BusinessDay 03 Sep 2019 by BusinessDay

FG, P&ID in talks to resolve $9.6bn judgment debt crises

... CSOs protest, say purported deal fraudulent, want judgment set aside … VP meets with Malami, others Onyinye nwachukwu, TOny ailemen & harrisOn edeh ndubuisi, abuja

here are indications that Nigeria has commenced the process for a negotiated settlement as government continues to explore ways out of the $9.6 billion

(about N3.5trn) judgment debt awarded last month by a UK court in favour of an Irish company - Process and Industrial Developments Limited (P&ID). This comes as the Coalition of Civil Society Groups on Monday in Abuja protested against the

judgment, describing it as a big fraud while calling on the British and Irish governments to ensure it is quickly set aside. BusinessDay s ources say the P&ID officials attended the meeting at the Presidential Villa on Monday and were seen leav-

Federal Government received reports of the team set up to advise it on the issue, where the P&ID officials were sighted. Recall that a UK court ruling that authorised an Irish

ing the Vice President Yemi Osinbajo’s office but refused to speak with the press. The Vice President also met behind closed doors with revenant government officials including Justice Minister, Abubakar Malami, and others, where

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NGUS NOV 27 2019 363.97

his could be a bit confusing, but the pattern of growth in Nigeria’s agricultural sector is defying logic. As the sector grows in one year, it declines the following year, and the cycle repeats itself. Even budgetary allocations over the last eight years have failed to give an indication of what correlation could be drawn in the sector’s abnormal growth pattern, an indication that the sector was run on a Trial and Error basis over at least eight years. Nigeria’s agricultural sector has not grown in the last two calendar years, following six years of haphazard growth, which is best described as a zigzag pattern. Growth in the sector has

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6M 0.85

0.09

10 y 0.08

20 y 0.00

14.57

14.37

14.25

14.56

NGUS FEB 26 2020 364.42

Inconsistent, declining growth marks Nigeria’s agric sector in 8yrs caleb OJewale

FGN BONDS

TreaSury BillS

NGUS SEP 30 2020 365.47

Flight delays worsen across Nigerian airports over aviation fuel scarcity iFeOma Okeke

omestic airlines have continued to record flight delays across Nigeria’s airports as a result of scarcity of Jet A1 (aviation fuel). This is also as the price of the

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Inside Multi-billion debt: AMCON’s moves against ABC Orjiako threatens $700m ANOH project P. 2

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Monday 03 02 september September 2019 Tuesday

DAY BUSINESS DAY BUSINESS

news How Nigeria can fix its struggles to realise gas potentials DIpO OLADeHINDe

L-R: Usman Ibrahim, chairman, infrastructure committee, Manufacturers Association of Nigeria (MAN); Ali S. Madugu, vice president, MAN; Ahmed Mansur, president, MAN; Hassan Adamu, guest of honour, and Francis Meshioye, chairman, Ikeja branch, MAN, during the opening ceremony of the 3-day Made in Nigeria Products Exhibition in Lagos, yesterday. Pic by Olawale Amoo

Multi-billion debt: AMCON’s moves against ABC Orjiako threatens $700m ANOH project …as prospective financiers comply with court directive By Our repOrters

he future of proposed Assa North and Ohaji South (ANOH) Greenfield gas and condensate development project is at risk following recent Federal High Court order for the Asset Management Corporation of Nigeria (AMCON) to take over the assets of ABC Orjiako, chairman of SEPLAT Petroleum Development Company Plc and that of his affiliate companies Shebah Exploration & Production Company Limited and Allenne Limited. The order followed an application by Mojisola Owoseni of Lexavier Partners, legal practitioners, legal counsel to AMCON in suit number FHC/ABJ/ CS/945/19 against ABC Orjiako, Shebah Exploration & Production Company Limited, with RC No 499348, and Allenne

Limited over an undisclosed multibillion debt. The ANOH gas processing project is managed by Anoh Gas Processing Company (AGPC), an incorporated Joint Venture (IJV) between SEPLAT and the Nigerian Gas Company. A final investment decision was taken by SEPLAT to invest in the ANOH project, as announced in the company’s 2018 full year results on March 6, 2019. SEPLAT with a duallisting on both the Nigerian and London Stock Exchanges had hosted capital markets event to attract investors ahead of the take-off of AHON project. The ANOH gas processing plant was to be the first stand-alone midstream joint venture business between the Nigerian National Petroleum Corporation (NNPC) and a company in the private sector. With the ANOH project, Se-

plat Petroleum Development Company Plc aims to be the largest supplier of gas to the domestic market. In line with ANOH project’s achievable funding timeline with flexibility, SEPLAT had lined up local banks which include but not limited to: UBA, Zenith, Stanbic, Fidelity, FCMB, First Bank, Access, Union, and Nova; while the international lenders include but not limited to: SCB, RMB, Standard Bank, BHGE, and Nedbank. “This is a major setback in the consideration,” a General Manager of one of the tiertwo lenders told BusinessDay in Lagos. The Export Credit Agencies SACE and CDP were also considering the opportunity alongside Italian nexus. SEPLAT was also in discussion with AFC/IFC. The Company had chosen a deferred payment structure embedded

into several supply contracts. The debt facility is expected to amortise over 5-7 years. The company appointed independent engineer, legal and market advisors to complete due diligence. Funds were targeted before the end 2019. SEPLAT had received letters of intent of up to $500million from international and local banks. Soft market sounding to date indicates significant local funding appetite of +$500 million. Orjiako has been battling with AMCON over an undisclosed multi-billion debt which the latter is yet to recover. The Federal High Court order, issued on August 15, was accompanied with the letters to the Managing Directors of 29 commercial and merchant banks in Nigeria where Orjiako and his allies have accounts.

•Continues online at www.businessday.ng

FG hikes Savings Bonds rates to hunt for more retail investors

… begins auction of September 2019 FGN Savings Bonds OLuWAseGuN OLAKOyeNIKAN

ollowing two consecutive months of abysmal subscription levels in the Federal Government of Nigeria (FGN) Savings Bonds on the back of reduced interest rates, the government has raised, for the first time in 4 months, its proposed rates for September 2019 Savings Bonds. This is in a move to boost retail participation at the Savings Bonds auction and to replicate elevated yields on short-tenored benchmark FGN Bonds and the Nigerian Treasury Bills in the secondary fixed- income market.

“When the treasury yield curve is being elevated, the DMO would have to adjust to be within market reality,” Nnamdi Olisaeloka, fixed income analyst at Lagos-based Zedcrest Capital Limited, said in a telephone interview. In a notice released by the Debt Management Office (DMO) on Monday, the FGN said it commenced an auction for the subscription of a two-year and three-year savings bonds for the month with interest rates at 11.15 percent and 12.15 percent per annum, respectively. These rates correspondingly compare with 10.301 percent and 11.301 percent offered on the bond

instruments in the previous month, and indicate the debt agency’s first rate hike on the securities since May 2019. “What we do with those bonds is pricing,” Patience Oniha, Director-General of DMO, had said while explaining the rationale behind the rate hike in an exclusive chat with BusinessDay in May. “We look at what our benchmark bonds are trading at FMDQ, and we apply that, so that’s essentially the basis for the increases.” Checks by BusinessDay reveal that allotments to successful bidders across the two-year and three-year tenors plunged by more than a quarter to N78.72 billion and N198.96 billion in July

2019 and rose marginally to N81.03 billion and N243.37 billion in August 2019, respectively. The average yield on short-dated benchmark bonds closed at 14.24 percent at the last trading session in August, while the average discount rate on benchmark Nigerian Treasury Bills stood at 12.96 percent. With the increased rates, though lower when compared with those at the secondary market, the DMO could attract more retail investors at the auction owing to the accessibility of the instruments.

•Continues online at www.businessday.ng

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nchaining Nigeria’s gas potentials of over 202Tcf of discovered natural gas reserves worth $462.5 billion will require collaboration between the Federal Government and private sector, Gas experts and stakeholders have said. The private sector has the ability to innovate, capacity for domestic gas market and willingness to make long-term commitments, they point out. For this to happen, there are several challenges relevant stakeholders must overcome in order to successfully develop growth projects in natural gas fields that are yet to be fully tapped. In the past, the entire laws and policies within the Nigerian petroleum sector were technically skewed in favour of oil, causing an unhealthy attention to it and neglect of gas resource. This is a narration that is beginning to change however, although relics of the old regime can still be seen. Ademuyiwa Adegun, an Abuja-based gas commercial advisor said the government should realise that it does not have to be a player in the gas sector. “Until government understands that it needs to be more of an enabler than a player, we will not move forward,” Adegun told BusinessDay. Charles Akinbobola, energy analyst at a Lagos-based energy firm Sofidam Capital, said the government needed to make sure there is ease in attracting capital and also resolve the issues surrounding regulation which deals with ease of entry, ability to set up and licenses. Other stakeholders believe the government sector have to be bold about solving challenges such as gas pricing, unreliable gas supply, poor gas infrastructure, power sector liquidity issue, ineffective regulation of the energy value chain, and concentration and control of gas resources within a limited set of license holders in the country. Bolaji Ogundare, an investor who runs NewCross Exploration and Production Limited, an indigenous oil and gas firm, said the bigger challenge he and his peers worry about when dealing with government was the issue of multiple taxations. “These are things that scare investors because there is no clarity of purpose, unlike other countries that are creating a more enabling environment,” Ogundare said. On the part of the private sector, Adeoluwa Eweje, an International Energy Solution Consultant, said private investors need to spread in-

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vestments along the gas value chain, for example creating a more robust pipeline network to improve reliability and security of supply. Bolaji Osunsanya, president of Nigeria Gas Association (NGA), told journalists at a conference that Nigeria’s gas sector had over $55 billion worth of investment opportunities, thus indicating great potentials for growth in the economy and in key areas such as exploration and production, processing, supply, and distribution. “Turning natural gas into a profit-making venture would require huge investments in infrastructure to address the five component areas of gas availability, gas affordability, deliverability, funding, and legal and regulatory framework,” Osunsanya said. Industry sources say there are lots of investment opportunities in Nigeria’s gas sector

ANALYSIS ranging from gas processing plants, fertilizers and petrochemicals, gas terminals, export-oriented projects, storage for LPG, gas flaring, and the virtual pipeline space. Layi Fatona, managing director of ND Western Limited, a private company with operations in Niger Delta said his company was the first in eliminating gas flaring from daily production. “The gas plant can process all the associated and nonassociated gas that we produce and put in a pipeline that goes to Bonny LNLG. Today, we are the only indigenous company that is delivering gas to Bonny LNLG,” Fatona told BusinessDay. Ademola Luqman, a gas expert with a Lagos-based advisory firm said although the government has to do more in creating an enabling however there is need for more collaboration between the private and public sectors in order to maximize Nigeria’s gas potentials just like Mozambique. Despite struggles in full utilization of Nigeria’s gas reserves some big-ticket projects are emerging in the country, thanks to collaboration between private sector and government. Seplat Petroleum’s planned $700million gas joint venture with the state-owned Nigeria Gas Company in Imo state is emblematic of what the government would like to happen more often – a high-impact project run by a home-grown company. The project, called Assa North-Ohaji South plant, will process wet gas from Niger Delta crude-producing blocks 21 and 53. It is slated to have a capacity of 300mn cubic feet a day (f3/d) with the first supply due in 2021.

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news NAFDAC’s e-payment on trade portal for e-Form ‘M’ begins September 9 – CBN HOPE MOSES-ASHIKE

entral Bank of Nigeria (CBN) has announced that the National Agency for Food and Drug Administration and Control’s (NAFDAC) e-permit on the Nigeria Trade Portal for processing Form ‘M’ will commence September 9, 2019. The CBN stated this in a circular to authorised dealers, the Nigeria Customs Service and the general public, dated August 30, and signed by Ahmed Umar, director, trade and exchange department. The circular titled ‘Integration of NAFDC e-Permit with e-Form ‘M’ on the Nigerian Trade Portal’, said NAFDAC had integrated its e-Permit for NAFDAC regulated products with e-Form M on the Nigeria Trade Portal for products with nonoverlapping HS codes with the Standards Organisation of Nigeria (SON). The regulator advised all concerned to ensure compliance.

Seplat allays investors’ fears over court judgment on chairman’s assets Olusola Bello

eplat has allayed the fears of investors over Federal High Court, Abuja’s judgment against Shebah Exploration & Production Company Limited, Allene Limited, and ABC Orjiako, who is also the chairman of the Board of Directors of Seplat, who are the defendants. The court granted Asset Management Corporation of Nigeria (AMCON)) who is the plaintiff/applicant to foreclose on the assets of the defendants. Seplat in a letter to the Ni-

gerian Stock Exchange (NSE) weekend said: “As stated in the NSE announcement dated 17th October 2018 of the same subject, Seplat is not a party to the litigation. The Company will continue to monitor the progress of this suit and would issue further communication on the matter as appropriate”. It said the announcement was being made by the Company in accordance with Rule 17.10, Rulebook of the NSE, 2015 (Issuers’ Rule). The Federal High Court Abuja, presided by Justice Taiwo O. Taiwo weekend granted the AMCON’s application to take over the assets of ABC

Orjiako. The order followed an application by Mojisola Owoseni of Lexavier Partners, legal practitioners, legal counsel to AMCON in suit number FHC/ ABJ/CS/945/19 against ABC Orjiako, Shebah Exploration & Production Company Limited, with RC No 499348, and Allenne Limited. In the application, AMCON asked the court to grant Francis Chuka, a Senior Advocate of Nigeria, right to exercise its function as Receiver/ Manager of Orjiako’s assets in Nigeria and abroad, including Shebah Exploration & Production Company Limited.

AMCON had on July 30, 2019 appointed Chuka as Receiver/Manager with the mandate to take possession of and preserve all its assets and undertakings by Orjiako. While granting AMCON’s application, the FCT Federal High Court presided by Justice Taiwo Taiwo, gave the Receiver/Manager judicial protection to take over and manage Shebah Exploration & Production Company Limited till the full determination of the case. The assets and undertakings include Orjiako personal properties at Nos. 10C and

Heritage Cinemas berths at Abule-Egba

eritage Cinemas has unveiled its Cineplex at the densely populated area of Abule-Egba and environs. Heritage Cinemas is a flagship Out-of-Home Entertainment product launched by Micromedia Marketing Limited, producer of award-winning drama s er ies, Taste of Love, Casino and Oghenekome. According to MD/CEO, Shileola Ibironke, Heritage Cinemas is positioned to offer the best of International and Nigerian Movies in a luxurious and stylish environment. Our core focus is to provide similar cinematic experiences, offered in highbrow and commercial nerve centres of Lagos, within mediumincome neighbourhoods with Abule-Egba been a flagship centre. The populace in AbuleEgba and its environs will be offered a range of highly anticipated blockbusters, food concession, entertainment lounge, game arcades, eGaming Arena amongst other offerings to be unveiled later. www.businessday.ng

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25A Lugard Avenue, Ikoyi, Lagos; an oil vessel, MT Trinity Spirit, used as a floating, Production, Storage, and Offloading (FPSO) facility in Ukpokiti Oil Field belonging to Shebah Exploration & Production Company Limited. Also included are all movable and immovable assets of Shebah Exploration & Production Company Limited in and outside Nigeria, including the oil production facilities and other assets belonging to Shebah Exploration & Production Company Limited and located in and around Ukpokiti Oil Field.

Tuesday 03 September 2019

BUSINESS DAY

news Ogun mulls partnership with state-based IPPs to feed industries, residences ...locates investment promotion desk to Agbara industrial hub RAZAQ AYINLA, Abeokuta

oing by increasing demand for energy, especially by manufacturing industries, public utilities, hotels and residences in the state, Governor Dapo Abiodun of Ogun State is finalising arrangements to partner state-based Independent Power Plants (IPPs) for uninterrupted power supply to various industrial hubs across the state. Consequently, the governor is making effort to establish Ogun State Energy and Electricity Board, which will coordinate and integrate all IPPs operating in the state as part of move to offer embedded power solutions that serve all the areas where energy is needed. Speaking at the Ogun State Governor’s Dialogue with Business Executives in Abeokuta, the state capital recently, Governor Abiodun said the state government had resolved to work around the enablers and investment promotion me chanisms

such as energy, security, roads, among others, to improve ease of doing business in the state. The governor, who was responding to questions raised by scores of investors at the Governor’s Dialogue with Business Executives, noted that the state would create investment promotion agency that offers a one-shop-stop solution and services for all existing and prospective investors in the state with a view to resolving all issues and challenges that affect production, processing and sales of finished goods as well as economy generally. He however ordered the relocation of business enquiry and complaint desk as well as headquarters of proposed Ogun State Investment Promotion Agency to the largest industrial hub in the state - the Agbara Industrial Estate for easier access by entrepreneurs and investors to government, adding that: “Ogun State Investment Promotion Agency will be located within OPIC in Agbara, that will save you

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stress of coming down to Abeokuta. “We are also establishing Ogun State Energy and Electricity Board which will do energy audit and ascertain where and how energy will be distributed. We are looking at possible partnership with the independent power plants. There must be a public private sector partnership in that regard if we must achieve tangible energy supplies for our manufacturing industries, public utilities and residential areas.” Responding to Governor Dapo Abiodun’s proposal on possible partnership with independent power plants in the state, a leading operator of independent power plant in the state Viathan Engineering, that operates Lisabi Power Plant and Compressed Natural Gas Plant under its sister company - Gasco Marine Limited at Onijanganjangan area of Abeokuta on LagosAbeokuta expressway, has offered to establish partnership with Ogun state government on power supply to needed areas.

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Human capital and future of work in Africa (3) STRATEGY & POLICY

MA JOHNSON

lobally, the fourth industrial revolution is already happening and accelerating. Artificial Intelligence (AI) which is one of the components of the fourth industrial revolution is now changing industries, products, and core capabilities. If we embrace AI, it has the capacity to enhance our lives, and make us smarter in the way we do things. AI has promise and risk in both the military and civil capacities. On the military side, AI holds promise for every military function, especially for intelligence. This is due to availability of large data sets, an intelligent workforce, the proliferation and integration of technology, and respectable processes widely understood by a diverse workforce. Currently, there is a saying in developed countries that, “The future of military intelligence is artificial.” Why? It is because AI would increase speed, efficiency and effectiveness of each phase in the intelligence cycle to better support military commanders in land, sea and air operations. It is predicted that AI will profoundly influence sea power in the future. It would be a game changer for world navies, doctrine, policy and operations. More importantly, it would provide areas in which naval person-

nel and their civilian counterparts in the maritime industry are expected to become knowledgeable and proficient. In spite of opportunities and risks associated with AI, China and other advanced nations are discussing it. Are Africans prepared to be actively involved in this industrial revolution? If Africans are to be part of the fourth industrial revolution, leadership has a significant role to play. Without visionary leaders, no African country can win the technological race. Some analysts say that societies get the leaders they deserve. This writer agrees with this philosophy, and hence the emphasis on the quality of leadership in Africa. The leadership crisis in Africa crisis is legendary despite an abundance of natural and mineral resources. Empirical evidence has shown that the probability of getting good leaders will be higher in societies where the people are more gifted than one in which millions are illiterates and dropouts from schools. What is however, disturbing is that Africa cannot boast of a handful of countries at the threshold of economic development in the 21st century. This is sad. The challenges many African nations face today are due to consistently inconsistent economic policies. The tragedy is that whilst African countries are ceaselessly preoccupied in petty religious and tribal wars that are of no strategic importance, the survival of the black people with full rights and respect in a knowledge-based world is ignored by most of their leaders. The result is that Africa is suffering from acute economic stagnation. This is one of the reasons why analysts say African countries in particular, and the black people in general, are marginalised in global economic, socio-political and cultural affairs. Af-

rican leaders are actually responsible for the marginalisation of Africans in world affairs. It is not an error that none of the 54 African countries is a permanent member of the United Nations (UN) Security Council. And no African country has staged the Olympics. Since 2010 that South Africa organized and hosted the World Cup, no other African country has been given the opportunity to host this tournament. If China was not technologically developed, it would not have been admitted as a permanent member of the UN Security Council soon after launching its first nuclear device in 1964. Also, India would not have gained the respect of the West but for her successful nuclear blast in 1974. It is regrettable that African countries have not demonstrated that they are ready in all respect for industrialisation and technological innovation. It all boils down to the quality of leaders. It is not a matter of colour. Far from it. The issue is beyond racism. That Japan and the Asian Tigers have used success in technological and economic developments to win the war against racism is now history. Africans must not blame anyone for their economic and technological backwardness. As Africans, we need to change our attitude and take responsibility for our future. In any case, a third of workers globally are worried about the future and their jobs due to automation, according to studies. This calls for a mature conversation among African countries about the future of their citizens. AI and automation will affect every aspect of business and its people. So our leaders must thoroughly understand the changing technological landscape. We must continue to nurture future generations and re-skill them for

‘

If Africans are to be part of the fourth industrial revolution, leadership has a significant role to play. Without visionary leaders, no African country can win the technological race

the fourth industrial revolution. Nigeria has no choice but to focus more on its human capital. Why? Human capital will make Nigeria thrive in industries which require greater reliance on micro-level precision, exactness and excellence. These are industries that are fundamental to both technological and economic development. It is now overdue to inculcate in Nigerians a strong science and technological culture while promoting sound education system, encouraging maintenance culture, and re-orienting the society into recognising outstanding individuals who have achieved excellence. This is against the prevailing unethical adoration of moneybags whose sources of wealth are often dubious. Economic development will help position Africa generally, and Nigeria in particular, in the international community so that they can start playing an active role in global economic, social, political, cultural, intellectual and technological affairs. Perhaps more importantly, Africans will become responsible for shaping and directing their own evolution while playing an important role in the progress of the global community. This writer therefore suggests debates be organised at regional, subregional and national levels on ways and means to build human capital within the continent of Africa. The main objective is to enable Africans accept these new technologies, build relevant skills, revamp old processes and prepare for the new revolution. The end of it all, according to Aristotle, is not knowing but doing. Thank you! (Concluded)

Johnson is an author and a retired naval engineer who has passion for African development and good governance

Insure football clubs against the threat of insolvency

he expulsion of Bury FC from the English Football League is a bitter pill for the fans of a club that was founded in 1885 and has played in the league since 1894. A similar fate faced Bolton Wanderers which this week was given a 14-day deadline to solve the same problem Bury had — to show that it is able to meet its financial commitments, not least among them player wages. Many people blame incompetence and dodgy business practice for these crises, but my research on football club insolvencies in England, France and Germany shows that its causes lie elsewhere. Insolvency has been a problem since the earliest days of professional football. In 1893, Middlesbrough Ironopolis reached the quarter-finals of the FA Cup only to find itself wound up in 1894. Financial failures occurred regularly during the Depression, and over the past 40 years, there have been about 70 cases of legal proceedings for insolvency in the top four English divisions. It is a popular misconception that such things are rare in the French and German league systems, where clubs have long been subject to financial regulation. In fact, insolvency is common in those leagues as well. Between 1992 and 2014, there were 45 insolvencies in the top three tiers in England, 40 in France and 30 in Germany. In the top five tiers, there were 97 in England and 106 in Germany over

the same period. Clearly, there is a lot of insolvency in football. The most likely cause is not incompetence or malice, though these traits are not in short supply — rather, it is the intersection of bad luck and the promotion and relegation system. Generally, the finances of professional football clubs are highly predictable. Achieving a better league performance requires increased spending on players, and revenues increase with league performance. Relegation to a lower division is a financial disaster: revenues fall quickly, while salary costs, tied to player contracts, can only adjust slowly. Clubs that enter insolvency have, on average, dropped 15 league ranking places over the previous five seasons. That is typically enough to be relegated — and indeed, Bolton, who played in the Premier League in 2012, were relegated to the third tier in April this year. All these relationships can be estimated using regression analysis, a standard statistical method. In any estimation, there is a systematic component, that which can be explained, and that which we cannot explain: the residual. Residuals are by definition random. A club will benefit from a positive residual in some seasons — perhaps an ageing striker has an unexpected goalscoring streak — and suffer from a negative residual in others — the striker breaks his leg. Relegation is, more often than not, a www.businessday.ng

product of persistent negative residuals: bad luck. The good news is that the clubs usually survive. All English clubs in the top four tiers that have gone into insolvency since 1980s have been resurrected in one form or another. Nonetheless, it might be easier on everybody involved if we could avoid this costly and upsetting process altogether. But how? Abolishing promotion and relegation is a non-starter, since fans consider it to be one of the most attractive aspects of the game. European football’s governing body, Uefa, introduced a regulatory system called financial fair play in 2011. This requires clubs to limit spending to their own resources, which, Uefa had hoped, would prevent further insolvencies. But precisely because the system requires each club to stand on its own two feet financially, it is not good for dealing with the kinds of risk created by promotion and relegation. Once we accept that insolvency is predominantly a product of bad luck rather than mismanagement, the solution becomes obvious. After all, we already know how to guard against bad luck in other walks of life: by buying insurance. If professional football clubs were required to pay just half a per cent of revenues into an insurance fund, they would generate about £30m a year in England, more than enough to finance the restructuring of

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STEFAN SZYMANSKI

Bury and Bolton. Whenever insurance arises as a possible solution to a problem of risk, sceptics raise the spectre of moral hazard. Wouldn’t insurance lead clubs to overspend deliberately, knowing they will be bailed out? Maybe, but this a poor excuse for not having any insurance at all. Insurance policies need to be designed with safeguards that militate against cheating. An elegant way to address this concern is to appoint an independent body to oversee the restructuring, before handing over control to a registered supporter trust. Over the past 30 years, these trusts have shown significant commitment to preserving the clubs they love, particularly when hit by insolvency. Rather than looking for scapegoats every time disaster strikes, we should use our collective strength to draw its sting.

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Climate change and conflict in West Africa (1) RAFIQ RAJI

y column this week is the first part of my recent paper for the NTU-SBF Centre for African Studies at Nanyang Business School in Singapore, where I am a research fellow. The references are in the original article. Climate change is the long-term modification of the Earth’s climate resulting from atmospheric changes and interactions among the atmosphere and other geological, chemical, biological, and spatial factors within the Earth’s powerful energy system. Climate scientists who collect and analyse information about our planet and climate on a global scale report an accelerating global rise in average temperature from the late 19th century to the present, nearing one degree Celsius. Leading scientists view this temperature change, accompanied by sea ice losses, sea level rises, longer, more intense heat waves and other increases in extreme weather events, as robust evidence of climate change. West Africa is particularly vulnerable due to its high climate variability, heavy reliance on rain-fed agriculture and limited economic and institutional capacity to offset the consequent scarcity and conflict effects. This paper identifies evidence linking climate change and conflict, traces the impact on the population of the West African region, and describes a case, set in West Africa, of conflicts arising from climate change. Finally, the author proposes a model to guide stakeholder interven-

tions intended to minimize the extent of such conflicts. Evidence linking climate change and conflict Formal evidence of causal links between climate change and violent conflict is mixed. The dominant view is that climate change potentially contributes to political instability and resource insecurity across the world, and thus poses a threat to peace (see Figure 1). However, critics argue there is no evidence of a direct relationship between climate change and violent conflict. They acknowledge that in some circumstances, and in association with other factors, climate change can induce or worsen conflict – for example among pastoralists and farmers competing for land and water. The circumstances cited by researchers include deteriorating livelihoods, increased migration, changes in the movement patterns of pastoralists, and opportunism by merchants of violence and the political and business elites. Figure 1: Schematic representation of relationships between climate change & conflict [Adapted from Brown, et al (2007). Climate change as the ‘new’ security threat: implications for Africa. International Affairs 83: 6 (2007) 1141–1154] The arrows in Figure 1 trace the path from climate change to conflict, while the letters mark potential opportunities for intervention. Reducing the impact of climate change on resource scarcity (A) is a task well beyond the scope of even a large individual nation. At best, nations within a region may be able to cooperate to minimize the impact of resource competition (B) on market prices, thus reducing resource and political conflicts. Examples of institutional interventions at the resource scarcity stage include water rationing, more efficient irrigation methods; pasture management, and natural resource rejuvenation and protection. Interventions in markets, such as resource rationing (C) or price controls are often unpopular,

and the resulting conflict may result in political intervention (D). The consequences of climate change vary with the context. As climate change impacts the world’s physical landscape, it alters our geopolitical structure. For example, drought will increase competition for a diminishing amount of fertile land. Combined with other market forces, scarcity leads to price rises that generate conflict among supply and demand resources, which may result in resource and political conflict (E), especially when prices rise faster than incomes. Rising sea levels will inevitably force coastal dwellers to migrate inland (F), further adding pressure to what are likely to be increasingly scarce land and water resources. When social and political institutions are strong, they can address these conflicts through community leaders, ombudsmen, and other dispute resolution mechanisms. When they are weak, institutional breakdown opens the door to violent conflict (G). One 2018 Stockholm International Peace Research Institute report finds “there is context-specific evidence that climate change can have an effect on the causes and dynamics of violent conflict in the region when: (a) it leads to a deterioration in people’s livelihoods; (b) it influences the tactical considerations of armed groups; (c) elites use it to exploit social vulnerabilities and resources; and (d) it displaces people and increases levels of migration.” Several studies find evidence of strong links between climate shocks and conflict. One reports that the risk of armed conflict increases when water is scarce. Another researcher finds that a standard deviation increase in temperature raises the risk of interpersonal conflict by 2.4 percent and intergroup conflict by 11.3 percent. Severe drought and water variability owing to climate change are found to cause conflict among farmers and pastoralists in several African countries. Across Africa, researchers report

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Formal evidence of causal links between climate change and violent conflict is mixed. The dominant view is that climate change potentially contributes to political instability and resource insecurity across the world

a strong linear relationship between temperature and civil war, with a 1 degree Celsius increase raising the risk of civil war by 4.5 percent within a one year span. Hsiang et al. contend that El Niño events bring hotter and drier weather and therefore serve as a model of future climate change. Examining the tropics between 1950 and 2001, they found that civil conflicts were twice as likely to commence in El Niño years as in cooler, wetter La Niña years. They estimate that El Niño may have contributed to 21 percent of civil conflicts during this period. Other research links the recent conflict in Darfur to climate change, exacerbating pre-existing tensions between farming villagers and pastoralists as rainfall and vegetation declined, and suggests that the government exploited these tensions to foment conflict and bolster its support among specific ethnic groups it favoured. This conflict was marked by violence directed at civilians, with reports of poisoned wells. A recent study, authoritative in light of the pedigree of its unprecedented number of authors for a scholarly article, concludes that “climate has affected organized armed conflict within countries” and “intensifying climate change is estimated to increase future risks of conflict.” Consistent with other findings, the authors also conclude that low socioeconomic development, intergroup inequality, and weak states worsen already difficult situations. The research cited above links the environmental impacts of climate change to their impacts on people, identifies the knock-on effects of climate change on the population, and identifies the propensity for these effects to act as sources of stress that may lead to conflict, especially where institutional weaknesses come into play. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Government by kneejerk

n October 2017, The Guardian, a Nigerian newspaper, did a TV documentary on drug abuse, featuring codeine, tramadol and cannabis. To my knowledge, there was, from Nigeria’s establishment, only lip service. No other reaction. A few months later, the BBC published a report on the same thing, and promptly, the Nigerian government banned codeine. On 20 August this year, without warning, the government closed Nigeria’s busiest border posts: Seme and Idiroko, a few days after a shipment of codeine and a similar drug, tramadol, were found in a warehouse in Lagos. For a week, it was believed that the border closures were as a result of that seizure, and then on 28 August, President Buhari told President Patrice Talon of Benin Republic something to the effect that the border was closed because of rice smuggling. On the same day, Nigeria, on the whims of a newly installed minister, Rauf Aregbesola, unilaterally reduced the prices that our consulates in the US charge American citizens for visa applications. The day before, the Americans had raised the prices for visa applications by Nigerians, in retaliation for what they considered to be unreasonably high prices for Nigerian visas. According to the Americans, they had been trying to get the Nigeria to be reasonable for 18 months, and there was no response. These three incidents provide a window into how the Nigerian system, and the government,

works. They work only to serve narrow interests, their reactions are kneejerk, without any long term thinking, and they are very disruptive. This does not augur well for the economy. Start with the closure of the Benin border. Why a seizure of banned goods should result in the closure of the two busiest border crossings on the African continent is a thing of wonder. It is in character with how the Nigerian law enforcement thinks. In most cases, they believe being disruptive as possible creates the impression of doing their jobs, regardless of the economic losses and social chaos such disruptions may create. In speaking with President Talon, President Buhari confirmed what analysts had feared – that the order to shut the borders came from his office, and just like the recent instruction to the CBN to restrict forex for food imports, this order came without a proper assessment of possible consequences. For instance, the African Continental Free Trade Agreement (AfCFTA) which the Buhari administration only recently, and with great reluctance assented to, calls for the opening of borders, and free movement of goods, persons, and investments across the continent. It is clear that the federal government did not consider the impression, of its kneejerk decision to shut the border, on foreign investors’ about its willingness to adhere to the terms of the AfCFTA.

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Consider the visa palaver. Was anyone surprised when on Friday the US did not immediately reduce their newly announced visa fees just because we could not be bothered to go through due process to reduce ours? The Americans tried to get our government to respond to this issue for several months, to no avail. The convenient appearance of a “Committee Report” requesting the reduction in the visa fees payable by Americans right when the egg appeared on the government’s face, is merely an attempt to save face, and present some semblance of guided policy. For a country desperate to appear open to foreign investors, the reduced visa fee of $160 is actually tantamount to price gouging. And is just another indicator of the rent-seeking tendencies of the government. It could take the US several months to reciprocate with a reduction in visa fees; such policy changes take time and have to be carefully studied. In fact, given the prominent anti-immigrant rhetoric of the present US government, and the fact that the Trump administration is also focused on reducing legal immigration from countries and regions it dislikes, the new high visa fees could well be seen as a valid deterrent to visa applicants, and might be here to stay. This arbitrary behaviour is one of the reasons why the foreign direct investments Nigeria desperately needs loathe parking their money here.

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CHETA NWANZE The risk, that someone will wake up and change the rules in the middle of the game without a care as to the results of their actions, is too great. As has become quite clear over the tenure of this administration, decision-makers do not consider the views of prospective foreign investors when making and implementing policy. The capital flight experienced during this administration, and the consequent desperate bids by the Central Bank of Nigeria to shore up the value of the Naira, only further buttress this point. Foreign investors do not see Nigeria as a viable long-term investment destination, and a big reason for this is that the government is unpredictable. Some might want to counter this by saying that the US also has an unpredictable president in Donald Trump, but the US has the sort of long history of stability and investorNwanze is Lead Partner and Head of Research at SBM Intelligence

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Tuesday 03 September 2019

BUSINESS DAY

EDITORIAL PUBLISHER/CEO

Frank Aigbogun EDITOR Patrick Atuanya DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua

Confronting xenophobia and the danger of single narrative

he xenophobic attacks that black South Africans unleash on foreigners, especially fellow blacks, have assumed such a pathological dimension that must be addressed now, or the country risks being isolated, this time by other African nations and for good. The reasons for such attacks are so flippant that it is so clear there is no justification for them. For black South Africans, the fear of or hatred for foreigners has a historical context. It could be viewed as a hangover from the repressive Apartheid era. The attacks are rooted in the belief that foreigners are a threat to the wellbeing of the natives. Foreigners, in this case blacks, they reason, take their jobs and business opportunities. There are other allegations bothering on human relations where the visitors are seen as threats to

family ties. These feelings of insecurity fueling the attacks are in a way the direct consequences the continuing social and economic inequality that still characterise the South African society. This, coupled with a formal economy that excludes many blacks, heightens their distaste of black migrants. While the attacks affect virtually all black visitors to the country, Nigerians seem to be specially targeted. They are branded as criminals involved in illicit trade, and trafficking in fake goods. Ahmed Lawan, Nigeria’s Senate President, on July 15 revealed that about 118 Nigerians have been killed in South Africa since xenophobic attacks started –13 were at the hands of South African police. No country can condone this colossal loss of is nationals especially in a nation Nigeria sacrificed so much for. Despite the passage of time, the contribution of Nigeria to the

liberation of South Africa from the jaws of apartheid cannot wane or be trivialised. Irked by these killings, Nigerian students recently issued an ultimatum to South African businesses operating in Nigeria, especially MTN, to fold up and go. MTN is the biggest telecom operation in Nigeria It does not have come to this. The time has come therefore for a change in the narrative. It is this unchanging version of the people’s story that has sustained the violence which is now accepted as a way of life for black South Africans. They must let South Africa’s dark past go for good and chart a new path and narrative to drive their future. The story that blacks are their mortal enemies must change. Part of the change process must be a conscious effort on the part of the South African government to initiate moves to get the blacks integrated into the economy. Such a big

economy on the continent must gradually begin to absorb those on the lower rungs of society who happen to be largely blacks. There is however hope. South African President, Cyril Ramaphosa, this week met with President Muhammadu Buhari on the sidelines of the seventh Tokyo International Conference for Africa Development in Japan, and both leaders had a discussion on the issue. Ramaphosa announced that his country’s justice system had already taken up the matter, declaring that he was not in support of the killings, which he said had no justifiable reasons. This is significant, coming from the number one citizen of the country. Nigerians look forward to concrete actions being taken in cases where justice is clearly seen not to have been done. This promises to be the beginning of an obviously long walk to justice.

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Tuesday 03 September 2019

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US tariff wars penalise Chinese development and African futures

DAN STEINBOCK

n the coming months, some of the worst collateral damage of US tariff wars will occur in sub-Saharan Africa. The adverse impact is likely to be aggravated by US protectionism, which shuns economic integration in Africa. After US tariff wars undermined the global recovery momentum in 2018, the World Bank projected in June that the world economy would only expand by 2.6 percent. The International Monetary Fund (IMF) has affirmed the trade wars could wipe $455 billion off global GDP in 2020. The adverse impact on sub-Saharan Africa is reflected by downgraded projections. In April, the World Bank cut the 2019 growth forecast for the region to 2.8 percent from 3.3 percent. Until the commodity price slump of 2015, Africa enjoyed a decade of rapid growth. The recovery of those growth levels could take long, due to the decline in industrial production and particularly as the US-Sino trade war is taking its toll. Indeed, the collateral damage in Africa is about to begin. Trade wars’ impact on Africa Recently, Akinwumi Adesina, president of the African Development Bank (AfDB) warned that the US-China trade war and uncertainty over Brexit pose risks to Africa’s economic prospects that are “increasing by the day. “Such prospects are also fueled by a recession in Germany. Indirectly, the diminished prospects are reflected by three major economies – Nigeria, South Africa and Angola – that make up about 60 percent of sub-Saharan Africa’s annual economic output. At the moment, all are coping with various challenges, curbing their contribution to the growth momentum.

Although Africa is not the direct target of the US-Sino trade war, US tariffs have typically heralded plunging commodity prices, local currencies and major equity exchanges. Earlier in the year, AfDB warned that the trade conflicts could result in a 2.5 percent reduction in the GDP of resource-intensive African countries and 1.0 percent reduction for oil exporters in the next two years. As US tariffs and diminishing global prospects slow down Chinese production and thus reduce Beijing’s demand for raw materials from Africa, the prospect of slowing Chinese demand could further reduce annual exports from Africa. The largest regional exporters to China – South Africa and Angola, but also the Republic of Congo, Democratic Republic of Congo, Ghana and Gabon, and Nigeria which rely on China’s need for resources for a significant chunk of their exports – are said to be vulnerable. And so are other African countries with more than 40 percent of their exports going to China, such as South Sudan, Eritrea, Gambia, Guinea and Zimbabwe. Conversely, Africa’s biggest exporters to the US – particularly Angola and South Africa, the Republic of Congo and Democratic Republic of Congo, Gabon and Ghana, Guinea and Nigeria which are dependent on US absorption capacity – remain particularly vulnerable. Recently, international spotlight has lingered on those African countries that rely on Chinese trade and investment. The highlight should be extended to those countries that depend on US trade and investment, due to the dramatic shifts in US economic presence in Africa in the past two to three decades. Disruptive changes in US and Chinese trade and FDI Since December 2018, the Trump administration’s new “Africa strategy” has stressed three priorities: advancing US trade across the region, combating terrorism and aid reduction in the name of efficiency. The first tenet is reflected by the “Prosper Africa” initiative, whose stated goal is to substantially increase trade and investment between the U.S.

and Africa. Yet, to understand the real economic role of the US and China in Africa, it is instructive to take a long view. Let’s start with trade. Between the end of the Cold War and the onset of the Bush era, US exports to and imports from Africa were less than $1 billion annually. Africa was non-existent to Washington. In the same time period, Chinese exports to Africa more than quintupled to $6 billion, whereas imports from Africa increased even faster, almost ten-fold to over $4 billion. Prior to global crisis, U.S. trade soared to $100 billion, falling only $2 billion behind that of China. While Chinese trade with Africa was balanced, U.S. trade wasn’t. America imported 2.5 times more from Africa than it exported to Africa. Until the end of the commodity super-cycle and the collapse of energy prices, Chinese trade soared to more than $200 billion in 2015. After the subsequent plunge, it returned to $155 billion in 2017. Meanwhile, US trade plunged to $50 billion and remains only $55 billion annually. China’s trade surplus with Africa is about $35 billion, whereas US trade deficit with Africa is almost $13 billion. The former has led to some discontent in Africa; the latter is unacceptable to Trump’s trade hawks. What about the foreign direct investment (FDI) flows? US FDI into Africa peaked at more than $9 billion in 2009. At the same time, Chinese FDI into Africa soared from less than $0.1 billion to $5.5 billion annually. Following the global crisis, the Obama administration pledged greater investments in Africa. In reality, the era saw a dramatic fall of US FDI into Africa, as it plunged to a negative of $2 billion in 2016. Concurrently, Chinese investment in Africa took a hit as well, decreasing to $2.5 billion in 2012. In 2017, US investment rose to only $0.3 billion; while Chinese FDI exceeded $4.1 billion annually. In the 2018 Forum on China Africa Cooperation (FOCAC), President Xi Jinping pledged $60 billion to the continent in loans, grants, and development financing. That’s when the Trump administration developed its “new Africa

strategy,” which is constrained by trade protectionism and longer-standing U.S. geopolitical goals.

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US exports to and imports from Africa were less than $1 billion annually. Africa was non-existent to Washington. In the same time period, Chinese exports to Africa more than quintupled to $6 billion

US and Chinese presence in Africa Initially, the Bush administration did push for Africa’s economic self-reliance, but its “war on terror” offset that goal. The Obama administration’s rhetoric failed to disguise the dramatic collapse of US trade and investment in Africa in the mid-2010s. In 2014, the US pledged to invest $14 billion in Africa over the next decade. With the most protectionist administration since the 1930s, this may prove unlikely. The Trump administration’s penchant for trade wars shuns efforts to contain collateral damage in Africa. Remedies simply aren’t viable as long as protectionism remains the White House’s primary weapon. Moreover, the $252 million funding cuts to Ebola response efforts in early 2018 illustrate the gap between the stated goals and effective actions. Finally, expectations should also be cautioned by the Trump administration’s racial bias. For all practical purposes, the US Africa strategy is largely dictated by the concern that China has become Africa’s largest economic partner. That’s why Washington misrepresents China’s Belt and Road Initiative (BRI) in Africa and elsewhere. In the postwar era, US-led globalization did not occur without significant mistakes. In the early 21st century, the BRI is going through its own birth pains. But unlike past globalization, the BRI seeks to boost industrialization in emerging and developing countries that is, countries that have been largely ignored by the advanced West. In the final analysis, economic development is a win-win game; geopolitics isn’t. Africa is a case in point. Dr. Dan Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup.net/

US and China are weaponising global trade networks

ith the end of the cold war, it looked as if globalisation had tamed power politics and heralded a more peaceful world. The networks that distributed money, information and production seemed to resist state control. Economic conflict appeared irrational: attacking a rival would hurt your economy as well. That’s not quite how it turned out, as US President Donald Trump’s recent tweets about forcing American businesses to leave China make clear. We are at the beginning of a new “quiet war”, where the global networks that were supposed to tie countries together have become a distributed and complex battlefield. Great powers such as the US and China are wielding supply chains as weapons in their grand disputes, while smaller states such as Japan and South Korea copy their tactics. Businesses like FedEx, Huawei and Samsung are pawns on the battlefield or collateral damage. What went wrong? States woke up and realised that global networks could be weaponised. The connections are not flat and open-ended, instead they have become more centralised, providing

chokepoints that states could exploit. Key nodes, such as financial clearing systems, dominant market players and suppliers of crucial components, created critical vulnerabilities. Google’s Android operating system, Huawei’s 5G technology or JPMorgan Chase’s dollar-clearing department could be used by powerful states to coerce adversaries or cow insufficiently co-operative allies. The US began converting networks into tools of domination after the September 11 terror attacks. The internet became a distributed system of surveillance, while the US press-ganged global finance into service. International banks are exposed to US regulators because they clear dollar transactions through US institutions. The US turned this vulnerability into the cornerstone of a vast system of secondary sanctions, implemented by foreign banks. This allowed the US administration, often with Europe’s support, to isolate Iran and North Korea, among others. The Trump administration is no longer limiting the war to rogue states. It is trying to undermine China’s access to global networks. But US over-reach is leading to countermeasures, as targeted states begin

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to respond. As the US has sought to cut Huawei off from American components, China has ramped up the development of its own semiconductor industry to ensure that it cannot be held to ransom. Meanwhile Europeans have created a special financial arrangement to insulate trade with Iran. Russia has, perhaps impishly, asked to use the arrangement and China is trying to build its own global financial infrastructure. Former Treasury secretary Jacob Lew has warned that “the plumbing is being built and tested to work around the United States”. Some states are moving to offence. For decades, China has used restricted market access to punish countries for inconvenient policies. Now it is threatening retaliation against US firms such as FedEx, and contemplating designating HSBC as an “unreliable entity” because it provided information that has been used against Huawei. Even Europe is beginning to think more aggressively; influential policy intellectuals have started talking about how Europe could build its own capacities to retaliate against US sanctions unilateralism. Meanwhile Japan has restricted exports of specialised chemicals critical to Samsung’s

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ABRAHAM NEWMAN

supply chain in order to extract concessions from South Korea in a dispute over wartime forced-labour practices. It is getting harder to identify the winners, and easier to see the losers. Decades of globalisation have produced an interdependent world. States will incur one set of costs when they are attacked using these interconnections and another when they seek to defend their economy by disentangling. The world economy risks descending into a game of tit-for-tat, as states seek to exploit their rivals’ vulnerabilities and retaliate when rivals exploit their own. Economic relations that appeared to be a substitute for war have become a kind of war by other means.

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Tuesday 03 September 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

TELECOMMUNICATIONS

Airtel grows subscriber base by 8.62% in 9 months, edges Glo to second spot … narrowest gap between duo in 12 months SEGUN ADAMS & STELLA ENENCHE, Abuja

irtel is Nigeria’s second-biggest Global System for Mobile Communications (GSM) operator after overtaking rival, Globalcom (GLO), in July but the gap between the two Telcos has never been narrower since Airtel edged Glo to the coveted spot in August 2018. According to industry statistics from the Nigerian Communications Commission (NCC), Airtel snapped Glo’s eight straight month reign as number two by increasing its share of the GSM market to 26.81 percent market share while Glo narrowly slipped to 26.70 percent. Just 123,327 subscribers stand between the duo. The Bharti-owned telecommunications company has grown its subscriber base by 8.62 percent to 46,836,395 in the last nine months after it has conceded grounds to Conpetro Nigeria’s Glo while latter has expanded its base by 7.95 percent to 46,713,068 in the same period. With 65,260,754 subscribers or 38 per cent market share, MTN Nigeria remains the country’s biggest GSM service provider. In July MTN gained 1,379 new subscribers with another 118,442 subscribers from Visafone, a Code-Division Multiple Access(CDMA) network it acquired.

Meanwhile, 9mobile was the only operator that lost subscribers dropping to 15,739,967, 9 percent of the GSM market. NCC notes that Visafone has transferred its 118,442 subscribers to the GSM band. Since GSM was introduced in Nigeria 18 years ago, the technology has been increasingly adopted by the country’s population. As of July the total subscribers in the GSM market are 174.67 million. In addition to rolling out attractive voice plans, Nigeria’s increasing urbanisation, young population with a median age of about 18 years, increasing adoption of smartphone and internet penetration has made the data segment the frontline of the “war” for subscribers as operators try to under-price each other. While Glo has the cheapest data plans and Airtel of-

fers the second cheapest, but some industry watchers say Airtel’s growth can be attributed to the numerous innovations; one of such is the latest launch of its 4G network. “One difference for me is the speed of the internet. Where I stay Airtel is faster,” Vivian, 25, a university student in Lagos said. “I spend hours on the internet working and keeping up with friends. This makes data a priority.” SBM Intel, a leading geopolitical intelligence platform, estimates that after food, data and clothing top the list on the budget of Nigerians. The research by SBM intel is in line with expectations given that Social media platforms like Twitter, Facebook, Instagram, Whatsapp, among others, has become more popular means of communication and offer an alternative to

voice and SMS. Underscoring the importance of faster data connectivity, according to a recent survey by Jumia, Nigeria’s mobile broadband penetration is forecast to rise to 55 percent of the population by 2025, with 70 percent having 3G connectivity and 17percent having access to 4G networks. In addition, the report states that 5G network with the 26 GHz, 38 GHz and 42 GHz spectrum bands will be rolled out by 2020, it noted. In 2018, the telecommunications industry grew 5.87 times faster than the rest of the economy as telecom output grew 11.33 percent to N6.6 trillion. The performance in 2018, the best for the telecommunications industry in the six-year period, was followed by a 12.18 percent in the first quarter of 2019 while the economy

expanded by 2.01 percent. Airtel Africa listed on the Nigerian Stock Exchange in July as the country’s only Telco on the bourse after MTN which had earlier on listed by introduction. In the first quarter to 30 June 2019 Airtel Africa, the African subsidiary of Indian based Airtel, saw revenue jumped 10.2 percent by double-digit growth in Nigeria and East Africa, partially offset by a decline in revenue in rest of Africa. The operator’s profit pared in the period. Reported revenue in Nigeria increased by 22.2 percent, broadly in line with constant currency growth as a result of a stable foreign exchange environment, the Telco said. Meanwhile, it noted that in Nigeria, voice revenue increased 12.7 percent on the back of its efficient distribution system and leading 4G network to acquire

new customers. Data revenue was also up 73.1 percent and it was the largest contributor to revenue growth in the Nigerian business. Airtel said it benefited from the increased penetration of 4G data customers following the rollout of its 4G network. The result was a 21 percent increase in the customer base and growth in Average Revenue Per User. Data revenue in the quarter ended 30 June 2019 accounts for 30 percent of the Nigeria revenue, compared to 21 percent in the prior year. During the quarter, Airtel’s capital expenditure more than doubled, to $ 53.2 million, as the business continued to expand and investing the 4G network with the number of 4G sites increased fivefold, representing 60 percent of total sites.

MARKETS

Over documentation, unrealistic regulations affect Nigeria non-oil export community DAVID IBIDAPO

hile over the years the Nigerian economy has focused on crude oil export as a major source of revenue, recent moves to reduce dependency on a volatile market and shift to increase non-oil revenue through non-oil exports may only be a dream and not a reality on the back of the challenges of over documentation, overlap of agency functions and unrealistic regulations. According to data by the National Bureau of Statistics

(NBS), crude oil contributed 82 percent to total export in Q1 2019 against 13 percent of non-oil export in Q1 2019. This evidently portrays how far the African most populous country is to delivering herself from the fears of negative oil price shocks hence getting her gross dollar reserve depleted and pressuring downwards the value of Naira. At a recently concluded summit at the chamber’s 2019 export group’s symposium tagged “Synergy between Regulations and Trade in Nigeria: Driving Exports,” export experts and stakeholders raised con-

cerns over the effect of over documentation activities and unrealistic regulations on the success of export businesses in Nigeria. Over the years, exporters in non-oil commodities have had to deal with rejection of goods or having to pay for the destruction of their goods in other countries exported to, despite having gone through several documentation processes here in Nigeria hence increasing incurred expenses, shortage in revenue and loss. According to stakeholders in this space, while we could attribute the rejec-

tion to exporters ignorance in the business, too many certificates and standard regulations expected to be met by exporters in Nigeria are somewhat confusing with several agencies performing overlap functions hence necessitating exporters boycott even the most important processes. “People want to avoid NAFDAC if it were possible saying that the agency is slow, tedious and very discouraging for any exporter,” Olumuyiwa Aiyegbusi, CEO of Olu Olu foods, “Our institutions are still weak and only strong institutions make a business environ-

ment working.” According to the export policy guidelines and regulation of NAFDAC as published on its site, it will require at least 28 working days to begin and end export process if one has a registered product. “One of the requirements for export certificate is that you have to produce your invoice and packing list, having obtained it my truck will have to wait for 28 days losing about N25,000 per day while I wait,” Kolawole Awe, Chairman NACCIMA export group stated how cumbersome this is, “in 28 days my truck would have

made 8 trips.” This translate into loss for exporter in the bid to get an export certificate. “The problem with Nigeria is that we are over documented and over regulated, we have to remove all these bottlenecks,” Aiyegbusi said. Amongst issue raised is the need for exporters to understand what documentation the importer requires. Stakeholders there advocated for a “one stop shop” where all necessary documentation and certification can be done in a single building as this will eradicate time wastage and reduce processing cost.

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

Tuesday 03 September 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

OIL & GAS

Exxon Mobil faces exit from S&P 500 top 10 as hydrocarbon loses charm SEGUN ADAMS

xxon Mobil Corp. is set to be removed from the S&P 500 Index’s 10 biggest companies for the first time ever portending the end of an era for oil firms as investors look beyond hydrocarbon to technology, Bloomberg reports. The S&P 500, a closely followed gauge, is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. Exxon yielded its place to Visa Inc. by weighting on August 1 and then to Procter & Gamble Co. two weeks later, according to data compiled by Bloomberg which now believes that S&P Dow Jones Indices will an official annoucement in that regard. Once confirmed, it would be the first time in nearly a century of the S&P index that Exxon would be weighted out of the top 10. “The oil sector has gone

from being the leader of the world economy to a laggard,” said Tom Sanzillo, director of the Institute for Energy Economics and Financial Analysis, told Bloomberg. In the last 10 years, the oil sector has weakened from 11.7 percent to 4.4 percent of the S&P 500 Index following the rise of tech firms like Facebook, Amazon, Microsoft and the likes, and a shale-induced glut in the oil market. Exxon Mobil in the second quarter earnings published in August noted that earnings grew 13 percent over 2,876 million USD in the preceding quarter and 7.27 percent from the year before. In the downstream business, however, while Exxon Mobil turned the corner to post 451 million USD profit after it had made 256 million USD loss in Q1, year-onyear bottom-line slid 37.71 percent. In the chemical segment, earnings more-than-halved to 188 million USD from 518 million USD in the first quarter. Compared to the corre-

sponding quarter in 2018, the second quarter number was down by 78.9 percent. Lower margins due to lengthening supply, higher scheduled maintenance, higher expense related to growth projects and unfavourable tax, forex impacts, among others were cited as headwinds. Exxon Mobil is the largest direct descendant of John D. Rockefeller’s Standard Oil, and was formed on November 30, 1999 by the merger of Exxon (formerly the Standard Oil Company of New Jersey) and Mobil (formerly the Standard Oil Company of New York). The Company operations include exploration and production of oil and gas, electric power generation, and coal and minerals operations. Exxon Mobil also manufactures and markets fuels, lubricants, and chemicals. Exxon Mobil Corporation operates petroleum and petrochemicals businesses on a worldwide basis including in Nigeria.

CONSUMER GOODS

L-R: Grace Ihejiamaizu, founder, iKapture Centre for Development; Chidera Ogbu, founder/CEO, Olaedo Naturals Limited; Adetola Juyitan, national president of JCI Nigeria and Paschal Dike, CEO, Glitz Group of Companies, and 2016 president of JCI and CEO, Dega Multi Concept Limited, at the Tokyo International Conference on African Development (TICAD) in Yokohama, Japan.

L-R: Sarah Agha, portfolio manager, International Premium Brands; Emmanuel Oriakhi, marketing director, Nigerian Breweries Plc; Grace Omo-Lamai, H.R. director, Nigerian Breweries Plc, and Martin Kochl, supply chain director, Nigerian Breweries Plc, at the unveil of Heineken’s newly designed 33cl cans in Lagos.

RedBull unveils documentary on Nigeria’s BMX athlete, Courage Adams TEMITAYO AYETOTO

documentary on the rise of Nigerianborn bicycle motocross BMX talent, Courage Adams has been unveiled before a budding crew of local BMX athletes in Lagos. In its quest to spark youth’s interest in the bicycle racing sport, RedBull made a documentary of how Adams, from Edo state, grew from sheer childhood love for bicycles to developing passion in professional BMX sports in Spain. 23-year-old Adams left Nigeria for northern Spain at six. BMX, a recreative cycling sport performed on bikes either in competitive racing or freestyle is still in an infant stage in Nigeria. Using specially designed bicycles on skating parks or roads, cyclists attempt ingenious stunts and styles, maintaining proper balance. It began during the early 1970s in the United States when children began racing their bicycles on dirt tracks in southern California, inspired by the motocross stars of the time. In the United Kingdom, BMX was a popular trend which took off in the early 1980s, expanded by children and teenagers’ interest in

bicycles. Freestyle BMX is now one of the staple events at the annual Summer X Games Extreme Sports competition held primarily on the East and West coasts of the United States. With the popularity of the sport increasing, it was officially recognised in 1993 the International Cycling Union (UCI) fully integrated it. The sport made its Olympic debut at the 2008 Beijing Games. Mat Hoffman, Ryan Nyquist, Tinker Juarez, Dakota Roche and Dennis McCoy among others are globally reckoned in the BMX athletes. Few Nigerian youths have already begun pouring passion into sports in Lagos, with most of them using the streets as their stage, in the absence of purpose-built tracks. They leverage video streaming application, YouTube to learn intriguing and daring moves from international professionals such as Adams. For them, Adams is considered an inspiration that emboldened them to continue developing their skills on a professional level. Before RedBull decided to partner with Adams, he was in the streets of Spain practising possible moves with a

team of friends. “I would really like to see one of these guys doing what I am doing right now. I see the guys trying to do some tricks and they are afraid of nothing. That’s not normal in Spain or in Europe. People have a place to practise and practically everything but they don’t have the energy or that courage to try new tricks.” Adams said at the unveiling. “But here, they are actually creative at new tricks. I would really like to see one of them traveling around, doing what they really like. I wish everyone can do it.” Acknowledging that challenges are present in the sports just as many athletic ventures, he advised they pursue happiness in their passion most importantly in their journey to success. Many of the local BMX enthusiasts including Temitope Matthew, the initiator of the Lagos BMX crew and Oluwasegun Adosu draw inspiration from Adams. “Right from day one, Courage Adams has always been my inspiration. The name I give him is ‘king of balance’ because when it has to do with riding BMX, he has balance to the fullest. And for me to know that he is Nigerian, it makes me so happy.”

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L-R: Udeme Ufot, group managing director, SO&U/chairman of the occassion; Joshua Ajayi, publisher, Brand Communicator/convener, Women in Marketing and Communication Conference/Awards 2019; Caroline Ogbuma, executive head, corporate affiars, MultiChoice Nigeria, and Tony Agenmonmen, president, National Institute of Marketing of Nigeria (NIMN], at the 2019 Women in Marketing and Communications conference and awards in Lagos

L-R: Sanusi Isa, BLB Promo winner; Adenike Oyebami, legal officer, Lagos Lotteries Board; Ifureuwem Emoeka, BLB promo winner, and Celestine Achi, director-general, BLB Promo, at the 2nd weekly draw/ presentation of cheque and investment certificates to winners in Lagos.

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Tuesday 03 September 2019

BUSINESS DAY

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Tuesday 03 September 2019

BUSINESS DAY

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Tuesday 03 September 2019

BUSINESS DAY

Media business Story-telling still best way to connect with consumers – Expert Daniel Obi

hris Ogbechie, a Senior Faculty Officer, Lagos Business School (LBS) has assessed marketing practice in contemporary world and said that story-telling was the best way of connecting with consumers emotionally in the 21st century. Speaking at marketing and advertising magazine, MARKETING EDGE annual National Marketing Stakeholders Summit recently in Lagos, Ogbechie noted that in today’s marketing world, most brands were competing in the same space to win the hearts of the consumers, stressing that it was only those whose stories resonate emotionally that would win consumer loyalty. “Marketing itself is a fight for the consumer’s mind. The more you get into the mind of the consumer, the greater your chances of being successful with that consumer,” Ogbechie said. According to him, “In today’s marketing world, the key issue is to create emotional brand attachment with the consumers. Brands need to create relationship and that would further create that emotional attachment between the brand and the consumers.” Also speaking at the summit, Chairman of the occasion and CEO of Marketing Space, George Thorpe told participants at the summit that storytelling has the capacity to help brand owners

achieve their growth projections if deployed in a consumer-centric manner. The veteran marketer warned that in deploying storytelling, brand owners must be careful to make consumers the hero in the story. “Stories should make the consumer the hero. He should see himself in the story. The philosophy of the story should not overshadow the brand,” he said. The forum was organised by the magazine to reward outstanding brands and professionals in the integrated marketing communications industry in Nigeria. The two-in-one event, attracted over 1000 highprofile guests and dignitaries from various segments of the IMC industry, including top brands and government institutions who took advantage of the convergence to drive consumer engagement and deepen brand loyalty. In his speech, John Ajayi, Managing Director/CEO of MARKETING EDGE said that the theme of this year’s summit “Story Telling as a New Paradigm Shift in Contemporary Brand Building:

Convergence of Creativity and Technology” was a reflection of the current mood in the marketplace. His words: This year’s summit is a reflection of the current mood in the market place which necessitates the need to create a nexus and a positive engagement between the brand and its target audience. With the seller’s market era gone for good, today’s marketer company cannot continue to lord it over the modern consumers. In the words of Seth Gordin, an American author and former dot.com business executive, ‘’marketing is no longer about the stuff that you market, but about the stories you tell’’. His view was further corroborated by William Robert Baker, also an American and a retired hockey veteran who said ‘’Story telling is the mother of all ‘’pull’’ marketing strategies. It encourages dialogue, engagement and interaction among equals- interaction is an exchange of meaning between people. Yet many companies and brands are still relentlessly pushing messages out, hoping that with enough repetition, something will stick’’.

Foodco Sunfresh Bread bags continental recognition

unfresh, a bread brand, has been named as the 2019 winners of Africa’s Best Premium Quality Bread Award. The announcement, according to a statment was made at the 5th edition of the African Brand Leadership Merit Awards organized by the African Brand Congress (ABC), held in Lagos, Nigeria, recently. Speaking on the award, Desmond Esorougwe, Convener of ABC, stated that the decision to award Sunfresh the prize was taken following

research conducted by the Body’s technical committee on different categories of brands across the continent. He said: “This award is based on rigorous work and

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subsequent recommendations from our technical committee following a survey carried out on selected brands across Africa. We are impressed at the positive feedback from respondents about the Sunfresh range in the baking and confectionery category. I must say, this award is well deserved because the brand is only six years old but in its relatively young life span, it has made significant impact in the market especially in the areas of innovation, quality and customer satisfaction.”

African payment firm, Innovate 1 Pay expands, takes fintech services to Dubai

oremost African payment gateway brand, Innovate 1 Pay has announced the expansion of its operations and provision of financial technology services to African expatriates in Dubai, Middle East. With the move, Innovate 1 Pay is aiming to consolidate cooperation and integration between Dubai and several African countries as well as tap into the market to address unmet needs. Africa is set to surpass China and India as a job market by 2040, and with the recent visa reforms in the UAE, Dubai has emerged as an attractive destination for Africans to pursue career advancement and professional fulfilment. Innovate 1 Pay is leading this drive with the provision of international money transfer and payment services. The Chairman of Innovate 1 Pay, Mahmood Ahmadu says in a statement that the move will enhance ease of doing business between the UAE and Nigeria and ultimately drive business growth. “With the maturing of financial markets in Africa, we have expanded our presence to a total of 56 countries currently, and with the promise

that the new UAE visa regime holds for African professionals, we believe the prospects for growth in addressing this demographic is very promising indeed.” He added “The next generation of financial services needs to reflect customer expectations around secure and quick transfer of funds. Our relationship with government bodies and comprehensive presence in the African market positions Innovate 1 Pay uniquely in being able to leverage these strengths, and amplify them with the use of appropriate and user friendly technologies.” According to the Chief Executive Officer of Innovate 1 Pay, Anthony Nwachukwu, “the time for a concerted effort to extend financial inclusion in Africa is right now. Africa is currently the second fastest growing continent, after Asia, and we are looking at an average GDP growth of 5% across the continent that has lasted a decade now.” Speaking on the potential of Africa’s population, the CEO said Innovative 1 Pay is working towards the larger social goal of boosting financial inclusion on the continent. “Africa is home to 40% of

the people in the world who lack access to banking services and we at Innovate 1 Pay see our business mission within the context of this larger social goal. Bringing financial inclusion to all is possibly one of the most important steps in empowering untapped human potential, more equitable wealth distribution and a universally prosperous world.” The UAE and African countries ties are on solid track. Due to the relationship, Dubai Chamber of Commerce and Industry (Dubai Chamber) has announced its plans to host the fifth edition of the Global Business Forum (GBF) on Africa from November 1819 in Dubai. Organised under the theme Scale Up Africa, GBF Africa 2019 will bring together African and UAE governments and business leaders to explore avenues of economic cooperation and to facilitate bilateral trade and investment flows.

Tolaram, Colgate partner to bring innovative, personal care products to Nigerian consumers

olgate-Palmolive Company makers of “Colgate” and Tolaram Group Inc. have entered into a strategic joint venture and long-term partnership to bring innovative oral care, personal care and home care products to consumers across Nigeria. The partnership further strengthens Colgate’s presence in Africa’s largest economy and continues to cement Tolaram Group’s position as one of the leading and most diversified consumer brand builders in the country.

The joint venture consists of an investment by Colgate in Tolaram’s market-leading Hypo bleach business, as well as Colgate’s world-leading oral care, personal care and home care brands. Operationally, the joint venture will leverage Tolaram’s significant

Fatgbems Petroleum commissions mega retail outlet in Abeokuta

ne of Nigeria’s foremost independent petroleum product marketing companies, Fatgbems Petroleum Company Limited has commissioned a mega retail station in the capital city of Ogun State, Abeokuta. The unique aesthetics of the new outlet restates the brand’s commitment to building a lasting identity and providing customers with real experience at every touch point.

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The retail outlet which carries seven pumps of fourteen nozzles is designed to give customers speedy refueling of 5 mins turn-out time with the latest automation system to ensure customers are given right value for their money. It also warehouses a modern office complex, that will provide different services ranging from tyre sales, auto care, restaurant and super mart to offer a one- stop quality experience to customers. @Businessdayng

local manufacturing presence, marketing expertise and distribution strength with Colgate’s product formulations and R&D capabilities. “Colgate is proud to partner with Tolaram to increase its investment in Nigeria. We see many bright opportunities ahead for this new venture and for consumers in this vibrant and growing market.” said John Hazlin, President Africa Eurasia for the Colgate-Palmolive Company in a statment.

Heineken makes bold statement with 33cl Cans

eineken has launched its newly designed 33cl cans. The unveil, which was made at an exclusive event at the Heineken House in Lagos, last weekend, follows Heineken’s impressive charge to bring a fresh perspective to beer consumption in Nigeria. The brand has also unveiled a new sleek can, the first of its kind in the beer category. With the new sleek can, Heineken raises its appeal to the upwardly-mobile, city folks who love to quench their thirst on-the-go.

Tuesday 03 September 2019

BUSINESS DAY

ADVERTISING

Marketers, communicators renew call for gender parity at WIMCA 2019

n today’s world, marketers are currently seeking for new ways to connect and engage the female population globally growing at about 49.56 % female in 2018 of the world population of 7.62 billion according to Worldometers. This gives credence to the long call for gender equality as featured in the celebration of the International Women’s Day (IWD) yearly. Specifically, in Nigeria’s marketing and communications industry, a women conference and awards tagged ‘Women In Marketing & Communications Conference/ Awards (WIMCA)’ has been at the forefront of renewing the call and chattering the way forward for professionals in deploying new ways of marketing to women and seeking long time engagement. The third edition of WIMCA held recently in Lagos themed “Better the Balance in the Brands and Marketing Communications Industry” was in line with the theme of IWD this year, ‘Better the Balance’ Findings indicate that there are so many girls/ladies at the secondary and tertiary levels of education in Nigeria, in spite of this, few women are only at the top in the corporate world. A cursory look at the global scene revealed that the number of female CEOs in 2019 according to Fortune 500 now stands at 6.6%, a considerable jump from 2018’s total of 24 of 4.8%. Also, industry analysts reveal that, only four out of the top 20 AAAN member agencies have women at the helm of affairs in different agencies. In the commercial banking sector, two out of the 21 commercial banks in Nigeria have female as Chief Executive Officer. The ten major Media Independent agencies on the other hand do not have any woman as the head. Other sub-sectors of the industry cutting across both agency and clients’ side have very few women piloting the affairs of their organisations. However, a good number of women are calling the shots as CMOs with opportunities for more women engagements on the client’s side of the business. Hence, according to the organisers of WIMCA, the event was designed to identify the current trends in marketing communications while addressing the career challenges of female marketing professionals. Corroborating on this, Joshua Ajayi, the Convener of WIMCA, and Publisher, Brand Communicator, said “For the past few editions of this conference, the theme of the International Women’s Day (IWD) Celebration commemorated every March has always informed the theme of WIMCA, and this year is no different. Hence, the theme for this year’s conference is ‘Better the Balance in the Brands & Marketing Industry,” after this year’s IWD

L-R: Anurika Azubuike, founder, Marketplace Innovation Africa; Bridget Oyefeso-Odusami, head, Marketing and Communications, Stanbic IBTC; Emmanuel Agu, group marketing director, JOTNA Nigeria Limited; Joshua Ajayi, the Convener, WIMCA and publisher, brand communicator; Bukky Bandele, marketing director, Electricals Africa, HPZ, PZ Cussons Nigeria Plc; and Tolulope Adedeji, marketing director, Abinbev West Africa at the 2019 edition of Women in Marketing & Communications Conference/ Awards (WIMCA) held at Muson Centre, Onikan Lagos.

‘Better the balance’ theme. “The theme is a reminder to us in this industry that the race is on for gender-balanced boardrooms, government, workforces, media coverage, income and wealth distribution among others. Interestingly, the industry, the nation, the continent and the world generally have in the few couple of years recorded history-defining achievements in gender balance, though, there is more to be done.” Speaking on the theme, Ademola Adebise, MD/CEO of Wema Bank and Keynote speaker, represented by Tunde Mabawonku, Chief Finance Officer at Wema Bank Plc said a lot of women in marketing and communications industry are doing great, he therefore urged women to support each other, be focus and be deliberate about their goals in the quest to ensure that more of them get to the top in their career and to the boardroom. Contemporary trends in marketing to women Similarly, John Ugbe, CEO, MultiChoice Nigeria and keynote speaker while speaking on contemporary trends in marketing to women explained that his organisation has more women who have risen to the top in their career and more are still springing up. He urged other organisations to deploy creative ways in addressing female related challenges. Proffering solution to a case study which involved an agency that has about 25 female staffs while 18 of them got pregnant at the same time, Ugbe suggested such an organisation should provide an enabling environment in terms of where they can get medical www.businessday.ng

attention close by to make them comfortable and as well go all out to win the account of brands attracting pregnant women and mothers because the pregnant women in the agency can relate better with the brand than any other person. He added that his organisation will continue to seek more ways to empower women, one of which is the MultiChoice Women Forum. Meanwhile, during the panel discussion, moderated by Anurika Azubuike, Founder, Marketplace Innovation Africa, the panelists proffered new ways of marketing to women. Bukky Bandele, Marketing Director, Electricals Africa, HPZ, PZ Cussons Nigeria Plc said that today women are the biggest influencers and spenders and they are loyal once a brand is able to effectively engage with them. Bridget Oyefeso-Odusami, Head, Marketing and Communications, Stanbic IBTC said that women are really interested in the functionality of any good or services they key into, explaining that more women invest 90 per cent of their earning in their financial and

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investment services. On another note, Tolulope Adedeji, Marketing Director, AB InBev West Africa said that women are in the season of empowerment and are readily interested in anything that will empower them and make their lives better. Similarly, Emmanuel Agu, Group Marketing Director, JOTNA Nigeria Limited pointed that in Television commercials and advertising campaigns generally women are often projected in a bad light either as a domestic worker or as a sex object which is also often portrayed in the movies and musicals. He therefore explained that there is need for diversity which a balance of male and female in the work place and the need for organisations to stop lip services to issue of gender equality, “What an organization does is a reflection of who they are,” he said. Equity Vs Equality The issue of organizations choosing between equity and equality in their corporate philosophy has always been on the front burner. Equity is the quality of being fair and impartial while Equality is

Industry analysts reveal that, only four out of the top 20 AAAN member agencies have women at the helm of affairs in different agencies. In the commercial banking sector, two out of the 21 commercial banks in Nigeria have female as Chief Executive Officer. The ten major Media Independent agencies on the other hand do not have any woman as the head

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the state of being equal, especially in status, rights, or opportunities. At the second session of the conference, Ndidi Nnoli-Edozien, Group Chief, Sustainability & Governance, Dangote Industries Limited who spoke on the subtheme, ‘Better the Balance in the Work Place; Equity or Equality?’ said women in business are always dedicated and for them to find the way to the top they need to “define and understand the problem, align with a global movement. She revealed that men usually networking, seal deals when at pubs, adding that they usually reach consensus before a board meeting. She therefore advised women to borrow a leaf from that, embark on networking, support each other to rise to the top and equally learn to complete favourably with men. Meanwhile, during the panel discussion moderated by Tosin Adefeko, Managing Director, AT3 Resources, Omobolanle VictorLaniyan, Head, Sustainability, Access Bank Plc urged women to be more deliberate in their approach and stay on top of their trade irrespective of men domination or not. She said that her organisation Access Bank has made the working environment easy for women irrespective of the stage of life they are. Charles Nnochiri, Head of Marketing, PZ Cussons, on his own part said that irrespective of being a man of woman, people should be treated equally and their expertise should be the criteria to pick a potential employee not necessarily the gender. He said that equity should be favoured ahead of equality. In the same vein, Caroline Oghuma, Executive Head, Corporate Affairs, MultiChoice Nigeria, stated that today’s organisations are making conscious effort to ensure equity in the workplace irrespective of the gender. She therefore urged women to be diligent and innovative in order to remain relevant in the work place. On a different note, Bunmi Oke, Managing Director, Ladybird Limited said both equity and equality are needed in the work place, pointed that all women have a role to play by being the best they can be, have a positive mindset, work hard and fight for what they want. Interestingly, the event was chaired by Udeme Ufot, Group Managing Director, SO&U while sectorial heads and members from NIMN, IAA, NIPR, AAAN and among others were also in attendance to give their support to women and WIMCA 2019. Prominent and outstanding female marketing professionals in the Nigerian Integrated Marketing Communications industry were awarded from different sectors for their contributions to the growth of the industry.

Tuesday 03 September 2019

BUSINESS DAY

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Tuesday 03 September 2019

BUSINESS DAY

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Tuesday 03 September 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Industry players advocate innovative approach to STEM education KELECHI EWUZIE

orried by the current state of traditional education system in Nigeria, educationists, industry players have called for innovative approach to Science, Technology, Engineering, and Mathematics (STEM) education to secure the future of youths. Educationists observed that Nigerian students especially those in public primary and secondary schools are largely uninspired to pursue their passion in STEM related fields, thereby leaving them unprepared for the opportunities and challenges of the 21st century world. Reports indicate that Nigerian students rank low among students of both the industrialised and developing countries when it comes to achievement in Science Technology, Engineering and Mathematics (STEM) subjects in test scores and other assessments of academic achievement in both foundation and external examinations. Industry experts insist that for Nigeria to attract and sus-

Ibilola Amao, (4th from right) principal consultant, Lonadek in a group photograph with industry stakeholders and students at the 13th edition of the Youth Empowerment and Restoration Initiative (YERI) in Lagos.

tain the needed investments in STEM education, the formulation of an education policy that is focused on STEM; less emphasis on certificates with more emphasis on skills and competence; collaboration between educational institutions and industries to determine the knowledge and skills students are expected to possess. Ibilola Amao, principal consultant Lonadek Limited, while speaking at the 13th

edition of the Youth Empowerment and Restoration Initiative (YERI) in Lagos said the initiative is geared towards helping to develop the leadership, entrepreneurial, professional and vocational skills of the Nigerian youth especially in the area of Science, Technology, Engineering, and Mathematics (STEM), and also provide them exposure to industry. The one week Summer Camp programme enlighten

and empower students with STEM skills which can be further harnessed to solving challenges in our community. The programme also aimed to help students develop and implement innovative ideas that can make real life impact on the society, and also expose them to career opportunities available in the STEM industries such as Energy, Infrastructure, Manufacturing, Engineering, Agricul-

ture, Technology sectors of the economy. Amao stressed that by the year 2020, the project would have successfully impacted one hundred thousand youths across Nigeria with relevant skills, industry and professional awareness trainings. “In the long run, more youths would have been prepared to take up challenges in different spheres of our national development and

add tremendous value to the socio-economic transformation drive of the nation,” she said. She further said that having identified the issues that underscored the slow progress of youth development in STEM and national development by extension, the project model offers a life line to the underprivileged youths through counselling and Industry Awareness Workshops in major cities across Nigeria. The week long programme hosted about 31 students from 10 Secondary Schools in Lagos state. Highlight of the programme was the presentation of awards to Osegbo Chinaza, from Queen’s College Yaba, Olisama Chisom from CEDEC International and Onuoha Chinerem Favour from Queen’s College Yaba who came 1st, 2nd and 3rd place respectively in the essay completion. Other categories of winners in the Summer Camp include: Hamzah Idris from Arch Deacon Adelaja Senior High School for being the Most Outstanding Male Student and Amazing grace Kalu Olua from Queen’s College Yaba for being the Most Outstanding Female Student.

Bayero University Kano receives FG’s Tech-U VC calls for revamping of education Solar Hybrid power plant learning boost REMI FEYISIPO, Ibadan KELECHI EWUZIE

ayero University, Kano (BUK) will today (Tuesday) receive the largest offgrid solar hybrid power plant in Africa under the Energising Education Programme (EEP) of the Federal Government. Under implementation by the Rural Electrification Agency (REA), the Energising Education Programme (EEP) is a Federal Government intervention focused on developing off-grid dedicated independent power plants, rehabilitating existing distribution infrastructure to supply clean, safe and reliable power to 37 federal universities and 7 affiliated university teaching hospitals. The projects commissioned will see 55,815 students and 3,077 staff have access to electricity supply from the university’s 7.1Mega Watts

solar hybrid power plant. Damilola Ogunbiyi, managing director, Rural Electrification Agency says the Bayero University commissioning would include the launch of 11.41KM of solar powered street lights as well as a world class renewables training centre. According to Ogunbiyi, “This is the largest off-grid solar hybrid power plant in Africa, we as Nigerians, should be very proud of, thanks to commitment of the Federal Government towards sustainable energy and education. Students and staff of Bayero University, Kano can now experience learning and teaching in a safer, cleaner and more conducive academic environment”. One of the major highlight of the events will be the graduation of 20 female students who participated in the Female STEM Students www.businessday.ng

Internship Programme. The female students, who received practical training during the course of the project construction would be awarded certificates of completion. Commenting on the impact of the BUK solar hybrid installations, Evangelos Kamaris, managing director, METKA West Africa Limited, the EPC contractor mentioned that “the state-of-theart solar hybrid power plant will result in carbon dioxide savings of 108,875,120Ibs, a feat we as green contractors are proud of.” Bayero University, Kano is the second project to be commissioned under Phase 1 of the Energizing Education Programme that will deliver clean and sustainable energy to nine federal universities and one university teaching hospital in the next 4 years, using solar hybrid and/or gasfired captive power plants.

o arrest the decay in the nation’s education sector, Vice Chancellor of the First Technical University (Tech-U), Ibadan, Ayobami Salami has called on stakeholders in the education industry to unite for the transformation of the sector. He made this call recently as the Guest Lecturer at the grand finale of the 2019 United Nations International Youths Week organised by the National Youth Council of Nigeria, Oyo State Chapter. “Educational transformation is very dear to me; having been active in providing tertiary education for over thirty years. I have also traversed our educational system as a student, a teacher and as an administrator at various levels. As an ardent stakeholder, I can state unequivocally that all hands are required on deck to harness our vast human

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and capital resources towards achieving educational transformation at local, regional and national levels”, Salami said. Salami who represented by Adesola Ajayi, deputy vice-chancellor of the Institution, underscored the urgent need to revamp the subsisting model of education in the country characterised by monumental infrastructural deficit, inadequate funding, irrelevant curricular, inadequate staffing, warped orientation of learners, dismal student performance, and the resultant dysfunctional system among other sectoral deficiencies. He said, “The consequences of poor education in Nigeria over the years is already evident in extremely high unemployment of educated youths, gross dependence on foreign technology, and lack of technical expertise for even simple tasks”. “To fully explore the potentials of our intelligent youth populace, all stake@Businessdayng

holders in the educational sector must agree on curriculum and delivery strategies that would elicit innovation, cooperation and ingenuity in educational spaces that guarantee practicality. We require the Government at various levels to provide infrastructure and funding commensurate to the urgency and extent of the transformation we need in the educational sector. The government must actualize the tenets of its recently declared State of Emergency in the sector. Our brand of education must deliver development and social progress all over the country in alignment to the nation’s developmental priorities”. Salami, a professor who was also honoured with an Award of Excellence in Education for his contribution to the development of education in the country by the NYCN through its Chapter leader, Adebola Agbeja, called for an all-inclusive strategy that would place education in the country on the right pedestal.

Tuesday 03 September 2019

BUSINESS DAY

EDUCATION What children could teach adults

OYIN EGBEYEMI

ne beautiful thing about young children is that they are not yet formed, physically and mentally. Because they have limited exposure to the world and some of its adversities, they are pure, innocent and really just beginning to learn the ropes of life. Those who are exposed to relatively normal upbringing (i.e. not in adverse conditions such as abusive homes and wartorn countries) have certain attitudes and behaviours that I think adults could

learn from. “I can do anything and everything”: Children are not very aware of their limits…and as dangerous as it sounds, this is actually an attitude that many adults lack. It’s very interesting to see infants attempt to walk, talk and do many of the things that they see older ones do. They make several attempts, fail many times, but pick themselves up and continue to try again, and again and again. Even when they make demands for certain items they desire, they nag and nag and nag until they get them. They persevere until they succeed; or they may hurt themselves and fail, but they quickly pick themselves up and move on. This skill of persistence and perseverance is something that many adults lack today; but if we applied these more to some of our own challenges, we would probably yield better

results in our endeavours. “What grudge?” Literally. It is almost impossible to hold a grudge with children. One minute, two children may be having a heated argument over one fickle subject or the other, and the next minute, they are best friends. They do not hold on to the wrongdoings of others and use them as weapons against them even after the argument has been resolved, unlike adults who could hold grudges that may last lifetimes. They also do not exhibit passive-aggressiveness that adults are so familiar with (the “I forgive you, but I do not really forgive you attitude). What happened to “forgive and forget?” “We are all different but equal”: The current state of the world and many recent activities are beginning to make it clear that adult human beings might be more divisive than we think. This

Anxiety mounts for parents as school resumption draws nearer PEACE DANIEL

s schools prepare to resume for the 2019/2020 academic session, many parents have expressed concern at the high cost of school items. Some parents, who spoke to BusinessDay, said it is time to start thinking of how to pay school fees, do school errand, meet the demands of their wards, new and old students, especially those in boarding house. Adekoya Lawrence, a parent and businessman said that the cost of textbooks and stationeries was quite high. “We parents and guardians have already set aside funds for the preparation of their kids and wards for this new academic session,

however, the market prices is beyond our expectations,” Lawrence said. Lawrence narrated that August and early September season are also fearful months because some father has three or four kids or (more) to cater for, “this season requires a lot of planning and discipline because most schools don’t even allow for part of installment payments.” Ukpong Casper, principal, Royal Christian College, Essien Udim Akwa Ibom State said as the new schools session commence preparations for new laboratory equipment, library books, and putting in school facilities are in top gear in order to equip students with the skills and academic success required to access new opportunities and enhance their life chances.

“We tend to keep our classes and tutorial groups relatively small to create an atmosphere where you can feel relaxed and comfortable, which allows learners to really get to know their teachers,” Casper said. The principal also said schools are also looking forward to replacing some teachers who are not performing well in their duties. Traders in school items such as textbooks, school bags and stationeries, however, ruled out any form of profiteering, saying that the profit margin on books was quite minimal. Ruth Uwandu, owner of Favour Bookshop, Oshodi said: “We are into the business to keep body and soul together, not that there is much gain in the business.

L-R: Ronald Kayanja, director, United Nations Information Centre (UNIC), Nigeria; Adeola Azeez, deputy country director, Deutsche Bank; Adetola Juyitan, National President, Junior Chamber International (JCI) Nigeria; Bamidele Abiodun, wife of Ogun state governor and Ketil Karlsen Head of Delegation, European Union, during the unveiling of honorees for the Ten Outstanding Young Persons (TOYP) initiative by JCI Nigeria held in Lagos. www.businessday.ng

even questions the concept of globalisation. With racism, anti-Semitism and neo-Nazi demonstrations gaining some form of momentum in the West; and of course our cultural barriers in Nigeria and many other African countries; and even intellectual and social differences, you would wonder what the actual underlying reasons for such discrimination other than human beings merely just deciding that one group is more or less superior to the other (again, for no concrete reason other than an irrational opinion). When children are young, they do not have these issues; they see one another as different and equal and accept it. After all, we cannot all be the same, and are each a product of our environments and genetic makeup. I found it absolutely

beautiful when one of the children at the school I work at was asked who his best friend is, and he said that is was one of his intellectually challenged classmates. It could be because the classroom environment and teaching methods at this school are deliberately planned to ensure equality; however, for a child to make that conscious decision to select that one person amongst about fifteen others in his class. It goes a long way to show that children have the ability not to judge other people for their differences. This is something that adults have a great deal to learn from, so that we get along a little better. “I love you, and I’m not afraid to say or show it”: Children are probably the most expressive form of human begins. They are not afraid to show affection to one another and to others around

them. I have received numerous unsolicited hugs from some of these young people. For them, love is not as complicated as we as adults seem to make it. Because of the fear of vulnerability (which is usually and wrongfully linked to weakness), adults seem to hide their true feelings or fail to express them effectively, whereas they may be fully aware of the way they feel. Why don’t we take a note from children and express more love to each other in whatever way we can? Children are absolutely wonderful creatures. If we took a few lessons from them, there would probably be more peace and love in our communities and in the world. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Nigeria schools make a record number of exam entries for Cambridge qualifications KELECHI EWUZIE

xaminations entries for Cambridge International across all qualifications have risen again by 4 percent internationally and by 14 percent in Nigeria for 2018/19. The June 2019 examination released results has shown. The number of schools now teaching Cambridge International programmes has grown by 6 percent internationally this year and by 10 percent in Nigeria, which now has more than 360 schools located across the country. According to the results, there has also been a 6 percent increase in the number of students taking Cambridge examinations internationally and a 12 percent increase in the number of students taking Cambridge examinations in Nigeria. In Nigeria there has been a significant increase in IGCSE and AS&A Level this year, with more than 22 000 entries, an increase of 14 percent on last year. The number of entries for Cambridge International AS & A Level qualifications has grown by 7 percent globally this year. Juan Visser, regional director, Cambridge International, said: “I am delighted that the uptake of Cambridge qualifications continues to go from strength to strength in Nigeria. This is in no small part to the tremendous effort on the part

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of our registered schools in Nigeria preparing learners for our examinations. “Our examinations have proven to be an excellent platform for learners to get into, and get on, at institutions of higher learning. Congratulations to the schools, the dedicated teachers, and not least the students. These results have been duplicated in the many countries across the Sub-Saharan region in which our schools operate, proving there is a strong demand for robust programmes of study supported by valid and reliable exams trusted by universities across the region.” This year the most popular Cambridge IGCSEs in Nigeria are mathematics, biology and physics. The most popular Cambridge International AS & A Level subjects are physics, chemistry and biology. Globally, the most popular Cambridge International AS & A Levels this year are maths, physics and chemistry. The most popular Cambridge IGCSEs are maths, physics and First Language English. Ayeni Oluwatosin Olawale, an A Level physics teacher from Global Cambridge College in Ibadan, said: ‘Sciences are the most popular A Level subjects with students in Nigeria because young adults in the country see sciences as a pathway to great achievement in life. The Cambridge curriculum is splendid. It has given room for critical thinking and analysis. @Businessdayng

‘The full determination of the students and their readiness to study coupled with the teaching ability of the teachers contributed to the success of the students.’ Oluwadurotimi Jonathan Efunshile, an A Level student from Global Cambridge College, achieved A* in physics and chemistry and an A in maths. He said: ‘I am glad I was able to achieve my aim of success in the Cambridge International programme. I worked closely with my teachers who are well experienced in teaching the curriculum. I worked hard and solved enough questions in preparation for the final examination. My school contributed much to my success - I appreciate them. I am planning on going to university outside Nigeria to study aeronautical engineering’. Agbodesi Christian Imoagene, an A Level student from Bridge House College in Lagos, achieved A*s for chemistry, physics and Mathematics. According to him, “I am proud of my grades and very grateful to everyone who made it possible for me to attain them. I put a lot of hours into reading but the most important part of the exam preparation for me was practicing past papers”. He plans on studying mechanical engineering at the University of Loughborough in the UK.

Tuesday 03 September 2019

BUSINESS DAY

STEP 9

Making it Stick How do we keep the music playing? How do we make it last?

icture this: an older married couple walking into the sunset, arms intertwined, gazing lovingly into each other’s eyes. #Goals right? You’ve probably wondered how they went the distance and didn’t call it quits. You want that for yourself, I mean, who doesn’t? However, speak to these older couples about how to make a marriage go the distance and you’ll be shocked (or won’t) about just how much work goes into it. When it comes to retaining talent, the same hard work applies; you need to go beyond delivering on your employee value proposition, and into continuously building and refining your company culture. Investing in the acquisition of competent talent puts you owever, to ahead of the game. H stay ahead you need to maximise your return on your investment by spending even more time on culture, and the systems that reinforce said culture, than you do on selecting the right talent. You can think of selection as 15% of the battle, culture as 45% and systems to reinforce culture would account for the remaining 40% of employee alignment (read: making sure we live happily ever after). So, how exactly do we win at culture?

Ruth David

Ruth David is the Partnerships Coordinator at WAVE, an organisation focused on rewiring the education-toemployment system to create a level playing field for every African youth to access the skills and opportunity to become what they imagine.

How then shall we live / work together? Culture is simply a way of working - how you achieve your mission. This “way of working” is simply a set of behaviors that you (and whoever the “powers that be”) decided are required to achieve your company’s goals. Therefore, b uilding and reinforcing culture is about fortifying a set of required behaviors. A practical example: In your relationship / organization, you might decide that a required behaviour to achieve your mission is “candour in communication”, i.e. open, honest and proactive communication at all times. In other words, “if you see something, say something”. Building a culture of candour in communication in your organization will require having this desired behavior recognized, rewarded and reinforced. The 3 Rs Let’s introduce you to a virtuous cycle called “The 3Rs”: Recognise, Reward, Reinforce. Simply put, to reinforce a behaviour, you must first recognize it www.businessday.ng

and then reward it. Recognizing the behaviour means you have to have a system to identify when employees exhibit these behaviours, given you cannot be with each and every one of them daily. Do you have ways for their peers to recognize their behaviours? It’s impossible to expect that a biannual performance review will capture every time each employee exhibited “candour in communication” during the 28-week period. Figuring out how to get more real-time “ground-up” feedback (i.e. from the people on the ground daily) on who is exhibiting the required behaviours can be a herculean task. One way to do this is to implement “shout-out boxes” where employees can write anonymous notes (“shout-outs”) celebrating colleagues who have exhibited culture-reinforcing behaviours. Other companies have surveys sent out to employees on a monthly or quarterly basis asking them to mention instances in which colleagues have exhibited these behaviours. Figuring out how best to reward is an exercise in empathy in and of itself. It’s very easy to assume that everyone wants to be recognized and rewarded the same way we would like to be, but that just isn’t the case. The same way you have love languages in relationships (words of affirmation, quality time, acts of service, gifts and physical touch), you have reward/appreciation

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languages in the workplace. For some, a simple thank you email suffices as all the reward they need, while for others, it’s plainly “show me the money”. While you can’t please everyone, surveying a few team members to find out how they want to be appreciated is a good way to design multiple reward/appreciation languages at your organization. Another rule of thumb is to start as you intend to finish, so it’s better to be consistent in your chosen languages than to start something and realize you can’t afford to keep it running a few months later. Imagine starting a monthly “candour in communication” award with a cash prize or gift voucher and 12 months later, you realize that you’ve depleted your employee welfare budget. The Good, Bad and Ugly However, simply recognising and rewarding positive “culturereinforcing” behaviours that team members exhibit are insufficient on their own. You will also have to recognise and reprimand negative “culture-eroding” behaviours in order to minimize/ eliminate them. While this might be awkward, dis-incentivizing negative behaviours prevent them from being a model for others to follow, which will only accelerate the erosion of the positive work culture you build. We all know of those employers who “deduct salary anyhow”, and we know fully well that it isn’t an @Businessdayng

“anyhow” affair, but if employees feel that negative consequences will be meted out randomly, then the game becomes about “how not to get caught”. Whereas if you have a clear system to identify infractions against the culture, you are more likely to have people focus on how to make sure they fall in line. The same systems described for positive behaviours can also be applied to negative ones without having to wait 28 weeks to identify these infractions. In our “candour in communication” universe, a cultureeroding behaviour might be gossiping about colleagues. I once knew a senior executive who made sure that whenever any colleague came to him to complain about another colleague, he would ask the complainant to give him a minute while he would dial/call in “the accused” into the meeting and then ask the complainant to continue. This demonstrated to his employees that the culture (way of working) was to be open and honest in communicating feedback with colleagues directly. Just as with marriages, ensuring that you go the distance is less to do with keeping momentum, and more to do with adapting and evolving in sync with each other. To achieve this, leaders of organizations need to forge strong company cultures that are communicated effectively with employees.

Tuesday 03 September 2019

BUSINESS DAY

How Columbia’s new dean is redefining business education Costis Maglaras believes business schools are at an ‘inflection point’ and need to change Jonathan Moules, FT

ostis Maglaras, the new dean of Columbia Business School, has long been an insider at one of the world’s elite MBA providers. Before taking up the post this summer he had spent 21 years teaching business at Columbia’s Ivy League campus on Manhattan’s Upper West Side. More surprising, though, is the fact that his qualifications, up to PhD level, are in electrical engineering, not economics, maths or management. And he does not have an MBA. Mr Maglaras, 49, says this difference is an opportunity, not a problem. He believes that business education is at an “inflection point”, where data science is becoming as important as management science. That makes him, as someone with both science training and decades of experience of teaching in a business school, well placed to enable Columbia to offer innovative new opportunities. It has started to offer joint engineering and business degrees and greater amounts of data analytics teaching on the MBA courses. “Being dean was never part of my master plan,” Mr Maglaras says, giving his first interview since taking up the leadership role in July. He changed his mind when he heard that the search committee for the new dean were interested in finding someone who could introduce more data analytics into the degree programmes Columbia offers. Mr Maglaras, whom Columbia’s president Lee Bollinger describes as a “generous colleague, beloved by his students”, had been doing work around this area, such as the design and analysis of trading platforms and algorithms and research into the economics of cloud computing services. “I happened to be a person that had been pushing that agenda already for the last five or six years here in the school, so naturally they wanted me to be involved,” he says. His first goal as dean is to “significantly” increase the number of joint

engineering and business degrees Columbia offers from just a couple at present. “What I would like to do is really redefine business education,” he says. “We need to keep refining our curriculum in order to embrace how tech and data and algorithms are actually transforming different businesses. Data analytics is essentially transforming pretty much every industry.” Making engineering students work side by side with MBA students is good preparation for the modern world of work, where they will be expected to manage diverse teams of specialists, including computer science graduates, Mr Maglaras adds. “What MBA students used to do was graduate and go to companies where they would be one of five business school graduates in a room working on business problems. “Now when they graduate, the type of team they will work with will have a couple of engiwww.businessday.ng

neers, maybe a user-interface expert or a software developer Skypeing in from Bangalore. So we need to change how we train people.” As a Greek immigrant, born

‘

I happened to be a person that had been pushing that agenda already for the last five or six years here in the school, so naturally they wanted me to be involved

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in Athens, with an engineering background, Mr Maglaras is a marked change from his high-profile predecessor, the US-born economist and former deputy assistant secretary to the Treasury Glenn Hubbard. “I think I bring an original perspective into the school,” Mr Maglaras says. However, he is quick to praise the achievements of his predecessor, who spent 15 years at the helm and raised more than $1bn for the school, including more than $500m for buildings at Columbia University’s ambitious new Manhattanville campus, which is taking shape north of 125th street in West Harlem. “Glenn was an amazing dean for the school and clearly he brought a different profile and interest.” Columbia is part of the “magnificent seven” group of elite US business schools that command the highest fees and the greatest return on investment of any MBA courses worldwide. Columbia has also been @Businessdayng

a regular among the top 10 schools in the FT’s global MBA ranking list, although it has never taken the number one slot. Mr Maglaras believes that the school could top the poll under his stewardship. He takes over the business school at a difficult time for the two-year, full-time MBA programme. Last year applications for this course fell 2.6 per cent at Columbia. Demand is likely to be down “a little” further or flat, Mr Maglaras admits, and he does not rule out following the lead set by Harvard Business School and the University of Chicago’s Booth School of Business, both of which froze their MBA tuition fees after years of above-inflation increases. “Everything is on the table,” Mr Maglaras says, adding that he does feel cost has become a deterrent to some people applying to business school. He does not, however, think that the MBA is going to be replaced by another qualification. “I think the two-year MBA programme is actually a robust, well thought out offering because it allows for a successful pivot in the career of a young adult.” Mr Maglaras plans to help Columbia begin another new chapter in its 103-year history as he oversees the school’s move to two new purpose-built buildings on the Manhattanville campus, a couple of miles north of its current site, by 2022. The two new buildings the school will inhabit will further encourage collaboration with data science students because they will be shared with the university’s engineering faculty. “Physical proximity helps,” Mr Maglaras says. He likens the new glass and steel campus design, built on the principles of flexible use of space and open plan working, to the modern business environment, particularly at tech start-ups. “We will have a lot more light but also a lot more space where people can interact,” Mr Maglaras says. “We need to move out of the siloed approach where we have an office and there is a door and I don’t talk to anyone.”

Tuesday 03 September 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

MARKET

The Future of refining in West Africa is in future ... New reports says China, Nigeria to lead new refinery capacity growth to 2023 ISAAC ANYAOGU

here are eight refineries in West Africa but having them all at functional capacity have been a difficult task as they are often beset by challenges which has seen the region account for the biggest global importation of refined petroleum products. Nigeria has four refineries, two in Port Harcourt, and one in Warri and another in Kaduna but according to NNPC’s monthly financial and operations report, they are currently operating at 5.55 percent of their combined nameplate capacity of 445,000 barrels per day. Senegal’s sole refinery with located in Dakar, has halted production in late May due to a lack of crude but has since reportedly restarted but not at full capacity. The refinery is unable to process any crude despite having a crude cargo at the port of Dakar, sources added. Senegalese media reported the Suezmax tanker Max Jacob has been waiting to

discharge its 950,917-barrel crude cargo since May 5. Cameroon’s 72,000 bpd remains offline after the refinery suffered serious damage when an explosion occurred at some of its units at the end of May according to industry sources. Ghana’s sole refinery at Tema continues to run at about half its

EXPLAINER

What Eni’s huge gas discovery means for Nigeria economy DIPO OLADEHINDE

talian multinational oil and gas company ENI revealed it has made a “significant” gas and condensate discovery, through its affiliate Nigerian Agip Oil Company (NAOC), in the deeper sequences of the Obiafu-Obrikom fields’ onshore Niger delta, a development which have huge implication on Nigeria’s economy. This discovery is expected to boost the Federal Government’s aspiration to grow the country’s oil reserves to 40 billion barrels and daily production to 4 million barrels per day. ENI noted that the well can deliver in excess of 100 million standard cubic feet of gas per day and 3,000 barrels of associated condensates per day. It will immediately be put on-stream to increase NAOC’s gas production, Eni confirmed. The new find by ENI will increase Nigeria’s gas reserves to 203 trillion cubic feet, increasing the stride of the West African nation as the largest gas reserves in Africa. According to Nigeria National Petroleum Corporation (NNPC), Nigeria has around 202 Tcf of proven gas reserves, a number that was increased from around 187 Tcf late last year -- plus about 600 Tcf of unproven gas reserves.

Gas has an important role as a key enabler to the diversification and growth of Nigeria’s broader economy through adequate power generation, provision of feedstock for value-adding manufacturing, and increased government revenue from LNG. A swing to gas-fueled power generation would represent significant savings opportunities over sources such as diesel which is multiple times more expensive than gas at the current price of $2.28 as at 30 August. This saving can then be redeployed by power consumers (individuals and businesses) to other goods & services and to new investments. Also, additional opportunity exists in leveraging gas to develop industries that use gas as feedstock, to produce methanol and ammonia used in fertilizer production. Trinidad and Tobago is a good example of a country that has accomplished much with its gas resources. With a small population of 1.4 million and only 11 TCF of proven gas reserves, the country has developed a globally competitive petrochemicals industry. Nigeria, with significantly larger gas reserves, has the potential to achieve even bigger success. Other areas where gas can benefit the economy include alternative fuel for transportation, residential and commercial utilization etc. www.businessday.ng

nameplate capacity with a return to the full 45,000 bpd rate expected later this year according to a refinery official Cote d’Ivoire SIR near Abidjan has secured a Eur577 million debt financing deal from Africa Finance Corporation which will help fund the much needed upgrade of refinery

Future aspirations However, in a note of hope, China and Nigeria are expected to be the major contributors to the global refinery crude distillation unit (CDU) industry capacity growth from new-build and expansion projects between 2019 and 2023, a new study from GlobalData, a leading analytics firm. In the company’s report – Global Refinery Crude Distillation Units (CDU) Outlook to 2023: Capacity and Capital Expenditure Forecasts with Details of All Operating and Planned Crude Distillation Units – states that around 21,579 thousand barrels of oil per day (mbd), of refinery CDU capacity, is expected to be added globally by 2023, taking the total global refinery crude distillation unit capacity to around 121,454mbd in 2023. China will emerge the global leader in terms of refinery CDU capacity additions during the outlook period with 4,000mbd. The country also has the third highest new-build, and expansion capex

globally, to be spent the over the next four years. “Growing demand from the domestic transportation sector and industrial growth is driving China’s primary distillation capacity additions. Crude distillation capacity expansion is also powering China’s crude imports, and will further help the country to increase exports of petroleum products,” said Sumit Kumar Chaudhuri, oil and gas analyst at GlobalData. GlobalData identifies Nigeria as the second largest country in terms of refinery CDU capacity additions. The country will add around 2,039mbd of CDU capacity by 2023. With 1,470mbd of CDU capacity, Iraq will be the third largest country globally for refinery CDU capacity additions. In terms of capacity, among the upcoming refinery CDUs, Dayushan Island refinery in China, the Dangote Refinery in Nigeria and Al-Zour refinery in Kuwait will lead with 800mbd, 650mbd and 615mbd, respectively, by 2023.

ANALYSIS

Nigeria’s P&ID litigation, Congo DR contract breach raise countries’ risk profile …Senegal, Equatorial Guinea present different approaches STEPHEN ONYEKWELU

nvestors across industries are highly sensitive to social and political environments when investing in any country, and want to be reassured that their investments are safe. Upholding the sanctity of contracts is oneway countries send out the right signal to investors. Nigeria and The Democratic Republic of Congo have been in the news recently for doing the opposite; they breached contract terms, which have raised their risk profiles. For Nigeria, a commercial court in the United Kingdom has given reason to a claim by engineering company Process and Industrial Developments Ltd (P&ID), which demands over USD$9 billion from the Nigerian government over a failed gas deal. The decision follows a 2017 arbitration award and turns it into a legal judgement, which could allow P&ID to seize Nigeria’s international commercial assets. Nigeria plans to appeal and apply for a stay of execution. In March, an international court ordered the Democratic Republic of Congo to pay South African DIG Oil Ltd $617 million for failing to honour two oil contracts. The gravity of these situations

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become more apparent when one considers that the loss is incurred because the country’s leaders failed to comply with a contract that could have brought a considerable amount of wealth for the country for many years to come, in both royalties and taxes, as well as help develop its oil industry. These cases represent an important cautionary tale for African governments everywhere. Very few things matter more in the struggle to attract investment and build a favourable business environment that will push the economy forward than the absolute sanctity of the contracts signed. “You want to make sure that when you invest in a project, the returns are such that associated risks are mitigated. If you are in any environment where there is any doubt about whether those returns may materialise, then you begin to question whether you should make an investment at all,” Oliver Andrews, chief investment officer at the Africa Finance Corporation said. “When you operate in an unpredictable environment in terms of the sanctity of contract, there is a cost associated with that risk profile.” Senegal and Equatorial Guinea took a different approach to contract sanctity that Nigeria can emulate. @Businessdayng

Senegal’s government under President Macky Sall avoided this kind of litigation when it was confronted with the issue of the Timis Corporation and its ownership of acreage that included the Tortue field, which is estimated to contain more than 15 trillion cubic feet of discovered gas resources. If President Macky Sall had proceeded with terminating a valid contract for the acreage, the Timis Corporation would have engaged in arbitration and would have probably gotten a favourable judgment against Senegal. Even with criticism from civil society groups, Equatorial Guinea has honoured contracts with the US oil companies that many oil analysts believe are unfavourable to the state. This principle has kept Equatorial Guinea’s oil industry stable and US firms continue to invest in new projects like the EGLNG backfilling project with Noble, Atlas Oranto, Glencore Marathon and the state. African leaders and African nations cannot afford this sort of mistakes anymore. If on the one hand, contracts must be respected, protected and followed through, the people in charge of evaluating and signing those contracts must have the project’s feasibility as the dominant reasoning behind any decision.

Tuesday 03 September 2019

BUSINESS DAY

ENERGY INTELLIGENCE INTERVIEW

Petralon targets $100m financing to expand asset portfolio, grow reserves – Wanogho-Onunkete Joseph Wanogho-Onunkete, Petralon’s Chief Operating Officer (COO) has over 30 years’ cognate experience in the oil and gas industry working in Shell and Schlumberger. He has worked in multiple roles within the industry as a Wellsite Petroleum Engineer, Operations Engineer (Wells) and Operations Production Geologist, among others. He speaks to BusinessDay’s Isaac Anyaogu about the plans of Petralon, his current firm and a marginal field operator, to grow reserves and raise financing.

hat is Petralon Energy’s strategy to stay competitive in an oil sector struggling to secure investments? We have a five-year plan which kicked off this year, as we aim to increase production seven-fold and net reserves by 500%. Our focus currently is on significantly expanding our asset portfolio and so we are right in the middle of an investing on asset acquisitions and also on development expenditure where required to unlock the value in the acquired reserves. To attain the 50% mark, our attention is on a few mid-sized transactions for 2019, which are at different stages in the pipeline. Our mid-term goal is to increase our net reserves position up to 30 mmbbls and also grow our production to a minimum of 15,000 barrels per day net, by the end of 2023. We are well positioned to secure the investment required for our growth plan and are actually in the process of raising between $80 to 100million dollars, which will bring in new shareholders to the company. Many marginal field operators have been unable to take their fields to development. From your experience with OML 54, why has it been so difficult? There are different kinds of challenges marginal field operators encounter in the development process. Firstly, the marginal field arrangement was a program created and targeted at fields which were undeveloped by the IOC’s due to their assessment that the fields were not commercial at the point relative to other opportunities within their portfolio. This means that the fields within the wider block were already con-

Wanogho-Onunkete

sidered as ‘development problem candidate’. This was mainly due to their relatively smaller size or reserve accumulation, which makes the justifying the investment required to unlock the value in the fields a major task. There is a lack of infrastructure on the fields, for instance, most of the fields did not have an established evacuation route for the produced crude and have in addition to drilling wells and putting production facilities on the field location. The asset owners have had to put in place pipelines to take their production to market or evacuate through a third party location or terminal which requires barging the crude or trucking, which if not efficiently managed is a very tedious process. Moreover, the dearth of adequate social and infrastructural amenities

like good roads, secure waterways, and proximity to functional seaports, jetties, airports, etc, implies that these marginal field operators make budgetary provisions for some of these amenities rather than channeling their scarce means on the primary business of exploiting hydrocarbon from the plays. I am also aware that some of the forged partnerships were not properly fitted and so the partners inability to work towards the common objective has created delays in achieving the desired results. Finally, and perhaps most impactful is the funding sources being deployed on the asset. The exploration and production industry is capital intensive and a huge capital outlay is required to achieve first oil. Most of the marginal field operators have struggled to get the right funding mix for the assets and as a result are either

over indebted at an early stage and cannot access more funding or lack the sophistication or organization to appeal to the right funding sources. What is the best way operators can quickly take these fields to production? I think it is more a question of the quality of the partnership and how the partner entities can work together towards achieving an objective. The best way to successfully yield production is to have the right people, great and complementary partnerships and the courage to take calculated risks. Secondly, well-structured and complementary partnerships cannot be overemphasized; it is a key driver for any successful investment or operation in the oil and gas sector. This is why we positioned ourselves optimally for the right strategic partnerships – from our Board of Directors to the drivers of our operations, we are keen on leveraging the capabilities of individuals and organisations within and outside the oil and gas sector. For example, in 2017, we formed a partnership with Julius Berger Nigeria Plc. JB has the capacity to deliver construction and the pre-fabrication works, which we need in developing oil and gas assets, as well as dredging and tug-boating for assets located in swamp or shallow water terrains. Considering Petralon Energy’s experience, what technical attributes and risks should investors look out for in oil assets in the Niger Delta? Potential investors should look out for such technical attributes like the size of the hydrocarbon pool(s), operational terrain (land, swamp, shallow offshore, offshore), geophysical and geological setting, hydrocarbon types and their associated petrophysical and reservoir en-

gineering (PVT) properties. Aquifer support and drive mechanism. In the Niger delta, the prolific paralic reservoirs of the Agbada formation are essentially of clastic origin and the clay minerals of the smectite family that impede hydrocarbon productivity are less common. Investors are much more wary of the reservoir fluids API gravity, aquifer support, and reservoir compartmentalization, reservoir connectivity, etc. These parameters determine the type and number of wells to optimally exploit the hydrocarbons. It is also common knowledge that, relatively, there are minimal subsurface risks in the Niger Delta and the challenges are mainly above surface on execution, such as with infrastructure, effectively managing the community and providing adequate security. We take these risks seriously and have proven active strategies which we deploy to ensure that they are well managed. Besides awarding licenses, what else can regulatory bodies do to ensure that investors actually use the fields? As facilitators, regulators must seek to understand the challenges and successes of players within the industry. By creating platforms for objective questioning and feedback, as well as information-sharing, it will be possible to gain insight into production challenges and relevant solutions. It is also important to conduct regular checks and establish adequate monitoring mechanisms, with the intention to support rather than punish. Where possible, regulatory bodies can make recommendations for industry partnerships and pairings, based on in-depth analysis and observations, which can only be achieved if the right monitoring measures are established.

Nigeria has abundant natural gas but faces low-energy future STEPHEN ONYEKWELU

igeria is forecast to be more populous than Indonesia by 2034 and the United States by 2045 but it still struggles to power households and factories despite being home to the world’s 9th largest natural gas reserves. The power sector consumes up to 70 percent of the domestic natural gas supply in Nigeria but the persistent liquidity crisis in the sector has negatively affected the country’s

gas pricing framework, as a result, electricity generation and per-capita consumption suffer. The Central Bank of Nigeria’s (CBN) annual reports show that substantial supply gap for electricity generation still exists in Nigeria, despite these variances in gas prices. Total installed capacity for electricity generation has stagnated at 12,232 mega-Watts (MW) for close to a decade. The average generation capacity of electricity has been oscillating within the range of 2,623.1 MW/hr and 4, 000 MW/hr against the estiwww.businessday.ng

mated demand of 10,000MW. According to the World Bank’s data, per-capita electricity consumption in Nigeria is 145 kiloWatts per hour (KWh) compared to other neighbouring West African countries, such as Ghana and Ivory Coast, which is not endowed with such resources, with per-capita electricity consumption of 351 KWh and 275 KWh respectively. The key dilemma in Nigeria is that while lower gas prices are needed to encourage gas demand and support local industries and power

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generation, cost-reflective prices are needed to stimulate investment in gas infrastructure and assure supply sustainability. “I believe that a market reflective pricing framework should come to full effect in Nigeria to incentivise investors into the gas sector,” said Victor Okoronkwo, GMD of Aiteo E&P Company Ltd. But full monetisation of Nigeria’s abundant natural gas through gas exports on the one hand and domestic gas utilisation in gas-to-power, gasbased industries such as fertilizer, @Businessdayng

methanol, other petrochemicals as well as transportation initiatives on another hand will further propel the country’s economic diversification agenda. To reach this, experts say there are gaps the country has to deal with to make the gas to value chain both profitable and sustainable. Some of these include solving the immediate liquidity issues in the sector, the noncost reflective electricity tariff, payment securitisation, infrastructure deficits across the value chain and foreign exchange volatility.

Tuesday 03 September 2019

BUSINESS DAY

OFFGRID BUSINESS

COMMENT

Creating the Needed Jobs for the Off-Grid Sector? MARK AMAZA & IFEOMA MALO

y 2023, it is expected that up to 10,000 minigrids would have been installed in Nigeria, generating 405 MW of power and bringing electricity to hundreds of thousands of people for the first time, predominantly in rural communities. It is also expected that by 2030, at least 9000 MW will be generated from renewable energy as part of the Vision 30:30:30 of the Federal Government which aims to generate 30% of 30GW by 2030. To actualize this, there are numerous donor programs that are giving grants to catalyse the sector, as well as the Rural Electrification Fund of the Rural Electrification Agency which has received a loan from the World Bank and the African Development Bank to the tune of $350 million and $150 million respectively to be given as grants to mini-grids and solar home systems developers. Not only that, there is a rise in equity funding to renewable energy companies to finance their expansions in order to meet the huge demand for power. It is evident that the sector is about to experience explosive growth. However, a critical question is yet to be answered: where will the thousands of skilled workers to install, maintain and operate these systems come from? This is very important because without skilled manpower, the growth of the sector will not be sustained and its resilience will not be achieved. This is the driving motivation behind the launch of a new campaign by Power for All, called Powering Jobs on the 18th of July, 2019. This campaign was launched in Nigeria, India and Kenya which are all experiencing rapid growth in the deployment of decentralized renewable solutions as the fastest, most cost-effective means

to achieve universal electrification. The campaign is aimed at catalysing policy action on developing human capital for the DRE sector as it grows, and it will incorporate a multi-stakeholder approach across numerous sectors such as gender and youth, agriculture, education and health. This is because the growth of the sector also creates impact across other sectors, and it is necessary to ensure that job opportunities for women and youth are available in the sector in order to meet the Sustainable Development Goal 8, which is Decent Work and Livelihoods. In order to better understand the correct state of jobs in the DRE sector and where the demand for job skills will be, Power for All conducted a jobs census across 50 companies in Nigeria. The census results show that even though DRE solutions have only captured a small percentage of the demand, it already has created about 27,000 jobs – 4,000 direct jobs and 23,000

indirect jobs. So far, the bulk of these jobs are in the pico-solar, solar home systems segments and small off-grid appliances segment, where companies that sell directly to enduser consumers exist. However, our census survey has predicted that due to the expected rise in the number of mini-grids, the bulk of the 52,000 direct jobs will come from mini-grids by 2023 while 14,500 informal jobs will come from pico-solar and solar home systems by same year. The growth of the Decentralized Renewable Energy sectors across these countries will require the development of skilled technical manpower who will build, install, maintain and operate these solutions. But not only that, an estimated 27 percent of the jobs skills that will be in demand by 2023 will be non-technical skilled workers in roles such as management and business administration. Considering that the demand

for these skills puts the sector in competition with other sectors, there is need for deliberate action by training institutions and DRE companies to develop and attract workforce with these skills. The potential of job creation from decentralized renewables to impact other sectors such as agriculture, health and education through the deployment of productive-use systems such as solar water pumps and solar dryers necessitates the need for the Powering Jobs campaign to work with stakeholders from other sectors. There is also a need to mainstream gender and youth considerations into the campaign in order to create opportunities for everyone within the sector as it undergoes rapid growth: as at present, only 27% of jobs in the DRE sector are taken up by women, with the bulk of the jobs coming from end-user companies where women take up to half of the direct, formal jobs and taking

another 44% of the informal jobs, often as sales agents. However, as the growth in jobs will come from the mini-grids where project developers, installers and mini-grid operators currently employ very few women, there is the risk that the percentage of women in the entire will shrink unless there is deliberate action taken on women’s empowerment and education regarding the technical and management skills needed to install, maintain and operate mini-grids. As the Powering Jobs campaign rolls out, it will create a synergy between the various efforts of government agencies, private companies, tertiary educational institutions and training institutes that focus on the power sector to begin to take a unified approach to creating the much-needed human capital for the sector to grow. Doing so will also fulfil the Regulations on National Content Development for the Power Sector approved by the Nigerian Electrical Regulatory Commission in 2014 which seeks to ensure the development of local capacity - job and work opportunities – across all levels of the power supply value chain in the Nigerian Electricity Supply Industry (NESI) – generation, transmission and distribution. This ranges from basic labour positions such as construction and procurement positions, to management and administrative positions. Without this development of competent manpower to build, grow and sustain the industry, the gains of the anticipated increase in the adoption of decentralized renewables to provide access to energy will be eroded. • Mark Amaza is the Lead – Strategic Communications at Power for All – Nigeria •• Ifeoma Malo is the Country Director, Power for All – Nigeria.

Germany commence plans to rely strictly on renewables for power, Nigeria can do same DIPO OLADEHINDE

ne of the world’s biggest consumers of coal, Germany has announce it will soon primarily reply on renewable energy as the country plans to shut down all 84 of its coal-fired power plants over the next few years in order to meet its international commitments in the fight against climate change. While Nigeria possesses an abundance of access to renewable energy sources and a master plan for renewable energy, the country is still behind in renewable energy development and usage

however in Germany renewable energy overtook coal last year as the leading source of energy and now account for 41percent of the country’s electricity supply. “It’s a big moment for climate policy in Germany that could make the country a leader once again in fighting climate change,” Claudia Kemfert, professor for energy economics at German Institute for Economic Research told Bloomberg. In Germany, 12 of the country’s 19 nuclear plants have been shuttered so far as the country hasten up its gradual steps towards renewable energy. The plan to eliminate coal-burning plants as well as nuclear means that Germany will

be counting on renewable energy to provide 65percent to 80percent of the country’s power by 2040. The German government plans to bring the share of renewables in Germany’s power consumption to 65 percent by 2030, although the country’s chamber of commerce and other stakeholders have warned that this goal will be out of reach if renewables expansion is not accelerated significantly. Faced with a population boom that has sent carbon emissions soaring and stretched power supplies to breaking point, oil-rich Nigeria should be turning to renewable energy in a big way just like Germany. Nigeria is a country with an

ANALYSTS: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde

ever-growing population of about 180 million people and yet produces an estimate of 7,000MW of power primarily through fossil fuels (natural gas and oil). This is a challenging fact when compared to other countries. “Ready access to electricity will reduce youth unemployment and increase productivity,” Ifeoma Malo, Nigeria country director at the global campaign group Power For All, told the Thomson Reuters Foundation. Based on the United Nations Population Division (UNDP) estimates; Algeria with a population of about 41 million, generates about 11,000MW; Egypt (95 million population) – 24,000MW; United

Kingdom (65 million population) – 80,000MW; Germany (80 million population) -120,000MW, South Africa (60 million population) – 40,000MW and again Nigeria with 191 million population generates a paltry 4,500MW. In a bid to restructure the power sector to pave the way in solving Nigeria’s energy crises, the country is turning to renewable as a sustainable source of energy. This consideration of an alternative source of energy is not only to meet the power demands of Nigerians living in rural areas who are underserved and unserved but also to limit the damage fossil fuels has inflicted on the country.

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email: isaac.anyaogu@businessdayonline.com, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com

Tuesday 03 September 2019

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

‘Data and identity are important for social services, security, economic planning and development’ ESIGIE AGUELE is the chief executive officer of VerifyMe Nigeria, a leading database management company. In this exclusive interview with JUMOKE AKIYODE-LAWANSON, Aguele speaks about the importance of securely digitizing identities in Nigeria for economic planning and development. He also talks about the need for data harmonization and the company’s plans to introduce advanced biometric recognition products to collect and warehouse citizen data. Excerpts…

hat solution is VerifyMe Nigeria offering to ensure that digital identity of Nigerians are captured, secure and properly managed for economic planning and advancement? Our new product is a real-time ID verification platform that brings together three major repositories which are the National Identity Number (NIN), Federal Road Safety Commission (FRSC) through its driver’s license and Bank Verification Number (BVN). We are bringing together all these capabilities and we also took a long step back to study the industry in terms of what exactly Know Your Customer (KYC) and ID verification is, and why it is important. We figured that if you look at the global market, there is the antimoney laundering laws that actually say why KYC is important, there is the British General Data Protection Regulation (GDPR) directive for privacy guidelines and we said we want to build a system that provides the most convenient verification solution to Nigerians; adhering to strict compliance rules, so that we have data integrity, but also protecting the privacy and people’s information so that we are not carelessly giving out information to people and this is why we have VerifyMe Nigeria. We want to digitize trust essentially. We can deliver digital trust to banks, consumers, employers etc. This is what will facilitate the hiring industry, lending, and so many other services. What VerifyMe is doing with the data is that we are digitizing it and not just doing last mile research on someone’s information to digitize it, but we also make that information available. With our multi-factor platform, we can link FRSC, NIN and BVN to harmonize digitized data, and that data now becomes available and enables many organizations to meet their throughput demands. VerifyMe allows very fast processing

you cannot really consider it tier 3 data, as there is the case of preregistered SIM cards for a lot of Nigerians. Another thing is that for the pictures they were taking, the telcos didn’t have standards for facial recognition in mind which are services that companies like VerifyMe are bringing. Although telco data is very important, it is necessary for lower level KYC .

Esigie Aguele

of KYC so that companies can grow. How is VerifyMe Nigeria working to ensure that the platform is inclusive and can help create a digital identity for the millions of unbanked and unidentifiable Nigerians? First we have a problem with being able to provide services to the about 70 million people who are documented in Nigeria between FRSC, BVN and the National Identity Management Commission (NIMC). A lot of those people cannot go and get insurance real-time, they cannot open bank accounts real-time and get other services, and that is a big problem that we are able to solve for the market today. The second thing is that there are a lot of people who are excluded from micro lending and financial services because they are unbanked and VerifyMe Nigeria is working with the National Identity Management Commission on an enrolment program so that with our platform, you can actually pre-register and we can collect biometrics and send it to NIMC to help you get your

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ID. The solution we have now caters to the 70 million identifiable Nigerians, but we are also very aware that both private sector and government need to come together to close the gap so that this 70 million becomes 200 million, where everybody is documented in this country, and that is our goal. We are very aware that the starting point is the 60-70 million documented Nigerians and the second phase of our battle is to digitize identity for the rest of Nigeria’s population. Why did VerifyMe Nigeria choose the BVN, FRSC and NIN as the three repositories for collected digital data, rather than work with the telcos who have over 160million registered subscribers on their networks? It is about the tier level of the data. So, with CBN, NIMC and FRSC, when they were collecting citizen data, there was a lot more stringent compliance. With the telcos, unfortunately, the integrity of the data is a lot less. According to CBN, if you are using telco data for verification,

How does your company deal with collecting and verifying data from remote locations and the challenge of inadequate mapping system in Nigeria? This is a big problem because VerifyMe is everywhere in Nigeria. We do a lot of KYC for banks and we operate across all geographical regions in Nigeria except for areas where there are security challenges. So, if an address is not available, it is unidentifiable and we have to list it that way which is a problem in the industry. However, we still digitize it so that if somebody tries to use that address next time, it is flagged as a nonexisting address. We are helping to map out addresses in Nigeria. What does VerifyMe do about reported cases of theft or misdemeanor? For example, if a particular person has been flagged on your platform by a former employer what steps are taken to ensure that there is no re-occurrence? One big gap we have in Nigeria today is the concept of people being able to do wrong things in one location, go somewhere else and nobody knows. We cannot stop it from re-occurring, but we can provide information to prevent repeated incidents. What VerifyMe has done by digitizing this data is that we have also created a national work history repository so that anybody who plugs into it has access to work history that anyone has reported. What this does is that it enables both corporate and do-

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mestic employers to access work history of employees. What are the security measures that VerifyMe has put in place to ensure the safety of citizen data on its platform? In order to be a NIMC agent in Nigeria, you have to be compliant with the laws. Data has to be hosted in Nigeria and before you can be a corporate customer using our API, we have to verify that you are allowed to operate in Nigeria. We are International Information Security Management System (ISMS) 207 compliant and we are compliant with Nigerian law in terms of our data hosting and management. We have world standard technology protecting our data and our data is our business so we know that we cannot afford to be hacked or have any issues at all, and so, we invest heavily in that area. Apart from the corporate and domestic employee profiling, what other product does VerifyMe offer on its platform? We also do certificate verification but it is not part of our online model because certificate verification is not digitized yet and we are really into using technology for verifications. It is also not really important for KYC. For our future, we have really exciting features that are coming to standardize and secure KYC data. In the next few months, we are going to be rolling out a lot of biometric-type recognitions for use and bring out a lot of digital services. We would be rolling out a KYC market place so that the originator of the address verification will be given a percentage share of money paid every time that particular viable address is used for authentication. So it is essentially a place where you can also sell your data. What can the government do to ensure that citizen data are properly harnessed and pro-

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cessed for social development, planning, improved healthcare systems and other economic benefits? The government needs to know its people so that it can provide adequate security and social services. It is important for Nigerians to get documented so that we can engage in our economy, get secure and know who needs to be and who does not need to be in our country, for social protection and social investment. From the private sector perspective, data and identity is the bedrock of any development that is going to happen in this country. If banks cannot lend money, they cannot make money, and by law, the banks cannot lend money if they don’t have KYC, so data is very important. What is VerifyMe Nigeria’s business model and how does the company make profit from what it does? We make money from people doing verifications on our platform. For ID verification on domestic staff, it costs about N500. That gives you history of work history reporting that is downloadable. It is linked to address verification, guarantor verification and all of your tiered KYC. We make money by selling our services; for example, address verification in the traditional market will cost about N5, 000 to N8, 000. VerifyMe does that for N2, 000, and for our high volume customers, we even do it cheaper because we have been able to leverage technology, we’ve been able to drop the prices in the market while still remaining profitable essentially. We have decentralized the whole process of verification while we manage and operate backend technology that makes the data have integrity. Our business process has allowed us to have a really cheap, safe product that can also make us profitable and we believe that we are going to be one of the biggest companies in Nigeria in the next few years.

Tuesday 03 September 2019

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

ISSAN advocates safer cyber space, urges banks to protect against cyber attacks Stories by JUMOKE AKIYODE-LAWANSON

he information Security Society of Africa – Nigeria (ISSAN) has urged banks and other financial services providers in Nigeria to see cybersecurity as of utmost importance and put up their guards to ensure that loses as a result of cybercrime are cut to the barest minimum. The wide range, multiple stages and scale of today’s attacks are proving effective and Business email compromise, Escrow fraud and romance scams have been identified as the main methods used to perpetuate cybercrime today. Speaking at a cybercrime conference organized by the society to sensitize bank IT managers and staff, recently in Lagos, David Isiavwe, president of ISSAN and group head, operations and technology, Ecobank, Nigeria, said; “Cyber security is a big global problem that exists everywhere including right here in Nigeria. The fraudsters perpetuate these criminal acts from the confines of their homes or wherever they are s long as they have a device with access to the internet and the losses are huge. The Central Bank of Nigeria recognises this, and so CBN is actually at the fore front of fighting cybercrime in Nigeria.” Isiavwe said that organistaions would need to weigh the risks and chose between convenience and security, especially as the Central Bank of Nigeria is taking major steps to improve digital financial service security

…introduces more advanced spam detection features

L-R: Oluwatoyin Asaju; director special duties, Nigerian Communications commission (NCC), Wakil Bako; chairman ITU study group 5, Ubale Maska; executive commissioner, Technical Services, NCC, Reyna Ubeda; ITU-T project officer, Umar Garba Danbatta; executive vice chairman, Nigerian Communications commission (NCC) , Helen Nakiguli; ITU-T study group 5- regional group Africa, Paolo Gemma; working Party 2 Group 5 chairman ITU-T, at the First Digital Africa Week, ITU-T SG5 and SG20 regional group for Africa held in Abuja on August 27, 2019.

in the country. “From what we have seen, a lot of our systems here are even safer than what obtains outside in the developed world. One of the key mechanisms that the CBN has introduced is the Bank Verification Number (BVN) which is a very good tool to fight against cybercrime. Another one is what we call two factor authentication (2FA) which the CBN has come up with framework and policies around this to ensure that the systems are safe and secure. That is why if you want to do certain types of online transfers, CBN mandates that the customer must have a token, so if somebody steals your password but doesn’t have your token, the person cannot access your money.”

On further steps being taken, Isiavwe told BusinessDay that the latest mandate for Bank ATMs is facial recognition technology. “Automated Teller Machines would soon be able to recognise your face as the owner of the card used. If your face is not recognised, then tour transaction will be declined. So, the fight against cybercrime from a regulatory standpoint is very good. Representatives of Nigerian banks present at the conference expressed worry that a lot of Nigerians do not take time to read warning emails and awareness messages sent by banks. However, stakeholders have recommended that banks should get their ATMs to verbally relay messages rather than

put it in written form. Information Security Society of Africa in Nigeria (ISSAN) is collaborating with all key stakeholders to ensure that there is adequate level of awareness to customers and ensure that people exercise basic hygiene methods to carry out safe and secure transactions. Non-bank organisations that perform financial services have been advised to spend enough time doing appropriate testing of products that they want to deploy. “The CBN recognises Fintechs and so they are working with the Nigeria inter-bank settlement system (NIBSS) and other stakeholders to create sandboxes; a safe environment for experimentation and testing,” Isiavwe said.

iDAF launches iAspire data science fellowship program in Nigeria DAF, a non-governmental organisation that focuses on creating an Artificial Intelligence (A.I.) empowered community in Africa, has introduced iAspire data science fellowship program. Data Science entails a combination of data inference, algorithms, and technology that solves complex problems. The core of this technology is data that is initially raw, then is streamlined, and stored in a data warehouse. These vast amounts of data can help generate significant business values. Today, leading organisations bring their data science and business intelligence practices together, providing them with timely and centralised access to corporate data. To cue Nigerian businesses to emerging business models, they

Truecaller app records 1million paying subscribers

require skilled data scientists. To this end, the iDAF’s flagship program aims to train and prepare Nigeria’s bright minds to use Artificial Intelligence and advanced machine and deep learning concepts to tackle business and social problems. The program is a two-year program that includes six-month comprehensive data science training and 18 months of professional work as a data scientist consultant with iDAF’s partner, Data Wrangling. In addition, successful graduates take a cloud certification in AWS, Azure or Google. Participants on the two-year journey will also enjoy sleuth of mentors from the industry and academia that brings all the interaction, social learning, localized capstone project and a globally www.businessday.ng

accepted cloud certification. Speaking to the press about the program, Theophilus Medeiros, the co-founder/CEO of iDAF, said that the data science program offers a comprehensive curriculum for participants and is designed for the industry. “iAspire data science fellowship is about the only data science program in Africa that offers the most comprehensive curriculum and a guaranteed Cloud Certification. Curriculum designed and being constantly updated to cater to industry needs by experienced data science practitioners and professors “The program creates a portfolio of 10 mini-projects and a capstone project across industries of your choice to showcase your skills and knowledge and will definitely offer participants knowl-

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edge about the theory of current data science technologies with hands-on experience”. To participate in the program, interested candidates are to visit iDAF’s website (www.idaf.ng/apply) and submit their application not later than October 5, 2019. “Therefore, we get you up to speed as quickly and deeply in just six months of current topics. Interestingly, the faculty is a mix of Top Data Scientists working for Fortune 50 companies who are passionate in teaching,” the Founder added. Also commenting, Prince Ogwuru, iDAF’s co-founder, advised the government to develop policy frameworks and structures on which artificial intelligence can thrive, and position Nigeria as the leader of Artificial Intelligence in Africa. @Businessdayng

ruecaller, a popular smartphone application which has features of caller identification, call blocking, call recording, flash messaging, spam message blocking etc., has announced that it has crossed 1milliom paying subscribers globally, and has added a series of new features to its paid subscription service, Truecaller Premium. Rolled out globally, the premium subscription service will now incorporate several advanced and more powerful spam blocking features that include automatically updating and blocking top spammers among others. The spam blocking features are currently available to Android users across all global markets of Truecaller. Another of Truecaller’s recently launched subscription service, Truecaller Premium Gold, will also offer the upgraded features under its plan. “The gold-themed interface empowers customers by making them stand apart from the crowd, hence adding more value and branding to their profile,” the company said. The new spam blocking features include: automatically updating and blocking top spammers; availability of extended top spammers list (in cases where users want to block low volume spammers) and block hidden numbers. Others are: block foreign numbers to prevent scams from other countries; block all numbers which are not in the user’s phone book, and block 140 series telemarketers (This feature is for India users only). For Premium users, the following features are available: Ads-free experience; who viewed my profile (get notified when someone views your profile); call recording - record important conversations and hear them later (not available in Android 9 and above) and premium badge (look professional when you call someone). Speaking on the development, Alan Mamedi, CEO and co-founder, Truecaller, said: “We are happy to see this growth, and it makes us proud that users value the benefits with our premium features. We are also excited to announce these new upgrades that will help us add even more value to our growing premium users and help them make their communication safer and more efficient.” Truecaller says its spam blocking features can be availed by subscribing to Truecaller Premium, which is currently available globally, for all new subscribers, at an 80 percent discount for the first three months.

Tuesday 03 September 2019

BUSINESS DAY

FEATURE

How news habits are changing as media evolves IFEOMA OKEKE

Tini Sevak, vice president, Audiences & Data, CNN International Commercial

conducted earlier this year found that 67 percent of audiences generally use websites and apps for their news consumption, with social (58 percent) and search (42 percent), National TV (61 percent) and dedicated TV news channels (55 percent) still playing a critical role in following the story. According to Sevak, all this insight speaks to the rapid change of the news cycle, but also the need for brands and publishers to focus on providing audiences with content that matters to them. She explained that there are also indications that, driven by concerns of misinformation, in 2019 attitudes (especially amongst younger audiences) are changing towards news on social media. For instance, according to the Reuters Institute Digital News Report 2019, while 68 percent of international news audiences have used Facebook for news, less than a quarter of the audience trusts news from the platform. There can be an exception here though when news is clearly provided on social media by a trusted news brand that the audience is already familiar with. According to her, audiences today have higher expectations www.businessday.ng

and lower attention spans when it comes to content. “Moreover, in the “Amazon era” of easy access and fast delivery, audiences demand that media and news brands meet their expectations for what they want, when they want it and where they need it. This is driven by three points: “Building credibility and favourability through accuracy and trust—Being responsible not just with audience’s data but in the calibre of the content delivered to them; having a deep and enriched knowledge of audiences— “Understanding and treating

them as people with real life interests and behaviours, not proxies defined by general demographics; and providing audiences with relevant and meaningful content— Identifying the key moments when content is going to resonate the most,” she said. Every news organisation must embrace these points because trust translates into loyalty, and vice versa. As part of our research study earlier this year, CNN rated 4.6 times higher on average than other news brands when it came to trustworthy and reliability. The importance of trust also

“

Building credibility and favourability through accuracy and trust—Being responsible not just with audience’s data but in the calibre of the content delivered to them; having a deep and enriched knowledge of audiences

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“

ith more choice, power and information at their fingertips than ever before, today’s consumers are making quicker, more connected decisions about everything from how to spend their money to which media they consume. This has placed an onus on brands and media companies to use technology to not only make things faster, easier and more productive, but to ensure audiences feel part of something meaningful. It is vital to make experiences personal to audiences and to deliver them at the moments when they are going to resonate the most. When and where content will be the most receptive to viewers is continually changing, as evidenced by a dramatic shift in the last five years of where consumers are spending their time. On average globally, people spend over 11 hours a day consuming media in some form across platforms, marking a 10 percent increase in consumption compared to data from 2012. Television continues to remain an important part of this mix, but unsurprisingly we are seeing a shift in people spending more time online, especially in nonEnglish speaking countries. Time spent on mobiles is now at over three hours 15 minutes per day on average according to Global Web Index’s Q1 2019 research data. Looking specifically at Nigeria, mobile becomes an even more important of the media mix as, Global Web Index ’s 2017-2018 data shows mobile usage far outpaces other digital devices, with 97 percent of the population having a smartphone compared to 35 percent having a PC/laptop and 13 percent a tablet. Consequently, Nigerians are spending significantly more time than the global average consuming content on mobile, with an average of four hours 33 minutes per day (according to 2017 data), and a large proportion of this time is on social media – three hours 17 minutes. These changes in consumer behaviour are affecting where and how often people find their news, with smartphones becoming the primary device and start point for news consumption. Tini Sevak is the Vice President, Audiences & Data, CNN International Commercial said a bespoke research study CNN

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permeated throughout the Reuters Institute Digital News Report, which found that consumers are relying more on “reputable brands” as trust in news more generally continues to fall with rising concerns of negativity, fake news and overload of information. In the global study, nearly a quarter of people (24 percent) said that they would stop using sources that had a “less accurate reputation”. Linked directly to this need for trust is an appetite for enterprising and informed journalism. “Our research study found that audiences placed most value on journalists who display a depth of knowledge and passion, ability and drive for the truth and a willingness to go to wherever the heart of the story is to report the facts first-hand. “Specifically regarding its own network, participants in the study said they come to CNN to find something unique that they can’t get elsewhere; for relevant content; to better understand what is going on in the world today; and for news that is important to them personally. “It is paramount for news brands to live up these expectations if CNN is to retain and grow audiences. Advertisers and audiences have just as much to gain from creating deeper experiences because consumers expect a twoway relationship with brands and furthermore expect experiences to be consistent across all touch points of their journey,” Sevak said. She noted that listening to consumers, understanding their behaviour, interacting with them and responding to their wants and needs (all in a data responsible and safe environment of course) is the only way this is achieved. As VP, Audiences & Data, Tini Sevak leads and develops CNNIC’s international and geographically distributed team of specialists focused on using WarnerMedia and out-of-house data capabilities to create new data solutions via analytics and visualisation, as well as accelerating the modernisation of our existing audience research tools. Tini joined CNN from YouGov, a data & analytics provider, where she was Global Director of Data Applications. Prior to joining YouGov, Tini spent over 14 years in the media agency industry. Whilst working at Mindshare & Starcom Mediavest, Tini worked with digital, data, analytics and technology to lead clients on a journey of transformation turning insights into actions to drive business outcomes.

Tuesday 03 September 2019

BUSINESS DAY

AVIATION GUIDE in association with ‘Partnership by African carriers is key to tapping its huge unexploited market’ Mesfin Tasew is the chief operating officer, Ethiopian Airlines. In this interview with IFEOMA OKEKE in Lagos, he speaks on how African carriers can leverage corporate to tap into huge untapped African market. During festive period, Ethiopian Airlines (ET) recorded lot of cargo and many South Easterners in Diaspora look forward to using Ethiopian Airlines to send in their cargo. With the closure of Enugu airport, do you have alternative? ince the airport is closed, we have planned to still serve the South East region. We have planned to shift the Enugu flight to Port Harcourt and we will start operations on the 3rd of September 2019. We will continue operating to this airport until Enugu becomes ready. When Enugu is ready, we will go back to Enugu. Do Nigerian airlines patronise Ethiopian airline for aircraft maintenance as much as you expect? First of all, I will like to say that Ethiopian Airlines today has the largest Maintenance Repair Overhaul (MRO) facility in Africa. We repair all Boeing models of aircraft except 747. We also repair the Airbus A350 aircraft, which is the newest Airbus aircraft. We repair the Bombardier Q400 aircraft in Addis Ababa. We have six hangars and a very big engine shop. We have several component repair shops. We have been doing this for several decades now. Primary, it was developed to support operations of Ethiopian Airlines but we are also supporting other African Airlines from different parts of Africa. Today we support several airlines including Asky in Togo and many of the Nigerian airlines including Arik Air. I came to Nigeria and before my departure I saw Arik Q400 aircraft going for C-check in Addis Ababa. Prior to that, we repair several aircraft from Nigeria including the former Air Nigeria, Chachangi and Belview aircraft. So, we supported all of them. We currently have our engineers here supporting Arik. Aero Contractors now have maintenance facility and they employed four engineers from Ethiopian Airline. Are you looking at collaborating with them? We have been looking for a dependable partner to join and establish an MRO facility in Nigeria. We have had some discussions earlier with some companies including Aero Contractors but unfortunately, so far we have not agreed with anyone. However, we are still

Mesfin Tasew

looking for a partner. Aircraft repair and maintenance is very capital intensive for Nigerian carriers. What are doing to support them in this regard? Do you give them incentives as way of support compared than what they get from Europe or other continents? We are ready and willing to support African airlines in respect to MRO services because it requires investment to establish MRO facility and small African airlines cannot afford this. It also requires human resource. Today, we don’t have so many schools training Africans such as aircraft technicians, engineers and pilots. It takes time and experience. Even if you have money, you have to train people and even if you have trained people, you need some experience to do that. Most of African airlines are small and they can’t afford to have their own MRO facility, so they need the support and Ethiopian Airlines is here to support them in different ways. One approach is while they operate, we give them total maintenance support. It means we can send our people here to maintain

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their aircraft. We can also deploy spare parts at their location, so they can focus on transporting people and goods. As they grow, we encourage them to start developing their internal MRO capabilities little by little. For example, they can start by doing line maintenance service. This means they can have qualified and fortified engineers when the aircraft flies to do small checks such as rectifying some defectors. As they grow further, they can do major airframe maintenance. They can establish some shops like wheel shops and battery shops to repair their wheels and batteries amongst other. Finally, they need support on major repair of airframe, engines and spare part repairs. We can support them from Addis Ababa. This is how we think we can support them. Regarding engine maintenance, it requires very high investment and they can’t afford it. Ethiopian Airlines has invested a lot as Addis Ababa. On the other hand, because we are located in East Africa, to get closer to the airlines, we will like to establish MRO facilities in West Africa, Central Africa and Southern Africa. To do that, we need partners locally. How many airlines do you maintain their aircraft in Africa and how much do you realise yearly from MRO? Today, we support several African airlines. From West Africa, our major customer is Asky in Togo and Lome. We maintain aircraft for two carriers in Nigeria; from East Africa, RwandAir; from Kenya, Jambo Jet and Congo Airways; From South, Malawi Airlines and Mozambique, amongst many others. Annually, we generate around 80million dollars from MRO. We want to maximise this because we are developing more internal capabilities on engines and components. So, our revenue is expected to grow faster. You said you needed a dependable company to partner with in Nigeria to set up MRO. What are the things you will be looking at? The first is interest and secondly, they should be committed in terms of investment, requirement and leadership. They should have the capacity to facilitate the local re-

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quirements like getting the land permissions, facilitating the local government requirements and having a reputable track record. Last time, your CEO spoke of setting up a new airline with reputable partners in Nigeria. How far has that plan gone? We have established several airlines in partnership with local governments and local investors in different parts of Africa, including the neighbouring Togo. Now we have signed an MOU with another country in West Africa. We had several discussions in Nigeria till now but none of them have matured. It is still under discussion. How will you describe open sky for Africa which should be working but is not working because of suspicions here and there? What do you think are the hindrances and how can we overcome the hindrances? You might have heard from different sources that today around 80 percent of Africa traffic are carried by non-African carriers. Hence, Africa shares the remaining 20 percent. The 20 percent is carried by African carriers. So, there is a big market for African airlines. We have to take our reasonable share from this market. We can only take this share when Africans partner. We are brothers as African citizens and that is what we are encouraging. Unfortunately, many new starters African airlines didn’t succeed. The problem is internal capacity; capacity in leadership and deployment of resources. We don’t have the right visions individually. We have to cooperate on financial front, on maintenance, technical know-how and developing human resources amongst others. One of the critical problems for African airlines is that we don’t have enough trained aviation professionals. So, we have to corporate. Unfortunately, we didn’t succeed for different reasons. One is lack of leadership, from African government and airline operators. Air transport business requires discipline in leadership and commitment. If you don’t control your costs, you cannot succeed. If you cannot develop long term strategy, you cannot succeed. So, we have to help each other and government has to play an active role in facilitating development of airlines in Africa.

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Tuesday 03 September 2019

BUSINESS DAY

property&lifestyle Reprieve for renters as Real estate investments fall short of Lagos declares war on real estate growth expectations on crawling economy fraudulent transactions ENDURANCE OKAFOR

t’s almost six months since the real estate sector exited recession in the first quarter of 2019 but not so much has changed for the lagging industry as investors are yet to see a meeting point between their investments and projected growth. Industry players have revealed that investments in the sector has failed to respond positively to predicted growth, owing to the slow but positive pace of the Nigerian economy. “We are nowhere near the place where investments in real estate projects will surpasses or meet our growth projection; this is because the economy is not yet zooming, it is just there,” Chiedu Nweke, CEO of CZAR Project Limited, told BusinessDay. After contracting for 12 consecutive quarters, Nigerian real estate sector saw the break of dawn in Q1 2019, six quarters after the larger economy exited its 15 month contraction in Q2 of 2017. In real terms, the property industry expanded by 0.93 percent in the first quarter of 2019, the first positive value reported for the industry since Q1 2016 when National Bureau of Statistics (NBS) started collating the data. “The economy really improved but real estate lagged behind. But this is understandable. Not much progress can be made in this sector

with a large portion of Nigeria’s population outside the housing market and mortgage still remains too expensive for many people to access and afford,” Adeniyi Akinlusi, CEO, Trustbond Mortgage Bank explained. In the first quarter of 2019,, Nigerian economy grew by 2.01 percent, a slow down by 0.37 percentage points when compared to the 2.38 percent it reported in the previous quarter. Despite reporting positive figures in Q1 2019, the real estate sector’s contribution to the overall real GDP slowed to 5.58 percent, lower than contribution recorded in the preceding quarter, as well as the corresponding quarters of 2018. When BusinessDay asked Sa’adiya Aminu, MD/CEO of Urban Shelter on the sidelines of the 2019 edition of the Africa Real Estate Conference & Awards (AFRECA 2019) which held recently in Lagos, if returns on investment were meeting projections, she said “the real estate sector is suffering and money is a major challenge,” adding, “you and l can afford a million dollar house if there is mortgage.” Nigeria has one of the world’s lowest mortgageto-Gross Domestic Product (GDP) rate at 0.6 percent. This lags Ghana’s 2 percent, South Africa’s 30 percent and crawls after the U.S and UK rates of 60 percent and 70 percent respectively. Nigeria has more than 17 million housing deficit and

CHUKA UROKO

more than 90 percent of new homes that are built in the country is funded from personal savings. According to Femi Akintunde, Group MD, Alpha Mead Group, “if Nigerian real estate sector must play the role of providing Nigerians with the basic need of shelter, there must be that enabling environment and infrastructure that will allow the sector to prosper “There is a serious constraint around financing because the real estate sector sucks capital and the ability of the economy to support the kind of growth and development we’ll like to see in the real estate sector is not happening yet,” he said. Bank lending to real estate sector tumbled to its lowest level at 3.92 percent in four

years as at March 2019. Sectoral credit allocation to the estate shed 0.2 percentage point quarter-on-quarter and 2.49 percentage point yearon-year. Of the N15.21 trillion combined credit disbursed to 17 sectors by the Nigerian deposit money banks, real estate got N596 billion in the first quarter of 2019, N26 billion or 4 percent lower than N622 billion received in the preceding quarter. For real estate investments to deliver expected growth, Akintunde said, there would have to be some actions on the part of the government in terms of regulatory framework and also the discipline to enforce compliance and application of those laws. “Capital is not a problem, there is money all over the

world but they’re not coming to this direction because we’re not treating investment well; the environment in which investment can thrive and make adequate returns is not created and so investments flow in other direction, be it local or foreign,” he noted. Checks by BusinessDay revealed that since exiting recession in the first quarter of this year, Nigerian property market has been on a growth trajectory and expectation is that it will record an estimated 2.5 percent growth before the end of the year. ‘We are optimistic and believe that by Q1 or Q2 of 2020, the sector will be better and, at that point, I think every businessman will start enjoying because the middle class will start emerging again,” Nweke, told BusinessDay.

Non-bankable projects, asset-liability gap top reasons fund managers shun real estate ISRAEL ODUBOLA

etting cash is not the concern of fund managers whether pension administrators or insurance firms as it is very much available, but selecting viable investment to channel those funds for optimal return is a big issue, experts have observed. Real estate is seen as a dicey venture by most fund managers, even as the low performance of real estate investment trusts (REITs) coupled with asset and liability mismatch as well as the paucity of bankable projects deters investment flow to the sector. Experts say fund managers prefer locking their clients’ money in government securities that deliver 12 to 14 percent return above the current inflation figure of 11 percent, to having their hands burnt by financing real estate projects. “Money is not the prob-

lem. The problem is that we don’t have quality real estate products,” said Chuks Umeche, investment banking associate at Stanbic IBTC Capital Limited at a break-out session at the recently-held African Real Estate Conference and Award (AFRECA 2019), which held in Lagos. “There is dearth of bankable real estate projects in the market. The ones currently

in the market are not doing well.” He added. In as much as PFAs look for funds that yield good return, the safety of capital also matter to them. This explains why the bulk of pension funds find their way into government securities. Putting this into context, total pension assets is worth N9.3 billion as at June 30, 2019, in which 70 percent

are invested in Federal Government Bonds while real estate got a paltry 3 percent, according to figures from the National Pension Commission. The poor performance of Nigeria’s REITs, as pointed out by Umeche, also dampens fund managers’ appetite for real estate assets. Nigeria’s REITs lack sufficient liquidity to distribute profit to owners

as all of them are struggling to stay afloat. REITs are corporation or trusts that use pooled capital of investors to purchase and manage income property and mortgage loans. Nigeria’s REITs are among the worst performers globally on account of illiquidity. The three listed REITs – UPDC, Union Homes and Skye Shelter Fund—have plunged to a record low. Real estate mutual funds have, however, returned 4.6 percent gain to investors since January 2019, emerging the fourth best performer across seven asset classes. From the insurers’ point of view, the mismatch between assets and liability is the chief constraint restraining insurance firms from funding real estate. An executive director at African Reinsurance Corporation Limited based in South Africa, Ibrahim Ibisomi, explained that unlike the pension industry where Continues on page 34

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eprieve is on the way for defrauded accommodation seekers as Lagos State government reveals that it has declared war on all fraudulent real estate transactions in the state, assuring that it will explore legal means to protect the interest of its citizens from real estate swindlers. Fraudulent activities in real estate transactions are on the increase in Lagos, but the state government is assuring that it is determined to make Lagos a no-go area for unscrupulous individuals who prey on Lagosians under the guise of real estate business. Moruf Akinderu Fatai, the state Commissioner for Housing, who gave this assurance while receiving defrauded accommodation seekers from Alapere, Ketu area of the state, stressed that the state government had declared a war against fraudulent practitioners in the real estate sector. The commissioner told his visitors that justice would definitely be served to the fraudulent property developer who swindled them out of their hard earned money, adding that the state government was aware of their case and had instituted legal actions against the said developer on behalf of the victims. “We encourage members of the public to report dubious estate agents and developers to the office of Lagos State Real Estate Transaction Department (LASRETRAD) in Block 7 at the Secretariat, Alausa, Ikeja,” he said, adding, “I want to assure you that the state government is very responsive and will leave no stone unturned in ensuring that the culprits are brought to book.” Earlier, Aliyu Toyin, leader of the victims who were defrauded by one Tasleem Idowu Alabi that allegedly collected N65million rents from over 250 prospective tenants for only 15 units of accommodation, had expressed fears that the accused might not be brought to book. He pleaded for help for immediate refund of the rents paid. Wasiu Akewusola, the Permanent Secretary in the Ministry, urged Lagos residents seeking accommodation to always transact business with estate agents and developers that are registered with LASRETRAD which is a directorate under the Ministry of Housing. He disclosed that the directorate was saddled with the responsibility of registering, regulating and monitoring real estate operators across the state. He appealed to the victims to maintain peace and order while the state government took the necessary action on the matter.

Tuesday 03 September 2019

BUSINESS DAY

property&lifestyle New jobs coming as Farmforte of Netherlands berths on Gracefield Island CHUKA UROKO

n a move that is clearly a big plus for Gravitas Investment in particular and the Nigerian economy at large, a major agricultural value chain management company from Netherlands, Farmforte, has committed to the Gracefield Island where it will be building facilities for its operations in Nigeria. Farmforte is coming on the heels of 9Mobile, the vibrant telecom provider which, just a couple of weeks ago, entered into an enterprise telecom solution agreement with Gravitas, the Gracefield Island project owner. 9Mobile was followed closely by HealthCare Outpost, a health service provider based out of the United States, which was welcome on Tuesday, August 27, to Gracefield Island as its main operation centre in Nigeria. Gracefield Island is a city development project set to cover a land mass of 100 hectares. It is designed and being constructed to function as a green, integrated urban conurbation. The vision of its developers is to build a livable and sustainable city where technology will hold sway as

the new way to go. At an off-take contract signing event at the weekend, André Schaap, the managing director of Farmforte, said his company’s ambition fits snuggly into the vision of sustainability of Gracefield Island and its cutting edge technology in enhancing farm productivity, preservation and helping small holder farmers to access both domestic and international markets which align with the vision and implementation plan of Gravitas to make Gracefield Island a desirable destination for enterprise and wealth creation. Osazuwa Osayi, Country Representative and Chief Executive of Farmforte Solutions in Nigeria, explained to BusinessDay in an interview at the event that their interest in Gracefield Island is because the city is strategically and centrally located, considering the different kinds of customers they have across Lagos. He added that it was easy to take a quick decision to co-locate its core operation facilities on Gracefield Island as the destination reflects the ethical approach of his company to business, pointing out that the city’s infrastructure implementation plan was so

L-R: Tokunbo Adeyemi, executive director, Gravitas; Olufemi Babalola, CEO, Gravitas; Osazuwa Osayi, country representative, Farmforte, and Andre Schaap, CEO, Farmforte, at Gracefield Island, last weekend.

clear and encouraging that they could enhance the efficiency of their operation by being on Gracefield Island. A major highpoint of the coming of Farmforte into Gracefield Island is wealth creation through job creation which aligns with the vision of the city. “About 350 jobs will be created within our first year on Gracefield Island. That will be increasing as our production progresses to about 850 direct jobs and a

couple of other indirect jobs,” Osayi assured. Presently, Farmforte which opened for business in Nigeria in 2014 has created about 300 direct jobs. Indirectly, they have created over 800 jobs and, according to the country rep, they engage about 22,000 small holder farmers that produce different kinds of farm products. In a country where unemployment figure is very high, estimated at 20 million

by the National Bureau of Statistics, this is a good development given its impact on household income and the economy at large. In welcoming Farmforte, Olufemi Babalola, the Chief Executive of Gravitas, expressed his delight in having Farmforte at Gracefield Island and committed his company to giving them necessary support in order for their business to thrive even more. The company will be set-

Lagos-Ibadan Expressway: FG urges patience, understanding as reconstruction resumes CHUKA UROKO

s work resumes on the Lagos-Ibadan Expressway with the reconstruction of Berger to Kara Bridge stretch, motorists and residents along that corridor have been urged by the federal government and the contractor to endure the expected inconveniences with patience and understanding. The Lagos-Ibadan Expressway is one of the busiest highways in Nigeria with high volume of traffic on daily basis. The reconstruction of the highway, which has lasted for too long, is being undertaken by the construction giant, Julius Berger. Funsho Adebiyi, director, Federal Highways, South West, who led a delegation of Federal Ministry of Works and Housing officials as well as traffic regulatory agencies to the construction site on Thursday last week, appealed to road users to also comply with diversion and traffic rules. Expectation is that there will be no gridlock on the expressway during the reconstruction period which commenced yesterday, September 2 and would end on December 15 because, according to the highway di-

rector, “major lanes had been rehabilitated to curb gridlock.” “We are appealing to motorists to observe speed limits around the construction zones, obey diversion signs and bear the temporary inconvenience that comes with construction; we have instructed our contractors to make adequate signage available, as well as lighting systems, reflexive materials and other diversion signs to cope with night trips,” he revealed. “We want to beg all road users to comply with these simple rules, drive safely, and drive slowly, especially

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around diversions. To people who live around here, we want to appeal to them because, definitely, traffic will be increasing; we beg them to tolerate and accept us for this moment; it is difficult to construct a road of this nature without any discomfort,’’ he noted. Adebiyi informed that work was going on simultaneously on various sections of the highway beyond Lagos to fast track construction on the important highway, disclosing that arrangements had been made for adequate towing vehicles with all relevant traffic

agencies for speedy clearance of breakdown to avert gridlock on the highway. Hygenus Omeje, Lagos Sector Commander of the Federal Roads Safety Corps (FRSC), also assured of gridlock-free period, explaining that the Lagos command was coordinating and working in synergy with other traffic regulatory agencies to ensure free flow of traffic. Omeje noted that the section to be worked upon was just about 600 metres and was not enough to cause too much stress for road users. “The section is very small for

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anybody to lose sleep over; we are looking at a length of about just 600 meters, so it is not anything fantastic. “The only thing is that we are at the critical section of this corridor. The Kara Bridge is like the neck to the expressway. So if you twist the neck, the entire body will definitely have problem; but I can assure you that nobody is going to sleep on this section. There is going to be adequate deployment of personnel and resources,’’ he assured. He disclosed that FRSC had three heavy towing trucks and would call for more, if there was need, from sister agencies to ensure free-flow of traffic. On his part, Clement Oladele, Ogun State Sector Commander of the FRSC, said security meetings were held concerning the highway to ensure safety of road users during construction, warning miscreants to stay away as the FRSC would not take it easy with criminal elements. Jubril Adeyemi-Oshodi of Lagos State Traffic Management Authority (LASTMA) said that the agency would give the public real time information to ensure smooth ride. He added that they would give traffic updates using the state’s traffic radio station. @Businessdayng

ting up a facility in Gracefield Island for processing their products and distributing same to different parts of the world. “Farmforte is an agriculture value chain development company. We do processing of raw materials and make them ready for the market; we supply our products to retail outlets across the country and other parts of the globe,” he explained. Continuing, Osayi said, “largely, we have three brands, including sustainable agriculture, value addition and market creation. On sustainable agriculture practice, we grow products either directly or through farmers on our network. We add value to these different products. Our main focus is sweet potato. We add value to sweet potato crops and export to European markets. We have sales offices in these markets and other parts of the world.” He hinted that Gracefield Island would be a distribution theatre for them because, from there, they would be moving products to different parts of the country and, the same way, products from different parts of the country would be moved into the place for processing.

Non-bankable projects, assetliability gap top reasons .... Continued from page 33

funds are preserved for the future, insurers sit mostly on short-term funds. “Policy-holders can call for their funds anytime. So it doesn’t make sense putting those funds in real estate with long gestation period,” Ibisomi said at the conference, adding, “except for some life insurers that invest in real estate because pulling funds out of life insurance is rigorous.” Insurance is yet to get warm embrace in Nigeria with a penetration rate of 0.3 percent below peer African nations, aggravating the disinterest of insurers in real estate. Experts also blamed fund managers’ apathy for real estate on the country’s weak regulatory framework and poor infrastructure. This is because no housing sector can thrive in an environment with inadequate facilities. Drawing lessons from South Africa, Ibisomi posited that the country was able to revamp its housing sector by putting in place friendly regulations. “Nigeria’s infrastructure stock to GDP of 35 percent is below South Africa’s 80 percent. It will be nice if fund managers can start from infrastructure financing before moving to alternative asset class,” he said.

Tuesday 03 September 2019

BUSINESS DAY

Markets + Finance

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

UBA records fastest profit expansion among peers ...Non interest income underpins earnings BALA AUGIE

ince the start of 2018, Nigerian banks have been struggling to magnify gross earnings as a precipitous drop in short term government securities ended an era of free money. Lenders are also operating in a harsh regulatory environment , as Central Bank of Nigeria (CBN)’ new rules are a threat to future profit. The regulator is forcing banks to lend more or face higher cash requirements, part of a series of measures to revive the economy. In a circular dated July 3, CBN stated that lenders who fall short of a target minimum loan to deposit ratio of 60 percent by September would have to maintain higher cash reserve. Some experts are playing the devil’s advocate by stating that a slow growing economy is the reason banks are not motivated to lend to the real sector of the economy Nigerian banks are grappling with poor asset quality as non performing loans ballooned on the back of a sudden slump in crude oil price

Kennedy Uzoka, GMD/CEO, UBA

of mid 2014 that tipped the country in its first recession in 25 years. Consequently, they packed their money in the save heaven assets such as fixed income securities, as they continue to conserve their capital at the expense of their profit through lending. With high energy costs due to money expended on the purchase of diesel fuel to run generator plants at head office and branches scattered across the country, it is practically

difficult for lenders to deliver a high return to shareholders in form of share appreciation or bumper dividend. Gross domestic product in Africa’s largest oil producer expanded by 2.01 percent in the three months through March from a year earlier and that compares with 2.4 percent expansion in the fourth quarter. Amid these monumental challenges, United Bank for Africa (UBA), the pan African lender with operations across 20 key African markets, is thriving. UBA just released its half year financial statement that showed it recorded improvement is in key performance metrics. For instance, its profit after tax increased by 29.56 percent as at June 2019, this compares with Zenith Bank, 8.74 percent; Guaranty Trust Bank (GTBank), 3.74 percent; and First Bank Holdings Plc, -5.30 percent. UBA’s profits have been growing since 2016, when a slump in crude oil price resulted in huge bad loans, and the lender has also been using its on line platform to underpin earnings. Growth in non Interest strengthens UBA’s gross earnings Gross earnings defiled declining yield environment as it increased by 13.90 percent to N294.03 billion in June 2019

from N258.04 billion as at June 2018. The growth at the top line was also driven by a 26.52 percent increase in noninterest income to N72.46 billion in the period under review from N57.37 billion the previous year. The uptick in non interest income was underpinned by an 11.12 percent uptick in fees and commission income to N36.05 billion in the period under review from N32.59 billion the previous year. Also foreign exchange income increased by 60 percent to N32.74 billion as UBA continues to leverage on its digital offering and business remittances to bolster profit. Interest income, which contributed 75 percent of gross earnings, grew by 9.39 percent to N204.88 billion in June 2019 from N187.29 billion the previous year. A breakdown of interest income shows interest income from short term government securities was up 16.11 percent to N91.63 billion in June 2019 from N78.91 bil-

lion as at June 2018.Interest income on loans and advances were up 3.47 percent to N99.26 billion from N95.93 billion the previous year. Interest expense was up by 24.30 percent to N94.76 billion in the period under review from N76.21 billion the previous year. A breakdown of the component of interest expense shows that the increase was triggered by a 37.49 percent rise in interest expense on time deposit to N66.62 billion in the period under review from N48.46 billion the previous year. The significant increase in interest expense was due

to high interest rate environment even as the Monetary Policy Committee (MPC) of the central bank had cut rates to 13.0 percent. Effective management of expenses add impetus to profit UBA’s profit before tax was up 60.47 percent to N70.27 billion in the period under review from N43.79 billion the previous year while profit after that followed the same growth trajectory as it grew by 29.56 percent to N56.74 billion in June 2019 from N43.79 billion as at June 2018. The growth at the bottom line (profit) was largely driven

previous year. The growth in total assets can be largely attributed to a 15.57 percent increase in cash and cash equivalent to N1.41 trillion in June 2019 from N1.22 trillion the previous year. Loans and advances were up 2.18 percent to N1.76 trillion in June 2019 from N1.73 trillion the previous year. Deposit to customers were up 4.47 percent to N3.68 trillion in June 2019 from N3.52 trillion the previous year as the drive for retail deposits continues to yield desired results.

by contributions from interest income, lower impairment charge on financial assets, income from foreign exchange trading, and cost curtailment. Total operating expenses were up 5.67 to N109.58 billion in June 2019 as against N103.70 billion the previous year. The growth in operating expense is lower than the 11.08 percent July inflation figures. Banks’ impressive performance underpins margins In spite of slow recovery in economic activities I’m Nigeria, the Bank’s total assets grew 4.72 percent to N5.10 trillion from N4.86 trillion the

Despite a tough and unpredictable macroeconomic environment, UBA is efficient in curtailing operating expenses as cost to income ratio fell to 59.90 percent in the period under review from 61.50 percent as at June 2018. UBA has utilized the resources of shareholders in generating higher profit as Return on Average Equity (ROAE) increased to 21.70 percent in June 2019 from 17.0 percent as at June 2018. Return on Average Assets (ROAA) followed the same growth trajectory as it moved to 2.30 percent in the period under review from 2.0 percent the previous year.

BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng

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Tuesday 03 September 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 02 September 2019

Top Gainers/Losers as at Monday 02 September 2019 LOSERS

GAINERS Company

Opening

Closing

Change

NESTLE

N1245

N1319

CCNN

Company

Opening

Closing

Change

MTNN

N141

N138.5

-2.5

ASI (Points) DEALS (Numbers)

N15.85

N17.4

1.55

DANGCEM

N162

N160

-2

UNILEVER

N28.5

N29.45

0.95

DANGSUGAR

N8.5

-0.5

VOLUME (Numbers)

UBA

N5.85

N6.2

0.35

UACN

N4.5

-0.5

VALUE (N billion)

ZENITHBANK

N17.2

N17.55

0.35

AFRIPRUD

N3.63

-0.37

MARKET CAP (N Trn)

27,565.09 3,122.00 111,515,327.00 1.560 13.410

Global market indicators FTSE 100 Index 7,281.94GBP +74.76+1.04%

Nikkei 225 20,620.19JPY -84.18-0.41%

S&P 500 Index 2,926.46USD +1.88+0.06%

Deutsche Boerse AG German Stock Index DAX 11,953.78EUR +14.50+0.12%

Generic 1st ‘DM’ Future 26,218.00USD -188.00-0.71%

Shanghai Stock Exchange Composite Index 2,924.11CNY +37.87+1.31%

Stock investors gain N19bn as market opens week on positive note …SEC asks shareholders of Defunct Afribank to claim their dividends Stories by Iheanyi Nwachukwu

he Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0 . 1 4 p e rc e nt on Monday September 2, 2019 while the value of listed stocks increased by N19billion as investors rushed to take position in stocks for capital appreciation and interim dividend income. The market’s Year-to-Date (ytd) return stood at -12.30percent. The All Share Index closed at 27,565.09 points as against the preceding day’s close of 27,525.81 points while Market Capitalisation closed at N13.410 trillion as against preceding day’s close of N13.391 trillion. Nestle Nigeria Plc advanced most from N1245 to N1319,

adding N74 or 5.94percent, while MTNN Plc declined most from N141 to N138.5, adding N2.5 or 1.77percent. The volume of stocks traded decreased by 10.63percent from 124.78million to 111.51million, while the total value of stocks traded decreased by 14.03percent from N1.816 billion to N1.561 billion in 3,122 deals. Zenith Bank Plc, UBA Plc, FBN Holdings Plc, UACN Plc, and GTBank Plc were actively traded stocks. The Financial Services sector led the activity chart with 70.535 million shares exchanged for N634 million, followed by Consumer Goods with 13.159 million shares traded for N443million. In a related market development, The Securities and Exchange Commission (SEC) has asked shareholders

of the defunct Afribank Plc to claim their dividends. SEC said this is part of i t s i nv e s t o r p ro t e c t i o n programme and as well as ensure that shareholders get the benefits of investing in the capital market.

UBA shares on demand as investors respond positively to H1 scorecard

he shares of United Bank for Africa (UBA) Plc were on demand at the Nigerian Bourse on Monday September 2 as investors reacted positively to the bank’s first-half (H1) financial results released last weekend. UBA made the top gainers table, after advancing from day open level of N5.85 to N6.2, adding 35kobo or 5.98percent. The record rally is good for investors who had earlier taken position in the stock which analysts had included as value stock because of the capacity of the Group to deliver a strong performance. Equity dealers exchanged 13,952,577 units of the bank’s shares valued at N86.039million. Most investors moved to take position in the stock to qualify for an interim dividend of N0.20 per share declared by the Board of Directors of the pan African financial institution. UBA recorded sterling results in the first-half of 2019. The Group’s H1 results show

impressive growth across key performance indices as well as a significant contribution from its African subsidiaries. In spite of the increasingly unpredictable environment witnessed in some of its countries of operations, the Group delivered double digit growth in its profit before tax as it rose by 21 percent to N70.3billion for the half year to June 2019, up from N58.1billion recorded in the similar period of 2018. This is just as the Profit after Tax also improved to N56.7 billion, a 29.6 percent growth compared to N43.8 billion achieve d in the

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corresponding period of 2018. The profit for the first half of the year, translated to an annualised return on average equity of 21.7 per cent. According to its results filed with the Nigerian Stock Exchange, UBA recorded a 14 percent year-on-year rise in top-line, with gross earnings of N293.7 billion, compared to N257.9 billion recorded in the corresponding period of 2018. As at 30 June 2019, the Bank’s Total Assets grew by 4.8percent crossing the N5trillion mark to N5.10 trillion. Customer Deposits also rose by 4.8 per cent to N3.51 trillion, compared to N3.35 trillion as at December 2018. This growth trajectory underscores UBA’s market share gain, as it increasingly wins customers through its revitalized customer service culture coupled with innovative digital banking offerings. The bank’s Shareholders’ Funds remained strong at N542.5 billion, reflecting its strong capacity for internal capital generation.

According to the Acting Director General of SEC, Mary Uduk, gradually, the C o m m i ss i o n i s ma k i ng concrete efforts to ensure that investors get their dividends as this would reduce the high profile of unclaimed dividends

in the market. S h e s a i d : “ We h a v e informed shareholders of the defunct AfriBank Plc that unclaimed dividends declared by the bank are being held in trust on their behalf. This will further help reduce the volume of unclaimed dividends in the market and boost investor confidence. “Investors that have unclaimed dividends are therefore advised to contact Carnation Registrars to process their dividend payments,” she said. Uduk said the commission has also directed Carnation Registrars and Meristem Trustees to ensure that all genuine claims of beneficiary shareholders be addressed forthwith. “Since the company is no longer in operation, these unclaimed dividends have

to be made available to the rightful owners that are the shareholders. That will go a long way in boosting investor confidence in the market. That is why we are calling on them to take advantage of this opportunity and claim their dividends,” uduk said. Recall that recently, the SEC had directed investors in the defunct Skye bank plc to claim all outstanding dividends declared by the bank which were being held in trust on their behalf. The SEC also went further to direct Cardinalstone Registrars and STL Trustees to ensure that all genuine claims of beneficiary shareholders were addressed forthwith. This, the SEC said was part of its investors’ protection programme to ensure that shareholders got the benefits of investing in the capital market.

ASHON proposes strategies to deepen capital market

s part of the efforts to deepen Nigeria’s C a p i t a l Ma r k e t , the Association of Securities Dealing Houses of Nigeria (ASHON) has renewed the call for increased investment of Pension Fund Administrators (FPAs) in the market. Besides, ASHON which urged the government to utilize the market to raise long term funds to finance the budget in the areas of infrastructure projects frowned at the current re-introduction of Value Added Tax (VAT) to capital market transactions. PenCom has embarked on major reforms aimed at

making more capital market investment windows open to PFAs. These are contained in a 2015 Draft Regulation on Investment of Pension Fund Assets that is presently awaiting approval to become o p e rat i ve. Th e re f o r m also seeks to increase the number of capital market products included in the list of “Allowable Instruments” The total Assets under Management (AuM) by PFAs is believed to be at N5 trillion. Of the amount, only 12 percent is invested in equities and 15 percent is invested in debt instruments while 70 percent is held in Federal Government bonds and Treasury Bills.

However, an ongoing reform of PFAs functions i s e x p e c t e d t o a d d re s s the imbalances in the investment policies of the administrators. Responding to media enquiries, ASHON’s Chairman, Chief Patrick Ezeagu explained that the capital market needed to be deepened in order to increase its absorptive capacity. Ezeagu noted that this should be one of the areas where the PFAs could be deployed to strengthen the market. According to him, the assets held by PFAs largely have long term tenor, they are desirable on the stock market in a winwin situation.

Chams unfolds four strategic focus

oised to sustain its global competitiveness and boost shareholder value, irrespective of vagaries in the operating environment, Chams Plc has unfolded four strategic focus. Besides, only last week, the leading information and Communications Technology (ICT) Company with strong background in innovative and intelli-

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gence solution concluded its first round of its comprehensive training of personnel across the board to enhance quality of service delivery and boost market share. The company’s Group Managing Director and Chief Executive Officer, Femi Williams who unfolded the new strategic direction while addressing the shareholders in Lagos @Businessdayng

recently said the company had moved upwardly from loss to profit due to the success of its restructuring which placed premium on internal efficiency. Williams noted that the company redefined its strategic focus in the areas of solutions, product portfolios, operations, marketing and sales, raising of capital and effective and efficient allocation of resources.

Tuesday 03 September 2019

BUSINESS DAY

INSIGHT

Ovia named co-chair of WEF Africa, to focus on inclusive growth

Jim Ovia, Chairman, Zenith Bank

investors aiming to fast-track development of the region’s most promising start-ups and SMEs The Africa Risk Resilience Platform, a scheme to help governments prepare for, mitigate and prevent climate- and diseaserelated disasters with the support of the private sector Africa E-Commerce Agenda, a partnership between governments, the international trade community and the development community to create three million jobs by 2025 Heads of state or government participating in the meeting include: South Africa’s President Cyril Ramaphosa; Mokgweetsi Masisi, President of Botswana; Azali Assoumani, President of the Union of the Comoros; Mandulo

Ambrose Dlamini, Prime Minister of Eswatini; Sahle-Work Zewde, President of Ethiopia, Peter Mutharika, President of Malawi, Hage Geingob, President of Namibia, Yemi Osinbajo, Vice-President of Nigeria, Yoweri Museveni, President of Uganda, Danny Faure, President of Seychelles, Emmerson Mnangagwa, President of Zimbabwe. South African government leaders include: David D. Mabuza, Deputy President; Tito Mboweni, Minister of Finance; Jackson Mthembu, Minister in the Presidency; Khumbudzo Ntshavheni, Minister of Small Business Development; Patricia de Lille, Minister of Public Works and Infrastructure; Zwelini Lawrence Mkhize, Minister of Health; Bonginkosi

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The World Economic Forum brings top leaders together to create the conditions for socioeconomic investment to happen. Africa, like all regions of the world, faces great challenges www.businessday.ng

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“

ub-Saharan Africa’s future prosperity hinges on the ability of its leaders to create inclusive, sustainable growth at a time of rapid transformation in the Fourth Industrial Revolution according to the World Economic Forum. The message is coming on the even of the 28th World Economic Forum on Africa which will hold in Cape Town, South Africa from 4-6 September. The meeting will bring together 1,100 leaders from government, business and civil society, including ten heads of state or government. A statement by the forum made available to BusinessDay says “top of the agenda will be new partnerships to create sustainable employment opportunities for Africa’s large and growing workforce.” According to the statement, “the meeting will highlight: improving the funding and regulatory environments for start-ups; developing new partnerships for re-skilling and upskilling workers; identifying opportunities for green growth such as the circular economy; scaling-up e-commerce for rapid business growth, especially in the SME sector; and how to leverage the new Africa Continental Free Trade Agreement to drive regional integration.” Also high on the agenda are government policies and responsible business practices to provide a foundation for a more inclusive society. While globalization has driven economic growth, it is criticized for leading to unacceptable levels of income inequality. Tackling corruption, universal healthcare provision and protection of workers in the gig economy all have a role to play in building more equitable societies. “The World Economic Forum brings top leaders together to create the conditions for socioeconomic investment to happen. Africa, like all regions of the world, faces great challenges. For the region to prosper in an increasingly globalized world, it needs transparent governance, competitive economies and peaceful societies. This systemic change can only be achieved through multistakeholder collaboration,” said Elsie Kanza, Head of Africa at the Forum. New initiatives that will be launched at this week’s meeting include: The Africa Growth Platform, a coalition of governments and

Emmanuel Nzimande, Minister of Higher Education and Training; Ebrahim Patel, Minister of Trade and Industry; Pravin Gordhan, Minister of Public Enterprises; Fikile Mbalula, Minister of Transport; Stella Ndabeni-Abrahams, Minister of Communications, Telecommunications and Postal Services; Grace Naledi Mandisa Pandor, Minister of International Relations and Cooperation. Lindiwe Nonceba Sisulu, Minister of Human Settlements, Water and Sanitation of South Africa, Barbara Dallas Creecy, Minister of Environment, Forestry and Fisheries of South Africa. Senior government leaders from other parts of Africa include: Cesar Augusto Mba Abogo, Minister of Finance, Economy and Planning of Equatorial Guinea; Mamadi Camara, Minister of Economy and Finance of Guinea; Safia Boly, Minister of Investment Promotion, Small and Medium Enterprises and National Entrepreneurship of Mali; Carl-Hermann Gustav Schlettwein, Minister of Finance of Namibia; Uzziel Ndagijimana, Minister of Finance and Economic Planning of Rwanda; Christopher Yaluma, Minister of Commerce, Trade and Industry of Zambia and; Mthuli Ncube, Minister of Finance and Economic Development of Zimbabwe. Leaders from outside the re@Businessdayng

gion are: Mohcine Jazouli, Minister-Delegate for Foreign Affairs, African Cooperation of Morocco; Xu Jinghu, Special Representative of the Chinese Government on African Affairs, Ministry of Foreign Affairs of the People’s Republic of China; Mohamad Maliki Bin Osman, Senior Minister of State, Ministry of Defence and Ministry of Foreign Affairs of Singapore; Xiana Mendez, Secretary of State for Trade of Spain; Daniela Stoffel Delprete, State Secretary for International Finance of Switzerland; Graham Stuart, Parliamentary Under-Secretary of State and Minister for Investment, Department for International Trade (DIT), United Kingdom and; Cyrus Habib, Lieutenant Governor of Washington, USA. Representatives from international organizations are: Amina Mohammed, Deputy SecretaryGeneral, United Nations, New York; Ibrahim Assane Mayaki, Chief Executive Officer, AUDANEPAD Planning and Coordinating Agency, Johannesburg; Moussa Oumarou, Deputy Director-General for Field Operations and Partnerships, International Labour Organization (ILO), Geneva; Mukhisa Kituyi, SecretaryGeneral, United Nations Conference on Trade and Development (UNCTAD), Geneva; Susanna Moorehead, Chair, Development Assistance Committee, Organisation for Economic Cooperation and Development (OECD), Paris; Valerie Guarnieri, Assistant Executive Director, Operations Services, United Nations World Food Programme (WFP), Rome; Vera Songwe, Executive Secretary, United Nations Economic Commission for Africa (UNECA), Addis Ababa; Vijay Iyer, Vice-President and Chief Operating Officer, Multilateral Investment Guarantee Agency (MIGA), Washington DC; and Yonov Frederick Agah, Deputy Director-General, World Trade Organization (WTO), Geneva. The Co-Chairs of the 2019 World Economic Forum on Africa are: Ellen Agler, Chief Executive Officer, The END Fund, USA; Jeremy Farrar, Director, Wellcome Trust, United Kingdom; Arancha Gonzalez Laya, Executive Director, International Trade Centre (ITC), Geneva; André Hoffmann, ViceChairman, Roche, Switzerland; Alex Liu, Managing Partner and Chairman, A. T. Kearney, USA; Jim Ovia, Chairman, Zenith Bank, Nigeria, Sipho M. Pityana, Chairman, AngloGold Ashanti, South Africa.

Tuesday 03 September 2019

BUSINESS DAY

news Flight delays worsen across Nigerian... Continued from page 1

product increased from N200 per litre to between N230 and N250 per litre as operators envisage the price of the product may further increase as a result of the scarcity. Kingsley Ezenwa, Media and Communications Manager of Dana Air confirmed to BusinessDay that there is scarcity of aviation, which has caused slight flight delays across the country. Ezenwa said despite the increase in the price of the product, Jet A1 is still scarce as Abuja marketers were locking up stock for international flights. “Domestic flights in Abuja have to prepay and wait to be allocated. Trucks takes minimum of 3 days to truck from Lagos to Abuja and Apapa gridlock is causing delays in loading and trucking. “The cost of the product ranges between N220 and N255, depending on location. Lagos is cheaper than outsta-

tions because of trucking,” he said. Last week, the scarcity of aviation fuel in the domestic market derailed hajj operations from Saudi Arabia by Nigerian carriers. Scarcity of the fuel, which has lingered since the beginning of last week, affected the outbound flight of Skypower Express Airlines, a charter operator in the hajj exercise. At least about 265 pilgrims of the carrier were delayed at Saudi Arabia airport, as the airline could not purchase fuel in Nigeria. Muhammed Joji, CEO of Skypower Express Airlines, confirmed this to our correspondent on phone. According to Joji, attempts to purchase fuel in Lagos and Kano were futile, but explained that the airline eventually bought the product at a very exorbitant rate, which enabled the airline to continue with the second leg of the exercise.

•Continues online at www.businessday.ng

FG, P&ID in talks to resolve $9.6bn judgment... Continued from page 1

engineering and project management company, P&ID to seize $9.6 billion in Nigerian assets over the failed contract, had sparked off reactions, forcing the government to institute action into the matter.

BusinessDay Presidential Villa sources reveal that the interim report was submitted to Vice President who presided over the meeting. The team refused to comment on their recommendations as the Federal Government was still studying them, expected to come up with final resolution soon, a source says. President Muhammadu Buhari had directed a select team including the Economic and Financial Crimes Commission (EFCC) and other relevant anti-graft agencies to study the judgment and advise it on the next line of action. The Monday meeting, which was also attended by the officials of the EFCC, was in continuation of government effort to find out the best way to get the country out of the quagmire created by the judgment. The meeting was attended by the ministers of Finance, Budget and National planning, Zainab Ahmed; Justice, Abubakar Malami; Information, Lai Mohammed; State for Petroleum, Timipre Silva, and State for Niger Delta Affairs, Festus Keyamo. Also at the meeting were group managing director of NNPC, Melee Kyari; acting chairman of the EFCC, Ibrahim Magu, and the governor of the Central Bank of Nigeria,

Godwin Emefiele. BusinessDay also gathers that the Federal Government is worried over rising judgment debts, which is moving close to N4 trillion, including the N3.5 trillion to P&ID, and another N132 billion owed BiCourtney. The P&ID matter is even worrisome given that relevant government agencies, including the Infrastructure Concessions and Regulations Commission and the Bureau of Public Procurement (BPP) claimed ignorance of the contract award. Segun Imohiosen of the BPP had in a telephone interview, simply declared that the “organisation was not in the picture of the contract.” Okwy Ilo, a commercial lawyer, however, raised hope on a possibility of Nigeria wriggling out of the $9.6 billion debt through a proper re-negotiation. He said, “Both the Federal Government and the P&ID should find a common ground on this issue. If you look at the issue closely, you discover that the other party has not fulfilled its own obligation as should and that is the reason why they should enter a common table and re-discuss.” Meanwhile, marching out in their hundreds, the Coalition of Civil Society Groups group - an umbrella body of over 5,000 Civil Society Organisations - protested at the British High Commission and later at the Irish Embassy in Abuja, where they expressed their concern that the judgment would hurt the economy.

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

L-R: Ibrahim Dikko Adamu, country officer, International Finance Corporation, World Bank Group; Babatunde Ruwase, president, Lagos Chamber of Commerce and Industry (LCCI); Marco Hernandez, lead economist for Nigeria, World Bank Group, and Muda Yusuf, director-general, LCCI, during a courtesy visit to LCCI in Lagos, yesterday.

Inconsistent, declining growth marks Nigeria’s... Continued from page 1

failed to track the rhetoric of economic diversification through the sector by successive administrations. Instead, it recorded a distorted growth pattern in the eight-year period from 2011 to 2018. This observed pattern f o l l o w s B u s i n e s s D a y ’s analysis of Gross Domestic Product (GDP) data by the National Bureau of Statistics (NBS), revealing that between 2011 and 2018, for every year the agric sector recorded a growth, it would decline the following year, and as abysmal as this is, it was an established pattern for six years between 2011 and 2016. In 2017, however, the sector declined in growth rate, and this decline continued in 2018. BusinessDay analysis of NBS data shows that in 2011 the Agricultural Sector recorded a GDP growth rate of 2.92 percent in real terms. In 2012 the sector improved, recording 6.7 percent, but the following year, 2013, the growth rate declined to 2.94 percent. It again rose in 2014 to 4.27 percent, and going by the now established pattern, declined yet again in 2015 to 3.72 percent. It increased in 2016 to 4.11 percent, and as now established to be the pattern, declined to 3.45 percent in 2017. The sector however failed to grow the following year, 2018, it was expected to grow again, going by the pattern established over time, but instead further declined to 2.12 percent. “Short-term year to year moves on any index are hard to explain, and determined by a multiple of factors. However, longterm trend, declining, even

with all the interventions (by government) is what is worrying,” said Mezuo Nwuneli, managing partner, Sahel Capital Agribusiness Managers Ltd, in a chat with BusinessDay. The growth rate of real GDP is often used as an indicator of the general health of the economy, according to the International Monetary Fund. In broad terms, an increase in real GDP is interpreted as a sign that the economy is doing well. When real GDP is growing strongly, employment is likely to be increasing as companies hire more workers for their factories and people have more money in their pockets. Extrapolating this to the pattern of growth in Nigeria’s agricultural sector, for every year agriculture creates new jobs and money, it is followed by another year of decline, indicating that the gains made over at least the last eight years have not been sustained. About 90 percent of the agriculture sector in Nigeria as captured in GDP data is crop production. Ironically, the bulk of inter vention programmes by governments in Nigeria favour crop production, from rice, to maize, cassava, cotton and other crops supported either directly by government at the Federal or State level, or by the Central Bank of Nigeria. “When government does interventions in agriculture, it is almost always directed towards crop production,” stressed Ayodeji Balogun, country manager, AFEX Commodities Exchange Limited. Further analysis of the GDP data, shows that crop production as a subsector,

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has followed the zigzag pattern of growth in the agric sector. As noted by Nwuneli whose company invests across the agricultural value chain in different parts of Nigeria, the “agric GDP index primarily measures crop production and is effectively saying that the pace of growth has declined significantly. “ My v i e w o n t h i s i s that there have been factors which have been hampering (agricultural) production over the past 10years, and which have increasingly been getting worse - in particular the security situation in the north and middle belt rural areas, alongside with farmer-herder crisis,” said Nwuneli. He further explained that a contributing factor in the haphazard agricultural growth is climate change and its impact on rain and flash floods, noting that at least twice in the last seven years there have been major floods across the country that devastated farmlands. There have also been smaller floods, which occurred and isolated to particular communities. Invariably, all these factors combine every year to hamper the country’s agricultural output. “Production increases, and then prices fall,” said Balogun, AFEX’s country manager, giving an insight into another explanation for the haphazard growth. He explained that over time, a lot of effort is put into production, forgetting there is a market and other aspects of the value chain that need to be optimised. Invariably, for every year of increased production, there is a glut in the market, and farmers flee produc@Businessdayng

tion the following year. This is followed by a dip the following year when many have run away from a particular crop production to do something else. Logically, it creates an illusion of demand again when there is insufficient supply, and the farmers again come back to produce, followed by yet another glut and the cycle continues. “Government interventions are always focused on one side, so if they focus on production they increase volume produced, but they don’t provide any solution for market,” said Balogun. “So, if the farmers produce, they don’t have anywhere to sell, then you have a slump the following year, and it goes up and down and the pattern continues.” Balogun also expressed the view that the size of money going into agriculture is at complete variance with the size of the sector. The agricultural sector is large, and relative to the size, amount of funding being committed to it is nothing. Worse still, the funds and interventions being committed to the sector are not structurally designed, so, a lot of it goes into wastage and very little gets to the farmers, according to him. If more money is going into agriculture, it would have been expected that the sector would at least maintain a steady growth, but at least for the last eight years from 2011 to 2018, this has not been the case. The sector, it appears, is being run on a trial and error basis, with the same things being done every year, and as should be expected, giving the same results of inconsistent growth. By the end of this year (2019), it will be seen how the growth pattern will continue.

Tuesday 03 September 2019

BUSINESS DAY

news 79% of businesses in Nigeria, SA, others expect revenue losses from skills shortages Endurance Okafor

cross the nine key economies in Africa surveyed by PricewaterhouseCoopers (PWC) in 2019, 79 percent of the respondents expect revenue losses due to skills shortages. In countries such as South Africa, Namibia, Botswana, and Nigeria, where unemployment is significant, majority of private business respondents (nearly 80%) said a lack of suitably skilled staff undercuts revenue. “Recruitment and staff management is crucial to the future success of any company. Conversations

with owners and managers of private businesses in Africa suggest that some companies may not know exactly what they need in this regard to transform digitally and future-proof their businesses,” PWC said in its recent report titled: Africa Private Business Survey 2019. Analysis of the data from the survey revealed that 15 percent of the respondents expect significant losses, 30 percent expect great losses and 34 percent said they expect slight losses while only 21 percent said they were not expecting losses as a result of skills shortage. Private businesses were nonetheless optimistic about their prospects; 83 percent

of African private business leaders predicted revenues overall would grow over the 12 months following the survey by PWC, while only 7percent expected declines. Such optimism contrasts with the findings of the London-based firm in the European Union, where only 58 percent of private business leaders expect revenue growth in the next 12 months – representing a drop in confidence from 2018 – and just half of leaders surveyed in the Middle East predicted sales growth. “Conditions for businesses, and particularly for small and medium-sized businesses, are being made worse by high electricity

costs and frequent blackouts,” PWC noted. According to the 2017 data compiled from MSMEs report by the World Bank and Finance Forum with the title: Assessment of the Shortfalls and Opportunities in Financing Micro, Small and Medium Enterprises in Emerging Markets, micro MSMEs in emerging markets are estimated to be 162 million with Nigeria accounting for 37 million. According to the Washington-based financial institution, MSMEs play a major role in facilitating economic development due to their flexibility and affinity to innovation, noting that is

“even more so in emerging economies with a high contribution from the informal sector.” Overall, Africa’s economic performance is expected to improve this year and next, with the World Bank predicting the continent growing by 2.8 percent in 2019, from an estimated 2.3percent in 2018. This is however below population growth for the fourth consecutive year. Structural problems including corruption, a lack of infrastructure (including digital infrastructure such as broadband), high unemployment and inadequate education systems continue to undermine growth.

N i g e r i a’s e c o n o m i c growth slowed in the first quarter of 2019 after the oil sector, the country’s biggest foreign-exchange earner, contracted. Gross domestic product in Africa’s largest oil producer expanded by 2.01percent in the three months through March from a year earlier growth or 2.4 percent. South Africa’s economy, the second-largest in Africa, contracted 3.2percent in the first quarter of 2019, representing the worst economic decline in a decade. Combined, the two nations account for more than a quarter of the continent’s gross domestic product.

Top officials of NNPC sign performance bond on key priorities HARRISON EDEH, Abuja

roup Managing Director, Mele Kyari, Nigerian National Petroleum Corporation (NNPC), has charged members of his management team to work on key priority areas of growing the nation’s crude oil reserves and production, ensuring steady supply of petroleum products and supplying adequate gas. Kyari gave the charge to the Chief Operating Officers (COOs) of the various Autonomous Business Units (ABUs) of the Corporation at a sign-off event held for the COOs to formally commit to the delivery of the key priority areas at the NNPC Towers, Abuja, on Monday. He explained that all the Key Performance Areas (KPAs) and Key Performance Indicators (KPIs) were designed by in-house experts without inputs from consultants, adding that it was an indication of the abundant talents within the corpora-

tion’s human resource base. “I have the conviction that we can deliver on these KPAs and even do more. We have enormous goodwill from our various stakeholders and Nigerians that we can do things differently. Let me emphasize that our stakeholders have tremendous trust in us and it is only excellent performance that can sustain the trust they have in us,” Kyari said in a statement issued by the Corporation’s spokesperson Ndu Ughammdu on Monday. He maintained that the clear goal of his management was to drive an NNPC that was Transparent and Accountable with Performance Excellence (TAPE), stressing that the milestones for all the ABUs and Strategic Business Units (SBUs) would be delivered within the timelines. Kyari posited that the KPAs were the roadmap for growth and consolidation, assuring that his management would ensure effective stimulation of industrial growth in the country.

Excitement as 10 more win N5m each in BLB Promo

ore winners have emerged in the Better Life Billionaire Promo. In the second draw held in Lagos on Friday, August 30, 10 participants won N5 million each to bring the total pay out in the weekly draw to N100 million. Th e w i n n e r s i n c l u d e Agu Chukwuemeka, Lagos, Eze R i ta, Lag o s, As h i r u Fadekemi Abigail, Akure, Stephen Abiodun Emmanuel, Bauchi, Nura Bagudu Balarabe, Abuja, Alozie Kelechi Thankgod, Abuja, Osunrinide Kehinde Ezekiel, Lagos, Kehinde Olalekan Lanre, Sango, and Daniel Adesoji, Nasarawa. Some of the winners who were contacted immediately through telephone call expressed surprise and were overtly excited at the

financial windfall. Speaking at the draw, director-general of the BLB p ro m o, C e l e s t i n e A c h i , said: “The BLB Promo is not only novel in its idea but also its prizes are unprecedented as it is the highest paying gaming promo in the history of lottery in Nigeria.” He said NNB Capital and Investment Limited was touching and changing lives with this promo. Achi urged Nigerians to take advantage of the promo to change their story. To participate in the promo, users of GSM networks in Nigeria should dial *5453# or text blbpromo to 5453 on MTN network. He said that participants in the promo could also visit www.blbpromo.com to play. www.businessday.ng

L-R: Paul Usoro, president, Nigerian Bar Association (NBA); Gbenga Oyebode, chairman, technical committee on conference planning, and Stanley Imo, 1st vice president, NBA, during a press briefing by the NBA president to release the communiqué of the 59th annual general meeting of the association in Lagos.

Nigeria’s dwindling oil revenue worries experts HARRISON EDEH, Abuja

ndustry analysts have expressed concerns over Nigeria’s dwindling oil revenue, as the latest report by the Nigerian National Petroleum Corporation (NNPC) June report revealed a drop of over forty percent. Oil and gas production earnings in June were down by 44.65 per cent, indicating a value reduction of about $226.38 million between May and June 2019, data NPC have shown. NNPC in its June 2019 monthly financial and operations report, stated that its sales value of oil and gas production in June dropped to $321.23 million down from was ‎$547.61 million in May. The report said that within the month under review, NNPC’s under-recovery-a team it uses in place of subsidy payments for petrol consumption in the country- fell to N30,637,245,949 in June, from N102,338,408,727 in May. Some analysts who spoke to

BusinessDay expressed worries that issues of recurring pipeline vandalism, subsidy payment, which should have been addressed, are still recurring incidences in the industry. Governor Godwin Obaseki, who briefed the National Economic Council last week, expressed concern on the loss of 22 million barrels of oil in the first half of the year, pointing out dangers arising from rising pipeline vandalism across the country. Also, Austin Onuoha, an oil sector governance expert told BusinessDay that NNPC must ensure proper fiscal governance for the oil and gas sector to ensure an investor friendly petroleum sector. NNPC’s June report shows N4,730,839,707 lost to oil theft in June as against N5,657,069,733 lost to same in May, but could not cut down expenditures on repairs of pipeline in June, when it spent N16,812,746.932 as against the N12,430,497,197 spent in May.

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World Economic Forum on Africa to focus on inclusive growth MIKE OCHONMA

he 28th World Economic Forum on Africa (WEF Africa) will focus on inclusive growth in the Fourth Industrial Revolution (4IR), with discussions aimed at finding ways to achieve sustainable growth in a continent with high levels of inequality, corruption and unemployment. This was indicated at a preWEF Africa press conference, held at IBM Research Africa, in Johannesburg, on Monday. WEF Africa head, Elsie Kanza, emphasised that 4IR needed to be embedded in humanity, saying the meeting, to be held in Cape Town from September 4 to 6, would explore how this could be implemented on the continent. An integral part of this would be to explore opportunities for upskilling and reskilling, she noted. WEF Africa will convene 1,100 leaders from government, business and civil society, including ten heads of States or @Businessdayng

government. A key point of the agenda at WEF Africa will be new partnerships to create sustainable employment for Africa’s large and growing workforce. WEF Africa will focus on improving the funding and regulatory environment for start-ups; identifying opportunities for green growth such as the circular economy; increasing commerce for rapid business growth; and leveraging the new Africa Continent Free Trade Agreement to drive regional integration. WEF Africa will also see the launch of several new initiatives. This includes The Africa Growth Platform, a coalition of governments and investors aiming to fast-track development of the region’s most promising start-up enterprises and SMEs, to facilitate their growth and assist them in competing internationally. There will also be the Africa Risk Resilience Platform, which will assist government in prepare, mitigating and preventing climate and disease-related disasters the support of the private sector.

Tuesday 03 September 2019

BUSINESS DAY

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Tuesday 03 September 2019

BUSINESS DAY

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Tuesday 03 September 2019

BUSINESS DAY

news MAN reignites clamour for resuscitation of Nigeria’s moribund paper mills … drives tripartite plan to establish paper research institute in Ogun

RAZAQ AYINLA

pparently worried by ceaseless losses recorded annually in form of capital flight to foreign lands as a result of imports of newsprint and other paper products, the Manufacturers Association of Nigeria (MAN) has reignited calls for immediate resuscitation of three moribund Nigeria’s pulp and paper mills located in Iwopin, Ogun State; Jebba in Kwara State, and Oku-Iboku in Akwa Ibom State. BusinessDay gathers that bureaucratic problems, shoddy privatisation policy and lack of recapitalisation have dealt a big blow to the sustenance of the three pulp and paper mills in the country. The collapse of these three state-owned paper mills as well as newsprint manufacturing plants has brought series of hardships on the country’s economy, leading to huge losses of several billions of dollars to foreign lands, just as the forest reserves and Gmelina plantations dedicated for pulp, paper and newsprint processing and production have also been deforested. Speaking on the effort of MAN and other government agencies to resuscitate the moribund paper mills in Nigeria, Layo Okeowo, chair, Printing and Paper Group of MAN, expressed dissatisfaction over government’s shoddy arrangement that propelled total col-

lapse of pulp and paper mills in the country, which has paved way for some recycling plants that are owned and operated by Chinese investors. Okeowo noted at Governor Dapo Abiodun’s parley with investors held in Abeokuta that the total collapse of Nigeria’s pulp and paper mills accounted for financial and economic losses in the paper and printing industry as imports of such products were increasing on daily basis, paving way for capital flight, loss of jobs, patronage of sub standard pulp and paper products, which she said were not in the best interest of Nigerian economy. She however said MAN had begun a tripartite arrangement with the Federal Institute of Industrial Research, Oshodi (FIIRO) and Raw Materials Research and Development Council (RMRDC) to drive government’s participation and policy in resuscitating and establishment of new pulp and paper mills with a view to drastically reducing foreign exchange used to import newsprint and other paper products to the country. Okeowo revealed that arrangement were in the final stage to drive establishment of paper research institute in Ogun state being one of the host states of pulp and paper mills, coupled with abundance of resources required for both pulp and paper processingandproductionaswell astechnicalknow-howforthecreation of paper research institute.

Africa has opportunity to mitigate climate change through renewable energy – UN MIKE OCHONMA

nited Nations’ (UN) climate special envoy, Luis Alfonso de Alba, has advocated that, the UN’s 2019 Climate Action Summit to be held next month in New York should deliver a solid plan of action to ensure radical changes with regard to climate change. The summit has been called amid rising global emissions levels. The last four years have been the four hottest on record and winter temperatures in the Arctic have risen by 3 ˚C since 1990. The summit will bring together governments, the private sector, civil society, local authorities and other international organisations to develop ambitious solutions in six areas: a global transition to renewable energy; sustainable and resilient infrastructures and cities; sustainable agriculture and management of forests and oceans; resilience and adaptation to climate impacts, and alignment of public and private finance with a net zero economy. The UN urges governments to come to the summit with clear, concrete and ambitious plans to address the worsening climate emergency, enhancing their nationally determined contributions by 2020. The UN believes this should be in line with reducing green-

house-gas emissions by 45 percent over the next decade and to net zero emissions by 2050. While sea levels are rising, coral reefs are dying and negative impacts on human health continue owing to air pollution, heatwaves and risks to food security. The UN states that, if action is taken now, carbon emission can be reduced within 12 years and hold the global average temperature to well below 2 ˚C higher than pre-industrial levels and even to 1.5 ˚C above those levels. Although the Paris Agreement is in place, setting out what needs to be done to stop climate disruption and reverse its impact, the UN says the agreement itself is meaningless without ambitious action. According to De Alba, “Business is on our side. Accelerated climate solutions can strengthen our economies and create jobs, while bringing cleaner air, preserving natural habitats and biodiversity, and protecting our environment.” De Alba notes that, new technologies and engineering solutions are already delivering energy at a lower cost than the fossil fuel driven economy. Solar and onshore winds are now the cheapest sources of new bulk power in virtually all major economies. He insists that nation’s must set radical change in motion to realise set objectives.

Luqman Edu (m), chief visionary officer, FilmoRealty, with representatives of Microsoft (US HQ office), during a visit to launch project in Lagos.

FilmoRealty partners Microsoft in move into Proptech

ilmoRealty, a real estate services company in Nigeria with a focus on facilities and project management, has partnered Microsoft to transform the real estate services industry in Nigeria. With a 25-year track record of delivering real estate services to high-profile companies and individuals spanning 12 states, FilmoRealty is accelerating and investing in the development of technologydriven solutions necessary to better serve its clients and drive forward the evolution of real estate services. Through its partnership with Microsoft, FilmoRealty is now uniquely positioned to

execute its new tech-driven business strategy, which will optimise real estate service delivery and also place it at the forefront of proptech (property technology) in Africa. Representatives from Microsoft’s US headquarters recently paid a visit to FilmoRealty’s Lagos office to spotlight its tech-focused strategies and processes as an innovative company. The visit resulted in a spotlight feature video, which highlights FilmoRealty’s adoption of Microsoft’s cloud-based, highly secure workplace tools to optimise its services and build its growing portfolio of proptech products. One such tool includes Mi-

Boost for National Sports Festival as Edo accelerates work on event secretariat, stadium

…tasks new cabinet members on effective service delivery at retreat

lthough Nigerians would have to wait till next year for the official kick-off of the National Sports Festival, the Governor Godwin Obaseki-led Edo State government, the host of the next edition of the festival, is leaving no stone unturned in preparing for the competition as the secretariat for the event nears completion. In a statement in Benin City, Crusoe Osagie, special adviser to the Edo State Governor on Media and Communication Strategy, said the secretariat would serve as the coordinating venue for the competition, which would hold in different venues across the state. With the secretariat building almost ready, the Samuel Ogbemudia Stadium is also getting a total makeover. The stadium’s main bowl has been renovated with a canopy cover, the lawn tennis court is being reconstructed while other facilities are being remodelled, as the state fast-tracks preparation to

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host Nigeria’s 36 states and the Federal Capital Territory (FCT). According to Osagie, “The Edo State government is hard at work on a number of projects to open up the state to the world. We would be hosting key sporting events in the coming months, including the National Sports Festival and some qualifying matches of the Super Eagles and the Super Falcons. “The Secretariat for the National Sports Festival is almost ready. What is left is the internal finishing and other detailing. This goes to show the seriousness, we, as a government, attach to this competition. We are certain that other facilities marked down for the competition will be ready ahead of time.” Recall that the state played host to top FIFA officials when the team visited the state to inspect facilities, including the stadium and other infrastructure, for Nigeria’s bid to host the 2020 Women U-20 World Cup, which has Edo as one of the venues.

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crosoft’s Power BI, which supports FilmoRealty’s operations with big data analysis and insights that equips clients with the information needed to make powerful strategic business decisions related to the management of their real estate portfolio. “We are moving from just managing sites and responding to situations, to understanding trends in maintenance issues, resolution times, contractors’ SLAs, customer satisfaction levels – everything we need to optimise management services,” says Luqman Edu, FilmoRealty’s chief visionary officer. “Our new operations control center runs on VAMP, our flagship

proprietary software which monitors our clients’ sites and is the engine that supports our services.” Through its partnership with Microsoft, FilmoRealty will continue to set the pace for the paradigm shift in the Nigerian real estate industry, ensuring the development of innovative tools, technologies and service delivery models necessary to produce breakthrough results for its clients. FilmoRealty is a leading real estate services and proptech company in Nigeria with a focus on property and facilities management, development and project management and advisory and consultancy services.

‘Efficient board as panacea for organisational sustainability’ SEYI JOHN SALAU s management continues to balance their portfolio and increase the bottomline of the company, industry stakeholders and analysts have argued the need for effective and efficient composition of organisation’sboardofdirectorstoguarantee organisational sustainability. “Effective strategy formulation is therefore a major function of directors and the continued survival of organisations, be it a public establishment or a private corporateentitylargelydependon the dexterity of its board and their ability to proffer strategies that help the company wade through the murky waters of the business environment,” said Chris Okunowo, president/chairman of Governing Council of the Institute of Directors (IoD) Nigeria. Okunowo stated this at the August edition of the institute’s new members induction held recently in Lagos, where he said boards of directors had assumed increasing critical positions, which impact directly on the

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fortune or misfortune of their organisations. According to Okunowo, directors’ responsibilities have now assumed different dimensions and the responsibilities are now diverse. “Boards now have to be more accountable to their companies’ owners, and many other stakeholders, more than ever before. Therefore, for the boards to be of value and resultoriented, it must first; be effective and efficient,” he stated. Speaking further on collaboration between public and private sectors in driving sustainability in the country, Okunowo said the IoD would continue to engage in positive and collaborative advocacy, established through relationships. “It is our goal and policy objectives to maintain a robust and wellgrounded advocacy programme that will be based on good research and analysis. By this, we intend to engage government in order to positively influence policy directions towards creating amorebusiness-friendlyenvironment in Nigeria,” he said.

Tuesday 03 September 2019

BUSINESS DAY

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Monday 26 August 2019

BUSINESS DAY

news

Ogun to pay farmers upkeep allowances until first harvest Rasaq Ayinla

gun State Governor Dapo Abiodun on Monday identified cassava, maize and rice as produce of interest under its Ogun State Anchor Borrowers Programme (ABP). The governor said some farmers would be issued their certificates of occupancy this week. “We plan for 10,000 participants in the first phase of the scheme. Some of them will emerge this week and I will sign off their C of O for one hectare each. We are also going to concentrate on maize, cassava and rice because the off-takers are waiting to buy them from us,” a statement issued by the Chief Press Secretary to the Governor, Kunle Somorin, noted. “To motivate the graduate farmers, we are going to provide some allowances for the farmers’ upkeep until their first harvest. By that time, it is our belief that they would start to make money and stand on their own. “Our support for them is total. We will provide inputs, service support and training required for farmers through a single digit loan and a guaranteed off-taker,” according to the statement. The statement said interested residents were to log in on the job portal of the state government – www.jobs@ogunstate. gov.ng under the Anchor Borrowers link. It further advised those already on the portal who are interested in the scheme to log back and update their application on their dashboard to

join the scheme. While inaugurating the Steering Committee to oversee the state’s ABP, last week, Governor Abiodun assured the people that his administration was fully committed to providing an environment that would ensure a better life for the people of the state, adding that the state would ensure the development of all sectors of the economy. He said his government appreciated the immense potential of the agricultural sector. According to Governor Abiodun, the target of his administration is to attain self-sufficiency in food by producing more, as providence has blessed the state with favourable climate, fertile soil that sits on over 16,000 square meters, of which 80 percent is arable. “While we have seen the success of the anchor borrowers scheme in other states, it is disheartening that Ogun State has never accessed the CBN ABP through the public window,” he said. He said the inauguration of the committee was a practical demonstration of his administration’s commitment to the development of the agricultural sector, adding that the programme would be targeting over 40,000 farmers, of which 10,000 would be attended to in the first instance. “In this programme, we are targeting the empowerment of over 40,000 farmers; we are going to be starting in the first instance with an initial 10,000 farmers to which we are going to allocate 10,000 hectares of land,” he said.

Sanwo-Olu drums support for ex-servicemen ... as David Mark leads delegation to Lagos JOSHUA BASSEY

agos State Governor Babajide Sanwo-Olu has made case for improved welfare package for families of ex-servicemen who died in the course of serving the country. Sanwo-Olu spoke while receiving a delegation of exservicemen on a visit to Lagos House, Alausa, on Monday, saying there was the need to create economic opportunities for such families. According to the governor, such will encourage them to keep the faith in oneness of the country and raise their level of patriotism. The delegation, made up of alumni of 3rd Regular Course of the Nigerian Defence Academy (NDA), met with the governor ahead of their yearly reunion holding today and tomorrow in Lagos. The governor said: “The country owes a duty to honour servicemen either dead or alive, because their thoughts and aspirations are the benefits some of us are enjoying today. As members of the 3rd Regular Course, it means each one of your members has, at one point or the other, played a part in the wellbeing of our nation. Therefore, we must not let their

families regret the action and heroism of their fathers who put down their lives to keep us united. “The legacies left by ex-Servicemen also bring the burden of leadership on the present crop of leaders. We must do a lot more so that the generations coming behind us would also have good things to say about us.” The governor described the ex-servicemen as “men of high calibre,” noting that their gallantry had shaped the Nigeria narratives since independence, and charged all Nigerians to promote unity and uphold values that would make the labour of the servicemen not to be in vain. Leader of the delegation and former Senate president, David Mark, praised the Lagos government for creating a peaceful atmosphere to host the meeting of the participants of the 3rd Regular Course, noting that the alumni took the course 52 years ago at a time Nigeria was facing internal crisis. Since the alumni body was constituted, Mark, who retired from the military with the rank of Brigadier General, said the group usually met on September 3 and 4 every year to help widows and children of their colleagues who died in active service to the country. www.businessday.ng

L-R: Chamberlain Usoh, editor, Channels TV; Rodria Laline, visiting professor, Insead and IESE; Lartey Bolaji Ebunoluwa, deputy director, Central Bank of Nigeria (CBN); Jamila Maina, deputy director, PEFMB, and Alim Abubakre, founder/non-execuive chair, TEXEM,UK, during the last Texem training in Lagos.

Cheaper prices of unhealthy food linked to stunting, diverse health problems Temitayo Ayetoto

here is an association between relatively cheaper unhealthy food and rate of stunting and micronutrient deficiencies in early childhood, findings by the International Food Policy Research Institute show. Considering the fact that many struggle economically to keep up with high prices of nutrient-rich foods like fruits, vegetables, dairy, eggs, meat, and fish, they practise poor eating habit, which results in diverse range of health challenges. This means higher milk price, for instance, impacts on the increased prevalence of stunting, while the relative prices of sugar-rich foods are negatively associated with obesity prevalence. Nigeria’s stunting rate at 37.8 percent surpasses peers like Senegal at 20.7, South Africa 23.9, Egypt 26.5, Kenya 30.6 and Uganda 33.7. However, it fairs

better than Malawi at 46.3 percent or Ethiopia at 42.3 percent. Using ‘relative caloric price’ of a given food as metric, the study, which compared the cost of calories derived from eggs to calories from staple food such as rice, corn or bread found sugary foods dense in calories and cheap, green leafy vegetables otherwise. Food prices weigh more heavily on purchase decisions made by low-income group. But as incomes rise, the absolute amount of money spent on food increases, but the proportion of income spent on food drops. Eggs and fresh milk do not come cheap, and for processed foods, prices are more a function of whether the market of junk food is big enough and the related ability of manufacturing sector to produce processed foods inexpensively. Sadly, manufacturing in Africa faces many challenges. Poor productivity in the dairy and poultry sectors of low-

income countries, therefore, directly translates into high prices. For countries with low potential for dairy production, the most viable means of increasing consumption, the study suggests, is to use dairy powder imports judiciously, including industrial reconstitution, in conjunction with efforts to stimulate domestic production and domestic demand for milk. Given that the food systems are poor, poor populations tend to care more about purchasing cheap calories, making it harder to diversify away from staple foods low in nutrient. Contrastingly in high-income countries, unhealthy calories have simply become a very affordable option. In the United States, for instance, calories from soft drinks are just 1.9 times as expensive as staple food calories and require no preparation time. The study, therefore, raises the need for nutrition-focused food policies, since relative food

prices differ so markedly and so systematically. Also, closing the healthy food gap between the rich and poor countries requires more diversified investments in agricultural research and development to improve the productivity of nutrient-dense foods as well as improve infrastructure and the broader business environment. It sees the declining cost of unhealthy foods being addressed by taxes on the one hand, while nutrition education and supply-side regulations such as food labelling could be used to tackle caloric cheapness of sugars and oils and fats. “Yet one thing is for certain: Reducing the immense global health burden of poor diets will be a huge challenge in the 21st Century, and fixing the global food system must be at the very centre of efforts to meet this challenge,” the International Food Policy Research Institute study stated.

How police arrested 2,015 armed robbery, 1,154 kidnapping suspects in 8 months …to deploy CCTV technology, strategise for community policing Innocent Odoh, Abuja nspector General of Police (IGP) Mohammed Adamu says the “Operation Puff Adder” recently launched by the police has yielded positive results as men of the Police Force have arrested 2,015 armed robbery suspects, 1154 kidnapping suspects and 552 murder suspects between January and August 2019. The IGP disclosed this in his keynote address during stakeholders’ security summit with traditional rulers and other strategic stakeholders from the six states in the South West geo-political zone, held at the International Conference Centre, University of Ibadan, on Monday. Adamu pointed out that the police would also deploy of cutting-edge CCTV technology for

surveillance functions across the highways and vulnerable locations in communities in the Zone and other parts of the country. The IGP noted that the summit was convened within the context of the police “Community Policing Vision,” which emphasises citizens’ engagement in the process of identifying, dissecting and prioritising threats to communal values, partnering to develop strategies to address the threats, and building trust to undertake actions directed at mitigating them. “In consequence, between January – August 2019, a total of 552 murder suspects were arrested with 66 such arrests effected in the South West. Similarly, 2,015 armed robbery suspects were arrested with 363 of the figure arrested in the South West, while

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1,154 kidnapping suspects were also apprehended in various operations. 147 of these were arrested in the South West. Furthermore, 1,183 suspected cultists have also been arrested with 425 of this figure apprehended in the South Western states. “In relation to recoveries, 1,356 firearms of various calibre and descriptions were recovered in various intelligence-led operations by the Police with 277 of such recoveries made in the South Western part of the country. Similarly, 21,300 ammunition of various descriptions and calibre were recovered in various intelligence-led operations with the highest number of 5, 270 ammunition recovered from criminal syndicates in the South West including about 2,700 ammunition recovered in June @Businessdayng

2019 from a cross-border arms smuggling syndicate in Oyo State. “Furthermore, 1,541 stolen vehicles were recovered with 482 of such recoveries achieved in the South West while a total of 837 kidnapping victim were rescued with 106 of such rescues achieved in the South West,” he said. The IGP stressed that from these statistics the Nigeria Police in recent months have developed capacity and demonstrated the requisite professional zeal such that today, they can confidently say that they have the institutional capability not only for preventive actions, but for responding effectively to any crime situation or threat with a view to locating and apprehending the criminal elements and disrupting their criminal enterprises across the country.

Tuesday 03 September 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

GEORGE PARKER AND SEBASTIAN PAYNE IN LONDON

oris Johnson has ordered an emergency cabinet meeting for Monday afternoon, fuelling expectations that he could call a general election if his Brexit strategy is defeated in the House of Commons this week. David Gauke, one of the leading Tory MPs opposed to a no-deal Brexit, said Mr Johnson was taking a “confrontational” approach with Conservative rebels, with the aim of purging them from the party before calling an election. Allies of the prime minister said they would view a parliamentary defeat for the government this week as “a vote of no confidence” in his Brexit negotiating strategy, giving him an excuse to go to the polls. A senior Downing Street official confirmed that the cabinet would meet on Monday to “discuss the government’s response to MPs seeking to take control of the legislative agenda away from the government and handing it to the opposition and [Jeremy] Corbyn without the consent of the people”. The official added that any potential Commons votes on Tuesday would be “an expression of confidence in government’s negotiating position to secure a deal and will be treated as such”. Whitehall sources said that rather than wait for MPs to defeat the government on legislation to ban a no-deal exit, Mr Johnson could act first and table a motion for debate on Thursday to trigger an election. Under the terms of the fixed term

Boris Johnson fuels election talk by ordering emergency cabinet meeting Tory rebel says PM is taking confrontational approach in attempt to force a snap poll

parliament act, Mr Johnson would need two-thirds of MPs to support an election. Labour would almost certainly vote for an election, provided Mr Johnson promised to hold it before Brexit day on October 31. “They’re almost goading people into voting against the government,”

Mr Gauke said, as about 15 Conservative MPs considered voting with Labour and other opposition parties to try to halt a no-deal exit. Mr Johnson has warned the rebels they will lose the party whip and be banned from standing as Conservative candidates.

“I think their strategy, to be honest, is to lose this week and seek a general election having removed those of us who are not against Brexit or leaving the EU but believe we should do so with a deal,” Mr Gauke told the BBC Today programme. If Mr Johnson triggered an elec-

tion on Thursday it would allow an election on October 17 — the date of an EU council meeting in Brussels — following the standard 25 days normally required for a campaign. Downing Street declined to comment on speculation of an early election but stuck to the standard line: “What the prime minister wants is for the UK to get out of the EU on October 31 and that’s what he’s working on.” The pound was down 0.7 per cent against the dollar at $1.208 by midday on Monday as the battle within the Conservative party over the shape of the UK’s exit from the EU intensified. On Sunday, Mr Johnson refused a request from Tory rebels for a meeting at Westminster on Monday and Mr Gauke confirmed that party whips or other senior figures were doing nothing to try to win over the rebels. Although Downing Street believes that the threat of deselection will stop some of the rebels, Mr Gauke said the prime minister’s tactics — including the suspension of parliament for five weeks — was hardening opinion. “I would say there is a 95 per cent chance that if parliament does not act this week, we will leave without a deal on October 31,” he said.

Colombia heads back Swedish buyout group EQT seeks towards its violent past to raise at least €500m in IPO

Farc declaration of war raises fears of a fresh outbreak of conflict GIDEON LONG IN LONDON

video published on YouTube last week was a bleak reminder of Colombia’s violent past. It showed two dozen guerrillas in military fatigues in the jungle, guns slung over their shoulders, announcing that they were returning to war. At their centre was Ivan Márquez, a longtime leader of the Revolutionary Armed Forces of Colombia (Farc) and an architect of the group’s 2016 peace deal with the state after years of negotiations in Cuba. Now Mr Márquez has accused Colombia’s government of “betrayal” of those peace accords. “This is the continuation of the guerrilla fight in response,” he said, flanked by his comrades. It is the latest evidence that Colombia’s peace agreement is under threat. Much of the country is still racked by violence, with Marxist guerrillas and rightwing paramilitaries active. Civilians are being displaced by fighting. Cocaine production is at an all-time high and social activists are being assassinated with alarming regularity. This was not how things were

envisaged three years ago when the Farc and the government signed their agreement and heralded an end to half a century of conflict. But since then, the government has changed and President Iván Duque’s rightwing administration is far more sceptical of the peace process. Prosecutors have pursued Mr Márquez for alleged drug-trafficking and he has slipped back into the jungle, accusing the government of betraying the Farc, culminating in his call to arms on Thursday. It is unclear how much support he has. The Economist Intelligence Unit says his splinter group appears to number about 25-30 guerrillas, with no territory and few resources. In contrast, Control Risks believes the group has some 500 members and “is no idle threat”. Much will depend on whether Mr Márquez can join forces with other Farc dissidents and rebel groups, notably the National Liberation Army (ELN), which was never part of the 2016 agreement and has continued its war against the state. The Farc and the ELN both grew out of the same Marxist ideology in the 1960s but have fought against each other rather than in unison — usually over territory and control of drug-trafficking routes. www.businessday.ng

Some big names in private equity to have already listed say markets fail to understand them RICHARD MILNE, NORDIC AND BALTIC CORRESPONDENT

wedish buyout group EQT announced its intention to seek a stock market listing in Stockholm in a rare recent move from a private equity company to float its shares. EQT, which was founded by the Wallenberg family of industrialists in 1994 and has grown to become one of Europe’s biggest private equity groups, is seeking to sell about a fifth of its shares in a listing that could value it at about €4bn. At least €500m in fresh equity will be raised while existing shareholders — Investor, the Wallenberg investment vehicle, owns 23 per cent while EQT’s partners own the rest — will sell down their stakes pro rata. “We have been growing EQT for the past 25 years as a private company. To strengthen EQT for the long term, it’s time for us to have our own balance sheet so we can invest in our own growth,” chief executive Christian Sinding told the Financial Times. EQT would become the first private equity company to list for several years after a difficult experience for those few that have already

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floated. Mr Sinding told the FT earlier this year that any listing would take place ahead of a looming bear market but he said on Monday that the planned IPO was “not particularly related to the cycle”. He added: “We’ve had a fairly long bull cycle. So as an investor today you have to be prepared for a certain change in the markets or a downturn.” Some of the big names in private equity to have listed complain that markets fail to understand buyout groups. Leon Black, co-founder of listed Apollo, said in June that he “absolutely” had regrets about taking his firm public. “The public market doesn’t understand creatures like us very well,” he added. Mr Sinding argued that EQT should be “relatively straightforward to understand” compared with other listed private equity firms as it had a normal corporate structure with an independent board, one share one vote and paid a dividend. EQT had €40bn of assets under management as of the end of June and said they had increased 23 per cent a year since its founding. It added that it expected assets under @Businessdayng

management for the private equity industry as a whole to increase 10 per cent a year in the future, compared with 15 per cent growth in 2012-16. Mr Sinding said EQT had “almost built a fort in Europe” and would soon open a new office in France, the only large country on the continent where it did not have much of a presence. It was growing quickly in the US but its main areas for expansion in coming years would be Asia, real estate and growth investments. One of the goals of the IPO is to allow EQT to become a cornerstone investor in its own funds. He declined to comment on any potential valuation. There will be two weeks of talks with analysts followed by two weeks of a management roadshow before any IPO. In the first six months of 2019, EQT said its revenues rose by twothirds from a year earlier to €295m, while underlying net profit more than doubled to €110m. Johan Forssell, Investor’s chief executive, backed the planned IPO: “A listing will provide further opportunities for EQT to grow and develop its successful business model built on industrial value creation. We will remain a long-term owner as we see attractive return potential.”

Tuesday 03 September 2019

BUSINESS DAY

NATIONAL NEWS

Closure of Guatemala’s anti-graft body sparks concern UN programme that helped expose multibillion-dollar corruption networks to shut its doors this week JUDE WEBBER IN MEXICO CITY

nti-corruption efforts in Guatemala have been thrown into doubt as the curtain comes down on Tuesday on a groundbreaking UN Commission. Its investigations in the Central American country put two former presidents and scores of officials in jail, exposing “a state that has been completely captured” by criminal networks. Outgoing President Jimmy Morales, who hands over to Presidentelect Alejandro Giammattei in January, last year refused to renew the mandate of the International Commission against Impunity in Guatemala, and barred its chief Iván Velásquez from the country. “It leaves a huge hole,” said James Goldston, executive director of the Open Society Justice Initiative, who has followed the commission closely since its inception a dozen years ago at Guatemala’s behest. “It was seen as an institution that had a really significant impact.” Cicig, as the commission is known by its Spanish acronym, helped expose intricate multibillion-dollar corruption networks such as the one dubbed La Linea that toppled former president Otto Pérez Molina. A separate graft probe temporarily jailed his predecessor, Álvaro Colom and one in five legislators found themselves under investigation for corruption. But the commission made powerful enemies in Guatemala, and was weakened when the administration of US President Donald Trump watered down Washington’s former strong support. Cicig investigated Mr Morales and members of his family. He denied wrongdoing and his relatives have since been cleared, but he accused the commission of threatening national security and sovereignty and violating human rights. As he geared up to end Cicig’s mandate, he deployed tanks outside the commission’s headquarters, which is to be knocked down and turned into a shopping centre. Mr Giammattei, a 63-year-old doctor who triumphed in a run-off in August, has also locked horns with Cicig in the past: it investigated him over alleged extrajudicial killings in a jail when he was director of prisons. He was briefly jailed but later exonerated. “Pursuing corruption is right but that’s the easy part,” the president-elect told the FT, in a telephone interview. He said the real challenge was to attack the causes of a system that churns out corruption. He intends to replace Cicig with a state commission that he said would “go deeper” than Cicig, but was fuzzy on the details. “This commission will have the power to promote the necessary changes so that we see changes in the system,” he said. Cicig’s role in strengthening institutions and the rule of law

was seen as particularly crucial given that hundreds of thousands of Guatemalans have sought to migrate to the US in recent years to escape violent crime, near total official impunity and poverty — a tide Mr Trump wants to halt. Cicig helped file more than 120 cases implicating more than 1,540 people and to secure more than 400 convictions. It pushed for legal reforms to allow prosecutors to access phone records and seek plea bargains and helped set up special courts and a witness protection programme, the Washington Office on Latin America noted. But despite its advances, illicit networks involving politicians, business leaders, and members of the armed forces and criminal gangs continue to hold sway in the country. These structures — which are “designed to be permanent” — illegally finance electoral campaigns, enrich themselves and pervert institutions, the commission said in a damning final report entitled “A Captured State”. In a farewell speech last week broadcast in Guatemala by video, Mr Velásquez warned that Guatemala remained riven by “systematic and structural” corruption in which drug trafficking groups were also embroiled. In this year’s elections alone, a quarter of the country’s mayorships “were won by known drug traffickers,” he said. “Just when Guatemala needs it the most, it’s going away because of the very powerful vested interests that do not want Cicig to keep digging,” said Orlando Pérez, dean of liberal arts and sciences at the University of North Texas at Dallas. Thelma Aldana, a former crusading attorney-general who worked closely with Cicig and now lives in self-imposed exile, said: “The state is captured and we have to free it . . . We were on the point of achieving it but it seems we have to do more.” Mr Giammattei played down the difficulty of picking up the baton on fighting corruption. “There are no impossible challenges, he told the FT. “Nothing is impossible.” Christopher Sabatini, senior fellow for Latin America at Chatham House, a think-tank, was sceptical. “We can’t count on anti-corruption initiatives remaining,” he said. “Today, Guatemalan society is at a crossroads,” Cicig said in its report: go backwards and give into criminal networks or continue to break them up and appoint independent prosecutors and judges. Mr Velásquez was under no illusions, saying he expected to see a “systematic effort to . . . rewrite the history of the last 12 years demonising the Cicig and its contributions”. Mr Sabatini said Cicig proved that it was possible to expose illicit and corrupt networks. But its demise underscored “how quickly that can vanish. It raised expectations, brought down a government, inspired Guatemalans — but in the end, it was broken”. www.businessday.ng

US stance on Arctic is ‘dangerous’, says Sweden’s foreign minister Margot Wallstrom criticises Washington over its questioning of climate change

RICHARD MILNE IN STOCKHOLM

weden’s foreign minister has lashed out at the US’s “sad and dangerous” approach to the Arctic, warning of a risk to decades of co-operation with the likes of Russia and China in the far north. Margot Wallstrom told the Financial Times that US president Donald Trump’s offer to buy the Arctic island of Greenland from Denmark “sounded like a joke” and “was a shock”. But Sweden’s centre-left foreign minister for the past five years reserved her strongest words for how the US had approached the Arctic Council, the intergovernmental group that discusses regional issues. Diplomats say the council is a rare forum where the west and Russia have engaged with each other since the latter’s annexation of Crimea. Washington caused consternation in May when for the first time

it blocked the council’s traditional joint declaration because of references to climate change. “I am extremely worried about this. It’s a questioning of science. You have a right to your own opinion, but not to your own facts. This is the case also with the Arctic region. All the rest of the us, we have to stand up for the Arctic region and the Arctic Council and use it in the best possible way,” Ms Wallstrom said. Diplomats in the Nordic countries have long decried the lack of US interest in the Arctic compared with Russia and China, which have spent years building up their commercial and, for Moscow, military interests in the high north. But they were bewildered by the tone of a speech to the council by US secretary of state Mike Pompeo in May, where he warned against “aggressive” behaviour by China and Russia in the region. “That has never been the theme or the task for the Arctic Council to discuss security policy. It is a

non-military and sort of peaceful council where other issues are being discussed. They want to turn it into something else,” said Ms Wallstrom. “We all understand that we are in this together and this is something that will affect us enormously over the years to come. We’ve only seen the start of that. This is sad and dangerous,” she said. Climate change is opening up the Arctic, bringing the prospect of new shipping routes between Asia and Europe as well as creating mineral and petroleum potential in areas such as Greenland, Alaska and the Russian high north. That has sparked predictions from some of a new “Great Game” in the north. Ms Wallstrom conceded that there would be “renewed interest from China, from Russia, from the US” but argued that a separate political discussion was needed to “create an international rules-based order also for the Arctic”, probably under the auspices of the UN.

Pronto.AI vows to deliver despite charges against founder Self-driving start-up in turmoil after Anthony Levandowski is accused of stealing from Google PATRICK MCGEE IN SAN FRANCISCO

elf-driving start-up Pronto. AI has said it will deliver its flagship product to customers this year despite being thrown into crisis last Tuesday when Anthony Levandowski, its founder and chief executive, was charged on 33 counts of theft or attempted theft from Google. “We have deadlines and we are going to meet them — what’s going on isn’t going to affect that,” Robbie Miller, the head of safety who took the reins as chief executive, told the Financial Times. Pronto’s first product, CoPilot, is “Level 2” driver-assist technology giving commercial trucks a set of cameras and predictive analytics

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software designed to make driving safer. The product is focused on vehicles on the road today rather than the fully autonomous “Level 4” technology competitors such as Waymo and Zoox are aiming to achieve. “Is it more compelling to just take the driver out of vehicle? Clearly,” Mr Miller said. “The issue is, the technology is not there yet.” Allegations against Mr Levandowski first emerged in 2017 when Waymo — which started life as Google’s self-driving car project — sued his then employer, Uber, claiming that he had stolen information months before his departure. Uber paid roughly $250m in shares to settle. Mr Levandowski has always denied the charges. His lawyers last week said: “None of these suppos@Businessdayng

edly secret files ever went to Uber or to any other company.” Mr Miller was on vacation in Bora Bora when he received the news, prompting an immediate call with senior directors. He was quickly appointed chief executive and took the first flight back to San Francisco to be with the small team of fewer than 100 employees. The charges could have implications for big tech at a time when antitrust probes are beginning against the likes of Google, Facebook, Amazon and Apple. Some critics believe the criminal charges from federal agents could stifle innovation, noting that the line between intellectual theft and simply using one’s experience at another company can be blurry. Others see the charges as long overdue.

Tuesday 03 September 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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China’s economy shows signs of resilience despite trade war Manufacturing rebounds to five-month high in August as stimulus measures provide boost DON WEINLAND IN BEIJING AND DANIEL SHANE IN HONG KONG

s a fresh round of tariffs hit Chinese goods this week, the country’s economy is showing signs of resilience that could help counteract the effects of the US administration’s intensifying trade war against Beijing. Activity in China’s manufacturing sector rebounded to a five-month high in August, data showed on Monday, a result of stimulus measures that China’s leadership hopes will offset the impact of a series of tariffs imposed by Washington, including new levies of 15 per cent on $112bn of goods from China that took effect on Sunday. The latest Caixin China General Manufacturing PMI hit 50.4 during the month, compared with 49.9 in July. That is the highest reading for the index since March, as well as the first time in three months that it has risen above the 50 mark, which separates expansion and contraction in the country’s manufacturing industry. The August reading, which was bolstered by recent stimulus measures such as infrastructure spending, was also higher than the figure of 49.8 forecast by economists polled by Reuters. Analysts have taken the PMI reading as positive news but many expect the government will be forced to step up monetary easing to allow more credit to flow into the economy, buoying companies that are struggling to access loans from banks. “Given growth appears to be tracking near the lower end of the policy target range and external pressures are intensifying (given

another round of US tariffs), we expect policy to ease further on the margin,” analysts at Goldman Sachs said in a note to investors. The latest round of US tariffs were aimed at so-called final goods, such as shoes and clothing manufactured in China, and expected to hit not only Chinese producers but also US consumers that rely on cheap goods from the world’s second-largest economy. China has responded to the US measures, triggering additional tariffs on US goods including crude oil, leaving no end in sight for the trade dispute that erupted more than a year ago. “China’s economy showed signs of a short-term recovery, but downward pressure remains a long-term problem,” said Dr Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group. “Amid unstable SinoAmerican relations, China needs to step up countercyclical policies.” The good news reflected in the PMI numbers could be fleeting without a substantial policy response from China’s leaders, economists warned. “Clouds are still hanging over the outlook — global demand looks set to weaken further and a long-overdue pullback in property construction is getting under way,” said Julian Evans-Pritchard, an economist at Capital Economics, noting he expected Beijing to unveil further stimulus measures over the coming months. The PMI showed that the outlook for Chinese manufacturers toward the coming 12 months was close to its lowest since the Caixin series began. Manufacturers’ export orders also fell to their weakest point this year amid fears over the impact of trade friction and a cooling global economy.

Musk moves into insurance to cut premiums for Tesla owners Carmarker says it can use anonymised fleet data to gain edge on pricing ROBERT ARMSTRONG AND OLIVER RALPH

esla is in the early stages of becoming a fully-fledged motor insurer, in a rare move by a carmaker to break into the insurance market as it attempts to bring down the cost of premiums for owners of its electric vehicles. The electric car maker announced last week that it would begin offering auto insurance to its customers, but only acting as a broker in the state of California. Speciality insurance company Markel writes the underlying insurance policies. However, Tesla has told the Financial Times that it is “taking steps” towards becoming an insurer in its own right and “taking on these responsibilities in the future”. Using its own balance sheet to underwrite car insurance would be a highly unusual, if not unique move by a car manufacturer. Tesla chief executive Elon Musk, who is known for his ambitions that span industries from solar power to space travel, has complained in the

past about the high premium paid to insure Tesla cars, which range in price from $38,000 to more than $80,000. He said in April that Tesla was hoping to launch an insurance programme by as early as May, adding that “it will be much more compelling than anything else out there”. He also suggested that Tesla’s access to data captured by the cars themselves would give the company an edge in pricing over thirdparty insurers: “We essentially have a substantial . . . information arbitrage opportunity where we have direct knowledge of the risk profile of customers and basically the car.” Tesla said it used “anonymised fleet data” but not driver-specific data to assess risks. The company’s announcement of the current programme said it was “designed to provide Tesla owners with up to 20% lower rates, and in some cases as much as 30 per cent”. The lower price also reflected “Tesla’s active safety and advanced driver assistance features”, it added. www.businessday.ng

India manufacturing growth drops to its lowest level in 15 months Purchasing managers’ index plus fall in domestic car sales offer more evidence of slowdown BENJAMIN PARKIN IN MUMBAI

ndia’s manufacturing growth in August fell to its lowest level in 15 months, signalling that the country’s alarming slowdown is continuing and raising pressure on re-elected prime minister Narendra Modi to expand economic stimulus. The IHS Markit Indian manufacturing purchasing managers’ index showed growth dropping to 51.4 in August, down from 52.5 in July and the lowest level since May 2018. A reading above 50 signals expansion. However, a drop in spending on items such as raw and semi-finished materials suggested that the slowdown would probably continue to weigh on production. “Until manufacturers are willing to loosen the purse strings, it’s difficult to foresee a meaningful rebound in production growth on the

horizon,” said Pollyanna de Lima, IHS Markit’s principal economist. The figures came after some of India’s largest automobile manufacturers on Sunday reported steep drops in domestic sales for August with Maruti Suzuki reporting a 36 per cent fall and Tata Motors a 49 per cent decline from a year earlier. The disappointing data follow news on Friday that gross domestic product growth fell to a six-year low in the quarter ending in June. The unravelling in what was until recently touted as the world’s fastest-growing large economy could prove one of the biggest challenges for Mr Modi’s administration, which was elected for a second term in May. Indian business groups have become increasingly vocal about the need for government intervention. The slowdown is “a matter

of deep concern”, said Sandip Somany, president of the Federation of Indian Chambers of Commerce and Industry, one of the country’s largest business organisations. Finance minister Nirmala Sitharaman has in recent weeks announced measures including a government car-buying spree and accelerating consolidation of public-sector banks. Ms Sitharaman on Sunday also suggested cutting taxes on automobile manufacturers, according to local media. But data such as the manufacturing PMI, which registered the first drop in material purchases in more than a year, suggest that a rebound may be slow to come. Darren Aw, of Capital Economics, said the government had more flexibility to implement stimulus measures after receiving a bumper Rs1.7tn ($24.8bn) payout from the Reserve Bank of India last week.

Russians sceptical of Putin’s grand projects as economy founders Kremlin struggles to keep its promises on infrastructure spending HENRY FOY IN MOSCOW

ou can learn a lot about Russia’s struggling economy, and the Kremlin’s much-trumpeted Rbs 25.7tn ($390bn) spending plans to kick-start it, from a wander around Moscow’s Kazansky railway station. Under ornate chandeliers and grand Soviet murals depicting the triumph of labour, the small electronic departures board tells a story of under-investment, outdated infrastructure and years of unfulfilled promises. No more than eight trains run from the capital to regional city Kazan each day, taking roughly 12 hours to trundle along the 750km route. To fix that, president Vladi-

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mir Putin has promised to build a Rbs 1.7tn ($25bn) high-speed line reducing the journey to three and a half hours. It is a prominent initiative in the Russian leader’s grand scheme of “National Projects” that the Kremlin says will reinvigorate the country’s moribund economy. But those clutching suitcases on the platform have heard it all before: Mr Putin first made such a promise six years ago, and weary travellers are still waiting for work to start. Many fear that a similar tale of ambitious but unfulfilled pledges will undermine the Kremlin’s promised five-year investment bonanza, which has been billed as the cure to Russia’s economic ills: from tepid growth and low productivity, to falling real incomes and a heavy @Businessdayng

reliance on exports of oil, gas and other natural resources. But projects tackling everything from demography and infrastructure to clean water and providing musical instruments to schools are bogged down, people involved in their implementation told the FT, in tussles over financing and confusion over how private companies should contribute. Ministers managing the schemes “are totally naive about [them], and view the whole thing with such simplicity,” said one person involved in funding discussions. “They have no real clue about the numbers involved and what they expect to achieve from it. They are like children: asking [each other] ‘OK, so there is all this money. How can we spend it?’”

Tuesday 03 September 2019

BUSINESS DAY

ANALYSIS

UK’s Labour would seize £300bn of company shares FT analysis reveals potential scale of confiscation while landlords face ‘right to buy’ plan JIM PICKARD, CHIEF POLITICAL CORRESPONDENT

Labour government would confiscate about £300bn of shares in 7,000 large companies and hand them to workers in one of the biggest state raids on the private sector to take place in a western democracy, according to analysis by the Financial Times and Clifford Chance. The UK’s 2.6m landlords would also face a moment of reckoning if Labour won the next general election after shadow chancellor John McDonnell said he wanted a “right to buy” scheme for private tenants as well as higher taxes on landlords. With British politics in turmoil and the chances of a snap general election fast increasing, the FT is this week examining the consequences for the UK economy of a Labour government — which would be the most leftwing in modern history. The Labour leadership is determined to shift power away from bosses and landlords and to workers and tenants. The £300bn share seizure would be the consequence of Mr McDonnell’s plans for “inclusive ownership funds”, where every company with more than 250 staff would have to gradually transfer 10 per cent of their shares to workers. The radical plan would see the transfer of 1 per cent a year of shares from shareholders to workers over 10 years. Shares would be held and managed by workers, who would receive dividends up to £500 each per year. Any income beyond that level would be redistributed to the Exchequer, representing a stealth tax by the state. Labour has never put an estimate on the scale of the transfer of private wealth from shareholders to

workers that the policy would entail. But the FT and law firm Clifford Chance have sought to gauge the size of the policy by extrapolating data from the Office for National Statistics. The ONS estimates that financial and non-financial corporations have a book value of £5.5tn. The national accounts do not separate out large companies, but 57 per cent of overall corporate turnover derives from large companies, according to the ONS. On that basis the value of large private sector companies is about £3tn — meaning Labour would expropriate £300bn. For comparison, the windfall tax by Tony Blair’s New Labour government on utility companies raised just £4.8bn. “There is no historic precedent for this,” said Dan Neidle, a partner at Clifford Chance. “We are in completely uncharted territory.” Mr Neidle predicted litigation from aggrieved companies and shareholders, challenges from other countries, including the US and China, potential WTO complaints and perhaps “retaliation in kind”. Matt Kilcoyne, of the Adam Smith Institute, called the share move “expropriation”. He added: “Our largest investors are pension funds and they’ll see billions of pounds wiped off their books. So we’ll all see the value of our pensions fall. It’s the biggest raid of all our nest eggs in living memory.” Mr McDonnell said greater employee ownership increased a company’s productivity and encouraged long-term thinking. “It’s right that we all share in the benefits that investment produces,” he said. Meanwhile, the shadow chancellor has told the FT that he wants to see a new “right to buy” for millions of private tenants.

Saudi Arabia replaces Aramco chairman with MBS ally ahead of IPO Energy giant to appoint Yasir al-Rumayyan to succeed Khalid al-Falih ANJLI RAVAL IN ABERDEEN, ARASH MASSOUDI IN LONDON AND SIMEON KERR IN DUBAI

audi Arabia has removed its energy minister as chairman of Saudi Aramco and appointed Yasiral-Rumayyan,acloseallyof crownprinceMohammedbinSalman, to the role ahead of its planned blockbuster stock market listing. Mr Rumayyan, who is on the board of Saudi Aramco, has gained in stature and influence in recent years as the head of the country’s sovereign wealth fund, the main vehicle through which Prince Mohammed has sought to diversify the kingdom’s economy away from oil. The Public Investment Fund is scrambling for cash to fund Prince Mohammed’s domestic bet and international investments in ride-hailing company Uber, electric carmaker Tesla and SoftBank’s Vision Fund. The expansion of Mr Rumayyan’s brief, confirmed by people with direct knowledge of the situation and

first reported by Bloomberg, comes as Khalid al-Falih, Saudi Aramco’s former chief executive and its chairman since 2015, has seen his position within the government weakened. While Mr Falih has kept his official role overseeing oil production policy for the kingdom, on Friday he was stripped of part of his government portfolio managing industrial development. There have been discussions in recent months about replacing Mr Falih as chairman as part of a process to separate the government from Saudi Aramco and improve governance ahead of the IPO. But the change in chairman highlights the more active role Saudi Arabia’s PIF is taking in the listing preparations for the kingdom’s state energy giant, four people familiar with the IPO process told the Financial Times. Saudi Aramco did not immediately respond to a request for comment, while the PIF and the energy ministry declined to comment. www.businessday.ng

Argentina: how IMF’s biggest ever bailout crumbled under Macri With the Peronists waiting in the wings, the country is struggling to avoid a ninth sovereign default MICHAEL STOTT AND BENEDICT MANDER IN BUENOS AIRES

he decision to seek what became the biggest bailout in the IMF’s history took only a few minutes.

A loss of faith in Argentina’s reform programme had been visibly demonstrated by a two-week run on the peso in spring last year. President Mauricio Macri had few options left. A long-mooted contingency plan went into action. “When it came to it, we had discussed it so much, for Macri it was no problem,” says one senior government official recalling the events of last May. “The decision took five minutes . . . back then, Macri was fine and he was very happy with the agreement . . . after all, we had managed to get $50bn.” Fifteen months later, the giant bailout has become a millstone around Mr Macri’s neck. Voters angry at the continuing recession delivered a stinging rebuke on August 11, handing a big victory to his Peronist rival Alberto Fernández in a primary vote. The contest is regarded as a reliable barometer for the election in October and its result panicked investors because it spelt disaster for Mr Macri’s chances. Following days of market chaos in the wake of the vote, Mr Macri’s government bowed to the inevitable last week and asked creditors for more time to pay back Argentina’s $101bn of foreign debt, including the IMF money, as Buenos Aires struggled to avoid the country’s ninth sovereign default — and the third this century. Currency controls were imposed on businesses on Sunday after it lost an estimated $3bn in reserves in just two days last week. With the record-breaking bailout veering off track, questions are being asked about why the IMF, which has overseen 21 bailouts to Argentina, including one that ended in a historic default, lent so much money to support a programme that is crumbling after little more than a year. “It’s another black eye for the IMF in Argentina,” says Benjamin Gedan, who leads the Argentina project at the Wilson Center in Washington. “They were caught up in the

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same euphoria as investors . . . They thought the number two economy in South America was embracing the Washington consensus.” Having already disbursed $44bn of the bailout to Buenos Aires, the fund now faces a difficult choice: whether to stick with the programme and hand over another $5.4bn later this month to Mr Macri’s government or cut its losses and wait to deal with the next president. The IMF said in a statement issued after officials visited Argentina last week that it was assessing the impact of the proposed debt measures but would “continue to stand with Argentina during these challenging times”. Its decision on the bailout’s future will be taken without the person who was instrumental in winning approval for the rescue: Christine Lagarde, who has stepped down from the IMF’s top job to lead the European Central Bank. Ms Lagarde is unapologetic about her leading role in lending to Argentina. “We were the only game in town,” she told the Financial Times in July. “There was nobody else at the time to invest in the recovery process through which the government had decided to engage, and given the size of the challenge, we had to go big.” The last 70 years of Argentina’s history have been punctuated with regular economic crises, and Mr Macri’s inauguration in December 2015 was no different. His Peronist predecessor, Cristina Fernández de Kirchner, had emptied the government coffers, signing decrees to increase spending by an extra $27bn in her final days in power. Inflation was running close to 25 per cent, foreign exchange reserves were dangerously low and generous subsidies for utilities and transport were draining the budget. The new president seemed well equipped for the challenge. The multimillionaire scion of an Italian immigrant who made his fortune through lucrative government contracts, he projected an image of cool competence, business savvy and sober realism which came as a relief to investors after the chaotic populism of Ms Fernández. “I really believe that finally we have learnt from our mistakes,” Mr

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Macri told the Financial Times in September 2016, when asked about his economic programme. “There is no other country in the world with as much upside as Argentina.” Something Mr Macri was keen to avoid if at all possible was being forced to seek help from the IMF, a perennial bugbear for Argentine leaders. Buenos Aires’ troubled history with the fund stretches back six decades. Most notorious was the 2001 economic collapse, which ended with what was then the biggest debt default in history, bank runs, widespread civil unrest and the president fleeing by helicopter from the roof of the presidential palace. Nearly a generation later, the bitterness remains. A poll last year by the Wilson Center found that 56 per cent of Argentines dislike the IMF, the worst ranking of any international organisation surveyed. The centre’s Mr Gedan compares the organisation to Superman’s arch enemy: “In Argentina, the IMF is like Lex Luthor,” he says. “Historically whenever the IMF swoops into Argentina, it leaves brutal budget cuts and economic chaos in its wake.” So Mr Macri opted for a gradual approach to fixing the economic mess left to him by Ms Fernández, hoping to avoid another cycle of IMFimposed austerity and political crisis. “Macri’s political team told him he couldn’t start his term with a big [austerity plan],” says one source close to the administration. “That would be a typical rightwing government, which would end up with him leaving the presidential palace by helicopter when it failed.” Mr Macri, who was also handicapped by his lack of a majority in congress, avoided big cuts to public spending and hoped that steady growth and restoring access to international borrowing would dig the economy out of its hole. For a couple of years, the plan seemed to work. But the big deficits needed a constant stream of foreign money to fund them. High interest rates pushed up the value of the peso, meaning more dollars needed to be borrowed to fund the deficit. When a loss of market confidence triggered last year’s run on the peso, Mr Macri had to turn to the IMF.

Tuesday 03 September 2019

BUSINESS DAY

POLITICS & POLICY Nigeria’s democracy not balanced without roles for youths, women - ADP …Party raises alarm over rising involvement of youths in crime INIOBONG IWOK

he Action Democratic Party (ADP) says the poor representation of women in elective positions in the country was a huge set back to the nation’s democracy which had created an imbalance in the polity, saying that urgent steps must be taken to address the ugly trend. The party condemned the increasing trend where many youths were now concentrating their energies on internet fraud and other crimes rather than nation-building. Sani Yabagi, ADP national chairman, stated this in Lagos while speaking at the 2019 National Youth Summit organised by the party. Speaking on the theme ‘Building Bridges among youths across continents,’ Yabagi noted that the youth were the bulwark and strength of any society and that they were indispensable in nation building. The party chairman, however, said it was disturbing that a large number of youths in the country were taking to negativities instead of channelling their energies in things that would make the country better According to him, “The Nigerian youths are not just the bulwark of every society but the embodiment of the strength, dignity and aspirations of Nigeria in its 59years as a sovereign independent nation. ‘’The values, with which the Ni-

???????????? Sani Yabagi, ADP national chairman.

gerian state builds socio-political, cultural and economic vitality, are represented in the profound energy of the Nigerian youths. ‘’That is why at different times in the Nigerian political history, youths had played roles for the uplift of the nation. ‘’Today, rather than focus on things that could promote our nation and make it a potent force to be reckoned with globally, the youths are concentrating their energies on things that could defame us. ‘’However, an ugly streak appears to be enveloping the Nigerian youths. Many youths these days spear to dwell more on the

negative. ‘’Most of those carrying out insurgency and insurrection in the North East, banditry in the North West, session in the South East, kidnapping and robbery in other geopolitical zones are youths. ‘’Most disturbing is the recent trend of events in our nation, where cases of cybercrime, fondly branded ‘Yahoo-Yahoo’ is gradually becoming a fad. ‘’To our consternation, youth engaging in this demeaning business are doing it overtly. Some are even proud enough to flaunt their wealth around and could boldly pronounce themselves as ‘Yahoo’ boys wherever they go.

BMO hails Senate President for committing to partnership with executive

he Buhari Media Organisation (BMO) has commended the Senate President, Ahmad Lawan for his sense of patriotism, dedication and commitment, particularly over his recent promise that the ninth National Assembly would not fail President Muhammadu Buhari in his efforts to bring succour to Nigerians, and finding lasting solution to some of the numerous challenges confronting the country. The Pro-Buhari group was reacting to the recent statement made by the Senate President at a town hall meeting in Yobe State during which he promised Nigerians that the ninth National Assembly would have a good working relationship with the administration of President Muhhammadu Buhari, unlike the previous eighth National Assembly. BMO in a statement signed by its Chairman Niyi Akinsiju and Secretary Cassidy Madueke, said the Senate President, since assumption of office has left no one in doubt of his readiness, and the commitment of the ninth National Assembly to work with Buhari administration to deliver on his Next Level agenda for the benefit of the people. “It is gratifying to note that we now have a Senate President who

‘’This substantiated further the level of degeneracy in our youths and the well-entrenched decadence in our society’’, he said. Speaking further, Yabagi charged governments at all levels to provide jobs and opportunities for the youth to substantially address the problem. The party chairman urged the youth not to find excuse in the economic challenges in the country to take to crime, urging them to strive to do anything legitimate to better their lives. He pointed out that the likes of late Obafemi Awolowo, Nnamdi Azikwe and Yakubu Gowon (rtd) and others made great contributions to the country as young people, urging the present generation to draw inspiration from them. The party chairman urged the youth to take charge of the future by participating more actively in the political process, stressing that the summit was organised by the ADP to raise the consciousness of young people to the need to play the expected role in nationbuilding. Yabagi said ADP was a party that firmly believed in the youths; hence it encouraged many youths to contest under its tickets in the last elections. A member of the Conservative Party in the UK, Jaymey Mclvor said young people were the real movers of the society. Mclvor, who was the guest speaker, said Nigeria was a land of opportunities and urged the

APC worries over alleged partisanship of royal fathers in A/Ibom ANIEFIOK UDONQUAK, Uyo

T From left, Oyo State Governor, Seyi Makinde; FPPRO, DCP Frank Mba; Special Adviser to Governor Makinde on Security, CP Fatai Owoseni (rtd) and Inspector General of Police, Mohammed Abubakar Adamu during a South-West Geopolitical Zone Security Summit held at International Conference Center University of Ibadan.

is ready to mobilise his colleagues in both chambers of the National Assembly to work harmoniously with the executive arm of government and other agencies of government for the benefit of Nigeria. For us, this is a welcome development which every well-meaning Nigerian should applaud. “The purpose of the legislative arm of government is to work in partnership with the executive arm of government to ensure the dividends of democracy reach all and sundry. It is with great hope that the second coming of President Buhari and the new

leadership of the Senate and House of Representatives provide the landscape for all Nigerians to thrive and move to the Next Level. “This singular act of patriotism which the Senate President has repeatedly demonstrated over time has not only shown that Senator Lawan acknowledges and appreciates the enormity of the problems confronting the country, he also believes that through collective efforts of various government agencies, departments and Nigerians, we stand a better chance of resolving our problems”, the group added.

youths to do their best to take the country to where it should be. The guest speaker, himself a youth said he was at the summit to share ideas on how youths could define the future of the country, using the UK experience. ‘’The young people need to stand up and participate more in nation-building. e youths are the movers of any society; they should take charge and define the future of the country,’’ he said. Mclvor said in making the kind of change needed to move the country forward; the youth should not anything that could threaten the peace and unity of the country. He said the ideology of the Conservative Party centred on building a better British society and said he saw some correlations between the values of ADP and those of the Conservative Party. The British politician said every country had its own challenge and urged Nigerians to work to fix the country. In his welcome address, Lagos Chairman of the party, Bolaji Nasir said though the summit was the first edition, it would be organised on a periodic basis across all the geographical zones. He described ADP as a party for everyone, saying no party had provided more opportunities for the youths than ADP. Speaking, Publicity Secretary of the party in the state, Adelaja Adeoye said the party did well in the last elections despite being relatively new.

he Akwa Ibom chapter of the All progressives Congress(APC) has expressed concern over the alleged partisanship of traditional rulers saying the royal should be neutral in political issues of the state. In a release, signed by the State Publicity Secretary of the party, Nkereuwem Enyongekere, a copy of which was made available to the media, it urged the traditional rulers to play advisory roles which it said would ensure the unity in the state. The party crticised the traditional fathers for allowing themselves to be used by for political purposes. Besides, the party called on the traditional rulers to encourage “a healthy and conducive political environment in the state as all the contenders were able qualified to vie for political offices.” “We have observed that the entire literature from the “royal fathers” is a belated endorsement of the conduct of the highly contested outcome of the March 9, 2019 General election in the states “It is instructive to note that the release is an open chastisement of all Petitioners, particularly of the All Progressives Congress (APC) who participated in that contentious election and who have a plenitude of reasons to seek judicial intervention and review of

the entire process and outcome of the exercise. That, of course is the minimum provided by Law and expected of peaceloving and law-abiding citizens.” It reminded the Akwa Ibom Council of Chiefs that all candidates of the party that contested the 2019 elections are legally empowered to seek redress in the tribunal and to challenge the outcome of the elections if they felt unsatisfied with the process. “The electoral process, being essentially a creation of Law, must be conducted according to Law with inbuilt safeguards and red flags. The option of challenging the outcome of an election is lawful and legitimate as practiced even in the most developed democracies of the world. The Laws also provide ample opportunities for all parties to prove and defend their roles in any such contentious electoral exercise without inhibition including calling for evidence of observers and monitors.” The statement added, “Apparently, our royal fathers who said they “participated and witnessed” the elections “as being totally free, fair, transparent and acceptable across the length and breadth of Akwa Ibom State” did not deem it fit to seize the golden opportunity to also file an Observer/Monitor report or better still, for grandiose effect, testify at the Tribunal as the Arewa Peoples Assembly (APA) frantically tried to do in the course of the proceedings.

Tuesday 03 September 2019

BUSINESS DAY

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Tuesday 03 September 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 02 September 2019 Company

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 231,043.97 6.50 0.77 156 4,609,845 UNITED BANK FOR AFRICA PLC 212,036.41 6.20 5.98 266 13,952,577 ZENITH BANK PLC 551,008.47 17.55 2.03 327 16,149,775 749 34,712,197 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 168,707.88 4.70 -1.05 192 13,639,256 192 13,639,256 941 48,351,453 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,819,100.06 138.50 -1.77 129 1,803,416 129 1,803,416 129 1,803,416 BUILDING MATERIALS DANGOTE CEMENT PLC 2,726,481.18 160.00 -1.23 53 550,513 LAFARGE AFRICA PLC. 230,341.48 14.30 0.35 29 2,190,166 82 2,740,679 82 2,740,679 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 234,024.40 397.70 - 6 730 6 730 6 730 1,158 52,896,278 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 39,825.74 41.75 0.60 47 635,814 PRESCO PLC 44,800.00 44.80 - 5 9,474 52 645,288 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,260.00 0.42 -2.38 10 659,084 10 659,084 62 1,304,372 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 688.30 0.26 - 2 3,600 JOHN HOLT PLC. 217.92 0.56 1.82 3 104,889 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 42,273.91 1.04 1.96 52 2,444,683 U A C N PLC. 12,965.83 4.50 -10.00 170 7,796,066 227 10,349,238 227 10,349,238 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 11 9,909 ROADS NIG PLC. 165.00 6.60 - 0 0 11 9,909 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,286.59 0.88 - 15 357,330 15 357,330 26 367,239 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 10,804.71 1.38 -9.80 3 150,000 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 90,681.85 41.40 - 28 56,506 INTERNATIONAL BREWERIES PLC. 85,958.62 10.00 2.56 11 189,600 NIGERIAN BREW. PLC. 411,840.46 51.50 0.59 101 4,981,074 143 5,377,180 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 105,000.00 21.00 0.48 63 715,847 DANGOTE SUGAR REFINERY PLC 102,000.00 8.50 -5.56 101 1,364,618 FLOUR MILLS NIG. PLC. 56,175.20 13.70 1.48 47 3,186,810 HONEYWELL FLOUR MILL PLC 8,088.80 1.02 2.00 12 551,059 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 34,442.70 13.00 - 14 345,695 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 237 6,164,029 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 17,467.28 9.30 - 13 47,200 NESTLE NIGERIA PLC. 1,045,513.60 1,319.00 5.94 47 49,849 60 97,049 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,366.12 4.29 - 7 70,900 7 70,900 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 23,425.81 5.90 - 16 31,924 UNILEVER NIGERIA PLC. 169,190.41 29.45 3.33 25 1,418,401 41 1,450,325 488 13,159,483 BANKING ECOBANK TRANSNATIONAL INCORPORATED 133,951.72 7.30 0.69 26 178,747 FIDELITY BANK PLC 46,359.68 1.60 -4.76 53 2,817,676 GUARANTY TRUST BANK PLC. 800,528.07 27.20 -0.55 246 5,151,334 JAIZ BANK PLC 11,491.06 0.39 -2.50 5 234,310 STERLING BANK PLC. 71,976.05 2.50 - 18 162,204 UNION BANK NIG.PLC. 203,845.27 7.00 2.19 25 202,803 8,182.54 0.70 - 3 17,336 UNITY BANK PLC WEMA BANK PLC. 23,144.68 0.60 - 15 2,392,844 391 11,157,254 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 950 AIICO INSURANCE PLC. 4,435.33 0.64 -1.54 14 1,055,921 AXAMANSARD INSURANCE PLC 18,900.00 1.80 - 2 10,000 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 0 0 CONTINENTAL REINSURANCE PLC 15,559.12 1.50 3.45 13 1,233,000 CORNERSTONE INSURANCE PLC 3,387.79 0.23 9.52 2 105,000 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 - 7 1,055,700 LAW UNION AND ROCK INS. PLC. 1,675.57 0.39 - 0 0 LINKAGE ASSURANCE PLC 3,840.00 0.48 - 4 106,000 MUTUAL BENEFITS ASSURANCE PLC. 2,346.27 0.21 -4.55 4 153,100 NEM INSURANCE PLC 10,032.96 1.90 - 22 275,027 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,583.62 0.48 - 1 19,834 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 100 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 7 150,600 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 2,800.00 0.20 - 2 230,000 SUNU ASSURANCES NIGERIA PLC. UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 5,085.44 0.38 - 20 82,709 100 4,477,941

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,583.90 1.13 - 1 40,000 1 40,000 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,158.00 0.99 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,260.00 3.63 -9.25 42 731,341 35,291.19 6.00 - 4 218,815 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 31,288.28 1.58 1.94 29 704,100 FCMB GROUP PLC. ROYAL EXCHANGE PLC. 1,029.07 0.20 - 12 238,288 STANBIC IBTC HOLDINGS PLC 389,141.01 38.00 - 46 20,321 12,240.00 2.04 2.00 69 4,595,381 UNITED CAPITAL PLC 202 6,508,246 694 22,183,441 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 817.22 0.23 - 3 90,300 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 3 90,300 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 9,388.62 4.50 - 1 16,000 GLAXO SMITHKLINE CONSUMER NIG. PLC. 8,909.28 7.45 3.47 13 170,020 MAY & BAKER NIGERIA PLC. 3,450.47 2.00 -4.76 14 718,273 949.58 0.50 - 4 97,410 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 32 1,001,703 35 1,092,003 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 4 914,676 4 914,676 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 534.60 4.95 - 1 500 TRIPPLE GEE AND COMPANY PLC. 311.82 0.63 - 3 1,522 4 2,022 PROCESSING SYSTEMS CHAMS PLC 1,127.05 0.24 -7.69 17 2,797,081 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 2 11,700 19 2,808,781 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,215,762.01 323.50 - 4 6,532 4 6,532 31 3,732,011 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 7 4,240 CAP PLC 17,325.00 24.75 - 10 27,700 CEMENT CO. OF NORTH.NIG. PLC 228,696.92 17.40 9.78 40 192,635 MEYER PLC. 313.43 0.59 - 1 2,500 1,959.74 2.47 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 58 227,075 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,641.98 1.50 -3.23 18 359,640 18 359,640 PACKAGING/CONTAINERS BETA GLASS PLC. 29,873.33 59.75 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 76 586,715 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 3 8,242 3 8,242 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 92.40 0.42 - 0 0 0 0 3 8,242 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 11 465,000 11 465,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 49,104.08 3.95 1.28 41 401,009 41 401,009 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 56,974.05 158.00 - 5 1,255 CONOIL PLC 11,658.40 16.80 - 20 50,899 ETERNA PLC. 3,651.61 2.80 - 11 78,839 FORTE OIL PLC. 21,425.81 16.45 - 107 620,752 MRS OIL NIGERIA PLC. 5,729.98 18.80 - 1 522 TOTAL NIGERIA PLC. 33,952.18 100.00 - 42 61,909 186 814,176 238 1,680,185 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,387.46 4.05 - 3 21,400 TRANS-NATIONWIDE EXPRESS PLC. 328.19 0.70 - 1 50 4 21,450 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,972.68 1.43 - 1 500 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 41,042.18 5.40 - 0 0 TRANSCORP HOTELS PLC 1 500 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 211.68 0.35 - 0 0 LEARN AFRICA PLC 1,072.32 1.39 - 5 8,090 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 487.49 1.13 -7.38 23 532,847 28 540,937 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 530.46 0.32 - 0 0

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leaderSHIP

BUSINESS DAY Tuesday 03 September 2019 www.businessday.ng

CEO in focus

Adesola Adeduntan: Bridging Nigeria’s financial inclusion gap years to come.” Moody’s Investors Service, an American credit rating agency, recently applauded FBN Holdings (FBNH), the parent company of First Bank for driving down its Non-performing Loan (NPL) ratio to 14.5 percent. “The decline is credit positive because it shows the bank is making progress cleaning up its balance sheet, which will support its solvency,” Moody’s said in its financial institution report on July 30th 2019. According to the s e cond quarter report of FBN Holdings, its NPL ratio, mainly from First Bank, declined to by 10.8 percentage points from 25.3 percent in the first quarter 2019 to 14.5 percent, which is also 11.4 percentage points lower than the 25.9 percent at reported in 2018. Although still high, FBNH’s problem loans has dropped by 49percent since the end of 2018 to about N273 billion after the bank wrote off N127 billion worth of loans that were fully provisioned coupled with some NPLs that were recovered. FBN Holdings is targeting an NPL ratio of lower than 10percent by the end of 2019. At the end of the first half of 2019, FirstBank Holdings posted a profit before tax of N39.9 billion. This is an increase of 2.6 percent over N38.9 billion made a year ago. In the six month period end-

ENDURANCE OKAFOR

n exceptional business executive, banker and exemplary leader, Adesola Adeduntan has grown progressively in his career, breaking every barrier to become the current managing director/chief executive officer of First Bank of Nigeria Limited and Subsidiaries (comprising FBN UK, FBN Congo DR, FBN Ghana, FBN Senegal, FBN Guinea, FBN Gambia, FBN Sierra Leone, FBN Mortgages, and First Pension Custodian). Prior to this appointment, he was an executive director and the Bank’s chief financial officer. Before coming to First Bank, Sola, as he is fondly called was a Director and the pioneer chief financial officer/business manager of Africa Finance Corporation. He has served as a senior vice-president & chief financial officer at Citibank Nigeria Limited, a senior manager in the Financial Services Group of KPMG Professional Services and a manager at Arthur Andersen Nigeria. Over the course of his sterling career, he has garnered diverse expertise in treasury and financial management, risk management, accounting and internal controls, corporate governance, corporate strategy development and implementation, corporate finance, business performance management, financial advisory, investors, regulators and rating agencies relationship management, deployment and management of information technology, and compliance. Sola attended the University of Ibadan, where he obtained a Doctor of Veterinary Medicine (DVM) degree. He also holds a Master’s Degree in Business Administration (MBA) from Cranfield University Business School, United Kingdom, which he attended as a “British Chevening Scholar.” In addition to his MBA, he has attended executive/leadership programmes at Harvard, Cambridge, Oxford and INSEAD. Since becoming the MD of First Bank, Sola’s drive for nation-building, poverty reduction as well as economic growth and development led to the rolling out of the Group’s digital banking strategy, which aims to leverage new and evolving technologies to facilitate access to everyday financial services for consumers and businesses alike.

Adesola Adeduntan One of the things that make FirstBank stand out from its peers is the fact that under the umbrella of Sola, the lender has successfully put financial inclusion as a core part of its business strategy and it is thus, exploiting the opportunity to create significant social impact in a profitable manner. With over 125 years of existence, First Bank under the leadership of Sola is focusing on deepening financial inclusion like never before especially through it’s over 31,000 agents spread across the nooks and crannies of the country. The bank under Sola’s watch is channelling resources to ensure it contributes its quota in providing easy and affordable financial services to Nigerians in line with the aim of the Federal Government and the Central Bank of Nigeria (CBN). In 2018, Sola was named the African Banker of the Year in the African Leadership Magazine Persons of the Year Award which took place in Johannesburg, South Africa. He was

also inducted into the African Leadership CEOs Hall of Fame at the event. His emergence as the African Banker of the Year was noted to have been in recognition of his commitment to the ethics of the banking profession, strict compliance to the CBN’s reforms in the Nigerian banking industry and the economic development of the nation, coupled with his exemplary leadership in and out of the boardroom. Also, Global Banking and Finance Review recently awarded First Bank of Nigeria Limited, a pioneer in retail banking development in Nigeria with recognition for its dedication to providing leadership and excellence in the banking sector. “ The bank’s commitment to retail banking is reflected in their strategic vision, organizational structure and strong risk management which contributed to their outstanding performance,” said Wanda Rich, editor, Global Banking & Finance Review “We look forward to seeing more from them for

”

The bank’s commitment to retail banking is reflected in their strategic vision, organizational structure and strong risk management which contributed to their outstanding performance

ed June 30, 2019, gross earnings of FBHN stood at N294.2 billion, up 0.3 percent year-on-year from N293.3 billion in the corresponding period of 2018. Net-interest income slowed by two percent to N146.7 billion year-on-year, however, FBHN was able to improve its non-interest income by 3.6 percent from last year. The lender recorded N63.6 billion noninterest income, up from N61.3 billion in H1 2018. Net interest margin, a measure of the difference between interest income banks make and the interest paid on depositor funds, rose to 7.7 percent in H1 2019, as against 7.1 percent in the same period last year. In H1 2019, FBHN noted an impairment charge for credit losses of N22.1 billion, down 58.1 percent YoY from N52.8 billion. Post-tax return on average equity, a gauge of how well shareholders fund is utilised in creating net income, improved to 11.6 percent compared to 10 percent in H1 2018. However, post-tax return on average assets declined to 1.1 percent. Liquidity ratio for H1 2019 was 40.3 percent for First Bank (Nigeria), down from 45.2 percent in December 2018, while its Capital Adequacy Ratio stood at 15.6 percent. Fo r F B N Q u e s t Me rc h a n t Bank, the unified brand name for the Merchant Banking and Asset Management businesses of FBN Holdings, CAR improved to 13.4 percent from 12.2 percent in December 2018. In the period under review, total assets of the bank rose 1.8 percent to N5.7 trillion, from N5.6 trillion in December. Customers’ deposits increased by 2.8 percent to N3.6 trillion. Customer loans and advances (net) also rose 3.5 percent to N1.74 trillion from N1.68 trillion in December last year. Under the leadership of Sola, First Bank plans to drive its retail banking and deepen financial inclusion through the use of credit as an incentive to bring the excluded into the financial net. First Bank was awarded the Best Retail Bank Nigeria 2019 because of the company’s outstanding performance and achievements in retail banking and by scoring well in the following categories. Sola is evidence that hard work and consistency pays regardless of background, age or religion.

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