace, existing relationships. “We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow,” said Dave Clark, its senior vicepresident of worldwide operations, at the launch the new delivery programme last week. A USPS spokesman said the agency “continue[s] to attract ecommerce customers and business partners because our customers see the value of our predictable service, enhanced visibility, and affordable pricing”. Amazon has a number of delivery options in addition to USPS. It sends packages through UPS, FedEx, DHL and courier services and, increasingly, it employs its own drivers and signs up people to deliver packages with their own cars through a programme called Flex. UPS and FedEx will also lose share in the shift, but analysts say those two are less exposed to Amazon’s whims in the near term. “UPS and FedEx have seen the writing on the wall for a long time and they’ve diversified. It’s going to take a long time for Amazon to make a dent,” said Tuna Amobi of CFRA Research. “But there’s no question the market understands that UPS and FedEx are going to be disrupted by this. It’s just of question of when.”

Tuesday 03 July 2018

BUSINESS DAY

Tuesday 03 July 2018

BUSINESS DAY

Tuesday 03 July 2018

STRATEGYBRIEFING IDEAS THAT POWER HIGH PERFORMANCE

Are you losing out to the competition? Here’s what to do... JAY ABRAHAM

here’s no denying it: It’s a dog-eat-dog world. And the business world is no different—if anything, the canines there might be even more cannibalistic. So how do you come out on top? How do you ensure that your products and services beat out all the rest? Peter Drucker—in my opinion, the greatest business thinker of the twentieth century—once said, “Marketing and innovation produce results; all the rest are costs.” I would add a third income-generating activity to his statement: strategizing. And yet, despite the fact that marketing, innovation, and strategizing tower above anything else businesspeople could be doing for their businesses, most of them fail to engineer a continuous flow of breakthroughs in these three key areas. As a result, although they are not obsolescing themselves, they can rest assured that their competitors are. If you’re losing out to the competition, it’s time to do something different. You’ll need to learn how to launch your business forward so that your competitors are left standing in the dust, wondering what the hell happened. All it takes is a little innovation and a killer strategy. In

other words, a different approach. Let’s look at an example. A few years ago, I had two friends who each discovered the same business opportunity but approached it in radically different ways—one tactical and shortsighted, the other strategic and focused on the long term. The first, Tom, was a gifted copywriter who saw potential in the overlooked market of simulated diamonds, or cubic zirconium. For $30,000, he ran a full-page ad in the Los Angeles Times announcing his new enterprise, the Beverly Hills Diamond Company, and its key product, a loose, one-karat stone that sold for $39. The wonderfully crafted ad pulled in about $42,000 worth of sales, which amounted to about $3,000 profit after all expenses. Tom, who was used to making massive, front-end profits, didn’t see enough profit in the concept, so he folded his tent and left. The second friend, Larry, didn’t possess Tom’s copywriting prowess, but he was a world-class strategist— and strategy will always trump copy. Larry soldiered into the very same marketplace, armed with a game plan for an identical product but a very different result. His ad wasn’t as well written, and so Van Pliss and Tissany (his take on Van Cleef

& Arpel and Tiffany, which were hot brands at the time) pulled in only $28,000 from his $30,000 ad— meaning he’d lost $2,000 before he’d even counted overhead. But instead of getting frustrated, Larry continued with the next phase of his strategy. Whereas Tom had mailed his product in a chintzy cardboard box, Larry delivered his in a high-end jeweler’s case, which in turn was placed in a velvet bag— packaging that cost a pretty penny beyond what he’d already spent on the ad. Along with that, Larry included a letter: Thank you for purchasing your Van Pliss and Tissany one-karat gemstone. When you remove it from its beautiful jeweler’s case, you’ll immediately notice its fiery brilliance, which is even more beautiful than we promised. You may also notice that the stone is smaller than you expected— but that’s the nature of the Van Pliss diamond. In order to achieve such extraordinary brilliance, our gem is denser, which makes it 25 percent smaller than most people expect. However, thebrilliance of the diamond inspires many of our buyers to upgrade to larger five- and ten-karat stones, which they hope to then set. Because we’ve experienced this so often, we’ve set some

of our most magnificent five- and ten-karat stones in fourteen- and eighteen-k rings, necklaces, earrings, and bracelets, which you can find in the accompanying catalog. And, more important, because we do such volume, we have manufactured these jewelry pieces ourselves, thus slashing the price by 50 percent of what you would pay for the same product from a jewelry store. We would like to offer you the chance to upgrade: Not only have we included a pre-paid return carton and UPS form, but we are also extending you double credit. In addition, any purchase you make with us will not be considered binding on your part until you’ve had the set

jewelry item in your possession for thirty days. If your family and friends don’t remark on how beautiful your new gem is, or if you find that buying the same piece from a jeweler would have saved you money, you may return your gemstone and setting, no questions asked. What was the end difference between Tom’s tactics and Larry’s strategy? Whereas Tom made $3,000 and promptly quit, Larry’s strategy lost $2,000 up front, then netted him $25 million in his first year of business alone. That’s the difference. If you come up with a killer strategy and a dynamite approach, you can make a killing, too.

Jay Abraham is founder and CEO of The Abraham Group, Inc., and is recognized as one of the world’s most successful/impactful marketing strategists, business innovators, entrepreneurial advisors/mentors, and masters of revenue and performance enhancement and acceleration. He has spent the last 30+ years solving problems and significantly increasing the bottom lines of over 10,000 clients in more than 400 industries worldwide. Abraham has identified the patterns that limit and restrict business growth and shows his clients how to create a powerful advantage over their competition by taking success concepts from different industries and adapting them for clients’ specific businesses. He is considered a leading expert on multiplying clients’ “Relational Capital,” and a thought leader on the concept of “Risk Reversal.” He has also been pivotal in defining the strategic business concepts of “Power Partnering” and “The Strategy of Preeminence, and he popularized the phrase “Unique Selling Proposition.”

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Tuesday 03 July 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Federal Reserve in the spotlight as summer markets feel the heat It is unclear whether Jay Powell will alter course to ease bouts of global turmoil MICHAEL MACKENZIE

lobal markets are feeling the heat from the unilateralist policies of the Trump administration and that leaves investors looking to the US Federal Reserve for relief. They may be waiting for a while and, in turn, that raises the prospect of a major market accident this summer, a time when market liquidity is generally thin. The big question is whether the US central bank will continue tightening policy as the economic expansion for emerging markets, led by China, and the eurozone shows signs of having peaked. Rising trade protectionism hardly improves the macro outlook — a point illustrated by further losses for global equities on Monday, while in the currency market, traders were once more favouring the US dollar across the board. The strengthening US dollar has clearly intensified pressure on EMs, notably among its more indebted members. The BIS estimates that of the $11.4tn in dollar-denominated debt outside the US, one-third is owed by the non-financial sector, including companies, households and governments. Hence, the increasing talk of a dollar shortage outside of the US among investors and policymakers that looks set to intensify. The dollar is benefiting from upbeat US economic data, in sharp contrast with global rivals, a trend that keeps the Fed on a tightening track. Hefty redemptions from EM bond and equity funds show no sign of slowing

and this also bolsters the reserve currency. Later this week, a solid US employment report for June is forecast with economists expecting average hourly earnings will expand at an annual pace of 2.8 per cent, “matching the cyclical high recorded last September”, according to Brown Brothers Harriman. That kind of macro backdrop will do little to alter the Fed from its present course or prevent further dollar strength. Hence, the increasing tone of market commentary about the parallels with 2015 and 2016, a period when the US central bank cautiously tightened policy and was clearly influenced by bouts of global market turmoil. ‘’The combination of Chinese equity market declines and currency depreciation pressures revive memories of 2015, and this combination has the potential to unsettle risky markets,’’ note analysts at JPMorgan. ‘’Especially if a hawkish Fed or an escalation of trade tensions puts further upward pressure on the dollar.’’ Whether the Fed under Jay Powell adopts a more measured tone and recognises the importance of the dollar in the financial system remains to be seen. As Simon Derrick at Bank of New York Mellon notes: “If, in contrast to 2016, the FOMC [Federal Open Market Committee] remains indifferent to concerns about Chinese markets (as they have done so far) and the trade tensions increase from here then it is possible markets could experience a particularly turbulent summer.”

HSBC completes ‘ringfencing’ of UK high street banking unit Big acquisitions are off the table for Allianz, says JPMorgan MARTIN ARNOLD

SBC has created a standalone entity for its UK high street banking business, fulfilling a legal requirement designed to prevent a repeat of the taxpayer bailouts that were needed to rescue the sector a decade ago. Following in the footsteps of Barclays and Royal Bank of Scotland, which have already completed their ringfencing process, HSBC said it had separated 250 computer systems from the rest of the group and transferred 400,000 customer accounts to new sort codes. The Birmingham-based UK subsidiary of HSBC has 14.5m retail and business customers — including those of its First Direct

and M&S Bank brands — 22,000 staff and more than £200bn of assets, making it one of the country’s biggest lenders in its own right. The bank said it had moved about 1,000 head office roles from London to Birmingham, where it plans to open its new 210,000 sq ft office later this year. HSBC UK received its full banking licence from the Bank of England’s Prudential Regulation Authority on June 27. “We are delighted to complete the ringfencing of HSBC UK six months ahead of the legal deadline,” said Ian Stuart, chief executive of HSBC UK. “The creation of our ringfenced bank and our move to Birmingham is a once in a lifetime opportunity to get closer to our customers, colleagues and communities across the UK.”

Trade jitters spark broad gains for the US dollar Major developed and emerging market currencies lower against the buck ADAM SAMSON

he US dollar climbed on Monday against a broad swath of developed and emerging market currencies amid mounting concerns over global trade. In morning action in New York, the US dollar index, which measures the buck against six developed market peers, climbed 0.3 per cent. The euro fell 0.45 per cent, while the pound declined 0.41 per cent. The Japanese yen inched just slightly lower. Japanese investors often shift funds back to the domestic market during times of growing market nervousness, providing a cushion for the currency. In emerging markets, China’s renminbi remained a major focus. It fell 0.6 per cent in onshore trade within China to Rmb6.66, while it was down 0.65 per cent in offshore markets to Rmb6.68. China’s financial markets have come under acute pressure — one

of its main stock gauges faced one of its heaviest drops of 2018 on Monday — amid concern over the escalating trade battle being waged by America. In the latest twist, Brussels has warned the Trump administration that it might slap the US with some $300bn in countermeasures if the country moves ahead with import tariffs on EU cars and auto parts. Goldman Sachs said at the weekend that Chinese policymakers are facing the “actual crystallisation of some of the trade war risks.” This has shifted the “calculus”, Goldman said, pushing the country into loosening policy. “Chinese policymakers can no longer count on a positive external trade impulse to offset domestic tightening and have already taken steps to respond to the weaker credit and money data and soft activity prints such as fixed asset investment,” the New York investment bank said. Other actively traded EMs also faced significant selling pressure.

Turkey’s lira fell 0.87 per cent, South Africa’s rand dropped 0.81 per cent and the Mexican peso slipped 0.63 per cent. India’s rupee meanwhile was down 0.49 per cent at 68.8 rupees per dollar, slightly above the record low it touched last week. The US dollar has been a key beneficiary of the rising trade tension despite the fact that it has largely been instigated by Washington. The dollar index has risen 2.7 per cent in 2018, lifted by both its status as a perceived ‘haven’ and also as the Federal Reserve tightens monetary policy. The bullish dollar sentiment is highlighted in the futures market, a sliver of the overall foreign exchange market but still an important proxy for investors. Hedge funds have taken the biggest net long position on the dollar against other major currencies in 14 months, clocking in just under $17bn, according to a BMO analysis of US Commodity Futures Trading Commission data.

Vedanta shares jump after Anil Agarwal proposes buyout Billionaire describes transaction as ‘a natural progression’ to simplify corporate structure NEIL HUME

nil Agarwal has struck a deal to buy out the minority shareholders of Vedanta Resources for almost £800m, as the Indian metals tycoon pushes ahead with plans to simplify the structure of his sprawling business empire. Under the proposed offer, which has been recommended by an independent committee, Mr Agarwal’s family trust Volcan will offer 825p a share in cash for the 33.5 per cent of Vedanta it does not already own. The offer is pitched at a 28 per cent premium to Vedanta’s closing price on Friday and values the company’s equity at more than £2.35bn. Shareholders will also receive a previously announced dividend of around 31p a share. Shares in Vedanta rose 26.3 per cent to 816p in London morning trading. Mr Agarwal, a self-made billionaire, said the move to buy out the minority shareholders of Vedanta Resources was a “natural progression of our journey to simplify the Vedanta Group’s corporate struc-

ture”. “However, given the subsequent growth of our underlying businesses and the maturity of the Indian capital markets . . . we have concluded that a separate London listing is no longer necessary to achieve the Vedanta Group’s strategic objectives.” Vedanta Resources has two main assets: a 50.1 per cent stake in Indialisted Vedanta Ltd and a 79 per cent holding in KCM, a copper mine and smelter in Zambia. Vedanta Ltd, which has an equity market value of nearly $13bn, controls 64.9 per cent of Hindustan Zinc, one of the world’s biggest zinc producers, as well as a 51 per cent stake in Bharat Aluminium and zinc mines in Africa. It also owns all of Mr Agarwal’s copper and iron ore assets plus oil and gas company Cairn India, which he plans expand into a 400,000-plus barrel a day producer. He has also made no secret of his desire to purchase the Indian government’s 30 per cent stake in Hindustan Zinc. The buyout of Vedanta Resources could also fuel further talk of a bid for

Anglo American, the FTSE 100 mining company. Through a series of complex transactions involving mandatory exchange bonds, Volcan has an interest in just over 20 per cent of the FTSE 100 miner. The Vedanta boss has previously tried to merge Hindustan Zinc with Anglo American but the plan was rebuffed by the UK company. By grouping all of his interests under Vedanta Ltd, it could make deals with Anglo easier to pull off, say analysts. Mr Agarwal’s ascent from smalltown metals merchant to Indian mining tycoon is one of the country’s brightest success stories in recent years. But shares in Vedanta Ltd have fallen 30 per cent this year because of problems at its giant copper smelter in the south Indian town of Tuticorin. Last month, police shot dead 13 people protesting against Vedanta’s proposed extension of the smelter, one of the world’s largest. The plant, whose 1997 opening marked Mr Agarwal’s arrival in the top tier of Indian industry, is now closed but Vedanta is working on a legal challenge to reopen it.

BUSINESS DAY

C002D5556

Tuesday 03 July 2018

ANALYSIS

Lopez Obrador secures ironclad mandate for Mexico political change Leftwing nationalist promises ‘a government by the people with the people’ JUDE WEBBER

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Nestlé: Betting on big brands The fate of the Swiss group will be a defining test for an industry under pressure from changing consumer tastes and activist investors RALPH ATKINS AND SCHEHERAZADE DANESHKHU

ark Schneider pours a can of cold brew Nitro Nescafé coffee in the company’s head office overlooking Lake Geneva, Switzerland. He points out the distinctive cream “head” on the dark liquid. “You see that foam building up!” he exclaims. Testing new products is the fun part of heading the world’s largest food and drinks company. More difficult for Nestlé’s 52-year old German chief executive is rebuilding sales growth and profits in an industry roiled by rapid changes in consumer tastes, increasingly severe cost competition and a plethora of mergers and acquisitions. With annual revenues last year of SFr90bn ($91bn), Nestlé is larger than Japan’s Sony and just smaller than Russian energy producer Gazprom. Its best-known brands include KitKat chocolate bars, Perrier bottled water and Purina pet food. But size per se is looking less attractive. Nestlé’s sales growth has slowed substantially , smaller rivals and start-ups have taken market share and the company’s shares have fallen more than 9 per cent during the past year. To fight back, Nestlé is trimming costs and buying up smaller rivals. But crucial to its success will be products that excite the next generation of consumers. The group has a SFr1.7bn annual budget to research and develop products, such as new ways of serving coffee. Others in the industry might see this as something to cut to boost profitability. “I just want payback,” says Mr Schneider. “I want a steady stream of must-have winning products.” Nestlé’s fate will serve as an important test for consumer goods companies at a time when the multinationals which have dominated the industry for decades are under threat like never before. Some of Nestlé’s competitors are taking radical action. Procter & Gamble has cut prices and sold off more than half its brands. Unilever is reducing bureaucracy and costs. But Nestlé is betting that a more incremental approach will pay dividends. Three years ago Peter Brabeck-Letmathe, Nestlé’s former chairman, attacked 3G Capital, the private equity group founded by Brazilian investors, for having “pulverised the food industry with serial acquisitions and ruthless cost-cutting”. Last year, Kraft Heinz, controlled by 3G and Warren Buffett’s Berkshire Hathaway investment group, launched an audacious $143bn bid for Nestlé’s Anglo-Dutch rival Unilever. That bid flopped — but had it succeeded, Nestlé itself could have been next in private equity’s crosshairs, despite its size. Nestlé has not been immune

to these pressures: last September it added profit margin targets to growth objectives. Such targets were a main demand of US investor Daniel Loeb, whose Third Point activist hedge fund a year ago revealed a 1.25 per cent stake in Nestlé, worth $3.5bn. Mr Loeb argues that the group has a “muddled strategic approach” and should move faster to shed underperforming and nonstrategic businesses, as well as reduce layers of bureaucracy. However, Nestlé is sticking largely to its traditional reliance on leveraging its size. Mr Schneider has announced bolt-on deals in highend US coffee and food and a $7.2bn tie-up with Starbucks, but “he is still at the beginning of what could be a long journey”, says Celine Pannuti, an analyst at JPMorgan. Founded in the 1860s as a baby food manufacturer in the lakeside town of Vevey, near Lausanne, Nestlé has faced criticism that it was too slow to adapt to a digital age which has cut the cost of market entry for media savvy start-ups. “Nestlé and other global players have left smaller competitors to grow for too long before reacting . . . It’s the old Nestlé thinking, ‘we’re number one, we’re the best’,” says Jean-Philippe Bertschy, an analyst at Vontobel bank. “The world has changed for good.” Mr Schneider was the first outsider to be appointed Nestlé chief

plethora of smaller companies have sprung up to cater to them. New foods and beverages have become “almost as a form of entertainment”, Mr Schneider says. Nestlé has more than 30 brands with more than SFr1bn of sales. “Can these big brands grow, given brand fragmentation and the desire of millennials for smaller brands?” asks Warren Ackerman, an analyst at Société Générale. The Swiss group’s answer is, Yes. “‘Too big’ is a notion I disagree with,” Mr Schneider says. “Size, if you can handle it, should be nothing to be afraid of; in fact size gives you a whole lot of good things.” Nestlé, which is organised to keep operations close to local markets, has tried to “handle” its size in the past. A decade ago, Mr Brabeck pushed through a programme to speed up decision-making. But Andrew Wood, an analyst at Bernstein, says Nestlé missed important consumer trends. “Just because something is decentralised, it doesn’t mean it will be successful if the culture is risk-averse or the organisation doesn’t want to disrupt itself,” he argues. He estimates Nestlé’s sales should be growing at above 5 per cent based on its size in the categories in which it operates, instead of half that rate. “The world has moved on a lot quicker than Nestlé. It needs a fundamental change in the way it

executive in almost a century, joining from German healthcare group Fresenius. His diagnosis is that there is no specific Nestlé problem. Rather, the entire food industry had “collectively” overlooked a revolution in consumer behaviour after “a history of 30, 40 years of almost uninterrupted success”. Mr Schneider adds: “Many of these changes have been under way for the better part of a decade, but it’s only now that they really come to the surface and are plainly visible.” Consumers have moved away from traditional packaged foods, preferring less processing and more artisanal, fresher options. A

runs its businesses — a change of culture,” says Mr Wood. One investor adds: “No one expects them to be as nimble as a start-up. But there’s a gap between being nimble and asleep.” Nestlé admits some weaknesses. In the US, it was slow to introduce organic versions of its Gerber baby food, allowing smaller rivals to enter the market. Critics say it missed the fashion for flavoured waters and premium frozen foods. Mr Schneider is careful, however, not to criticise past Nestlé managers — his immediate predecessor, Paul Bulcke, is now chairman of its board and Mr Brabeck-Letmathe is chairman emeritus.

ogether we’ll make history” was his campaign slogan. And with a landslide victory in Mexico’s presidential elections that has turned the country’s political establishment on its head, the leftwing nationalist Andrés Manuel López Obrador, with his Morena party, has done just that. According to an official quick count by the National Electoral Institute, Mr López Obrador secured 53 to 53.8 per cent support in Sunday’s election. If confirmed, that would be the best result for any Mexican president in 30 years — delivering an ironclad mandate for the political change demanded by voters furious with the ruling Institutional Revolutionary party (PRI) for presiding over rampant corruption and record levels of violence. “We triumphed and now we’re going to transform Mexico,” Mr López Obrador told tens of thousands of jubilant supporters chanting “Yes we could”

We do not aim to construct an overt or a covert dictatorship. Change will be deep, but anchored in legality,” he said. Mr López Obrador has promised to slash government perks and plough the proceeds back into social projects, such as bursaries and apprenticeships to keep young people out of crime. He promised a relationship of “friendship and mutual respect” with the US but made no mention of the North American Free Trade Agreement or of controversial domestic platforms such as his pledge to scrap an education reform enacted by Mr Peña Nieto. Earlier, exuberant supporters mobbed Mr López Obrador’s car as he drove from his campaign headquarters. Beaming from the passenger seat of the modest white Volkswagen, he posed for selfies with fans who rushed alongside the car, flashed a V for victory sign and waved to passengers hanging from the windows of a bus, waving their fists in triumph. Mexicans voted overwhelmingly

crammed into Mexico City’s central square, the Zócalo, to celebrate victory in his third bid for the presidency. Exit polls earlier pointed not only to an overwhelming lead for Mr López Obrador, but also to a likely congressional majority that is set to decimate the PRI. The party, a former monolith once branded a “perfect dictatorship”, could end up with fewer seats than the previously small parties that are Mr López Obrador’s electoral allies. Reiterating promises to boost oldage and disability benefits and infrastructure projects across Mexico, Mr López Obrador told the crowd he would meet outgoing President Enrique Peña Nieto on Tuesday to start mapping out the transition before he dons the presidential sash on December 1. His arms outstretched in victory and with ticker tape flying, Mr López Obrador promised to embark on a tour of the country in September as president-elect. “There will be no divorce . . . this is a government by the people with the people,” he said. “I won’t let you down.” In a Mexico City hotel earlier, the 64-year-old popularly known as Amlo struck a more muted tone that contrasted with his passion on the campaign trail. Reading from a prepared speech, he delivered a careful nod to critics who fear that a lurch to the left will lead Mexico into populist chaos, reiterating that he would respect the autonomy of the Bank of Mexico, would not raise taxes or debt, would not expropriate, and would respect business, union and press freedoms. “I call on all Mexicans to reconcile . . . this new national project will seek to establish an authentic democracy.

for change — more overwhelmingly, indeed, than in 2000, when the PAN’s Vicente Fox won with 42.52 per cent to eject the PRI after 71 straight years in power. “All this anger was converted into happiness,” said Arturo Ramírez, 50, a university professor who voted for Mr López Obrador and was among the cheering crowd in the Zócalo. “It was time . . . the parties from the system had to go.” But despite his delight, Mr Ramírez confessed to some concerns, notably over Mr López Obrador’s plans for education. “There’s going to be friction there,” he said. Business leaders swiftly offered the president-elect their support, despite their open hostility towards him during the campaign, in which they cautioned that Mexico under Mr López Obrador would slide back into the economic crises of the 1970s and 1980s. Rogelio Zambrano, president of Cemex, one of Mexico’s biggest companies, sent his congratulations to Mr López Obrador and said “we wish the next government luck”. “We will work with the presidentelect’s team to build together an agenda for the stability and development of the country,” Juan Pablo Castañón, head of the main business lobby the CCE, told a news conference. But he warned that Mexico faced “enormous challenges to be resolved”. Ricardo Salinas, a magnate with media, business and banking interests, tweeted: “All together, we must give López Obrador the opportunity to demonstrate that he is going to fulfil his promises of justice and honesty and, as he himself says ‘that he won’t let us down’”.

BUSINESS DAY

Tuesday 03 July 2018

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NEWS YOU CAN TRUST I TUESDAY 03 JULY 2018

Opinion

Nigeria and shaku shaku dance OGHO OKITI Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

n many re curring scenes during t h e p re p a ra t i o n s towards the 2015 elections, and some after that, our president i a l a n d g ov e r n o r s h i p candidates danced to popular and trending Nigerian music. If you have forgotten those scenes, never mind, you will soon find our aspirants near you in the coming months. This time, they w ill be dancing shaku shaku. The party has started and it will be with us for the next 8 months. It will also be boosted by the emergence of who is likely to provide the most challenge to President Mu ha m ma d u Bu ha r i’s quest for “progress” when the People’s Democratic Par t y (PDP) s ele cts its flag bearer in a few months time. Already, the chronicles are well choreographed. In the last six months, we

have seen the first chronicle – strategic meetings between the President and the largely previously ignored Asiwaju, visits to different parts of the countr y, the President being honoured by foreign bodies, known and unknown, the scuttling of the plan to have an isolated presidential election, the political masterstroke of acknowledging the sins of June 12, and the culmination of the former governor of Edo State, Adams Oshiomole, as the chairman to lead the party into the 2019 election. Unlike his predecessor, Adams Oshiomole has the confidence of Asiwaju and he is a combatant politician, key attributes the party will need ahead of the 2019 elections. However, before we start to see the second chronicle and the real Shaku Shaku dance, some stubborn issues are reminding us all that all is not well. Last week, the Brookings Institution released a damning poverty report that now suggests that the numb er of p e ople living in extreme poverty in the country is higher than those in India. Context matters. For a very long time, the fraction of people living in extreme

poverty in Nigeria has been higher than those in India, but the news that Nigeria now has the highest number of people in absolute numbers must be a very uncomfortable truth for President Muha m ma d u Bu ha r i a n d his spin doctors. It is no wonder that the response provided by the Minister for Industry, Trade and Investment is that pove r t y w i l l va n i s h w h e n infrastructure projects are completed by the administration. All I did was wondered when the Minister joined the league of the Minister for Information. So, what I believe the government find most disturbing ahead of the elections is that these “disrespectful” foreign think tanks are providing a different narrative than that they would like us to believe. Remember the narrative provided by Transparency International, suggesting that corruption is on the up. From above, we have now been told that poverty and corruption are a l l w o rs e n i ng. That i s neither the story, nor the change that Nigerian wanted. But, as important as those are, the narrative that hurts the most is the one contrary to that which says that Nigerians

have hired a strong man t o d e a l w i t h Ni g e r i a’s escalating security challenges experienced in the last administration. Just as the Shaku Shaku procession ended, Nig e r i a w i t n e s s e d t h e most atrocious, horrific, brutal, barbaric, wicked, merciless, murderous, repugnant and despicable herdsmen attacks in Plateau State. While some Nigerians were still mourning, two front-page photos showed Mr. President meeting diaspora Nigerians on the front page of ThisDay and the front page Guardian showed him meeting the delegation of traditional rulers from Urhobo land. Those two photos after the incident in Plateau demonstrated, more than anything, that we have a most insensitive president. To add insult to injur y, the Presidenc y suggests we should blame the opposition. Wors e still, the government continued to see this as clashes and reprisals between herdsmen and farmers. Oh my God, how did we arrive here? The lives of Nigerians have never been this cheap and worthless. The lives of Nigerians have never in the history of this country

been equated to that of a cow, and never in the history of Nigeria has the government become the spokes entity for killers. It has been so bad that, if we had been declaring three days mourning after each attack, we would never leave the state of mourning. No w , s p e a k i n g t o a friend last week, he said he wished the militar y would come back. I disagreed. I have always been a believer in government by consent and agreement. What differentiates democrac y from other forms of governance is that consent that is given through the ballot box for a person or a group of people to manage our resources and do the best for the country based on the electorate’s assessment of their abilities and character, and the strength and feasibility of their campaign promises and ideas. In a l l t h e s e p a ra m eters, there is no doubt that there has been little progress with our politics in almost twenty years of party politics. Nigerian politics since 1999 has been characterized by three important disconnects betw een po litical campaigns and governance. First, there

is a disconnect between the promises and ideas shared during campaign and what gets implemented after the election. Second, there is adisconnect between the abilities and characters displayed during the election and the behaviour of politicians after elections (think of an administration which has a SAN as its Vice President disobeying court orders). And, perhaps, most importantly in the case of Nigeria, there is obviously the disconnect between the national interest which politicians are elected to serve and the personal, ethnic and religious interests they often serve while in power. Even if we accept that these things are a feature of politics in Nigeria, there is a minimum expectation that there are some aspects of governance, which should not be coloured by personal, ethnic and religious considerations. And that minimum expectation is in relation to lives. In the last three years, we have certainly entered a new low where the lives of Nigerians do not matter anymore, such that those in government are now dancing shaku shaku on their corpses. I thank you.

Work in the age of intelligent machines •How do you organise a society in which few people do anything economically productive? MARTIN WOLF Wolf is the Chief Economics Commentator of The Financial Times.

s long ago as 1984, in his Paths to Paradise, André Gorz, a selfproclaimed “revolutionary-reformist” stated, baldly, that the “micro-economic revolution heralds the abolition of work”. He even argued that “waged work . . . may cease to be a central preoccupation by the end of the century”. His timing was wrong. But serious analysts think he was directionally right. So what might a world of intelligent machines mean for humanity? Will human beings become as economically irrelevant as horses? If so, what will happen to our individual self-worth and the organisation of our societies? In a remarkable recent lecture, Adair Turner, former chairman of the UK’s financial regulator and chairman of the Institute for New Economic

Thinking, addresses just these questions. He started from the assumption that intelligent machines will ultimately be able to perform most forms of current work better than people and at lower cost. This, he argues, is a question of when, not if. It will happen because of the progressive advance of processing power, the costless replicability of software and the rise of machine learning. Robot gods will make us all redundant. Drawing on A Future that Works, a report published by the McKinsey Global Institute last year, Lord Turner adds that this future will not come evenly: some will be more affected far sooner than others. Moreover, even if intelligent machines cannot do every aspect of any given job, they can displace a great many workers. With current technology, predictable physical tasks and collecting and processing of data will be especially vulnerable. By sector, “accommodation and food services”, manufacturing and transportation will be particularly vulnerable. According to a paper by Jason

Furman, former chairman of the US Council of Economic Advisers, and Robert Seamans of the Stern School of Business, those who earn less and those with less education are more vulnerable. Lord Turner argues that what is happening also explains the “productivity paradox” — rapid innovation, but low productivity growth — that I discussed two weeks ago. A big part of the explanation may be a shift from relatively high-paid jobs in sectors with relatively fast productivity growth, such as manufacturing, towards relatively low-paid jobs in sectors with low productivity growth, such as personal care, home health aides and retail sales. Of the 10 US sectors with the biggest forecast growth in employment between 2014 and 2024, which are expected to generate 29 per cent of all new jobs, eight have median wages below the national median. This, of course, would worsen inequality, and would have strongly negative implications for overall productivity. That is not all. Lord Turner

also suggests other reasons for rising inequality and low average productivity growth. The first is the growth of “zero (or near zero)-sum” activities, some of which are not measured in economic output and few of which contribute to social wellbeing: think lobbyists, flash-traders or tax lawyers. Even education has a strongly zero-sum character: it is a positional good. Moreover, such zero-sum activities are well paid and so extract a great deal of rent. Successful creators of digital near monopolies also enjoy a great deal of rent. So, not least, do owners of property in prosperous conurbations. The new economy then is the rentier’s paradise. The second is the underrecording of the value of free services. This is possible. But free services — social media, for example — may, he notes, contribute little to welfare. Right now, the contributions may be much personal misery and the destruction of our democracies. This then is the picture for the medium-term future: sluggish overall productivity growth

and worsening inequality. This is inconsistent with stable democracy. More likely is an aggravation of today’s politics of greed and grievance. The outcome could be plutocracy, populist autocracy, or a blend. If automation ultimately rendered humanity economically irrelevant, the challenges would be even more radical. In the medium term, so long as there is a reasonable prospect of jobs for people who want to work, the crucial policy will be subsidising jobs. It is also vital to fund high-quality public services for all, notably, health, education and transportation. Moreover, as Dean Baker argues, the concentration of incomes from scarcity rents cries out for higher taxation of wealth and top incomes, notably including land and intellectual property. Indeed, intellectual property is almost certainly too highly protected now. There is a case for some protection, but not too much of it. I believe Adam Smith would agree. In the longer term, our descendants may face even more

existential decisions (provided the machines allow them to make them). How might they organise society in a world in which few people can do anything that is obviously economically productive? The world might become techno-feudal, with an owning elite hiring great numbers of cheap human servants not for their value, but for the pleasure of domination. People might instead share the abundance more equally, with all enjoying the civilised leisure that was once the province of the very few. Ours is the first civilisation to view work as the highest calling. Maybe that strange prejudice will need to be discarded. That is for the distant future, however, though one we must think about now. But the trends under way demand action. If the natural tendency of our economies is towards ever-rising rent extraction and inequality, with all its dire social and political results, we need to respond in a thoughtful and determined way. That is the great challenge.

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