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CBN, AMCON spend N3.83trn rescuing sick banks since 2009

Tinubu, Ambode clash dissolves Analysts fear a moral hazard monster has been created into a maze of confusion

EMEKA UCHEAGA & DAVID IBIDAPO

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he Central Bank of Nigeria (CBN) and the Asset Management Corporation of Nigeria (AMCON) has spent as much as N3.83 trillion since 2009 rescuing sick banks, BusinessDay analysis has shown.

The big bank bailout started in 2009 when the CBN pumped N620 billion into 10 sick banks to prevent them from dying.

The then CBN Governor, Sanusi Lamido Sanusi, now Emir of Kano had ordered a joint examination of 10 banks by the CBN and the Nigerian Deposit Insurance Corporation (NDIC).

The 10 banks were Diamond Bank, First Bank, United Bank for Africa, Guaranty Trust bank

and Sterling Bank, Afribank Plc, Intercontinental Bank Plc, Union Bank of Nigeria Plc, Oceanic International Bank Plc and Finbank Plc. After the examinations, the CBN found five institutions in a ‘grave situation’ namely Afrib-

ank Plc, Intercontinental Bank Plc, Union Bank of Nigeria Plc, Oceanic International Bank Plc and Finbank Plc. After securing the consent of the Board of Directors of the CBN, Sanusi removed and replaced the executive management of the five

banks. He then injected N420 billion in the form of tier 2 capital into the five banks to enable them continue as going concern.

Sanusi then went on to order another forensic audit on the

Continues on page 38

Inside With 5000 trucks daily, Nigeria loses N6.7trn to congested Apapa ports annually P. 4

L-R: Afolabi Imoukwuede, senior special assistant to the President on Job Creation and N-Power Scheme; Jim Ovia, chairman, Zenith Bank plc; Emmanuel Ijewere, past president, ICAN; Razak Adeleke Jaiyeola, president, ICAN; Rachael Grimes, president, IFAC, and Adetunji Eleso, managing partner, CG Fund, at the 48th annual accountant conference, theme ‘Securing Our Shared Future: A Collective Responsibility’ held in Abuja.

Pic by Tunde Adeniyi

joshua bassey

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he road to Alausa Governor’s Office Lagos 2019 turned into a maze Tuesday, October 2 as news of a landslide victory by Babajide SanwoOlu, the anointed candidate of Bola Ahmed Tinubu, national leader of the All Progressive Congress, conflicted with an indictment of the purported primaries by the Election Committee sent in from Abuja and a denial of the suspension by yet another official of the party.

Seemingly innocuous, the announcement by the Lagos State Election Monitoring Committee, representing the National office of the All Progressives Congress, points to the introduction of other parties into the dispute in Lagos.

Clement Ebri, chairman of the seven-member NWC panel who addressed a press conference at about 4:10pm at Protea Hotel, Alausa, Ikeja, said materials meant for the conduct of the Continues on page 38

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Hayford Alile: Pioneer director-general of the Nigerian Stock Exchange dies

L-R: Higo Aigboje, managing director/chief executive officer, Capital Bancorp plc; Tola Mobolurin, chairman; Oluwarotimi Odeyemi, chief finance officer, and Tosin Olojo, head, investment, at a press conference on Capital Bancorp’s 30th anniversary celebration, in Lagos.

Iheanyi Nwachukwu

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ayford Ikponmwosa Alile (Dr), the pioneer DirectorGeneral of the Nigerian Stock Exchange (NSE) who also chaired the board of numerous blue-chip companies is dead. He died on September 4 at the age of 87.

“We have lost a rare gem in the transition of Pa Alile as a state and nation, but we are consoled by the Godly life he led and the indelible marks he left in the minds and hearts of millions of people”,said Godwin Obaseki, Governor, Edo State, in a condolence message released yesterday.

In his life time Alile was a role model for many Nigerians who admired how he succeeded in striking a balance between Christian ministry, work and family. Alile was seen as courageous and incorruptible professional who championed the global outlook for the Nigerian Stock Exchange through several reforms and pioneered the revolutionary ideas which positioned the Exchange for international recognition.

While celebrating his 80 th birth-

day, Alile gave some insight on his days at the helm of the Exchange and how he managed to stay away from corrupt practices.

“Well, you know that people would always want you to do the wrong thing but from the very beginning I read out all the rules and regulations of the institution and spent much time educating them that the good that they would derive from corrupt doings will not be as big as the loss that society will gain from it. To a certain extent, I believe God was always speaking through me and guided me to pay deaf ears to corrupt discussions”.

Alile also contributed significantly to the take-off and growth of the

Continues on page 38

September PMI reading justifies CBN’s fears over economy HOPE MOSES-ASHIKE, ENDURANCE OKAFOR

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urchasing Managers Index (PMI) reading for September, which shows slower expansion in manufacturing activity in the country, has justified the fears expressed by the Central Bank of Nigeria (CBN) about the economy.

The PMI of the manufacturing sector of the economy released by the CBN on Tuesday stood at 56.2 index points in September, represents a 0.9 index points lower expansion figure when compared to the 57.1 index points reported in August 2018.

The alternative PMI figure released by FBNQuest yesterday also show a slower expansion rate PMI declined to 53.7 index point in September from 54.8 index point in August.

A composite PMI above 50 points indicates that the manufacturing/ non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally contracting.

Godwin Emefiele, governor of the CBN, had at the last Monetary Policy Committee (MPC) meeting in September expressed fears that the exit from recession may be under threat following the slowdown in economic growth to 1.5 percent in the second quarter of 2018 from the 1.90 percent growth recorded in the first quarter.

Emefiele and other members of the Monetary Policy Committee (MPC) which decided to keep interest rate unchanged at 14 percent in the third meeting this year, identified rising inflation and pressure on external reserves created by capital flow reversal as the current challenges to growth.

They noted that inflationary pressures have started rebuilding and capital flow reversals have intensified as shown by the bearish trend in the equities market even though the exchange rate remains very stable.

Nigeria’s inflation rate year-onyear increased to 11.23 percent in August, 2018 from 11.14 percent

recorded in July according to the National Bureau of Statistics (NBS).

The CBN’s PMI figures revealed that production level, new orders, employment level and inventories grew at a slower rate; but supplier delivery time grew at a faster rate in September 2018.

Economic analysts told BusinessDay yesterday that the slower growth in PMI is a signal that the growth in economic output (GDP) in the third quarter (Q3) will be weak.

“The PMI data is the most credible data of what Q3 GDP might look like and with the most recently released data, there is an increasing likelihood that the headline might come out below expectation. Nonetheless, since it is above 50, it shows the economy is still expanding but at a slower pace,”Rafiq Raji, the chief economist at Macroafricaintel Investment told BusienssDay. “We would not be surprised to see the economy grow at a slower pace in Q3:2018 relative to Q2:2018 due to the delay in the implementation of the 2018 budget. We have not seen any drastic policy announcement to bolster economic performance in Q3:208 especially for the manufacturing sector,” Ayodeji Ebo, managing director, Afrinvest Securities limited had earlier said.

Also responding to the report Ayo Akinwunmi, Head of Research at FSDH Merchant bank said “So for me it still what we have been discussing, the slow expansion rate slows down the activity in the country.”

However, 10 out of 14 sub-sectors surveyed by the CBN, reported growth in the review month compared to the 13 sub-sectors that reported growth in the previous month.

“The manufacturing sector continues to enjoy the benefits of the CBN’s exchange-rate reforms since greater foreign exchange rate availability translates directly into increased access to imported inputs.

However, demand remains soft.

Although, there was a pickup in output, we note that reduced cash circulation had a negative impact on sales”, FBNQuest analysts said.

Wednesday 03 October 2018

As oil price hits $85/barrel, concerns rise over NNPC subsidies STEPHEN ONYEKWELU & DIPO OLADEHINDE

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he Nigeria National Petroleum Corporation (NNPC) is about to see a considerable spike in the subsidies it is paying on imported petroleum products following a sharp rise in crude oil prices in the international markets.

Crude oil prices crossed US$85 per barrel yesterday, which will boost the country’s oil dependent revenues but would also raise the cost of subsidies.

The NNPC usually classifies subsidies in its books as under-recovery.

Under-recovery is a term used in the petroleum sector to denote the notional losses that oil companies incur due to the difference between the subsidised price at which the oil marketing companies sell certain products like diesel, fuel and kerosene and the price which they should have received for meeting their cost of production.

Oil price hit a four-year-high of $85 on Tuesday but this may not necessarily mean a windfall for Nigeria.

BusinessDay analysis of the latest financial records of Nigerian National Petroleum Corporation (NNPC) re-

leased on Tuesday showed that from January 2018 to May 2018, the government has paid N304 billion for under recovery. In the month of May, amount of under recovery stood at N88 billion.

“There is lots of secrecy with NNPC; also despite doing so much under recovery how come a loss making organization have not gone bankrupt,” Luqmon Agboola, head of energy and infrastructure at Sofidam Capital told BusinessDay. In January when oil prices averaged at $69 the NNPC incurred N45 billion in under-recovery; in February when oil prices increased to $65 there was a corresponding increase in under recovery to N59 billion.

In March when oil prices was $70, the amount incurred in under recovery decreased to N34 billion, however in the month of April it sky rocked to N77 billion as oil prices averaged at $75.Also in May, under recovery expenses increased to N88 billion.

The amount was the highest under-recovery since January 2017, and represented a 14.2 per cent appreciation compared to N77 billion recorded in April 2017.

“The amount of money spent

on subsidy or under recovery can provide lots of infrastructure for the teaming population,” Agboola told BusinessDay by Phone.

Further analysis of NNPC report showed products theft and vandalism have continued to destroy value and put NNPC at a disadvantaged competitive position as a total of 1, 621 vandalized points have been recorded between May 2017 to May2018 which increasedcomparedtothetotalof1,484 vandalized points have been recorded between April 2017 to April 2018.

BusinessDay investigations into the latest report of NNPC showed gains of N180.7 million made by NNPCs upstream and gas processing subsidiaries such as the Nigerian Petroleum Development Company (NPDC), RETAIL and Nigerian Gas Processing Transportation Company Limited and PipelinesandProductMarketingCompany (PPMC), were wiped off largely by its downstream subsidiary operations which recorded deficits north of N118.7 million according to figures from the organization’s operations and financial report for 2018 actual.

•Continues online at www.businessdayonline.com

With 5000 trucks daily, Nigeria loses N6.7trn to congested Apapa ports annually …25% of cashew went bad at ports ODINAKA ANUDU

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n average of 5000 trucks struggle to access Apapa ports on a daily basis through very bad and narrow roads with no railways to aid access. The time wasted on the roads and the resulting long turnaround times of the trucks cost the country an annual loss of N6.7 trillion, a report released on Tuesday by the Lagos Chamber of Commerce and Industry (LCCI) says.

In a breakdown of the numbers, the report states that the biggest loss of N600 billion is from customs revenue, $10 billion (N3.6trn) in the non-oil export sector and N2.5 trillion in corporate earnings across various sectors on annual basis.

The Apapa and Tin Can ports were built to accommodate only 1,500 trucks daily but now have to deal with an influx of 5,000 trucks daily, according to the report leading to the massive congestion noticed

at the entrance to ports daily and massive traffic it engineers across the country’s commercial capital, Lagos.

The LCCI report notes that 25 percent of cashew nuts exported from Lagos to Vietnam in 2017 went bad or were downgraded owing to delays at Lagos ports. Similarly, only 10 percent of cargoes are cleared within the set timeline of 48 hours now while the majority of cargoes take between five and 14 days to clear. The report notes that some cargoes take as many as 20 days to be cleared at the ports.

The clearance process is made worse by the number of government agencies at the ports which now 12 rather than eight, with each demanding inspection and associated fees.

To reduce the congestion at the Apapa ports which accounts for more than 90 percent of the country’s cargo imports and exports, experts advise that the government takes certain steps.

“There is a need to extend reform

action plans of Presidential Enabling BusinessEnvironmentCouncil(PEBEC) to Eastern ports, air and land ports,” Babatunde Paul Ruwase, president of the LCCI, said at a press conference.

“The concessioning of Onitsha seaport should be finalised, while government should improve the security situation along and within the Warri port in order to ward off militants and touts. Stakeholders request that government should approve and publicise a bouquet of incentives to importers and exports that patronise ports outside Lagos,” Ruwase said.

Ruwase recommended enforcement of Executive Order on Single Examination, digitalising export process, reduction of enforcement agencies from 12 to eight, use of National Data Centre and passage of Enabling Port Reforms Bills by the National Assembly.

•Continues online at www.businessdayonline.com

Wednesday 03 October 2018

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IGP vs. Senate: Court strikes out IGP’s case FELIX OMOHOMHION, Abuja

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Clement Ebri, chairman, APC National Working Committee (NWC) Panel for the Gubernatorial Primary Election in Lagos (2nd r); members of the panel, Chris Dirisu (r); Clever Egbeji (m); Nze Chidi Duru (2nd l), and Clever Ikisikpo (l), during a media briefing to give guidelines for the election at Ikeja, yesterday.

Governance goes on holiday in Nigeria as politics takes centre stage CHUKA UROKO

…Lagos, country’s economic heartbeat, shutting down

overnance at all levels - local, state and federal - in Nigeria has gone on holiday as political activities pursuant to the February 2019 general elections have taken centre stage. Economy in its slow and fragile recovery is a major victim of the inertia in government.

All government business seems to have been kept on hold as ministers, commissioners and other heads of government agencies have returned to base to canvass for votes, either for themselves or for their principal seeking a second term in office or fighting to install his surrogate.

“Nothing is happening now because government functionaries are politicking. This shows that our democracy is still imma-

ture; we should be able to separate politics from governance. In developed societies like the US and UK, politics and governance run almost on parallel lines,” noted Femi Akintunde, GMD, Alpha Mead Group in an interview.

Akintunde pointed out that government business in those societies runs seamlessly even as politics is heating up because there are policies and programmes that must be followed through, irrespective of who was in government when such policies were made.

The implication of the situation we have on hands is that apart from the economy, the citizens are being subjected to undue hardship. In Lagos, for instance, Apapa, the country’s premier port city, has become a metaphor for stress and suf-

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focation as a result of port congestion and gridlock.

The Federal Government, about three months ago, commenced rehabilitation work on the dilapidated Ijora Bridge. For so long, the bridge, which is the only major outbound route from Apapa ports, has been closed, forcing all motorists to take a narrow alternative route out of the port city.

The rehabilitation work, which is taking place at two separate spots on the bridge, is being delayed because the materials needed for the work have to be imported. “The materials needed for the rehabilitation are to be imported and work will resume at the site as soon as the materials are available,” assured Adedamola Kuti, Federal Controller of Works in Lagos.

Kuti explained that the

Nigeria’s wealth growth declined 10% in 2017 BUNMI BAILEY

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igeria’s wealth growth declined year-on-year by 10 percent in 2017, according to AfrAsia Bank Africa Wealth report 2018 by AfrAsia Bank, a private and corporate bank in Mauritius.

According to report, Nigeria’s poor performance in 2017 is attributable to the outgoing migration of HNWIs (we estimate that around 900 HNWIs left Nigeria in 2017). Most went to the UK, the US, France, Switzerland, the UAE and South Africa.

Also, the loss of local currency value versus US dollar drop in local real estate prices in US dollar terms, and safety concerns in the country, which have deterred investment and discouraged wealthy people from staying in the country. In particular,

woman safety is an issue in the North of the country.

A look into the movement of the naira reveals that the value of the naira declined by 42 percent to N360 in 2017 from N253.5 in 2016.

Based on the report, a country’s wealth includes all individuals that are working or living in that country, including expatriates.

Ayo Akinwunmi, head of research, FSDH Merchant Bank, said, “I work in the banking industry and I can tell you that a whole lot of people have left the banking industry in the last two years for Canada for whatever reasons such as education, relocating their families etc. And we have not had such quality of people coming from that country back to Nigeria in the last periods.”

Akinwunmi further said, “So, we have a huge amount of brain drain. And if you

look at it from that perspective you will see really that wealth declined. The spending power of people like that has been taken out of the system. Also the devaluation of the currency has attributed to the decline in wealth.”

The top 10 Africa countries in terms of wealth growth in 2017 were Mauritius, Botswana, Namibia, Ghana, South Africa, Morocco, Uganda, Rwanda, Tanzania and Ethiopia, whose wealth grew by 18 percent, 11 percent, 10 percent, 8 percent, 8 percent, 6 percent, 6 percent, 6 percent, 5 percent, and 5 percent, respectively The report, which analysed 17 major African markets, also made a forecast that Mauritius, Ghana, Rwanda and Uganda will be the strongest performing wealth markets in Africa in the next 10 years from (2017-2027).

delay in rehabilitating the part of the bridge that was burnt by fire being handled by Julius Berger was because approval for the rehabilitation has not been given. Apparently, the delay in approving the job proposal is because politicians in government who have the final say are too busy for government business at the moment.

Lagos as a city seems to be gradually shutting down as the battle for the soul of the state increases with ferocity. Lagos economy is adjudged the most buoyant in the country. The city is touted to become the second largest in Africa by Gross Domestic Product (GDP) and this is predicated on the expected gains from policy reforms by the current administration which is encouraging private investments.

Federal High Court sitting in Abuja, on Tuesday dismissed the suit filed by the Inspector-General of Police (IGP), Ibrahim Idris, against the Senate president, Bukola Saraki and the Senate over his summon by the Senate.

Delivering a judgment yesterday, Justice John Tsoho held that the IGP’s suit constituted an abuse of court process.

In the suit, marked, FHC/ ABJ/ CS/ 457/2018, Justice Tsoho agreed with the arguments canvassed by the defendants that the suit, as filed by the plaintiff, is subjudice.

Justice Tsoho said he did not see any harm that would have been caused if the Police boss had honoured the invitation of the Senate.

“I hold that the Plaintiff

(Inspector-General of Police) ought to have honoured the invitation of the Senate, instead of running to the court to stop the Senate from investigating him.

“The action of the Plaintiff amounts to an abuse of court process and, it is hereby struck out,” Justice Tsoho held, adding also that the IGP ought to have honoured the second invitation of the Senate on him, having failed to respond to the first one as he was on an official assignment to Bauchi State with President Muhammadu Buhari.

Justice Tsoho returned another suit the IGP filed against the Senate and its President to the Chief Judge of the Federal High Court, Justice Adamu Abdu-Kafarati for re-assignment to another Judge for hearing and adjudication.

PROWAN makes case for women in race for Nigeria’s economic independence IHEANYI NWACHUKWU

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s Nigeria races for economic independence, members of Professional Women Accountants in Nigeria (PROWAN) who rose from their oneday seminar held in Lagos carefully considered issues raised by all discussants and made a 20-point recommendation for women.

Objective of the seminar was to enable Nigerian women recognise the urgent need for economic independence; promote the sustainability of economic independence for the women fold by way of inward looking finance strategy, and to ensure that Nigerian women entrepreneur maintain good work-life balance as they multi-task.

The seminar was also aimed at propelling women toward good financial strategy that can ensure accountability, proper documentation and time management; and to place Nigerian women on the front burner through continuous acquisition of relevant skills, knowledge, capacities and competencies in their chosen careers.

Akinwunmi Ambode, governor of Lagos State, was represented at the seminar by the chief of staff, Olukunle Ojo, while Folashade Adesoye, head of service, Lagos State, delivered the keynote address.

Also, the Accountant General of Lagos State, Abimbola Shukurat Umar, who is also the permanent secretary of the Ministry of Finance, graced the seminar.

Hilton to double footprint in Africa with Legend Hotel Lagos Airport, others

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egend Hotel Lagos Airport sees the introduction of Hilton’s Curio Collection to Africa and marks the milestone of 500 operating hotels across EMEA. Legend Hotel Lagos Airport is located at Murtala Muhammed International Airport, which serves more than 8 million passengers each year. The stylish hotel is adjacent to the airport’s private jet terminal and has an exclusive immigrations and customs desk in the hotel for private jet passengers.

Handpicked to be part of the exclusive collection of one-of-a-kind hotels and resorts celebrated for their individuality, the hotel joins more than 60 Curio Collection hotels around the world. This is Hilton’s first hotel in Lagos and its second in Nigeria, with an additional seven hotels in its

development pipeline for the country.

Speaking ahead of the Africa Hotel Investment Forum (AHIF) in Nairobi, Hilton’s president/CEO, Chris Nassetta, said: “We continue to innovate in Africa with new brands and products, and we are pleased to introduce our Curio Collection brand here with the opening of Legend Hotel Lagos Airport.

“As the continent continues to undergo rapid urbanisation, with the UN forecasting that the world’s 10 fastest-growing cities will all be in Africa by 2035, this hotel is a part of our strategy to connect guests to key cities and airport locations across the region.”

Hilton is seeing strong demand for its brands across the continent and expects to open eight hotels in total across Africa this year, three

of which will fly under the Hilton Garden Inn flag. This brand appeals to the rising tide of middle class travellers into and across Africa and the company expects to open at least 16 Hilton Garden Inn hotels in the coming five years, including brand entries in Kampala, Ghana, Malawi, eSwatini (formerly Swaziland) and many other strategic locations across sub-Saharan Africa.

Last year, Hilton launched the Hilton Africa Growth Initiative, which will support the conversion of existing hotels to Hilton brands with an investment of $50 million over five years. During that period, Hilton expects to secure 100 conversion opportunities with some 15-20,000 rooms added to its portfolio to meet the growing need for quality branded hotels across the continent.

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NIBSS denies not remitting N22trn in stamp duties HOPE MOSES-ASHIKE, DAVID IBIDAPO

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he Nigeria InterBank Settlement System (NIBSS) on Tuesday denied allegations that it had collected N22 trillion stamp duties it failed to remit to the federation account.

The allegation was made by one Tola Adekoya of the School of Banking Honours (SBH), which claims to have the mandate of the Presidency to collect stamp duties on behalf of the government for which it is allowed to keep 7.5 percent as commission.

“NIBSS is limited to sweeping collected taxes only. Only banks are approved tax collectors since taxpayers have accounts with banks and not with NIBSS. What we do is to sweep taxes collected by banks to the CBN. Sweeping in this case is to get stamp duties collected by banks from designated accounts by NIBSS and transferring digitally to designated account

in the CBN. This process is legally documented, spelling out the roles of different players. Hence, there is an institutional framework on how things are done,” Oladele Agboola, company secretary at NIBSS, explained in an exclusive interview with BusinessDay. “It is impossible for NIBSS to debit directly from bank accounts without clear directives from the CBN,” Agboola said.

“It is also not possible for NIBSS to collect stamp duties from banks if the banks have not collected stamp duties from their customers. Charging of stamp duties dates back to 2016 in which banks remitted directly to the CBN. However, in 2017 the CBN gave directives to NIBSS to sweep stamp duty charges from designated bank accounts to the CBN. “With respect to stamp duty printed on the face of the cheque, it is Nigerian Mint that put that on the cheque and I want to believe that the Mint remits

that charge to the Federal Government,” Agboola said.

Agboola also explained that different agents of government had invited NIBSS over the allegation by the School of Banking Honours.

“The minister of finance has set up an inter-ministerial committee consisting of the attorney general of the federation, chairman of revenue mobilisation commission, and other agents of government that are concerned with revenue generation on this subject and all reached the conclusion that the allegations against NIBSS were spurious and were dismissed by the minister of finance.

NIBSS was also invited by the EFCC to explain allegations and NIBSS was exonerated,” Agboola said.

According to Ade Shonubi, managing director, NIBSS, the NIBSS is not mandated to collect taxes on behalf of the government but only sweeps taxes paid to the government through the commercial banks into a government account.

AfDB seeks partnerships to lift 1bn people out of hunger MIKE OCHONMA

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he African Development Bank (AfDB) has called on global partners to join hands to lift one billion people globally out of hunger. The finance institution said in a statement that it was leading the way by investing $24 billion in African agriculture over the next decade.

AfDB president, Akinwumi Adesina, told delegates at an agriculture conference at Purdue University, in Indianapolis, USA, last week that the organisation was not winning the war against global hunger and must not get carried away, referring to statistics showing a decline

in the global population living on less than $2 a day.

Adesina lamented that, in reality, the number of hungry people in the world, had, according to the latest World Food Security and Nutrition data, had increased from 777-million in 2015 to 815-million in 2016.

He told the audience that simple technical and scientific methods were already making a difference to farm yields and income in Africa.

While such technologies to deliver the continent’s green revolution exist, they are mostly just sitting on the shelves, he said. “The release of water efficient maize varieties now allows farmers to harvest good yields in the

face of moderate drought,” he noted.

“Today, rice varieties exist that can give yields of 8 t/ha. Cassava varieties exist with yields of up to 80 t/ha.

Heat tolerant and disease resistant livestock and technologies for ramping up aquaculture exist.”

AfDB stressed that, what was urgently needed was the deployment of supportive policies to ensure technologies are cascaded down to millions of farmers.

“All Africa needs to do is to harness the available technologies with the right policies and rapidly raise agricultural productivity and incomes for farmers and assure lower food prices for consumers,” Adesina noted.

Experts say good leaders need strong institutions to achieve set goals JEREMIAH MBATA & SANDRA OKOYE

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igeria’s defective leadership practices and weak democratic institutions have been blamed on the absence of sustained mutual relationship between good leaders and effective institution building processes.

Leadership and development experts say Nigerians have continued to believe in the possibility of a strongman coming to fix the country in one go. This was largely the motivation for electing Muhammadu Buhari as Nigeria’s president during the 2015 elections.

Governor Abdullahi Umar Ganduje of Kano State says there is need for symbiotic relationship between good leaders and strong institution to deliver national credibility and development as Nigeria struggles to build good leadership and strong institutions.

Ganduje, who made this statement at the recent 2018 Annual National Management conference, also stated that good leaders build strong institutions to help them achieve national goals rather than personal objectives.

“The existence of a strong, objectively analytical institution is likely

to strengthen the hands of a courageous leader in order not to pander for emotive demands that are not in the long-term interests of the generality or majority of the citizenry,” governor said.

The conference however charged strong leaders to rely on strong institutions rather than ‘strong men’ who tend to place their interests above national development goals.

Olakunle Iyanda, president and chairman, Nigerian Institute of Management, gave some reasons why Nigeria needed to shift from reliance on strong men to strong institutions.

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Africa under siege by rising mobile threat JUMOKE AKIYODE-LAWANSON

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frica’s increased mobile subscriber penetration of 44 percent and minimal attention on cyber security have made the continent particularly attractive as a choice target for cyber criminals.

CheckPoint Software Technologies, globally recognised provider of cyber security solutions, says although internet penetration in Africa was only 35.2 percent in December 2017, 19.2 percent behind the world average, cybercrime remains a serious threat to countries in Africa who face the main challenge of securing their cyber space.

This is especially because the continent has seen rapid growth in numbers of mobile phone subscribers, expected to hit 52 percent in 2025.

The company has therefore recognised Africa as an important region for growth and investment in software

technology solutions for cyber security.

“The sheer economy of scale offered by mobile devices is incredibly appealing to cyber criminals. They are using every available opportunity to attack individuals and organisations through their mobile devices, including Apps, particularly because these devices are so popular and people usually do not take as strict precautions when it comes to securing them as they would with their laptops for example,” says Rick Rogers, regional director, Africa at CheckPoint.

Two major vulnerabilities related to mobile devices over the past month have been discovered by CheckPoint, - Man-in-the-Disk, which its researchers discovered as a new attack surface for Android apps exploiting a shortcoming in the way that Android apps use storage resources, and FakesApp, which researchers discovered a vulnerability in WhatsApp

that allows a threat actor to intercept and manipulate messages sent by those in a group or private conversation.

It is no surprise that mobile attacks are having a major impact on organisations is Nigeria. One of the key markets in Africa, Nigeria has become a mobile-first country, with mobile penetration increasing from 53% in 2016 to 84% in 2017. And considering the availability of phones is at a lower price point, more Nigerians are now able to afford a mobile device.

Even though major malware like Ransomware, cryptominer, and banking trojans have had, and continue to have a big impact, it is mobile attacks on Nigerian companies that are growing in prevalence. When comparing the impact of these attacks to the global market, experts find that Nigeria averaged 20% 35% higher between January and August this year.

“The current threat landscape has evolved into a

much more aggressive beast.

We are now experiencing Gen V (5th Generation) cyber-attacks, which are characterised as large-scale and fast moving across multiple industries.

These sophisticated attacks on mobile, cloud and various enterprise networks, easily bypass conventional defences being used by most organisations today as they rely on older generations of security,” says Rogers.

Seeing that Africa is increasingly under threat from cyber criminals, the need for local businesses to partner with security specialists that can help them remain one step ahead of the game is essential.

To ensure that enterprises across Africa have access to the expertise and technology needed to protect themselves from sophisticated attacks on all fronts, the company has invested in growing its local teams in North Africa, East Africa, South Africa, SADC and West Africa.

7 NEWS

BUSINESS DAY

Flooding: Displaced persons laud intervention as Obaseki writes off victims’ medical bills

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ictims of the recent flood disaster housed in resettlement camps in Etsako Central and Esan South East local government areas of Edo State have lauded the intervention of the Godwin Obaseki-led government.

Speaking on the support they received at the resettlement camp in Ubiaja, Esan South East LGA, a victim, Happiness Ugbajo, from Efuko Island, commended the state government for giving them succour and providing them with beds, cooking utensils, foodstuff and temporary shelter.

Recall that the Edo government over two weeks ago evacuated the flood victims from some communities in Etsako Central and Esan South East local councils to safety in resettlement camps.

“We are happy and comfortable here. We feel at home, we appreciate the local and state governments for giving us this place. Youth corps members come here to teach our children and we have access to health talks and services,” she said.

A member of the Nigerian Red Cross Society at the camp, Victor Sagua, commended the state government for making the camp conducive for them to live in and said that the victims have been taught the benefits of good personal hygiene.

“There is no cause for alarm in the camp, a pregnant woman was taken to a nearby hospital where she put to birth safely and there

is another pregnant woman who is under our watch,” Sagua said.

Umaru Aminu Umaru, commander of Ekperi resettlement camp in Etsako Central LGA, explained that the state government had been taking care of their health and security needs in the camp.

“We thank the governor for paying the medical bills of six persons on whom appendicectomy were performed, including two women who gave birth through caesarean section.”

Special adviser to the governor on special duties, Yakubu Gowon, who celebrated the 58th Independence anniversary with the displaced persons at both camps, assured that the provision of relief materials and the welfare of the flood victims would continue to receive priority attention until they are resettled in their homes.

“We are here to celebrate the independence anniversary with our mothers, fathers and children in the camps, they have been here for over two weeks and the state government empathises with them. The state governor has been supportive, he has continued to provide relief materials to the IDPs and he is very concerned about their welfare.

“He has paid the medical bills of those who had to go undergo one form of surgical procedure or the other, and has been providing security to ensure safety of life and property at the camp.”

Tanker explosion kills many along Lagos-Badagry road MIKE OCHONMA

L-R: Aching Steiner, UNDP administrator; Geoffrey Onyeama, minister of foreign affairs, and Mark Lowcock, UN Emergency Relief Coordinator and Head of UN Office for the Coordination of Humanitarian Affairs, after a meeting at the 73rd UN General Assembly in New York, yesterday. NAN

Households secured credit to increase in Q4 2018 JONATHAN ADEROJU

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he total available credit to the corporate sector increased in Q3 2018, and it is expected to increase also in Q4 2018, and according to Central Bank of Nigeria (CBN) report the share market objectives are fingered as the major factor contributing to the increase.

The report further indicates that demand for secured lending for house purchase decreased in Q3 2018, but is also expected that more lenders expect demand for secure lending to increase in Q4 2018.

The CBN notes that the proportion of loan applica-

tions approved decreased in Q3, even though lenders maintained the same credit scoring criteria.

With the similar trends of the supply, the demand for total unsecured lending from households decreased in Q3 2018 but was previously expected to increase in Q4 2018.

Notwithstanding lenders’ resolve to stiffen the credit scoring criteria, the proportion of approved unsecured loan applications increased in the current quarter and was expected to increase in the next quarter, as lenders reported increased demand for corporate credit from all firm sizes in Q3 2018.

The report also notes

that lenders expect increased demand from all firm sizes in Q4 2018.

On defaults, secured loan performance, as measured by default rates, improved in the review quarter, and lenders expect lower default rates in the next quarter.

Total unsecured loan performance to households, as measured by default rates, deteriorated in Q3 2018 but is expected to improve in Q4 2018.

Corporate loan performance improved across all sizes of the firm in the current quarter, except for small businesses. Lenders generally expect a lower default in the next quarter, except for large Public Non-

Financial Corporations (PNFCs).

In loan pricing, lenders reported that the overall spreads on secured lending rates on approved new loans to households relative to Monetary Policy Rate narrowed in Q3 2018, but was expected to remain unchanged in Q4 2018.

The overall spreads on unsecured lending narrowed in Q3 2018 but were expected to remain unchanged in Q4 2018.

Changes in spreads between bank rates and MPR on approved new loan applications to all firm sizes narrowed in Q3 2018, but the regulator said it would widen for all firm sizes in Q4 2018.

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any vehicles were burnt beyond recognition while scores of people sustained injuries when struggling to jump out of their vehicles when a petrol tanker exploded yesterday along the Lagos-Badagry Expressway between the office of Department of State Security Services (DSS) and Ojo Military Cantonment.

Commuters, road users and eyewitnesses at the scene of the incident said the tanker fell as a result of the collapsed state of the road and spilled its content on the road.

The impact of the fall resulted in the explosion of the tanker, and in the process, other vehicles caught fire.

About seven vehicles were consumed by the inferno, while an unspecified number of people, who were trapped in their vehicles, were burnt during sad incident that occurred at about 6.38am on Tuesday morning.

As of the time of filing this report, men of the Fed-

eral Fire Service and Lagos State Emergency Services Management Agency, the Federal Roads Safety Corps (FRSC) the Army and the Police were seen condoning off the vicinity while efforts were being made to remove the debris caused by the inferno billowing from the burning vehicles.

The accident increased traffic gridlock on the road as commuters coming to Mile 2 were seen taking Tedi Road opposite the army cantonment as an alternative.

It would be recalled that since this year, road users along the corridor have been experiencing untold hardship due to the abandoned portions of the construction work by the Chinese Civil Engineering and Construction Company (CCECC).

This has resulted to high and daily accidents, loss of man hours, wear and tear on vehicles and regular armed robbery attacks with little or no interventions by the authorities concerned on a very important and strategic corridor that leads from Nigeria to other West African countries.

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BUSINESS DAY

Wednesday 03 October 2018

Wednesday 03 October 2018

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BUSINESS DAY

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Tax Issues

New Transfer Pricing Regulation: Game-changer for Nigeria – FIRS MICHEAL ANI

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he Federal Inland Revenue Service (FIRS) says the new Transfer Pricing (TP) regulations which took effect in March this year is a game changer as it will help drive tax compliance that will contribute to the growth of the Nigerian economy.

The revenue agency disclosed this statement at a stakeholders’ knowledge sharing session organis e d by Ernst & Young Nigeria (EY) in Lagos last week.

“This new regulation is a game-changer because it is going to drive compliance very well; it will also address other pressing issues – issues that pertain to Africa and Nigeria particulaarly,” Mathew Gbonjubola, Director, International Tax Department of the FIRS said.

“Furthermore, it will provide clarity to tax payers. This is very important because a lot of the noncompliance issues, arise as a result of lack of understanding or clarity of this rules.”

The Federal Inland Revenue Service (FIRS) in February this year revised Income Tax (Transfer Pricing) Regulations 2018 (the Regulations) which has ushered in a Transfer Pricing (TP) specific penalty regime.

The Regulations rep eale d the Income Tax (Transfer Pricing) Regulations No. 1 2012 (the 2012 Regulations), and had an effective date of 12 March this year. Thus, it applied to the basis period commencing after 12 March 2018.

Gbonjubola noted that the

new TP was introduced to correct a number of flaws that was contained in the 2012 draft such as issues around how certain c om m o d i t y s e r v i c e s ca n b e taxed which could be manipulated to make profit from one country to the other by either over-pricing or under-pricing, hence the review.

Also, there was base level of c orp orate shifting proje ct t h at w a s d o n e g l o b a l l y a n d there was s ome re c ommendation for countries to adopt

in their transfer pricing, he noted U n l i ke t h e 2 0 1 2 Re g u l a tions, the new TP Regulations intro duc es ad ministrative p enalties for TP relate d offences, This include a N10 million fine in the first instance and N10,000 fine every day if a firm fails to file TP declaration within the specified period.

N25, 000 for each day in which the failure continues if a firm fails to file an updated

T P d e c l a rat i o n /n o t i f i c at i o n ab o ut c h a n g e s i n d i re c t o r s .

The higher of N10 million or 1 percent of the value of the controlled transaction not disclosed, and ₦10,000 for every day the failure continues for failure to file TP dis closures within the specified period.

The higher of N10 million or 1 percent of the value of the controlled transaction incorrectly disclosed, the higher of N10 million or 1 percent of the value of all controlled transac-

tions and N10, 000 for every day the failure continues if a firm fails to file TP documentation upon request.

Finally, a 1 percent of the value of each controlled transaction for which the information or do cumentation was required and ₦10,000 for every day the failure continues if the firm fails to furnish information or document within the specified period.

However, Gb onjub ola explained that the essence of these penalties were to protect those that are complying those those that are not complying.

According to him, the practice is part of the recommendations of the Organisation for Economic Cooperation and Development (OECD) hence is worldwide and not just particular to Nigeria alone.

Echoing the same line of thought was the Team Lead, Transfer Pricing, EY Nigeria, Temitope Oni, who said the new draft was more comprehensive and clearer as many of the transfer pricing-related recommendations by the OECD were captured.

“We have codes that were not in the former draft, being covered for in the new regulations; als o, they are driving compliance because we are of the opinion that, many taxpayers have not been complying with the provisions of the old transfer pricing regulation.”

He added that the knowledge sharing session was held to sensitise stakeholders on the new regulations and also to prove EY’s commitment in building a better working world for businesses to thrive.

Three approaches to reimagining the tax and finance function

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he tax and finance function is struggling to keep up with digital advances, a push toward transparency and global reforms of the international tax system.

Here’s how they should adapt, writes Dave Helmer, EY Global Tax and Finance Operate Leader and EY Global Director of Business Tax Services Our recent study of senior executives from 1,722 large organisations around the world indicates that 84percent of companies are taking action due to deficiencies in their current target operating model.

It demonstrates how the tax and finance function generally is struggling to keep up with digital advances, a push toward transparency and global reforms of the international tax system.

The survey, which was conducted

by Euromoney Institutional Investor Thought Leadership and includes respondents from 63percent of the Forbes Global 500 largest public companies, indicates organizations recognize they need to be bold and innovate their tax and finance function to successfully manage these pressures and deliver value in an era of cost reduction. But it also shows many are struggling to find the right solution. 98percent companies believe that the core competencies needed from tax and finance profes-

sionals will shift from traditional tax technical skills toward deeper process and technology skills.

Determine your approach Once they decide to act, leading companies typically choose one of three approaches. Each has its pros and cons.

This report explores these options in more detail, using survey results to explain what companies are doing in the aggregate while offering insights to help companies decide which approach is right for them.

The first option is rebuilding or transforming the existing tax and finance function. This generally will include building a new digital platform, training or hiring tax technologists who understand both tax and the new tools and exploring the creation or expansion of a shared service center. 87percent responded that they don’t have enough resources in place to identify, evaluate and respond to new tax legislation.

The second option is outsourcing tax and finance activities to a third party.

Under this option, the IT costs and risks are shifted to the vendor(s) who have already made large investments in a technology platform and a global network of skilled people. However, it requires a significant change for the organization, including a new management and governance model. 51percent

of survey respondents said a lack of technological investment was having the most significant impact on the tax and finance function.

Find your path forward Leading tax and finance professionals need to reimagine their tax and finance functions to properly manage today’s mounting pressures. The path to success starts to emerge as companies take a holistic look at their tax and finance function and the role it plays in the overall organization. To identify and execute the change required, companies can take these few steps: Scrutinize the current target operating model: Companies must first examine their priorities around cost minimization, value creation and risk management and how the tax and finance function plays into the overall strategy. With a thorough understanding of their priorities, companies will have a clear view to assess any gaps in their current target operating model and its ability to stand in the future. 84percent of organisations are taking action due to deficiencies in their current target operating model.

Determine what to build: Keeping tax and finance activities in-house generally requires some degree of internal transformation aimed at optimizing a company’s existing

people, process, data and technology. Oftentimes, companies will want to maintain or build activities that are considered higher-value, or best-in-class, as they should be performed with optimal effectiveness and control.

Examples of best-in-class activities include tax planning and managing controversy.

Determine what to buy: Activities that are considered lower-value, or best-in-cost, should be performed at minimal cost through centralization, sourcing from lower-cost locations, or via third parties. This provides high efficiency performance of those activities at a lower cost. Some typical activities with lower cost or efficiency objectives include completion of tax returns and data collection.

Find the right mix: Once a decision has been made to designate an activity as best-in-class or best-in-cost, companies need to decide whether they want to “own” that task by keeping it in-house or alternatively “buy” or outsource the task to an external provider. Many businesses choose a hybrid approach in order to maximize the effectiveness and efficiency of their tax function. 84percent of companies are already outsourcing or considering outsourcing for the tax and finance

function.

There are pros and cons to keeping activities in-house versus outsourcing.

An internal transformation and keeping these activities in-house is the most traditional and may be the most familiar solution, as it creates the least amount of change and disruption. But it requires significant management focus and capital investment. Moreover, sustaining a robust tax and finance function in a rapidly changing environment may be the most difficult challenge of all.

Outsourcing to a third party can ultimately reduce overall tax costs, control unpredictable IT investment and pivot internal resources for more strategic activities. Because the external vendor bears the burden of making considerable investments in the necessary talent and technology, the company is able to leverage change more effectively. However, outsourcing requires a significant transition effort as well as management and governance of a new operating model.

With the challenges for the tax and finance function building, it is imperative to act. Companies should consider the best approach and take the necessary steps to meet their tax and finance objectives. Only then can they fully reimagine and deliver the tax and finance function they need and be positioned to thrive.

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COMMENT SMALL BUSINESS HANDBOOK

EMEKA OSUJI Dr Emeka Osuji School of Management and Social Sciences Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

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e are still a long way off the road to shared prosperity in Nigeria.

It has just been reported that Nigeria placed 171 in the list of195 countries whose investment in health and education were evaluated. The report just published in the international journal, Lancet, covered 2016. It was undertaken by the Institute for Health Metrics and Evaluation (IHME) of the University of Washington, United States. By this report, Nigeria has beaten some 24 other countries to it and taken the 171st place in this competition in which Finland was the number one. South Africa, our major reference country, was 144th. That could be quite encouraging, because no matter how CHARACTER MATTERS WITH DAPS

DAPO AKANDE Graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.”

Contact: dapsakande25@gmail.com

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ust the other day as I was approaching my children’s school, still about twenty meters or so away, I began to gradually decelerate in order to safely make the almost ninety degrees turn off the road and into the school compound. Being a responsible Lagos driver (why does that sound like a contradiction in terms?) I indicated well on time with my traffic lights, which is why I was so surprised to have the car behind me bellow its horn as if I had piled up ten miles of traffic by my very grievous offence of slowing down. This was a very free road with hardly any other vehicle in sight.

Why couldn’t he wait the split second longer it would take for me to clear off the road so he could pound the throttle in his bid to break the world’s land speed record? Honestly, I was flabbergasted. As my children must be so used to hearing, the next thing to blurt out of my mouth was,”this is just so typical.

Why are we Nigerians so inconsiderate and self centred?” It’s possible my children may well be getting tired of hearing that so often but my prayer is they will hear it enough for it to shape their minds and character positively, for one of the few ways parents can help to shape the future of the world

Wednesday 03 October 2018

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Still on education and poverty we view them, all countries are great in their own rights. However, Nigeria came behind the notoriously dangerous Democratic Republic of Congo.

There is so much statistics on the defects of Nigeria and her negative achievements. . Sometimes it reads like someone is after us and making sure we do not do anything right.Nobody is”doing us”, as they say in Nigerian local parlance. What is doing us is headless leadership that gives leadership only in the wrong direction.

It has been there. The only thing happening now, and it has been on for well over one year, is how to re-elect the current leaders for no other reason than that they need to complete their eight years like the ones before them. There is no discussion going on about who they are. If anyone tries to raise such conversation he immediately becomes hostile or an opposition member.

Lagosians, for instance, are now all ears waiting to hear the fate of their current governor, who is alleged to have fallen out of favour with those who made him. His report card is not based on anything about the projects he initiated or completed. It only has records of the kind of boy he has been to a few people, not the

‘ At the federal

people of Logos State, whom he is supposed to represent. At the end of the day, we find that people come into office for reasons and agenda completely diametrically opposed to the needs of the people they represent.

We are asking everyone to go back to agriculture. Nobody is doing anything about land reforms. The Land Use Act, one of the many frauds

of government against the people of Nigeria guarantees that no meaningful farming goes on in rural Nigeria. Land is in small bits and those who have it do not have title. They cannot raise finance with it because the Governor will not give consent.

Many governors are busy grabbing the land for themselves under the Land Use Act, which gives them absolute control over all land. One state governor in the South East is said to have about 2,000 certificates of occupancy to his name. At the federal level, it is the same thing.

Officials are distributing the peoples’ land among themselves in the name of federal government owning all federal lands. We are busy running a scam against our people and aspiring to lead Africa.

Nigeria is exporting poverty to its neighbours. It is time to begin to feel ashamed of our condition. We have laws that work only selectively.

We make policies and let them rot unimplemented. We cover up crime against the nation if the culprit is one of us, and we aspire to lead Africa. Some people say that once Nigeria makes it Africa has made it. I feel for those African countries waiting for Nigeria to lead them to freedom. Nigeria’s life expectancy is below the average for Africa. We have the highest maternal mortality and death rates of children at birth.

The list is embarrassing.

Those who have been leading the national assemblyare now in the field, asking Nigerians to make them president. These people have sat on all the bad laws that hold Nigeria down for years and found nothing wrong with them. There is nothing in the firmament that shows their imprint on the progress of Nigeria, while they headed parts of the ultimate law making bodies in the country. I think it is shameful to praise men like these who spent all their years in the National Assembly hiding from Nigerians, the sinful salaries and perquisites of office, which they gave to themselves.

The many years they spent in office was used to fight the Executive and for waging personal wars.The land Use Act is known to be the biggest handicap to the ability of Nigerians to feed themselves but they will have nothing to do with those important needs.

There are very few things we have done right in Nigeria and nobody appears to bother really seriously. Governments may come and go and Nigerians remain poor.

It is time to show some love to our country.

doing good. We treat each other in such a shabby manner, whether it be the way our supposed public servants lord it over us or even how the average Nigerian at the slightest whiff of an opportunity “chances” his fellow struggling compatriot. Unfortunately this shabby treatment seems to have become a Nigerian thing that no strata of society appear to be immune to. It’s quite incredible how well we’ve got it down to a Tee. God forbid I should speak for him and nor do I desire to but I can almost bet the devil himself must be impressed.

Is it the way we ever so sincerely say we’re coming when we’re really going?

Is it the way we rob not just Peter but John, James, Philip, Andrew and the whole clan to pay just moi? Or is it how what could almost pass as a small state’s annual budget is supposedly used to cut grass? Even more instructively, right before our eyes we have surprisingly quickly evolved into a community that either no longer discerns right from wrong or no longer cares. How often do we ask ourselves if our proposed course of action is right? The only thing that seems to matter now is, “can I get away with it”? To make it worse, when a “big man ole” is caught, the poverty ridden man who ought to see him as the cause of his pathetic state, having siphoned the commonwealth is the first person to empathise instead of calling for his head. How warped is that? In fact I’m convinced the devil must be respectfully doffing his hat.

So what is missing? As the root cause of all these ills is selfishness what is the cause of the selfishness? The absence of genuine love. Love for God and love for our fellow man. Without this the whole world and everyone in it can go to blazes for all one cares. If that chap behind me had genuine love in his heart he would patiently wait for me to go my way without making a fuss and we would all generally treat each

other better. I love the way the bible puts this in 1 Corinthians 13:4 where it says, ”Love is patient, love is kind.

It does not envy, it does not boast, it is not proud. It does not dishonour others, it is not self -seeking, it is not easily angered, it keeps no record of wrongs. Love does not delight in evil but rejoices with the truth. It always protects, always trusts, always hopes, always perseveres”. Need I say more?

I believe we’ve established love is the all in all so that naturally takes me to my question, do we truly love in Nigeria? I want to believe most of us don’t want people to die and all that but do we truly love others? Do we actually want the best for others and is this evident in our actions?

Yes, we love enough to favour some of our friends when we find ourselves in control of a public purse. We even love enough to settle some of our family members with our ill gotten loot but is that enough? Do we love enough to restrain the urge to dip our fingers in the cookie jar so millions of Nigerians can benefit from the God given resources of their motherland?

Do we love enough to see ourselves accountable to those who “voted” for us? Governors, do you love enough to pay civil servants their hard earned salaries as at when due instead of spending scarce resources on frivolities? Members of the National Assembly, do you love enough to review your humongous income so we can upwardly review the salaries of those whose services are equally crucial to the well being of our nation; doctors, nurses, teachers, police men and others? I was horrified to hear the salary of a whole police constable is less than forty five thousand naira a month! What is a family man meant to do with that? With this he’s expected to feed his family, pay for daily trans-

port, pay his children’s school fees and so much more. And we wonder why upon all the preaching and palpable disdain from the public towards them for their penchant to harass, they still extort hapless Nigerians on the road. We would do well to anchor our lives on the immutable word of God which says in Romans 13:9-10: “The commandments, “You shall not commit adultery,” “You shall not murder,” “You shall not steal,” “You shall not covet,” and whatever other command there may be, are summed up in this one command: “Love your neighbour as yourself.” Love does no harm to a neighbour. Therefore love is the fulfillment of all the law.”

I often feel we’re more interested in the appearance of things. More interested in how we appear than in the actual substance, the truth, warts and all. More interested in things appearing real than the reality, which would eventually help us. As the gospel says in 2 Timothy 3:1-5, “having a form of godliness” seems to hold a greater appeal to us than actually being godly. So why should we be surprised many become so easily enchanted by supposedly powerful men of God not because they speak the whole truth or because every teaching is painstakingly anchored on the scriptures but because of wonderful theatrics and the promise of supersonic miracles. Why should we be surprised most expressions of love are barely skin deep? Action, of the sincere variety, as they say, speaks louder than words.

“Do not accept anything as love without truth because love and truth have always been best friends” – Shannon Alder

level, it is the same thing. Officials are distributing the peoples’ land among themselves in the name of federal government owning all federal lands

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Love is...... (1) is by shaping their children’s values.

The first step to helping children to live right is for parents and guardians to live right.

I’ve taken time to do some research, I’ve observed, I’ve reflected and my irrefutable conclusion is, the most debilitating disease afflicting our society is not AIDS, tuberculosis or even malaria but selfishness, self centeredness and conceitedness. It’s debilitating because it saps the will or desire to do anything even remotely beneficial for others or for the good of all. Every Nigerian seems to have this belief that the whole world revolves around him or her therefore no one else really matters. This self centeredness I daresay, is the root of all other societal ills. Call it insatiable greed, 419, wanton corruption, cold hearted ritual killings, leaders that “don’t send”, kidnappers and even ordinary Nigerians who unashamedly defend them, a la the #FreeEvans movement.

Yes, believe it or not there is a group out there campaigning for this most despicable of men who callously caused countless of Nigerians untold misery to be freed! I wonder if any of the campaigners would still continue to sympathise with him and campaign he be set free if their own mother, spouse or child was abducted by another would-be Billionaire kidnapper, as the media have so glamorously monickered him.

I’ve said time and time again that we would be hard pressed to find many nationalities that do religion better than Nigerians but it is just a shame we don’t fare too well on the godliness scale; further evidence of our penchant for facade over substance. We’ve somehow been able to disingenuously detach, in our collective minds, the inextricable link between godliness and being true or

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The ordeals of sustainability professionals

KENNETH AMAESHI Amaeshi is a Policy Analyst and Professor of Business and Sustainable Development at the University of Edinburgh Business School, United Kingdom. He tweets @kenamaeshi

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he Sustainable Development Goals (SDGs) have become a dominant global preoccupation. They feature almost everywhere, and are shaping policies and practices across levels. One thing that is often mentioned in relation to the SDGs is that they are complex problems requiring collaborative efforts to address. They call for strong and creative collaborations amongst the public, private, and third sectors.

In the private sector, corporate sustainability can be succinctly described as an organisation’s genuine attempts to align with and contribute to meeting the SDGs. As such, some organisations are now engaging in all sorts of sustainability initiatives – from advocacy to zero waste management.

Some have gone as far as mainstreaming sustainability in all their processes and practices. The likes of Unilever appear to remain the global role models

EJEVIOME ELOHO OTOBO AND OSELOKA H. OBAZE Otobo is a Non-Resident Senior Expert at the Global Governance Institute, Brussels.

Obaze is a public policy expert and MD/CEO Selonnes Consult, Awka.

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ndependence anniversaries offer important opportunities to reflect on the course of national events. As Nigeria’s 58th independence anniversary being marked today, coincides with the 60th anniversary of Nigeria’s export of its first oil cargo, we offer this article as our contribution to the national reflection on a major public policy issue: Herdsmen-Farmers Conflict.

We refer to the oil export mainly to underline an important fact; that cattle rearing, from which Nigeria ought to be deriving much domestic and foreign exchange revenue by adopting global best practices, has degenerated into a source of national tension, antagonism, visceral violence and bloodletting. This is a policy failure of an epic scale.

Yet it would be wrong to attribute this failure to the current administration. Some 389 incidents of herders-farmers conflict were reported between 1997 and 2017, most occurring in the North Central geo-political zone. According to the Food and Agricultural Organization, Nigeria had 20.6 million herds of cattle in 2016 placing 14th among the

in this area.

However, in order for many organisations to mainstream and sustain these sustainability initiatives, they also need the requisite human capabilities and capacities. This has led to the emergence and proliferation of sustainability related jobs and roles in organisations. Given the newness of such jobs and roles, many people who move into them most of the time do not have the requisite technical background and training to fill such roles. Most of them tend to follow their interests in this area, while some are motivated to contribute to changing the world and how organisations respond to global environmental and social challenges. As such, many of them learn on the job and navigate their ways through the often tortuous labyrinth of organisational dynamics and politics.

Unfortunately for these sustainability professionals, no one loves change. Secondly, many people still fail to see the need for sustainability, especially in developing economies.

These economies simply want to grow, develop, and later worry about environmental and social challenges.

For them, the latter is a good problem to have and China, in recent times, remains a very good role model for this type of growth and development.

In sum, some people believe that if it is not broken, why fix it!

The other challenge that trails the sustainability role is the ever increasing demand to justify the role and its advice through the proverbial business case route. Should sustainability orientation automatically make money? Should it be profitable? If not, why not? The sustainability professional needs to adequately answer these questions to gain credibility and legitimacy in the organisation.

‘ In sum, it is fair to say that

sustainability professionals have a job many people will not like to do. No one wants to be the person always nagging top management and other members of the organisation to do the right thing and do things right

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Faced by these challenges, most sustainability professionals end up pushing up to win the support of doubting senior management and pulling up to carry along colleagues who are sceptical of senior management’s interest in sustainability. Trapped in the middle, the sustainability professional is inadvertently expected to be all things for all people. This is not a good space to be in.

In addition, the sustainability function, in most organisations, is seen as peripheral to the core business of the organisation and as such not adequately resourced. It is often seen as a cost centre and the first to lose its budget in times of emergency and turbulence, which appear to be often these days.

They are always on their toes to justify their existence. It can be a lonely space.

The sad reality is that intuitively sustainability is appealing but no one wants to invest in it. Senior management understand the need to protect the environment and minimise negative societal impacts, but they would

not want to go down this route unless it makes immediate returns in abundance. No one seems to believe or accept the long-term benefit rhetoric – perhaps because in the long term, we are all dead. This makes the sustainability role even harder!

In such scenarios, the sustainability professional wishes for some external forces to change his or her fortune. Some of these external forces include mega corporate scandals and organisational-life threatening situations. Research evidence shows that organisations seem to respond well to such near death experiences. But how often do such happen? Most organisations do not survive such crises and it is not in the interest of sustainability professionals to wish for such unless they also want to be out of job.

The other possible source of pressure is regulation. The view that corporate sustainability is a voluntary activity, sometimes makes it easy for organisations to walk away from it or do nothing about it. Regulation then becomes a strong way to nudge organisations on to the sustainability path.

This is a credible path, given that most of the issues sustainability professionals battle with are usually borne out of market failures and regulatory lapses. The regulator then should be the sustainability professional’s best friend and ally. Unfortunately, some regulators are behind the curve and or under capture by some business interests, especially in weak institutional environments.

In some contexts, where the civil society is vibrant, they can also be a force for good. At least, they can hold organisations accountable and endlessly hack on their reputation.

Organisations sometimes understand these pressures and sustainability professionals can take advantage of such.

Unfortunately, too, the civil society can suffer business capture and or be powerless; a double tragedy!

Tied to these challenges, the sustainability professional is also expected to walk the talk. Very few roles have such expectations. Are accountants expected to be good at accounting their personal financial activities?

Are investment managers expected to be good at managing their personal wealth? Are lawyers expected to be always law abiding? Expecting the sustainability professional to practice what he or she preaches moralises the role and can inadvertently become an extra moral burden for the sustainability profession. Again, that’s the cross of the sustainability professional!

In sum, it is fair to say that sustainability professionals have a job many people will not like to do. No one wants to be the person always nagging top management and other members of the organisation to do the right thing and do things right.

Despite the burdens of the sustainability professional, it is still a necessary job to be done and someone will have to do it. Perhaps, the joy of the profession is the zeal to take on new and complex challenges sustained by the hope of a fruitful and successful outcome. However, the job requires extra care and psycho-social balance. It is a role that requires a lot of emotional strength, diplomacy, and courage.

The sustainability professional should not be carried away by the lure of the positive kicks the role gives to the point of exhaustion and burnout. This is usually a possible outcome, which is rather unfortunate for a job to change the world!

cattle herds include policymakers and influencers. Naturally in their enlightened self-interest they loathe any adverse impact on their cattle investment, including restricting movement of herdsmen. In fact, the international best practices in cattle rearing and production do not include tedious movement of cattle or open-grazing.

Promulgation of anti-grazing Bill: Some stakeholders have argued that the promulgation of anti-grazing laws is not helpful to the resolution of the herdsmen-farmers conflict, insisting the promulgation of such laws are the cause rather than the consequences of the herdsmen-farmers conflict. What this explanation fails to explain is why herdsmen-farmers attacks have occurred in states that have not promulgated anti-grazing laws, for example, Delta, Edo, Enugu, Kaduna, Nasarawa and Ondo.

Surreptitious effort to Islamize Nigeria: This claim has been made by some analysts. However, the President has strongly disavowed that such a plan exists, insisting in his address to the meeting of Catholic Bishops in Sokoto on 9th September that such rumours are spread by persons with injurious schemes on the nation.

Naked attempt at land grab: Land remains a scare resource. A particularly disturbing feature of

the herdsmen-farmers conflict is the forceful seizure or occupation of land by herdsmen in various parts of the country. This not only discourages private investment but also damages the protection of property rights which is a key feature of market economy and democracy. This has prompted the Nobel Laureate in Literature, Wole Soyinka, in his open letter of June, 2018 titled “On Demand: A language of non- capitulation, non-appeasement,” to urge the President to send a strong warning that his administration would not tolerate forceful land seizure anywhere in Nigeria A careful review of these seven major explanations shows that there are some serious issues to tackle. Obvious existing gaps in policymaking and responses persist. Also evidence abound of important policy measures that the federal government can take to stem the tide of violence, restore property rights, ensure safety, and drive the dairy and leather industries and cattle economy in general to realize their potentials. But those potentials will not be realized unless and until policymakers are able to transcend the traditional binary parameters used to define national challenges and issues.

Send reactions to: comment@businessdayonline.com

A Time to reflect world cattle breeding nations. Paradoxically, Nigeria’s annual import of dairy products cost $1.3 billion; while she is barely benefitting from the global leather market valued at $75 billion annually.

Coming to grips with the problem of violence associated with cattle movement and grazing, compels us to examine the various rationalizations that have been adduced. By drawingon the various pronouncements of the government leaders, spokespersons of the Miyetti Allah Cattle Breeders Association of Nigeria (MACBAN) and the perspectives of various public commentators and policy analysts; an aggregate of seven explanations have emerged.

Climate change: As desert encroachment has intensified in Northern Nigeria due to climate change, herdsmen have engaged in habitual seasonal migratory patterns, moving from the semi-arid northern part of the country, during the dry season, to the middle belt and southern part of country to graze their cattle.

Climate-induced scarcity of water and viable grazing fields, inevitably translates to an existential concern.

That Herders and Farmers perceive the battle for grazing pasture and farmlands a matter of livelihood and survival is real.

Boko Haram infiltration of herdsmen: The notion that the at-

tacks attributed to herdsmen may be traceable to Boko Haram is widely presumed. Acceptably, in highly polarized environments, terrorists seek cover under any guise. Whilst it remains plausible that the successes of the Multinational Joint Task Force, (MJTF), might have compelled Boko Haram insurgents to seek cover for movement and intelligence gathering by embedding themselves within the ranks of herdsmen, the evidence of operational collusion has not been confirmed.

Sinister work of foreign marauders: More by default than by design, the intensification of herdsmen/ farmers conflict coincides with the spillover from the Libyan and Sahel crises, with the attending proliferation of small arm and light weapons (SALW). Foreign fighters that drifted from Libya have brought with them assault weapons, which they barter for cash, or present as tools that guarantee them job opportunities as herdsmen. Yet, it cannot be discounted that some cattle owners, concerned about rustlers, have also equipped herdsmen with assault weapons.

Diversionary tactics of corrupt politics: Corrupt practices manifest in different forms. Often, the nexus between ownership of cattle herds and public policy concerning cattle rearing is ignored. Though hardly admitted publicly, real owners of

Send reactions to: comment@businessdayonline.com

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EDITORIAL PUBLISHER/CEO

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

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

Bashir Ibrahim Hassan

Need for a Lekki development master plan

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he L ekki corridor, also known a s ‘ Ne w L a g o s ’ is, arguably, the fastest growing settlement in Africa. With its fast developing real estate market, huge construction projects and major developments, this corridor is emerging as new main-street of Africa, offering vast investment opportunities. The corridor is attracting huge individual and institutional investments such as the Lekki Free Trade Zone (LFTZ), the ambitious Dangote Refinery expected to come on stream by 2019, the Lekki deep seaport, chemical and fertilizer plants, among others.

About 70 companies cutting across diverse sectors of the economy are said to have signalled interest to do business within the LFTZ with many of them promising billions of dollars of investment in the corridor, which also boasts of West Africa’s biggest shopping mall. Even at that, the Lagos State government says this is just a scratch of the surface as the zone presents limitless opportunities

still to be tapped by local and foreign investors.

However, with all these investments and potentials to grow into a city with its own soul, there is no known and concrete plan at public or private sector level to provide the critical infrastructure that will drive and give those investments any meaning.

So far, the only access road to Lekki, for all it represents, is the six-lane Lekki-Epe Expressway that terminates at Abraham Adesanya estate.

The entire stretch of the road is congested with cars during rush hour because there are no viable alternatives. And there are increasing fears that things will get worse in that corridor when all the big ticket projects like the Dangote Refinery and Petrochemical complex as well as the Lekki Deep Sea port comes on stream within the next four years.

The implication is that the Lekki corridor is developing to be the heart of business activities in the country’s commercial capital when all these projects are completed. However, governments at the state and federal level are failing to

provide the critical infrastructure that is needed to support the huge developments taking place in that corridor. By now the government should have been busy expanding the road from Abraham Adesanya to Epe, constructing alternative roads, and building a rail network and providing other infrastructure and amenities to make life in that corridor match up with the development taking place.

But no, practically nothing is being done and nothing will be done until the situation is out of control before government thinking of a solution or plan.

Even the coastal road that was meant to link Victoria Island and Epe, and whose construction should have taken place simultaneously with the LekkiEpe Expressway construction has remained on the drawing board without any movement.

We see a recreation of another Apapa, Nigeria’s congested and gridlocked premier port city. But Lekki’s case will be worse than Apapa’s because there are multiple access roads to and from Apapa, but there is only one road to and from Lekki.

Besides critical infrastructure, there is also the fear that there is no planned development in the corridor even as more people move into the area. Analysts believe the government would be contending with the development of urban slums if it does not take an interest in how the area develops.

The long term impact may be a significant drop in property value that will leave land speculators counting their losses. Property value in Apapa has dropped by almost 50 percent as residents are fleeing and businesses are relocating.

No new investment is coming into the port city at the moment.

We call on the Lagos state government to wake up to the demands of administering a cosmopolitan city as Lagos. It should, as a matter of urgency, create a master plan for the development of the corridor and show commitment, beyond mere words, to building new road and train networks that would ease the congestion on that axis and bring the infrastructure in line with major cities in the world.

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

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Wednesday 03 October 2018

BUSINESS

COMPANIES & MARKETS

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‘Customer experience is our strategic focus in Diamond Bank’

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

United Capital re-launches platform to drive financial inclusion MICHEAL ANI

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nited Capital Plc, a financial investment group has launched an improved version of its online trading platform “InvestNow” that will help drive financial inclusion across all segment and deepen the Nigerian capital market.

This is in line with the expansion of the scope and perspective of the firm to reach out to a wider market in Nigeria.

“This new version is an improved level of our initial platform that will not only on the securities trading segment of the market, but will move beyond the equities market to the money market, providing high-level convenience and empowering investors to manage their account”, Peter Ashade, group chief executive officer for United Capital said.

According to him, the platform was first launched in 2014 but strictly as a solution for online securities trading on the floor of the stock exchange.

However, with the firm contin-

ued innovation, the platform was improved to inculcate other aspect of the group.

“With the new version, InvestNow covers other segments of our business including the trustees, investment banking and asset management”, Ashade said.

On his part, the Joseph Onyema, chief information officer of United Capital, said “the new version of InvestNow moves beyond the equities market to the money market, providing high-level convenience and empowering investors to manage their account”.

He noted that the new platform comes with variety of products that will help drive financial inclusion by catering for all segments of people across Nigeria.

He said that in other for them to drive top notch services across board, the company is creating WatsApp trading platform that will see that the needs of customers are attended to at all time. “The new platform also has a call centre running which is the first of its kind for our company”, he said.

According to him, unique products and features avail-

Dada Thomas, president, Nigerian Gas Association (NGA), (middle) sounding the closing gong at the Nigeria Stock Exchange (NSE). With him are; Taji Ogbe, executive secretary, NGA, (left); Favour Femi-Oyewole, head of information and security, NSE, (2nd left); Bola Adeeko, head, shared services division, NSE, (3rd left); Audrey Joe-Ezigbo, first vice president, NGA (2nd right), and Mina Abiodun, secretary general, NGA (right), during NGA’s visit to the Exchange in Lagos, ahead of its International Conference & Exhibitions scheduled for Abuja October 14-16, 2018.

able on the new platform are the direct debit functionality that helps to make saving and investment easy for the customer, by allowing for direct transfer from the customer’s bank account to their invest-

Odua investment wins contract case against Holiday’s and Tours Akinremi Feyisipo, Ibadan.

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Federal High Court sitting in Lagos has dismissed a case instituted by Holidays & Tours Limited against Odu’a Investment Company Limited for lack of merit.

In the judgment delivered by Justice I.N Buba, he affirmed that there was no valid and subsisting contract between Odu’a Investment Company Limited and Holidays and Tours Ltd as claimed by Holidays and Tours Limited in the case.

Holiday and Tours in the case alleged that there was a subsisting contract between Odu’a Investment Company Limited and itself whereby Lagos Airport Hotel, a subsidiary Company of the Odu’a Group was leased to it on “Lease, Redevelop, Operate and Transfer basis.

Holiday and Tours there-

fore placed a Caveat Emptor [buyers beware] in one of the National Newspaper of April 21, 2017 warning potential investors to disregard the expression of interest advert placed by KPMG on behalf of Odu’a for the repositioning of Lagos Airport Hotel.

It was stated in the judgment that the company failed to established or prove that there was a contract between it and Odu’a and therefore the plaintiff was not entitled to any relief for an award of damages or injunction as being sought.

While dismissing the case for lack of merit, the trial Judge referred to Holidays & Tours as “a busy body, gold digging and dishonest suitor trying to reap where it never sowed”.

The Judge said further that “the relief being sought by the plaintiff is the most egregious relief. The plaintiff was a small outfit which

before its bid in the Lease, Redevelop, Operate and transfer scheme never operated a major hotel in Nigeria but now sought this gold-digging prayer to be granted 1Billion Naira gratuitously”.

According to Justice Buba “the plaintiff is in the mildest being clever by half and in the strongest of terms plain dishonest” noting that the suit filed by it is a fundraising project by the plaintiff while other reliefs have been thrown in as red herrings to give its impression that plaintiff want to perform the contract.

The case instituted by Holidays and Tours was therefore dismissed as unmeritorious. With the outcome of the judgment, stakeholders and potential investors are hereby advised that there is no encumbrance or pending litigation on Lagos Airport Hotel.

ment account. The online wills which allows users to create a will online; and zero account balance which allows customers to open an account without funding their account.

The Direct Debit fund in

InvestNow, Onyema said will make it possible for investors to fund their account from their other existing bank accounts per day, per week or per month, growing their online investment automatically, al-

lowing them to focus on other things.

According to him, the platform is built an EV level 3 certificates that will ensure that client’s information’s are secured.

Internal auditors urged to embrace technology to remain relevant Endurance Okafor

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he Institute of Internal Auditors (IIA) Nigeria, a registered non-profit organisation has urged players in industry to embrace technology in order to remain relevant.

This was disclosed at the fourth annual conference of the Nigeria arm of the global Institute of Internal auditors with the theme: Advancing Internal Audit in a Disruptive Landscape.

Uduak Udoh, board chairman & president of IIA Nigeria said impacting technology into auditing is the way to go, else internal auditors will be disrupted.

“For internal auditors to remain relevant, they have to change the way they look at things, they must embrace technology. They must let it affect the way they carry out their functions, otherwise

they will become irrelevant,” Humphrey Okorie, the chief executive officer, IIA Nigeria said this year’s IIA Nigeria conference focused on equipping the internal audit activity to fulfill her pivotal role in the unpredictable and indeterminate economic and business tumult in human existence.

“This conference would assist you take the lead in providing advisory services to aid your organisation begin to discern, harness and soar high as an eagle. I believe the time has come for the internal auditing profession in Nigeria to become the most sought-after career; and to this end, issues that would enable the advancement of the professional practice of IIA Nigeria will be exhaustively deliberated upon,” Okorie said.

Meanwhile, IIA Nigeria is the only affiliate of the IIA Global in the country. The IIA is the creator and custodian

of the International Standards for the Professional administers, the only globally recognised certification for internal auditors- the most important being the Certified Internal Auditor (CIA).

During the two-day 2018 conference, the all-inclusive, diversified and fully committed IIA Nigeria 2018-2019 Board, whose tenure commenced following the January 27 2018 Annual General Meeting and elections were officially presented to IIA Nigeria, partners, and stakeholders.

Speaking on the take away from the conference, the Chairperson of the institution, Udoh said IIA Nigeria looked at internal audit as a function, and how it will remain in the future “will it remain as a department or it will become part of other business entities such that it will be partnering with those other businesses.

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COMPANIES & MARKETS ‘Customer experience is our strategic Business Event focus in Diamond Bank’ ODINAKA ANUDU

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u s t o m e r S e rvice Week is celebrated annually across the world during the first full week of October. This is a period when customerfriendly institutions and organisations offer gifts and certain special services to customers.

In Nigeria, one of the few commercial banks that recognise the power and importance of the customer is Diamond Bank. The bank focuses not just on customer service but also on customer experience.

“The way we view customer service in Diamond Bank is a little bit different,” Michelle Nwoga, head of customer experience & engagement centre in Diamond Bank, said in an interview in Lagos.

“For us in Diamond Bank, what we focus on is customer experience. The reason is that I can walk into a branch and a teller serves me. The teller has given me a service, but the branch is not the only place that I, as a customer, can interact with. I can interact with my mobile app; I can interact with Diamond online, and I can interact with staff and also the contact centre. All these channels of interactions are different ways the customer experiences the services,” Nwoga explained.

The bank is strategic with this, whether online or offline. For Diamond Bank, customer interactions happen via chats, calls, social media, live chats and even on the banking hall. The focus of the bank staff members is on leaving the customers happier than they met them.

On the social media front, which is where the majority of young bank customers are found, the bank interacts with customers via Facebook, Twitter, Instagram and other channels.

Responses are given to customers, whether on the social media or other channels, within six minutes.

Little wonder why the bank, in 2017, won the Most Responsive Bank on Social Media from the African Commercial Banks Social Media Benchmark.

“For us at Diamond Bank, when we talk about customer service and experience, we talk about speed, efficiency, convenience and responsiveness across all our different touch points,” Nwoga said.

For Alex Alozie, head of operations, Nigerians understand how much quality

service Diamond Bank offers, which is why the bank has over 10 million retail customers across the country today.

“As of today, the number of customers that use our *426# is even more than the number using our app on daily basis,” Alozie said.

“In terms of the number of transactions, we control over 40 percent of the industry market on that. Ours is unique. You can use any type of phone, not just a smart phone to do transaction on*426#. Most of our customers in financial inclusion areas use it. So, today, we use it not only to send money across to Diamond Bank, but to also send money to other banks,” he said.

Alozie disclosed that in terms of speed, based on statistics from the Nigeria Inter-Bank Settlement System (NIBSS), which is an independent body, Diamond Bank is adjudged the fastest in terms of transferring money to other banks.

“The records are there to show that we have the highest number of customers on that platform,” he added.

Ojiugo Emeruem, head of contact centre, explained that in terms of speed of responding to claims, the bank is guided by the CBN, which has a list of different timelines for different case types.

But Emeruem went further to state that the bank always tries to deliver ahead of the defined time.

Diamond Bank does not do manual reconciliation. The bank has robots, which inform it of failed transactions on ATM within minutes. The advantage of using this kind of advanced technology is that it enhances speed and customer experiences. Many bank customers in Nigeria have been asked to wait for two days before their failed transactions are reconciled and their money returned to them. But the use of robots eliminates this.

More so, the bank has hotlines for customer complaints.

These are toll free lines that customers can pick up.

“If you have an issue, those lines are provided beside our ATM machines and customers always get feedback,”Emeruem said.

Diamond Bank recently launched a whistle blower scheme to enable customers share their experiences with the staff. The essence of this is to enable the customers ventilate their opinions and complaints directly to the bank, rather than doing that on the social media.

Furthermore, one big way in which Diamond Bank en-

hances customer experience is through a chatbot named ‘Ada’.

This is an artificial intelligence (AI) technology, launched earlier in the year, providing a human-like interaction and personalised experience for customers.

Ada enables transactions such as airtime purchase, bill payments, stock trading, and money transfers via the social network platform.

Ada gives Diamond Bank the opportunity to reach millions of people, It also facilitates financial inclusion.

“Ada is a savvy, intelligent staff member of the Diamond Bank,” explained Emeruem.

“It is one of the things that we did leveraging on artificial intelligence and social media to provide a conventional means of interaction and basic banking transactions for customers via telegram, Facebook.

“Social media uptake is very high, as you know. So, we provided it on the platform where we knew it would be easy for somebody to interact. Ada answers your questions, helps you carry out basic banking transaction like transfers, provides information like forecasts, football fixes, and stock market prices,” she said.

She further stated that the uptake has been impressive.

“In a day, we have an average of 400 to 500 and it is increasing on daily basis in terms of customers who are interacting and carrying out transactions with Ada,” she said.

Ada is also not restricted to Diamond Bank customers as it also affords the bank the opportunity to interact with those who may need one thing or the other from it.

To celebrate this year’s Customer Service Week, Diamond Bank has an array of activities lined up for customers and even for the staff.

In the words of Nwoga, “We are going to reward customers with gen points when they carry out transactions with *426#. We also have ‘Happy Hour’ in our branches where we celebrate customers at a specific period in the day. We have got cakes and sweets. The ambience in our branches will be fantastic because it is going to be decorated. We are rewarding the Diamond Extra customers by presenting them with the gifts. We are supporting the Breast Cancer Awareness Month with our Diamond Women. We have a lot of events for staff, who are the ones providing these services to customers. They will be motivated and rewarded.”

L-R: Adeoye Abodunrin, executive director, Xpos technologies; Eugene Ohu, head of department, organizational/human resources management, Lagos Business School; John Obaro, MD/CEO, SystemSpecs, and Chukwuemeka Fred Agbata Jnr., co-founder, GoDo.ng, at the official unveiling of GoDo.ng in Lagos.

PicbyOlawaleAmoo.

L-R: Segun Ogunsanya, MD/CEO, Airtel Nigeria presenting Airtel sourvenir to the Nyesom Ezenwo Wike, govenor of Rivers State, during the Airtel Team visit to the office of the governor before the official launch of Airtel 4G LTE in Rivers State.

L-R: Peter Kajovo, events and sponsorships analyst, MTN Nigeria; Chinyelu Onochie, senior manager, Go-to-Market, MTN Nigeria; Oluforijimi Amu (DJ Jimmy Jat), Nigerian Disc Jockey, and Oduntan Adeola, general manager, supply chain management, MTN Nigeria, at the Preindependence party that held in Lagos.

L-R: Olalere Akinreti, chairman, Nigeria Union of Journalists (NUJ), Lagos State Chapter; Mauricio Alarcon, managing director of Nestle Nigeria PLC, and Lanre Idowu, trustee, Nestle Dame Nutrition Writers Awards, during the signing ceremony of the awards agreement in Lagos.

BUSINESS DAY

Wednesday 03 October 2018

15

CityFile

Kaduna: Group mobilises residents to demand good governance

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takeholders working for Open Government Partnership (OGP) have begun sensitisation campaign to enable residents demand for transparency and accountability in the running of government affairs in Kaduna State. The state signed into the OGP platform in 2017.

One of the stakeholders, Saied Tafida of Follow Taxes, explained at a sensitisation forum in Kaduna that the main aim was to enable the people engage government and demand for improvement in service delivery.

Tafida, who is also the secretary, OGP Kaduna, said the partnership was to encourage openness in budgeting and contract awards, ensure ease of doing business, enhance access to information and citizens engagement.

According to him, the essence is to secure concrete commitments from governments to promote transparency and accountability and empower citizens to fight corruption in governance.

“We can’t hold government accountable if we do not play our roles as citizens. Nigeria belongs to us and the government is supposed to be working for the people.

“As such, we are supposed to be responsible in setting government agenda through dialogue and advocacy.

“We have a role to play in policy formulation, decision making, policy implementation and policy evaluation toward ensuring improved quality of services and prudent use of public funds,” he said.

Flood victims create new IDP camps in Delta

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he impact of flooding in Delta has caused victims who could not access any of the 12 government established Internally Displaced Persons (IDPs) camps to create 10 new camps for themselves.

However, the flood management committee recently created by the state government and the National Emergency Management Agency (NEMA) said they were on top of the situation.

The agency said that it would cater for the needs of the people in both the government and the private camps.

Kayode Fagbemi, director, relief and rehabilitation, NEMA, in a statement in Asaba, commended the state government after inspecting some of the IDP camps and areas affected by the flood.

He noted that government had been proactive in the setting up of the camps to handle the impact of the flood across the state.

He expressed his sympathy for the people for their suffering and inconveniences particularly for those in the private camps and gave the assurance that the challenge was being addressed. The director expressed hope that the effect of the flood would not be as devastating as that of 2012.

In an interview, Walson Brandon, NEMA incident coordinator for 2018 Flood Emergency Operations Centre, Anambra and Delta States, said the agency was handling the situation.

According to him, NEMA had on Friday delivered truck loads of relief materials for distribution to the IDP camps in Delta.

He said that the material supplied included rice, tin tomatoes, blankets, mattresses, mosquito nets, sanitary pads, pots, children’s wears, women and men’s wears, water purifiers, others.

Brandon said that when the agency reviewed the situation in the camps there might be additional supply of relief materials to complement and to ensure that the victims’ needs were met.

He said that the agency was working with other partners to ensure that the people had good life while at the camps. He said that after the flooding the next line of action would be on how to resettle the victims back in their homes.

“Now, what we are doing is purely response and the most important need of the people now is how to eat. This is why, as you can see today, we are handing over some relief materials and medications.

Folashade Adesoye (m), head of service, Lagos State; Edgar Imohini (2nd r), CP; AbdulHakeem AbdulLate (r) commissioner for Home Affairs, Lagos State, and Tajudeen Ajose, the Apenaola of Lagos, representing, the Oba of Lagos, Oba Ridwan Akinolu, at the Independence cecelebration on Monday.

Navy apprehends 14 suspected oil smugglers IDRIS UMAR MOMOH

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ourteen suspected oil thieves have been arrested by the Nigerian Navy for smuggling adulterated diesel and ‘black oil’ to unsuspecting consumers in Rivers.

Samuel Garba, executive officer, Nigerian NavyShipPathfinder,madethedisclosurewhile parading the 14 suspected smugglers before newsmen in Port Harcourt, the state capital.

Garba told journalists on Monday that the suspects were caught trans-loading adulterated diesel and black oil from 12 large wooden boats into nine 33,000 litres capacity trucks.

According to him, the suspects were arrested in three different raids carried out at suspected illegal bunkering sites in Marine Base, Rumuolumeni and Eleme locations.

“In the first raid on September 16 at Horly Kings Waterfront at Marine base, our patrol team arrested nine suspects while transloading petroleum product.

“They were caught lifting substances believed to be stolen crude oil from eight wooden boats to six trucks stationed within a yard at the waterfront.

“In addition, a Sport Utility Vehicle stacked with sum of N1.95 million belonging to one of the suspects was confiscated,” he told newsmen.

Garba said that the troops also arrested one suspect accused of trans-loading stolen diesel from two wooden boats to a truck on September 17 around Yesin Waterside area of Rumuolumeni.

The executive officer said that the wooden boats were discharging the adulterated diesel to the truck stationed 100 meters away from the site before the seizure.

“The third raid was conducted on September 27 around Sand Fill at Eleme. There, we caught four suspects in the act discharging substances suspected to be black oil.

“The suspects were discharging the petroleum product into two 33,000 litres capacity truck stationed nearby before their arrest and seizure.

“Consequently, a total of 14 suspects, 12 wooden boats with products and nine trucks were detained to enable the (navy) base to conduct preliminary investigation,” he added.

Garba handed over the 14 suspects, diesel and oil to operatives of the Nigerian Security and Civil Defence Corps (NSCDC) to conduct further investigation and possible prosecution of the suspects in court.

He said that the handover was in line with the Harmonised Standard Operating Procedures that spelt out roles for security agencies in combating illegalities in the oil and gas sector.

According to him, the navy will not rest on its oars until it rids the waterways and creeks of illegal refining and bunker sites as part of efforts to end years of oil theft.

Receiving the suspects, Onuekwa Khela, NSCDC’s Head of Intel and Investigation, commended the navy for its synergy with the corps.

Khela, who said the corps would conduct speedy investigation into the matter, pledged that the suspects would be arraigned if found culpable to the crime.

Bayelsa orders closure of schools over flooding Samuel Ese, Yenagoa

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ayelsa State governor, Henry Seriake Dickson has ordered the closure of public and private schools as a precautionary measure to avert loss of lives as more communities are submerged by the rising water level in some parts of the state.

Dickson also directed the distribution of relief materials to communities and people affected by the flooding though more communities and people could fall victims as the flood is yet to abate.

Yakubu Suleiman, coordinator of the National Emergency Management Agency (NEMA) in Rivers/Bayelsa territory said that some 150,000 people have been displaced by the ongoing flood following rising water levels.

Suleiman said in Yenagoa on Sunday that the agency arrived at the figure after evaluat-

ing the flood situation across the eight council areas in the state.

Daniel Iworiso-Markson, the state commissioner for information and orientation, in a statement, said the decision to temporarily close schools was reached at a state executive council meeting.

Iworiso-Markson said that the government has also set up a special committee to facilitate prompt and effective response to the flood emergency in the state.

According to him, the council also directed the ministry of health to set up an emergency health response unit in the state to mitigate the effect of the flood on the people.

Iworiso-Markson added that the Emergency Health Response Unit of the ministry of health was designed to monitor and prevent the outbreak of diseases like cholera during the period of flooding in the state.

He said the director of the State Emergency

Management Agency (SEMA) briefed the council on the flood situation and commenced the distribution of relief materials to affected communities on Saturday.

The commissioner advised Bayelsans not to panic as the government was making all efforts to secure lives and properties in the state as nearly all the local government areas were seriously affected by the flooding.

“The council has directed immediate closure of all schools including private institutions in the state as a precautionary measure to avoid loss of lives to severe flooding in the state.

“The government has also set up a special committee to coordinate activities relating to the flood which has affected several communities in the state. The council also directed the commissioner for health to set up an emergency response unit to monitor and prevent the outbreak of diseases like cholera and others associated with flooding,” he said.

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In Association with

Banks record 1.0% increase in assets, liabilities Stories by HOPE MOSES-ASHIKE

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ast week, the Central Bank of Nigeria (CBN) released its economic report or the month of August, which indicated that total assets and liabilities of Deposit Money Banks (DMBs) grew by 1.0 percent to N35.98 trillion at the end of July 2018.

The banks sourced their funds mainly from increased unclassified liabilities, mobilisation of time, savings and foreign currency deposits as well as increased demand deposits.

In terms of usage, the funds were used, largely, to acquire unclassified assets, increase reserves, and increase claims on the central bank.

Meanwhile, banks’ credit to the domestic economy fell marginally by 0.4 per cent to N19.04 trillion at the end of July, 2018, in contrast with the level at the end of June, 2018. This was attributed to the decline in claims on both the Federal Government and the private sector in the review month.

Total specified liquid assets of banks stood at N11.

75 trillion at the end of July 2018, representing 77.12 per

cent of their total current liabilities.

At that level, the liquidity ratio was 0.99 percentage point above the level at the end of June, 2018, and was 29.12 percentage points above the stipulated minimum liquidity ratio of 30.0 per cent.

The loans-to-deposit ratio, at 64.30 per cent, was 0.3 percentage point below the level at the end of the preceding month, and was 15.70 percentage points below the maximum ratio of 80.0 per cent.

Banks’ credit to the private sector, on monthon-month basis, fell marginally by 0.1 per cent to N22.26 trillion at the end

of July, 2018, in contrast to the growth of 0.3 per cent and 0.9 percent at the end of the preceding month and the corresponding period of 2017, respectively. The development reflected the 0.8 per cent decline in claims on the State and Local Governments. Over the level at end-December, 2017, banking system’s credit to the private sector declined by 0.1 percent, compared with the decline of 0.04 per cent at the end of June, 2018, as a result of the 0.9 per cent fall in claims on the core private sector.

Foreign assets (net) of the banking system, at N17.78 trillion, on monthon-month, fell by 3.0 per

cent at the end of July, 2018, in contrast to the growth of 0.2 per cent and 3.3 percent at the end of the preceding month and corresponding period of 2017, respectively.

The fall was ascribed to the 3.2 per cent decline in foreign asset holdings of the CBN. Over the level at the end of December, 2017, foreign assets (net) increased by 14.6 per cent at end-July, 2018, compared with the 18.2 per cent growth recorded at the end of June 2018.

The growth was attributed to the 14.1 per cent and 33.1 percent growth in the foreign asset holdings of the CBN and banks, respectively.

Heritage Bank urges entrepreneurs to collaborate with SME desks for growth

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eritage Bank Plc, has encouraged the budding African entrepreneurs of the Next Titan Housemates to talk to small and medium enterprise (SME) desks of banks because the Central Bank of Nigeria (CBN) has a policy for disbursing money to banks for SMEs sector.

Ifie Sekibo, managing director/CEO, stated this while delivering a keynote address titled: Why African needs new breed of entrepreneurs and why is Heritage Bank championing it, at the premiere of the 5th edition of the Next Titan TV reality show in Lagos over the weekend.

The Next Titan is Nigeria’s entrepreneurial reality TV show where thousands of ambitious young entrepreneurs across the country compete with one another for a grand prize of N5 million and a brand new car to start his or her dream business.

He, however challenged the budding entrepreneurs to stir up their entrepreneurship DNAs in a bid to allow innate ideas to flow and blossom.

According to Sekibo, the entrepreneur is not the risk taker but the person who relentlessly pursue opportunities without recklessness, without regard to not having money, house or car or any strong financial support from family members, remarking that in most cases, he is the one that drops out at of school.

He said during the precolonial era in Africa, Africans, (our fore fathers) who were the entrepreneurs of those days

in places like Lagos Island and Badagry were engaged in fishing and farming as well as trade across the west coast among themselves under an organised system.

The bank’s chief said during the colonial period, (our fathers) were affected by the culture and traditions of the colonialists a development which affected their psyche, thereby making what is foreign to be more important than what is local.

Sekibo said western tradition became the order of the day as Africans moved away from entrepreneurship to white collar jobs to earn monthly income and the word job came into play, adding that work was no longer defined as the work of a tough man or woman on the farmland but depended on how much of the colonial language one understand.

In order to reverse the trend, Sekibo contended that budding African entrepreneurs should relive the DNAs that their forefathers left for them by uncapping them so that their innate ideas could flow and blossom.

He said Africans burn with ideas but they needed to mine them so that they could blossom, remarking that they need to have mentors that will enable them to achieve their goals.

The Chief Executive also said money is very critical to entrepreneurship and they had to be bold and courageous to get it, adding that there is a spirit behind getting money which is largely influenced by character and integrity.

Fidelity Bank promises better returns for investors

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idelity Bank has assured the investors and analysts community that the top Nigerian lender will deliver better returns in the 2018 financial year.

Speaking in Lagos, Friday during the Half Year Investors and Analyst Conference Call, , Nnamdi Okonkwo, CEO, said the bank will maintain the disciplined approach to the execution of the medium term strategic initiatives, that have sustained the bank’s strong performance in recent years.

“From what we have seen so

far and going by our half year results, we are staying with our guidance for the full year” said Okonkwo.

The engagement with investors and analysts, came on the heels of the recently released H1 2018 results which saw the Bank record doubledigit growth in key revenue lines and achieving significant traction in its chosen business segments.

Gross profits rose by 27.3 to close at N13 billion whilst Profit After Tax (PAT) grew by 31 percent to close at N11.8 billion from N9.03 billion re-

corded in 2017, a performance that Okonkwo attributed to the “disciplined approach in managing the balance sheet growth of the bank, it’s strategic cost containment initiatives; focused attention to chosen business segments and determined execution of its retail and digital banking strategy” The bank’s much awaited HI 2018 results have been positively received by the market. Renaissance Capital said “on a sequential basis, PBT was up an impressive 61 percent QoQ, largely driven by

much stronger income during the quarter. We like the decent 8 percent QoQ (+3 percent YtD) growth in the bank’s loan book, which was largely driven by the manufacturing, general commerce and transport segments. We find this performance impressive in light of the tepid growth in the sector.”

“The bank’s Return On Equity (RoE) of 12.2 percent is the highest it has been since 2008, driven by a combination of higher Return On Asset (RoA) and leverage – leverage of 7.6x in 1H18 com-

pares with 6.9x in FY17, while RoA of 1.6 percent, compares with 1.4 percent, within the same periods. Contributing to this RoE uplift, is of course the IFRS 9 impact of a lower equity base” Rencap further stated.

Also, analysts at InvestmentOne pointed out that “the Bank’s efforts at driving its digital banking strategy is paying off, having posted a 30.1 percent year-on-year boost in non-interest income to N14.3 billion in H1 2018” According to them, the growth was driven mainly by a 60.9

percent year-on-year increase in net fees and commission.

“The Bank’s digital banking strategy has shown that about 40 percent of its customers have now enrolled on its digital platforms in H1 2018, up 10 percent year-on-year, 80 percent of its total transactions are now done on these platforms.

On operations and contact channels, the Bank at the end of Q2 2018 has 4,513 Point of Sale (PoS) terminals, 2 million ATM Cards and 778 Automated Teller Machines (ATMs) and 1.6 million mobile customers” noted the analyst report.

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Buhari is the most incompetent leader in our history - Junaid Moh’d INNOCENT ODOH, Abuja

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econd Republic lawmaker, Junaid Mohammed has said that it is unfortunate that Nigeria has failed to make any meaningful progress in the last 58 years of independence even as he lambasted the current government of President Muhammadu Buhari as the “most incompetent in the history of Nigeria.”

Speaking to BusinessDay on the occasion of Nigeria’s 58th Independence anniversary, the Kano state- born politician said “we have not done well in the last 58 years as a nation. It is unfortunate but the fact of the matter is that we are still talking about our potentials but we have not been able to deliver on the human potentials, economic potentials, leadership potential in Africa. I have not seen evidence of achieving those potentials but I don’t know why.

“But the fact is that in spite of our best efforts or the efforts of the people leading us, in politics in governance and in economy and international activities, in the professions; we have not been able to

Mohammed

do anything worth noting in terms of our contribution to human development, the development of the country and the continent.”

Although he agreed that it was an important achievement that Nigeria survived a civil war that cost over one million lives and remain united, he said that survival is a very important component of life but survival alone with no reliable benchmark of progress of life is no achievement because even animals

Kwara APC guber aspirant salutes Nigeria at 58, seeks for patriotism SIKIRAT SHEHU, Ilorin

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governorship aspirant on the platform of the All Progressives Congress, (APC), Shuaibu Yaman Abdullahi, has urged Nigerians to remain committed and steadfast in prayers for the country in her bid to remain the pride of the African continent and better place for all to live.

The aspirant in his Democracy message signed by his Director Media and Publicity, Abdulazeez Arowona, rejoiced with Nigerians on the nation’s 58th independence anniversary celebrations and encouraged them to be more patriotic.

Yaman also felicitated with President Muhammadu Buhari for his incorruptible leadership qualities which have kept the nation to remain a united and indivisible entity despite numerous challenges posing threats on her unity among others.

He, however, charged electorates to be focus in choosing their leaders in the forthcoming general elections stressing, “For Kwara State to remain economically viable among the comity of states in the country, there is urgent need to adopt holistic

approaches in tackling issues such as youth empowerment, wealth creation, infrastructural development, even execution of projects among regions and most importantly, promotion of principle of equity, justice and fairness.

“It is not a rocket science that all these can be achieved. It requires great sacrifices, honesty, sincerity of purpose, steadfastness, sense of accountability as well as visionary tendencies from God fearing leaders which is currently lacking in our state.

“I have therefore offered myself to restore the lost dignities and prides of our dear state and also ensure that Kwara State indigenes stand shoulder to shoulder with indigenes of other states or even better than them in all ramifications. And I want to assure you that on no account or any guise will I steal your money because ours, is a call to service for the benefit of the masses.”

While eulogising the virtues of Nigeria’s founding fathers, Shuaibu Yaman said: “The labour of our Heroes shall never be in vain”, even as he appealed to party faithful to support his aspiration in the forthcoming governorship primaries and beyond.

survive.

“Our governance is worse today than it was in 1960 when we became independent. Compare the status of the first generation universities; Ibadan, ABU, Nsukka, Lagos and Ife and look at what they were then and what they are today. I understand that not one Nigerian university is among the one thousand leading universities in the world today, that is not good enough ’’ he added.

When asked whether Nigeria’s diversity was the reason the country has not progressed in years, Mohammed said “our diversity is not a problem, there are countries in the world which are diverse like Nigeria but they have managed to stay together and doing very well.

Our problem has to do with political leadership. Nigerian political elite has been thoroughly irresponsible. When you look at the elite that took power from the British in 1960 and compare them with the elite now, those people who took power in 1960 are saints.”

He came down hard on President Buhari stressing that in specific terms the Buhari government, “is the most incompetent, the most irresponsible, and the most unashamedly corrupt government in the history of Nigeria”.

He also claimed that the Buhari government is implacably clannish pointing out that a substantial number of people in the Buhari government are his relations, cousins or in laws.

“From 2015 when Buhari became president till today, can you tell me what he has done? Look at the economy, immediately after he assumed office we went into

recession and in the last three years, we have been struggling to go out of the recession. There no improvement in education, health and security.

“There is nothing to show in this government. Nigeria is worse off in terms of its GDP, Nigeria is worse off in terms of the performance of the stock market, Nigeria is worse off in terms of the state own companies and private companies, security is worse off. Look at the herdsmen conundrum which has not been properly explained by the government because it does not understand it.

“As far as I am concerned there is nothing to show for the three and half years of this administration and if Nigerians by default vote this administration to continue, they will see the kind of suffering we have never seen in the nation’s history. The condition will even be worse that the days of the civil war,” he said.

He urged the Nigerian people to reject President Buhari in 2019 and elect a better leader not based on sentiment or ethnicity, religion or geopolitical zone. He said “we have to get rid of Buhari and get a better leader.”

2019: Kwankwaso is right man to lead Nigeria- Igbo group HARRISON EDEH, Abuja

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pro-democracy group, Igbo Progressive Forum, has averred that former Kano state Governor and now a senator, Rabiu Musa Kwankwaso is gifted with the right qualities and vision that can deliver good governance to the entire Nigerians and Nigerians in Diaspora if voted as president in 2019.

The group in statement issued on Monday to BusinessDay, by its national coordinator, Rosemary Ukiwe and national secretary Ezebugwu Hyacinth Onyekwere, noted that as Nigeria searches for redemption in 2019, Kwankwaso represents “a New Dawn with seasoned tree with ripped fruits all over it that birds, animals and human beings are looking up to.”

The group said further that the presidential aspirant of the People’s Democratic Party (PDP), is a man with high intellectual prowess, an administrator and grass root politician, adding that the former Kano state Governor is humble and disciplined, and has built a strong

political base judging by how he started his career at the grassroots as a councilor, from where he rose to become a governor and now a senator of the Federal Republic.

Kwankwaso is of the over a dozen aspirants that will contest the PDP presidential primaries on October 6 even as the group urged stakeholders in the party to acknowledge his qualification and give him the chance to fly the party’s flag in the presidential election.

“Rabiu Musa Kwankwaso is a highly disciplined administrator who runs an open door policy. In his ideology he believes in holistic and inclusive governance that cut across the entire Nigeria. Throughout his tenure as a Governor of Kano State, Kwankwaso published his Executive Council Minutes to the entire Nation and Diaspora through “This day News Paper” for people to read and know his itinerary for his State, which no other Governor in the whole of Nigeria has ever done,” the statement said.

The group noted that in Kwankwaso’s Cabinet, he made sure that every state in Nigeria was included in his State Executive Council of

which an Igbo man was one of his commissioners, adding that Kwankwaso made a law that every child in Kano State be enrolled in a school whether he was the state’s indigene or not and he went further to build schools in every ward in the state to accommodate every child.

“Kwankwaso is an Engineer and also a Psychologist who takes his time to study everybody within his reach. It is not difficult for him to single out sycophants and greedy men around him. Kwankwaso believes in rewarding hard work no matter the time it takes. He is a different breed of politician who will never make political promises to Nigerians but always have an inclusive plan which is yet to be unfolding to any Nigerian,” the group added.

The Igbo group also pointed out that his rich administrative knowhow and his International Relationship puts him in a better stead to deliver to the fullest all that Nigerians desire from a Leader. They expressed optimism that Kwankanso is endowed with wisdom, knowledge and understanding, which will surely translate all he has done in the past into a reality for the entire nation.

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Osun: Int’l community, Nigerians worry over 2019 polls INNOCENT ODOH, Abuja

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he governorship rerun election conducted by the Independent National Electoral Commission (INEC), which returned the candidate of the All Progressives Congress (APC), Gboyega Oyetola as GovernorElect, has elicited widespread anxiety as the international community and many Nigerians have expressed concerns about the credibility of the 2019 elections, following widespread voter intimidation, harassment, arrests and brutality of voters, journalists and accredited observers.

The Delegations from the Missions of the European Union, the United Kingdom and the United States lead among those who have expressed concerns over Thursday September 27 governorship rerun election. A joint statement issued on Saturday by the three missions, made available to BusinessDay lamented the intimidation, harassment and arrest of voters, journalists and observers.

“We observed the voting in the Osun State re-run election on September 27. We once again commend the vast majority of the voters in the state for exercising their democratic rights peacefully.

“In contrast to our overall findings on the vote of September 22, we were concerned to witness widespread incidents of interference and intimidation of voters, journalists, and civil society observers by some political party supporters and security agencies.

Many of our findings mirror those of leading civil society groups that observed the election.

“We commend the work of INEC leadership during both elections.

But it is clear that the neutrality of the security services and responsible conduct by party agents, both inside and outside polling units, will be essential to ensure free, fair, credible and peaceful elections in 2019.

“We continue to call for calm from all stakeholders and urge that any challenges to the election result be made through peaceful and lawful means.

“We restate our position of firm neutrality among all parties and candidates. We remain committed to supporting the Nigerian people in seeing free, fair, credible, and

Saraki

peaceful elections,” the statement said.

President of the Nigerian Senate, Bukola Saraki, described the rerun as a “sham and biggest electoral fraud in Nigeria” even as he alleged that the All Progressives Congress (APC) had rigged the election.

Saraki, who is also a presidential aspirant of the People’s Democratic Party (PDP), stated this while addressing journalists during his campaign tour in Kaduna state.

He also called for the cancellation of the result, especially in view of the complaints made about the supplementary election. He stressed that the candidate of the People’s Democratic Party (PDP), Senator Ademola Adeleke, ought to have been declared the winner by the Independent National Electoral Commission (INEC) after the first ballot that held on Saturday, September 22.

In the same vein, the Centre for Democracy and Development (CDD) said the election fell short of the minimum standards. “We hold strongly the view that the rerun poll does not meet up with the minimum standards for free, fair and credible elections. It falls short of global best practices in democratic elections which Nigeria aspires towards,” the CDD, which monitored the election, said in a statement on Thursday.

Also reacting to the malpractices that marred the supplementary election in Osun, the Integrity Friends for Truth and Peace Initiative(TIFPI), a civil society organization, condemned the outcome of rerun election, stressing that the process was compromised as voters, journalists and observers were harassed and intimidated.

Yakubu

Founder/ Executive Director of TIFPI, Livingstone Wechie, made this lamentation in a statement issued on Friday in reaction to the declaration of the candidate of the All Progressives Congress (APC), Gboyega Oyetola as the winner by the Independent National Electoral Commission (INEC).

He said that the election in Osun was a major experience with two sides of the coin. While he praised the September 22 election as arguably the best organized election under INEC, he condemned the rerun as a rape on democracy.

For the September 22 election Wechie observed that as early as 6:30am across most of the poling units in the 30 LGAs of the state people had come out enmass to be accredited and cast their vote which commenced at 8am across the state. “This is one lesson that the rest of Nigerians must learn come 2019 in terms of coming out to own the process. The Osun voters never left the poling units until votes were counted from 2pm and results declared at the Units levels and this is commendable.

“This indeed was like a festival of votes as demonstrated by the politically conscious Osun people in the keenly contested election. It was a substantially peaceful process with relatively insignificant observation of vote buying which was an initial fear except for the Rerun experience.”

He added that the ban on use of smart phone which INEC employed was a huge success. He noted that Security was of a very professional disposition putting on human face without doubt.

He however, expressed worry was as to where and at what point

Wechie

things went wrong leading to the cancellation of elections in 7 poling units resulting in the supplementary election which held on Thursday 27 2018.

“The mundane conduct of desperate politicians in the Osun rerun election was a clear rape of the gains of the September 22 election despite all genuine efforts by INEC and huge investment of tax payers monies. It further raises concerns in terms of justifying the huge investment of public funds on these elections and those of independent observers who put in so much in terms of logistics and other risk factors given the unfortunate actions of these desperate politicians who are bent on derailing the process for self -serving purposes never minding public interest.

“The election was a direct opposite on all sides compared to the widely celebrated September 22 election. We observed widespread violence, intimidation of voters, Observers, Party Agents, journalists by security agents and political thugs.

“We observed cases of mass vote buying and open identification of prospective voters who were only permitted to vote only if it was in favor of a choice political party.

“Observers and journalists from AIT, Premium Times, Sahara Reporters and channels TV were either assaulted or arrested and refused access to cover certain parts of the affected poling Units including Orolu and some places.

“Very worrisome and as clearly noted by most observers, the various factors that led to the cancellation of the 7 poling units of the September 22 election more than reared their heads again in higher proportions, yet results were an-

nounced. Further explanations may be needed here by the appropriate authority.

“We observe that the election was seriously compromised by desperate politicians and their thugs from various fronts aided by security agents. This obviously undermined the credibility and integrity of the entire process.

“Our worry is that this Osun election is not a good signal for the 2019 general election if steps are not taken by critical stakeholders to reassure Nigerians of a free fair and credible election particularly on the security aspects.

“However we urge the courts to be upright in their adjudication of matters brought before them at the tribunal by aggrieved parties.

“Hence whoever is aggrieved by the outcome of the Osun election should freely approach the courts to seek redress without recourse to self -help.

“We will continue to support INEC and Nigerians towards ensuring that we get it right,” he said.

The concern here is that INEC seems to lack the capacity to organize such a rerun as it appears to give the ruling party an advantage with the deployment of very partisan security forces. The fear is that if the Presidential election perforce runs into a rerun, the manipulative tendencies of the ruling party using the security agencies may come handy to divert the people’s mandate to an underserving candidate and party. The result of the closely contested elections such like we had in Osun State, clearly shows that the process of a supplementary poll in a few polling units could easily be manipulated by the party in power.

Williams Toyin Akanle declares Senatorial ambition, bags recognition award HARRISON EDEH, Abuja

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retired Director with the Department of State Service, (DSS) Williams Toyin Akanle, has declared his senatorial ambition for the Kogi West Senatorial district, even as he said the bedrock of his political trajectory is built on service to the people.

The former security expert and intelligent analyst who is also an established academic, said his ambition is to give back to society, having gained from the Nigerian

society.

Speaking at the President Muhammadu Buhari-Yemi Osinbajo Nationwide Supporters Group as he received award of the recognition from the group, Williams said, “I have read the act of service Mahatma Gandhi, Nelson Mandela, Kwame Nkruma, and so many others, and I began to wonder that these people could decide to lay down their lives for National Development, for societal development and for peace” “My Push for the senatorial ambition is to add value to the lives of

my people. I opted to come to the centre for my political journey to ensure that my services are delivered to my people.

He said further that, “The actions of great men are propelling me, for it behoves on all of us to have something that we are remembered like the people aforementioned.

Further in his remarks, he said, “My first contact with President Muhammadu Buhari was while I was working as an intelligent analyst, and I saw the zeal in him to deliver good governance to the

people. What gave me the impetus was that as a young intelligent analyst my contribution was also used as a guide for national policy.”

Earlier in his remarks, Danjuma Fachiwe Gwoza, the National Coordinator of the President Muhammadu Buhari-Yemi Osinbajo National Support Group said the group chose to recognise the intelligent analyst because of his unflinching contribution to the development of the country.

He remarked further that the group has been recognised by the leadership of the All Progressives

Congress for its numerous work even before the emergence of President Muhammadu Buhari as President ,as he revealed that during the 2015 elections, the awardee supported the group in several areas as they promoted the cause of the campaign of President Buhari.

The award of recognition to the Kogi- born intelligence analyst was witnessed by high dignitaries such as the officials representing the group in different states of the federation, and some key government officials.

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How we won Osun - Oshiomhole Adams Oshiomhole, National Chairman of the All Progressives Congress, APC at briefing in Abuja revealed how his party won the Osun governorship rerun election. He also disclosed why the then Minister of Women Affairs, Aisha Alhassan and Minister of Communications Adebayo Shittu, were disqualified from participating in the APC governorship primary elections in Taraba and Oyo respectively. James Kwen brings the excerpts: What is the purpose of this briefing? he purpose of this press briefing is to respond to some of the issues being raised by the main opposition, the People’s Democratic Party (PDP) on their reactions to the final outcome of the Osun State governorship election that was concluded on Thursday.

Firstly, I have already congratulated the winner of the election and I will like to again express our gratitude to God and to the great people of Osun State for renewing confidence in our party as evidence by their free choice of the APC candidate in the 22nd September election.

And I want to be able to assure great people of Osun State that the new governor under the guidance of the party will do everything possible to justify the confidence reposed, not only the governor as a person, the governor-elect but also in our party as a political party platform.

We are determined to ensure that anyone elected on our platform approach good governance on the basis of the manifestoes of our party and ensure and know that what other government failed to do, will be those things and all things that affect welfare of the people of their respective states.

I am very comfortable that the new governor will not be a failure in government having had vast experience in the private sector. He is going to bring fresh ideas to the governance of Osun and continue to build on the foundation already laid by the current governor, Ogbeni Aregbesola.

For us as a party, we will not only congratulate the candidate, we congratulate all those who were involved in the process that led to this outcome. That include: Independent National Electoral Commission, all the genuine observers, whether local or foreign and even the media that showed tremendous interest in the election both before, during and even after the election.

I believe that all these categories of persons and institutions are necessary pillars without which our democracy cannot be said to advance. We will continue to encourage every Nigerian to show interest in the democratic process because it is about our country, it is about our state and it about our future.

However, we have seen over the period that the opposition party has always, whenever it is not winning an election, it will raise issue of rigging. But I do understand why PDP is quick to suggest rigging in any election which is not favoured because our electoral history since 1999 confirmed clearly that all of the sixteen years PDP was in power,

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Oshiomhole

rigging was the name of the game.

They did rig for those sixteen years and they proclaimed that they were going to govern for sixty years, it means they were determined to even rig future elections because if otherwise, there is no way a political party will sit down and tell people it will govern a country for sixty but thank God, the Nigerian people in 2015 terminated the People’s Democratic Party’s misrule, particularly at the federal level.

Now, with the specific reference to the Osun election, there is no better proof that this was an election that can be said to be substantially free and fair - I used the word substantially because it testified to the fact that some votes were cancelled, suggests that couple of things went wrong on the first day.

But that those cancellation were by effected by INEC also showed the independence of INEC that it can make decision on its own based on the evidence on ground and doing the real opinions of those I referred to as genuine monitors.

The fact that the election was inconclusive was something accepted not only by the local observers but also by foreign observers.

Again, you will recall that PDP disagreed with the idea of conducting elections in those areas and units in which elections were cancelled.

What is your take on the negotiation with Iyiola Omisore and automatic ticket?

I said we had a negotiation and had a deal that has to do with the governance of Osun State. I didn’t go with money and I don’t have money to give to anybody. He didn’t ask and there was no basis for him to ask.

The word automatic ticket has meaning. Having regards to the provisions of electoral acts which makes primary mandatory, can you at the same time talk of automatic ticket? Even when I spoke to our National Assembly members, it is not that I don’t know that word exist, but I simply didn’t find it useful and never used it.

We agreed that he will have an opportunity for him to contest for a seat on APC platform. Not just for senate or House of Representatives, but also for house of assembly. That is why I said we spoke about the immediate which is the Osun election and going forward.

Both the APC and the PDP recognizes that we needed to do business with the other minority parties that participated in the election and it wasn’t difficult to understand who to do business with if you want to influence the outcome of the election.

It was clear that the SDP was largely in control of those areas.

If you want to do a Coalition, you identify the leaders who have influence and enter into negotiation.

Why PDP were shouting in the morning, that they were going to challenge the rerun their leader went to Senator Omisore to persuade him to negotiate a possible working arrangement.

Recognizing the fact that SDP was critical to this conversation, we decided to also open negotiation with their leadership and I was impressed by his emphasis. He told us that, yes he has lost, but he believe that he can still win if we have a deal that seeks to address the primary purpose of his participation in the process which is the governance of

the state and specific policy issues that were of concern to him.

We had a robust conversation and reached an agreement which I think is healthy. We didn’t have to negotiate about compensation or about paying money to anyone. The issue was about governance, education and how we can have a working relationship ahead of the general election and in future elections.

We were able to strike a deal that has to do with the specific issues that affect the welfare and the well being of the people of Osun State.

Whereas Saraki failed to strike a deal with the SDP, we secured a deal with them and now APC, working with the SDP had huge influence in those areas and combining our efforts, it was not strange that at the end, we won.

What is your reaction on the PDP accusation of manipulation?

For democracy to flourish, only people who can accept the pain of defeat should participate in an election because there must be a winner and a loser, but for PDP to take the position as if election is only free and fair if they win is not ideal.

When they won election in Cross River last month, we did not hear any voice, they won in Taraba, we did not hear any voice, INEC was perfect, but whenever they lost, INEC is colluding. We do not have the rigging no-how.”

What led to the disqualification of Aisha Alhassan?

As for the Honourable Minister of Women Affairs, she has issues that have to do with party loyalty. Our constitution is clear and it dictates

that to contest elections or even hold office in the APC, you must be loyal to the party in every material concern.

From all she had said in the past and even her comments and general attitude during the screening, the NWC reviewed everything taken together and we arrived at the conclusion that she does not possess the level of loyalty that the APC requires for her to contest elections on our platform.

We made it clear when the defections happened that APC may well benefit from these defections if it helps us to be more critical in terms of who we give platform to contest elections and that there are core values that binds the APC together and they are non-negotiable.

The Electoral Act and the APC constitution forbid anyone from being a member of more than one political party at a time. You cannot be a member of APC and be a card carrying member of another party but when you have a situation where it would appear, based on what you know and based on what I know that someone is probably APC in the day time maybe for the purpose of retaining certain offices and they are PDP at heart.

Or if they are not PDP at heart, they are actually and simply a follower of a one-man permanent presidential candidate. Then we have the right to ask ourselves if these attitudes and qualities are characteristics of an ideal member of an APC. So, those are the reasons. We did not want to have a lengthy explanation to do but she knows why she was disqualified and we know why we denied her the use of our platform.

Why did you disqualify of Adebayo Shittu from the APC governorshp primaries?

He admitted that he did not do the mandatory NYSC as provided for under the law and in his own judgment, his being a member of the House of Assembly in the state and now as a minister of the federal republic that these were enough sacrifices.

But for us as a party we know that NYSC is a mandatory scheme. It is not something you may elect to do or abstain from doing and my understanding of the NYSC Act is that no employer of labour is permitted to employ anyone who graduated under 30 years and who did not obtain an exemption for reasons as provided for in the NYSC Act. So, for us, not participating in the NYSC raises very serious moral issue as well as legal issue. After interviewing him, we were convinced that if he did not do NYSC, that for us was enough to disqualify him and we had to find the courage to do so.

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E-mail: insurancetoday@businessdayonline.com

FIRS advances efforts to amend controversial insurance law Stories by Modestus Anaesoronye

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he Federal Inland Revenue Service (FIRS) has made proposals to the National Assembly to amend provisions of Section 16 of the Companies Income Tax Act (CITA) to allow a level playing field for insurers, chairman, FIRS, Babatunde Fowler has said.

Fowler, represented by Toluwalase Akpomedaye, FIRS Regional Coordinator, made the disclosure during a seminar on, “Taxation Matters in Insurance Value Chain”, organised by Leadway Assurance Limited in Lagos.

Sequel to this, insurers have cried out over the controversial Section 16 of the CITA which set out specific rules with respect to the taxation of insurance business.

They describe it as a tax burden on their business.

The FIRS boss stated that under the CITA, Non-Life insurance companies are taxed on the basis of their gross premiums and interest as well as other receivables less returned premiums, premiums paid on re-insurance and reserve for unexpired risks.

Fowler noted that from recent engagements, it has been identified that there are some provisions of the tax laws that are not favorable to the industry and several suggestions have been made, stating that FIRS will allow a level playing field to all taxpayers in line with the taxation canon of equity and fairness.

He said insurance plays a pivotal role in any economy as it seeks to help individuals and businesses manage risk by transferring and sharing the burden of risk with the insurance carrier.

He said: “Over the years, the Nigerian insurance industry has undergone significant reforms and is now a fairly developed sector.

Insurance penetration in Nigeria is still very low and total contribution of the industry to GDP is within the 1 per cent range. There is need for stakeholders to work together to increase the size and contribution of the sector not only to GDP, but also to tax collection.

Oye Hassan-Odukale, managing director, Leadway Assurance Limited, on his part said the tax sessions would help improve the relationship between FIRS and the industry.

He noted that the event was part of his companies contributions to the development of the industry and by extension the economy.

He agreed that there is need for the industry to have yearly interaction forum with FIRS and Lagos State Inland Revenue Service (LIRS).

In a presentation by an expert of Pricewaterhousecooper (PWC), Kenneth Erikume said tax and insurance are two important aspects of the economy that are yet to live up to their potential.

He noted that insurance faces significant legacy and structural challenges and strict application would kill the insurance industry.

“Section 16 of the CITA set out specific rules with respect to the taxation of insurance business.

CITA having identified the specialised nature of the insurance business dedicates a whole session of the Act to the taxation of the insurance industry, for the treatment of income derived from insurance business. Section 16(8) of CITA allows the companies to deduct a percentage of the premium income into a reserve before arriving at the total profit for tax purposes.”

He however called for a yearly tax interactive session with the industry to help address all tax related concerns clogging the progress of insurance business, adding that such sessions have helped foster understanding with other sectors of the economy.

Sovereign Trust Insurance gets shareholders’ approval to raise fresh funds

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nderwriting firm, Sovereign Trust Insurance Plc has secured the approval of its shareholders to raise fresh capital in line with the company’s recapitalisation plan to enable it play big in the nation’s insurance industry.

The shareholders, who gave the approval at the 2017 Annual General Meeting (AGM) of the company in Lagos, applauded the management of the firm for a steering the company to positive performance in the 2017 financial year despite challenges in the economic environment.

Speaking during the meeting, Williams Adebayo, president of Greenish Shareholders’ Association, commended the company for improving its performance in the year under review, compared to that of 2016.

He said that shareholders will support the company in the quest to raise fresh funds to enable it compete favourably and becomes one of the top players in insurance industry.

While calling on the National Insurance Commission (NAICOM) for extension of Tier-Based recapitalisation model, he stressed that the Central Bank of Nigeria (CBN) had warned about a possible re-

Cornerstone pays N6.3bn claims, moves to optimise branch performance

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L-R: Margaret Moore, chairperson, Finance and Budget; Joyce Ojemudia, vice president/chairperson media and publicity; Ajoke Awoderu, chairperson, Investiture committee/social publicity secretary and Bolanle Baruwa, event committee chairperson, all of, the Professional Insurance Ladies Association (PILA) at the pre-investiture press conference of Ose Oluyanwo as the 12th President of PILA in Lagos.

Anchor Insurance sees healthy minds, better bonding of staff contribute to productivity

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nchor Insurance Plc says it is committed to ensuring that its staffers are physically and mentally healthy to enable them work productively. This, the company said, was in line with its recent Staff Fitness Walk, with all the staff trekking from its Obanikoro, Ikorodu Road branch office and terminated at the National Stadium, Surulere, Lagos.

It was also an opportunity for the underwriting firm to create awareness for not only about Anchor Insurance Limited but also for the larger insurance industry, as the commuters and passersby stood still to watch the glamour of insurance display,

with product pamphlets on the busy Ikorodu Road.

Ebose Austin, managing director/ CEO of the underwriting firm, said the event was organised to keep the staff physically and mentally fit, adding that the exercise will strengthen the body and soul of the staff and make them think well, which will translate into enhanced productivity.

He also noted that the exercise will help strengthen the bond amongst members of staff, stating that the exercise has helped unite staff from different departments and branches and boost relationship, which is important for a cordial productive process in any organisation.

Ebose said the event will be organised quarterly, adding that in line with the vision of the new management of the company, staff will continue to work together to make the firm remain “Where Insurance Works”. He said the firm will continue to deepen insurance penetration through a well coordinated awareness campaign. Ebose posited that the company is aiming at playing in tier 1 business class when the TierBased Minimum Capital Solvency (TBMCS) commences.He said the firm has written business over N3 billion this year compared to the N2 billion written last year and hope to hit N4 billion mark by the end of the year.

lapse into recession of the economy based on fundamentals and analysts predictions.

Earlier, the chairman of the company, Oluseun Ajayi, said the insurer recorded Gross Premium Written (GPW) of N8.5 billion in 2017, a 33 per cent increase over the N6.3 billion recorded in 2016.

He noted that the company’s net claims expenses for 2017 was N1.3 billion, which was a 9.5 per cent improvement over the N1.44 billion recorded in 2016.

According to him, the firm also recorded a Profit Before Tax (PBT) of N202 million as against N44 million recorded in 2016, representing over 351 increase. Profit After Tax (PAT), he said stood at N157 million, a 569 per cent increase as against N23 million recorded in 2016.

He noted that Return on Capital Employed (RoCE) recorded a positive performance of 1.87 per cent as against 0.47 per cent in the previous year and Investment income increased by 41.6 per cent from N286 million in 2016 to N406 million in 2017.

Ajayi pointed out that the firm’s total assets rose from N9.5 billion to N10 billion representing 13.7 per cent increase.

ornerstone Insurance Plc paid N6.3 billion claims to policyholders who suffered insured risks in the 2017 financial year, Segun Adebanji, chairman of the company said.

Adebanji disclosed this at the 2017 Annual General Meeting (AGM) of the company in Lagos, adding that the claims paid was N2.9 billion higher than N3.4 billion claims paid in its 2016 financial year.

Claim recovery, according to him, was N1.4 billion as against N1.2 billion in 2016, noting that sharp increase in claim expenses led to underwriting loss of N2 billion compared to underwriting profit of N696 million of 2016.

The net claims ratio for 2017, he stated, stood at 117 per cent as against 73 per cent for the previous year.

The largest contributors to the claims figure, he said, were the Oil & Gas and Motor Insurance revenue accounts, which recorded net claims ratios of 536 per cent and 104 lper cent respectively, mainly due to adverse development on certain claims and reserve strengthening in general.

“The Board of Directors and Management have taken a number of steps towards reversing the loss performance of 2017, including the institution of rigorous cost control measures, some of which have started yielding positive results. Secondly, a branch optimisation exercise is ongoing to improve the efficiency and profitability of our operations.

The exercise may streamline our footprint across the Country but is intended to deliver profitable branch operations relative to their income generating capacities.”

He posited that the company’s

Gross Premium Written (GPW) for the year under review was N7.9 billion which was almost the same figure with the previous year, stressing that the firm tightened its risk acceptance parameters as competitive pressures have driven premium rates to uneconomic levels, even as certain regulatory bottlenecks have hampered the implementation of the company’s expansion plans in the retail and mass market segments.

Promising that necessary actions have been taken to realign the company’s risk portfolio away from the unprofitable accounts that led to heavy losses, he added that: ‘Where repricing has not been possible, we exited or reduced our exposure significantly.’

Ganiyu Musa, group managing director/CEO of the Company briefing shareholders on efforts being made by the company to comply with the Tier-Based Minimum Solvency Capital (TBMSC) policy of the National Insurance Commission (NAICOM), noted that the board had indicated the tier the company will operate in the TBMSC regime.

He told the shareholders that parts of the resolutions adopted by the board, is to approach them for fund to enable the firm meet the minimum solvency capital required for the tier adopted.

The former President of Noble Shareholders Association, Timothy Adesiyan, applauded the firm for sustaining a steady growth over the years and urged the firm to effectively manage claims burden arising from oil and gas business.

He also lauded NAICOM’s regulatory measures, especially the No Premium No Cover which had enhanced profitability of the sector.

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African reinsurers express confidence as growth, profitability improve Stories by Modestus Anaesoronye

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frican reinsurers and brokerage executives have expressed confidence in the reinsurance market, predicting rising rates and profitability on the back of rebounding original markets and a resurgent economy.

This was contained in the third edition of the Africa Reinsurance Pulse, and announced at the 23rd African Reinsurance Forum taking place in Namibia.

Across Africa, the International Monetary Fund (IMF) expects GDP to rise from 2.8 percent in 2017 to 3.4 percent in 2018, benefiting from global growth, higher commodity prices and improved access to capital markets. In 2017 Africa’s reinsurance premiums already increased to an estimated $ 7.5 billion, up from $ 6.8 billion in 2016, also driven by a strengthening of the major currencies against the US dollar.

According to executives of the reinsurance and brokerage firms operating in Africa, the continent’s reinsurers weathered the economic downturn of 2015 and 2016 remarkably well as the underlying strengths of Africa’s insurance markets remained unscathed. An abundance of natural resources, continued population growth, rising affluence and still unmet needs for infrastructure investments as well as digitisation are expected to drive the growth of assets and insurance penetration. Although during the crisis premium volumes contracted, most markets remained profitable – albeit with the exception of the continent’s largest market – South Africa.

The survey report also showed that personal lines are expected to benefit from the growing size and affluence of Africa’s middle class.

Higher affordable incomes translates into rising car sales, property purchases, but also demand for

L-R: Ebose Austin, managing director/CEO, Anchor Insurance Limited; Rotimi Popoola, executive director, Senforce a Insurance Brokers a Limited; Nelson Egboboh, head, Brand and Corporate Communications; and Jide Fasanmi, general manager, Business Development, during the Anchor Insurance ‘Fitness Walk’ held in Lagos.

health protection as well as life or savings products. Technology creates further opportunities as on the back of Africa’s high mobile phone penetration, financial inclusion improves and enables new products in agricultural insurance, credit, as well as in life and health.

In commercial lines, investments in infrastructure remain high.

Roads, utilities, schools and hospitals have to be built to serve the young and growing society, provide access to the resources of the continent and encourage an expansion in manufacturing.

Excess reinsurance capacity affects Africa too. Markets suffer from price distortion and aggressive competition. While tighter solvency regimes are viewed positively, the rising protectionism, which spreads across the continent poses a threat. Installed to contain the flight of premiums to offshore destinations, requirements to retain premiums locally have become an obstacle to reinsurers

which provide capacity across Africa. Political instability – although improved – still presents a threat, as some of the recent handovers of power lingered on the verge of open conflict.

Pricing has improved across Africa. The number of reinsurers, who regard rates as low has dropped from 75 percent to 40 percent of interviewees.

Following the natural catastrophe events of 2017 and soaring claims, rates increased particularly in South Africa. In addition, as commodity prices recover, executives expect stable or rising rates due to higher employment, investments in infrastructure and the resurgence of exports and trade. Profitability is expected to strengthen too. With the exception of South Africa, which suffers from last year’s heavy claims, profitability is positive for most of Africa with combined ratios below 100 percent. As the economy accelerates, higher

rates and a decline in loss ratios will strengthen profitability.

Risk exposures are expected to grow in line or even faster than GDP, as value creation translates into insurance demand. As a result, for the first time in this survey series, a majority of interviewees predict that reinsurance premiums will grow in line or faster than GDP and that accordingly penetration may improve. Still, reinsurance capacity will continue to rise.

The continent’s underpenetrated insurance markets continue to attract capital. However, additional capacity is also created by domestic reinsurers, which are set-up to retain more risk nationally. A majority of interviewees expect that nonAfrican reinsurers will outgrow the regional capacity. As the economy picks up again, the large industrial risk exposures, which are ceded internationally, will rebound faster than the smaller, domestic risk exposures and thus primarily benefit foreign players.

Quick tips to customer service excellence

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ne can be fooled by an exceptional experience on a single event, but Customer Service Excellence is defined by consistency, today and every day. Organisations that demonstrate Customer Service Excellence enable longlasting customer relationships that drive repeat sales, build valuable word-of-mouth and move your business to an entirely new level. Here are a few tips to follow to achieve an Exceptional Customer Service Excellence.

Study the Best.

We are “not a shoe company”, we are a “customer support company that happens to sell shoes” - Tony Hsieh, investor and CEO Zappos.

Set a Goal.

A first-call resolution is one of the most important customer service goals a company can have.

Whenever a complaint is made, it should be treated and resolved in a way that the customer will not have to call back for the same issue.

Listen.

Empathy starts with listening and listening is the rock-bed of any effective customer service activity. It is also an effective tool in converting negative experiences to positive ones.

Respond and Track Feedback.

“The best acts of customer service are the tiny things that reinforce the customer’s loyalty. They can be done daily, usually without any cost, and can foster customer retention, increase customer satisfaction, and yes, even grow your customer base.” - Peter Shankman (Communications and Customer Service Expert) Make This A Routine.

Building trust and loyalty is most often the result of sustained positive customer experiences delivered on every occasion by every member of your team. To achieve Customer Service Excellence, make the above tips a routine and enjoy continued patronage and referrals from your customers.

Wednesday 03 October 2018

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In Association with

Driving corporate governance excellence, sustainable investment in Nigeria’s pension industry

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ndeed, the Nigerian pension industry, having been nurtured from its foundation in 2004 to its present standing, should be focused on consolidating towards a promising and more predictable future.

The choice of sustainable investment and excellence in Corporate Governance practices as the vehicles of that consolidation is by no means fortuitous.

Sustainable investments have become steady vehicles for channelling long-term patient capital, such as pension funds, to projects that would develop nations and guarantee healthy living in the environment. While the inefficiencies of the pre-pension reform period could be traced to a large extent on poor governance, albeit mostly in a public sector, the adoption of good Corporate Governance as a hallmark of its existence has assured the stability of the Nigerian pension industry.

The significance of corporate governance is perhaps the most pertinent environmental, social, governance (ESG) element in sustainability cannot be overemphasized.

This is due to the fact that a strong corporate governance system of principles, policies and procedures is necessary in order to resolve potential conflicts and risks inherent in a company, thus, increasing sustainability within organizations.

Realizing the novelty of the Contributory Pension Scheme, against the backdrop of pre-pension reform experiences, the Nigerian Pension Industry adopted a culture that strives to attain excellence in corporate governance.

Indeed, the fiduciary duties of pension operators in managing and securing pension fund assets could not have been achieved with a weak governance structure.

It was, therefore, appropriate that the National Pension Commission instituted some

measures that facilitated sound corporate governance including, stringent licensing requirements for pension operators, strict process of screening Board Directors as well as the fit and proper persons test for top management to determine suitability on critical roles. The issuance of the Code of Corporate Governance and the Code of Ethics and Business Practices for Licensed Pension Operators in 2008 further underscores this commitment.

The adherence of the industry to these measures has resulted in the near absence of corporate governance deficits in the industry. The resultant effect has been largely positive when compared with other institutions in the financial sector. It is instructive that the financial crisis of 2008 – 2009, which resulted in a regulatory intervention covering eight banks, had several corporate governance imprints. On the other hand, since inception of the pension industry, it recorded only one regulatory intervention, in 2011, occasioned largely by corporate governance breaches. It is noteworthy that this isolated incidence had

no negative impact on the safety of pension fund assets under management. This was assured by the sound structures, inherent in the Scheme, which segregated pension fund assets from that of pension operators in addition to segregation of administration from custody of the assets.

It is also noteworthy that the Corporate Governance in the pension industry transcends pension operators and extends to entities in which pension funds are invested. The Investment Regulations have stringent prescriptions for entities that are eligible for pension fund investments. For instance, companies that qualify for equity investments by pension funds must maintain high standards of transparency and governance. Pension Fund Managers are, therefore, required to adequately take cognizance of sound corporate governance practices in their decisions to invest in entities or specialist investment funds. The consistent growth in pension fund assets from N1.1 trillion in 2008 when the Code of Corporate Governance for Licensed Operators was issued to N8.23

RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State.

Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@diamondpfc.com Website: www.diamondpfc.com

Pension Operators must operate with high Corporate Governance standards due to the pension industry’s stringent rules and regulations that stem from the sacrosanct nature of the funds trillion as at June 2018, indicate the ever rising stake of the pension industry in the governance of the financial markets.

Accordingly, efforts must therefore be channelled towards establishing a more structured process of ensuring that the pension industry collectively protects its interest in some major companies in which it invests through

securing adequate board representations and ensuring they maintain excellent standards of corporate governance. It is also worthy of consideration that Pension Fund Custodians ensure the exercise of voting rights in a cohesive manner to enable the attainment of sustainable positive returns on investment. The imperative of doing this is evident considering the value of N710 billion in equity investments of blue chip companies quoted on the Nigerian Stock Exchange as at June, 2018.

The pursuit of excellence in Corporate Governance by the pension industry underscores the imperative of seeking continuous improvement in all aspects of regulation and management. Consequently, the pension industry should consider the following measures: *Adequacy of Board Size: Pension Fund Operators should ensure that their Boards comprise of adequate number of directors with diverse qualifications and experiences. The inadequacy of directors often results in recycling of members on various board sub-committees, thus, limiting the quality of deliberations. It was understood at the formative stages that operators were constrained by cost due to low volume of business. However, the consistent accumulation of pension assets has reversed that trend with at least 12 out of the 21 Pension Fund Administrators each currently managing pension assets in excess of N100 billion. *Independent Directors: The appointment of independent directors enriches the company’s policy decision making process. Pension Fund Operators should ensure their appointment as provided in the Code of Corporate Governance for Licensed Pension Fund Operators. This also contributes to the much needed diversity of the Boards.

* Board Evaluation: Attaining a culture of excellent corporate governance also entails instituting a reliable process of Board evaluation, which could be internal or external. Whatever option selected, it is important to highlight areas of deficiencies with a view to remedying same. The evaluation report should also be made available to the shareholders at the Annual General Meeting as a feedback on the performance of the directors. * Disclosure: Ensure greater disclosure to the shareholders, regulatory body and the funds members. The information should contain both financial and non-financial item to engender greater confidence. * Implement comprehensive industry policy on information/data protection. * Implement targeted capacity building for stakeholders in the industry. * Sustain stakeholders’ engagement, documentations of feedbacks and implementation of recommendations.

In conclusion, Pension Operators must operate with high Corporate Governance standards due to the pension industry’s stringent rules and regulations that stem from the sacrosanct nature of the funds. Meaning that the funds must be available as and when due for payment of retirement benefits. It is our hope that this conference will provide a springboard for achieving the desired Pension Industry for Nigeria through sustainable investment and excellence in corporate governance.

Source: Being part of the presentation by Mohammad Ahmad, former director general of PenCom at the 2018 edition of the Conference for Directors of Pension Operators in Nigeria organized by the Commission with the theme: ‘Consolidating the Nigerian Pension Industry through Sustainable Investment and Excellence in Corporate Governance’.

This section is created to increase awarness and deepen knowledge about the contributory pension scheme.

If you have enquiries or contributions, send to this e-mail: diamondpfcbusday@yahoo.com

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In association with

a g @ bu s ines s dayo nl ine. co m

How US’ persistent ban on Nigerian fish is shrinking domestic market Stories by JOSEPHINE OKOJIE

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he United States persistent ban on Nigeria’s smoked catfish (siluriformes) and all fish products from the country is sinking the country’s domestic market for fish, farmers say.

Fish farmers’ who spoke to BusinessDay, say that some markets in Canada and Europe have begun denying entry to the country’s fish products as the ban by the US government continue to lag.

“Our markets for smoked fish is getting smaller by the day with the ban by the United States and the high importation of fish products into the country as well as smuggling,” Tayo Akingbolagun, former national president, Catfish Association of Nigeria (CFAN) says in a response to BusinessDay questions.

“The government has not been proactive about the problems in the industry, and things are getting very bad. We could see this in the last GDP report where the sector contracted,” Akingbolagun says.

He notes that some European markets have started rejecting the country’s smoked catfish and other fish products owing to the prolong

AfricanFarmer Mogaji, chief executive officer, X-Ray Farms Consulting Limited; Cosmos Maduka, president and CEO, Coscharis Group; Edobong Akpabio, executive director, Living Green Farms and Garden Foundation; Olusegun Mcmedal, chief reputation strategist, Upticomm Marketing Company Ltd and Tokunbo Talabi, chairman, Superflux Group during the annual Fate Foundation Alumni conference in Lagos recently.

ban by the US government.

BusinessDay had on the 3rd of May, 2018 reported about the ban on all fish products from Nigeria into the US owing to the failure of the government to fully supply information requested in the Self Reporting Tool (SRT) before the due date.

“It has been very difficult for us and our sales and markets have reduced drastically since the ban.

We mainly export to markets in the US and Canada, now we are trying to sell locally but the demand has been very low,” Richard Agetu cofounder Richsi Nigeria Limited, makers of Ejazuki smoked tells BusinessDay.

“We had to reduce our staff strength last month since we are not making as much sales as before,” Agetu says.

Nigeria has recorded tremendous growth in its fish production in recent years as output has increased from less than 500,000MT in 2011 to 1.1 million MT in 2017, data from

the Federal Ministry of Agriculture states.

But stakeholders believe that the growth will be halted owing to ban by the US government and that the diversification drive of the country will also be hampered.

This is already evident in the country’s second quarter GDP report.

The fishing sector contracted in the q2 quarter of 2018 by 1.4 percent from a growth of 4.3 percent recorded in the previous quarter, data from the National Bureau of Statistics (NBS) states.

Muazu Mohammed, director of fisheries, Federal Ministry of Agriculture and Rural Development (FAMARD) says that the ministry has sent in the Self Reporting Tool (SRT) to the United States since May and would continue to dialogue with them. “ We have sat i s f i e d t h e requirement and we have sent it to them. There are certain parameters that they are looking at and if the parameters are okay then they will we lift the ban. We just sent in a reminder they told us that they were still studying the documents,” Mohammed says.

Efforts to reach the US Food Safety and Inspection Service (FSIS) proved abortive.

GAIN, Royal DSM, SBN drive investments in Africa’s nutrition business

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he Global Alliance for Improved Nutrition (GAIN) in partnership with Royal DSM, the SUN Business Network (SBN) and African Business magazine is positioning nutrition as a promising new area of investment on the continent as its set to hold the first ever investor forum.

The Nutrition Africa Investor Forum (NAIF) is expected to bring together leaders from commerce, agri-food, development agencies, academia along with investors t o s h a re t h e i r e x p e r i e n c e s, present research results, explore collaborations and spark new ideas – all with the aim of developing new projects and attracting investment for high-impact nutrition businesses.

“Through years of experience working with African partners and governments, I am convinced that if we grow and support high impact businesses in food systems in Africa, we will be able to make inroads to reducing malnutrition,” Lawrence Haddad, executive director said in a statement made available to BusinessDay. “The potential is huge if we can get the investment recipe right. We have a great opportunity to close that gap by creating a sustainable food value chain and working through

local agrifood industry SMEs, to ensure that nutritious foods are more accessible, affordable, and aspirational,” Haddad explained.

Malnutrition affects millions of children across the world but Africa alone has an estimated 58.7 million children under the age of five having stunted growth, according to the 2017 Global Nutrition Report There is no doubt that stunted children today will lead to stunted economies tomorrow. In fact, African

nations lose between 1.9percent and 16percent of the gross domestic product (GDP) annually to undernutrition due to increased mortality, absenteeism, chronic illnesses, and lost productivity, according to GAIN. “Governments alone cannot address this issue. Private sector investment is key to tackle this challenge. In fact, the nutrition sector offers tremendous opportunities to businesses. There is a central role for business in tackling

malnutrition in Africa,” explains Fokko Wientjes,vice president of nutrition in emerging markets and public-private partnerships at Royal DSM. “As scaling up nutrition action delivers at least $16 in returns o n i nv e s t m e nt f o r e v e r y $ 1 spent, nutrition-sensitive capital investments along the entire food value chain are likely to represent a tremendous purpose-driven investment opportunity. We will

fundamentally integrate SDG 1 (poverty reduction) with SDG 2 (hunger & nutrition) by producing locally; Africa nourishes Africa.”

“Africa’s demographic dividend is also an opportunity, there are more than 1 billion people in the current African consumer market.

This is expected to increase to more than 2 billion by 2050.

“With 226 million people aged between 15 and 25 years, the continent also has the youngest population in the world. This represents enormous potential: a young, growing African consumer market that is more healthconscious, favouring nutritious and healthy foods,” Wientjes said.

The nutrition investor forum is expected to have in attendance over 200 delegates including dealmakers, entrepreneurs and investors.

The forum is schedule to take place on October 16 and 17, to mark the 2018 World Food Day in Nairobi Kenya.

Selected Small and Medium Enterprises (SMEs) from across Africa will also have the opportunities to participate in the first ever Scaling Up Nutrition Pitch Competition as well as The Nutrition Dealroom to meet venture capitalists and business financiers to improve their access to finance.

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ag@businessdayonline.com

NIRSAL deliberates compensation for farmers affected by flood ADEOLA AJAKAIYE, Kano

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he Nigeria IncentiveBased Risk Sharing for Agr icultural L ending (NIRSAL) is considering bringing prompt relief to hundreds of farmers affected by the on-going flood ravaging farmlands by working with stakeholders across the agricultural value chain.

NIRSAL is particularly working with the Nigerian Insurance Company (NIC), to document the effect of the flood on rice, sorghum, and millet farmers in Kano, Katsina, Jigawa, and Kaduna states with the view of assisting the farmers meet their loans obligations to banks where the facilities were obtained.

Danladi Mato, branch manager, NIC, Kano zonal office, made this disclosure to BusinessDay during a five-day capacity development training programme organised by NIRSAL for stakeholders in the agricultural value chain held recently in Kano state.

Danladi disclosed on the sidelines of the training programme that NIC has kick started the process of collecting the names of the affected farmers, whose farms are insured with the view of helping them meet the obligations of loan re-payments.

“On the issue of flooding ravaging most states in northern Nigeria, in order to assist those that obtain

insurance cover for their farms, we have initiated talks with the leadership of the various farmers associations and those who are insured with us, we are collecting names right now, in their various offices,” Danladi said.

“The associations we are currently in talk with include the Rice Farmers Association of Nigeria (RFAN), and Sorghum and Millet Growers. After the collection of names it will be followed with an assessment of the level of damage caused by the flood on each farmland.

“When we are able to ascertain the level of damages, we then step up with

IITA, AfDB collaborate to boost Taraba’s cassava production …trains 60 extension agents JOSEPHINE OKOJIE

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he International Institute of Tropical Agriculture (IITA) and the African Development Bank (AfDB) have collaborated to boost cassava production through the Technologies for African Agriculture Transformation (TAAT) funded program.

The partnership with the support of Taraba State government inaugurate the cassava compact—a component of the TAAT, trained 60 extension agents drawn from different local government areas in the state, and validate sites for the establishment of cassava demonstration plots in the state.

Nteranya Sanginga, director general, IITA said the inauguration of the cassava compact in Taraba state would open up opportunities for scaling new innovations for cassava grower in the state and the entire north east region of the country.

Sanginga, who was represented

by Godwin Atser, communication &knowledge exchange expert, IITA said the transformation of cassava in Taraba state offers tremendous opportunities in food security and job creation in Nigeria.

“We hope that this program will contribute to reducing the food

import bill to Africa of about $35bn per year,” Sanginga said.

The move to invest more in north east Nigeria comes at a time when IITA received the 2018 Africa Food Prize for its efforts in transforming agriculture on the continent.

Darius Ishaku, Governor of Taraba State commended IITA and AfDB for selecting the state as part of the TAATcassava compact program, adding that the program would amplify the efforts of the state government in cassava transformation and revitalise agricultural activities in Taraba.

“While we remain grateful to AfDB and IITA for the kind gesture and honour done to the state, I wish to also pledge that Taraba State Government will do its best to ensure the success of the program in the state,” Governor Ishaku, who was represented by Anthony Jellason, secretary to the State Government said.

He expressed optimism that the TAAT-cassava compact program would turn around the economic fortunes of the state and that of cassava growers in particular.

The Governor noted that the TAAT program was of utmost importance to the state in view of its vast arable land and the importance which cassava plays to the livelihoods of millions of farmers in the state.

the settlement of their loans to the banks, what this mean is that they do not need to worry about how to pay their loan to the banks, as the company will now take over the obligation” he explained.

Sanusi Gulac, chairman, Sorghum-Millet Farmers Association of Nigeria said thethe(SMAN), one of the participants at the stakeholders meeting, described the move by NIC and NIRSAL to get prompt compensation for the affected farmers is a positive efforts towards the government food security quest.

“We have b eing e ducating our members about agricultural

Insurance policy, and the need for them to enlist in it. We are aware that most farmers in northern Nigeria are not exploring the insurance, some of these reasons why most of them do not participate, ranges from cultural and religious factors,” Gulac said.

“We have been trying our best to ensure that the farmers embrace insurance because of the growing risk involved in the practice of agriculture in the country. There are disasters which are not known before that are now with us and insurance is one of the way of mitigating effect of the disasters.

“ The insurance polic y was conceived to assist the farmers with stand the effect of this kind of disasters. Our people are now being made to embrace insurance as it is now mandatory for any farmers seeking for loans to take insurance cover, so whether one like or not once you are a farmer and you want to take loan facility from the banks you need to sign for insurance” he stated.

In his address earlier, Babagana Mustapha, head of the Kano zonal office, NIRSAL, who presided over the programme, said that the NIRSAL `s organised workshop is the third leg of the series of training organized for stakeholders in the Agriculture value chain.

According to him, the participating stakeholders, includes: insurance companies, farmers associations, commercial banks, micro finance institutions, input suppliers, processors, and other, pointing out that the goal of the workshop was to bring them up to speed on the innovations, new idea, and technology products which if properly applied will assist them to improve their production Babagana added that the workshop would fashioned to assist the stakeholders in boosting their profit- margins, boost production, and in the overall the nation`s food self- sufficiency, as well as reducing food importation, and enhance wealth creation by the citizenry.

How Nigeria can leverage greenhouse technology to achieve food security JOSEPHINE OKOJIE

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he adoption of greenhouse technology in farming has been seen as a way of narrowing the increasing food gap in Nigeria as its population growth rate continues to grow at an alarming rate.

Nigeria is currently populated by 182 million people who must be fed. However, there is still much demand-supply gap in most of its food, even as the population growth rate stands at 3.2 percent per annum.

Stakeholders in the agric sector believe that with the adoption

of greenhouse technology and innovative farming techniques, Nig er ia can re duce its fo o d insecurity risks.

“Greenhouse technology is aimed at providing farmers with an all year round technique to produce and increase the yields of greenhouse crops such as tomatoes, pepper, cucumber and sweet-melon,” Antti Ritvonen, chief executive officer and country manager of Dizengoff Nigeria said during the Dizengoff Farmers Field Day in Epe, Lagos recently said.

“It is a technique which provides steady income for the farmer as well as the transfer of knowledge

Antti Ritvonen, CEO and country manager, Dizengoff Nigeria (2nd left) in a handshake with Emmanuel Ijewere, chairman, Best Foods Fresh Farms(1st right) ; (2nd right) Olusola Kehinde, dean -school of agriculture, Lagos State University, Epe Campus and (1st left) and Jonathan Atungwu, director, Institute for Organic Agriculture & Green Economy, during a “Customer Open Day” organized by Dizengoff Nigeria and Best Foods Farm in Epe, Lagos State recently.

on how to improve the quality of their produce, reduce field losses and ensure higher profit for their investment,” Ritvonen said.

He said farmers could get their investment back in 12 months because the technology increases their average yields about 30 times more than on the same square meter in an open field farm setting.

R i t v o n e n a l s o n o t e d t hat Nigeria’s demand for vegetables is put at over 2.3 million metric tons per year; it is only able to produce just about 1.8 million metric tons.

The greenhouse technology he submitted “is a potentially very viable option capable of narrowing this gap.”

Also speaking during the farmers day, Emmanuel Ijewere, chairman, Best Foods, noted that Nigeria has a lot to do in terms of improving modern farming methods that would improve food quality and sufficiency.

He disclosed the greenhouses technology usage in Nigeria at the moment is just about 4,000 units whereas, a country like Kenya has well over 172,000 units.

Ijewere further disclosed that Kenya has recorded milestones and has become Africa’s biggest exporter of agricultural produce because 18 aircrafts containing flowers, tomato, peppers and other leave the country daily to Europe.

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Leadership

Wednesday 03 October 2018

SHAPING PEOPLE INTO A TEAM

What has the Eurozone learned from the financial crisis?

ANTONIO FATAS

just poorer.

his month marks the 10year anniversary of the Lehman Brothers collapse, the prelude to the worst global financial crisis since 1929. As we pass that mark, we are also approaching the 20-year anniversary of the launch of the euro. And when the retrospective assessments of the euro’s first two decades are written, they will all be set in the context of the economic disaster that followed Lehman’s collapse.

Back in January 2009, European officials assumed that the crisis was purely a U.S. phenomenon, unlikely to affect European economies. This assumption could not have been farther from the truth; a recession started in Europe in the first quarter of 2009, just a couple of months after it hit the U.S. But the real tragedy happened later: A timid recovery during 2010-11 was followed by a second recession starting in the third quarter of 2011, from which Europe did not start recovering until 2015. Yet the place where the crisis had originated, the U.S., avoided the second recession and continued its recovery. What went wrong? How could a crisis that started in the U.S. have caused so much damage in Europe?

The answer to those questions is threefold:

WHERE DOES THE EURO GO FROM HERE? Ten years after the crisis, observers of the U.S. economy are asking whether we learned enough from the 2008 crisis about how to manage risk in the financial system.

The euro area is asking a very different question: Have we learned enough about monetary and fiscal policy to better manage the next crisis? I am afraid the answer is no.

Interest rates today remain low (negative), monetary policy is far from normal with no room for decreases to stimulate the economy if a crisis happens. The ECB could do more QE, but it will likely face opposition by some countries — and Draghi will not be around, as he will step down as ECB president

by October 2019. Fiscal policy is in no better place. Euro governments continue to struggle with high debt levels, leaving little room for a fiscal stimulus if a recession happens.

What’s more, eurozone governments would have to coordinate their fiscal policies for them to be effective. But that would require a political consensus across the euro area, yet another challenge, given that the fallout from the financial crisis has not only left the region economically enfeebled but also created deep political scars.

So as we approach the euro’s 20th birthday in January, let’s try to accentuate the positive in that achievement and find ways to strengthen the political ties underpinning the project. If our politicians cannot achieve some sense of common purpose, there is little likelihood that the euro will celebrate a 30th birthday in 2029.

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CENTRAL BANK CHOICES Both the U.S. Federal Reserve and the European Central Bank followed broadly similar policies in reaction to the crisis, lowering interest rates and injecting liquidity. But they differed greatly in how far and when they applied these policies.

By Dec. 16, 2008, interest rates were close to 0% in the U.S. The Federal Reserve had already engaged in quantitative easing by committing to buy about $1 trillion of securities, an amount than

later grew through two additional rounds of QE. That same month, interest rates in the eurozone were as high as 2.5% and it took five months for them to go all the way down to 1%. And there is no doubt that the ECB felt uncomfortable with these historically low rates; at the first opportunity, in the summer of 2011, the central bank pushed interest rates up to 1.5%. There was, moreover, no attempt to introduce QE in Europe at this time.

It took a second recession in Europe, along with a change in leadership before the ECB decided to do “whatever it takes” to save the euro. Mario Draghi (who replaced Claude Trichet as ECB president) took interest rates down to zero and after difficult political negotiations, put a QE plan in place by 2015. Although policymakers agreed that the measures were necessary to prevent the euro from breaking up under the pressure of the crisis, they arrived too late to save the eurozone from its second recession in 2012.

FISCAL POLICY As the ECB’s bazooka began to run out of ammunition, all eyes were on fiscal policy. After an initial fiscal policy stimulus, eurozone

governments — especially those in struggling Southern European countries (Spain, Greece and Portugal) — switched dramatically toward austerity in the years 20102014. Most experts now agree that these policies had such damaging and persistent negative effects on growth that they were self-defeating. Governments were reducing spending in order to bring their debt levels under control. But gross domestic product fell so much that the actual effect was to push up the ratio of debt to GDP. As a result, debt became even less sustainable than before the austerity measures were implemented.

POLITICS Why did the euro area get its macroeconomic policies so wrong?

Undoubtedly some of the mistaken decisions reflect poor judgment on the part of policymakers at the time. The ECB unanimously voted in favor of an increase in interest rates on July 7, 2011, because of concerns about inflation, which turned out to be, ex-post, a clear mistake.

But one cannot forget that policy in the euro area is complex and subject to political constraints.

QE was postponed because it was

deemed to be inconsistent with the stated “no bailout” rule of the euro treaties. Austerity was seen as the only correct policy because of the German view that the crisis was the outcome of a lack of discipline on the part of other governments. In the words of Jurgen Start, former ECB member: “The truth is that, in contrast to many eurozone countries, Germany has reliably pursued a prudent economic policy. While others were living beyond their means, Germany avoided excess.”

While this might be reasonable advice for an indebted individual, it is the wrong advice for countries and a disastrous policy when applied to all countries at once. In his 1936 book “The General Theory of Employment, Interest and Money,” John Maynard Keynes described what we can call the paradox of thrift: “The reactions of the amount of his consumption on the incomes of others makes it impossible for all individuals simultaneously to save any given sums. Every such attempt to save more by reducing consumption will so affect incomes that the attempt necessarily defeats itself.”

In other words, if we all try to save at once, no one saves, and we are

c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

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Antonio Fatas is a professor at Insead and a research fellow at the Center for Economic and Policy Research in London.

Wednesday 03 October 2018

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30 BUSINESS DAY

Inside-out Toyota Yaris after 20 years

...TMC adopts innovative at Paris Motor Show Stories by MIKE OCHONMA

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oyota is paying tribute to the original Yaris by introducing a new Y20 grade to its 2019 model range, marking the 20th anniversary of its successful B segment car displayed for the first time at Paris Motor show in 1998.

Through two decades and three generations, Yaris has become firmly established as Toyota’s bestselling model in some regions like Europe, and also built at its Valenciennes factory in France.

The revised Yaris range, revealed for the first time at the Paris Motor Show, will offer a new multimedia system that enables smartphone integration.

In fitting style, there will be an initial production run of 1998 Launch Edition Y20 models featuring the same gold paintwork used by the first Yaris back in 1998, but with the contemporary twist of a bi-tone dark grey roof.

The full-production Y20 models will sit at the heart of the 2019 Yaris model range, replacing the current Mid+ grade and offering a strong value proposition for customers.

Standard and bi-tone versions will be available, the latter matching silver, pearl or black bodywork colours with a new dark grey finish for the roof depending on the peculiarities .

The exterior styling uses dark grey features to distinguish the Y20 within the Yaris line-up. These include, 16-inch grey and machinedface 10-spoke alloy wheels, and dark grey side mouldings, front grille, door mirror casings and fog light surrounds (with chrome detailing). The Y20 also sports a shark fin antenna, colour-matched to the roof, dark-tinted rear privacy glass

and special Y20 badging at the rear.

The interior extends the dark grey theme, applied to the centre console, steering wheel inserts and new chequer-pattern fabric upholstery. Satin chrome air vent, audio speaker and meter surrounds and gear knob trim, black carpet mats with silver edging and Y20 badging on the instrument panel and front setbacks further enhance the quality feel of the interior.

Meanwhile, the 2019 model year Yaris’ new multimedia system is in tune with people’s desire to keep connected at all times.

Connectivity has become an increasingly important purchase consideration for customers and the new package will enable easy smartphone integration and access to useful, popular apps.

Operation is via a simple central touchscreen; once connected; selected smartphone contents can be viewed and accessed using the screen. Functionality will be extended over time to enable access to other third party apps.

The system has a clear and simple hardware and HMI design.

It can be used to provide smartphone-enabled route navigation and is able to respond to voice commands, via a new microphone and a dedicated button on the head unit, with least driver distraction.

The touchscreen will also respond to familiar multi-touch gestures, such as screen flicking and pinching in/out.

Two key product elements are exclusively featured at the Paris Motor Show: Hybrid technology and Toyota New Global Architecture (TNGA).

For more than 20 years Toyota has developed, improved and democratised its self-charging hybrid technology. At Paris this year, only hybrid vehicles will be exhibitedfrom the compact Yaris, to the latest generations of the Corolla, the RAV4 and the Camry.

Toyota New Global Architecture (TNGA) forms the basis of Toyota’s new product and powertrain offers.

More than a platform, TNGA is an

engineering and design philosophy. While improving the driving dynamics of cars, it also allows the development of exterior and interior designs with stronger emotional appeal.

At the Paris motor show this year, Toyota will demonstrate how it is reinforcing its foundations and preparing for future growth a the automotive industry is entering a once-in-a-century transformation and Toyota is preparing by shifting from a pure car company towards an innovative mobility provider offering ever better mobility for all.

This brand shift is reflected by a new motor show stand that features 3 distinct areas. One that is called Start Your Impossible―is dedicated to new mobility solutions and future innovation.

The second celebrates Toyota’s motorsport activities with Toyota GAZOO Racing. And the third area is dedicated to the brand’s new models, with a clear focus on the latest self-charging hybrid product offers.

Coscharis premium, high and low-end auto brands celebrate customers

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n the spirit of this year’s Customer Service Week theme: “Excellence Happens Here”, Coscharis Motors has set up customer-centric activities from October 1 to 5, 2018 in all of its branches nationwide to recognize and celebrate all her brands’ customers including Jaguar Land Rover, BMW, Ford, Rolls Royce, MG and Joylong.

According to Abiona Babarinde, the GM, Marketing and Corporate Communications for the Group, ‘Our focus this year is to visit the customers in their respective business environment and welcome those who visit our business within this period.

For Coscharis Motors, the motivation is to bond with existing customers both happy and dissatisfied.

We are specially targeting the latter given our revitalized service capacity aimed at sustaining value for money.

Importantly, we are offering all customers 10% discount for repairs and parts during the customer week across all our branches in Nigeria.

He stated that, as a global practice, Coscharis is celebrating its staff

L-R: Yebeltal Getachew, general manager, Stills and VEB, The Coca-Cola company; Jonathan Ukoko, Men Net category winner; Alaba Adetunji, Ladies Net category winner; Brad Ross, marketing and C & CL director, the Coca-Cola company; and Abiona Babarinde, general manager, Marketing &Corporate Communications, Coscharis Group at the Jaguar Land Rover co sponsored Coca-Cola 2018 Golf Tournament award dinner held at Ikoyi Club, Lagos.

that serve and support its customers on a daily basis. The week-long activity is geared towards motivating them to always treat the customer as king or queen; meaning the cus-

Wednesday 03 October 2018

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tomer has every right to be listened to and respected.

Every complaint should be viewed as a privilege, evaluated and rectified with appropriate

action(s). He remarked that “exhibiting excellent Customer Care delivery drives any business success in the long term.

In addition, he stated that the customer service week avails Coscharis the chance, as a customer - focused business, a week-long opportunity to raise further awareness among the staff on customer service and the vital role it plays in successful business practice.

The executive director, Aftersales, Cosmas Jr. Maduka enthused that the company must use this Customer Service Week to re-assess how easy it is to make customers satisfied and loyal and be willing to go the extra mile; as the ways we deal with challenges are as important for customers as the eventual outcome.

Coscharis Motors as the sole importer of BMW, Jaguar Land Rover, MG and a franchise dealer of Ford in Nigeria offers a comprehensive warranty backed by a region-wide service network responsible for the provision of world-class maintenance and parts back-up.

FRSC boss delivesr keynote address at HAULMACE 2018

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takeholders in cargo transportation in Nigeria will once again gather in Lagos today during the 2018 edition of the Haulage & Logistics Magazine Annual Conference & Exhibition (HAULMACE 2018), to discuss one of the issues of concern to all stakeholders in the haulage value chain.

The theme of HAULMACE 2018 holding at the City Hall, Catholic Mission Street, Lagos Island, Lagos is “Safety of Life & Property: Imperative for cargo transportation on Nigerian Roads”.

Boboye Oyeyemi Corps Marshal, Federal Road Safety Corps, will deliver the keynote address.

In view of the importance of the theme of this year’s event, the FRSC boss has confirmed that, he will be available to personally present the keynote address at the event.

Apart from the FRSC boss who will present the keynote address, Total Nigeria Plc will also present paper at the event on the topic “Sustaining a culture of safety in wet cargo transportation on Nigerian road: the Total Experience”.

Total Nigeria plc, it should be

noted has absolute commitment to safety which has enable it to record accident free distribution of its products over the years.

Also, Regha Verere Tesman (FRSC Rtd.), head of safety department, ABC Transport plc will present paper on the topic ‘Achieving a Complete Safety Culture in Cargo Transportation on Nigerian Road: The ABC Transport experience.

The aim of HAULMACE 2018 is to bring every stakeholder in cargo transportation and supply chain management in Nigeria together to avail them the opportunity of deliberating on how a culture of safety can be developed and entrenched on Nigerian roads by all stakeholders.

After attending the event, every stakeholder in the cargo transportation on the roads is expected to be safety conscious and also go away with practical actionable steps to promoting and entrenching a culture of safety in their various organizations. HAULMACE 2018 promises to be the biggest and most important gathering of haulage and logistics professionals in Nigeria this year.

Expected to attend the event include CEOs of haulage companies, supply chain managers and logistics directors of various organizations.

Other qualified participants include managing directors/chief executives of companies, executives and members of various associations in the haulage industry, such as NARTO, PTD, NUPENG, AMATO, and Corporate Fleet Truck Owners among others.

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BUSINESS DAY

31

MTRAVEL odern

Nigeria lags as Marrakech tops African hospitality market Stories by MIKE OCHONMA

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ased on figures for the first half of 2018 from STR, Marrakech has emerged as a standout performer among key African cities, including Nigeria despite the country’s large population size and very vast tourism potentials. Average daily rates in the city increased by 40.7 per cent, to $195, in the first six months of the year.

N i g e r i a’s f a i l u r e t o make any impact on the Africa’s hospitality index industry analysts say may not be unconnected w ith the secur ity concerns plaguing the countr y which the y lament have hindered tourism business, This comes despite the considerable rate growth, while the market also recorded a 12.3 per cent increase in occupancy. In terms of RevPAR; a technical measure used by hotel investors and operators because it takes into account how full a hotel is, Marrakech saw a 58 percent increase to $124.

Thomas Emanuel, business development director for STR, said: “Due to its proximity to markets where security concerns have hindered tourism business, Morocco’s hotel performance has suffered in recent years.

“A s c o n s u m e r c o n fidence is returning to several of these markets, Morocco’s leisure capital, Marrakech, has seen an increase in demand and hotel operators have man-

aged to capitalise by driving rate growth.”

Another key African destination seeing notable growth is the Cairo and Giza market. In the first half of 2018, occupancy went up 10.1 per cent while average daily rates went up 9.6 per cent, reaching $93.

In some other major African cities, the picture for hotels is less positive.

In Cape Town, for example, occupancy dropped 10.8 per cent compared with half one of 2017.

With the appreciation of the South African rand against the US dollar, the market recorded a three percent decline in average daily rates in local currency, but a 5.4 per cent increase when looked at in US dollars, reaching $151.

Occupancy and rates have also fallen in Nairobi and Dar Es Salaam. In Nairobi, occupancy dropped 0.6 per cent, while average

daily rates fell 6.5 per cent in US dollars.

Dar Es Salaam saw a sharper occupancy decline (down 2.1 per cent), but a less severe rate decline (down 2.7 per cent in dollar terms.

This information and more evaluation of hotel investment across key African cities will be a subject of great debate at the African Hotel Investment Forum in Nairobi in October and at the Forum sur l’Investissement Hôtelier Africain in February in Marrakesh.

AHIF is the premier hotel investment conference in Africa, attracting many prominent international hotel owners, investors, financiers, management companies and their advisers.

It is organised by Bench Events, who have an established record of delivering high-level networking

and thought leadership conferences for hospitality investment and aviation in Europe, the Middle East, Africa, Asia and Latin America.

‘Creating an impact’ is the core focus of Bench Events, as the company enables growth by facilitating deal opportunities.

Matthew Weihs, managing director, Bench Events, which owns and runs AHIF and FIHA, said: “This latest data from STR shows that the attractiveness of owning hotels in Africa is quite mixed when one looks back over the horizon of a single year.

“However, high spots like Marrakesh and the general trend in economic growth across the continent, which is improving from a low in 2016, should enable hotel owners to feel genuine optimism in the medium to long term.”

Matthew Weihs concluded.

Mark Willis adds to Africa, Middle East role

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ccorHotels has appointed Mark Willis as chief executive officer for Middle East and Africa. Based in Dubai, Willis will be responsible for overseeing a combined network of close to 400 hotels in operation and pipeline across the regions.

Willis joins the company in the region at a time when the Middle East and Africa region is experiencing significant growth, with Accor opening on average two hotels every month.

A venerated leader with over 30 years of hospitality experience, he will be tasked with driving operational excellence through top line performance, quality and guest satisfaction.

At the same time, Willis will seek to fuel growth in the region by nurturing a talent pool set to reach 50,000 employees by 2021. Formerly president for the Asia region with Mövenpick Hotels & Resorts, Willis joined Accor when the French company acquired Mövenpick earlier this year.

Reacting on his appointment, Chris Cahill, deputy chief executive officer, AccorHotels said; “Mark has demonstrated exceptional leadership in operational, commercial and strategic areas and understands the travel and hospitality industry intuitively’’.

Cahill said that his guestcentric approach combined with a deep understanding of the Middle East and Africa will be invaluable as we continue delivering cherished experiences for our guests and demonstrable returns for the organisations’ valued partners.

Over the span of 20 years, his career has also taken Willis on a journey into several senior leadership roles within the Radisson Hotel Group (formerly Carlson Rezidor Hotel Group), including regional director for the UK, area vice president, Middle East & subSahara Africa and senior vice president Middle East, Africa

& Turkey.

It was in this last role with the Radisson Hotel Group, that Willis oversaw all brands within a portfolio of 85 hotels with over 80 hotels in the development pipeline.

Willis has completed several senior management programs at Cornell University, New York and holds an MBA in International Business from Oxford University in the UK. He has also held

active board member positions within the Hospitality industry in both the UK and the Middle East.

AccorHotels is a worldleading travel and lifestyle group and digital innovator offering unique experiences in more than 4,500 hotels, resorts and residences across 100 different countries.

With a portfolio of internationally renowned hotel brands encompassing the entire range from luxury to economy, from upscale to lifestyle and midscale brands, AccorHotels was founded more than 50 years ago. The group is also active in the fields of concierge services, co-working, dining, events management and digital solutions.

In addition to its core hospitality business, it has successfully expanded its range of services, becoming the world leader in luxury private residence rental with more than 10,000 properties around the world.

WT&TC hosts leaders forum in Portugal

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ong term planning, placing communities at the centre of the sector, has been highlighted during the first European Leaders Forum, organised by the World Travel & Tourism Council.

Also on the agenda were plans for increasing resilience by preparing for crises and transitioning to a seamless traveller journey through the use of technology. All three are necessary if the sector is to remain competitive, the WTTC argued The first forum took place in Lisbon, Portugal, and was hosted by Turismo de Portugal and the Portuguese ministry of tourism.

In her opening address to the 150 leaders present, WTTC president, Gloria

Guevara, said: “Tourism accounts for 10.4 per cent of the world’s GDP and one in ten jobs and has consistently outperformed the economy as a whole.

“Here in Europe, which attracts over half of global international arrivals, tourism contributes 9.9 per cent to

GDP, and in 2017, the sector grew more than twice as fast as the rest of the economy.

IATA is forecasting an additional 1.5 billion passengers a year in Europe by 2036. The challenge for the future is to ensure that growth is maintained and is sustainable, providing

benefits for local communities, be they in large cities or remote rural areas, and ensuring a great experience for the traveller.”

Guevara highlighted three areas of opportunity for Europe and these includes that growth needs to be sustainable, planned for the long term and with communities at the centre of planning, to ensure that growth is inclusive and positively benefits the people of Europe.

Crisis preparedness, where destinations and the private sector work together to learn from previous experience and ensure an integrated approach to dealing with crises such as extreme weather events, health pandemics and terrorism.

Improve efficiency and travel security through the use of technologies such as biometrics, which put a seamless traveller journey at the centre and expand capacity to capitalise on growth opportunities.

“WTTC calls for action in these areas so that Europe maintains competitiveness and maximises future job creation through tourism.

Europe is a large and important tourism market, but it is important that its leaders do not take this for granted.

WTTC is delighted to pledge our support to European tourism in this journey,” added Guevara.

Guevara congratulated host country Portugal on impressive growth and a focus on investment and

long-term planning and stressed that Portugal is a great example of one of Europe’s mature yet growing destinations.

Last year tourism contributed 17 per cent of Portugal’s economy and supported one in five jobs as the sector grew three times faster than the country’s economy as a whole.

“The focus on investment, as showcased by the ‘Invest in Portugal’ programme and long-term planning evidenced in the country’s Tourism Strategy 2027, shows the Portuguese government’s commitment to our sector and I am delighted that we have been able to showcase that through our first WTTC Europe Leaders Forum.” Guevara concluded.

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Wednesday 03 October 2018

Local and global rail news as it breaks

S/West rail crossing decay blamed on Lagos, Ogun

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Global rail market still growing, says UNIFE … Nigeria, Bulgaria joins the league

MIKE OCHONMA

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here are very strong indications that steady growth in the global demand for railway products and services can be expected for the next six years.

This is according to the 2018 World Rail Market Study compiled for UNIFE conducted by Roland Berger and commissioned by the European Rail Industry Association (UNIFE) and launched by Sabrina Soussan, the chairman at just concluded InnoTrans.

The seventh biennial study once again draws on data provided by UNIFE member companies as well as independent research.

It takes a look at trends in 60 of the world’s biggest rail markets, accounting for 95 percent of all passengerkm and freight tonne-km, including for the first time Bulgaria and Nigeria.

By comparing five dif-

ferent product categories in seven geographical regions, the study considers 155 segments in total, in order to build up a comprehensive picture of the global market.

Whilst the detailed statistics are primarily aimed at suppliers and consultants, this year’s study includes a special chapter giving a qualitative overview of global trends shaping the rail sector, such as urbanisation, digitisation and climate change, which UNIFE anticipates will be of value to politicians and financiers.

According to Andreas Schwilling the lead author, the total market volume for rail products and services reached a record high of €163·2bn last year, following two years of positive market development.

H o w e v e r, t h e c o m pound annual growth rate of around 1·3 percent between 2013-15 and 2015-17 was slightly below the figure predicted in the previous

survey.

L o o k i ng a h e a d , t h e study anticipates growth of around 2·5 percent to 3 percent over the next six years and expects slower growth in the rolling stock segment over the next few coming years, following the placing of some very large orders in the previous two or three study periods.

Countering this will be steady growth in the services sector and rail control systems, driven by the digitalisation trend as well as the deployment of ERTMS and PTC and increasing automation. Total market volume is predicted to reach approximately €192bn a year by 2023.

In 2016, it was predicted that the world rail supply market volume will hit a record level of nearly 160 billion euros in 2015 with the growth expecetd to continue in spite of certain regional differences.

In the years to come, the

market volume will grow 2.6 percent per year on average worldwide and may reach about 185 billion euros in 2021. These are among the findings of the sixth UNIFE World Rail Market Study.

The study’s authors predict that urban transport will demonstrate the highest growth rates, whereas in absolute figures, the demand will remain strongest in regional and long-distance travel.

The 2018 edition of the UNIFE World Rail Market Study published biennially since 2006 provides a comprehensive overview and key insights on all relevant developments in the rail supply market.

It takes an especially deep dive into the rail market in sub-Saharan Africa, as well as providing a detailed analysis of the market impacts of the EU’s Fourth Railway Package legislation and the on-going efforts to digitalise the rail system.

Africa’s first high speed rail project launched in Morocco

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frica’s first high speed railway for Morocco’s Al Boraq high speed service is now expected to open for traffic by the end of the year as commissioning trials continue.

LGV Maroc comprises a 183 km high speed line between Tanger and Kénitra which is being built for operation at up to 320 km/h, as well as 137 km of upgraded conventional line from Kénitra to Casablanca where trains will run at up to 220 km/h.

Having once targeted an opening in 2015, national railway ONCF had hoped to have the new line ready this

summer, but a series of delays have pushed the launch date back.

Among the causes of the hold-up is an area of subsidence over a 3 km section of the alignment south of Tanger caused by geological issues; the track is understood to have moved by a few centimetres.

Nevertheless, dynamic

tests have been underway since February last year, which included a test run in May this year which reached 357 km/h which is a new rail speed record for Africa. The training of 600 staff in partnership with French national operator SNCF is also on course.

On June 19, formal approval was granted for testing to move into the simulated operation phase, with a view to a team of auditors signing off the railway as fit for operation in accordance with UIC standards in the weeks

ahead.

Four stations are being built or heavily remodelled for high speed services; these are Tanger, Kénitra, Rabat-Agdal and CasaVoyageurs.

The Casablanca station is on course to open later this summer, covering a 10,000 m2 area and with capacity for 20 million passengers per annum compared to 7 million for the existing station, which ONCF plans to redevelop as a museum. ONCF says that the other three facilities ‘will be ready alongside the opening of the railway’.

he southwest states of Lagos and Ogun have been blamed for not meeting their obligations of funding maintenance of level crossing gates/barriers and flagmen as entrenched in the statutory Act establishing the Nigerian Railway Corporation (NRC).

This dismay was expressed by Jerry Oche, Lagos district manager of NRC. He accused state governments, local governments’ authorities and host communities that were authorized by the Corporation to construct roads across railway lines.

Only recently, a policeman and commercial motorcyclist were killed at the PWD Level Crossing axis by an Ijoko to Apapa bound mass transit train as well as other train mishaps that occurred at railway level crossings in the past.

have met the obligation of paying monthly dues after paying the initial deposit to enable them construct roads across railway line and install level crossing gates/barriers at such locations.

On the recent killing of a policeman and commercial motorcyclist at PWD railway level crossing, the NRC official explained that all the vehicles coming from Oshodi and Ikeja GRA were flagged down to stop at the rail intersection but that the commercial motorcyclist ignored the warning in preference to cross the railway line only to be knocked down by an oncoming train.

He advised that “When approaching a level crossing, both the motorists and pedestrians should endeavour to stop, look and listen before moving ahead”.

The district manager

The railway district manager lamented over the cost of maintaining level crossing barriers/ gates as well as flagmen regulating traffic at level crossings across the country which he said has over the years been left to management of the Corporation instead of states, local governments and communities located along railway corridors.

States, local governments and communities located at railway corridors he noted had at one time or the other applied to NRC to construct roads across railway lines with a caveat to pay monthly dues to the corporation for maintenance of level crossing gates/barriers and payment of salaries to flagmen stationed at these critical, but all important level crossings.

Oche stated further that “So far no state, local government and community

stated categorically that the braking distance of a train is 0.8 kilometers (800 meters) and that a train driver cannot apply brake at short distance otherwise there would be many casualties especially passengers inside the train.

He advised the motoring public not to see railway tracks as a place to play due to the danger inherent. He also explained that, not all the dead bodies seen on railway lines are caused by train accidents.

Instead, the NRC authorities spends enormous resources to remove such bodies that might have been deposited by ritualists at nights after removing vital part to pave “right of way” for trains.

He also alleged that oftentimes some level crossing barriers/gates are damaged by motorist and abandoned for NRC to repair.

Wednesday 03 October 2018

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Financial Inclusion

& INNOVATION

BUSINESS DAY

33

Supported by:

Small banks boost lending to SMEs in victory for financial inclusion LOLADE AKINMURELE

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inancial inclusion is not only about having a bank account, but also the ability of individuals and businesses to have access to useful and affordable financial products from bank loans to mortgage and insurance.

Access to a transaction account is a first step towards broader financial inclusion, but at the heart of true inclusion is the ability for small business owners to access affordable loans to expand their businesses, create jobs and lift millions out of poverty.

That is why the increase in bank lending to SMEs is a victory in itself for financial inclusion, with small banks growing their risk appetite by the highest margin in the period between December 2017 and end-June 2018, shrugging off the risks of an economy fraught with rising political tension in the build up to the 2019 general elections and weak economic activity, While the general trend in the banking sector shows a contraction in loans and advances to customers in the last two years, the loan books of Sterling and Fidelity bank have risen the most this year, according to Business Day’s analysis of company filings.

Sterling and Fidelity banks grew their loans and advances to customers by 20 percent and 10 percent respectively thanks to increased activity in their Micro, Small and

Medium enterprises (MSME) banking segment, as deduced from interactions with management, while Stanbic Ibtc and Wema bank grew theirs by 9 percent each.

Union bank also increased its loans to customers, albeit by a small margin of 1 percent, while Diamond bank and Ecobank bucked the trend after their loan books contracted 30 percent and 9 percent respectively.

While the smaller banks have taken an aggressive approach towards lending, the big banks haven’t followed suit, probably because quality borrowers are actually scarce these days.

The loan books of Guaranty Trust, Zenith, Access, United bank for Africa and First bank, shrank cumulatively by 6.6 percent as at June 2018 compared to the level at the end of 2017, with two

of the country’s most capitalised banks on the stock exchange, GTB and Zenith contracting the most.

That is not to say the larger banks are not committed to moving the needle on financial inclusion, as even they have invested billions of naira in financial literacy programmes, building agent banking networks and developing mobile applications to ease financial transactions.

The reality instead is that the big lenders are trying to derisk their balance sheets at a time when the smaller banks are playing catch-up.

Nigerian banks pulled the plug on private sector lending to manage a worrying spike in non-performing loans, after the economy slumped to its first recession in 25 years two years ago, causing loans to go bad and threatening the asset quality of lenders.

The economic crisis was triggered by the decline in oil prices and production and because banks were largely exposed to the oil and gas sector, bad loans spiralled out of control in 2016 but the situation has since improved after an oil-led recovery took the economy out recession in the second quarter of 2017.

Oil prices have rallied and production in the Niger-delta has stabilised, having been disrupted by militant attacks in 2016. Brent crude touched $79 per barrel Friday, September 28, according to Bloomberg data and has more than doubled since 2016’s average of $38 per barrel.

Other macroeconomic indicators have also improved.

The economy expanded some 1.7 percent in the first half of this year and is tipped to expand by the International Monetary Fund (IMF)

to grow by 2 percent by yearend compared to 0.8 percent in 2017 and -0.5 percent in 2016. Although in GDP percapita terms, the economy is still in doldrums with economic growth rate below the population growth rate of around 3 percent.

Inflation has declined significantly to around 11 percent from a peak of 18 percent in January 2017 and FX liquidity has improved, helping the exchange rate stabilise at around N360 per USD at a market-driven window called the Investors and Exporters window. The window was created by the CBN in April 2017 to boost autonomous dollar inflows.

The CBN’s external reserves have benefited from higher oil prices and increased foreign portfolio inflows which means the apex bank doesn’t have to burn through reserves like in 2016 when it emerged the biggest supplier in the market after autonomous inflows gummed up.

Impressed by the improved economic situation, banks largely forecast 10 percent loan growth during investor presentations at the start of the year, but earlier than expected political tensions heading into the 2019 presidential elections and fragile economic activity have forced banks to renege on their promise and be conservative with credit creation.

Still a long way to go in credit provision According to World bank data, 70 percent of the 445 million MSMEs in emerging

markets lack access to to credit. While the gap varies region to region, it is particularly wide in Africa and Asia, but no specific data is provided.

Some 40.1 million Nigerians are financially excluded according to a survey by development agency, Efina, meaning they had no bank account and zero access to financial products and services.

Beyond broader economic gains, bringing the unbanked in their large swaths into the banking sector would boost bank deposits and improve affordable lending to small businesses.

The total deposits held by commercial banks in Nigeria was N21 trillion as at the end of 2017, according to CBN data. That comes to 24 percent of GDP, a poor figure compared to South Africa’s bank deposits as a percentage of GDP of 200 percent.

If every adult Nigerian without a bank account opened one and puts N5,000 naira each in those accounts, the banking sector will have an additional N200 billion naira, a fifth of a trillion, in fresh deposits, providing better liquidity and reduced interest rates which will be triggered by banks’ access to a larger pool of cheap funds in customer deposits.

Greater adoption of digital financial services to ease financial transactions and penetrate rural areas has often been touted as a viable means of getting more people to transact via formal channels.

Importance of Financial Inclusion – A Global Perspective Usoro Usoro, General Manager, Mobile Financial Services; MTN

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ver the last decade, financial inclusion has been a target pursued across the

world.

We are seeing significant progress, as globally, there are 3.8 billion people (69% of all adults) with a bank account or mobile money provider, up from 62% in 2014, according to Global Findex.

About 1.2 billion adults across the world have obtained some sort of formal financial account since 2011, when the rate of global financial inclusion was just 51%.

Africa is not left out of this growth – for example, in Kenya, with the introduction of M-Pesa, which reformed the country’s financial system, the number of financially-served individuals in the country has

risen significantly to its current rate of 82.5%.

In spite of these giant strides, 1.7 billion people around the world remain outside the formal financial system, with more than half of them living in Asia & Africa.

The inclusion gap between high-income economies, like the United States and Austria, and developing economies like Nigeria is vast: an average of 94% of adults in developed countries have bank accounts, compared to an average of only 63% in the latter.

Taking a look at Nigeria in isolation, only 38.3% of the adult population is banked, and 40.1 million are financially-excluded (41.6% exclusion rate).

The situation is even more dismal when you consider that

the country’s population is made up of over 42% of people who are under the age of 18, which will likely increase the number of unbanked adults even further. Even worse, the exclusion rate has been on the rise over the last few years – between 2014 and 2017, the percentage of banked adults dropped by almost 4%.

When compared with global standards, such as the United States’ 7% average exclusion rate, it is clear that there remains a lot to be done.

There has been much discourse, policy development, and investment into financial inclusion.

But why is it important to push for financial inclusion?

Because it is the smart thing to do. Studies have shown a positive correlation between

access to finance and sustainable economic growth.

This is not surprising, as countries with higher income levels have higher levels of inclusion, and hence lower poverty rates. The United States, for example, had a 1.3% extreme poverty rate in 2016, and an average exclusion rate at 7%; Nigeria, on the other hand, has a nearly 50% poverty rate, and a 41.6% exclusion rate.

Financial inclusion helps to improve the standard of living of citizens, especially those at the bottom of the pyramid, who are mostly neglected by deposit money banks.

Access to financial services, beyond the usual deposits and withdrawals, such as credit and insurance, will equip these individuals to

start and expand businesses, invest in education and health, manage risk, and weather financial shocks, and ultimately improve the overall quality of their lives.

Nigeria has a large informal sector and a lot of the funds they receive and earn do not enter the formal financial system. If brought into the system, they will increase the funds available for loans and other financial services that have the potential to benefit many.

Increased access to capital allows for rapid expansions, which will in turn create more jobs. This will eventually lead to better overall economic output levels.

The World Bank’s stated goal is to achieve Universal Financial Access by 2020; in Nigeria, the CBN set a target

of reaching 80% inclusion by 2020. Imagine what a more financially-inclusive Nigeria could look like.

One where Nigeria is no longer the poverty capital of the world because citizens can afford basic necessities; where SMEs are scaling up because they have access to finance; and more importantly, one where anyone, irrespective of geography, gender and income level, is able to access useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in an affordable and sustainable way.

This impact of such a feat will undoubtedly be farreaching and felt by every single Nigerian.

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& INNOVATION How telcos plan to financially include 90mln Nigerians in 30 months Supported by:

Stories by ENDURANCE OKAFOR

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obile operators in Nigeria ; MTN, Airtel, Globacom and 9mobile recently announced their commitment towards deepening financial inclusion to at least 90 million customers in the next 30 months on the condition that they are given a level playing ground to perform mobile money functions.

When BusinessDay reached out to the telecommunication companies, inquiring how they plan to achieve the set target, leverage on already existing customer base, recognised brands and distribution network were the measures cited.

“With a combined customer base of over 160 million and our trusted and recognizable brands, Telcos can easily upsell financial services to this existing base of customers, with a good percentage of them currently classified as un-banked,” Usoro Usoro, the GM of Mobile Financial Services at MTN Nigeria told BusinessDay by mail.

Although, at the time of this report, the three other mobile operators were yet to respond on the measures they want to use in achieving the set target.

In Nigeria, Telcos are excluded from accessing mobile money licences directly under current guidelines, while in most sub-Saharan African markets where mobile money is successful, Telcos are given a level play-

ing field.

A survey by BusinessDay showed that the Telco led model in African countries reported tremendous progress owing to the already existing large customer base of the Telco’s.

Kenya has about 60 percent mobile money service penetration, while Ghana has about 40 percent service penetration, and Nigeria with a lot more population numbers, remains at 1 percent, largely due to its bank-led model.

Ghana’s decision to have a Telco led model resulted in a 73 percent increase in registered mobile money customers in just one year, according to World bank data, and has helped lift financial inclusion rates in Ghana to 58 percent in 2017

from 41 percent in 2014.

This was not different for Ivory Coast which has experienced a mobile money revolution. As a result, there are now more adults with mobile money accounts of 24.3 percent than with bank accounts of 15 percent.

In fact, Ivory Coast has the fifth highest rate of mobile money accounts in the world behind Kenya (58 percent), Somalia (37 percent), Uganda (35 percent), and Tanzania (32 percent), according to Brookings Institute, a highly regarded, non-profit public policy organization based in Washington, DC. Kenya also improved to 81.6 percent financial inclusion rate in 2017 from 74.7 percent in 2014, Ivory Coast improved to 41.3 percent

from 34.3 percent and South Africa increased marginally to 69.2 percent from 70.3 percent.

Nigeria mobile operators therefore concluded that it is overly possible to significantly reduce the country’s financial exclusion rates of about 41.6 percent to 20 percent if the telecommunications operators with a wider subscriber base than the total banked population are allowed to drive mobile money penetration.

This was disclosed at the meeting held on Tuesday September 4, 2018, where the major Telcos were in attendance.

“We also intend to leverage our combined distribution network of over 1 million agents, present in all 774 local government areas

in the country, to provide financial services to the last mile, supported with massive educational campaigns required to appropriately educate and promote the basic services required to drive adoption, such local and international transfer services, micro-loans and bill payments,” Usoro concluded in a mail response to BusinessDay. Meanwhile, figures released by the National Bureau of Statistics (NBS) revealed that MTN Nigeria as at the end of second quarter 2018 has active voice subscribers of 66.4 million, followed by Glo with 39.8 million while Airtel and 9mobile reported 39.7 million and 16 million respectively.

Sources also told Busi-

nessDay that the country’s financial institutions, telecommunication companies, Central Bank of Nigeria (CBN), Nigerian Communications Commission (NCC) and the Vice President, Yemi Osinbajo, held a meeting recently which was aimed at finding common ground in bridging the nation’s financial exclusion gap.

The sources however disclosed that the Vice President promised that efforts will continue at ensuring Telcos have opportunity to drive financial inclusion in a country that has huge exclusion rate. Although financial inclusion experts have also disclosed that stakeholders fear Telcos to lead the way in driving financial inclusion in the country.

Responding to stakeholder’s fear of Telcos dominating the Fintech space through mobile money, Dolapo Ashiru, Lagosbased analyst said “a communication company like MTN Nigeria is already bigger than most banks in terms of turnover and profitability.”

“Stakeholders may be afraid that the Telco’s who are dominating the market share in their telecommunications industry will also begin to make more profit and generate more revenue in mobile money functions,” a financial inclusion analyst who pleaded anonymity said.

“There is also an argument for rural telephoning but a combination of MTN, Airtel,9mobile and GLO already rakes up about 140 million subscribers and they have the capacity to do more, so there is reason for concern,” Ashiru said by Phone.

EFInA launches capacity building porgramme for media to increase financial inclusion

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nhancing Financial Innovation & Access (EFInA), Nigeria’s leading financial sector development organization organized a media forum to discuss the role of media in driving Financial Inclusion.

As part of its mission to promote financial inclusion in Nigeria EFInA desires to improve the existing financial awareness and literacy of the un(der)banked through the existing media infrastructure so that Media can play an increasing role

in the efficient adoption of financial services in Nigeria.

Giving the welcome address, EFInA Board Chair, Segun Akerele, emphasized the importance of collaboration amongst all stakeholders including the media to reduce the rate of financial exclusion.

Te m i t o p e O t u m a r a , Communication Specialist for EFInA said that financial inclusion and inclusive growth are not just policy choices, but are policy imperatives, which determine the long-term

financial stability and sustainability of the economic and social order, going forward. Temi further explained we need to ensure that all of us are collectively willing to walk that extra mile to ensure that our fellow countrymen get easy access to the financial system by leading the initiative and spreading our message far and wide.

EFInA Grants Manager, Suzanne Adeoye said no organization can drive financial inclusion alone so EFInA will be working with the

media to increase financial services awareness and literacy to the un(der)banked during her presentation on “Introduction to EFInA” .

During a presentation at the event Nimi Akinkugbe, the founder of moneymatters laid emphasis on the 3 core purpose of the media, which is to inform, influence and entertain. She further explained that an improved Financial Awareness & Financial Literacy effort from the media could result in more discerning choice of investment and

other financial products by consumers which would make financial institutions respond innovatively to consumer demand, leading to a more efficient financial system.

Nimi concluded her presentation stressing the fact that a better-informed public will exert greater scrutiny over the risks of financial institutions and the quality of their products and services.

Presenting on the Role of Media in driving Financial Inclusion, Editi Efiong, CEO of Anakle educated the Mar-

keting managers of different banks, fintechs and journalists from different platforms including Channels TV, Wazobia, Businessday, EbonyLifeTv, CNBC, Naira-Metrics amongst others about the essence of simplifying the message for the un(der)banked.

Editi further explained that the messaging will need to be localized on a community basis to drive adoption in the rural areas as most of these people still have low trust in the financial system based on little or no understanding on how it works.

BUSINESS DAY

Wednesday 03 October 2018

SHIPPING

LOGISTICS

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MARITIME e-COMMERCE

Breaking the jinx of foreign dominance in Nigeria’s shipping business, the NigerStar 7 example Stories by UZOAMAKA ANAGOR-EWUZIE

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efore the passing into law of t h e Ni g e r i a n Oil and Gas Industry Content Development of Act 2010, popularly known as the Nigerian Content Act, the service segment of the Nigerian maritime and oil industries were mostly dominated by the International Oil Companies (IOCs) and other foreign owned companies.

At that time, the shipping arm of the oil and gas industry, which is the maritime segment of the oil and gas business was most affected.

In this segment, vessels including anchor handlers, tug boats, crude carriers, as well as crew and passenger boats were mostly owned by foreign shipping companies.

This, pundits blamed on lack of enabling legal framework to encourage international oil majors to engage Nigerian-owned and flagged vessels in the execution of their offshore contracts. They also attributed the foreign domination of Nigeria’s shipping business to lack of capacity by Nigerian ship owners to acquire standard vessels that could compete with foreign owned and flagged vessels.

Bu s i n e s s D ay u n d e rstands that lack of affordable funding for vessel acquisition has been one of the biggest challenges facing the nation’s shipping businesses. This was owing to the inability of the Nigerian banking industry to develop a framework for financing ship acquisition, which has long gestation periods.

As a result, credit facilities received from Nigerian commercial banks by indigenous ship owners to fund vessel acquisition, usually come with repayment interest in double digit and as high as 20 percent. This makes it difficult for Nigerian indigenous shipping firms to compete with their foreign counterparts that operate with offshore loans which have single digit repayment options.

It will be recalled that a survey conducted in 2008 revealed that though Nigeria’s oil and gas industry accounted for 90 percent of the

NigerStar7 Adaba

nation’s revenue, the sector contributed less than 38 percent of the Gross Domestic Product (GDP).

This was due to shortage of local participation in the oil and gas industry, resulting to the repatriation of a large portion of the $10 billion estimated average industry spending per annum into foreign banks that are based offshore.

Furthermore, the situation resulted to capital flight, as jobs such as lucrative seafaring, welding and engineering jobs created by oil servicing firms, were mostly dominated by expatriates and foreign seafarers, while Nigerian trained workforce, were left with next to nothing, therefore creating adverse effects on the labour force and economy as a whole.

With the enactment of the Nigerian Oil and Gas Industry Content Development Act 2010, which was signed into law on 22 April 2010, indigenous Nigerian companies such as NigerStar 7, started making inroads into Nigerian maritime, as well as oil and gas industries by breaking the jinx of foreign dominance in the sector.

A imed at increasing indigenous participation in the oil and gas industry by prescribing minimum thresholds for the use of local services, materials and skills in order to promote the transfer of technology and

skill to Nigerians, the Local Content Act has enabled local firms to build capacity that would enable them to start competing with their foreign counterparts.

The enactment of the Local Content Act in 2010, industry watchers say, was very timely because it has remained incredibly important. Here, the actualisation of the objectives of the act was made possible through the inauguration of the Nigerian Content Development and Monitoring Board (NCDMB), which also enabled the government to enforce the provisions of the laws.

The Local Content Act has also encouraged Nigerians, like the owners of NigerStar 7 to invest their money in-country into building infrastructure, asset and human capital development that would enable them to compete in oil servicing business.

NigerStar 7, a frontline player in the service section of the oil and gas industry, is a Nigerian company that brings together the engineering, installation and project management expertise of Subsea 7, the global seabed-to-surface company in Nigeria, with the fabrication capacity and capability of Nigerdock, a subsidiary of Nigeria’s Jagal Group.

Based in Lagos, NigerStar 7 is dedicated to serving

Nigeria’s offshore oil and gas industry by enabling the execution of the largest and most complex EPIC deepwater projects.

Recently, the company officially renamed and launched its newly acquired vessel, NigerStar7 Adaba, to boost capability in the maritime segment of the oil and gas industry.

Described as the most powerful Nigerian flagged DP2 Anchor Handler (140mT bollard pull) and owned by a Nigerian company, to operate in Nigerian waters, NigerStar7 Adaba has a 52-passenger-on-board accommodation capacity, 460m² deck space, and an Electronic Fuel Monitoring System.

NigerStar 7 Adaba is described as the first of its kind to explore Nigerian waters and has been hailed as a major complement to the Local Content Policy of the Federal Government.

As an experienced and efficient oil servicing firm, NigerStar 7 has a strong workforce comprising of experienced staff; it also has two fabrication yards in Lagos and Warri, with capacity to handle Nigeria’s largest offshore projects and the support of Subsea 7’s offshore construction fleet, one of the largest in the industry.

NigerStar 7 is committed to the Nigerian oil industry by helping industry players to develop new jobs and

skills in-country.

“Our mission is to serve Nigeria’s offshore oil and gas industry by executing the largest and most complex EPIC deep-water projects, and with this new addition to our fleet, we are closer to our goal as we become the only Nigerian Tier 1 EPCI contractor with a number of modern assets that are 100 percent owned and positioned in Nigeria,” Yann Cottart, chief executive officer of NigerStar 7, said at the renaming ceremony of newly acquired NigerStar7 Adaba vessel, held recently at Nigerdock Shipyard in Lagos.

According to NigerStar 7 CEO, the investment in the acquisition of the new vessel enables NigerStar 7 as a Local Content provider in Nigeria, to create employment opportunities for marine personnel, onshore team and contractors as well as suppliers, who provide support services to the vessel.

Meanwhile, Simbi Wabote, executive secretary of the Nigerian Content Development and Monitoring Board (NCDMB), who extolled the partnership between NigerStar 7 and Nigerdock Shipyard, called for more collaboration among industry players, to enable Nigerian owned companies to deliver on the goal of growing local content in the maritime, oil and gas industry.

“We must commend NigerStar 7 for its renewed commitment to local content practice and the noticeable repositioning it has undertaken to project the value proposition it offers as an oil and gas service provider of high repute,” Wabote stated.

Wabote, who applauded NigerStar 7 for its commitment to Nigeria, called on other companies to emulate the example of the company in making visible investment in the Nigerian economy.

In accordance with NigerStar 7’s commitment to the Nigerian Oil and Gas Industry Content Development Act of 2010, the personnel on NigerStar7 Adaba, including its captain are Nigerians.

Here, the crew has a robust understanding of the peculiarities of the Nigerian environment and are set on delivery of quality service to clients.

Olapeju Adenuga, the vessel’s god-mother, who doubles as the legal counsel to NigerStar 7, said that the name of the vessel, originates from its new habitat in Nigeria.

Adaba, she explained, emanates from the native Yoruba language of the western people of Nigeria and refers to the bird called ‘Dove’.

“The dove is symbolic as an embodiment of hope, reliability, guidance and loyalty.

The sturdy bird also characterises the strong build of our vessel.”

Research shows that Local Content is critical to the development of Nigeria’s economy. It is absolutely critical, and industry close watchers believed that Nigerian owned companies need to follow the NigerStar 7 example to work collaboratively to create capacity and generate businesses that would provide sustainable jobs and wealth for Nigerians.

More importantly, people need to understand that Local Content should include the whole of Nigeria.

It is about creating jobs and opportunities across the country and it has also been described as the only way Nigeria can be able to overcome the resource curse, and get into an era of positive growth, which would help tackle poverty and inequality in Nigeria.

36 BUSINESS DAY

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Wednesday 03 October 2018

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BUSINESS DAY

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FEATURE

Bridge Bank as an effective failure resolution option UMARU IBRAHIM

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he Nigeria Deposit Insurance Corporation (NDIC) was established with the core mandate of Deposit Guarantee, Bank Supervision, Failure Resolution, Liquidation as well as contributing to banking policies. Since its establishment, the Corporation has been doing its best to collaborate with safety net players especially the Central Bank of Nigeria (CBN) to ensure financial system stability in Nigeria.

The Corporation adopts various bank failure resolution measures such as Purchase and Assumption, provision of liquidity support, assisted merger, take over and management of ailing banks. Other strategies include the establishment of bridge banks and where necessary, the outright liquidation of failed insured institutions.

It would be recalled that due to the deterioration in the financial condition of Skye Bank Plc as a result of mismanagement by the erstwhile management and directors of the bank, it became necessary to sack them and appoint a new management team in July, 2016. The essence of this was to resuscitate the bank given its size and complexity in the industry.

The ‘Bridge Bank’ as a failure resolution option was adopted with the establishment of Polaris Bank Limited, after which the operating license of the defunct Skye Bank was revoked by the Central Bank of Nigeria (CBN).

The key objectives of bank failure resolution include but not limited to maintaining public confidence, enhancing market discipline and minimising the use of tax payers’ funds as well as minimising disruption to the banking system.

Simply put, a Bridge Bank is incorporated by the Deposit Insurer to take-over the loans and advances, fixed assets, other assets, deposits and other liabilities of a failed or failing bank owned and managed until the bridge bank is in such a state that it becomes viable to be sold to credible investors. However, where the bridge bank remains unviable after the stipulated

period for its existence, the Deposit Insurer could resort to its liquidation.

Although the establishment of Polaris Bank Limited immediately before the revocation of the operating license of Skye bank may appear spontaneous to the uninformed, the processes leading to the establishment of the bridge bank are actually very thorough and exhaustive as provided for under Part VIII, Section 39 of the NDIC Act (2006) as amended.

The first step involves series of consultations between the NDIC and Central Bank of Nigeria (CBN) after which the name and bridge bank is incorporated and registered with the Corporate Affairs Commission (CAC) as a limited liability company with the objective of assuming the deposits and other liabilities of the failing bank along with the acquisition of its assets.

After incorporation, the CBN issues operating licence to the bridge bank to enable it commence operations as a fully licenced bank. At the third stage, the NDIC transfers the entire assets and liabilities of the failing

bank (i.e. Skye Bank Plc) to the bridge bank (i.e. Polaris Bank Limited) under a ‘Purchase and Assumption’ (P&A) Agreement executed between the NDIC and the Bridge bank.

Under the P & A Agreement, all or some of the assets and all or some of the liabilities of the failing bank which are transferred to the bridge bank to enable it carry out the business of the failing bank, which, in this instance, happens to be the defunct Skye Bank Plc. The biggest advantage of this arrangement is that the

depositors of Skye Bank Plc are able to access their deposits at the Polaris Bank Limited (i.e. the bridge bank) without hindrance.

The fourth process involves the withdrawal of the operating licence of the Skye Bank Plc by the CBN, upon which the closed bank is effectively handed over to the NDIC being the provisional liquidator, as provided for under the NDIC Act, 2006, as amended.

The NDIC commences the liquidation process by filing appropriate applications at the Federal High Court.

The NDIC operates the Bridge Bank and appoints Directors to manage the bank until suitable investors are found for its acquisition. In the course of all these, the NDIC enjoys forbearances from Regulatory Authorities in the operations of the bridge bank as it strives to return it to the path of profitability. The final act in the process is that once investors acquire the bridge bank, it is no longer a bridge bank. It becomes a regular bank.

The aforementioned processes were followed in the resolution of the defunct Afribank, Bank PHB, and the Spring Bank in 2011. Skye bank is only the latest to be subjected to the same resolution process.

Let me also emphasis that a Bridge Bank is not an end in itself.

It can be best described as a special purpose vehicle designed to return a failing bank to profitably bearing another name. If it fails to return to profitability in the timeframe envisaged by the Deposit Insurer, the bank must be liquidated. However, the experience of the NDIC in the management of the Bridge Banks it previously

Unlike the other failure resolution options such as outright liquidation which could result in delays in depositors’ access to their total funds, the Bridge Bank guarantees depositors uninterrupted operation of their accounts. The same benefits apply to the creditors of the failing bank whose liabilities are assumed by the bridge bank

established, have been highly successful.

The Asset Management Corporation of Nigeria (AMCON) had capitalised the previous bridge banks established by the Corporation which it later sold to new investors. Many countries such as the USA, Philippines, Japan, Korea, Taiwan had, at one time or the other, successfully adopted the Bridge Bank option for the distress resolution of ailing banks in their various jurisdictions.

Unlike the other failure resolution options such as outright liquidation which could result in delays in depositors’ access to their total funds, the Bridge Bank guarantees depositors uninterrupted operation of their accounts. The same benefits apply to the creditors of the failing bank whose liabilities are assumed by the bridge bank.

On the whole, the Bridge bank ensures preservation and continuity of daily operations that were hitherto being undertaken by the failed bank throughout all its branches and guarantees all depositors immediate access to their deposits. It ensures that no jobs are lost in the resolution process. The adoption of the bridge bank as the resolution option of the defunct Skye Bank will save 6000 jobs and ensures continuity of banking services in the 300 branches of the defunct bank.

The shareholders having lost their investments as a result of the negative capital in the defunct bank and also for failing to recapitalise the defunct Skye Bank when required to do so by the Regulatory Authorities. The members of the Board and Management who contributed to the collapse of the defunct Skye Bank Plc will be investigated and prosecuted.

The stability of the banking system cannot be over emphasised. The establishment of Polaris Bank Limited to resolve the failed Skye bank was done in the interest of depositors. Its establishment also protected the ex-employees of the failed bank by preserving their jobs.

Umaru Ibrahim, FCIB, mni, is the Managing Director and Chief Executive of the NDIC

38 BUSINESS DAY NEWS CBN, AMCON spend N3.83trn rescuing sick...

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remaining 14 banks at the time.

The results showed that another four banks were found to be in a ‘grave situation’ namely: Bank

PHB Plc; Equitorial Trust Bank Plc; Spring Bank Plc; and Wema Bank Plc. Again, the CBN sacked and replaced the executive management of three banks: Bank PHB Plc, Equitorial Trust Bank Plc and Spring Bank Plc. The apex regulator then injected N200 billion as liquidity support and long-term loans in the banks which it had adjudged to be in a grave situation to enable them continue normal business, while pursuing recapitalisation options.

The huge funds injected into the sick banks did not revive them.

In August 2011, CBN revoked the licence of Afribank, Bank PHB and Spring bank and created bridge banks to take over their assets. Main Street Bank Limited assumed the assets and liabilities of Afribank Nigeria PLC; Keystone Bank Limited assumed the assets and liabilities of Bank PHB PLC; Enterprise Bank Limited has assumed the assets and liabilities of Spring Bank PLC. AMCON funded the bridge banks with N679 billion.

Also, AMCON had earlier in 2010 purchased roughly around 14,000 loans from the financial

institutions for about N1.7 trillion. The loans were valued then at about N3.3 trillion according to Ahmed Kuru, AMCON Managing Director. Kuru also said that the firm had also provided financial accommodation of about N2.2 trillion. But interestingly, only about 300 customers of the 14,000 loans, which is less than five per cent of the total number of loans, accounted for more than 70 per cent of the total value outstanding of the loans that were purchased.

Despite the fact that only a small number of customers owed majority of the loans that went bad, as at 2017, AMCON had recovered only N716.1 billion from obligors of which cash and assets accounted for 45 per cent and 55 per cent respectively according to Kuru.

Most analysts had thought that the clean-up of the banking system in 2009 would be the last. But on September 21 the CBN announced that it had revoked the licence of Skye bank just as it did to three banks in 2011 and asked AMCON to capitalize a new bridge bank, Polaris bank with N786 billion.

Polaris bank will need every dime of the capital after assuming the assets and liabilities of the defunct Skye bank which Godwin Emiefele, CBN Governor said had a negative book value of almost N800 billion due to the bank’s high

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non-performing loans.

The new capital injection took the total amount of investment by AMCON to distressed banks to N3.16 trillion after earlier injecting N679 billion to three bridge banks, acquiring debt of financial institutions at a cost of N1.75 trillion and now injecting N786 billion into Polaris bank.

However, beyond the “remove or sack” punishment by CBN, none of the bank executives and non-executive directors of the defunct banks excluding Cecilia Ibru of Oceanic bank, have been convicted of committing any crime by the court even though their gross negligence led to failure of large cap banks and cost investors billions of Naira.

“Bailouts incite bad behaviour in the banking industry as this bailout isn’t really changing anything fundamentally as another bank can still fail tomorrow. The root of the problem is still not being tackled.

We need to address the ethical issues in the bank; corporate governance right now is very bad in the country”, said Abiola Babajide, Associate Professor Department of Finance, Covenant University “The corporate governance rule we operate in Nigeria is below standard, flawed and out-dated.

The fines are too small, some sanctions are as small as N10,000. There should be tougher rules where people are jailed and their properties seized. The directors should be made to pay back to funds they

squandered in the banks. Also shareholders ought to do their part by ensuring that the board of directors they elect are responsible and accountable professionals,” Babajide concluded.

“The CBN bailouts have to a large extent helped to protect depositors’ funds and also create stability in the banking industry though at the expense of the tax payers. However, in the real sense, not all of the money that the regulators have invested in these banks have been fully recouped so it is not profitable for the CBN to continues bailouts but for the sake of stability in the industry it is important they do.”

John Darlington, former Bond Bank managing director urges shareholders to sue the managing directors, executive and non-executive directors that ran down their banks. Speaking specifically about Skye Bank, he said that the past CEOs that managed Skye ‘face the law,’ for running down the bank.

‘They looted the patrimony of a whole lot of shareholders and destroyed otherwise what was meant to be a solid bank,” he said.

“The board must also face the music, the board failed in their role of protecting the interest of all stakeholders” “I believe shareholders must now come together under an umbrella and go after the management and the board that looted and destroyed their common patrimony.

Wednesday 03 October 2018

Let us test it in court and see if they can get justice against those who looted the assets of the bank and destroyed their investments.”

Darlington noted that because the CBN has not decisively dealt with managing directors that ran down their banks, incidences of bank failures will continue to happen.

“The regulators have not dealt decisively with those found culpable of running down their banks.

If people know they can walk away with impunity, why wouldn’t they try it,” he asked.

But Tajudeen Ibrahim, Head of Research Chapel Hill said, “I think the CBN has been doing the right thing changing the board of these banks. If the board of directors are not answerable to any case, there is no need to prosecute them”.

“The major case they could answer to will be if during the process of granting loans, processes were skipped and approval of these loans where not thorough, then the CBN could go ahead to prosecute the offenders,” Ibrahim told BusinessDay. Bismack Rewane, CEO Financial Derivative told BusinessDay that the judicial system should be held responsible.

“The judicial system has to complement the activities of the CBN and AMCON as these regulatory bodies cannot jail people.

Hence, people are freed based on technicalities”.

Hayford Alile: Pioneer director-general of...

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country’s organised private sector, through his visionary leadership on the boards of several leading companies across the country and left a good legacy everywhere he worked.

Born into Alile family of Benin over 87 years ago (1938), Alile attended briefly the University of Ibadan as a State Scholar in Physics and thereafter proceeded to Howard University, Washington D.C. where he earned his B.A. degree in Economics and Mathematics. He later attended Rutgers Graduate School of Management, New Jersey, USA for his MBA and the Harvard Business School for AMP. Alile’s rich working history began as an economic and financial Consultant to Louis Berger Inc, East Orange, New Jersey, USA in 1968. Between 1969 and 1972, he served as Assistant Director, Rutgers University Entrepre-

President Muhammadu Buhari (r) welcoming William Kumuyi, general superintendent of Deeper Life Bible Church, at the Presidential Villa, Abuja. NAN

Tinubu, Ambode clash dissolves into...

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election as released to them by the national secretariat of the APC had only just been distributed, and wondered how an election could have been conducted without the involvement of the panel.

Ebri, who described Lagos as the flagship of the APC, said the panel would do everything to ensure a free and fair primaries which outcome will be acceptable to all parties involved because the process would have been seen to be to above board.

According to Ebri, a former governor of Cross River State; “We are in touch with the national secretariat.

We’re ready to give you a credible election.” He added the panel could not carry out the primaries on Tuesday morning as planned because one of the parties involved failed to submit list of voters to the panel.

Ebri spoke further: “Due to the politicaltensioninthestate,wehavedecided to be very careful and methodical with the process. As party men, peace is more important to us than victory.

“We are interested in the process that will be celebrated by both parties.

And that is what we have done. We are ready to go to the field and execute this. We aim to do it in a clinical version because Lagos is very important to us and it is the flagship for the party.”

“In the next few minutes I will contact the national headquarters and inform them that we are done with the preparatory process. It takes a lot of work for the main show to take place. We are ready to give the state the most credible election. We will contact the national headquarters on the timing for the release of materials. It is not our fault that this exercise took this long. In some states, primary were moved to Thursday.”

“We were waiting for the state party chairman to provide certain information that will enable us post people to the wards. We have two aspirants and we needed to be fair to both parties. The information we demanded for came in about an hour ago. And we had to struggle this period to balance the equation.”

Ebri said there were five persons from the local organising committee and four for each ward, adding “they will all go out to ensure the primary

is conducted. We all understand the terrain in the state especially as it concerns the traffic situation. So, the materials are available now and ready for deployment.”

He further stated that the “national secretariat advised us to use ballot papers and we came into Lagos with thousands of them. But during the stakeholders meeting, it became obvious that the state chapter of the party wasn’t ready for such primary. They claimed that there was time to educate themembersandothers.Andbasedon the submission made at the stakeholdersmeeting,somechangesweremade.”

“And we were advised to conduct the open ballot in a manner that would be objective to all parties.

And that is one of the adjustment we made to accommodate views of the stakeholders. For us, the stage is set and the primary should commence any moment from now.”

The panel chairman said the group has had a section with representatives of both aspirants at about 8 am yesterday during which it requested them to bring names of their representatives that would be used for the exercise. But the names didn’t arrive early from both parties.

However, the Lagos Chapter

of the APC insisted that the Lagos state primaries have already been conducted.

“Our members were visible in Lagos. For example, our national leader, Bola Ahmed Tinubu was at Ikeja, his own ward” Tunde Balogun, the party chairman said.

“He took part in the election and we saw the results. The results have been signed by the agents of the two aspirants. Those results were credible because the Independent National Electoral Commission (INEC) were there and they all signed off. We were all witnesses to the conduct of the election. There were no violence, no chaos, it was free, fair and transparent.

That’s what I am saying,” said Balogun while addressing journalists in Ikeja.

On whether he was satisfied, he said: “I am surely for the fact that the conduct of the election were seamless, free, no chaos, no violence and people conducted themselves well.

However, some of Ambode’s supporters described the exercise as a charade, as they were intimidated, beaten, chased away and prevented from voting across the state.

One of them, Oluwabunmi Adebola, from Ward J, Somolu, said “They did not allow anybody

neurial Development Center, New Jersey and Rutgers Minority Investment Co Inc. He worked as an Investment Adviser/Broker with Investors Diversified Services Inc, Minneapolis, Minnesota, USA, 1972-1973.

In 1973, Alile returned to Nigeria to head the Management Consulting Department of the Centre for Management Development, Lagos where he was responsible for the establishment of the Institute of Management Consultants (IMCON) and the Nigerian Association of Management Consultants (NAMCON). Thereafter, he was appointed in 1976 as the Executive Director/CEO of the then Lagos Stock Exchange (LSE). He became the Director-General and Chief Executive Officer of The Nigeria Stock Exchange in 1979 from where he retired in 1999.

•Continues online at www.businessdayonline.com supporting Ambode to vote. They brought in thugs, guns and chased us away,” she said.

All indications are that the APC gubernatorial primaries to select the flagbearer for next year’s election has become a ding-dong affair.

The heart of the matter is the conflict between Governor Akinwunmi Ambode and the national leader of the APC Asiwaju Bola Ahmed Tinubu, a former Governor of the state. Tinubu asked Ambode to step down while instructing party faithful to support Babajide Sanwo-Olu, current Managing Director of the Lagos State Property Development Corporation (LSDPC). Ambode declined and insisted he would rather face the direct primaries the party had declared it would conduct.

It seemed at first like a straightforward fight between a godfather and his recalcitrant godson. The party lords of Lagos declared that Ambode was no longer suitable. Tinubu, known as the Lion of Bourdillon, further asked the Governor to step down from the contest so the party could have a consensus candidate in Sanwo-Olu.

•Continues online at www.businessdayonline.com

Wednesday 03 October 2018

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FG approves 90-day special window for MSMEs registration HOPE MOSES-ASHIKE

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n its bid to further ease the process of registering Micro, Small and Medium Enterprises (MSMEs) in the country, Vice President Yemi Osinbajo on Tuesday, announced the Federal Government’s approval of a 90-day special window to register businesses at a reduced rate of N5,000 from N10,000.

The Vice President, who made the disclosure on Tuesday at the launch of the 19th edition of the National MSMEs Clinics in Enugu, Enugu State, said the special window of 90 days started October 1 to December 31, 2018.

“It was observed during some of the earlier editions of the MSME Clinics that a lot of MSMEs were finding it difficult to register their businesses as a result of cost,” Osinbajo said.

“The practice since we began the MSME clinics is that most agencies offer price reductions, especially for registration, and all other pre-investment approv-

als, during the Clinics.

“So, I am pleased to announce that the Federal Government, through the Corporate Affairs Commission, has approved a special window of 90 days from October 1 to December 31, 2018, to register businesses at a considerably reduced rate of N5000 only, down from as much as N10,000 previously. This will afford more MSMEs an opportunity to formalise their businesses.”

Speaking on other initiatives by the Federal Government designed to consolidate the gains of the MSMEs Clinics, Osinbajo said, “we will be establishing shared facilities for MSMEs based on a partnership between the Federal Government, interested states, Bank of Industry, NEXIM Bank, FIRS, NAFDAC, SON and interested private sector partners, as part of our efforts at deepening the impact of the Clinics.

“The purpose of these shared facilities is to have a fully-equipped place with machinery and equipment required for various trades

and businesses. MSMEs can then do their businesses at those locations at a reasonable cost.

“This way, MSMEs are spared the financial burden of having to buy their own equipment in order to be able to do business. Where possible, these shared facilities would have been precertified by relevant agencies, removing the need for MSMEs to pursue these certifications by themselves,” the Vice President said.

He also announced the Federal Government’s willingness to partner with State governments in establishing more One-Stop Shops, to further enhance business registration and facilitate seamless interaction between owners of small businesses and the relevant regulatory agencies.

According to Osinbajo, “We are also aware that some States have gone on to set up ‘One-Stop Shops’ after the Clinics. These OneStop Shops bring all the relevant agencies together in one place so as to enable the MSMEs access their services on an on-going basis.

Shell takes FID on $30bn LNG Canada ... as decision on NLNG Train 7 still under consideration OLUSOLA BELLO

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hile Nigeria is still dillydallying on the issue of signing the final investment decision (FID) in respect of Train 7 project of the Nigeria Liquefied Natural Gas Limited, Shell, a major stakeholder, has just taken a FID on the $30 billion LNG Canada.

Having taken FID on LNG Canada construction, Shell will start construction immediately with first LNG expected before the middle of the next decade.

Barring any last minute changes, the Nigeria Liquefied Natural Gas Limited (NLNG) would take the FID on its new 8 million tons per annum (MTPA) LNG Train-7 plant by December this year. The sale and purchase agreements (SPAs) for the new volumes had been locked down with off-takers since 2007, but its terms would need to be concretised before the FID is achieved.

Tony Attah, managing director of NLNG, said after the company meetings with its shareholders and investors in London, a financial adviser was appointed ahead of the expected FID. The NLNG had meetings to commemorate its repayment of $5.45 billion taken from its shareholders to build its six existing LNG

trains, in addition to signing dual Front End Engineering Design (FEED) contracts with two consortia for the Train-7. The company was banking on its $11 billion balance sheet and reported business credibility to woo investors for its Train-7 plant. Efforts had been made to do Train-7 since 2007.

Attah stated, “Essentially, we are giving it everything we have. We’ve got the best supports now, my shareholders have approved that we can go for it.

We are ready and believe it is time for Train-7.”

The NLNG already has existing Gas Sales Agreements (GSAs) to service Train-7, as well as SPAs. He said, “I have GSAs in place because I am a brown field and so it is not a critical factor in essence because I can improve on what I have and my gas suppliers are in agreement that we go for this, we are jointly working.

“The SPAs have also been signed before, so already I have existing SPAs for Train-7. 22MTPA today and going to 30MTPA, increasing capacity by 35 percent or more. All of the new capacities have been contracted.

“What is important is that the SPAs have been signed since 2007, and we’ve been rolling them.

We need to renew them, and in terms of the tenure it is a conversation that has

to come.

“The NLNG is expected to ask for a 20-year tenure, but we are not unmindful of the changing dynamics in the market, people want it shorter, the word there for us is flexibility and competitiveness. “What we are really pursuing is not so much the tenure but value, and so we are open to discuss at an appropriate time,” Attah said.

He said there were existing agreements with the current off-takers, except for one that was no longer involved but that would easily be re-distributed among them, depending on their interest. That for us is the next phase to begin to test that interests, he said, and, at the point of FID, we now have to concretise on the actual terms.

“We appointed a financial adviser and we will go to the market. We underpin a lot with our balance sheet. I have an $11 billion balance sheet, that is pretty healthy, but more importantly the result with the credibility of my company based on the loans that we paid out. For 20 years we never missed one payment, we are credible and liquid, and believe it should not be difficult,” he said.

Shell’s 40 percent share of the project’s capital cost is within the company’s current overall capital investment guidance of $25$30 billion per year.

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BUSINESS DAY

2019: Ekweremadu lauds Ugwuanyi’s emergence as PDP candidate REGIS ANUKWUOJI, Enugu

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he emergence of Governor Ifeanyi Ugwuanyi of Enugu State as the governorship candidate in the just concluded governorship primary of the People’s Democratic Party (PDP) for the 2019 general election has been described as a major sign of the party’s maturity and understanding in the state, as the governor stood for the election unopposed.

Deputy Senate president, Ike Ekweremadu, who introduced the aspirant before the delegates, PDP national executives and INEC representatives at the Nnamdi Azikiwe Stadium Enugu, venue of the event, said Ugwuanyi became the only candidate because of his humility and the magic power he possessed in making peace and unity across board.

He also explained that Ugwuanyi had earlier during his days at the National Assembly

and even before joining politics as an insurer prepared himself for leadership. Ekweremadu went down memory lane on the story of PDP governorship primaries in the state since 1999, pointing out that this was the only time governorship primary was conducted without rancour.

“No two party chairmen, no one is going to court,” he said. The deputy Senate president however castigated the All Progressives Congress (APC) in the state, stressing the APC primary at the Enugu temporary stadium ended in crisis as the two chairmen of the party in the state led by Ben Nwoye and Okey Ogbodo, respectively, refused to agree and the primary was shifted to Thursday.

“It was alleged that the people are not favoured with the imposition of senator Anyogu Eze, who was nursing the injury of the Supreme Court against him over the 2014 PDP primaries, an insider said that Eze was trying to

buy his way to ensure that he gets the APC ticket,” he said.

He noted that feelings from the PDP was that they were comfortable with Eze emerging as APC candidate, adding that it would give the PDP clean win.

The leader of the PDP Board of Trustees (BOT) of the gubernatorial committee, Abu Zike, who monitored the primary in accordance with the Electoral Law and PDP guidelines, commended Ugwuanyi for his peace and high managerial skills that saved the party from crisis.

The general view is that the governorship of the state is zoned to the north and therefore the next governor should come from Enugu North Senatorial zone for two tenures, which Ugwuanyi has completed. After his second term it will shift to Enugu East, however, Eze’s ambition is to truncate the zoning arrangement in Enugu and create confusion in future elections.

Support fight against corruption with professionalism, Buhari tells ICAN HARRISON EDEH, Abuja

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resident Muhammadu Buhari has called on the Institute of Chartered Accountant of Nigeria (ICAN) at its 48th annual conference in Abuja to contribute to the Federal Government’s fight against corruption with professionalism, while adding value through their book keeping and accounting profession.

Speaking on the theme of the conference on Tuesday, ‘Securing our shared future - a collective responsibility’ the President, who was represented by minister of budget and national planning, Udoma Udo Udoma, said the pillar of the current administration, hinged on: Fighting corruption, repairing the broken economy, and restoring

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the security, the ICAN body had a strong role to play in it.

“With regard to fighting corruption, your members could bring to bear, their special skills in reassuring that books are well recorded and professionalism entrenched in government business.

ICAN and ICAN members are always in a better position to assist government,” he said.

Speaking further on the government’s efforts in addressing other concerns of the economy, he said, “When we came in 2015, we discovered that the economy is down, that is the reason why we developed the economic Recovery and Growth Plan. We are currently putting in place the right infrastructure that would help us diversify the economy away from oil.”

Further, the ERGP is already laying the foundation for the

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private sector as the economic engine for development, with the government working together to improve the enabling environment for the private sector to thrive, he said.

In his earlier remarks, Razak Jaiyeola, ICAN president, said the theme of this year’s annual conference was chosen to enable the professional body proffer key solutions to Nigeria’s programme.

“Nigeria is richly blessed but poor leadership has not helped it to optimised the opportunities in its resources,” he said.

Expressing concern on the recent United Nation’s Development Programme report, which ranked Nigeria lowly on human development index, he said professional body is determined to work with the government to deliver effective governance.

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Wednesday 03 October 2018

BUSINESS DAY

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Wednesday 03 October 2018

FINANCIAL TIMES

World Business Newspaper

Doubts over new Nafta deal unlocking US investment

Trade deal will pose a greater challenge to EU and Japanese automakers in the US PETER CAMPBELL AND PATTI WALDMEIR

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he car industry breathed a sigh of relief at Sunday night’s announcement of a revamped trade agreement between the US, Canada and Mexico. But if Donald Trump was hoping the deal would unlock new investment in US plants, he will be disappointed.

The president, who campaigned on restoring the fortunes of the US rust belt, sought to protect domestic car manufacturing from cheaper international competition. His solution — which replaces the old Nafta pact — largely reinforces the status quo.

Carmakers, looking at sales in the US market peaking, and additional spending challenges globally, welcomed the new agreements, but are not reaching into their pockets to pour more resources into the US. Under the new rules, manufacturers will have to increase the amount of “local content” — parts sourced from the US, Mexico or Canada — that they install into the final vehicles from 62.5 per cent to 75 per cent.

This will probably pose a greater challenge to European and Japanese manufacturers in the US that import expensive parts such as engines from their home markets.

“The new regional value content requirements mean that automakers will not able to source parts as freely, so there will be added costs associated with vehicle manufacturing,” said Ivan Drury, a senior analyst at Edmunds.

Kristin Dziczek, head of industry, labour and economics at the Centre for Automotive Research, says the German brands VW, BMW and Mercedes face a greater challenge as they depend on importing engines and transmissions from their home markets.

But the “big five” — Ford, General Motors, FCA, Honda and Toyota — “should be reasonably well positioned to conform to these new rules”.

The Alliance of Automobile Manufacturers, which represents about 70 per cent of new car and light vehicle sales, called the deal an encouraging development, adding: “The North American auto industry needs to have all three countries included in the agreement to realise the benefits and goals of a new pact.”

Joe Hinrichs, global markets president for Ford, said the new deal “will

support an integrated, globally competitive automotive business in North America”. GM said it is “vital to the success of the North American auto industry”.

Didier Leroy, executive vice-president of Toyota, said his company’s plans were largely unaffected by the new rules. The Japanese carmaker’s plant in Georgetown, Kentucky is its largest in the world, producing about half a million vehicles a year.

“We have had a policy for many, many years to produce as much as possible locally for the local market,” he told the Financial Times on the eve of the Paris Motor Show.

Toyota spent $1.3bn upgrading its facility in Kentucky last year, as part of an anticipated $10bn investment into the US, one of its most important markets. The plans were put in place before Nafta discussions started, and not affected by their outcome.

In all, Toyota makes about 70 per cent of its cars for the North American market in the three nations, only importing “niche” model lines, Mr Leroy said.

Toyota has expanded its Canadian plant, and is increasing its Mexican capacity as well. Had Nafta collapsed, the business would have been severely hit. As it is, the company will adjust to the new rules and likely carry on much as before.

“We have to deeply study the exact content . . . but it is an important step to reduce uncertainty for the future,” Mr Leroy said.

Additionally, carmakers will have to guarantee that 40-45 per cent of workers in their facilities earn at least $16 an hour — a wage designed to whittle away the appeal of Mexican labour costs.

But it will be all but impossible to extricate Mexico or Canada, which together build a quarter of the cars sold in the US, from the equation altogether.

“Given decades of supply chain evolution based on Nafta, a substantial portion of the vehicles assembled within the US are dependent on components from Mexico and Canada,” said Jonathan Smoke, chief economist at Cox Automotive.

Both measures will also push up costs for manufacturers that are already suffering higher raw material costs due to rising prices caused by Mr Trump.

Irish regulator set to probe Facebook over cyber attack under GDPR World’s largest social network chose Ireland as ‘one-stop shop’ for EU oversight ARTHUR BEESLEY

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reland’s data regulator has opened a case into the cyber attack that allowed hackers to access up to 50m Facebook accounts.

The Irish regulator is preparing to launch a formal investigation

under sweeping new European rules that expose the company to huge fines for serious data breaches.

The world’s largest social network disclosed on Friday that hackers had stolen keys that allowed them to access up to 50m Continues on page A3

Donald Trump speaking on the trade deal. Under new rules, manufacturers will have to increase the amount of parts sourced from the US, Mexico or Canada © Getty

Amazon lifts minimum wage for US and UK workers Move to $15 and £9.50 floor comes as strong economy and labour market pose hiring challenge ADAM SAMSON, JONATHAN ELEY AND ALISTAIR GRAY

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mazon is increasing the minimum wage paid to US and UK workers, passing on some of the spoils of its rapid expansion to staff in the face of criticism over how the ecommerce group treats its employees.

Jeff Bezos, chief executive, said the company had “listened” to its critics on Tuesday as he announced that new wage floors — $15 in the US and £9.50 in the UK, with a higher £10.50 rate in London — would go into effect next month.

About 250,000 regular employees, as well as more than 100,000 seasonal workers hired for the festive shopping season, would benefit in the US, the company said. In the UK, about 17,000 employees and 20,000 temporary staff would be paid more.

Amazon has come under scrutiny for its worker conditions, especially as it has enjoyed greater financial success. Last month it became the second US company in history whose market capitalisation topped $1 trillion.

Warehouses have been the sub-

ject of long-running protests about insecure work and poor conditions.

Workers in Spain and Germany went on strike earlier this year.

US senator Bernie Sanders said last week that there was “no reason” why the company could not pay its workers $15 an hour, comparing the fortunes of workers with Mr Bezos, the world’s richest person.

Amazon is also facing market pressures to pay employees more.

Economic expansion and a tightening of the labour market in recent months have left companies competing more aggressively to hire staff.

Retailers have reported shortfalls in lower skilled workers in parts of the US and are having to sweeten pay deals. Walmart, the world’s biggest bricks-and-mortar retailer, earlier this year increased its minimum hourly wage in the US from $9 to $11.

Across the wider US economy, average hourly earnings of non-farm employees increased in August at the quickest rate in nine years, according to the latest labour department data.

Existing pay rates at Amazon vary by area, although its lowest hourly wages in the US start at around $11.

The new rate is more than double

the US federal minimum wage of $7.25, although 29 US states and Washington DC have requirements that exceed that level.

Mr Bezos said on Tuesday: “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead.”

Amazon also said on Tuesday that it would lobby the US government to increase the federal minimum wage.

“We intend to advocate for a minimum-wage increase that will have a profound impact on the lives of tens of millions of people and families across this country,” said Jay Carney, senior vice-president of Amazon global corporate affairs.

The rate being offered by the company in the UK is above the current national living wage for over-25s of £7.83. It is also higher than the £9 an hour that the government has pledged as a national living wage by 2025.

As in the US, minimum wage legislation and high employment levels have pushed pay rates higher in Britain. UK retailers must also contend with the country’s looming departure from the EU and its uncertain impact on the 170,000 EU nationals currently working for UK retailers.

Angola accused of coercion in holding head of Swiss investment group Dos Santos associate detained in Quantum Global’s tussle with sovereign wealth fund JOSEPH COTTERILL

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he Swiss investment group linked to a scandal at Angola’s $5bn sovereign wealth fund accused authorities in the oil-rich African nation of intimidation after its founder was detained in the country alongside the former president’s son.

Quantum Global, which was already locked in a dispute with the wealth fund, said on Monday that it denounced “intimidation, coercion and abuse of human rights” by the Angolan government in the arrest of Jean-Claude Bastos de Morais last week.

Mr Bastos is a close associate of José Filomeno dos Santos, the wealth fund’s former head who was removed after his father, José Eduardo dos Santos, stepped down as Angola’s post-independence strongman of four decades last year.

Angolan prosecutors accused the younger Mr dos Santos of corruption, fraud, money laundering and other crimes in connection with the alleged illegal transfer abroad of $500m from the central bank. They accused Mr

Bastos of similar wrongdoing.

The detention of the two men is the most significant step yet in a campaign by President João Lourenço, Mr dos Santos’s successor, to remove the influence of the dos Santos children over senior positions in the state, which critics say were used to loot government resources. The former president’s daughter, Isabel dos Santos, was also removed as head of the state-owned oil company. Ms dos Santos has denied any wrongdoing.

Angola’s chief state prosecutor said last week that Mr Bastos and Mr dos Santos were taken into preventive custody because of “the complexity and seriousness” of the allegations against them.

The younger Mr dos Santos was charged with fraud earlier this year in relation to a scheme to illegally transfer $500m out of Angola’s central bank. He has denied all wrongdoing.

Under Mr Lourenço’s rule the wealth fund has also sought to sever ties with Quantum Global, which manages most of its $5bn assets. Critics say that the Zurich-based group overcharged the fund with its fees and that its investments helped cronies.

Quantum Global said that Mr Bastos was detained over the alleged $500m scheme despite never having been accused of wrongdoing in connection with it.

“Quantum Global believes that the measures to constrain Mr Bastos were designed to force him to give up his rights and to surrender all assets and funds under the management of the group,” it added.

“These tactics were supported through the promotion of a false narrative publicly broadcast on government-controlled media,” the firm said.

Mr Bastos was also wrongly held at a notorious prison for violent offenders, Quantum Global said.

The Angolan wealth fund’s dispute with Quantum Global has become a sprawling international saga as it launched legal attempts worldwide to freeze the assets managed by the group.

In August a UK court overturned one $3bn asset-freezing order in a blow to the fund’s efforts. Quantum Global has said that its managed funds have all been properly accounted for and that it is seeking to negotiate a resolution to the matter.

Wednesday 03 October 2018

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BUSINESS DAY

NATIONAL NEWS

FT Irish regulator set to probe Facebook...

Tanium stalls IPO plans after attracting $200m in fundraising

Continued from page A2 user accounts. Less than 10 per cent of the users potentially affected were in the EU, according to the Irish regulator.

Silicon Valley-based Facebook is among scores of big US groups that have chosen the Irish national regulator as a “one-stop shop” for data oversight under the EU’s new General Data Protection Regulation, which came into force in May. A spokesman for Helen Dixon, the Irish data commissioner, said on Monday: “Before we would launch any investigation there are steps that would have to be taken in relation to information gathering and preparing the scope of an inquiry.

“Furthermore we would need to establish under which provisions of the Data Protection Act 2018 we would conduct it. We are currently engaged in those steps.”

Data experts in Dublin believe an inquiry is now inevitable, with any investigation seen as an important test for Ms Dixon’s office under GDPR. Liam McKenna, a partner at Mazars accountants in Dublin, said the Facebook breach was a “very significant” event, and Ms Dixon was “under pressure to be seen to respond”.

Under GDPR, Ms Dixon — who previously pledged to use her “full toolkit” to uphold privacy rights — has the power to impose fines of up to 4 per cent of a company’s global turnover for the most serious data breaches. Facebook’s turnover in 2017 was $40.65bn.

The Irish regulator said that while Facebook had been quick to alert it of the breach, the notification “lacked detail”. The regulator also expressed concern that the company was unable to clarify the nature of the breach and the risks it had posed to users.

“What’s not clear is who are these people. What data did they get? And what are they going to do with it?” said Mr McKenna of Mazars. “If that’s a bad story then you would expect there to be consequences for Facebook. But we don’t know yet if that’s the case.”

Justin Antonipillai, a privacy expert who helped negotiate the Privacy Shield agreement between the US and EU, said Facebook would be under regulatory scrutiny for how careful it was checking its software code.

“More than GDPR and regulators in other countries, the number one issue Facebook faces is a fundamental loss of trust,” he said.

April Doss, chair of the cyber security and privacy practice at Saul Ewing and lead Democratic counsel for the Senate investigation into Russian interference in the US 2016 election, said Facebook should expect “a lot of scrutiny” on both sides of the Atlantic.

“Facebook needs to be very concerned about this and anticipate more Congressional hearings in the US, more parliamentary hearings in the UK, and more inquiries from data protection authorities across the EU,” she said.

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Cyber security start-up valued at $6.5bn after latest investment round HANNAH KUCHLER

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European Commission president Jean-Claude Juncker would often joke that with the British ‘you negotiate always three times’ © FT montage; Epa

What the EU will do if Westminster votes Withdrawal treaty is sacrosanct but Brussels sees room for manoeuvre on future ties ALEX BARKER

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he mutinous mood at Britain’s Conservative party conference this week has reinforced one big concern for Brexit negotiators: the hard part may not be a UK-EU deal in Brussels but rather securing approval for it at Westminster.

Whether from disgruntled Brexiters or naysaying Labour MPs, the defiant warnings from all sides of the House of Commons will pose an important dilemma for EU leaders — if and when a deal is agreed with London.

What will the EU side do — and what will they say they will do — if that agreement is voted down in Westminster? The answer will be the first phase in Europe’s plan B. “We are not there yet, but this decision will be vital,” said a senior EU diplomat working on Brexit.

Brussels is well used to nail-biting negotiations that stretch past a deadline, appear to collapse and then are miraculously saved.

Even before the Brexit referendum, Jean-Claude Juncker, the European Commission president, would often joke that with the British “you

negotiate always three times”.

“There are always three dramas, and you end up at the end with three protocols and 15 side declarations,” he said to one colleague. “It is always like that.”

Both sides are positioning themselves for what could be the decisive weeks in the negotiations: an EU summit is scheduled to discuss Brexit on October 18, with another meeting possible in November.

Withdrawal agreement Whatever political misfortunes may befall it, the EU’s negotiators see one part of the Brexit deal as all but sacrosanct: the withdrawal treaty.

Should this be agreed by Theresa May, the UK prime minister, the EU side sees little prospect of reopening the terms, which cover a financial settlement, citizen rights and the Northern Ireland border.

To some in Brussels, a negative vote in Westminster would, in itself, amount to breaching the obligations of an EU-UK agreement and therefore lead to a no-deal exit. “Pacta sunt servanda,” said one senior EU diplomat, quoting a Latin maxim that “agreements must be kept”.

The EU could cite many practi-

cal reasons for refusing to engage in revisions: time to negotiate would be short before Britain’s scheduled March 29 exit, and France and Germany would argue they had already gone as far as they could to reach agreement.

But the biggest constraint may be political. It would be hard to revise the withdrawal treaty in a way to rebuild support in Westminster, since any adjustments would probably alienate other important voting constituencies.

“There is no plan B [on the withdrawal treaty] because there is nowhere to run,” said one EU official.

Political declaration on future relations The EU’s approach to the other part of a Brexit deal this autumn — a political declaration on future relations — would be different since such a statement is non-binding.

“There is room for manoeuvre.

The EU has always said it wants the best possible relationship with the UK,” said Lotta Nymann-Lindegren, a diplomat who handled Brexit issues for Finland before joining the Miltton consultancy.

Africa must look to Eisenhower for inspiration Infrastructure spending requires the hand of the state to put finance in place IBRAHIM ASSANE MAYAKI

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xt ra o rd i na r y c hal le ng es demand radical thinking.

The US, home to the world’s most developed road system, had no proper national system of freeways until the 1950s. The only reason the land of free enterprise engaged in road building on such an unprecedented scale was that the state mandated it.

Through the landmark Federal Aid Highway Act of 1956, President Dwight Eisenhower directed massive spending on roads and other infrastructure, giving birth to a transport network that to this day is a cornerstone of the US economy.

The US of the 1950s cannot be compared with Africa today. But Eisenhower’s example shows how far political will can go.

The African Development Bank reckons that between $130bn and $170bn would be needed annually to finance the backbone of

our development, building roads, power stations, ports and water and sanitation facilities. Instead, in the five years from 2012 to 2016, the total spent on infrastructure on the continent was $150.7bn.

African states put money into infrastructure but it is money ill spent. They support 80 per cent of infrastructure funding through national budgets, which is both a strain on their public finances and plainly inefficient.

What surprises me today in light of the US precedent is the relative lack of creativity from African states when it comes to finding new sources of funding or experimenting with bold policies. To overcome its infrastructure challenge, Africa must set ambitious goals on a continental scale and adopt a radical approach both from a financing and from a policy standpoint.

We need a new investment model based on the mobilisation of our own savings, adequate regulation, a strong guarantee scheme and the

political will to make projects happen. Given Africa’s demographic explosion, already in full swing, building infrastructure is truly one of our most pressing obligations towards our children. It is also becoming a sensitive political topic all over Africa.

What puzzles me most is that so many long-established and trusted solutions involving a mix of domestic and external, mostly private, financing, well known to state planners, be it PPP, eurobonds, debt, etc, are not more leveraged.

There is also one huge and quite natural source of financing that has not been taped yet: Africa’s pension and sovereign wealth funds. We reckon African institutional investors hold more than $1.1tn. For the time being, these funds are invested in ultra-safe assets such as US government bonds or, quite ironically, European toll roads and airports.

This is understandable, given their mission to manage cautiously the public funds they are entrusted with.

anium has raised $200m in an investment round that values the cyber security start-up at $6.5bn, using the money to help early investors and employees cash out rather than wait for an initial public offering.

The Bay Area start-up’s latest fundraising — which saw its valuation soar by more than 70 per cent in just 16 months — was led by Wellington Management, with investments from Baillie Gifford & Co and Adage Capital Management.

Tanium is one of the largest investments of Silicon Valley venture capitalist group Andreessen Horowitz. It was attracted to the start-up’s technology, which allows companies to search their network and manage and update computers with record speed. Other investors include private equity firm TPG and Citi Ventures, Citibank’s venture capital arm.

Fazal Merchant, Tanium’s chief financial officer, said on Tuesday that the company was not rushing to go public, despite previously saying that an IPO was imminent. Orion Hindawi, Tanium’s chief executive, told the Financial Times in 2016 that it would go public in the next 18 months.

“The initial public offering is not the strategy for us, it is not the mission. It might be part of the natural evolution of the business,” Mr Merchant said.

Tanium had positive operating cash flow of $25m and about $320m in cash and equivalents when its fiscal year ended on January 31 2018. The company’s customers include more than half the Fortune 100, with many companies not just renewing but increasing their spend on their subscriptions for its security platform. Annual recurring revenue was $230m last year, up 80 per cent year on year.

Mr Merchant said investors were becoming more “cautiously optimistic”.

“I’m really proud of what our team was able to accomplish, bringing in uber high-quality investors at our valuation at a time like this,” he said.

Tanium faced criticism in the past after it exposed customer data in a demo for another potential customer, using the live network of a US hospital. The company has also been accused of having a toxic work culture, which Bloomberg reported had led to the departure of several senior executives.

But Mr Merchant said the problems were “old news”.

He said Tanium had a “great leadership team” and had been certified as a Great Place to Work, after the eponymous organisation had done interviews and surveys with staff. The company employs 800 people.

Peter Singlehurst, head of the unlisted equities team at Baillie Gifford, said Tanium had an “extraordinary platform”.

“As long-term investors, we look forward to supporting Tanium’s management team over the coming years as it continues to build a world-class technology business.”

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BUSINESS DAY

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Tuesday 03 October 2018

PRIVATEEQUITY & FUNDRAISING

A5 BUSINESS DAY Africa M & A deals double in Q3 on South Africa rebound

LOLADE AKINMURELE

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ergers and Acquisitions (M & A) in Africa picked up in the third quarter of 2018, recording its highest quarterly value of the year, according to a Mergermarket report released this week.

The US$ 4.9 billion announced in the third quarter is almost double the US$ 2.5 billion seen in Q2 and pushes the year-to-date figure to US$ 11.4 billion.

Three deals worth more than US$ 500 million were announced in Q3, including two that breached the US$ 1 billion mark.

The largest of these saw Anglo American Platinum acquire a 39 percent stake in the South Africa-based Mototolo joint venture, for US$ 1.6 billion, the largest African deal so far this year.

After a slow start to 2018, South African M&A is on the up, recording a total US$ 4.9 billon (48 deals) so far. That’s 22.3 percent higher than the year-to-date figure in 2017 (US$ 4 billion, 80 deals).

No Nigeria deal was large enough to be featured. M & A activity in the continent’s largest economy this year include Allianz Group’s 8 percent acquisition of Africa Reinsurance in an $81 million deal in June.

Others are Zinox’s $41 million acquisition of online consumer goods retailer, Konga in February and De United Food’s acquisition of Mimee noodles in a $2.5 million deal in April, according to data compiled by Business Day. Revised industry guidelines in Nigeria’s insurance sector is widely expected to usher a raft of M

Source: Mergermarket & A activity in the coming months.

M&A targeting the Middle East (excluding Israel) stood at US$ 1.7 billion in Q3, a slight dip compared to previous quarters, yet is still on course to be one of the most active years in the region on Merger market record.

A total US$ 13.9 billion has been reported so far, making it the fourth highest YTD value on record, and 24.2 percent ahead of YTD 2017 (US$ 11.2billion).

Energy, mining & utilities has seen tremendous growth this year, reaching US$ 9 billion across 17 deals, already the highest annual val-

Source: Mergermarket

ue and number of deals on Mergermarket record.

This was assisted by the US$849 million acquisition of Kuwait Energy

by Hong Kong-based United Energy Group, announced in late September.

In contrast to trends seen globally, M&A targeting the Middle East & Africa rose slightly in Q3. The US$ 14.5 billion spent across 71 deals recorded in the last three months represents a 5.6 percent uptick in value compared to Q2 despite a drop in the number of deals (US$ 13.7 billion, 89 deals).

The region has now seen more than US$ 10bn change hands in each of the last five consecutive quarters.

Q3’s activity was largely driven by five US$ 1bn-plus deals, including PepsiCo’s US$ 3.2bn acquisition of SodaStream – the second largest deal to target the region so far this year.

The pipeline appears to be strong, with high levels of foreign interest in assets in the region, particularly in innovative firms in Israel where areas such as driverless cars are propelling inbound investment.

The global demand for innovative companies is pushing Israeli M&A to new heights, with several multi-billion blockbuster deals already announced this year. A total of US$ 21.3 billion across 66 deals has been announced so far, leaving the country on course to break its record full-year total of US$ 25.3 billion, announced last year.

Three US investments each valued above US$ 3bn – including PepsiCo’s US$ 3.2bn takeover of SodaStream – have been instrumental in guiding the year’s performance so far.

The technology and industrials & chemicals sectors continue to

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be the most attractive, accounting for a 24.2% and 18.2% share of the overall number of deals targeting Israel respectively. The technology sector has been particularly active in 2018, with this year’s value of US$ 4.1bn already 91.8% ahead of the full-year 2017 figure (US$ 2.1bn).

Following a frenetic first half of the year, global M & A saw subdued activity in the third quarter as growing geopolitical tensions trade wars and protectionism dampened spirits and caused corporates to pause over the summer.

A total US$ 703.2bn changed hands in Q3, the lowest quarterly value since Q1 2016 (US$ 627.9 billion) and 35.4% lower than Q2 (US$ 1.09 trillion).

There was a distinct lack of big-ticket deals conducted over the last three months, which dominated the headlines in H1. Just four deals worth more than US$ 10 billion were recorded during the third quarter after 28 such deals were announced in H1.

The largest deal conducted in the last three months saw Energy Transfer Equity acquire 97.64% of Energy Transfer Partners for US$ 59.6bn. Yet despite the quarterly drop in activity, 2018 has to date registered the second highest value on record behind 2007 (US$ 2.94 tn) and with US$ 2.72 trillion across 13,575 deals announced so far.

“With macro events playing a larger part in steering M&A this year, companies have continued looking closer to home instead of conducting high-profile cross-border deals,” said Jonathan Klonowski, research editor EMEA, for Mergermarket.

“With tariffs introduced by the US and China and political protectionism creeping further into deal making considerations, advisors are having to contend with much harsher conditions.

“This is now leading corporates to consider more defensive domestic consolidation, bulking up in challenging times, while the deals will receive much lower levels of scrutiny,” Klonowski added.

Consequently, domestic M&A increased by 30.6% on YTD 2017 to US$ 1.67 trillion – its highest YTD value on record.

The US dominated global M&A once again, drawing in 47.5% of the global Q3 value, almost seven percentage points higher than that seen in 2017 (40.9%), with US$ 333.9 bn announced in Q3. This pushed the country’s YTD value to US$ 1.14 trillion, 25.7% higher than YTD 2017 and the second highest YTD figure on Mergermarket record.

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Wednesday 03 October 2018

COMPANIES & MARKETS

Radisson eyes investment in three new hotels in Ngeria MICHEAL ANI

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adisson Hospitality AB, a publicly listed firm on the Nasdaq Stockholm, says it has plans of investing in three new hotels in Nigeria.

The investments also include seven other investments across different regions within the African continent. This is in line with the expansion of the scope and perspective of the firm to reach out to a wider market in the African continent, the company said in a statement on Tuesday “We are thrilled to be announcing 10 new hotel deals in just nine months, which equates to a new signing every month,” Andrew McLachlan, senior vice president for development in sub-Saharan Africa at Radisson .

“Each signing is strategically aligned to deliver our five-year development plan, through new market entries, the introduction of new brands and delivering scaled growth in Africa’s key destinations”.

These three investment deals in Nigeria include Radisson collection Ikoyi Lagos which is scheduled to be opened in 2020, Radisson Hotel Lagos Ikeja, and the Park Inn by Radisson Serviced Apartment Lagos VI, Nigeria.

Amaka Ndekwu, Founder/President, Women in Hospitality Nigeria (WIHN) said. “The new deal will surely have a good effect on service standardisation and global competitiveness for the Nigerian Hospitality industry and its employees.”

Other planned hotel investment deals by the firm include Radisson RED Hotel Abidjan, Ivory Coast, Radisson Blu Hotel Casablanca, Park Inn by Radisson Tunis, Radisson Blu Hotel Niamey, Niger and Radisson Blu Hotel Conakry, Republic of Guinea. All scheduled to open in 2021.

Global hotel chains, including Marriott International and Hyatt Hotels, have been increasing their investments in Africa, which has some of the world’s fastest growing economies and a rising middle class.

“So far this year, we will be adding 1,300 plus rooms to our portfolio in Africa and plan to continue this accelerated growth through further expansion in key markets across this flourishing continent,” McLachlan said in a statement.

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BUSINESS DAY

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Wednesday 03 October 2018

People & Perspectives

PRIVATEEQUITY & FUNDRAISING

Much Ado about CCIs UDO UDOMA AND BELO-OSAGIE

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t has been almost four hundred years since William Shakespeare wrote the comedy “Much Ado About Nothing” and although we have taken inspiration from its title, there is nothing even remotely funny about the recent confusion around Certificates of Capital Importation (“CCIs”). To explain, CCIs are issued, on application, to parties that inflow foreign currency equity or debt capital into Nigeria and provide such parties with access to Nigeria’s official foreign exchange market for the purpose of repatriating dividends, interest, principal and capital as the case may be. This brief note is an attempt to clear the current confusion and assuage the understandable concerns of the numerous foreign investors that have made investments in Nigeria, been issued with CCIs, who may be wondering whether they can still rely on those CCIs. Hopefully, this note will also assuage the doubts and concerns of prospective investors who plan to invest in Nigeria and to obtain CCIs in connection with such investments.

This note is not, however, about MTN Nigeria Communications Ltd (“MTNN”), and the reference to the Central Bank of Nigeria’s (“CBN”) recent sanction against MTNN is mentioned below, only by way of background.

RECENT EVENTS In the last week of August 2018, the CBN wrote a letter to MTNN, the operator of Nigeria’s largest mobile network, in which the CBN alleged that following an investigation carried out by the CBN on Standard Chartered Bank Limited, Stanbic IBTC Bank PLC., Citibank Nigeria Limited and Diamond Bank PLC. (‘the Banks”), it had been determined by the CBN that between 2007 and 2015, the Banks used “illegally issued CCIs” to “illegally repatriate” US$8.13 billion to MTNN’s shareholders. Following the above determination the CBN decided, among other things, that MTNN and the Banks had breached Nigeria’s foreign exchange laws and regulations and that the “illegally repatriated” sum of US$8.13 billion should be “refunded to the coffers” of the CBN immediately. The CBN also imposed fines totalling NGN 5.87 billion on the Banks.

ARE YOU A WORRIED (PAST OR PROSPECTIVE) FOREIGN INVESTOR? If an “Authorised Dealer” (more on that shortly) has issued you with a CCI in the past, or the recent events have made you concerned about whether the CCI regime can be relied on, then to borrow a phrase (or more accurately: part of a phrase) used

by William Shakespeare in the play Cymbeline, “fear no more…”. We shall explain why below.

THE LAW: THE FEMM ACT If you have had any contact with the Nigerian banking system, or plan to do so, you will have come across (or will soon come across) the term “Authorised Dealer.” Quite simply, an “Authorised Dealer” is a Nigerian bank that is licensed by the CBN to deal in foreign exchange under the

Left to Right: Olayinka Atere, Partner at TNP; Bukola Bankole, head Private Equity; Babajimi Ayorinde, Partner at TNP, Tokunbo Ishmael and Baba Alokolaro, managing partner at TNP

provisions of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act (Chapter F34) Laws of the Federation of Nigeria 2004 (“the FEMM Act”).

A little more (‘boring’ but necessary!) background. Section 1 of the FEMM Act establishes the Nigerian Foreign Exchange Market (“the Market”) where transactions in foreign exchange can be conducted, and empowers the CBN to issue guidelines to regulate the procedures for transactions in the Market and in relation to such other matters as the CBN may deem appropriate for the effective operation of the Market.

One of such “guidelines” is the Foreign Exchange Manual (strictly speaking, a collection of foreign exchange guidelines issued by the CBN), which was first issued in 1990, reissued in 2004 and 2006, and updated in 2018. Section 8(1) of the FEMM Act also empowers the CBN to supervise and monitor the operation of the Market in order to ensure that the Market performs efficiently.

In order that the CBN can effectively discharge its functions, Sections 5(1) and (2) of the FEMM Act empowers the CBN to appoint banks that have adequate resources and capacity as Authorised Dealers, and to delegate to the Authorised Dealers such powers as may be specified by the CBN in their respective letters of appointment. The role of the CBN under the FEMM Act is consistent with one of its powers under section 2 of the Central Bank of Nigeria Act 2007, which is to “maintain external reserves to safeguard the international value” of the Naira.

By virtue of their appointment Authorised Dealers apply the FEMM Act, the Foreign Exchange Manual, and other regulations issued by the CBN in relation to their dealings in foreign exchange. In doing so Authorised Dealers will, from time to time, have to make decisions and create enforceable contracts with third parties - all the time while acting as delegates of the CBN. And where power has been lawfully delegated it is for the delegate to act within the scope of the actual power that has been delegated. Even where an Authorised Dealer exceeds such powers, however, the CBN has a responsibility to affirm the approvals

granted, and the transactions processed, on its behalf by its delegate.

And where the Authorised Dealer has exceeded or wrongly exercised its delegated powers the CBN’s proper recourse is to sanction the Authorised Dealer, in such manner as is provided in the FEMM Act. THE LAW: DELEGATION OF AUTHORITY A little more about the delegation of authority. As already indicated above, Section 1 of the FEMM Act empowers the CBN to regulate the procedures for transactions in the Market, while Section 8(1) of the FEMM Act empowers the CBN to monitor and supervise the operations of the Market in order to ensure its efficient performance. We have also indicated that Section 5 of the FEMM Act permits the CBN to appoint Authorised Dealers that will operate in the Market on the terms and conditions prescribed by the CBN. And whenever, in the exercise of such authority, an Authorised Dealer is not clear about any issue in relation to a foreign exchange transaction, the Foreign Exchange Manual requires the Authorised Dealer to seek clarification / approval from the CBN. The seeking of such clarification is entirely for the Authorised Dealer to do - or not do as the case may be. It is clear from the Nigerian case law on the subject that whatever an Authorised Dealer does, pursuant to its delegated authority, is done for and on behalf of the CBN. This was the position of Nigeria’s Supreme Court in the case of Ondo State University v. Folayan where the late Justice Coker said: “It is a trite principle of Administrative Law that where a power has been delegated, the delegating authority will be bound by the decision of its delegate and will be therefore incapable of rescinding that decision.”

THE LAW: AGENCY The relationship between the CBN and Authorised Dealers also has elements of agency, in the sense that the CBN can be regarded as a principal and the Authorised Dealers as its agents. This is consistent with the decision of the Supreme Court in the case of Tunde Bamgboye v.

University of llorin & Anor., where

Justice Onu stated that: “An agent, in my view, means more or less the same thing as a delegate …” Under the Nigerian law of agency, a person or entity that has been disclosed by an agent to be the agent’s principal, (a “disclosed principal”), is bound by any decisions made or contracts entered into by the agent on the principal’s behalf.

Although not expressly stated in these terms by the FEMM Act Authorised Dealers are, in our opinion, the agents of the CBN in relation to dealings in foreign exchange and the CBN is a disclosed principal.

We have arrived at this conclusion after considering whether the key characteristics of agency are present in the relationship between the CBN and an Authorised Dealer. Such characteristics include: (a) the fact of the agent providing a service or doing an act on behalf of its principal; (b) the fact of the agent representing its principal; and (c) the creation, by an agent, of legal rights and liabilities on behalf of the principal.

These principles have been considered by the Supreme Court in cases such as Niger Progress Ltd v.

N.E.L. Corp, where the court held that agency is a relationship which exists between two persons, one of whom expressly or impliedly consents that the other should represent him or to act on his behalf and the other of whom similarly consents to represent the former or so to act. It does not matter that the parties have not described themselves or their relationship as that of principal and agent but, rather, a determination as to whether the relationship of agent and principal exists will depend on the true nature of the agreement between agent and principal and on the exact circumstances of the relationship between the alleged principal and the alleged agent.

THE LAW: DELEGATION HAS BEEN CONFIRMED BY THE CBN But forget about legal theories, opinions and Supreme Court decisions! The good news is that the CBN itself has confirmed that it delegated its decision-making powers to Authorised Dealers, particularly in relation to the issuance of CCIs. This was confirmed by the CBN in a press release dated 19th September 2018, where the CBN stated that:

“…the delegation of the issuance of Certificates of Capital Importation (CCIs) to commercial and merchant banks some years ago was done to instill confidence in the investor community and encourage the flow of foreign direct and portfolio investments into the Nigerian economy.”

The CBN also confirmed in the same press release that: “…the integrity of the CCI regime remains sacrosanct and there shall be no retroactive application of foreign exchange rules and regulations.”

WHERE DOES THAT LEAVE PRIVATE EQUITY AND OTHER FOREIGN INVESTORS? Foreign investors have only two obligations. The first is to ensure that the bank they are dealing with is an Authorised Dealer - an easy obligation to satisfy since the banks that are Authorised Dealers are well known.

The second obligation is to ensure that they provide the Authorised Dealer with all the supporting documents that the Authorised Dealer requires in order to issue the CCI. Foreign investors have no obligation under the FEMM Act, the Foreign Exchange Manual, or other relevant regulations to take steps to ‘verify’ that the CCIs issued to them are genuine or valid, or that the Authorised Dealers have first complied with all the conditions stipulated by the CBN before issuing the CCIs. They are entitled to assume that such Authorised Dealers are validly exercising the authority conferred on them by the CBN. As we have indicated elsewhere in this note, the CBN is bound by decisions taken by Authorised Dealers on its behalf pursuant to the authority conferred on them by the CBN. As the Court of Appeal rightly held in the case of F.G.N v.

Shobu (Nig.) Ltd.“he who does an act through another is deemed in law to do it himself”.

Foreign investors and other third parties are legitimately entitled to rely on steps taken and documents issued by Authorised Dealers. Where an Authorised Dealer incorrectly or improperly issues a CCI, through no fault of an investor, the investor cannot, lawfully, be made to bear the consequences of that action.

If an Authorised Dealer has in some way exceeded its authority, or breached the regulations applicable to the issuance of CCIs and dealings in foreign exchange transactions, the Nigerian courts should not allow a foreign investor to be punished for what is, in effect, a breach by the CBN itself - albeit through its delegates / agents.

We are not saying anything new or novel. This is the law. This has been the law since 1995. Nothing has changed!

CONCLUSION In closing we shall again quote Shakespeare who said, in “Measure for Measure”, that “Our doubts are traitors, and make us lose the good we oft might win, by fearing to attempt.” We hope we have been able to clear the doubts of foreign investors in relation to CCIs and that, as regards their past or prospective investments in Nigeria, foreign investors will “fear no more”.

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

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

Wednesday 03 October 2018

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LegalPerspectives With Odunayo Oyasiji Case Review

Oriebosi V. Andy Sam Investment Co. Ltd (2014) LPELR-23607(CA) What to note: his is a matter that was decided at the Court of Appeal in 2014. It bothers on commercial law and company law. Issues like whether a director of a company is an agent of the company and whether an agent acting on behalf of a known principal can incur liability were treated.

T

Facts Andy Sam Investment Co. Ltd was the plaintiff at the lower court. The matter was commenced at the lower court on October 15, 2004 by writ of summons. The matter was against two defendants- the appellant in this appeal was the 2nd defendant at the lower court. The plaintiff was supplying the 1st defendant goods on credit. The payment for the goods were guaranteed by the appellant (who was the 2nd defendant in the lower court).

The 1st defendant defaulted in payment and the respondent instituted the action at the lower court claiming against the 1st and 2nd defendants jointly and severally “1. the sum of 2,178,400.00 (Two million one hundred and seventy-eight thousand, four hundred naira) being the outstanding balance of the value of the goods supplied on credit by the plaintiff to the 1st defendant and for which payment the 2nd defendant guaranteed. 2. 10% interest rate per annum beginning from date of judgment until final liquidation of the entire judgment debt. 3. Cost of the action including solicitors fee of N300,000. 00.”

Judgement was given in favour of the plaintiff at the lower court and the 2nd defendant filed an appeal against the decision of the lower court.

Issues for determination The appellant came up with two grounds of appeal i.e. 1. “the decision of the court below is unreasonable, unwarranted and cannot be supported having regard to the weight of evidence adduced at the trial 2.

The Court below erred in law when it gave judgment against the Appellant (the 2nd defendant) in favour of the Respondent (then plaintiff ) in the amount claimed despite the fact that no evidence whatsoever was given by the Respondent in support of the material facts pleaded by the said Respondent in its statement of claim.”

A sole issue was formulated from the grounds of appeal- “Whether the judgment given by the High Court against the Appellant in favour of the Respondent Company can be supported having regard to the averments of the Respondent company in its statement of claim vis-a-vis the evidence led in support thereof.”

The respondent filed a preliminary objection attacking the competence of the appeal. The grounds for the objection was “1. That this court lacks jurisdiction to hear and determine this appeal. 2. That this suit is incompetent.”

The preliminary objection was successful and the sole issue for determination was struck out on the basis that it was distilled from incompetent grounds of appeal. However, the court still went ahead to consider the appeal on the merit in case there was an error in the determination of the preliminary objection.

Submissions

Issues for determination The court pointed out that from the pleadings of the parties, it can be deduced that the issues in the matter were “(1) the alleged want of authority on the part of Myrianthousis to indorse the bill; and (2) the alleged want of consideration for issue of the same.”

The appellant’s counsel argued that the only link the appellant has with the debt owed the respondent by Emeka Oriebosi was the appellant’s guarantee to liquidate any debt owed by him (Emeke Oriebosi) while transacting business with the company. He further stated that from the statement of claim of the respondent the goods belong to the respondent company and the guarantee issued in favour of the respondent was to pay the debt incurred by Emeka Oriebosi.

However, the evidence led by the respondent shows that the goods belong to Samuel Ude (Managing director of the respondent) and that the debt is being owed the Samuel Ude. On the basis of the above, he argued that there is no evidence to the effect that Emeka Oriebosi is owing the respondent company in whose favour the appellant issued the guarantee. He then submitted that the position of the law is that failure to give evidence in support of the facts pleaded makes it mere averments not supported by evidence. He submitted that Samuel Ude is not even a party to the proceedings before the court and that a registered company is different from its directors and members. Therefore, the court below was wrong to have given judgement in favour of the respondent despite the fact that there was no evidence in support of the facts in the respondent’s pleadings.

Judgement The court held that “there is no doubt that PW1(Samuel Ude) is the Managing Director of the Respondent Company. The law is that a company is in law a person distinct from its promoters or directors. However, a director of a company is in the eyes of the law, an agent of the company for which he acts and the general principle of the law of principal and agent would apply. Where a Director enters into a contract in the name of or purporting to bind the company, it is the company which is liable on it and not the director.”

The court further held that “An agent acting on behalf of a known and disclosed principal incurs no liability. This is because the act of the agent is the act of the principal. The situation is as if it was the principal that did what the agent did or omitted to do what the agent omitted to doThe common law rule is expressed in the latin maxim”qui facit per alium facit per se ipsam facerevindetur” Which means; He who does an act through another is

deemed in law to do it himself.”

The court held that all that the managing director of the respondent company did was done on behalf of the company as agent of the company. Therefore, the court refused to agree with the appellant that there was no evidence supporting the averments in the statement of claim.

In the light of the foregoing, the sole issue for determination was unanimously resolved in favour of the respondent and the appeal was dismissed for lacking merit. The decision of the lower court was affirmed.

Conclusion This matter provides a perfect scenario of how agency principle can apply to the relationship between a company and its directors. ake alternative payment arrangement with the appellant. WASCO wrote a letter dated February 18, 1972 to the appellant proposing that the payment be spread over a period of time (starting from March 1972 to February 1973).

The payment is to be in monthly equal instalment of the sum of N56,126 to be paid into a special account in United Bank for Africa, Lagos.

AG Leventis (Nigeria) Ltd signed an undertaking guaranteeing the monthly payment and also wrote a letter to secure the N25,000 monthly ordering on credit of rolled steel products from the appellant. In addition to the undertaking of AG Leventis, the appellant also requested and accepted 12 bills of exchange covering the 12 months monthly instalment of N56,126. The bills were indorsed by P. Myrianthousis as Director of AG Leventis.

The first bill of exchange was honoured while the second one was not. The appellant therefore filed the action “claiming against the respondent the sum of N102,702.73 as indorsers of a bill of exchange dated 1st March, 1972, and payable on 30th April, 1972, and in the alternative as guarantors of a contractual undertaking made to the appellants

by Messrs. West Africa Steel and Wire Company Ltd. (hereinafter referred to as “WASCO”), a trading company incorporated in Nigeria; this amount (i.e. N102,702.73) is made up of the principal sum of N97,798 due under the bill, the sum of N4,890.13 being interest thereon and the costs of noting protest on the said bill, being the sum of N14.60.

The appellants also claim interest on the total sum claimed (i.e.

N102,702.73) “at 10% per annum until judgement is delivered”.

Submissions of Parties The Respondent was represented

by Chief Obafemi Awolowo, The defence of the respondent was mainly that Mr Myrianthousis had no authority to bind the company in the transaction in dispute as he was not authorized by AG Leventis to either sign the undertaking or indorse the bill of exchange. It was also alleged that Mr Summ, Mr Myrianthousis and Mr Louvaris conspired to defraud the company- this allegation was not supported with evidence.

The Supreme Court noted that from the Statement of Defence of the respondent, the respondent’s defence can be divided into three i.e. fraud and illegality, lack of authority on the part of Myrianthousis and lack of consideration in the alleged transaction between the appellant and the respondent.

Counsel to the appellant argued that the respondents cannot deny the authority of Mr. Myrianthousis to sign and indorse the bill of exchange on behalf of the company as the first bill of exchange that was signed on behalf of the company was negotiated and honoured by the company. The Chief Legal Adviser of the appellant (Dr Hontvari) while testifying in the trial court in favour of the appellant noted that the bills were indorsed by P, Myrianthousis as director of AG Leventis.

He further stated that he came to Nigeria in March 1972 to confirm the genuineness of the signature of Mr Myrianthousis from the bankers of the AG Leventis and WASCO and that he was satisfied that the signature was genuine.

Judgement of Court On the issue of lack of authority of Mr. Myrianthousis to sign the undertaking and indorse the bill of exchange on behalf of AG Leventis, the court held that “when contract is entered into on behalf of a company the question which arises is whether such a contract is binding on the company and can be enforced by or against it. The answer depends inter alia on whether the contract is (1) ultra vires (ultra vires means ‘not within the powers of )’ the company or (2) intra vires (intra vires means within the powers of ) the company but ultra vires its directors. If the contract is ultra vires the company neither the company nor the opposite party to it can generally sue on it. If, however, the contract is intra vires the company but ultra vires its directors the opposite party to it can, in certain circumstances, sue the company.”

The court further held that the memorandum and articles of association of a company are public documents and anybody dealing with a company is presumed to have knowledge of what the company can deal in and the powers of its directors.

Therefore, if a person deals with a company in a manner that contradicts what is in the memorandum

and articles of association of the company such a person must face the consequence.

It was further held that “a person may hold a company liable on any contract between them although ultra vires the directors of the company if:(a) the company has held out the director as having the necessary authority; or (b) the circumstances fall within the well known rule in Royal British Bank v. Turquand (1856) 6 E. & B 327 which put shortly is this: a person dealing with a company is assumed to be aware of the powers of the company which are set out in its public documents (i.e. the memorandum and articles of association) filed with the Registrar since he has access to these documents, and although it is his duty to see that any contracts he proposes to enter with the company are within its powers he is not bound to do more. He need not inquire into the internal working of the company; and he is entitled to assume that everything is being done properly or constitutionally.

There are, of course, limitations to the above rule and it does not apply in the following cases: (a) cases of forgery or “non genuine” transactions; (b) where the person seeking to rely on the. rule is himself aware or has knowledge, of irregularities; or (c) where the transaction is of such an unusual nature that a person dealing with the officers of a company might reasonably be expected to make inquiries to ‘assure himself that those with whom he is dealing are acting regularly and within the authority of the company; or (d) where the person seeking to rely on it was not aware of the contents of the memorandum and articles of association of the company.”

On the issue of lack of consideration, the court held that “ unlike other forms of simple contract, bills of exchange (and promissory notes) are presumed to stand on the basis of a valuable consideration; on the basis of this presumption therefore the burden is on the party who alleges want of consideration (and in the instant case, this will be the respondent) to prove the same. The respondents gave no evidence in the court below. The evidence on record, however - that of the appellants establishes that the subsisting debt of WASCO was the consideration for the bill (exhibit E); and the case of Balfour v. Sea Fire Life Assurance Co. (1857) 3 C.B. (N.S.) 300 is authority for the view and proposition that a subsisting debt from a third person is good consideration for a bill of exchange, at least, if the instrument is (as in the case in hand) payable at a future date (because it amounts to an implied agreement - as it clearly does in the case in hand - to give time to the original debtor, and this indulgence to the original debtor, is indeed, consideration to the maker or indorser of the bill).”

The court resolved the matter in favour of the appellant.

Conclusion The matter gives a perfect example of the usefulness of incorporation documents –especially the articles of association. It also shows how the acts of a director can be held to be binding on the company. The issue of what constitutes consideration in bills of exchange was also properly addressed by the court.

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Wednesday 03 October 2018

NEWS ANALYSIS

Lagos guber primary: Is Abuja’s confidence in Tinubu waning?

ZEBULON AGOMUO

T

hat Governor Akinwunmi Ambode has determined to put his whole strength to ensure he retains his seat beyond May 29, 2019 is not in question; that in doing so, he has decided to bite anything in sight without minding the part of the body, is also not in doubt, what is in doubt is the level of confidence Abuja still reposes in the National Leader of the All Progressives Congress (APC), Bola Ahmed Tinubu.

Observers say that recent developments surrounding the gubernatorial primary in Lagos State may have put Tinubu at loggerheads with the powers that be in Abuja.

Permutations heightened yesterday over the state of relationship between Aso Rock and Bourdillon in Lagos, when against all expectations, the Chairman of the Lagos State Election Monitoring Committee, Clement Ebri, unilaterally cancelled an earlier primary, the result of which had already flooded the social media; declaring it null and void. The monitoring team went ahead to conduct another election in the evening of yesterday, a development that elicited variegated insinuations.

Before yesterday, the election had become an issue, pitching Ambode against Tinubu. Months to the primaries, the camp of the governor had become so quiet over the approaching poll. Those close to Ambode had said that the governor had not received the green light from his political godfather to throw his hat into the ring.

It was to emerge later that the state chapter of the party had anointed another aspirant to do battle with the incumbent Ambode. Many Lagosians, particularly, sympathizers of the governor, were flabbergasted and miffed at the development. But Tinubu remained silent.

From the blues emerged Babajide Sanwo-Olu, a former commissioner for Establishment, Training and Pensions, and former managing director, Lagos State Property Development Corporation (LSPDC). Like a piece of magnet, he started attracting supporters and endorsements here and there.

Initially, Ambode was treating the issue as a featherweight matter. He severally dismissed reports about moves to replace him as rumours and claimed that his relationship with Tinubu was still intact.

But it was to dawn on him that the sudden conglomeration of “foes” against him was actually the hand of “Esau but voice of Jacob”.

Even at that, he did not want to declare outright war against the kingmaker in Lagos, hence his recent “kurukere” movement to

Buhari

plant himself besides Tinubu in a group photograph at the public presentation of a book authored

by Jim Ovia, founder of Zenith Bank Plc. Then, several meetings were held; Ambode sent many emissaries to the godfather and there were no rapprochement ; he decided to seek the intervention of Abuja. Several meetings were held in Aso Rock. The willingness of Abuja to intervene in the impasse, sources say, was responsible for the several postponements the primary suffered.

Last Saturday, Tinubu was said to have come out fiercely, endorsing Sanwo-Olu, which infuriated the governor.

Ambode decided to go for a broke the next day, declaring a full-scale war at a world Press Conference at the seat of power in Alausa, Ikeja. He fired from all cylinders, even though analysts have since described the vituperations as unnecessary.

The primary that was originally billed for Sunday, September 30 was moved to Monday. It was moved again to Tuesday. And at the time is going to press, information about the primary was hazy as those detailed to conduct the exercise began to stammer up till about 4.10pm.

The foot-dragging and general body language of the team from Abuja raised a lot of questions, including whose interest they were out to protect.

An analyst, who spoke with BusinessDay shortly after the Ebri-led NWC team disclaimed the earlier figures that were being bandied online as the result of the primary, alleged that the governor may have compromised the monitoring committee.

But then, some of the questions begging for answers are: Can the team manipulate the outcome of the primary without orders from above? Is it possible for the team to have unilaterally cancelled the earlier election without the buyin of Abuja? If Abuja gave consent, does it then mean that Abuja may have rated Ambode more highly and of being more important and relevant to its electoral success

Tinubu

as was in the days of Babatunde Fashola? Does it mean that placed side by side today, in the larger interest of the party, Abuja prefers Ambode now to Tinubu?

Again, if for any reason Ambode fails to clinch the ticket, and it is established that Abuja wanted to get rid of Tinubu using Ambode, wouldn’t that prove costly for Abuja? If on the other hand something happens in a reverse manner, Ambode fails after the monitoring team’s “unclear decisions”, would that not restrain Tinubu from giving his full support to Abuja? Just endless questions!

Observers strongly believe that there must be some power play between Tinubu and Abuja over Ambode, and that the influence of the former governor of Lagos State may be waning.

For some time now, there have been permutations over whether Tinubu would put in as much efforts as he did in 2015 to ensure the emergence of Muhammadu Buhari as president in 2019.

At a point, those very close to Tinubu said he may be supporting Buhari with his “eyes wide open”.

It is said that the former governor of Lagos State decided to take that route because it would be more beneficial to allow Buhari complete four more years and leave the stage than to allow a fresh person from the north to come in and spend eight years, which could affect the chances of the south.

A source said: “Asiwaju is not a neophyte in politics. He weighs his options and makes moves

I just met with the President. Our discussion was fruitful, productive and it was about the country and leadership as a whole

that he knows he will not regret.

There are ‘bad bellies’ who are not comfortable with his profile and they want to badmouth him before the President. They have not got the political sagacity to galvanise a support base that can give the President victory next time around.

“They have done a lot to bite the finger that fed them. Without Tinubu, many of them wouldn’t be in politics let alone amounting to anything in the country. I want to tell you as a matter of fact that Asiwaju remains as relevant to the electoral success of President Buhari as he was in 2015, and the President knows it and he would decide to toy with his relationship with Asiwaju to his own hurt. Politics is not all about trailer-load of money. If you don’t know the strategy, you go home in regret after an election because you find out that after spending the money you still did not make any impact. Asiwaju knows how to wisely deploy experience, men and money to achieve success.

That is why the President must court his friendship, at least for now.”

Recall that the relationship between Buhari and Tinubu had been everything but rosy until late last year. Shortly after the inauguration of the Buhari administration in 2015, the President went solo, abandoning those who made his victory possible.

Then Buhari began to ride roughshod, picking all manner of people from his native state of Katsina and his close associates, to work with, leaving in the cold those who spent their time and resources to enthrone him in Aso Rock.

Aisha Buhari sensed the ugly state of affairs and spoke out and up against the injustice. She noted that those who never sowed into the party were the ones reaping heavily, whereas those who laboured have been pushed away in harvest time.

Loyalists of Tinubu had also at the time listed some hostile actions against the former governor. Some of the issues raised include the exclusion of Tinubu’s

candidates from Buhari’s final ministerial list, the alleged gangup against his candidate, James Faleke, in the Kogi governorship election, who was the late Audu Abubakar’s running mate, and the alleged fraud against Olusegun Abraham, his candidate, in the Ondo governorship primary.

It was said that Tinubu lost out during the appointment of political office holders, members of the Federal Executive Council inclusive. This, according to observers, was part of the Buhari administration’s plot to build a new power base, detached from Tinubu’s stranglehold.

While in Akure, Ondo State in November 2017, Tinubu had declared that there was no automatic ticket for Buhari in 2019.

At that time, Tinubu’s next movement with APC and Buhari was unknown. Shortly after that, he began to seek out old friends and acquaintances in the Afenifere, pan-Yoruba socio-cultural group.

He went to greet the leader of the group, Pa. Reuben Fasonranti.

He came heavily on some APC governors who had endorsed President Buhari for second term, saying that whoever would represent the party must be selected through a transparent primary election.

He had insisted that the party would not violate its law to grant Buhari automatic ticket. Condemning governors who had already publicly endorsed President Buhari for 2019, Tinubu said the governors lacked the power to do so, as such action contravened the APC constitution.

“No governor can appropriate the power of endorsement to themselves,” he said.

But on October 30, 2017 the President met with Tinubu at the Presidential Villa. The meeting sparked controversy among Nigerians, with many saying that it is just a ploy to curry Tinubu’s favour as election year is drawing near and the credibility of the party is waning.

Tinubu announced to the whole world, “I just met with the President. Our discussion was fruitful, productive and it was about the country and leadership as a whole.”

Since after the October rapprochement, things appear to be going for both party men.

In the spirit of the rapprochement, the President had moved his seat from Abuja and relocated to Lagos just to please Tinubu.

He was the chairman of the 10th Colloquium to commemorate the 66th birthday of Asiwaju. The belief out there is that the President must have used the occasion of the visit to sandpaper some rough edges of their relationship as he spent extra day after the event.

But what is happening currently appears to suggest that there may have been a shift somehow.

The days ahead will tell where Tinubu and Abuja’s relationship is headed.

BUSINESS DAY

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NEWS YOU CAN TRUST I WEDNESDAY 03 OCTOBER 2018

Opinion

58 years! Will there be a nation?

FRANKLIN NNAEMEKA NGWU Dr.  Ngwu  is  a  Senior  Lecturer  in  Strategy,  Finance  and  Risk  Man-­ agement,  Lagos  Business  School  and  a  Member,  Expert  Network,  World  Economic  Forum.

H

urray, Nigeria is 58 years! We sincerely thank God for the worthy achievement. But what are we celebrating! We are celebrating the Giant of Africa that is the poverty capital o f t h e w o r l d ! We s h o u l d be happy that while global life expectancy is about 70 years, ours is 52 years! We should roll out drums that our GDP per capita is about $2000 when the average for other comparable emerging markets is about $6, 000.

Yes we should celebrate! We should celebrate that over 60 million of our youths remain unemployed or underemployed with our growing population of about 200 million now perceived as a serious emerging risk instead of an asset. Of course we should celebrate that we are now so divided along ethnic and religious lines w i t h t r u s t i n g ov e r na n c e and among ourselves almost eroded and the labour of

ou r h e ro e s p a s t v i r tu a l l y in vain! And yes we should celebrate!

In his ver y interesting book, “There was a Country�, erudite Chinua Achebe, d raw i ng ma i n l y f ro m t h e Biafra story deeply lamente d h ow t h e f o r t u n e s a n d opportunities of the Giant of Africa were and are being wasted. It is very sad that all he lamented that caused the civil war and that have retarded our development as a nation seems to be escalating 48 years after the civil war! God have mercy!

Who did this to us or why are we doing so much damage to ourselves. Life is very short! Why are we making it shorter and more inhuman for our fellow beloved citizens? In almost every lip and tongue, from Sokoto to Lagos and from Bayelsa to Ma i d u g u r i , t h e q u e s t i o n we urgently need to answer is-‘Will there be a Nation?’ And if there will be, when it will be! When will there be a nation where compatriots will arise to ser ve our fatherland with love, strength and faith creating a country and nation bound in freedom, peace and unity!

Few weeks ago, on questioning a friend on why he is relocating to Canada with his wife and four children, he answered me with a heart wrenching statement. “I love Nigeria and very scared

if I will survive in Canada.

I h av e t o g o b e c a u s e w e don’t really seem to a have a future and a nation in Nigeria. A society where good aspirations and opportunities of the citizens are not supported is a risk to me and my family�. He said that his only encouragement to go is because his bank has lost over 100 employees to Canada this year alone and that the Canadian bug is happening to almost all firms in Nigeria. Given the solemn and passionate way he expressed his feelings ab ou t Nig e r ia a n d Ca na da, I enquired more. At 46 years and having w orked f o r a b o u t 1 6 y e a r s, h e i s still an assistant manager in one of the banks. He got his BSc at 25 and secured his first job at 30 years after 4 years of active job search.

As the first son and bread winner of a family of seven, he has many dependants.

With limited rest and pressures mainly from work to achieve his target, he is presently under high blood pressure medication. This is the story of many Nigerians and it is a story of a successful and fortunate Nigerian!

When I narrated the story to another friend of mine, he said that my Canadian bound friend should go a n d g i ve t ha n k s g i v i ng i n church that he has a job in a country where over 60 mil-

lion youths remain either unemployed or underemployed. He advised him not to return to Nigeria until the signs that we are ready to be a nation are visible. The question is when will that be and will my friend and others like him ever return to Nigeria again!

A man of 58 years is no more a child! As an adult, he should be w illing and desperate to change if he has not achieved the basic things and expectations of life. As this is the case with Nigeria, I think that the 58th independence should be a period of deep remorse and sober reflection on the part of our leaders in every segment of our society (political, economic, religious, social and cultural). As political leadership almost deter mines ever ything in Niger ia, we implore PMB and his government to take a critical look at the coun-

It is very sad that all Achebe lamented that caused the civil war and that have retarded our development as a nation seems to be escalating 48 years after the civil war! God have mercy!

try and appreciate that we are in crisis. The countr y is highly divided, the economy is about to enter recession again, there is serious poverty and frightful insecurity pervades.

Mr President, this is not the time for blames, it is the time for action and v i s i o n a r y l e a d e r s h i p. I t demands more than what your independence speech enumerated! Nigeria desperately yearns for effective leadership and this you can provide even in the remaining months of this your first tenure. Do whatever it takes in terms of appointments, policies, actions and inactions, dialogue and engagement to rescue the precarious state of dear country Nigeria. While you have rejected calls for the restructuring of the country, I passionately implore you to rethink your position and appreciate how restructuring will positively help Mallam Aminu of SarkinYari of Daura, Kolawole of Ijebu Ode, Mama Doshima o f Va n d e k i y a , Pa p a I k e chukwu of Abakaliki and Akpan Asuquo of IkotEkp e n e. T h e re i s n o b e t t e r legacy than for you to be remembered as the President that put Nigeria in the path of sustainable economic growth, the leader that unified the country and provided the environment where

ever y Nigeria irrespective o f t r i b e o r re l ig i o n , st ate of origin or gender is able t o a c h i e v e h i s l e g i t i mat e potentials and aspirations.

The same passionate plea goes to our state governors who in most cases govern our states like prodigal sons bequeathing us with unsustainable debts and little development outcomes! Given the resources and potentials our states are endowed with, the only reason why they are in debts is purely due to lack of vision and inept leadership on the par t of His Excellencies! With good vision and effective leadership, there is no reason why every state in Nigeria should not have a savings deposit or investment fund of over $1 billion. In Proverbs 29, verse 2, it is stated that “When j u s t m e n a re m u l t i p l i e d , the common people shall rejoice. When the impious take up leadership, the p e o p l e s ha l l m o u r n . A n d verse 16 states that, “When the impious are multiplied, crimes will be multiplied.

But the just shall see their ruin�. O God of creation, we earnestly continue to pray that you in your infinite m e rc y a n d w i s d o m gu i d e our leaders right and help them to know the truth to build a nation where peace and justice shall reign and reign and reign!

Exploring more STEM competitions for Nigerian students

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

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hey are gradually fading from the news and the social media. The triumphant run of the Onitsha 5 Coding Girls climaxed with reception by the Vice President and another by the elated Anambra State Governor Willie Obiano. Obiano was deservedly a proud father, providing encouragement and support to the team before and after.

Salutations to Promise Nnalue, Jessica Osita, NwabuakuOssai, AdaezeOnuigbo,and Vivian Okoye, students of Regina Pacis Secondary School, Onitsha that brought cause for rejoicing in Nigeria in August.

Some beat their chest in ethnic triumphalism. Even that counts.

Before we consign the winners of the Technovation Challenge to our heap of for-

getfulness, there is need to do more with the matter. It concerns education. It involves particularly the STEM variant of it : Science, technology, engineering,and mathematics. Prof Yemi Osinbajo spoke of Nigeria adding A to STEM to bring about STEAM. The Arts are an essential component of science and technology, he stated. Anyone familiar with the inspiration and origins of many scientific achievements such as the Apple MacIntosh would agree.

As BusinessDaynoted in an editorial, there is a need to Replicate Technovation Challenge across the country.

EduFunk, the company of team lead UchennaOnwuamegbu, has the experience to lead the process. Start in Anambra State with the buzz from the Onitsha 5 ringing around the state and then do similar contests across the South East and Nigeria.

Then enable our girls and boys to enter many such contests across the world. Also, create similar competitionsin the country. Test the capacity and capability of our educational system to cope with the new world order in the STEM. How many teams of girls f ro m a c ro s s t h e c o u n t r y would enter for the 2019 Technovation Challenge?

Who are those seeking opportunities and recognition in other contests in the evolving area of applications of tech-

Companies should be exploring local versions or replicas of these global contests to replace the fixation with dancing competitions or strollin-the-jungle contests for which they win N5m and flashy cars while best graduating students only get N100, 000 for the wellendowed. Please change the narrative with decisive action. nology to solve community challenges? Or in the new field of Artificial Intelligence?

Wo m e n g ro u p s a c ro s s the country can play a role.

Individuals can register with Technovation on https :// technovationchallenge.org/ get-started/. There are roles for student, mentor, ambassador or judge. We should encourage teams of girls to enter the competition so they can try out their ideas to change the world through technology. Let us develop the curiosity, creativity,and determination of the girl child in Nigeria.

Many competitions are available for schools, minis-

tries of education and state governments to consider and steer students into entering. They include the AAN Neuroscience Prizes, BioGENEius Challenges, Discovery Education 3M Young Scientist Challenge, and the eCyberMission. Others include ExploraVision, Generation Nano: Superheroes Inspired

by Science and Google Science Fair.

Then there is the International Chemistry Olympiad, MIT THINK Scholars Program, the Science Olympiad and You Be The Chemist Challenge as well as the Intel International Science and Engineering Fair.

The Google Science Fair (https://www.googlesciencefair.com) is an online science competition sponsored by G oogle, L ego, Virgin Galactic, National Geographic and Scientific American. It invites 13-18 year olds to get inventive, solve problems, share ideas and win. Google Science Fair works on the proposition that “every idea has the power to shape our world.� Areas covered include Environment, Tech, Robotics, Space, Health and Community. Others are Food, Artificial Intelligence, Travel, and Energy. On offer are 139 prizes including a $50,000 educational scholarship, $15,000 scholarship and travel to LEGOŽ in Billund, Denmark, a National Geographic $15,000

Explorer Award that enables the winner to embark on an expedition and more.

THINK at the Massachusetts Institute of Technology (https://think.mit.edu/) is the annual science research and innovation competition for high school students.

THINK caters to students who have done extensive research on the background of a potential research project and are looking for additional evidence in the early stages of their project. Students submit proposals of not more than ten pages detailing the problem they are attempting to solve, how their idea/ system combats the target p ro b l e m, d e v e l o p m e n t a l procedure, a timetable of milestones and budget allocation. Finalists spend four days all-expenses paid at the MIT campus where they meet professors in their field of research, tour labs, attend MIT’s eFair and hang out with members of the THINK team.

THINK would open a call for entries this October.

Intel International Science and Engineering Fair (https://www.societyforscience.org/intel-internationalscience-and-engineeringfair) would next hold in Phoenix, Arizona, the USA from May 12-17, 2019. The Society for Science and the Public organises this annual STEM competition to encourage young people in the fields

of science and engineering. “Each year, approximately 1,800 high school students from more than 75 countries, regions, and territories are awarded the opportunity to showcase their independent research and compete for on average $5 million in prizes at Intel ISEF. The competition focuses on identifying, inspiring, and engaging the world’s next STEM generation.� Participants have gone on to stellar careers.

There are many others.

Royal College of S cience Union Science Challenge (http://sciencechallenge. org/about)is a UK-based annual science communication competition that asks entrants to demonstrate their skills in scientific debate and reasoning. It is open to those in secondary school or equivalent anywhere in the world.

Calling teachers and students. Get busy with ideas; challenge yourselves to do something in the STEM and win prizes for yourselves and the country. Companies should be exploring local versions or replicas of these global contests to replace the fixation with dancing competitions or stroll-in-the-jungle contests for which they win N5m and flashy cars while best graduating students only get N100, 000 for the well-endowed. Please change the narrative with decisive action.

Published  by  BusinessDAY  Media  Ltd.,  The  Brook,  6  Point  Road,  GRA,  Apapa,  Lagos.   Ghana OIÀFH Business  Day  Ghana  Ltd;͞  ABC  Junction,  near  Guinness  Ghana  Limited,  Achimota  –  Accra,  Ghana.  Tel:  +233243226596:  email:  PDLO#EXVLQHVVGD\RQOLQH FRP   Advert  Hotline:  08034743892.  Subscriptions   01-­2950687,  07045792677.  Newsroom:  08169609331 (GLWRU $QWKRQ\ 2VDH %URZQ.   All  correspondence  to  BusinessDAY  Media  Ltd.,  Box  1002,  Festac  Lagos.  ,661

WEST AFRICA

ENERGY intelligence oil

gas

power

Wednesday 03 October 2018

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POLICY

Can Nigeria take advantage as LNG shortage looms?

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finance people appointments

L-R: Obinna Uche, Director, Projects and Services, Mojola Ola, Head, Partner Projects, Viviane Mike-Eze, Marketing Communications Manager & Ifeanyi Odoh, Head Offer Marketing and Business Development all of Schneider Electric Anglophone West Africa after an interactive session with Energy Reporters in Lagos

Debrief

Qatar said to see $40bn income gain from gas expansion

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OPEC weekly basket price DAY

PRICE

28/9/18

80.64

21/9/18

76.71

14/9/18

76.59

7/9/18

75.19

31/8/18

74.96 Source: OPEC

Ghana set to push ahead with its gas bill FRANK UZUEGBUNAM

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hana has never hidden its ambition to outperform Nigeria in its utilization of oil and gas resources. While it has not done badly with the revenue accruing to it from its oil resources, they are quickly looking at gas and what they can do with it.

Mohammed Amin Adam, Ghana’s deputy minister for energy, stated a comprehensive gas bill is being drafted to consolidate the gas sector regulations to meet emerging global regulatory landscape. Accord-

ing to him, utilising gas for industrial development will help facilitate low-cost industrialization, including reducing the environmental cost and other externalities associated with oil-based development.

Adam noted that competitive pricing is key to derive gas-based industrialisation, because it has become a leading concern and requirement from accelerated industrialisation for cheaper inputs.

“Government has pursued the gas sector with the intent to accelerate industrialisation, and therefore adopted the Gas Masterplan which has provided a roadmap that could position the gas industry as the leading contributor

of value-added industrialisation in Ghana,” said Adam at a gas forum put in place by Gas Consortium.

The fulcrum of its gas plans is situated in the downstream. The Ghana National Gas Company aims to monetize an essential by-product, Isopentane to kick-start local production of fertilizer and other products. Isopentane, also known as 2-methyl butane, is an organic compound and flammable liquid that has various uses. Apart from fertilizer, it is used in the formulation of cosmetic products like makeup, shaving cream, cleaning products and hair conditioners.

The Ghana Gas Forum pro-

moted a close partnership among key industry players – including the Ministry of Energy, Ghana National Gas Company and Ghana National Petroleum Corporation – in policy discussions.

The Gas Consortium is an independent non-profit policy advocacy organisation that promotes the contributions of government policymakers, experts, practitioners and industry stakeholders to the policy formulation process. It does this to ensure that policy plans support the gas sector’s effective management and lead the country’s goal of leveraging its gas resources for industrialisation and economic transformation.

02 BUSINESS DAY WEST AFRICA Outlook Brief Ghana: Oil block auction set to begin in this month

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he third annual Regional Energy Co-operation Summit ended in Accra with confirmation of competitive bidding for oil block set to commence this month. Speaking at the close of the three-day summit, William Aidoo, Deputy Minister of Energy in charge of Power, stated that “Ghana for the first time is going to conduct and open a competitive bidding

round for the allocation of new oil blocks.”

“We look forward to the formal announcement of the competitive bidding round this month. This will pave the way for companies who express interest, leading to bidding and awarding of new oil and gas blocks,” he said.

In accordance with the Petroleum Exploration and Production Act (Act 919), a 23-member committee was constituted and tasked with the responsibility of allocating oil blocks for commercial exploration to local and international companies. The summit brought together policymakers from the Economic Community of West African States (ECOWAS) and other private sector stakeholders to explore the energy infrastructure in the sub-region.

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oil

Namibia: Drillship to spud offshore Namibia well

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he Ocean Rig Poseidon has been mobilized to drill the Prospect S Well in Petroleum Exploration License (PEL) 71 offshore Namibia, Azinam Limited and operator Chariot Oil and Gas reported.

“We are delighted to announce the mobilization of the Ocean Rig Poseidon as well approach drilling on Prospect S, the first well of our multi-well, multiyear drilling program,” Daniel McKeown, managing director of Namibia-based and Seacrest Capital Group-backed Azinam said in a written statement.

“Azinam is unique in this highly prospective part of the Southern African Atlantic Margin due to our license footprint,

G&G database and the scale of our drilling plans.”

Azinam stated that Ocean Rig Poseidon, a sixth-generation deep water drillship, should be onsite soon and that spudding should occur

shortly thereafter. The well is designed to test multiple zones including Aptian, Albian and Ceomanian-Turonian stacked targets within an overall structural closure, the company added. More-

over, the company noted that its most recent competent persons report by Lloyds Register indicates total gross mean prospective resources of 708 million barrels.

In a separate announcement, Chariot stated that Netherland Sewell Associates, Inc. has independently estimated a gross mean prospective resource of 459 million barrels and a 29-percent probability of geologic success for Prospect S. Azinam, which is backed by Seacrest Capital Group, owns a 20-percent stake in PEL 71.

Chariot holds a 65-percent interest. Other partners include NAMCOR (10 percent) and Ignitus Oil & Gas (5 percent).

Azinam noted that the partners estimate drilling to take approximately 40 days.

Angolan November programme is down to around a dozen cargoes. The Angolan November programme

is down to around a dozen cargoes, from a total of 46, down from closer to 18 the previous day, traders said.

BP was still offering Cabinda at dated Brent plus $1.00 a barrel and Girassol at dated Brent plus $1.45. Eni was offereing Palanca at dated Brent plus 90 cents a barrel.

Turkey’s Tupras issued a buy tender on Thursday for a Nov. 5-15 delivery seeking West African crude.

Uruguay’s state-run oil firm ANCAP is seeking to buy 1 million barrels of a medium to light crude for delivery Nov. 23-27 at Jose Ignacio.

West Africa: Nigerian overhang weighs but demand stays healthy for Angolan

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few cargoes of Nigerian crude cleared via tenders but a hefty overhang of October cargoes remained amid slim spot activity. Only a few of the smaller Nigerian loading programmes, such as Ebok and Oyo, had not yet emerged. Trading house Mercuria struggled to find a buyer for early Novemberloading Nigerian grades.

Mercuria offered a 1-million barrel cargo of Forcados for loading Nov. 8-9 at a premium of $1.80 to dated Brent, up from around $1.75, although no buyers emerged. So far, November exports look likely

to be as large as May’s 1.895 million bpd loading programme. About 15-20 cargoes of October loading Nigerian crude were still left while November cargoes were slow to sell on the spot market.

BP returned to the window bidding for Nigerian. BP bid for a cargo each of Bonga and Forcados at dated Brent plus $1.60 a barrel in the window. South Africa’s Sasol awarded its November delivery buy tender to Mercuria for a cargo of Forcados. Uruguay’s state-run oil firm ANCAP awarded its tender to buy 1 million barrels of

a medium to light crude for delivery Nov. 23-27 to Mercuria. The grade was said to be Erha.

However, Angolan cargoes continued to sell swiftly due largely to demand from Chinese refiners. The

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gas

ENERGY intelligence

Ghana: Ghana Gas to start compensation payment to people affected by Karpowership

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nity durbar at Shama in the Western Region, said the Company has followed the laid down procedures and all those affected by the relocation would be duly compensated.

The Durbar attended by chiefs, queen mothers, representatives from GRICO, ECG , Environmental Protection Agency (EPA), Ghana National Petroleum Corporation (GNPC) and the affected communities made up of Inchaban, Aboadze, Essipon and Ngreise was under the theme “Effective Community Engagement an Essential Component in

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Brief

ll is set for Ghana National Gas Company Limited (Ghana Gas) to commence the payment of compensation to individuals and communities that would be affected following the relocation of Karpowership from Tema to the Western Naval Base in Sekondi.

The necessary land and property valuation have been completed and Ghana Gas is ready to begin payment to the affected people in October this year.

Ing Robert Kofi Lartey, Director of Operation at Ghana Gas, who made this known during a commu-

BUSINESS DAY

Promoting Economic Development”.

The durbar was to enable Ghana Gas to further sensitize all stakeholders in the areas of operations of Karpowership to its principle of having a transparent, trustworthy and sustainable relationship.

Ing Lartey explained that any further delay in the relocation of the plant to Sekondi would cost the nation some $40 million monthly, “It is an aggressive programme and we will run with speed so no one should cross us with unnecessary litigations”.

The Karpowership is expected to added 470 mega-

watts to the national grid for 20 years.

The Director of Operations said the relocation of the plant was part of plans to get cheaper fuel such as gas from Atuabo for the plant to have easier and constant power supply.

He noted that the relocation would bring more positives than negatives impact to both the government and communities, adding that the plant would now operate at a lower cost, create job opportunities as well as ensure massive development in the beneficiary communities.

East Africa: Tanzania sees Uganda gas pipeline kicking off soon

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he Tanzania Petroleum Development Corp.

(TPDC) is confident a naturalgas pipeline to Uganda will start in 2021, according to Kapuulya Musomba, acting Managing Director of the state oil company.

At least 29 companies have shown interest in conducting a feasibility study and constructing the pipeline that will pump gas to western Uganda to power iron and steel factories, Musomba said.

“We expect the feasibility study to be concluded

by June next year,” he said adding that funding will be sought in 2019 and 2020 and then construction will start in 2021.

Tanzania and Uganda have already signed an agreement for the pipeline that will start in Dar es Salaam, pass through Tanga port on the Indian Ocean and Mwanza, a port city on Lake Victoria, before crossing to

Uganda. The two nations plan a separate pipeline to transport Uganda’s crude to Tanga port. Tanzania is positioning itself to become an energy hub within a decade and plans to supply gas, of which it has about 57 trillion cubic feet of proven reserves, to other east African nations.

“About 10 to 15 regions in East Africa will benefit from the pipeline that will

also serve as a catalyst for oil and gas exploration,” Musomba said.

The state intends to connect seven factories with natural gas during this financial year and at least 80 companies in the next four years, he said.

Musomba is optimistic gas will finally be pumped from the $30 billion planned liquefied naturalgas plant in Lindi region by 2026-27. Negotiations for

the stalled project are still on with companies including Exxon Mobil Corp., and Equinor ASA, he said.

Construction of the plant that will have the capacity to process 10 million metric tons annually was initially scheduled for completion in 2020, according to TPDC. When complete, it will add to projects in Mozambique, making the region a hub for the fuel.

Israel: Israeli natural gas exports to Egypt set to start after Noble, Delek pipeline deal

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xports of Israeli offshore natural gas to Egypt are set to start at the beginning of 2019 after producers Noble Energy and Delek Drilling agreed to buy a stake in the idled East Mediterranean Gas (EMG) pipeline.

US-based Noble and Israel’s Delek are partners in the development of both the producing Tamar field and the giant Leviathan field, which is due to start production by the end of 2019.

Together with an Egyptian-owned partner Sphinx

EG, Noble and Delek have agreed to take a 39 percent stake in the EMG pipeline for a total $518 million, pav-

ing the way for exports of gas first from Tamar and then from Leviathan to Egypt. The EMG pipeline has a design capacity of 7 Bcm/year or 19 million cu m/d.

The deliveries will be part of a deal signed in February this year to supply Egypt’s Dolphinus Holdings with 64 Bcm of Israeli gas over a 10year period.

“Today’s announcements mark significant steps forward in supplying gas from the Tamar and Leviathan fields to regional customers through existing infrastruc-

ture,” Keith Elliott, Noble senior vice president said in a statement.

“With these agreements, we are securing the capacity to deliver on our firm gas sales agreement with Dolphinus for Leviathan while also allowing for interruptible sales from Tamar into Egypt,” Elliott said.

At the start-up of the Leviathan field by the end of 2019, Noble anticipates selling at least 350 Mcf/d (10 million cu m/d) gross to contracted customers in Egypt through the pipeline.

04 BUSINESS DAY WEST AFRICA ENERGY intelligence Global solar equipment market projected to double by 2025

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new report published by Allied Market Research projected the global solar power equipment market to reach $188,304 million in 2025, growing at a CAGR of 12.5 percent. The study titled, Solar Power Equipment Market: Global Opportunity Analysis and Industry Forecast, 2018 - 2025, notes that the projected increase is up from $76,270.6 million in 2017. The utility segment accounted for more than

half of the market share in 2017 and is expected to witness significant growth during the forecast period.

The report notes that the growth of the global solar power equipment market is driven by rising construction projects and a surge in demand for electricity across of the world. In addition, the ability of home solar panels to improve carbon footprint and to reduce electric bill are inspected to provide a remunerative opportunity for the growth of the solar power equipment industry.

Furthermore, the rise in demand for electricity has augmented the need for concentrated solar power systems. Efficient conversion of solar energy into useable energy forms has enhanced the demand for monocrystalline and polycrystalline silicon cells.

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power

AfDB grants utility $217.9m for expansion programme

World Bank invests $1bn in scaling up battery storage developments

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he World Bank Group has committed $1 billion to a new global programme to accelerate investments in battery storage for energy systems in developing and middleincome countries.

The programme is expected to help these countries ramp up their use of renewables, particularly wind and solar power, improve energy

security, increase grid stability and expand access to electricity.

“For developing countries, this can be a game changer,” said World Bank Group President Jim Yong Kim. “Battery storage can help countries leapfrog to the next generation of power generation technology, expand energy access, and set the stage for much cleaner, more stable, energy systems.”

The $1 billion in World Bank Group financing is expected to mobilise another $4 billion in concessional climate financing and public and private investments.

The programme aims to finance 17.5GWh of battery storage by 2025 – more than triple the 4-5GWh currently installed in all developing countries.

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he African Development Bank has approved a $217.9 million loan to South Africa’s power utility Eskom Holdings, towards the upgrade and expansion of its transmission facilities.

The funding supports the Eskom Transmission Improvement Project (ETIP), which will see the construction of 555km of 400kV transmission lines in KwaZulu-Natal and Mpumalanga province and the upgrading of substation equipment and improvement of various substation earth mats in Mpumalanga.

According to the Bank, the transmission lines will provide additional power evacuation paths for new

generation capacity, ensure availability of power for future load growth, enable the reduction of network losses and ensure the safety of personnel and assets during network operations to ensure compliance to the Grid Code.

The Bank’s intervention will enable the provision of additional power evacuation paths to the network from the Kusile, Majuba, Drakensberg and Ingula power stations. It will also benefit the utility’s corporate restructuring and governance programme.

The ETIP aligns with the Government of South Africa’s National Development Plan 2030, geared toward financing infrastructure to support

the country’s mediumand long-term economic and social objectives.

ETIP was identified in the Bank’s South Africa Country Strategy Paper ((CSP) 2018–2022) and is consistent with its pillars of promoting industrialisation and deepening regional integration. The project is also consistent with the Bank’s ten-year strategy 2013–2022.

The loan, which was approved by the Bank’s board includes an additional co-financing of $25 million from the Africa Growing Together Fund (AGTF). The Bank’s contribution, covered by a South African Government guarantee, will finance up to 77 percent of the critical project. Eskom

will provide 15 percent.

These investments will enhance regional energy trade, end-user energy access for industrial development, and address the potential addition of 130 million on-grid connections by 2025.

Eskom operates South Africa’s national grid, which comprises 157 transmission substations and approximately 31,107km of transmission lines and 160 distribution substations, totalling 139,610MVA of installed transformer capacity. The utility contributes approximately 77% of the total installed power capacity in the Southern Africa Power Pool (SAPP) and makes up approximately 80% of the regional power demand.

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ENERGY intelligence

Can Nigeria take advantage as LNG shortage looms?

STEPHEN ONYEKWELU

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master thread weaving through liquefied natural gas (LNG) markets is that of an emerging LNG supply shortfall in Asia and higher prices by early 2020s and Nigeria can benefit if it improves regulatory framework and ease of doing business.

These LNG markets concerns are based on a recent report by New York based investment bank and financial services company, JP Morgan, informed by its annual Asia LNG tour to Beijing, Tokyo and Sydney and over 20 meetings held.

However, with several LNG projects in Nigeria stalled over the past years amid untapped gas reserves, opaque regulatory framework, and delays in taking some final investment decisions, Nigeria is losing its com-

petitive advantage in the global LNG market and may not be in a position to take advantage of this emerging market dynamics.

“Nigeria started 24 months after Qatar. Qatar now produces 77 million tonnes per annum and is the number one LNG supplier in the world, while Nigeria is still on 22 MTPA. Australia is already flooding the market and will know down Qatar to the third or fourth place” Tony Attah, managing director and chief executive officer of Nigeria LNG was quoted to have said at Nigeria International Petroleum Summit in Abuja early this year.

Data obtained from the Nigerian National Petroleum Corporation showed that export gas to the Nigeria LNG Limited was 1.12 trillion cubic feet (Tcf ) last year, translating to 3.06 billion cubic feet per day (Bcfpd).

In addition, NLNG’s latest Facts and Figures report, show

it currently manages 16 longterm LNG Sale and Purchase Agreements executed with 10 buyers on a Delivered Ex-Ship (DES) basis.

It said, “The long-term LNG buyers take delivery of their volumes at receiving facilities spread across the Atlantic Basin in countries such as Spain, France, Portugal and Italy in Europe, Turkey, Mexico and the United States of America.

“In recent times, the NLNG cargoes have been delivered to the Far East, Middle East, South America and the United Kingdom through existing customers and via Spot Free on Board Master Sales Agreements with several companies.”

The NLNG said volumes had been delivered to receiving facilities in Japan, South Korea, Taiwan, China, India, Kuwait, Brazil and Argentina, adding that this had positioned the company as a major player in the global gas/LNG industry.

These traditional NLNG markets are gradually falling under the United States of America because as it progressively makes inroads into export markets that Nigeria sends its Liquefied Natural Gas cargoes to as the North American country’s LNG exports quadrupled in 2017.

With two projects scheduled

Data obtained from the Nigerian National Petroleum Corporation showed that export gas to the Nigeria LNG Limited was 1.12 trillion cubic feet (Tcf) last year, translating to 3.06 billion cubic feet per day (Bcfpd)

to come online this year and another two in 2019, the USA is set to surpass Nigeria in terms of the LNG export.

Nigeria, according to the 2017 World LNG Report, retained its position as the fourthlargest exporter of the LNG in 2016, while the US occupied the 16th position. But this situation is changing rapidly, as the US gains market share.

The Energy Information Administration (EIA), the statistical arm of the US Energy Department, said more than half (53 per cent) of the US LNG exports in 2017 were shipped to three countries: Mexico, South Korea, and China, all of which had received the LNG volumes from Nigeria.

This situation is compounded by the fact that in Africa, significant gas finds in excess of 127 million cubic feet in Mozambique have created the potential for another African super player.

06 BUSINESS DAY

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ENERGY intelligence Brief Trafigura merges global fuel oil, gasoil trading desks ahead of IMO 2020 -source

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wiss trading house Trafigura has merged its global fuel oil and gasoil trading desks ahead of new shipping fuel regulations starting in 2020 set by the United Nations’ shipping agency, three trade sources said.

The merger is “a prudent step to structure ourselves

for future market conditions including in preparation for the upcoming IMO 2020 changes amongst others to ensure better integration across the bunkering space,” said one of the sources with direct knowledge of the matter.

From 2020, the International Maritime Organization (IMO) rules will ban ships from using marine fuels, also known as bunkers, with a sulphur content above 0.5 percent, compared with 3.5 per-

cent now, unless they are equipped with so-called scrubbers to clean up sulphur emissions.

Joshua Grizzle heads the new global team, while Seetal Patel has taken a new senior role within the oil and oil products trading division, the source said.

Trafigura’s trading desk merger mirrors a similar move by oil-giant BP, which combined its fuel oil and middle distillates desks about four months ago.

“Whatever we do in BP is to anticipate market changes, and to ensure we can run our business in the most efficient way, we can supply our customers, meet demand in the market,” Janet Kong, chief executive of Integrated Supply and Trading (IST) Eastern Hemisphere at BP in response to questions about BP’s trading desk merger.

The trade sources said similar trading desk mergers at other trading houses and major oil companies could be expected in the run up to the 2020 marine fuel sulphur cap.

Wednesday 03 October 2018

finance people appointments

Qatar said to see $40bn income gain from gas expansion

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atar will generate $40 billion in additional export revenue once it competes its natural gas expansion project in 2024.

Rising income from sales of liquefied natural gas will leave the government with a budget surplus of about $44 billion in 2024, with the bulk of the extra cash going to the $320 billion Qatar Investment Authority, the country’s sovereign wealth fund.

The world’s biggest LNG producer wants to bulk up as competing supplies from Australia and the US are also set to come to the market over the next decade. State-owned Qatar Petroleum will build four new liquefaction plants, known as trains, by 2025, up from a previously announced three, Saad Sherida Al Kaabi, Chief Executive Officer told reporters in Doha.

Qatar’s LNG capacity will rise to 110 million tons of LNG a year from 77 million currently. The country

last year announced plans to boost output to 100 million tons within seven years.

The decision to increase output even more was driven by rising demand for gas and the “good results obtained through recent additional appraisal and testing in the North Field,” Al Kaabi said, referring to Qatar’s portion of the giant offshore reservoir shared with Iran.

Qatar’s total production of oil and gas will reach an equivalent of 6.2 million barrels a day when the expansion is complete, up

from 4.8 million currently, he said. Global LNG consumption is expected to rise by more than a third over the next decade to 416 million tons a year.

Chinese imports of the fuel surged 35 percent in the first eight months of this year, and gas producers from Australia, Africa and the US are boosting output to capture a bigger share of this growing market.

Qatar Petroleum plans to make its final investment decision on the expansion by the end of 2019 and to reach its 110 million ton per year target in 2024,

Al Kaabi said. Tenders to drill new offshore wells will be issued next month.

Even if the company makes a final investment decision next year, “it will be very challenging for them to bring all the planned capacity online in five or six years,” said Maggie Kuang, an analyst at Bloomberg NEF. “Competition for labor and equipment will increase globally, and the smaller plants planned in the US will likely be quicker to build than the mega-trains in Qatar.”

On the other hand, reduced levels of current oil and gas investment make this a good time to expand because costs are low, Giles Farrer, research director for global gas and LNG supply at consultant Wood Mackenzie Ltd., said in a statement.

Qatar Petroleum has not decided how to finance the project but has ruled out at least one potential source of funds: an initial public offering. Al Kaabi said Qatar Petroleum has no IPO plans.

International Seaways to equip up to 10 VLCCs with scrubbers ahead of IMO 2020

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nternational Seaways has signed contracts with Norway’s Clean Marine AS to purchase seven exhaust gas cleaning systems, commonly known as scrubbers, to install on 50 percent of its VLCC fleet of 14 vessels, the company announced.

The scrubbers are to be installed by a qualified system installer on seven of the 10 modern VLCCs of the fleet in time for the International Maritime Organization’s mandated bunker sulfur limit to drop from currently 3.5 percent sulfur to 0.5 percent sulfur on January 1, 2020, the statement said.

The installation of scrubbers allows shipown-

ers to continue using 3.5 percent sulfur bunkers as the exhaust gas cleaning systems bring emissions in line with the tough 0.5% sulfur limit on board the vessel.

Other compliance options include the use of marine gas oil or low-sulfur bunker fuels, or the installation of dual-fuel engines to use LNG, LPG or methane as bunker fuel.

International Seaways has an option for another three scrubbers covering the remaining three modern VLCCs in its fleet.

The 10 modern VLCCs include the 2016 built Gener8 Supreme, Gener8 Militiades, Gener8 Chiotis, Gener8 Andrio-

tis, the 2015 built Gener8 Strength and Gener8 Success, the 2011 built Seaways Kilimanjaro, Sea-

ways McKinley and the 2010 built Seaways Everest and Seaways Raffles.

The scrubber installa-

tions strengthen International Seaway’s ability to take advantage of a potential strong tanker market

resulting from the IMO regulations, as both crude and product tankers stand to benefit from increased transportation demand, according to CEO and President Lois Zabrocky.

International Seaway’s public statement came on the heals of French container shipping company CMA CGM announcing plans to order several scrubbers.

Scrubber orders and installations have been quadrupling in 2018 in preparation for the IMO 2020 sulfur mandate from 344 units installed and ordered in January to around 1,100 units in September, according to industry sources.

07 WEST AFRICA ENERGY intelligence

Wednesday 03 October 2018

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marketinsight

Brent oil rises to 4-year high ahead of Iran sanctions

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rent crude oil prices rose to their highest since November 2014 ahead of US sanctions against Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), that kick in next month.

Benchmark Brent crude oil futures rose to as much as $83.27 a barrel and were at $83.21 at, up 48 cents, or 0.6 percent from their last close. US West Texas Intermediate (WTI) crude futures were up 32 cents, or 0.4 percent, at $73.57 a barrel. WTI prices were supported by a report of a stagnant rig count in the United States, which points to a slowdown in US crude production, which now rivals top producers Russia and Saudi Arabia.

Brent was pushed up by looming sanctions against Iran, which will start targeting its oil sector from November 4.

ANZ bank said that “the market is eyeing oil prices at $100 per barrel”.

In a sign that the financial market is positioning itself for further price rises, hedge funds increased their bullish wagers on US crude in the week to September 25, data from the US. US President Donald Trump called Saudi Arabia’s King Salman, discussing ways to maintain sufficient supply once Iran’s exports are hit by sanctions.

“Until sizable supply is offered up by OPEC, ultimately traders will continue

to push the envelope even more,” said Stephen Innes, head of trading for AsiaPacific at futures brokerage Oanda in Singapore.

“Even if they (Saudi Arabia) wanted to bend to President Trump’s wishes, how much spare capacity does the Kingdom have?” asked Innes.

“We are going to find out very soon as approximately 1.5 million barrels (per day) of Iranian oil is effectively going offline on November

4. If the market senses that Saudi Arabia capacity is tapped out at 10.5 million bpd, oil prices will rocket higher with the flashy $100 per barrel price tag indeed a reasonable sounding target,” Innes said.

With oil prices soaring, there are concerns over their inflationary effect on demand growth, especially in Asia’s emerging markets where weakening currencies are further adding to high fuel import costs.

Add the trade disputes between the United States and other major powers, especially China, and economic growth into 2019 could be eroded.

Growth in China’s manufacturing sector already sputtered in September as both external and domestic demand weakened, two surveys showed. In Japan, business confidence among big manufacturers declined in the last quarter its lowest in nearly a year, as firms felt the pinch from rising raw material costs and as global trade conditions worsened.

Iranian oil tankers disappearing from tracking systems

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ran’s oil tankers are starting to disappear from global satellite tracking systems with just under six weeks to go

until US sanctions are due to hit the country’s exports, making it harder to keep track of the nation’s sales.

No signals have been

received by shore stations or satellites from 10 of the Persian Gulf nation’s crude oil supertankers for at least a week, according to tanker tracking data compiled by Bloomberg.

The most likely explanation is that the vessels’ transponders have been switched off, making it more difficult to track their movements.

When they were last seen, the 10 vessels, which are listed below, were holding around 13 million barrels of crude and condensate, a light form of crude extracted from gas fields. If they are now full, that would rise to about 20 million barrels.

The disappearance of Iran’s tankers will make it increasingly difficult to

monitor ship movements as the November 4 deadline looms for buyers to halt purchases of Iranian crude and condensate or face being blocked from the US financial system.

The three full vessels last seen heading out of the Persian Gulf were all showing destinations in China.

The loss of the signals could be the result of seasonal atmospheric conditions, which can cause problems in winter in parts of the world where their capture relies on satellites, rather than shore stations.

But such disruptions are usually short lived and signals should have been received from ships once they left the Persian Gulf, unless their transponders have been switched off.

BUSINESS DAY

OPEC Flakes OPEC will balance oil markets, but spare capacity limited: Nigerian official

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he Organization of the Petroleum Exporting Countries (OPEC) will act to balance the market after oil prices hit their highest in four years, but its options may be limited by available spare capacity, Mele Kyari, head of crude oil marketing at Nigeria’s state oil firm NNPC said.

“It is obvious that if you have high prices it will affect demand, so you have to do some market balance,” Kyari, who is also the Nigeria’s OPEC representative said. “OPEC will do everything to stabilize, to balance the market but I am sure you are also aware that there is a limit to what they can do. You must have the spare capacity,” Kyari said.

Oil prices surged on uncertainty over the global supply outlook following US sanctions on Iran’s oil exports and also as

Saudi Arabia and Russia ruled out any immediate boost to output.

Kyari said Nigeria planned to increase its crude oil, condensate output by 100,000 barrels per day by the end of the year, up from about 2 million bpd currently.

The country’s current crude oil production is about 1.7 million bpd, he said.In 2019, the African producer is aiming for an average output of 2.3 million bpd by boosting output from existing fields as well as starting new production from an ultra deepwater field, Kyari said.

Oil prices spike as OPEC, Trump go head-to-head

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PEC producers and President Donald Trump are both embracing a combative attitude to energy market uncertainty as traders speculate about the possibility of $100 a barrel before year-end.

Earlier, Trump urged OPEC to ramp up production levels to prevent further price rises ahead of the mid-term elections in November. The calls for the Middle-East dominated cartel to raise global production levels comes as the US prepares to impose targeted crude sanctions against Iran in around five weeks’ time.

Further to this, Washington is also asking buyers of Iranian oil to slash imports to zero to force Tehran to negotiate a new nuclear agreement.

OPEC and non-OPEC producers were initially expected to be reluctant to immediately respond to heightened pressure from the Trump administration, but Saudi Arabia is now expected to quietly add additional barrels of oil to the market over the next couple of months.

Saudi Arabia has claimed to have around 1.5 million barrels per day (bpd) that they can add to the market if required.

08 BUSINESS DAY WEST AFRICA ENERGY intelligence

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Wednesday 03 October 2018

talking points

In association with

Nigerians may pay more for PMS soon FRANK UZUEGBUNAM

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igerians should be gearing up to pay more for the premium motor spirit (PMS) otherwise known as petrol going by the market dynamics and the current uncertainty that accompany the international crude oil price.

Brent crude oil prices are at their highest point in four years at $81.19 per barrel while WTI prices increased to more than $72.05 but that may not be the ceiling yet.

Already Mercuria Energy Group Ltd has predicted $100 per barrel by end of the year. They are not the only one with that prediction. Total SA is also among a growing chorus that sees $100 oil on the horizon. But the French energy giant is not thrilled about it.

Patrick Pouyanne, Total Chief Executive Officer, sees supportive elements, such as looming sanctions on Iran and disruptions in Venezuela that are stripping supply from the market and pushing prices back into triple digits for the first time seen since 2014. But Trafigura Group expects crude oil prices to pass the $100 threshold in 2019.

Though Nigeria produces crude oil, it depends almost entirely on imported petroleum products. So far, rising international crude oil prices have not trickled down to the pumps at the retail outlets as government have been absorbing much of the price differentials for now.

Eventually, a stable average price of $80 per barrel and above will cause pain for government analysts say, especially at this time when funding its national budget has become a herculean task.

“If the trend of high crude oil prices is sustained for some time, we could see an upward review in pump prices of petroleum products in Nigeria, “said an analyst.

Ultimately, Nigeria may be losing the

gains of increases in the international oil prices as the federal government subsidy on fuel keeps rising with the rise of crude oil prices. As at May this year, subsidy on PMS hit N2.4 billion daily from N774 million in March, 2018 as a result of the high price of crude oil in the international market which has pushed up the landing cost of the refined product in the domestic markets for the finished product importers.

A Petroleum Products Pricing Regulatory Agency (PPPRA) report stated that without the government subsidy, the price of petrol could have been as high as N205 per litre in

the domestic market. According to PPPRA, the price of the commodity appreciated by 8.47 per cent from N189 per litre recorded in April 25, 2018 to N205 per litre as at May 16, 2018. The PPPRA report disclosed that between May 11 and May 16, 2018, oil prices continued to soar, stating that the average price for Brent Dated was $77.92 per barrel; Nigeria’s Bonny Light was $78.08 while West Texas Intermediate, WTI, was $60.27 per barrel. Price of petrol is still fixed at a maximum of N145 per litre. But we are seeing crude oil prices breach $80 at present.

Though the differential between the land-

ing cost and the fixed pump price has been described as “under-recovery” and not a subsidy, but whichever name it is given, the increasing burden may make government to balk.

Despite being an election year, the impending scenario has potential to plunge the country into another fuel crisis, unless the federal government keeps up with the bulging fuel subsidy regime or fully deregulate the downstream sector to allow the market forces of demand and supply to dictate prices. The latter might just be it and it may be sooner not latter.