BusinessDay 04 Feb 2020 by BusinessDay

Nigerians get less value for voice calls, internet, as FG applies new 7.5% VAT Jumoke Akiyode-Lawanson

igeria’s over 184 million mobile subscribers and over 90 percent of its population who access the internet through

mobile phones are not left out of the increase in tariff following the signing of the Finance Bill by President Muhammadu Buhari in January, as telecommunications operators, February 1, 2020, started the implementa-

tion of the new 7.5 percent Value Added Tax (VAT), up from 5 percent. Telecoms operators through the Association of Licensed Telecommunications Operators of Nigeria (ALTON) have

notified subscribers across all the networks of the new rates, and assure Nigerians that the implementation of the new VAT will not negatively affect transparency of tariff and quality of service.

“An increase by 2.5 percent is not enough to cause significant harm on telecoms services. It is not that a N1,000 call credit voucher will now cost N1,200, Continues on page 34

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news you can trust I ** tuesDAY 04 february 2020 I vol. 19, no 491

Edo crisis: Obaseki orders arrest of embattled APC chairman, Oshiomhole ... As party accuses Oshiomhole of inciting violence for state of emergency DIPO OLADEHINDE

overnor of Edo State, Godwin Obaseki, has written a letter to Nigeria’s Inspector-General of Police (IGP), Mohammed Adamu, seeking the immediate arrest of Adams Oshiomhole, national chairman of All Progressives Congress (APC). The Governor Obaseki-led government also wants the former governor prosecuted by the security agencies, accusing Oshiomhole of constantly disobeying the state government’s orders. Philip Shaibu, the state deputy governor, told reporters in Abuja on Monday that a petition Continues on page 34

Inside

Why is the Coronavirus leading to a drop in oil prices? P. 2

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Nigeria misses out on exports boom from India to Indonesia ODINAKA ANUDU here is something the Federal Government of Nigeria can learn from Vietnam. Once a ver y poor country, the Southeast Asian country embarked on reforms, removed market unfriendly policies and built an exportoriented economy. Today, it has emerged from the ashes of poverty and become an Asian miracle, moved to the middle-income country category and attracted many investors, including big phone manufacturers such as Samsung, Intel, and LG. This has paid off. As of December 2019, it had earned $51.8 billion from export of phones and components, a 5.3 percent increase from 2018, according to General Statistics Office of the country. It earned $17.97 billion from garment and textile export in the first half of 2019, and expects to earn $21 billion from leather when calculations are concluded. Nigeria’s total non-

oil earnings from January to September (first to third quarters) amounted to only $5.191 billion (N1.87trn), less than one-thirds

of Vietnam’s earnings from garments and textiles, according to BusinessDay calculations from the National Bureau of Statistics

(NBS) data. In September 2014, India’s Continues on page 34

Zainab Ahmed (4th l), minister of finance, budget and national planning; Udo Udoma (4th r), convener, Udo Udoma and Belo Osagie, and others, at the just concluded 2nd Private Equity Summit in Lagos.

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news Banjo Adegbohungbe appointed acting MD, Coronation Merchant Bank

Aminu Bello Masari (l), governor, Katsina State, welcoming Aliko Dangote, president/CE, Dangote Industries Limited, to an event held in Katsina recently.

he Board of Directors of Coronation Merchant Bank Limited has announced the appointment of Banjo Adegbohungbe as the acting managing director of the bank, effective February 1, 2020. This announcement follows the Central Bank of Nigeria’s approval of the appointment. Banjo is positioned to succeed the current managing director/CEO, Abubakar Jimoh, whose retirement takes effect from April 30, 2020. Announcing the appointment, Babatunde Folawiyo, chairman of Coronation Merchant Bank, noted, “The seamless transition is a result of deliberate succession planning by the Board in line with the Bank’s commitment to strong corporate governance standards. In the past 18 months, Banjo has distinguished himself in service to the organization and contributed immensely to the overall growth of the Bank. We are confident that his appointment will further strengthen and position the Bank for improved performance.” Banjo commenced his bankingcareeratCitibankNigeria over 26 years ago. He joined Access Bank plc in March 2007 as deputy general manager and in June 2018, joined Coronation Merchant Bank as executive director/chief operating officer. Before this appointment, Banjo worked closely with the current managingdirectorasthedeputy managing director of the bank. Over the years, Banjo has garnered experience working in Global Trade, Corporate

Adegbohungbe

and Investment Banking, Operations, Treasury Management, Global Payments, Strategic Planning, Information Technology, Business Process Improvement, and Corporate Services Departments. BanjoholdsanMBAinBusiness Administration from the International Institute for Management (IMD) Switzerland and a B.Sc. in Mechanical EngineeringfromObafemiAwolowo University,Ife.Heisamemberof the Chartered Institute of Bankers and has also attended severalexecutivemanagementand bankingspecificdevelopmental courses in leading universities around the world. Commenting on the outgoing managing director, Folawiyo noted, “Abu gave himself to the growth of the Bank, having led a team that turned around a nearly-extinct Associated Discount House Limited and converted it to an “A+ rated” merchant bank in Nigeria within five years of its existence. We will always be grateful to Abu for his years of selfless service to the bank and for the strong values he instituted in the organisation.”

•Continues online at www.businessday.ng

NASCON benefits from increased capacity as assets hit N34.94bn GBEMI FAMINU

major player in the Consumer Goods sector, NASCON Allied Industries, recorded an increase in its total assets while maintaining an enhanced installed capacity, according to an unaudited fourth quarter results released on the floor of the Nigerian Stock Exchange (NSE). The unaudited fourth quarter report of the company as of December 31, 2019, showed that the total assets rose to N34.94 billion from N30.27 billion in the corresponding period of the preceding year, while revenue also rose to N27.58 billion compared to N25.65 billion from the previous year. In a move that analysts at Cordos Securities described as targeting more market share in the food sector through increased product range and innovation, the company recently increased its installed production capacity to 567,000

metric tons per annum from its Apapa, Port Harcourt and Oregun plants. While the Apapa refinery, located in the Apapa Port of Lagos, has an installed capacity of 275,000 metric tons per annum; the Port Harcourt refinery located in the seaport in Rivers State has an installed capacity of 210,000 metric tons per annum, and the Oregun plant’s installed capacity stands at 82,000 metric tons of salt per annum. Paul Farrer, managing director, NASCON, said the company, which has demonstrated resilience in the challenging environment, was strongly focused on capacity growth and increased market penetration. He disclosed that the company would be leveraging on a number of synergies including improved output in terms of quality, quantity, and business efficiency to deliver value for all stakeholders.

•Continues online at www.businessday.ng

Transport fares jump 50% in Lagos on Okada, Keke ban … as Lagosians left stranded at bus stops … commuters demand alternative option ENDURANCE OKAFOR

ollowing the enforcement of the recent ban on motorcycle (Okada) and tricycle (Keke) as means of transportation by the Lagos State government, residents of the most populated city in Africa were forced to pay 50 percent more on transportation within the busy city on Monday. The transport fares offered by both e-hailing companies (Uber, Bolt and OCar) and the public transport buses jumped on Monday morning as the absence of Okada and tricycle led to a surge in the demand for the available but insufficient transport options. “Okada was always my best option of getting to work

early due to Lagos traffic, but now that there is a ban I’m forced to take a bus. The prices are not even friendly,” a 28-year-old Eke John who works with a consulting firm in Lekki told BusinessDay at Yaba Bus Stop. The cost of transportation by public bus from Yaba to Obalende increased by N100 on Monday, the third day of the ban enforcement. Before Monday, passengers paid N200 for the distance but that changed to N300. It was the same price increase from Ajah to CMS as passengers were made to pay N100 more as against the normal N300 before the ban. “The drivers are obeying the law of demand, the higher the demand the higher the price,” Thomas

lmafidon told BusinessDay at Oyingbo Bus Stop. The fare offered by the ehailing Uber, Bolt and OCar surged by over 100 percent after the Okada and tricycle ban. When BusinessDay checked for the fare on the e-hailing platforms it showed that from Sabo to Victoria Island, which ordinarily costs at most N2000, was now going for as high as N5000 - N600, while the least was going for N3000 on one of the platforms. “Fares are higher due to increased demand,” Uber said on its app. Bolt on the hand said, “Price is higher due to high demand.” Pouring out their frustration and dissatisfaction over the recent ban, Lagosians lamented the lack of alterna-

tive measures to fill the gap that has been created due to the recent ban. “If they want to ban Okada and keke, I don’t have a problem with it but they should have put in measures in place to ensure that people like us who don’t have cars wouldn’t have to suffer,” a lady who simply identified herself as Jane, told BusinessDay in Victoria Island. “As you can see, we are more than 20 people here and we have been standing here for more than an hour, with no hope of getting a bus, and even the ones that are coming are calling ridiculous prices,” a middle-aged woman who asked not to be identified lamented.

•Continues online at www.businessday.ng

Why is the Coronavirus leading to a drop in oil prices? ISAAC ANYAOGU

he outbreak of the pneumonia-like coronavirus has left over 14,000 people infected and over 300 dead since the first case was reported on December 30 in Wuhan, the capital of China’s Hubei province. For oil markets, it has had a troubling effect. Oil prices fell on Monday to their lowest in more than a year as the virus spread to20othercountries,theimpact on oil markets may worsen. Brent crude was at $56.26 a barrel by 0926 GMT, down 36 cents. Prices dropped by more than a $1 earlier in the session to $55.42, the lowest since January 2019. US West Texas Intermediate (WTI) crude fell 5 cents to $51.51 a barrel, after earlier hitting a session low of $50.42, the lowest since January 2019.

EXPLAINER Oil markets are already so volatile that even a tweet from the US President has the potential to upend the markets. Last year, attacks at Saudi Oil facilities by suspected Yemeni rebels saw prices jump. In more recent times, Brent crude has dropped more than 10 percent this month even after the US killed a key Iranian general and Libya’s oil production was cut to near zero following a blockade of the nation’s ports that virtually halted exports. The simplest answer to why oil prices are falling due to the Coronavirus is China is that the Asian superpower accounts for at least 14 million barrels per day consumption. Since the outbreak of the virus, Chinese oil demand has dropped by about 3 million

barrels a day, or 20 percent of total consumption. Thisdropisperhapsthelargestdemandshocktheoilmarket has suffered since the global financial crisis of 2008 to 2009, and the most sudden since the September11attacks,according to Bloomberg reports. China is the world’s largest oil importer, after surpassing the US in 2016, so any change in consumption has a big impact on the global energy market. The country consumes about 14 million barrels a day - equivalent to the combined needs of France, Germany, Italy, Spain, the UK, Japan and South Korea. Already, OPEC is calling for emergency meeting of members to address the situation. While many have consented, Russia is yet to give support. The outbreak of the Coronavirus has led to airlines

across the world suspending flights to China, one of the world’s biggest industrial hubs. China has locked down Wuhan city where millions reside in quarantine and have extended the New Year holiday. Usually, the holidays set off increase demand for gasoline and jet-fuel demand as many people scramble to go home afterward, but many cannot leave. Governments across the world are scrambling to contain the virus and many travel warnings are being issued against travel to China. Industrial activity is slowing as the priority of the government is reining in the virus. To worsen the impact on global oil markets, the movement of oil cargoes to China from West Africa and Latin America have slowed as unused Chinese inventories are preventing fresh orders.

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Wine/spirit industry budgets N170m to tackle Accugas, Edinburgh Judo Club, others Sahara Group tackles substance abuse with #CleanLoveFeb campaign irresponsible, under-age drinking in Nigeria partner on first Judo Masterclass in Nigeria OLUFIKAYO OWOEYE

eading energy conglomerate, Sahara Group, is dedicating the month of February to a campaign against substance abuse which claims the lives of 11.8 million each year, more than the number of deaths from all cancers. Tagged #CleanLoveFeb, the focus of the campaign is to sensitise the public, particularly young people, to the dangers of substance abuse. The campaign will involve various activities across Sahara Group’s locations in Africa, Asia, Europe, and the Middle East. In 2018, Sahara Group launched an initiative to shift the focus of Valentine’s Day from a one-day event to a month-long activity aimed at taking the celebration of love to the level of giving more attention to serious global issues. According to Bethel Obioma, head, corporate communications, Sahara Group, the initiative commenced with the “GreenLove” campaign in February 2018. The focus then was on safeguarding the well-being of the planet earth that is home to almost 8 billion people. “In 2019 we celebrated #PinkLove to increase cancer

awareness. This February, Sahara Group is spreading “#CleanLoveFeb” all around the world, hoping that the message will connect with people caught in the web of substance abuse and above all, deliver an overwhelming zero-tolerance narrative that will make living and staying clean a way of life for everyone,” he said in a statement issued Monday. Obioma said the energy giant would be working with Tunde Fadipe, a psychiatrist, to engage various stakeholders on the campaign and undertake school activations such as open conversations, essay and chess competitions. Other activities include awareness walks, press, and radio interviews as well as visits to rehabilitation centres. “For us at Sahara Group, the #CleanLoveFeb campaign also represents a critical vehicle for beaming the searchlight on mental health issues that often emerge from substance abuse. We invite everyone to join us in promoting this noble cause by sharing our posts on social media to ensure that the #CleanLove message gets to much more people, especially, young and impressionable individuals,” he added.

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Daniel Obi

ompanies operating in the wines and spirit drink industry in Nigeria have raised N170 million to advocate responsible drinking in adults and also tackle under-age drinking in Nigeria. The fund will be spent in the next six months in creating awareness through the mass media about responsible alcohol consumption and highlighting the dangers of under-age drinking among youth below the age of 18. The companies operating under the body, Distillers and Blenders Association of Nigeria (DIBAN) is taking this step to further create a disciplined, sane future by setting the correct background with the campaign against irresponsible drinking. This is the second phase of such campaign by the body, which is a sub-sectoral group of Manufacturers Association of Nigeria (MAN). In the first phase, the body spent N90 million to drive home the message, it said was successful. “In 2019, our deep value for corporate social re-

sponsibility necessitated we respond with a strong advocacy platform to drive responsible drinking and zero alcohol consumption for minors and the underage,” says the chairman of DIBAN, Patrick Anegbe, at the flag off of the second phase of the campaign. He said the industry would continue to work in collaboration with all its regulatory agencies, the media and all stakeholders to champion initiatives which will cause Nigerians to imbibe the responsible drinking culture while having zero tolerance for underage drinking. Anegbe agreed companies in the wines and spirit industry want to sell their product but it is important to protect the future. Also speaking at the kickoff of the campaign, Sheriff Olagunju of NAFDAC commended DIBAN for the initiative stating that much juvenile behaviour are associated with alcohol. DIBAN’s effort complements moves by other alcohol drink manufacturing companies in Nigeria to promote responsible drinking among Nigerian population.

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s part of its support for sports development in Nigeria, Accugas Limited, in partnership with the Nigeria Judo Federation, Edinburgh Judo Club and Wakuta Judo Club has organised a two-day judo masterclass in Uyo, Akwa Ibom State. The masterclass, which was held at Nwaniba Hall, Ibom Hotel & Golf Resort on 1st and 2nd February, attracted over 200 Judokas across several categories from within and outside the state. Billy Cusack, legendary high-performance Great Britain judo coach and Sarah Clark, three times Olympian from the Edinburgh Judo club facilitated the masterclass session, the first of its kind in Nigeria. Speaking at the event, Andrew Knott, CEO of Savannah Petroleum, the parent company of Accugas Limited, said: “Apart from promoting healthy competition, respect and mental discipline, judo is a sport that engenders physical fitness. We sponsored this masterclass to bring these benefits to participants. In the long run, we look forward to having global champions emerge from this group of judokas.”

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Also speaking at the event, the secretary to the Akwa Ibom State government, Emmanuel Ekuwem, who represented the governor of the state, Udom Emmanuel, said: “This is a laudable masterclass and the state government is pleased with the initiative taken by Accugas to put an event of this magnitude together and in Akwa Ibom State. We are truly grateful to Accugas and ask that this initiative be sustained.” On his part, Prince Timothy Nsim, president of the Nigeria Judo Federation (NJF), said, “Judo is the first combat sport in Nigeria and it is plausible that Accugas took the initiative to put this event together. Nigerian judokas are very health and we are encouraged by the enthusiasm, stamina and professionalism exhibited during these two days of activity.” Participants, which were of various age brackets, were exposed to modern judo techniques combining jujitsu with mental discipline. The best approach to judo techniques including throws, falls, and grappling moves were demonstrated by the facilitators.

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Bequeathing future generations with a healthy environment STRATEGY & POLICY

MA JOHNSON

ver since the creation of man, natural resources have been exploited. Up to the industrial revolution, the negative impact of man’s activities has been bare minimum. With industrialisation coupled with scientific and technological advancements, man’s exploitative activities have increasingly devastating impact that not only threatens other species within his environment, but the survival of humanity. Economic growth and healthy environment are very essential to the survival of humanity. It is well known that most governments and economists are interested in either increasing the Gross Domestic Product (GDP) or per capita income of people through production. In an attempt to increase production, the environment is subjected to undue pressure. Some scholars have argued that economic growth is necessary regardless of environmental pressure. On the other side of the debate are those who argue that economic growth must be decoupled from environmental pressure. Decoupling economic growth from environmental pressure, they explained, involves ensuring that the latter does not deplete the natural resource on which future growth is predicated. To drive home their point, they say, social and economic developments must be pursued in a manner that does not prejudice options available to future generations for the use of natural resources.

Today, available evidence shows that serious environmental degradation is taking place in many parts of Africa. Desertification, soil erosion and deforestation degrade the quality of the environment. You may wish to recall that the World Economic Forum (WEF) in its 2018 Climate Change Vulnerability Index, predicts that half of Africa’s GDP is under threat as a result of climate change even though, Africa contributes least to global warming per capita. With rising sea levels, increasing temperatures and changes in rainfall patterns leading to floods or severe droughts, most cities in Africa will have their expanding population and investment opportunities threatened, according to experts. It is true that industries pollute the air, land and water with solid and liquid wastes which pose serious danger to the health of humanity. The world’s largest emitter of global emission is China, followed by the U.S. in recent times. These are two most industrialized countries of the world. The rise in the earth’s temperature was alarming that world leaders from 195 countries converged in Paris in 2015 at the United Nations climate talks. The aim was to find ways to keep the increasing global average temperature to well below 2 degrees Celsius. At the climate talks, it was agreed according to reports, that developed nations will pay a compensation of about $100 billion to developing countries by the year 2020. Thankfully, the year of our Lord 2020 is here, the WEF Annual Meeting in Davos was just concluded. This year’s forum marked 50 years of the WEF with the theme “Stakeholders for a Cohesive and Sustainable World.” World leaders, economic gurus among other professionals assembled Davos to address urgent climate and environmental challenges, the ecology and economy of most countries particularly, those in Africa. This year’s forum equally addressed: “How to transform industries to achieve

more sustainable and inclusive business models as new political, economic and societal priorities change trade and consumption patterns; how to govern the technologies driving the Fourth Industrial Revolution so that they can benefit businesses and society while minimizing their risks; and how to adapt to demographics, social, and technological trends reshaping education, employment and entrepreneurship.” Reflecting on the 2020 WEF Annual Meeting, one observes that the issue of climate change and the future of works were at the front burner on the agenda. There are reports that the WEF took farreaching decisions which some analysts call “ambitious goals” on climate and future work. For climate, the WEF came up with an “ambitious goal” of growing, restoring, and conserving one trillion trees over the next 10 years. And for the future of works, the forum equally outlined an “ambitious goal” of providing better jobs education and skills to one billion people by 2030. Many have questioned these “ambitious goals” and the underlying motivation. Why focus on these “ambitious goals” above everything else? Why did WEF make such a potentially risky commitment? The end state of providing better jobs, education and skills cannot be overemphasized bearing in mind the future of work. These “ambitious goals” are warning shots that we must be thinking of bequeathing a healthy environment to future generations while the continued relevance of talents in a changing world of knowledge is not negotiable. A nation that is unable to develop the skills and knowledge of its people and utilize them effectively for industrial purposes will find it challenging to develop. Globally, the business of government is to keep the economy healthy by creating an enabling environment so that businesses can thrive and ultimately, the people can be prosperous. The quality of people and stock of

‘

All things being equal, if Africa is able to muster good leaders with well-articulated but effectively implemented policies, the continent may witness some level of development

natural resources are principal assets of a country’s balance sheet. If we fail to protect the health of our people and the viability of our natural resources, then we have put everything else at risk. One of the ways of protecting the health of our people is for African governments and over one billion people to ensure that we have a healthy environment. All things being equal, if Africa is able to muster good leaders with wellarticulated but effectively implemented policies, the continent may witness some level of development. It is most likely that Africa’s population growth rate which is currently at 2 percent, with a prediction by the Africa Development Bank (AfDB) that the economy will grow by 3.9 percent in 2020, will give rise to poverty reduction in the continent that is home to high proportion of younger people. It is yet to be seen how the fourth Industrial Revolution will help solve one of the continent’s most pressing challenges- an unemployment rate almost running at around 30 percent. Some analysts have expressed fear that the Fourth Industrial Revolution will make jobs disappear. In Nigeria, we are faced with various environmental-related challenges which include poverty, water and air pollution, coastal and marine pollution, waste management, soil erosion, deforestation and desertification amongst others. Bearing in mind these environmental challenges, we must quickly realise that we need to exercise some restraints in our relationship with the environment. Individually and collectively, we must guard and keep a close watch on our environment. We must keep our environment clean; observe and report to appropriate authorities any moves or activities capable of destroying our God-given environment. If we destroy our environment, there may be no economic growth. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

From Wuhan to West Africa – Living in an era of infectious disease outbreaks

he ongoing new corona virus (nCov) outbreak that was first reported in Wuhan, China mid-December 2019 causes a pneumonia-like illness and has so far killed about 82 including a medical specialist and infected over 2800 people. That number is steadily on the rise. The break-neck speed at which the virus has spread to about thirteen countries including Australia, France and the United States speaks to how interconnected the world has become and a suspected case has just been reported in Abidjan. This reflects how wary we all must be about global health security, which basically means being ready to detect new threats early and prevent outbreaks. Chinese authorities in a desperate bid to curb the rampant spread of the virus have implemented travel bans, cancelled Lunar new year festivities, postponed resumption of schools and have quarantined up to an astounding 60 million people despite heightened health checks for passengers from China all over the world. Chinese health systems are overwhelmed, with teeming numbers of suspected cases flooding hospitals and many left untreated in a situation that is generating significant anger among citizens. While it remains to be confirmed whether the virus which has not been previously associated with humans originated from snakes as suggested by some researchers, it is now clear that it is rapidly spread from person to person. According to the World Health Organisation (WHO) and the United States Centres for Disease Control and Prevention (CDC), signs of infection could vary from mild respiratory illness to pneumonia, kidney failure and death in more severe cases. According to Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, severe acute respiratory syndrome (SARS)

another coronavirus that killed almost 800 people between 2002 and 2003 in mainland China, Hong Kong and several other countries disappeared due to a strong public health response. However, in a highly interconnected world where public health systems vary from region to region, as the saying goes “we are only as strong as our weakest link.” The most recent Ebola virus outbreak was declared in August 2018 in the Democratic Republic of Congo and has led to the deaths of more than 2200 people since then. Relatively eroded health systems borne out of decades of conflict consistently undermined the outbreak response leading to a prolonged epidemic. However, by using robust, responsive community-based systems, countries like Uganda and Rwanda limited the spread of Ebola from the DRC into their countries. This they accomplished by training tens of thousands of community leaders and volunteers in border areas and vaccinating those at risk. Between 2014 and 2016, the West African Ebola outbreak that engulfed Liberia, Sierra Leone and Guinea with a brief stint in Nigeria killed more than 11,000 people and cost over $4.3billion in foreign aid and as much as $53 billion in social and economic costs. In many parts of the world, even during highly publicised disease outbreaks, movements across international borders continue largely unhindered, providing a means of easy transmission of deadly organisms. In August 2015, during the West African Ebola crisis, I recall attending a regional meeting in South-west Nigeria where to our dismay and alarm, a participant from Liberia where Ebola was still raging at the time informed us that she had not been subjected to any screening measures throughout her journey. Similarly, Nigeria’s first Ebola case flew in from Liberia while infected and sick. This demonstrates the ease with which www.businessday.ng

deadly outbreaks can spread rapidly due to laxity at international borders. A lengthy outbreak in Nigeria was quashed by a multi-faceted response by Nigerian health authorities supported by global health organisations. While not every country has the ability, financial or otherwise to conceive, build and equip a 1000-bed hospital in fourteen days, national governments must at the very least dedicate resources for epidemic preparedness at national borders and in health facilities at national, state and district levels, screening travellers at international and domestic airports, seaports, railway stations and bus stations. Greater surveillance systems in place will detect symptomatic travellers earlier for further testing and treatment. Information dissemination to the public on the outbreak response is vital in epidemic preparedness, as uncertainty and a lack of information facilitate infection spread and increase otherwise avoidable death tolls. Given the highly volatile nature and pervasive conflict in much of the world including Nigeria, it is important to proactively prepare for the possibility of infectious disease outbreaks in order to prevent significant casualties. Whilst the capital outlay required for this advance preparedness will be substantial, the economic consequences of rampant outbreaks of infectious disease will be even more immense and with dire consequences. To illustrate this, since the news of the new corona virus outbreak, financial markets including Wall Street have plummeted with billions of dollars in investments lost due to fears of the consequences of the rapid spread of the virus on the global economy. Despite what might appear to be a painful upfront cost, health security investments must be made because any outbreak has the potential to significantly disrupt not only healthcare systems,

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Adaeze Oreh but also trade, tourism, energy, civil protection, transport and agriculture. To demonstrate the staggering scale of the wildfire-like spread such as is occurring now in China, the recent cancellation of the Chinese Lunar new year Spring Festival celebrations which typically attracts millions of Chinese travellers, is a desperate and unprecedented move by the Chinese government and has temporarily strangled what was historically described as the “biggest human migration on the planet”. As global leaders return to their respective countries from the World Economic Forum in Davos, Switzerland, a vital line of action that must be taken is shoring up the strength of national and global health security mechanisms. That virus reported in faraway China, now appears to be in Africa, illustrating that today’s world is undoubtedly a global village. The importance of public health security might well be best highlighted by pointing out that infectious diseases are undeterred by the most robust of military systems, and thus have the capacity to undermine a nation’s sovereignty no matter how powerful. Nations would do well to note this and act decisively and proactively to ensure health security and prevent a true nightmare scenario. Dr Oreh is a senior health policy advisor with Nigeria’s Federal Ministry of Health and Fellow of the West African College of Physicians and was involved in emergency preparedness during the 2014 – 2016 Ebola outbreak in West Africa. She is a Senior Aspen New Voices Fellow.

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Zuboff’s surveillance capitalism: Implications for Africa tech policy (1) Rafiq Raji

“

he Age of Surveillance Capitalism: The fight for a human future at the new frontier of power” by Shoshana Zuboff, professor emerita at Harvard Business School, was an exhausting read. Hitherto, I had not read any book by the author. And even as I appreciate, with the benefit of hindsight of course, how well grounded the book and the author are, I got exasperated at some point to be honest. I wondered about the myriad abstractions and theorizing by the author. But it was worth it in the end. This is not an attempt to preach patience as virtue. Zuboff could not have been extremely convincing as she was without the firm foundation,

she laid for making her point. And in the end, you are left with no doubt, you are compelled in fact, to accept all she wrote as truth. And quite frankly, I am yet to find a convincing rebuttal to her assertions. Zuboff ’s principal argument is that big tech wants you. All of you. Everything. You, the individual, are neither the product nor the customer. You are raw material. Yes, you. According to Zuboff, surveillance capitalism is “a new economic order that claims human experience as free raw material for hidden commercial practices of extraction, prediction, and sales.” She provides eight definitions and is most damning in the eighth: surveillance capitalism is “an expropriation of critical human rights that is best understood as a coup from above: an overthrow of the people’s sovereignty.” By her own admission, Zuboff’s life work has become about finding the answer to the question “Can the digital future be our home?” She contrasts the hitherto industrial future of yore that left many victims in its wake from pollution, climate change, and so on, because voices were not raised on time or high enough. Her main argument is that unlike the carte blanche that industrial capitalists literally had, surveillance capitalists must not be similarly watched in silence.

Zuboff ’s conclusion is instructive: “The Berlin Wall fell for many reasons, but above all it was because the people of East Berlin said, ‘No more!’. We too can be the authors of many ‘great and beautiful’ new facts that reclaim the digital future as humanity’s home. No more! Let this be our declaration.” In other words, the digital future will not be our home without a fight. But is this a fight Africa should join? Knowing you pays To properly put Zuboff’s views in proper perspective would require defining a lot of terms. Not that she didn’t throw in simplifications here and there. But quite frankly, her tome was not an easy read. To simplify, I present her logic as she did and then simplify it based on my own understanding: “Google [and other surveillance platforms like Facebook and Microsoft]…discovered a way to translate its nonmarket interactions with users into surplus raw material for the fabrication of products aimed at genuine market transactions with its real customers: advertisers.” Put simply, big tech or surveillance capitalists’ profit from the human experience. To this end, Google, Facebook, Microsoft and other surveillance platforms seek and store behavioural data in excess of that ordinarily required for the products and services they purport to provide.

‘

Put simply, big tech or surveillance capitalists’ profit from the human experience. To this end, Google, Facebook, Microsoft and other surveillance platforms seek and store behavioural data in excess of that ordinarily required for the products and services they purport to provide

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

Russian activities in Central Africa Republic

n Central Africa Republic (CAR) Russia is helping the national leadership establish control in one of Africa’s most volatile countries – at least, it is what the two parties say. But reports suggest otherwise, as news of rape, death, and harassment trail presence of the Russians said to be in CAR for sinister purposes. Recent news on the activities of Russia in CAR also brings into light draconian military drills perhaps obtainable in North Korea. On the 13th of May 2019, a family from Dirgba, a village close to Berengo, was the victim of the aggressive behaviour or Russian contractors under the influence of alcohol. Those Russian citizens, calling themselves “Ricko”, “Chamane” and “Djicki”, wasted their afternoon drinking palm wine in a bush around the village. The 16 years old victim, Isabelle Gadjie was raped by them and in the same evening during a skirmish between drunken Russians, “Djicki” was the victim of a grenade explosion that hurt him at his right leg. The victim, her father and the gendarmes wanted to hear the suspects the day after but were refused the access to the camp by the director of the military training base. Since, this file is pending, the perpetrators not being faced with the justice. Similarly, the training methods for the young CAR recruits by the Russians at the Berengo imperial camp are questioned as well and raise controversy. The Russian officers show themselves very tough with the young military men, giving blows or isolated them in holes dug specially to humiliate them, particularly when an order is not strictly obeyed or simply not understood.

Daily food rations are also reduced to the minimum (1 chicken for 12 soldiers) and are increased for the recruits that use only the Russian language. On November the 15th, those methods entailed the death of a young recruit and a badly injured one following a sportive session so-called “resistance”, developed by the Russians trainers. This death by the Russian side, the body was quickly and discreetly sent to the hospital at Bangui. An out-crying movement within the young soldiers following the death of their classmate quickly came up against the heavy hand of the trainers. Russia’s involvement in CAR came as a surprise to many considering it was President Faustin-Archange Touadera who met the Russian President Vladimir Putin for assistance at a UN General Assembly meeting in 2017. On account of human rights abuse by the Central African Armed Forces (FACA), CAR has since 2013 been placed a U.N. arms embargo. Hence, CAR had to seek approval of a U.N. Security Council special committee, made up of the Council’s 15 members, including France and Russia before it could buy weapons and the arrangement severely limited CAR’s ability to respond to the uprising in the country. France’s presence in the country brought much-needed military and technical support. However, in 2016, the French Operation Sangaris was brought to an end and the European power withdrew its troops- 2,000 ‘Peace Keepers’ in the same period where CAR saw fresh spate of violence. France said it would leave 350 soldiers behind to support CAR army, and that

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it had succeeded in helping the former colony douse tensions that arose after a rebellion group overthrew Francois Bozize, CAR’s former president. In 2017, CAR was overwhelmed by the rebels and asked for help. According to Reuters citing a Security Council memo and four diplomats, France first offered to help CAR buy old weapons but the proposal was too expensive. France then offered 1,400 AK47 assault rifles it had seized off Somalia in 2016. Sources told Reuters that Russia objected on the grounds that weapons seized for breaching the U.N. arms embargo on Somalia could not be recycled for use in another country under embargo. But mindful of the need for a quick solution, the sanctions committee approved Moscow’s donation of AK47s, sniper rifles, machineguns and grenade launchers in December, according to committee documents and diplomats, the report read. The stage was set for the Russia-CAR affair which has been said to be for Russia, an opportunity to pursue its global agenda using Africa as a stepping-stone to weaken U.S. and much of the West’s influence. Russia, now in agreement with the CAR government, would offer training, weapons and “advisory services” to the government. But it wasn’t just the conflict alone Russia was going to exploit to promote its agenda. There was gold, diamond and mercenaries that could secure Russia’s place and put the icing on the cake for the Kremlin in CAR. At the end of august 2019, one of the Russian contractors called “MELKINOV” in the imperial camp at Berengo raped a

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The suggestion is not that Google does not provide a search service or Facebook a social media platform. Of course, they do. What Zuboff asserts it that these are not the real ends of surveillance platforms. Instead, they are means to the end of what she termed “behavioural surplus;” that is behavioural data beyond what is ordinarily required in the normal course of their businesses as we know it. In other words, surveillance platforms are simply that: surveillance platforms. They gather data on everything about you. And because of their scale, they are thus able to gather data on virtually everyone. Consequently, over time they know you well enough to predict your future decisions and actions with almost perfect accuracy. As firms would be willing to pay for such knowledge to better sell their products, surveillance platforms are thus able to earn “surveillance revenues” that translates to “surveillance capital,” the logic of which is “surveillance capitalism,” which thus underpins the “surveillance economy.” (Now I am not so sure this is even a simple enough explanation.) Google, Facebook, Microsoft and others make money from knowing you. That is simple enough, I think.

TEMISAN ADIO

17-yrs-old girl in the village. This last one is now said to be pregnant. Informed of this affair, the CAR president security advisor, Valerii ZAKHAROV (Russian), ordered all the Russian elements in CAR to withhold this information, especially to French people, to the international community representatives and to the journalists. Helping establish peace might have been a part of the contract Russia must have glossed over, considering complaints of aggressive and hostile behaviour of Russian personnel in CAR. Talks about Russia-CAR being a conspiracy theory or anti-Russian fell on its face when three Russian journalists who were investigating possible corruption by the Wagner Group, Russian private security company, wound up dead. Recently documents were published by the Guardian showing official documents that mapped out inroads in Africa for Russia to exploit in promoting its goal to becoming global superpower. According to the Guardian last year, “Russia is seeking to bolster its presence in at least 13 countries across Africa by building relations with existing rulers, striking military deals, and grooming a new generation of “leaders” and undercover “agents”. Russia is recently held its first African Summit, one where security experts say Moscow made deliberate and covert attempts to steal personal information from African Head of States. Adio is a social commentator, writes from Lagos

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Tuesday 04 February 2020

BUSINESS DAY

EDITORIAL

Okadanomics of Lagos

Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti 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 GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

Banning okadas won’t fix an unmet demand

wnership of a car, bike or motorcycle is an indicator of the development of an economy. Nigeria, one of the least common places to find a car imported $112 billion worth of motorcycles in the second quarter of 2019, more than what was spent in the first six months of 2018 combined. In a 2015 Pew Research Survey, 18 percent of Nigerians said they owned a functioning car; 35 percent said they owned a motorcycle. In South Africa, 31 percent said the owned a car while 7 percent owned motorcycles. Among the eight African countries surveyed Nigeria had the highest number of motorcycle owners; South Africa had the least. According to data compiled by the National Bureau of Statistics (NBS), importation of twowheelers has risen significantly in the last two years. The biggest surge was in the fourth quarter of 2018 where expenditure on bike importation rose 109 percent.

Unemployment and heavy traffic are a menace but have been critical to the successful take-off of Nigeria’s bike ride-hailing industry which is worth around $65 million, based on the amount three biggest players have so far raised. Though the capital is for expansion activities in Nigeria and West Africa. Max.ng, Gokada and ORide have no less than 2,000 bikes among themselves and employ thousands of Nigeria’s working population in areas they operate, especially Lagos. An operator of one these bikehailing companies is assured of N8,000 daily. That’s a lot of money for someone with a master’s degree, some of whom took to riding motorcycles as a means of livelihood. Safety, cost, convenience and quality of service are the advantages they have brought to the riotous, unregulated and inefficient transport system of Lagos. Customers of these bike-hailing companies are mostly the tech-savvy youth whose rapid adoption of smartphones is pushing the digital

transformation of the country. They are also in a hurry; Lagos go-slow hampers their hustle. But they don’t mind taking their time to settle with the bikers on destination, route, and sometimes fare. Once a bargain is struck the pair put their helmets, the power bike roars to life and they zoom off. Traffic in Lagos is notorious. Horror stories of being stuck in traffic for five hours are common. In Lagos, motorcycles are often the only means to catch a plane (though one left home hours ahead to avoid traffic), arrive at work on time and dare to attend more than one meeting. Teju Cole the novelist who is writing a book on Lagos, calls Lagos a one-meeting city. In London, a commuter using public transport can reach 20 percent of jobs in 45 minutes. It’s too early to say if the bikehailing companies won’t be allowed to resume operations. It would be absurd. Why did Lagos State allow them at all if their operations didn’t comply with the 2012 law now been enforced? La-

gos risks sending the wrong signal to investors who see opportunities in the transport sector. Lax enforcement and politics under Governor Ambode were the reasons okadas became uncontrollable. The administration of Governor Sanwo-Olu is right to restrict okadas and kekes from major highways and bridges. It will curb accidents and reduce chaos. The sheer volume of motorcycle riders with three or more passengers riding without helmets and against traffic had become the norm, an unruly nuisance. Nevertheless, even though Gokada, Max.ng and ORide brought sanity and safety, even though okadas have become the most efficient means of transport in Lagos, they are not the solution. An intermodal transport system with more high capacity vehicles like the 30-seater BRT buses plying more routes, light rail and ferries will make mobility easier and cheaper. It will require more infrastructure investment, the N100 billion raised last week is laudable but little.

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

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Tuesday 04 February 2020

BUSINESS DAY

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Pioneering effort to contain virus outbreak in megacities

Dan Steinbock

fter the outbreak of a new coronavirus (2019-nCoV) and evidence of humanto-human transmission, central government urged people to stay at home, restricted travel and cancelled major public events. That caused travel to plunge 29 percent on the first day of the Lunar New Year, but likely saved countless lives. China extended Lunar New Year holiday to keep people at home and reduce the risk of the spread, while extending several billions of dollars to help contain the virus. As the number of the infected continues to accelerate and evidence of human-to-human transmission has been discovered in and outside China, the World Health Organization (WHO) has declared global health emergency. While the full effect of the outbreak on the Chinese and the global economy is too early to estimate, probable impact scenarios can be assessed. Despite enhanced capabilities, new risks Internationally, markets have responded to virus outbreaks with sharp but temporary reactions until the spread is halted. Recently, analysts have used as a guideline to these projections the Severe Acute Respiratory Syndrome (SARS) in 2002-3. But that’s premature. In the early 2000s, China’s efforts to control SARS were criticized as the disease spread internationally before the

global outbreak was subdued. A decade later, Chinese response to the Avian influenza (H7N9) was significantly faster, broadly praised and the disease did not spread widely. In recent years, China has significantly strengthened its national and local surveillance systems to prevent and control diseases. Laboratory and hospital capacity have been significantly reinforced. The record in emergency management is varied at local level. However, despite improved Chinese capabilities and Chinese authorities alerting outside bodies, including the World Health Organization, to the novel coronavirus relatively quickly, there are now new risks, due to greater global integration. In 2003, China’s air, rail and road travel was only a fraction of what it is now and most Chinese lived in the countryside. Today, China has the world’s largest logistical hubs and 60 percent of people reside in densely populated cities. That’s the reason for the effort to insulate Wuhan and other urban centres in its proximity, altogether 51 million people – which is comparable to the total population of South Korea. The timing also differs. Unlike SARS, the current outbreak took place before the Chinese Lunar New Year, which is accompanied by the world’s largest human migration. That’s why the government took extraordinary measures to reduce the risk of accelerated spread, which may set a new norm for struggle against epidemics in megacities. Early human and economic costs During SARS outbreak, 8,100 people worldwide were infected, while 774 died mainly in Chinese mainland and Hong Kong; 10 percent of the total. It was determined that the basic reproduction number – the number of people a newlyinfected person is likely to pass the virus to - was about 2-5. With the coronavirus, there are cur-

rently (8 pm Wuhan time, Jan 31) 9,776 confirmed cases in China, while 213 have died; that’s less than 2.2 percent of the total. According to early research, the reproduction number is 3.3-5.5. In other words, despite similar transmissibility, mortality rate in coronavirus seems to be less fatal (currently 2.2 percent) relative to SARS (11 percent) and particularly to Middle East Respiratory Syndrome MERS (35 percent). However, health authorities suggest that symptoms may not show during the 2 to 14-day incubation period for the new coronavirus, which would undermine traditional containment practices. If the new virus can be detected only after considerable collateral damage, there is worse ahead, as Chinese authorities have suggested. The implication is that the exponential stage of the virus is still ongoing. In the mainland, the current outbreak has already hit transportation, tourism and travel, restaurants and retail, which will impair near-term consumption data, while harming stocks most exposed to consumer markets. Globally, the damage was first felt in commodities, which react fast to outbreaks that typically penalise the sales of jet fuel, diesel and gasoline. In the past four weeks, crude oil plunged 15 percent until global health experts called for calm and reason. What analysts are now monitoring is the milestone when the number of new infections begins to decelerate because that tends to signal the turning point for sentiment as well. But that may still be some way ahead. While all early impact scenarios are subject to great epidemiological uncertainty, economic damage in past outbreaks typically hits first household consumption and trade. And it is likely to be compounded in major regional hubs, such as Wuhan, “China’s Chicago.” As government response takes off, outbreak spending will accelerate rapidly in emergency services.

‘

Chinese government has used very strong measures to contain the spread of the coronavirus outbreak in Wuhan. The ultimate economic impact will depend on the eventual diffusion and infectiousness of the new virus.

If outbreaks prove protracted, they may penalize companies’ capital expenditures, which are sensitive to demand expectations, and cause disruptions in supply chains as reduced mobility generates temporary outages. Stringent financial conditions in markets are likely to further amplify collateral damage and thereby risk aversion. Impact on economic growth in China Before the outbreak, China was moving toward a mild recovery. Despite US trade war, GDP growth amounted to 6.1 percent in 2019. Given progressive deceleration, which is normal after intensive industrialization, China was expected to grow by 5.8 to 6.2 percent in 2020. After the outbreak, three scenarios prevail. In the “SARS-like impact scenario,” a sharp quarterly effect – down to or below 5 percent - would be followed by a rebound in short order. The broader impact would be relatively low and regional. The impact on annualized growth would be relatively low. In the “accelerated impact scenario,” the adverse impact would be significantly steeper in terms of growth and damage, while a rebound would follow only later. The impact on annualized growth would prove more significant. The broader impact would prove more significant and affect global prospects.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Dr. Steinbock is an internationally recognised strategist of the multipolar world and the founder of Difference Group. He has served at India, China and America Institute (US), Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). For more, see https:// www.differencegroup.net/ A shorter version of the commentary was published by China Daily on January 31, 2020

Highlights of the new securities and exchange commission’s rules on the regulation of derivatives trading

nvestopedia defines a derivative as a contract between two or more parties whose value is based on an agreed-upon underlying financial asset (like a security) or set of assets (like an index). Common underlying instruments include bonds, commodities, currencies, interest rates, market indexes, and stocks. Futures contracts, forward contracts, options, swaps, and warrants are commonly used derivatives. There are Exchange trade Derivatives and Over the counter (OTC) Derivatives. Over the Counter Derivatives are contracts agreed between parties directly without going through an Exchange. The Securities and Exchange Commission (SEC) recently approved rules to regulate derivatives trading in the country. The new rules were approved on the 23rd of December, 2019. The New rules will apply to both Exchange traded Derivatives and OTC Derivatives where specifically mentioned. Highlights of the new rules are as follows; Registration of contracts Rule 3 (1) provides that SEC ’s approval shall be sought and obtained prior to the introduction of any contract. Such an application for the registration of a contract shall be filed with SEC by or on behalf of an Exchange. An application for the registration of a contract shall be accompanied with an Information memorandum that will state the specification of the contract. Where an Exchange intends to amend the contract specifications, it has an obligation to notify the Commission within 24 hours of such amendments Registration of derivatives clearing members Rule 4 lays down the registration requirements for Derivatives Clearing Members. It also

specifically provides that only merchant banks licensed by Central Bank of Nigeria are eligible to register as derivatives clearing members. One of the documents required for registration as a Clearing member is a Copy of Memorandum and Articles of Association certified by the Corporate Affairs Commission which among others shall include the power to act as a derivative clearing member. Rule 4(2) states that clearing members’ sponsored individuals shall pass a special examination on derivatives trading to be conducted by SEC. Where a bank, registered as a capital market operator intends to take up derivatives clearing as an additional function, an application shall be filed to SEC for registration of that function- Rule 4(4) Exchange rules on derivatives trading Rule 5 (1) provides that Exchanges shall develop rules for the derivatives market. The Exchange rules are to include the following: General Requirements, Membership Requirements, Reporting Requirements, Risk Management Requirements. Where an underlying is suspended from trading or delisted, contracts on such underlying shall cease to trade on an Exchange-Rule 5(2) Rule 5(3) provides that Exchange Traded Derivatives can only be traded on Exchanges recognized by SEC. Permitted participants Rule 7 (1) provides that no person(s) shall trade on Exchange-traded Derivatives either for proprietary accounts or on behalf of clients except entities registered with a recognized Exchange and/or Central Counterparty as Dealing Members and/or Derivatives Clearing Members. This implies that anyone who doesn’t fall under the listed categories cannot trade on Exchange-

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traded Derivatives. Rule 7 (2) indicates that no person(s) shall clear Exchange Traded Derivatives or OTC Derivatives except entities registered as Derivatives Clearing Members. Rule 7 (3) provides for the prompt provision of complete and accurate information by Participants on their trading and clearing activities to the Commission as the need arises in accordance with the Act and SEC Rules and Regulations. Participants are also to comply with all relevant provisions of the Act and SEC Rules and Regulations, whether or not expressly stated in these regulations. Market surveillance The Exchange (Any Securities, Commodities or Futures Exchange where derivatives are listed and/or traded) shall have the responsibility for market surveillance to ensure derivatives contract prices reflect demand and supply in order to deter market manipulations. - Rule 8(1) Disclosure Rule 11 (1) deals with the obligations of Participants to disclose their outstanding derivatives exposures to SEC on a quarterly basis. The disclosure shall include but not be limited to the following information: List and description of proprietary and clients’ outstanding positions; Outstanding derivatives exposure from proprietary and clients’ positions; Profit or loss resulting from proprietary positions; Proprietary and clients outstanding positions as a percentage of net liquid capital, where applicable; Estimated maximum loss that could be incurred from proprietary outstanding positions and its effect on the financial position. Risk management Clause 12 (1) provides for a robust risk man-

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ULOAKU EKWEGH agement framework for Participants as follows shall: Risk management units within their organizations; Comprehensive risk management frameworks and investment policies for managing derivatives related risks. The framework shall include but not limited to the following: The officer responsible for coordinating risk function, Reporting line, Risk appetite and risk tolerance for all classes of risks, Risk register, Roles and responsibilities of every staff including board members on risk management, Include risk management report in their annual financial statements. Any person who violates any provision of these rules and regulations shall be liable to a penalty of not less than N1,000,000 and a further sum of not more than N25,000 for every day of default. Ekwegh is a private legal practitioner with over 15 years legal experience in law firms and as in-house counsel. She is also a fellow of the Institute of Management Consultants. Email: uloekwegh@yahoo.com

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Tuesday 04 February 2020

BUSINESS DAY

COMPANIES & MARKETS

Company news analysis insight

Consumer Goods

Cadbury records best performance in 5 years as profit balloons to N1.26bn …hits highest revenue in 6 years OLUFIKAYO OWOEYE

fter a disappointing 2016 result, which saw Cadbury plunge into a loss of N296.4million on the back of an economic recession, the food and beverage maker seems to have gained momentum. But even more impressive was how the numbers have surged in the last six years. In its 2019 full-year unaudited result, Cadbury shrugged of a harsh operating environment coupled with a cashstrapped consumers to record a 9percent jump in revenue to N39.32bn from N35.97bn recorded

in same period in 2018. It grew its profit before tax from N1.22bn in 2018 to N1.54bn in 2019. A trend analysis further shows

that it grew its Profit Before Tax from a loss of N562.87million in 2016 to 360million in 2017. While profit after tax

turned from a loss of N296.4million in 2016 to a gain of N299million in 2017 which ballooned to N823million in 2018 and hitting the

highest record in four years to N1.26bn. Although this is still way behind N6billion recorded in 2013. Revenue from refreshment Beverages, which includes the manufacturing and sale of Bournvita and 3-in-1 Hot Chocolate stood at N23.15bn from N21.38bn in same period in 2018. Revenue from confectioneries which involves manufacturing and sale of Tom Tom, Buttermint and Clorets, was N11.48bn from N9.53bn and lastly revenue from Intermediate cocoa products, manufacturing and sale of cocoa powder, cocoa butter, cocoa liquor and cocoa cake dropped slightly to N4.68bn from N5.05bn

The company’s sales to countries outside of Nigeria mainly in Africa and Europe fell to N4.88bn from N4.93bn as the effect of border closure by the Nigerian government continues to bite harder on the consumer goods company. Earnings per share (Basic), the portion of a company’s profit that is allocated to each outstanding share of common stock and an indication of the company’s health improved to 67kobo from 44kobo well behind 2014’s N1.06. Selling and distribution expenses surged to N5.2bn from N4.70bn in 2018, while administrative expenses also increased from N1.57bn to N1.71bn.

Appointments

Jimoh hands baton to Adegbohungbe as Acting MD of Coronation Merchant Bank ENDURANCE OKAFOR

he Board of Directors of Coronation Merchant Bank Limited has announced the appointment of Banjo Adegbohungbe (Banjo) as the Acting Managing Director of the Bank effective February 1, 2020. This announcement follows the Central Bank of Nigeria’s approval of the appointment. Banjo is positioned to succeed the current Managing Director/Chief Executive Officer, Abubakar Jimoh (Abu), whose retirement takes effect from April 30, 2020. Announcing the appointment, the Chairman of Coronation Merchant Bank, Babatunde Folawiyo said the seamless transition is a result of deliberate succession planning by the Board in line with the Bank’s commitment to strong corporate governance standards. “In the past 18 months, Banjo has distinguished himself in service to the organization and contributed immensely to the overall growth of the Bank. We are confident that his appointment will further strengthen and position the Bank for improved performance,” Folawiyo said.

Banjo commenced his banking career at Citibank Nigeria over 26 years ago. He joined Access Bank PLC in March 2007 as Deputy General Manager and in June 2018 joined Coronation Merchant Bank as Executive Director/Chief Operating Officer. Before this appointment, Banjo worked closely with the current Managing Director as the Deputy Managing Director of the bank. Over the years, Banjo has garnered experience working in Global Trade, Corporate and Investment Banking, Operations, Treasury Management, Global Payments, Strategic Planning, Information Technology, Business Process Improvement, and Corporate Services Departments. Banjo holds an MBA in Business Administration from the International Institute for Management (IMD) Switzerland and a B.Sc. in Mechanical Engineering from Obafemi Awolowo University, Ife. He is a member of the Chartered Institute of Bankers and has also attended several executive management and banking specific developmental courses in leading universities around the world.

Commenting on the outgoing Managing Director, Folawiyo noted, “Abu gave himself to the growth of the Bank, having led a team that turned around a nearly-extinct Associated Discount House Limited and converted it to an “A+ rated” merchant bank in Nigeria within five years of its existence.” Expressing his gratitude to the soon to retire MD, Folawiyo said the bank will always be grateful to Abu for his years of selfless service to the bank and for the strong values he instituted in the organization. Coronation Merchant Bank was established in 2015 to provide wholesale banking to a longunderserved market. The Bank offers; Investment and Corporate Banking; Private Banking/Wealth Management and, Global Markets/Treasury Services to its niche clientele. In 2019, Coronation Merchant Bank received some national and international awards such as Best Investment Bank in Nigeria by Global Finance, Best Investment Bank in Nigeria by World Finance, Best Investment Bank by Global Banking and Finance Review, and Best Investment Bank by Global Business Outlook.

L-R: Sudan Balogun Ishola, youth leader, First Abattoir Youth Butchers Association, Lagos State; Omotayo Abiodun, public relations manager, Tolaram Group; Risikat Salau, iya oloja general, Ojokoro LCDA, and Omotunde Bamigbaye, brand manager, Hypo Bleach, at the public sensitization program in promotion of hygiene at Agege Abattoir, Lagos.

L-R: Sarah Clark, coach, Edinburgh Judo Club; Nkoyo Etuk, Head of Stakeholder Relations and Communications, Savannah Petroleum; Billy Cusack, coach, Edinburgh Judo Club; and Andrew Knott, CEO of Savannah Petroleum during the judo masterclass sponsored by Accugas Limited, a Savannah Petroleum company, in Uyo.

Tuesday 04 February 2020

BUSINESS DAY

COMPANIES&MARKETS Energy

Bhojsons Powerhub launches Amaze power back up solution into Nigeria Jumoke-akiyode-Lawanson

subsidiary of the Bhojsons Group - Powerhu b, e m e rg i ng power solutions company has launched Amaze power back up solution into the Nigerian market. The launch of Amaze - one of the leading power back up brands in India, is poised to help ease Nigeria’s lack of adequate power distribution, a situation similar to that of India. Speaking at the launch event held in Lagos on Friday January 31, Vishant Dalmal, the group managing director of Bhojsons Group Plc, said that Amaze inverters and batteries are one of the best-in-class power back up solutions in its segment with a pedigree of over 30 years of manufacturing excellence and category experience. Vishant further explained that the Amaze brand offers customers the best quality power solutions using cutting edge technology in a complete package that guarantees maximum performance.

“Amaze Power products are designed for young achievers who demand more in their lives. Amaze delivers more performance, more reliability, more attractive designs with consistent power, and the assurance of quality of global manufacturing standards and 24x7 after sales service across Nigeria. The brand also has one of the most interesting aesthetic designs from France with a smooth sophisticated architecture and refined edges,” he said. Earlier in his welcome address, Dalamal expressed profound gratitude and appreciation to the dealers for their immense support and contributions, which has seen the company grow over the years despite the difficult operating environment and challenges of the Nigerian economy as a whole. He described the dealers’ as partners and strong pillars to the continued growth of the company. “We are really excited to see and celebrate you, our esteemed business partners for your support in growing our business to where it is today. Without you all, it

won’t have been possible to get to where we are,” he said. Also speaking at the event, Rajneesh Gupta, the business unit head Bhojsons Powerhub stated that Amaze offers a technologically advanced power back up solution that meets the yearnings and power back up needs of Nigerians. Gupta said that Amaze power products are manufactured with an edge to deliver higher reliability. He mentioned that Amaze inverters and batteries are manufactured using cutting edge technology which ensure deliver more back up for the same capacity. He continued that Amaze is 24x7 protected with Nigeria’s trusted after sales service provider “Bhojsons Care” to provide round the clock customer support to deliver customer delight always. “Amaze power back up products are designed to reduce electrical losses, thereby improving power savings and efficiency. They are very safe, protecting appliances by delivering safe power output even under fluctuating input conditions,” Gupta said.

Business Event

L-R: Joseph Adeola, PR manager, OPPO Nigeria; Mohini Ufeli, OPPO Redefinition Contest finalist; Obidinma Nnebe, OPPO Redefinition Contest finalist, and Nengi Akinola, marketing manager, OPPO Nigeria, at the OPPO Redefinition Contest Participants Briefing.

Energy

Sahara Group backs gender equality at OECD summit in Paris Olusola Bello

nsuring equal access to resources and opportunities regardless of gender, is essential for promoting sustainable development across the globe, Pearl Uzokwe, Director, Governance and Sustainability, Sahara Group has said. Uzokwe who spoke in Paris at the Organisation for Economic Co-operation and Development (OECD) Private Finance for Sustainable Development Conference said galvanizing private finance alongside other sources of finance for gender equality was not only urgent but critical for sustained wealth creation, especially in developing countries. Uzokwe said Sahara Group had consistently led the cause of equal access and opportunities in the private sector through support for gender related projects and policies that supports employment and growth within

the organization which is free of any gender-based considerations. “Sahara Group is passionate about the issue of gender equality and we continue to promote and invest in projects that empower men and women to pursue economic prosperity. We are also entrenching gender diversity at the board level of the organization in line with global trends in corporate governance,” she said. Noting the need for women empowerment as a precursor to achieving gender equality, Uzokwe said governments and businesses need to be “more deliberate and committed” in their support for activities that will connect girls and women to transformative economic opportunities. She said strengthening the private sector and ensuring well-defined and unbiased entry pathways are available at all levels. “Sahara Group aligns with the position that empowering women and eliminating the

hurdles to success for women in both the formal and informal sectors has the potential to set the tone for attaining several sustainable development goals, with special emphasis on goal 5 that speaks to gender equality,” she affirmed. The OECD conference noted that a collaborative approach involving the government, business, civil society and development agencies will be required to achieve the task as raising private finance towards promoting gender equality. Participants called for an enabling environment for the private sector to thrive and support female entrants, adding that diversity remained the most potent driver of innovation that is required to make businesses thrive and prosper. They also noted that since women provide 50 per cent of that innovation ratio, ignoring their unique needs and offerings would be a cost too high for any organisation and country.

L-R: Murat Gebeceli, head, digital imaging category, Sony Middle East & Africa; Vinod Danani and Sham Doulatram; both of Kontakt Pro Nigeria Limited; Sajeer Shamsu head, business development, digital imaging, Sony Middle East & Africa; Jason Rego, category head, Sony Middle East & Africa, and Apoorv Soni, business development specialist, Sony Middle East & Africa, at the launch of the latest range of Sony Alpha mirrorless interchangeable lens cameras in Nigeria in Lagos

L-R: Femi Shobanjo, head, broker dealer department, Nigerian Stock Exchange (NSE); Dele Lawore, GMD/ CEO, and Yomi Atoloye, chairman, all of Integrated Trust & Investment Limited, at the launch of Integrated Shares Finder (ISF) in Lagos.

Toki Mabogunje, president, Lagos Chamber of Commerce and Industry (LCCI), presents a Plaque to Yemi Osinbajo, vice president of the Federal Republic of Nigeria, at a courtesy visit by the delegation of LCCI to the State House in Abuja

L-R: Siji Adesemowo, drector, PHX; Aya Jazairi and Bruno Marques, partners, MARU; Kunle Smith, CEO, PHX; Taiwo Allison and Oiza Effanga, partners, BSL, and Oluseye Olusoga, director, PHX, at a showcase to unveil PHX Realty Capital’s new residential development in Lagos.

Tuesday 04 February 2020

BUSINESS DAY

Media business Economist identifies sectors holding promises for marketing communication industry

Real estate firm, REFin Homes offers solutions to worsening housing deficit

Daniel Obi

n economist, Bismarck Rewane, ha s i d e nt i f i e d certain economic sectors that have promises or lack of it for Nigerian marketing communication industry. He said various government protectionist strategies would incentivize increased domestic production and sectors such as agriculture, manufacturing and ICT will likely benefit immensely. For FMCG, he said the sector benefitted from the government’s protectionist strategies and there will likely be increased activities partly due to the border closure. Based on this, Rewane foresees domestic productivity would most likely increase and this will likely lead to increase spending on advertisement, branding, promotions, advocacy and public relations consultation. As at Q3, last year, the FMCG sector was growing at 1.1% with contribution to GDP at 8.74% (Q3’19). The Trading sector, he said contracted by -1.45% in Q3’19 and it was first victim of border closure. The sector also suffered 43 banned items with Foreign exchange restrictions. Also exchange rate for converting import duty increased to N326/$ According to him, the new minimum wage will

L-R: Christopher Stephenson, Faculty, Ausso Leadership Academy ; Tosin Adefeko, president, Ausso Leadership Academy Alumni Association; Austin Okere, Founder & Entrepreneur-in-Residence, Ausso Leadership Academy; and Mike Mornu, vice President, Ausso Leadership Academy Alumni Association, at the Academy’s Alumni Inaugural Launch held in Lekki phase1.

likely boost aggregate demand but the increase in tariffs is expected to lead to reductions in traders revenue. The economist who spoke on ‘The Nigerian Economy in 2020: Implications for the Marketing Communications Sector ‘ recently in Lagos at Public Relations Consultants Association of Nigeria, PRCAN forum said delay in the re-opening of the land borders will remain a major threat to trading activities. He therefore warned that Trade sector’s impact will likely be neutral on demand for PR services.

For telecommunication sector, he foresees increased spending on PR services owing to the structure of the market. The telecommunication sector he said has growing customer sophistication and there are huge opportunities untapped in the roll-out of broadband networks and digital services. In 2020, he also foresees increased advertisement and branding by domestic companies to differentiate products. He said Banking sector vulnerabilities will persist and CBN will be more proactive in managing financial system risks.

He challenged PR practitioners who are working for companies to brace up for the challenges ahead to explain in clear terms and language the impact of border closure, cashless policy, VAT, rising inflation which erodes consumer purchasing power, government borrowing and other government actions on the cautious consumer. Speaking earlier, the President of PRCAN, Israel Opayemi who is the CEO of Chain Reactions said Public Relations is all about analysing trends and predicting their consequences.

GDM launches three marketing products, marks 10 years of doing business Daniel Obi

a rke t i ng f i r m GDM, has launched three innovative marketing products following its evolution from a brands solutions company, in commemoration of its 10th anniversary.

The products were unveiled at the firm’s clients’ appreciation party in Lagos recently. The products are Retailar, a B2B e-commerce platform that enables retailers effortlessly access products at the price of the manufacturer, order for them and have them delivered to them, right from the comfort of their phone, cheaper, faster

and more efficiently. Also unveiled was Retailscope, an audit platform which provides quantitative primary retail data about FMCG products. This is going to be shared with people in the marketing ecosystem for free. The innovation firm explained that having worked for the Federal Government on TraderMoni as

L-R: Ademola Oshunniyi, head Brand Creative; Adeola Akinola, group HR manager; Victor Afolabi, CEO; Labake Yussuff, COO; all of GDM group and Doja Ekereuche, board, Eko Innovation Centre at client appreciation of GDM group in commemoration of its10th anniversary held recently. www.businessday.ng

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an aggregator, it has acquired the capacity and competence to have had people across all the country. According to the Founder, GDM, Group, Victor Afolabi, “We have people in all local governments, we were in 774 local government areas to get raw primary data clients can rely on. Retailscope is going to be made available free of charge to the ecosystem via Brand Communicator as well as BusinessDay Newspaper.” Finally, the firm unveiled Alpha Geak, a subscription based solutions platform which the agency has used in the past two years for enumeration, validation and managing point of sales material for salesmen automation like a Sales Force Automation, SFA, developed for big projects. This, it unveiled to help small businesses scale up and compete favourably in the market. Prior the appreciation dinner, GDM held a series of activities within the week to commemorate its anniversary. Last Monday, GDM empowered students of Gbagada Junior Comprehensive Secondary School with educational materials.

o reduce the 17 million housing deficit in Nigeria which is getting worse due to increasing population, Managing Director of Lagos-based real estate company, REFin Homes, Olatunde Macaulay has suggested that developers should provide comfortable and attractive financing options for would-be home owners that will make it possible for them to afford those houses. He also called for improvement in infrastructure by government such as roads, rail systems that will enable people own homes in far-away areas and work in other places. “If there were good roads and good transportation systems such as rail system, people don’t mind going to live far places where developers can even build cheaper. People can live in Ibadan and work in Lagos”, he said. Speaking at launching of REFin Homes’ completed estate, Anchor Grounds and its ongoing project, Chelsea Court which has already been

endorsed by their stakeholders and it is currently on sale; Macaulay also said attention of estate development should focus on mid and lower end of the market. “Before now, there was focus on high end of the market which is beyond the reach of many Nigerians”. The company has already sold out apartments in Anchor Grounds, strategically located in Lafiaji Lekki of Lagos which was financed with flexible options for consumers. The Anchor Grounds estate has 16 units of three and two bedrooms respectively. The company is also offering after sales service to buyers. Macaulay said the company builds for requests and specifications for a group of people. “We make financing for the homes flexible for buyers to pay in months”. The Deputy Managing director, Kazeem Owolabi also expressed delight on the REFin Homes team for the achievement. Princess Kay Olufade, one of the unit buyers said she was attracted to the home based on financing option and quality.

Maltina brand begins school games competition to discover talents, promote youth Daniel Obi

igerian Breweries, under the Maltina brand has begun sponsorship of secondary schools games competition, designed primarily to promote the development of over 20 million secondary school children through sports and impact communities. Tagged ‘Maltina Schools Games’, the campaign will involve a series of track and field sporting competitions held across four states in Nigeria to grow the future champions at the secondary school level. This is with the objective that the journey to stardom starts with baby steps. Explaining the concept of this initiative, Jordi Borrut Bel, managing director, Nigerian Breweries Plc, said “The Maltina School Games is a platform designed to promote the development of children from improving their social and leadership skills, to bettering their wellbeing through sports. It also contributes to the United Nations Sustainable Development Goal 3, which is to ensure the health and @Businessdayng

wellbeing for all, with a focus on young schools children”, he said. Sade Morgan, Corporate Affairs Director of Nigerian Breweries Plc, said “Maltina is a brand that understands that happiness is not only a fleeting moment of joy, but it is the overall wellbeing that comes with activity, community bonding and a drive for secondary school students across Nigeria to play happy together and share happiness” In the competition, registered schools will be required to present their students who will compete in the state preliminaries heat and final events which will hold across Lagos, Anambra, Abuja, and Kano. Qualified students in the preliminaries will advance to the national finals which will hold in Lagos in March, 2020. The secondary schools games competition is in partnership with Nigeria School Sports Federation, NSSF. Schools which don’t have facility for training are encouraged to share with other schools for the training of their students. Winners will also be rewarded with prizes including scholarships, laptops among others.

Tuesday 04 February 2020

BUSINESS DAY

Branding The era of emotive embrace of brands is disappearing - Jaiye Opayemi Israel Jaiye Opayemi, is the MD/Chief Strategist of Chain Reactions Nigeria, one of the country’s foremost public relations consulting firms. He wears two caps, he is also the President, Public Relations Consultants Association of Nigeria, PRCAN. In this incisive interview with Daniel Obi, he predicts with conviction what will happen in the marketing communications in the year 2020 and takes a dive into how technology is shaping PR practice in Nigeria. Excerpts:

Israel Jaiye Opayemi

coming and we prepared for it. The Nigerian consumers will become more rational. Mark my words, you will find more people using the calculators on their phones at the malls and in the open markets before making purchase more than ever before. It is the age of rational buying. Impulsive buying based on emotions is giving way. Technology and analytics are re-defining business, how can PR leverage them to offer best services to their clients? With the benefit of technology and analytics, we can help our clients save money. Gone are the days when clients will tell a PR or an advertising firm, “our CEO wants to see this campaign on TV by this night.” Thanks to technology and analytics, we can now respectfully show the client that his target audience is watching videos more on Facebook and Instagram and they stand no chance of seeing the campaign on TV. We are now in an era where we can by the benefit of technology and analytics, counsel a client to put a piece of campaign on HipTV and not because their CEO only watches Channels TV. One of the things we also do at Chain Reactions is predictive analytics. We exploit patterns we see in historical and transactional data to identify risks and opportunities. I remember we once pitched to one of the leading online shopping platforms in Nigeria. www.businessday.ng

The Head of Marketing almost threw us out of the room when we used predictive analytics to warn that online shopping is trending towards what is called “omni channel shopping”. That Nigerian consumers love to see, to touch, compare the prices online and in a physical shop before buying. We outlined the opportunities to them. Madam would just not listen. Sadly, they are out of business today. I am pained because they would have continued to hold this market. Unknown to them, we were very spot on and confident of what research was telling us. It was a pitch, but we invested heavily to

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We began as a small media services consulting firm in 2007. It’s been a journey of grace and grinding. We opened for business with just two staff at inception and now we have grown to a 32 man professional army

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How would you assess Nigeria’s marketing communication industry in 2019, the ups and downs? It was not a particularly exciting year for the marketing communications industry just as other sectors of the economy except banking which defies all logic. This was due to a number of reasons. First, the Budget 2019 was only signed by President Muhammadu on Monday 27 May 2019. This meant that four months were lost in that financial year. Secondly, it was also an election year. Investors are usually circumspect and understandably so during an election year. What are your expectations and projections this year? Well, since Nigeria has been brought back to the long desired January to December budget cycle, I see hope of an early start of some real economic activities. Our industry rides on the wings of economic activities. So, unlike the past, there is at least some sense of direction in the economy today. Some practitioners have predicted a busy year for marketing communication industry based on clients heightened desire to engage consumers, investment opportunities from border closure, do you agree? This is true to an extent. I see stiffer competition in some key sectors of the economy such as banking, telecoms, and the FMCG sector. The competition in the FMCG sector will not be necessarily because of the border closure but because the Nigerian consumers will even be more rational than ever in their spending. The competition in banking and telecoms will heighten because value will trump brand loyalty. The era of emotive embrace some brands have enjoyed will end. There will be a lot of mobility and churning in the market. What this means for brand owners in these sectors is, they will need to spend more on consumer engagement campaigns. The communication will be more about value. Let me also predict that, clients will begin to depend more on marketing communications agencies and firms with consumer neuroscience capabilities because everything we have always held on to about using emotional brand appeal to drive market growth is about to blow up. This is why at Chain Reactions, we have invested in developing consumer neuroscience capabilities. We saw this era

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get that insight. They just did not listen. So, the type of PR we practice at Chain Reactions is already heavily dependent on technology and analytics. I am sure a number of PR firms in Nigeria are already walking this path too. Clients are considering specialisations before they engage marketing agencies. Do you then see collaborations among agencies with different specialisations to service clients? Do you see mergers and acquisitions happening? Unfortunately, I do not see likelihood of mergers by the local agencies. I also do not see collaborations happening. I guess it is just not in our DNA. The last time this happened, I had goose pimples when, Tunji Adeyinka, the MD of Connect Marketing invited us into a collaborative work on the tour of the Williams Sisters, Serena and Venus Williams to Nigeria. There was the PR aspect of that campaign and he said, we want an experienced PR firm like yours to manage this aspect for us. Connect Marketing could have done it alone. But I have come to respect him as a rare breed and one of Africa’s most brilliant professionals in that space. To you, what is best way to solve agency/clients debt challenges? I think the first thing is for us to enthrone the sanctity of contracts. I appeal to the legal professionals on the client sides to not only back off once the retainer contract has been signed, but to continually follow up with the finance department on compliance knowing that this speaks to corporate reputation too. If you have a contract to pay your agency in 30 days, make the plan to pay. Let the legal department remind the finance department of the implication of the default on the company’s reputation. We have an International client in the technology space that pays us every 30 days. The process does not require any human intervention. No phone calls, no begging, no reminder mails. They just pay because they know it is a contract and not a favour. It makes our work with them an amazing experience. My second proposition which we are currently discussing at our professional association’s level is the possibility of the insertion of a penalty clause in retainer contracts as it is done in places like South Africa. This makes default a burden for any client. What this entails is that, once a @Businessdayng

client defaults, the contract makes provision for a certain percentage to be paid as default penalty to the agency or the consultant. This is one of the things driving the growth of the marketing communications in other climes despite their own macro-economic challenges too. This default fee enables the agencies to be able to meet up with the default charges to their own lenders too. Your firm, Chain Reactions is enjoying steady growth, could you recall to us how the firm started? We began as a small media services consulting firm in 2007. It’s been a journey of grace and grinding. We opened for business with just two staff at inception and now we have grown to a 32 man professional army. Today, we are the Nigerian affiliate and West Africa’s Preferred Partner to Edelman, the largest Public Relations firm in the world! You have affiliation with Edelman since 2016, how has this partnership assisted both parties? Our affiliation with Edelman has been an amazing experience. I think for Edelman, our relationship has given Edelman the right finger on the pulse of the Nigerian market. Being the number one and indeed the largest Public Relations firm in the world, Edelman’s global clients now enjoy matchless market insights into the Nigerian economy; deeper understanding of media nuances, trends and government policies. This ensures they can take informed business decisions because of the quality of the depth of insights we often share. This is priceless for global businesses. For Chain Reactions, apart from life changing capacity development opportunities we have access to, the affiliation has availed us the unique opportunity of serving global and International clients GE, HP and Dubai Tourism amongst others. Congratulations on your election as PRCAN President, what are your objectives for the body? Together with my colleagues in the leadership, we are working on a strategic goal for the Public Relations industry in Nigeria named, “Better Business”. It is a mutually beneficial campaign for both the PR firms and the clients. Time will fail me to go into all the details in the cause of this interview. But watch out for it. The Public Relations industry in Nigeria will never remain the same again!

Tuesday 04 February 2020

BUSINESS DAY

Jensen Huang, chief executive of Nvidia, was ranked as the best company boss in the world in 2019 by the Harvard Business Review © David Paul Morris/Bloomberg

The impossible task of picking the best leaders Managers matter but it is hard to gauge what individuals contribute

S chief executive turnover almost certainly hit a new high-water mark last year. According to Challenger Gray and Christmas, as of the end of November, 1,480 CEOs had left their post, four short of the record for any full year since 2002, when the outplacement consultancy started collecting figures. The high turnover rate raises the question: to what end? Boards set great store by succession planning. They are serviced by hordes of headhunters, with data on the record and potential of candidates. Yet it is hard — some would say impossible — to work out the portion of a complex organisation’s performance that is owed to a single senior leader, let alone measure that input. That does not stop people from trying. One ranking, from Claremont Graduate University’s Drucker Institute, founded by management thinker Peter

Drucker, selected Amazon as the best-managed US company of 2019. The Wall Street Journal, which publishes this list, lauded its culture, set “from the top down” by founder Jeff Bezos. Another ranking, in Harvard Business Review, picks the 100 “best-performing CEOs in the world”. Its latest list was topped by Jensen Huang of Nvidia, the technology group. Mr Bezos, despite leading on financial performance, did not even make

the cut, held back by the group’s low environmental, social and governance score. Hard-headed investors would argue chief executives’ financial performance is all that counts. But it is difficult to disentangle their contribution from that of their team or sector. Investors’ assessment tends to be reflected in share price gyrations on the day the chief executive’s departure is announced. Even then, rational assessment of any suc-

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Hard-headed investors would argue chief executives’ financial performance is all that counts. But it is difficult to disentangle their contribution from that of their team or sector

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The editorial board

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cessor is often skewed by comparisons with their previous role. When Carolyn McCall (then running the Guardian Media Group) was appointed in 2010 to head easyJet, sceptics doubted her ability to switch her skills from media to aviation. Yet during her seven-year tenure, easyJet’s share price more than trebled. Identifying chief executives who are directly responsible for destroying value is easier, but not much. Research by Spencer Stuart, the search firm, suggests S&P 500 chief executives enjoy their “golden years” of share performance only after surviving for more than a decade. Chief executives of HSBC, Thyssenkrupp, and Renault, all of whom left abruptly this year, after, respectively, 18, 14 and nine months in the senior job, would argue they never had time to show their mettle. Meanwhile, chief executives who overstay their welcome risk having to shoulder all the blame for poor performance. Good managers make a difference as much by doggedly @Businessdayng

pursuing tested management methods as by showing leadership flair. The World Management Survey identifies practices such as target-setting and talentspotting that led to improved productivity. Separate research suggests companies whose chief executives focus more attention on staff than on investors and other stakeholders are better managed. But even managers often overstate how well-run their companies are, so good luck picking the best bosses from outside the boardroom. This is one reason private equity groups monitor chief executives of companies they own so intently. It is also why activists like having a seat on the board, where they can observe leaders at close quarters. Non-professionals are ill-placed to spot managerial nuances. Above all, they should beware using media coverage to predict the success of the new crop of CEOs: according to one study, business magazine cover stories often herald an end to outperformance.

Tuesday 04 February 2020

BUSINESS DAY

The practices of making decisions in Africa Enase Okonedo

he first of my publications in this realm was the book chapter on “Decisionmaking Practices in Africa”– Okonedo. E.F. (2018) in Uzo. U &Abel. K (Eds.), Indigenous Management Practices in Africa, (pp. 223-249). Emerald. In the study leading up to the publication, I sought to understand the possible influence of cultural beliefs, limited information, faith, ethics and other institutional factors have on decisions made by business executives in the different sub-regions of Africa – East, West, Norther and Southern regions of Africa. It was a very interesting study which compared and contrasted approaches to making decisions in the different sub regions on the African continent. Through interviews as well as surveys, gathering information from decision-makers resident in these regions was possible. Using factor analysis, the major factors guiding decision-making in these regions were analysed. Being prominent for her diverse cultural, religious and traditional beliefs and values, the study highlighted the factors aiding the process of making decisions in

the African setting. In West-Africa, the study revealed that decisions reached were as a result of collective effort of stakeholders as well as suggestions from elderly stakeholders. Arriving at decisions by consensus is the most common approach to decisionmaking. Loyalty and cooperation were considerations in decisions made by executives; and emphasis is placed on faith and spiritual beliefs. In the event of insufficient information, executives would usually draw knowledge from past situations or utilize available information. In Southern Africa, the decisions of business executives are guided by loyalty and language differences. The preferred way of arriving at decisions is collectively and the decisions of superiors are respected. Faith had some influence on decisions with some executive seeking divine assistance before they could execute major decisions. Moral justifications and a deep sense of integrity were found to be the most outstanding factors considered by decisionmakers in this region with emphasis placed on ethical values. Compared to West Africa where executives are actively guided by prevailing societal values with some degree of morality, in this region,

Enase Okonedo

executives would first seek to morally justify a decision before it is executed. Here also, the findings indicate that the consensus approach is a popular approach in making decisions. In East Africa, the most common approach is similar to that used by executives in West and Southern Africa which is by consensus. Here, the opinions and suggestions of elders, societal values, languages spoken, and consensus guide major decisions of business executives. Faith was also a crucial factor in guiding the decisions of executives similar to West and Southern Africa. In North Africa however, interestingly the results showed no meaningful influence of the cultural values

and faith, ethic as well as information paucity on the types of decisions executed by business executives. The key differentiators that stood out were inconsistencies in socio-political systems evidenced by political instability accompanied by social/ civil unrests; as well as government red-tapism and inconsistent policies of the government. In line with the African philosophical concept, “Ubuntu”, this study of the practices of making decisions in the African context indicated that factors such as community, a sense of group involvement and social harmony characterized the process of making decisions. Common factors such as culture and ethical considerations; institutional inefficiencies and social unrest, information paucity and faith and religion influence decisions made by executives in Africa more so than by executives in the Western world. Taking into cognizance the essentials of making decisions, organisational performance can witness a positive turn-around. A clear understanding of the nuances associated with making decisions in Africa will create an opportunity for business executives to make effective decisions in the context within which they operate It was with this

view that I embarked on writing a book- The Art of Decision-making: “A Guide to Executive DecisionMaking in Africa”- Enase Okonedo, PAU Press (in view 2020) --- to guide the processes of making decisions by African executives. The objective of this book was to guide executives in small and large organisations operating in Africa and across the developing world to think more systematically when approaching decisions and to enable them makes better decisions. Through in-depth discussion of each subject matter, the use of relevant real-life examples, interviews and interactions with different CEOs, and drawing from my experience as an executive, I discuss the essential factors to consider when making decisions, the different approaches to decision-making, how the decisionmaking challenges in African regions affect executive decisions, and finally, the critical learning points for decision-making within the African environment.

• Excerpt from the brilliant inaugural lecture by Professor Enase Okonedo Dean of the Lagos Business School and titled complexities of decision making in a volatile environment.

Business schools target the talented but less wealthy What can be done to attract applicants from broader socio-economic backgrounds? Seb Murray

social trip to Bogotá, Medellín and Cartagena in Colombia last year was an opportunity for Alexxis Isaac to build bonds and a network with her Harvard Business School classmates. “I wanted to fit in and enjoy the full MBA experience,” she says. While students can connect with peers on campus, she explains, “sometimes it feels like it’s essential to go on treks”. The price of these frequent, student-led getaways — between $1,000 and $2,500 per trip — risks excluding people who cannot afford them, says Isaac. Like about half of her cohort, Isaac received a scholarship based on financial need. She would go on more trips if they were cheaper. Isaac, an American who is black and Hispanic, says Harvard does not subsidise such trips, nor are they included in its calculations of the annual cost of attendance ($110,740 for a single person, covering tuition, accommodation and living costs). This is because the exact outlays are hard to estimate given the variety of locations and activities, such as cooking classes, hikes and travelling around. Isaac is collecting this data, with help from students and faculty, to determine the full cost of Harvard’s MBA experience, so students can budget accurately. She also wants more events to be held on campus. Chad Losee, Harvard’s managing director of MBA admissions and financial aid, says students do not need to be part of the jet set to fully participate in an MBA. But he does want to enrol students from

a wider range of socio-economic backgrounds and ensure they feel included. About 11 per cent of students in the most recent MBA class are the first in their family to go to university, for example — one indicator of being from a low-income background. Business schools increasingly acknowledge that a wider range of perspectives enriches learning through group discussion, and helps prepare students to lead diverse teams. Corporate recruiters have also raised pressure on schools to enrol people from a broader array of socioeconomic backgrounds, recognising the benefits of a diverse workforce. Consequently, in 2017 Harvard doubled the size of its annual summer school, the Summer Venture in Management Program, to 180 undergraduates. Attendees are selected based on a variety of factors, including if they are from a group that is under-represented in business education, such as firstgeneration college students. Business schools acknowledge that a wider range of perspectives enriches learning The SVMP aims to improve attendees’ access to graduate education: they spend a week on campus, taking MBA classes. “By the end, they have more confidence in themselves to apply for a place,” says Losee. About 1 per cent of the 900 students in the current MBA cohort attended the SVMP, but some enrol at other business schools or pursue different academic disciplines. Many business schools are trying to diversify their student intakes. Columbia Business School in New York has increased the amount of financial aid awarded to MBA and executive www.businessday.ng

MBA students by 388 per cent over the past decade. Students who demonstrate a financial need and go on to work in relatively lower-paying jobs, such as in the public sector, can also apply for up to $30,000 in educational loan assistance from Columbia. Michael Robinson, a director in admissions, says Columbia also extended its MBA application fee waiver of $250 to prospective students living in Africa. “I’ve been in Nairobi [Kenya’s capital] talking to a prospective student making the equivalent of $1,000 a month,” he says. The opportunity cost of not working is also a hurdle for students. This was part of the reason USC Marshall School of Business in Los Angeles launched an online MBA in 2015, says Sharoni Little, chief diversity, equity and inclusion officer. “Students study part-time so they do not have to give up their jobs to attend classes,”

Travel costs: Harvard student Alexxis Isaac says extracurricular trips can be prohibitively costly © Bryce Vickmark

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she says. “It has broadened the pool of applicants, including those who could not apply because of their economic circumstances.” Thirty-eight per cent of online MBA students who enrolled in the 2019 calendar year are first-generation college students, compared with approximately 10 per cent of the full-time MBA class. They are less likely to have family members who work in professions such as banking or consulting, which recruit heavily from MBA intakes, says Prof Lei Lei, dean of Rutgers Business School. Family ties can help students land jobs, so in 2018 Rutgers launched a mentoring programme to replicate them. Executives help MBA students improve their confidence, résumés and interview skills. “First-generation college students from relatively low-income backgrounds really need this kind of help. It makes a big difference,” says Prof Lei. For example, almost all the MBA students secure summer internships. Rutgers student Juan Penafiel is attached to a mentor at US financial services company Prudential. The mentor is helping Penafiel map out a career path, possibly overseeing businesses managed by his family, whom he supports financially. Penafiel moved from Peru to the US when he was a child, and is the first in his family to go to university. The mentor, who is also from a lowincome, migrant family, has helped inspire Penafiel to aim high. But Martin Parker, a professor of organisational studies at the University of Bristol and author of Shut Down the Business School, is sceptical about the commitment @Businessdayng

of business schools to broadening socio-economic diversity among their student intakes. Business schools are often required to make a financial surplus for their university He says schools remain focused largely on recruiting wealthy students who pay full fees, because business schools are required to make a financial surplus for their affiliated university. “They are cash cows.” Catherine Cassell, dean of Birmingham Business School in the UK, says some schools prefer to recruit candidateswithundergraduatedegreesfrom prestigious, prohibitively expensive institutions,assumingthisindicatesquality. “We cannot discriminate against people based on their education,” Cassell says. She also argues for a holistic approach to admissions that looks at a range of factors including students’ leadership experience. Alex Min, chief executive of admissions agency The MBA Exchange, says many would-be students fear that revealing financial hardship would discourage schools from admitting them. “It is not inconceivable that a school may not offer admission to some applicants that are otherwise qualified because of the fiscal realities of needing a certain percentage of admitted students to pay full tuition.” A potential solution is to assess candidates without knowledge of their finances. Min is optimistic that schools will improve the diversity of their intakes, given the recent global decline in MBA applications. “If this continues, business schools will have more reason to recruit a broader base of candidates.”

Tuesday 04 February 2020

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Why industry-ready talents shortfall across Nigeria must be tackled

Human Capital

Foundation marks International day of education, tasks teenagers on goal setting Iniobong Iwok

KELECHI EWUZIE

uman resource professionals insist Nigeria urgently need to upgrade her education and talent development programmes or risk sleep walking into a future of work where a whole generation of workers lacks the right skills or the opportunity to adapt to change. They observed that the future of work is upon us and we must take urgent action at all levels to ensure the Nigerian workforce always has the right skills and the ability to adapt in real time and succeed in the direction that work in readiness for the Fourth Industrial Revolution. In the ever-competitive world of employment, it is routine for employers to recruit candidates that parade not just certificates, but candidates with the right working skills that can contribute to the development of the company, says Abraham Laleye, CEO, Robins Begg Consulting Limited. With a workforce of 85 million people, Nigeria is home to an enormous labour market and the talent must be up-scaled and honed in order to compete successfully in the Fourth Industrial Revolution. Laleye, while reacting to the issue pointed out that human capital development is bedevilled by the neglect of the present and past governments regarding promises to the citizens in the area of investment in education, promises that have remained largely unde-

Higher

livered on account of primitive expressions of greed by the political elite. Laleye notes that the universities should work more closely with the industries, try to understand their needs, have a forum where there could be an exchange of ideas as to the challenges the industries are facing and how they can develop a proper curriculum to address these challenges. The problem of skill gap, he says, is increasingly becoming a multi-faceted one, noting that organisations are looking for certain skills to help their business improve. The employment consultant further notes that if organisations are serious about getting the right talents, there are lots of processes they have to go through. “They need to understand that talent requires skills to be able to ensure that it has perfected the art of doing what you want them to do,” he says. Emmanuel Imevbore, group CEO of CEED International

Company, on his part, blames the situation on the education system that fails to tailor learning to employment realities. Imevbore is worried that the academic contents in the country’s institutions often do not address the real needs of the society. “Academically, the Nigerian degree is not worthless because it is the basis of determination of students’ ability to think, it is also relevant for admission into institutions of higher learning abroad, but in practical relevance it is worth little. Often, academic contents are not relevant to the needs of the society, especially to the employers. Graduates from these institutions are usually theoretically baked but halfbaked for the business/practical world,” he says. In order to solve the problem and raise the competitiveness and relevance of Nigerian graduates, Imevbore suggests that a steady upgrade of university curriculum is required to meet the needs of the ever-changing

world of today. Ayodele Jaiyesimi, a human capital development expert while taking a holistic view of the situation as it concerns the shortfall of employable graduates in the country today, says the situation has really assumed a worrying dimension. According to her, “There is a dearth of skilled manpower. Employers hardly find graduates today who have the basics; most of the times we do a basic aptitude test to get people in and you find out that you can’t even get 10 percent of them that will pass appropriately. So, when we are talking of skills, it is a huge problem for us in the banking industry.” With this widening skill lacuna between industry demands and quality of the nation’s graduates, the human resource practitioner is of the view that there is much work to be done. “I feel we need to be committed to working together to lift up standards in the country,” she says.

A Phillip Akintoye Development Foundation (PAPADEF) a non- Governmental Organisation (NGO) has organised a sensitisation workshop aimed at improving teenagers awareness of sex education and goal setting among secondary school pupils in Lagos. The workshop with the topic: The role of education for peace in preventing sexual abuse in schools’ was part of activities of the NGO to commemorate 2020 international day of education. Opeloyeru Adams, a youth and sustainable development advocate while speaking at the workshop held at the Essy Gold College, Ogudu GRA said that goal setting was crucial because it motivate and help an individual to attain success and remain focus. Adams urged youths and teenagers to have a realistic plan of how they intend to achieve their dreams within a stipulated period of time and work hard toward attaining them.“Goal is important if you want to attain success, it motivates, but you have to set a time line for your goals and it must be realistic and time running,” Adams said. Kemi Sokoya, a sex councillor at the Miracle centre, Lagos, said the Increasing rate of sex abuse and rape in Nigeria had made sex education compulsory for children at an early age. Sokoya, urged parents and guardians to watch where and who their children and wards spend their time with, while advocating for stiffer penalty for perpetuators of rape in the

country. The councillor urged teenagers to become conscious of their body and changes in them, while reporting any abuse to their parents and guardians. “In my line of work we have been providing support for rape and majority of the rape victims are children, I mean 90 per cent. “It now makes it necessary to start and educate them young, build confident in them. What is happening now is that children are abused they are threaten to be silent, as a result the perpetuators do it over and over again”, Shokoya said. Speaking on the essence of the event, the program manager of the foundation, Eweka Yvonne Ogieomo, said the event was held to educate and improve the knowledge of youths on sex education and goal setting. Ogieomo said the programme would continue to be staged annually by the foundation, while lamenting that sexual abuse had become wide spread in Nigeria’s in recent years. According to Ogieomo, “The aim is to commemorate the international day of education and we are trying to send a message to the younger one that they should press for peace. Sexual abuse is very prevalent in Nigeria a society that is why we are doing this. Parents and guardians needs to talk more about sex education to their children and wards. “We have been able to achieve what we set out to do by impacting on the youths. Goal setting and planning is important toward their career, and ones they know this early it would aid them. That is what we aim to achieve,” Ogieomo said.

Factors that affect 21st Century Childcare

OYIN EGBEYEMI

he level of dynamism of today is such that it is very difficult to keep up with changes in our environment. Globalisation and the introduction of technology to the very minute details of our everyday lives means that the world is becoming more complicated in such a way that people could very easily be left behind if they are not ahead of new and innovative developments. These developments inevitably affect education. Education today is not the same as it

was fifty years ago; and if we are honest with ourselves, it really isn’t the same as it was just about five years ago. The evolving conditions of the world demand a equal adjustment to the way we approach the education and development of our children, otherwise they may be affected by exposure to certain environments that they may not be fully equipped for. Many of us may agree that parenting and raising children was very different in the pre-millenial era where the authoritarian method was the prevailing approach. Today’s approach to parenting has evolved into so many other methods, and those of the middle-upper class of our society these days harbour around close attention to the affairs of children. This has it pros and cons. Notwithstanding them it is very important to www.businessday.ng

ponder over many factors that influence parenting in the 21st century as things have inevitably changed in the world and even within our local context. It would be difficult not to struggle if we do not pay close attention and take whatever necessary action we need to in order to keep up with the times. Generation X (those born around the 60s/70s) and some millenials (those born around the 80s/90s) in an average stable Nigerian home would recall many elements of simplicity in their upbringing where the typical routine for a child was: wake up, have breakfast, go to school, return home, have lunch (interchangeable with returning home depending on the school programme), play for a while, do homework, have dinner, sleep…. repeat and

then on weekends, play, play and PLAY. Even though this routine is somewhat similar to what children of today undergo, if we take each element of it, we would notice that the way we do things has changed to a large extent. Simplicity would not always suffice. So what makes the difference? Technological, economical and social shifts (amongst others), individually and together, have influenced our environment such that we have to continuously adapt to a new way of doing things. Technology. We live in a global environment where the influence of technology has really taken a huge role in everyday tasks. Technology is gradually becoming the foundation of everyday activities from waking up in the morning, to

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exercising to banking. Even the way that we communicate and consume information is not the same as it used to be. It is also important to remember that children of the current generation are digital natives, so they do not even understand the concept of a world without technology. Therefore teaching and interacting with them also has to move in line with this, especially if we are trying to raise them to stand out amongst their peers (especially those in the developing and developed world). What makes it challenging is that the teachers and parents of these “advanced” children are digital converts, so they really have to ensure that they catch up with or even get ahead of the children in terms of technological skills and implementation. @Businessdayng

Economics. In the recent years, the Nigerian economy has experienced some hardship, with the price of oil plummeting, foreign exchange rising and inflation rates also rising. Unemployment has been looming around and entrepreneurs are suffering because the business environment is not particularly encouraging. This has therefore had many effects on the disposable income and lifestyles of Nigerians. The traditional concept of men going to work and women staying at home to take care of the children is nearing extinction because even when women are not willing to, they have to work and earn a salary in order to support their homes.

Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Tuesday 04 February 2020

BUSINESS DAY

EDUCATION Hebron Start-up Labs’ success story points direction to Nigerian universities STEPHEN ONYEKWELU

“

oday, I had a wonderful learning experience at @CUHEBRON Startup Lab though I studied at the University of Lagos, I saw why Covenant University is the best University in Nigeria concerning entrepreneurship,” Kayode Mfolorunsho Falayi, an English Language graduate of the University of Lagos post on his Facebook timeline recently. “They have built an ecosystem for their students to succeed and I was really fascinated by what I saw in the environment especially the support given to these startups.” Hebron Start-up Lab is Covenant University’s start-up accelerator established to help students and faculty members take their ideas and research outcomes from concept to product to market. Reputed to be the first University Startup Accelerator in Nigeria, it helps to take research with market potentials beyond the bookshelf. The Hebron Start-up Labs is a technology hub wholly funded and run by the management of Covenant University. Having run in different experimental phases for over

Peter Salovey, president Yale University while speaking more on the Yale Africa Initiative during his visit to Nigeria recently

4 years, the management of the hub decided to give it a more serious approach in 2015. It was not until early in 2017 that they finally secured a workspace approved by the school authority to carry out full operations, a report by Techpoint outlined. Some of the concepts incubated at the Start-up Lad that have developed into thriving businesses included Piggvest, an online savings platform that makes saving possible by combining discipline plus flex-

ibility. Softcom, an engineering company with the ambitious goal to improve the way people live, learn and work in Africa. Some of its products are PassID (identity), Koya (Learning), Eyowo (Payment) and DataBeaver (Data). One more company that is the outcome of Covenant University’s Hebron Start-up Lab is Thrive Agric, an online platform that brings together investors and farmers. For technology enthusiasts, the Hebron Start-up Labs

adds another level of validation to the Nigerian ecosystem and also signals that investment in entrepreneurship is necessary to spur economic development, with technology as a frontier. This mirrors the role of Stanford University in the development of Silicon Valley’s development. The presence of Stanford University was a key factor in the development of the technology enterprise now known as Silicon Valley.

More than anything, it was Frederick Terman (one-time engineering dean at Stanford University), his students, and the encouragements and opportunities that he gave them that enabled this great enterprise to flourish. As of 2011 nearly 5,000 companies existed which could trace their roots to Stanford, including HewlettPackard, Cisco Systems, Sun Microsystems, Yahoo, and Google.4 Electronics pioneer William Hewlett wrote in 1991

of the role of Stanford professor and its former Provost, Frederick Terman. Stanford University was founded by Leland Stanford, a former governor of California and United States senator who had made his fortune in the railroad industry. From its inception in 1891, Stanford’s leaders saw its mission as service to the Western United States, to serve as a counterpoise to the region’s exploitation by Eastern economic interests. Stanford looked to the Massachusetts Institute of Technology (MIT) as a model, reflecting the fact that MIT functioned as an incubator of new firms. Tertiary institutions remain key players in the growth and development of any functional ecosystem for technology innovation. This means tertiary institutions feed the ecosystem with the requisite skilled and intellectual stimuli to scale its growth. Most tertiary institutions in Nigeria have been widely criticised for their exaggerated bent for theories and abstract knowledge as opposed to solving practical everyday life problems. This is changing though, with a few tertiary institutions beginning to implement strong practical technology curricula. These allow students to take up a career in tech or easily blend into careers outside of tech.

Kwara approves payment of N30.5m WAEC fine

Greenwood House School celebrates 25-year milestone

…starts rehabilitation of 31 schools in the state

SIKIRAT SHEHU, Ilorin

s part of measures to address challenges and as well e n s u re q u a l i t y and improved education in Kwara, the state government has approved the payment of N30.5 million in penalties imposed on some schools in the state for malpractices in the last year secondary school leaving examination. Governor Abdulrahman Abdulrazaq, who disclosed this at the flag-off of rehabilitation of schools in Ilorin, the state capital attributed this to a lack of an enabling learning environment and longstanding failure to properly fund education. The state last ac-

cessed Universal Basic Education Commission (UBEC) fund in 2013 –examination malpractices have been rampant too. “We are working to end this menace and return Kwara to the top of the table in the north-central and beyond,” Abdulrazaq said. Speaking at the official flag-off of the rehabilitation of public schools across the state, the Governor noted that the 31 schools to be rehabilitated are the first phase of the exercise, saying that it required to gradually guarantee decent learning environment for children. Abdulrazaq flagged off the exercise in Baboko Community Secondary School in the capital city Ilorin where three blocks of six classrooms are www.businessday.ng

to be fully rehabilitated and fixed with modern information communication facilities. The rehabilitation of the Baboko School according to him is to last six weeks. Earlier, Abdulrazaq supervised the distribution of 932,572 free copies of customized 20, 40 and 80 leaves of exercise book to public school children in Kwara State. He, however, disclosed that government will soon hold an education summit bringing together all the stakeholders and private sector players to discuss the challenges and evolve with workable solutions. Fatimah Ahmed, commissioner for education commended the governor for his giant strides in the

...recommits to shaping the next 25 years with quality education

sector, including the establishment of an Information Communication Technology centre in the school for special needs, settling outstanding arrears of N55m feeding allowance of exchange students inherited from the past administration. Ahmed also said the administration has also provided N5m worth of teaching aids and other basic equipment at the special needs school sponsored the 2019 common entrance, and the recent approval of routine training for teachers on the state. Various stakeholders in the education sector commended the Governor for his determined effort to bring sanity and standard to the sector.

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reenwood House School, a nursery and primary school in Ikoyi celebrates 25 years of delivering quality education in Nigeria. The anniversary was commemorated at an event held on the school premises on the 30th of January. In 25 years, Greenwood House School has demonstrated its commitment to shaping world leaders. It has been accredited by the Cambridge International Examinations, British Council, Association of Private Educators in Nigeria (APEN), and the Association of International School Educators of Nigeria (AISEN). It was also awarded membership status by the Council of British International Schools (COBIS). @Businessdayng

COBIS is an organisation in service of British International Schools around the globe. This membership indicates total quality assurance in education for students and its dedication to teacher training. “We are pleased to have reached this pivotal milestone. For us, it is a testament to hard work, tenacity and dedication, especially in this tough environment. Our students have gone far and wide into different walks of life, doing extraordinary things and remaining exemplary,” Titilola Ekua Abudu, co-founder and administrator, Greenwood House School said. “I am thinking much more about the future and how we intend to keep grooming the next generation of leaders at.”

Tuesday 04 February 2020

BUSINESS DAY

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Tuesday 04 February 2020

BUSINESS DAY

property&lifestyle Without functional mortgage, here’s what experts see in Nigeria’s housing crisis ENDURANCE OKAFOR

o bridge its housing deficit which requires as much as N200 trillion, Nigeria needs to concentrate on making its mortgage system more efficient and functional, industry experts have advised. With a housing shortage of more than 20 million units, the industry sources are optimistic that an efficient mortgage system is a catalyst needed to provide homes for the over 64 million Nigerians who are employed yet do not earn enough to buy a house. “To address the housing challenges, you need to have a mortgage industry and it has to be at an affordable interest rate,” Funke Okubadejo, Director, real estate, Actis said. Housing anywhere else in the world is a basic necessity, which in the order of human needs, ranks third after food and clothing but in Nigeria, the country with the most population in Africa, it is a luxury accessible and affordable by only the rich who constitute less than 10 percent of the country’s over 200 million population. Only 5 million of the 69.54million Nigerians reported by the National Bureau of Statistics (NBS) to have been gainfully employed as at third quarter of 2018 earn a salary of N3 million and above per year, as compiled from data by Graeme Blaque Group, a Lagos-based advisory firm. This data put employed Nigerians who can buy affordable housing at only 7.19 percent, meaning as much as 64.54 million peo-

ple who earn less than N3 million cannot afford to buy a house except of course there is an increase in their income level. According to the Association of Housing Corporation of Nigeria (AHCN), an umbrella organization for all federal and state housing agencies, the underdevelopment of Nigeria mortgage sector in driving homeownership is worrisome as more than 90 percent of new homes utilise funds from personal savings for incremental construction. “The structure of the mortgage industry is the problem; there is the highinterest rate and this is on the back of the economic condition,” Adeniyi Akinlusi, president of Mortgage Bankers Association of Nigeria (MBAN) and CEO, Trustbond Mortgage told BusinessDay. The high mortgage interest rate in Nigeria is considered as one of the key culprits responsible for the country’s housing crisis. The typical mortgage rate in Nigeria ranges between 7-10 percent for Federal Mortgage Bank of Nigeria (FMBN) and between 1525 percent for commercial mortgage institutions, making it one of the highest in the world. Aside from the interest payable, the potential buyer must also have a certain percentage of the total amount needed for the purchase readily available; this amount is known as equity and should range between 30-70 percent of the total cost of the home. So, in Nigeria for instance, a Mor tgag e of N25million at 15 percent per annum interest rate means repayment of N37.9 million

Recently evicted residents of Tarkwa Bay

in interest-only over the 15 year period, which is even more than the principal itself. The trick here is that at 15 percent interest rate, it takes a lender approximately 7 years to recover the N25million it lent to you. That is about 6 years if the interest rate is 20 percent. “The biggest problem in the sector is the high cost of the very limited mortgage that is available. If they can develop a policy to ease housing finance, it will be impactful,” Wole Olabanji, the CEO of CoBuildIT, a Lagos-based real estate firm said. With single-digit interest rates in some other countries, mortgage industry contributes a significant amount to economic growth and development this is however not the case in Nigeria as the roaring inflation rate and the attendant high mortgage rate has not

only dampened housing demand but has blunt developers’ investment appetite. Africa’s largest economy has one of the world’s lowest mortgages to 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. In the last 41 years of its existence, the Federal Mortgage Bank of Nigeria (FMBN) said it has so far disbursed N193.4 billion to 18,935 Nigerian workers. FMBN is a Federal Government introduced a scheme that mobilizes long-term funds from Nigerian workers, banks, insurance companies and the Federal Government to advance loans at soft interest rates to its contributors. For Arua Nnamdi, a 28 years old Lagos-based con-

sultant, accessing a mortgage despite having a good credit history is almost an impossible task. “I have been trying to access a mortgage for the past two years as I was told my profile can give me a good rate but it’s not been successful. What the problem is, I don’t know,” Nnamdi told BusinessDay. According to Kehinde Ogundimu, the Managing Director/Chief Executive Officer of Nigeria Mortgage Refinance Company (NMRC), “NMRC has refinanced mortgage loans to the tune of N18billion as at December 2018.” The Chief executive said it was in line with the company’s mandate to promote affordable homeownership in the country by leveraging funding from the capital market to deepen liquidity in the primary and secondary mortgage markets.

NMRC is a vehicle created to close the gap between the capital market and mortgage lenders by refinancing loans-to assess the depth of mortgage refinancing through the company. “The structure of Nigeria’s mortgage system is the challenge; there is high default rate in the mortgage industry- which is most likely as a result of the fact that funds are being diverted and they have not been returned,” Adekunle Abdul, Managing Director, Metro & Castles Homes, a real estate development company, said. To provide affordable housing for Nigeria’s lowincome earners and thus, bridge the housing deficit in the country, industry stakeholders have recommended, policy review, restructuring and innovative mortgage products. According to Ayo Ibaru, COO/Director - Real Estate Advisory Northcourt, both recapitalisation of the mortgage industry and the structure needs to be improved. “The structure of the mortgage industry and the cost of funds need help; it takes too long to get approval and documentation for real estate projects, the lands also cost too much and about 90 percent of the raw materials used by developers are imported,” Ibaru explained. A b d u l m a l i k Ma h d i , M a n a g i n g P a r t n e r, a t Modern Shelter Systems & Services Ltd, an Abujabased real estate firm believes that “the players in the industry particularly financial institutions need to be innovative in approaching fundraising for mortgages.”

Opportunity for smart home-ownership as Etoniru offers The Sixtus ENDURANCE OKAFOR

new home ownership opportunity has just opened for investors and potential home buyers as Joe Etoniru & Associates; one of the leading real estate firms in Nigeria has launched The Sixtus, a smart home project that offers convenience, luxury and advanced control system. Offering four units of four-bedroom terrace duplexes and two units of five-bedroom detached duplexes, The Sixtus is set

within a serene, beautiful and easily accessible location in Lekki Phase One. A c c o rd i n g t o C h i d i Etoniru, Managing Partner of Joe Etoniru and Associates, the contemporary design by the Lagos-based real estate firms gives each homeowner the advantage of their own space with beautiful scenery and adequate serenity. “The Sixtus is one of the projects in our smart home series which offers convenience, luxury and advance home control systems to our prospective homeowners and investors,” Etoniru said.

Describing the luxury project which comes at an affordable rate, Joe Etoniru and Associates said the Sixtus consists of ensuite rooms, smart lighting, smart access control by Alexa, automatic blind control, smart locks and automated gate control. “The Sixtus is a masterpiece that not only gives buyers the convenience they deserve but also rewards investors with the ultimate value,” the company said in a statement. The location of The Sixtus project which is being delivered in partnership

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with CREATE-am Nigeria Limited avail residents easy access to schools, grocery stores, banks, hospitals, police stations, worship places, relaxation centres, restaurants, gyms, and beach. The project which offers a 12-month payment plan has smart living facilities that include blinds, electronics, lights, doors, Closed-circuit television (CCTV), gate. “From motion sensors light controls to CCTV viewing from anywhere in the world, every home in the Sixtus is fully automated with enough control over your home,”

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Joe Etoniru and Associates assured. Some of the past projects delivered by the real estate company include a set of luxury five-bedroom fully detached house with penthouse in Pinnock Beach Estate, Osapa London and has facilities like swimming pool, carport and fully fitted kitchen with gas cooker. The real estate firm has also delivered luxury 5-bedroom fully detached house with a room BQ in Megamound Estate, Ikota, and was built with an indoor 6-seater cinema, fully fitted kitchen with gas cooker, @Businessdayng

automated smart home controlled by Alexa Air conditioner, and a fire hydrant for emergencies. With decades of experience in Nigerian real estate market, Joe Etoniru and Associates offers activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land/landed property. The real estate development arm of the company also helps investors and homebuyers in realising their ideas or dream homes from paper to real property.

Tuesday 04 February 2020

BUSINESS DAY

property&lifestyle London’s rent-to-rent model holds lessons for Nigerian real estate investors ENDURANCE OKAFOR

replica of the London rent-to-rent model in Nigeria holds significant opportunities for local real estate investors and could bring relief for the housing industry which has a deficit of more than 20 million units. The rapidly growing world of ‘rent-to-rent’, also known as ‘rent the rented’ and ‘multilet’ kicked off about six years ago in London, the city with one of the most industrialized real estate sectors in the world. The model requires an investor to rent a house, then sublet the rooms to as many people as possible for a monthly or weekly payments. Damilare Ogundayo, a 29 years old Nigerian who is based in Eastern part of London told BusinessDay he’s raking in £32,000 (N14.8 million) a month in rent – without ever having to buy a property. “I have let out 202 rooms in 30 properties across London; I turned a fat profit by

renting a three-bed house from a landlord, converted the lounge and dining room into bedrooms,” Ogundayo told BusinessDay in London while giving the assurance that he got the permission of the landlord to carry out the sublet. The model could provide a solution to the housing crisis in Africa’s most populous nation which has one of the world’s lowest home-ownership rates and could also tackle rigid rent payment systems in the country. To rent an apartment in Nigeria, one would have to make a down payment of not less than one year, in other cases; some tenants are expected to pay up to 3 years upfront rent. This is however not the case in some African countries like Botswana, South Africa, Benin Republic, Togo and Rwanda, where rent payment frequency is paid on monthly basis without also an upfront or down payment, data from a survey by Lagosbased Estate Intel analysed by BusinessDay shows. According to Adeniyi Akin-

With Oluwakemi Adeyemo

How to prevent abandoned building projects (2)

lusi, president of Mortgage Bankers Association of Nigeria (MBAN) and CEO, Trustbond Mortgage, landlords in some cities in Nigeria collect upfront payment of 2 years because of the high-interest rate on the loans they borrowed from banks and as such are constantly in search for ways to recoup and pay up as soon as possible. “The second reason maybe because they are not sure that the tenants will be consistent in their monthly payment.” He added saying the “fear of high default rate due to the lack of credit collection system,” is a

challenge. The high demand for affordable apartments is one of the factors also cited by industry experts as the reason why landlords require tenants to pay different illegal amounts. The lack of a functioning mortgage system in Nigeria, high cost of developing properties, coupled with the country’s large population whose earning capacity have not improved in years are some of the reasons while most Nigerians especially those in the cities are at the mercy of landlords for accommodation.

Developer opens food manufacturing plant, builds 500-unit residential housing in Alaro City AMAKA ANAGOR-EWUZIE

endeavour, the developer of Alaro City, an emerging city, located in the Lekki Free Trade Zone (LFZ), has delivered and opened for business, the largest Ready-to-Use Therapeutic Food (RUTF) Factory in Africa, owned by Ariel Foods, one year after the launch of the City. It also commenced the construction of a 500-unit middleincome residential building project being developed by Universal Homes, and the unveiling of several other investments across key economic sectors, all sited in Alaro City. Speaking at the commissioning of the Ariel Food Factory and ground-breaking ceremony of 500-unit middle income residential housing, Babajide Sanwo-Olu, Governor of Lagos State, described the food factory as a welcome development because of its relevance, considering the challenges Nigeria is facing in tackling malnutrition among Internally Displaced Persons (IDPs) in the north-eastern part of the country. Ariel Foods, according to him, is one of the leading suppliers of Ready-toUse Therapeutic Foods to UNICEF and the World Food Programme globally, which saw an opportunity to add value by domesticating their production in Nigeria for local and export markets. “By choosing Lagos as the site for this investment,

they have put us on the map of major contributors to food security and humanitarian relief in Nigeria and West Africa. This is in addition to the direct and indirect jobs that will be created, and the accompanying increase in technical capacity,” said Sanwo-Olu, who was represented by Bola Balogun, permanent secretary, Ministry of Commerce, Industry and Cooperatives. Sanwo-Olu, who stated that construction, was set to commence in the planned 500-unit middle income housing, said the project will help contribute to the fulfilment of housing strategy in Lagos State. Stating that Lagos has continued to be an important contributor to the significant progress Nigeria has been recording on the World Bank’s Doing Business Index, San-

wo-Olu assured that Lagos will continue to welcome local and foreign investors to partner in its quest to deliver a Lagos that works. “As a public private partnership between Rendeavour and the Lagos State Government; our goal is for Alaro City to become a veritable model for PPPs of this kind and for the kind of reasonably-priced and climate-friendly urban developments that Lagos deserves, as a 21st century megacity,” he added. Frank Mosier, chairman of Rendeavour said the firm is investing in creating the infrastructure as well as the living and working spaces that will help sustain and accelerate Africa’s economic growth, and serve as a catalyst for further urban development. “When we launched Alaro City one year ago, we prom-

Yomi Ademola, Head West Africa; Frank Mosier, Chairman; and Stephen Jennings, CEO and Founder, all of Rendeavour. www.businessday.ng

Talking Real Estate

ised to deliver investment and jobs to Lagos State and Nigeria. So, it is with great pleasure that we welcome a major food producer and housing developer to Alaro City. Global, regional and local companies are building facilities in Alaro City, taking advantage of its ideal location for transport and logistics, free zone status, secure land title and high-quality infrastructure,” he said. Dhiren Chandaria, chairman of Ariel Foods said his company was proud to expand its production to Nigeria, and to play a major role in food security in West Africa through the production of Ready-to-Use Therapeutic Foods to feed malnourished children and to supplement the diets of persons with special nutrition requirements. John Latham, executive director of Universal Homes, said Universal Homes is bringing its high-quality, accessibly priced apartments to Nigeria, in partnership with Alaro City. “We are pleased to play a role in the housing agenda of Lagos State and to be the pioneer residential development in Lekki Free Zone surrounded by amenities like shops, schools and healthcare,” he said. According to him, the first phase of Unity Homes at Alaro City will feature up to 500 apartments, starting at US$55,000 (N20 million), with future phases expanding the project to 2,000 apartments.

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here is a myth that shelter needs in real estate are fixed and so, the solutions required will remain fixed. But, shelter needs change over a cycle of time which may span from 10 to 50 years or more. As demography changes, human needs change and so do shelter problems. There is a level of disparity between the rates at which shelter needs are evolving relative to the rate at which products designed to meet them are. This has led to many abandoned, gigantic projects scattered around cities in Nigeria as well as the disappearance of several employment-creating industries. Let’s even assume that shelter needs don’t change and income level has been good, would there still be cases of abandoned properties? Absolutely yes. There would be for this reason – improperly done investigative due diligence. For clarity, the dictionary defines due diligence as a comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its commercial potential. It is a reasonable step taken by a person (an investor) to avoid committing a tort or offence. A tort is a wrongful act or an infringement of the right leading to legal liability. This critical cause of abandoned projects has stood out over time. Due diligence is one phrase that, over time, has been discovered to mean different things to different stakeholders. Again, because some cities have existed for decades, the components of due diligence in such cities will differ from what would obtain in newly created states. An investor’s due diligence on a real estate investment, in addition to the 5WH critical thinking model approach, would reveal threats to the success or end goal of an investment. So far, a major challenge to conducting effective due diligence in the property sector is the lack of clarity and mutual understanding amongst stakeholders as per what due diligence should mean for individual projects. An investor needs to understand and define the elements of foolproof due diligence as regards the real estate project of interest before embarking on such. In addition to understanding the critical elements of due diligence, it is equally important to communicate it to all stakeholders such that there @Businessdayng

is the unity of purpose and all stakeholders can work towards or protect the vision as best as possible. It is detrimental to the success of an investment goal when an investor and other stakeholders on the project have differing, strongly held opinions about investigative due diligence. Such a project is dead on arrival. Due diligence, covers five major aspects of the real estate business and other businesses. These five aspects branches into different kinds of due diligence investigations. Due diligence in real estate becomes easy to understand, undertake and communicate under the five headings. These headings branch out into specifics when you apply the 5WH model question set to each. Applying the 5WH model tailored to a particular due-diligence exercise simplifies investigative due diligence. A handful of properties in Nigeria are subjects of litigation. Although this fact is usually concealed as much as possible. This, most likely, is as a result of the little or no effort put into understanding how real estate development is designed to work at a national level. Again, Nigeria has evolved through different systems of law. A piece of real estate is often a liability or litigation waiting to be passed to the next unsuspecting investor. A level of paranoia is required of an investor to ensure that no aspect of a building project is left unchecked. Not checking all that needs to be checked has contributed to the many incidences of abandoned projects. Once a project gets abandoned, returns, profit or even appreciation becomes far-fetched or outrightly impossible as it has been in many cases. Conducting foolproof due diligence would not have been herculean or delicate if there exists a body of trusted and organized data on every real estate transaction that takes place in the nation which is made accessible to all, without unnecessary bureaucracies. However, this data and information challenge should not deter an investor from investing. Rather, it should be a good reason to come hard on conducting a foolproof investigative due diligence before undertaking any real estate investment project. The simplified 5 aspects and checklist of real estate due diligence is available on request. To request, send 5 Aspects of DD to info@ futureperfectproperties.com

Tuesday 04 February 2020

BUSINESS DAY

BDTECH

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There’s not enough women-led tech startups and it’s costing us all Muhammad Nabil, partners and startups strategy lead, Microsoft 4afrika

frica’s technology startup scene is vibrant – and growing fast. There are currently over 640 active technology hubs across the continent, and according to Partech Africa, start-ups raised $1.163 billion raised in equity funding in 2018 – a 108 percent year-on-year growth. Topping the list are fintech start-ups, who raised $132.75 million in 2018 – enjoying 39.7 percent of all funding. Despite this momentum, however, there’s a concerning trend: Globally, women-led start-ups only receive two percent of all venture capital (VC) funding – and the picture within enterprise tech is dimmer. Additionally, of all start-ups, only 22 percent are founded by at least one woman. Africa-specific data is lacking, but sources suggest only nine percent of start-ups have women-leaders, and female-led South African start-ups receive only 4.5 percent of all funding. Female-led start-ups are in short supply. And, where they are available, they often lack the investor backing to scale. The result is a significant loss of insight, perspectives, development and solutions, which affects us all. African tech start-ups are renowned for building solutions to some of the most complex challenges. This often stems from having first-hand experience of the problem, and knowing best how to solve it. In Nigeria, payment technology

company Flutterwave enables Africans to build global businesses that can accept and make any payment from anywhere in the world. Their goal is to see that any merchant can process their payment with ease. By aggregating payment services from multiple gateways and placing them under one platform, Flutterwave is also helping international merchants more cost-effectively navigate the local market by embracing alternative payment methods, such as mobile money. Technology like this is set to completely redefine the way we interact with the world. But if technology is only being created by a portion of the population, how effective will it really

be? Without the input and contribution of women, how many challenges and opportunities will go unnoticed, or only partially met? Innovation needs diversity Microsoft recently partnered with Sehat Kahani, a tele-health start-up founded by two women, Iffat Zafar and Sara Khurram, in Pakistan. As doctors themselves, they noticed a recurring “doctor-bride” trend, where only 23 percent of female medical graduates in Pakistan become registered physicians. The others either move abroad, or stop practicing after marriage due to socio-cultural pressures and household responsibilities. Yet, Pakistan is in desperate need of doctors, with a doctor-patient ratio of

1:1200. Sehat Kahani developed a platform that pairs these female physicians with patients in need of healthcare. Patients receive affordable and quality care virtually using tele-medicine, while female physicians are able to remain active, working at home on their own hours to effectively balance family life. If it weren’t for these two women entrepreneurs, this challenge, opportunity and approach could have been missed entirely. Diversity is better for business Investors recognise the need for diversity in the long-run, which makes the lack of early-stage funding for female start-ups perplexing.

Studies show that start-ups with at least one female founder raise, over time, 21 percent more VC funding than companies with all-male teams. Similarly, research also shows that if women and men participate equally as entrepreneurs, global GDP could rise by approximately three to six percent. Diversity in business doesn’t just yield better innovation, but better financial results too, as mixed teams are better able to recognise and capitalize on market opportunities. So, the question becomes: What is needed to encourage more women to start businesses, and investors to take bigger bets on them earlier? Firstly, female entrepreneurs need to be given equal access to the tools needed to succeed as their male peers, including access to finance, technology, markets, information, skills and services. Second, and as a partial solve to the first, investing in diversity starts with having a diverse team of investors. Start-up mentors, investors, pitch competition judges and all ecosystem players should come from diverse backgrounds, able to recognise, relate to and see the potential in different challenges and opportunities. Last year’s Africa Seedstars Summit had a dedicated focus on female entrepreneurship, which is a positive step forward. However, the focus should not be on women-only initiatives or women-specific conversations alone, but on initiatives and conversations centered around all start-ups, where women are considered and treated as equals. Diversity and inclusion are not an initiative, they’re a lifestyle.

Smile resolves service breakdown with MainOne, Glo intervention …Says active redundancy with cable providers will protect consumers Jumoke Akiyode Lawanson

mile, one of Nigeria’s 4GLTE broadband service providers, affected by the recent downtime and disruption of internet service caused by the cuts in submarine cable, has been able to successfully resolve the issues with the swift intervention of MainOne and Globacom cable partners. The company which has restored full service, commended both MainOne and Globacom for “the relentless support both firms offered to Smile to aid

the quick delivery of additional capacity required during the recent WACS submarine fibre cut,” in a press statement. Expressing his delight, Ahmad Farroukh, the group CEO of Smile Communications, said; “there was huge demand for IP capacity from other operators in Nigeria during the unfortunate incident. We at Smile appreciate the commitment shown by MainOne and Globacom to make quick alternative arrangements with multiple upstream providers to accommodate the Smile telecommunications network.” “We should take learnings from

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the recent WACS and SAT3 cable cuts that resulted in the disruption of internet services in the country,” he said. In his applause to Ali Isa Pantami, the minister of communications and digital economy, Nigerian Communications Commission (NCC) and in achieving the National Broadband Committee objectives, Ahmad Farroukh pleaded that the minister and the regulatory agency should facilitate an environment where all Nigerian and Non-Nigerian cable providers will have active redundancy on each other so that consumers will not be

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impacted negatively in case of similar occurrence in the future. For example, if submarine cable X was subject to a cut, other cables existing in Nigeria should be able to carry on the lost capacity without negatively impacting the end users. Smile, renowned for the primacy of its customer’s service, said it regretted any inconvenience caused by the slight disruption in its service rendition in some areas and assured all its stakeholders that their best interest remains upmost in all its consideration. Smile, launched the first 4G LTE

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network in West Africa in Nigeria in 2014 revolutionising the way people access the internet. The company was the first to launch VoLTE on its network and has continued with its innovation, having introduced SmileVoice, which is a free mobile app that enables customers with any Android or Apple iPhone device (including those which are not VoLTE-enabled) to make clear voice calls over Smile’s 4G LTE network. It was also the first to introduce an unlimited offering, which enables what it calls SuperFast data and SuperClear voice, all on one bundle.

Tuesday 04 February 2020

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Samsung embeds high tech functionalities in new mid-range devices Jumoke Akiyode-Lawanson

one are the days when medium to low range mobile devices meant that you were missing out on advanced technology features, as Samsung has for th e first time, included cutting edge design and futuristic features in its newly launched Galaxy A71, Galaxy A51 and Galaxy Note 10 Lite. Samsung Nigeria officially launched the new devices into the market on Friday 31, January, highlighting the company’s continued efforts to bring pioneering technology to all Nigerians by ushering in a new decade of innovation. According to the company, its A Series is a showcase of a brand with a purpose. Dudu Mokholo, chief marketing officer, Samsung Central Africa reiterated Samsung’s focus on innovation for all - “We are committed to bridging the gap between flagship features and affordability. I believe the Galaxy A Series offers the best value in its segment. Additionally, the power of the Note10 Lite and its famous

L-R: Stephen Okwara; mobile quality assurance engineer, Omolade Agbadaola; marketing specialist, Anselm Etiobhio; head retail and Adetunji Taiwo; head, information technology and mobile (IM), during the launch of Samsung Galaxy Note10 Lite and A Series into the Nigerian market on Friday 31, January 2020.

S Pen is now accessible to more people in Nigeria.” The Galaxy A71 and Galaxy A51, the latest addition to the highly successful Galaxy A Series is available in the country in February, while the Galaxy Note10 Lite will be released in the next few weeks. Both devices include flagship features at an affordable

price. “We are proud to connect with a new generation of consumers from the value-seekers to the power users. We will continue to listen to the needs of the local market and bring innovation that empowers all,” Dudu Mokholo said. Speaking to journalists dur-

PMSL launches advanced IT solutions for service industries Jumoke Akiyode-Lawanson

n a bid to redeem Nigerians from the menace of disservice and the frustration of not necessarily receiving value for money which has plagued service industries in this country, Precise Management Systems Limited (PMSL), an indigenous software company based in Lagos, has introduced a range of IT solutions to tackle this issue at various levels. The company which is in partnership with with some of the top technology, research and development (R&D) and education providers in China, India, Spain, the United States and Nigeria, says its range of solutions are developed to ensure that customers get value for money across all industries. PMSL launched into the Nigerian market, a range of products and services including enterprise solutions (Integrated Enterprise Management System – IEMS, Hospital Management System – HOSMART, etc.), hardware solutions and services (ATM services and support, ICT centers implementation and support, biometric and security solutions), training and certification services (lead-

ership, management consulting, quality management and control, information security, HR certifications, etc.) PMSL also offers management and professional consultancy services for all industries both in public and private sectors. Speaking recently at an event held to launch the company’s solutions in Lagos, Darlington Umehnsofor, CEO/MD PMSL, said that the dream to develop these solutions was birthed out of the dismay and frustration discovered in various fields of endeavor where, customers do not always get value for which they were charged. According to him, some organisations either do not have the right training and structure in place to provide such services or there is poor service culture within the organisation. “As customers, it is either because the staff of the organisations that we subscribe for services do not have adequate training on service management or the organisation in question does have service culture. It could also be because we do not have consumer protection rights being strongly enforced in Nigeria,” he said. “As employees, it is not because we do not have the capacity to render exceptional service, www.businessday.ng

but the structure, culture, and management of the organisations we have at one point or the other found ourselves have eaten up the ethics of quality service,” Umehnsofor said. As a result of lingering poor quality of service, a team of likeminds came together to form a formidable team to redeem prospective customers from losing money on poor service delivery with the help of cutting edge IT solutions. In an interview with BusinessDay, Umehnsofor, said that PMSL is set to displace foreign software organisations through its advanced software solutions. “In the next 5 years we will be competing with various foreign organisation like Oracle because of our integrated management systems. Furthermore, he said, “Nigeria will be free from the shackles of foreign exchange restrictions and hindrances. It’s been noted that Nigerians pay a lot to these foreign organisations, but now we have developers that can create software that will solve our problems. Hence we can pay with out own local currency. Our dream in PMSL is to expand not just in Nigeria but other African countries.”

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ing a press conference held at the Samsung Nigeria head office in Lagos, Adetunji Taiwo, head of information technology and mobile, Samsung Nigeria, said that because the OEM is always looking to meet people’s needs, advanced technology such as macro-shot camera that allows focus on subject and blurred background, as

well as other unique features have been put in the A series devices for the first time. “Built to make meaningful innovations and awesome mobile experiences to everyone, the Galaxy A71 and A51 are packed with enhanced features: a longer-lasting battery to keep up with your busy lifestyle, a smarter camera to help capture the world as you see it and an Infinity-O display that gives an uninterrupted visual experience,” he said. Customers will also be able to get the premium Note experience and increase productivity on the Galaxy Note10 Lite smartphones. Its standout specs include spacious, 6.7-inch immersive display, 4,500mAh batteries with super fast charging and Samsung’s latest and greatest camera technologies. These enhancements, along with the Galaxy Note10 Lite’s everversatile S Pen, make it easy for users to capture, create and share more moments, and enable them to experience whole new levels of productivity. According to Samsung Nigeria, the recommended retail price for its Note 10 Lite is N183,300 while the A71 will sell for N142, 900 and the A51 will cost N103,800.

Sony unveils latest range of mirrorless cameras for photography enthusiasts in Nigeria Jumoke Akiyode-Lawanson

ony Middle East & Africa has launched the latest range of Alpha mirrorless interchangeable lens cameras in Nigeria in collaboration with Kontakt Pro to meet the growing demand for more sophisticated camera technology in the African market. The cameras were unveiled at a workshop held for photo enthusiasts and professional photographers in Lagos. Guests got a glimpse into Sony’s industryleading mirrorless cameras and lenses, which take imaging far beyond the capability of a smartphone and turn everyday shots into a beautiful work of art. Speaking about his experience with the new Sony cameras, professional wedding photographer, Akintayo Timi said he has been able to change the dynamics of his work by delivering wedding photos in 10 days or less due to the cutting edge technology in the new camera models. “It is easier to deliver clean, crisp pictures because the quality of the sensor in the camera is top notch and as a photographer, you don’t need to do too much editing on your shots,” he said. As the global leader in mir@Businessdayng

rorless technology, Sony says it has developed these industryleading technologies based on five fundamentals – lens, image quality, speed, battery life and compact and lightweight. Its mirrorless cameras offer the fastest shooting speed with Auto Focus (AF) and Auto Exposure (AE). It also offers the best performance for portraits with Animal Eye tracking and the best performance to shoot completely silent with full AF. This is in addition to its stellar battery – which lasts two times longer than any other camera model. Sajeer Shamsu, head, business development, digital imaging, Sony Middle East & Africa said, “Sony’s industry-leading innovations in digital imaging technologies, like processors, sensors and software algorithms and their rapid deployment in our cameras, has made us the go-to brand for photography and videography professionals and enthusiasts around the world. We are delighted that one of our key markets in Africa will have access and be able to use our innovative products.” Some of the Alpha range of cameras that will be available in Nigeria’s market include the A6100L, A6600M, A6400L, A7M3, A7RM3 and A7RM4.

Tuesday 04 February 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Policy

Poor policies that will rain on Nigeria’s gas year with an in-depth knowledge and understanding of the Nigerian gas industry.

ISAAC ANYAOGU

imipre Sylva, the minister of state for Petroleum Resources in a recent press conference said that 2020 is Nigeria’s year of unlocking gas investments but without concrete plans to review regulatory and failed policies, progress will be stymied. Though with over 200 trillion-cubic feet (TCF) of gas, Nigeria has often treated gas as the irritant to get out of the way in the search for gas. The Nigerian Petroleum Sector is oil focused and gas is largely subordinated to oil for legislative and regulatory purposes. The result of this is that even with the 9th largest gas reserves in the world, Nigeria lacks a comprehensive legal and fiscal regime for natural gas. It has no framework to attract sufficient investment in the gas industry. What passes as strategy is the Nigerian Gas Master Plan created in 2008 to create a framework for gas infrastructure development. Its goal was to serve as a blueprint for infrastructure, guarantee domestic supply obligation and a commercial framework. Analysts say the lack of comprehensive legal and regulatory framework inhibited the attainment of the overall objectives of the gas master plan. In 2017, The Federal Executive Council passed the Nigerian National Gas Policy intended to remove the barriers affecting investment and devel-

opment of the sector and transit Nigeria from an oil-base to an oil and gas based economy but like the gas masterplan, it also lacked legal framework. Sylva said this government will pass the Petroleum Industry Bill before the end of this year, but fears that the version that will be passed will be too nationalistic, it will turn off investors are legitimate. Nigeria passed a deepoffshore act months ago and International Oil Companies are not persuaded to invest in the country. Therefore, to make this year truly a gas year, the government will need to recognise gas a commodity in its own right. This involves creating a petroleum law designed for gas and inclusion of downstream gas in

legislations and streamline current laws that are overlapping. The legal and regulatory framework of the industry does not contemplate the midstream and downstream gas sectors as such it does not address the licensing, regulations and fiscal regime which would govern the activities in the sector. This has to be the priority of government if it is serious about developing gas. Gas needs to be regarded as a fuel in its own right and is done in the oil sector, the upstream should be separated from the mid stream. Regulation must engender competition, pricing should be liberalised, fiscal regime created, and ownership of gas infrastructure separate from ownership and operations of

gas trading. The gas chain has to be clearly delineated and backed by relevant legal framework which will activate the several laudable proposals made in the Nigeria Natural Gas Policy with respect to the legal and regulatory framework of the midstream segment of the natural gas sector. This will entail the unbundling the petroleum industry thereby having a standalone natural gas sector. The critical task for government going forward according to experts is developing a robust legal and regulatory framework specifically for the midstream segment of the Nigerian gas sector and engaging competent policy and regulatory oil and gas experts

Presidential Directive on Gas Pricing to the Textile Industry The Federal Government recently directed that end user gas price of $3.85/Mscf for textile manufacturers based on a distribution tariff of $1.15 and marketing margin of $0.50. The policy will apply retroactively from January 2018 ripping apart all contracts entered between producers and customers based on the government-approved price of US$7.62/Mscf. Operators say this action of the executive arm of government was ultra vires as it did not possess the legal power or authority to issue such directives In their view, Nigeria lacked a comprehensive legal and regulatory framework with the appropriate channels for issuing these types of directives in the gas sector, gas subsidies and appropriate gas policies/ laws and The proposed flat price provided for the textile industry failed to take into consideration the distinct investments undertaken by the distribution companies in the downstream sector and the underlying contractual framework by which they agree to supply gas to end-users. “In a nutshell, the proposed gas regime only contemplated the gas producer’s and transportations cost to the detriment of the local distribution companies,” one operator said.

Nigeria faces new uncertainty as coronavirus disrupts oil markets STEPHEN ONYEKWELU

igeria faces a new source uncertainty to its foreign exchange earnings as oil prices have continued to tumble because of fears that the coronavirus outbreak in China would depress oil demand, in the short term at least. As a country, Nigeria depends earns over 90 percent of its foreign exchange from oil exports and needs this to keep the naira stable through the activities of the Central Bank of Nigeria. At 10:52 a.m. on Friday, West Texas Intermediate (WTI) crude was down 2.38 percent at $52.06 and Brent Crude was trading down 2.39 percent at $57.52,

both flirting with the bear market territory. Since the outbreak of the coronavirus in China, oil prices have lost more than 10 percent, and are now at their lowest levels since early October 2019. The thought of dampened demand from the world’s secondlargest oil consumer outweighs even significant geopolitical risk, as well as tangible oil production outages such as the attacks on Saudi Aramco oil facilities in September and Libya’s current nearly complete outage of over 1 million barrels per day. China’s oil consumption was 13.50 million barrels per day in 2018 and oil demand has been growing at an annual rate of 5.5 percent.

The naira usually mirrors the movement in oil prices. Falling oil prices historically have the tendency to tighten liquidity on the currency market. Dollar shortage subsequently puts pressure on the naira and prompts the Central Bank of Nigeria to intervene in the foreign exchange market through open market auctions to boost dollar liquidity. Nigeria operates a multiple exchange rate regime, which it has used to manage pressure on the currency. The official rate of N306.90 is supported by the Central Bank but the traded rate of N364 is widely quoted by foreign investors and exporters. In response to this new uncertainty, the Organisation of

Petroleum Exporting Countries (OPEC) members are considering holding an emergency meeting this month, as oil prices sink on concern the coronavirus outbreak will hit demand. Mohamed Arkab, the Algerian energy minister said the producer group’s meeting scheduled for March is likely to be moved to February, the Algerie Presse Service reported. A decision may be taken “in the coming days,” he said. He currently holds the rotating post of OPEC President, giving him the authority to convene emergency meetings in consultation with the SecretaryGeneral and other members. The Severe Acute Respiratory Syndrome coronavirus (SARSCoV) could have the same effect

on the oil market as the original SARS outbreak back in 2002, which saw the price of oil dip by 20 percent some experts have said. Goldman Sachs observed that if it mimics the last virus-induced supply shock, the oil market could see a drop of 260,000 barrels per day in the global oil demand market, 170,000 bpd of which would be in the form of jet fuel. Goldman predicted earlier last week could see oil prices fall by $2.90 per barrel, but oil prices have already fallen more than $4.50 per barrel over the last few days alone, with the Brent benchmark falling to $57.41 on Thursday from $65.95 on Monday. And this is despite major oil production outages in Libya.

Tuesday 04 February 2020

BUSINESS DAY

ENERGY INTELLIGENCE Companies&Market

Shell’s gas production in Nigeria hits five-year high DIPO OLADEHINDE

lobal oil giant, Royal Dutch Shell, has announced that its total gas production in Nigeria grew to 642 million Standard cubic feet (Scf ) per day in fullyear 2019 which was higher compared to its operation in other African countries which have a combined total of 335million Scf within the same period. In the company’s fourthquarter report, Shell said Gas production available for sale in Nigeria rose to 642 million standard cubic feet per day from 632 million scfpd in 2018 and 647 million scfpd in 2017. 2019 increase in gas production can be attributed to Shell Nigeria Gas (SNG), increasing its gas distribution capacity by over 150percent following the safe completion of its second gas train, the Agbara-Ota Capacity Increase Project in the second Quarter of 2019. The new gas plant facility which was described as the “Agbara-Ota Capacity Increase Project” in Ogun State is Shell’s second gas train in Nigeria delivering reliable supply to industries, industrial parks, and manufacturing companies in the Lagos state, Ogun states, Abia and Niger delta states. SNG, which is also the country’s first and whollyowned subsidiary of an international oil company involved in domestic gas distribution in Nigeria disclosed the first phase of its pipeline expansion was already completed in Abia State, which directly con-

nects to the Osisioma Ngwa manufacturing industrial hub in the state. Also through the gas line expansion in Abia State, the company was responsible for delivering pipeline gas to IPP Consortium which is the electricity provider to the popular Ariaria market in Abia State, a development that reflected in the company’s gas production in 2019. In its newly released report, Shell said its total production in Nigeria increased in 2019 to 176,000 barrels of oil equivalent per day, the highest level in five years. In 2018, total production in Nigeria stood at 161,000 boepd, up from 159,000 boepd in 2017. Also, the company’s liquid production available in Nigeria increased from 47,000 barrels per day in 2017 and 51,000 bpd in 2018 to 65,000 barrels per day in 2019. Royal Dutch Shell pioneered Nigeria’s oil and gas industry and remains a

major investor in the West African country. But over the decades it has come under fire over spills in the Delta region and struggles with oil theft, corruption and oil-fueled violence. Shell said net income adjusted for cost of supply its preferred profit measure dropped to $2.9billion in the three months to December 31. This compared with $5.7billion in the same period the previous year. Full-year earnings for 2019 were 23 percent lower at $16.5billion. Shell said that it would slow investor payouts dramatically and planned to buy back $1billionn of shares between now and April 27, compared with $2.8billion in the fourth quarter of 2019. “The strength of Shell’s strategy and portfolio has enabled delivery of competitive cash flow performance in 2019 despite challenging macroeconomic conditions in refining and chemicals, as well as lower oil and gas prices,” Shell’s

CEO Ben van Beurden said in the report. The Shell boss noted that the company generated $47 billion in cash flow from operating activities excluding working capital movements and distributed over $25 billion in dividends and share buybacks to our shareholders. “We remain committed to prudent capital discipline supported by world-class project delivery and are looking to further strengthen our balance sheet while we continue with share buybacks. Our intention to complete the $25 billion share buyback programme is unchanged, but the pace remains subject to macro conditions and further debt reduction,” Van Beurden said. Shell had previously said it needed Brent crude prices to be above $65 a barrel in 2019 and $66 a barrel this year to meet its debt reduction targets and maintain the pace of share repurchases. Prices have largely been lower than that since June.

Equatorial Guinea launches Year of Investment 2020 Campaign ISAAC ANYAOGU

quatorial Guinea has kicked off a year-long investment campaign aimed at driving capital investment into the country’s bankable projects, casting uncomfortable scrutiny on Nigeria’s many investment roadshows under former Minister of State for Petroleum Ibe Kachikwu which yielded nothing. Major U.S. firms have pledged to increase their investment in Equatorial Guinea in 2020, along with Nigerian banking and financial institutions; Notable investment-ready projects include the construction of two modular oil refineries, an ammonia plant, a urea plant and a gold refinery; The first in-country investment event will be the Africa Oil & Investment Forum & Exhibition hosted in Malabo (April 1-2). Equator ial Guinea’s Ministry of Mines and Hydrocarbons (MMH) has officially launched its Year of Investment campaign, with a series of foreign investors already making their commitment to increasing planned investment in the country in 2020. In a bid to position Equatorial Guinea as a regional and international investment hub, the country aims to engage with financial entities and engines of growth in neighboring economies. High-level Nigerian investors, bankers and financiers, including Africa Financing Corporation, Sterling Bank, First Bank, UBA and Zenith Bank, are currently in talks with the MMH about project financing opportunities. The Nigerian Content Development and Monitoring Board, in partnership with Waltersmith Petroleum Oil Limited, has pledged to assist Equatorial Guinea in the development of its modular refineries, with the Nigerian modular refinery serving as a model for op-

eration and local content engagement. Owned by U.S. upstream giants Marathon Oil, Noble Energy and state-owned Sonagas, the Atlantic Methanol Production Company, meanwhile, announced its aim to double down on planned investment in the expansion and diversification of the country’s downstream sector through the construction of a methanolto-gasoline and derivatives unit. As part of its initiative, the MMH is targeting one billion dollars in foreign direct investment to be channeled into several key investment opportunities in both Equatorial Guinea’s and Africa’s energy sectors. These include, but are not limited to, modular oil refineries, an ammonia plant, a gas import terminal, liquefied petroleum gas storage tanks and other projects spanning the entire energy value chain. Equatorial Guinea 2020 Year of Investment serves to attract foreign direct investment into key industries in Equatorial Guinea that will diversify the country’s energy sector, boost entrepreneurship, generate profit for investors and create jobs. The campaign is anchored by three in-country investment-driven events: Africa Oil & Investment Forum & Exhibition (April 1-2); Oil & Gas Meeting Day (June1-2); and the Africa Economic Forum (November 24-25). International roadshows include: the UAE – Atlantic Council Global Energy Forum (January 10-12); Nigeria International Petroleum Summit (February 9-12); US-CERAWEEK 2020 (March 9-13); Canary Islands – O&G Meeting Day (June 1-2); Russia – St. Petersburg International Economic Forum (June 3-6); China – Equatorial Guinea Forum (July); UAE – ADIPEC (November 11-14); and U.S. – 23rd World Petroleum Congress, Houston (December 6-10).

Investment

Three ways to achieve boom in Nigeria’s domestic gas industry STEPHEN ONYEKWELU

igeria’s domestic oil and gas industry has stagnated due to many reasons but these three things when addressed will stimulate growth in the sector and improve the country’s overall economic wellbeing. The Ajaokuta-KadunaKano gas pipeline The Federal Government of Nigeria (FGN) has prioritised exploitation of the country’s vast gas resources to increase domestic and industrial power supply, raise living standards and sup-

port sustainable economic growth and diversification. The Nigerian National Petroleum Corporation (NNPC) estimates that Nigeria has around 202 trillion cubic feet (Tcf) of proven gas reserves plus about 600 TCF unproven gas reserves. Despite having the largest gas reserves in Africa, only about 25 percent of those reserves are being produced or are under development today. A challenge that has slowed down gas development and utilisation in Nigeria is the lack of pieces of infrastructure such as gas pipelines to move natural

gas from the point where it is produced to the marketplace and end-users. This is why the Ajaokuta-Kaduna-Kano gas pipeline is a critical factor and can spark a new wave of boom in the gas industry. The Ajaokuta-KadunaKano (AKK) pipeline is a 614 kilometre-long natural gas pipeline currently being developed by the Nigerian National Petroleum Corporation (NNPC). It is set to be laid between Ajaokuta and Kano in Nigeria and forms phase one of the TransNigeria Gas Pipeline (TNGP) project. The pipeline project is be-

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ing implemented via a build and transfer (BT) public-private partnership (PPP) model, which involves the contractor providing 100 percent of the funding. The pipeline will cost an estimated $2.8bn and is currently scheduled for commissioning in 2020. Nigeria will close a $2.5bn financing agreement with Chinese lenders by the start of the second quarter of 2020 to fund the single biggest gas pipeline project in the country’s history. On completion of the 614km Ajaokuta-KadunaKano (AKK) natural gas pipeline, new gas-to-power

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plants will push power generation capacity to more than 10,000 megawatts (MW), in a country of nearly 200 million people that have faced perennial electricity shortages for decades. Nigeria Gas Transport Network Code (NGTNC) The Department of Petroleum Resources (DPR) has for at least five years been working on plans to release the Nigeria Gas Transport Network Code, a set of rules that are supposed to guide the use of the gas transportation system in the industry. The aim is to stimulate private sector participation in @Businessdayng

building pipelines. The network code provides for non-discriminatory open access to gas transport infrastructure, and is usually developed by the Transport System Operator (TSO) in consultation with stakeholders and approved by the regulator. The Code is patterned after the United Kingdom’s Uniform Code (UNC). This is expected to promote investments in the gas sector; entrench specialisation and professionalism in gas business; develop the gas industry, and boost revenue generation for the country.

Tuesday 04 February 2020

BUSINESS DAY

offgrid Business

How Powerup Renewable’s customer focus won it BusinessDay Fastest Growing SME Award ISAAC ANYAOGU

owerup Renewables is an indigenous renewable energy established,,, has since grown to offer customer-focused service which and has made the country emerge among top renewable energy companies in Nigeria, earning it an inclusion in BusinessDay’s profile of fast growing firms in the country. The company was founded by Chidi Obike, a seasoned, technology and business professional with over 14 years experience working at multinational companies such as Ericsson and Huawei in senior sales management roles, before founding Powerup Renewables Ltd. “I am very passionate about contributing my quota to the economic development and technological advancement of my beloved country Nigeria which is among the major reasons I established this company,” Obike said. According to Obike, the company has extensively designed and installed SolarPV and Hybrid systems for clients spanning various industry sectors such as commercial, industrial and residential. “Providing economically viable energy solutions to our customers while practicing high ethical business standards is what we do. We provide our services nationwide, with plans to expand into West-Africa soon,” he said. In recognition of the com-

Chidi Obike

pany’s strides, it was awarded the Businessday Top 100 Fastest Growing SME 2019 Award. Obike’s says it was a great honour to be recognised “on such a distinguished platform, and fires up our motivation to do more in helping to bring Nigeria out of her power crisis.” It is estimated that over 600million people are without energy access in Sub Saharan Africa and energy poverty sees over 100million people use kerosene, wood and other dirty energy sources in Nigeria. Powerup Renewables says it was to address this need. “Nigeria spends about

$14billion annually on running generators for power supply, which is mostly inefficient, poor quality, noisy and polluting. “Availability of reliable electricity supply is a key driver of economic growth, prosperity and social well being of any nation. Nigeria has been plagued by inadequate and unstable power supply for decades now from the national grid. Over 50% of the population have limited or no access to the grid, with no solution in sight. “Hence I decided you contribute my quota in service my nation to solve this power crisis and put her on

the path of economic recovery by setting up Powerup Renewables. Obike counts on renewable energy systems, especially solar energy reputed to be reliable, giving 24hrs power supply, quick to deploy, and cost-effective to achieve these goals. “They can be easily deployed at locations where they are needed eliminating the need for expensive extension of the national grid to all areas. Also greatly reducing or totally eliminating the money spent of fuel generators According to Obike, the company’s mission is to make renewable energy systems

accessible and affordable in Nigeria and Africa, through continuous provision of innovative solutions tailored to this environment. “We created various product packages to cater for all income brackets of individuals and businesses. We pride ourselves as a pioneer in offering flexible installment payment plans of 2 years and above, which makes acquiring solar systems easy on the pocket and affordable for all income brackets. Thereby contributing greatly to the alleviation of the power issue in Nigeria. We provide power systems that range from 0.5KVA to 20,000KVA Some of the company’s activities include deployment of Solar Power Systems for Homes and Offices/Companies/Industries, Solar borehole systems for water supply in farms, rural communities etc, solar streetlights and solar powered ATMs for Banks, filling stations, and construction of minigrids for electrification of communities. “We place a lot of emphasis on marketing as a core part of our business strategy. We do a lot of marketing across various channels such as Social Media , Radio broadcast, Billboards. We also carry out extensive physical b2b and b2c sales activities,” said Obike. On the power sector in Nigeria, Obike said there is no end in sight to power issues from the national grid. It is still plagued by a badly implemented privatization program, poor regulation,

absence of a cost-reflective tariff and prohibitive cost of extending the national grid to cater for all communities nationwide. “Deployment of renewable energy nationwide is a sure means of solving the power issues plaguing Nigeria in the short term and long term,” he said. Obike also he believes that solar energy will be able to displace the use of generator sets that Nigerians are addicted to for supply of power to their home and business. “There is a saying that once you taste solar power you cannot go back to generator. As its operating expenses is almost zero, noiseless and does not pollute the environment,” he said. On the issue of multiple taxes and tariffs, the entrepreneur the newly introduced import tarrif on solar components which were increased to 10%, coupled with the company Income Tax levied on solar entrepreneurs and contrary to the Nigerian Renewable Energy Action Plan 2017 and Companies Income Act 2017, has negatively impacted the market by reducing sales growth and market penetration with the resultant revenue loss. “We call on the Ministries of Power and Finance to work together to revert the tariff hike so the much needed rapid growth in the renewable industry can happen, this is critical for economic growth and future of our beloved country Nigeria,” he said.

US-based energy finance firm, Nithio disburses first debt facility to Nigerian solar firm DIPO OLADEHINDE

ashington, DCbased energy finance company with focus on the off-grid sector in Africa Nithio Holdings has announced the disbursement of its first debt facility to Abuja based Winock Solar in partnership with Solar Nigeria for The financial agreement is as a result of a partnership between Nithio and Solar Nigeria, a program funded by UK aid implemented by Adam Smith International that aims to accelerate access to solar power in Nigeria. Nithio provides financing to off-grid solar energy

companies through receivables purchases as well as corporate loans backed by receivables and inventory. Nithio targets a broad range of off-grid solar companies, with initial target markets including Nigeria, Kenya, and Uganda and aims to scale beyond in the next five years. “The successful execution of our first loan agreement is an important milestone in Nithio’s role to provide financing to off-grid solar energy sector,” said Hela Cheikhrouhou, Nithio’s CEO said in a statement seen by BusinessDay. Utilizing its proven credit scoring algorithms, Nithio has uniquely positioned itself to value off-grid solar

companies’ portfolio risk and channel commercial and concessional financing at scale. Nithio’s CEO said as the off-grid solar companies’ further scale and expands into new markets, Nithio helps investors improve their performance by leveraging geospatial data and predictive analytics to better manage energy users’ credit risk. “Nithio serves as a conduit that allows investors to provide scalable funding to the off-grid solar sector in Africa, blending concessional and commercial capital to achieve sustainable future growth of the industry,” Nithio’s CEO said. Nithio supports both

multi-country and local off-grid solar energy companies, providing access to much-needed growth capital. Sanmi Lajuwomi, CEO Winock Solar said the company is excited to partner with Nithio towards providing off-grid solar access to a market of 37 million Nigerian micro-businesses. Winock Solar is a local company focused on improving energy access and reliability for microbusinesses in Nigeria; the company’s mission is to make solar accessible, reliable and affordable to Nigerian micro-businesses for productive use. “Lack of access to clean and sustainable energy is

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

the bane of environmental, social and economic sustainability in Sub-Saharan Africa. The opportunity is apparent, but the poor availability of data and capital makes it difficult to achieve scale,” Lajuwomi said. The CEO of Winock Solar noted that Nithio’s predictive data analytics will help Winock Solar and its industry peers to organize their deep knowledge of consumer behaviour and climatic conditions to develop insight that can be utilized by investors and project developers to solve lack of access to energy in Sub-Saharan Africa. Solar Nigeria program manager Bodunde Onemola said Nithio- Winock

collaboration is in line with Solar Nigeria’s goal of expanding the solar market and consequently improving access for under-served households. Solar Nigeria Programme (SNP) is funded by UK aid and is the largest solar programme in Nigeria. It aims to improve access to clean, affordable energy for poor communities and scale up the private markets for solar solutions. Since its inception in 2014, the Programme has electrified public health and educational institutions across 3 Nigerian estates and has accelerated the uptake of solar energy technology by private households and businesses nationwide.

Feedback: 07037817378, 08137433034, 08135447789

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

Tuesday 04 February 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 03 February 2020

Top Gainers/Losers as at Monday 03 February 2020 LOSERS

GAINERS Company

Closing

Change

N20.6

N18.55

-2.05

JBERGER

N22.5

N21.2

-1.3

0.09

CADBURY

N10.75

N9.7

-1.05

VOLUME (Numbers)

N0.77

0.07

ZENITHBANK

N20.85

N19.9

-0.95

VALUE (N billion)

N8.95

0.05

ACCESS

N9.9

N9.1

-0.8

MARKET CAP (N Trn)

Closing

Change

UPDCREIT

N3.1

N3.35

0.25

UBN

N5.9

0.1

HONYFLOUR

N0.97

N1.06

LAWUNION

N0.7

UACN

N8.9

Company

ASI (Points)

Opening

DEALS (Numbers)

28,533.40 4,752.00 251,591,615.00 3,152

Global market indicators FTSE 100 Index 7,348.75GBP +62.74+0.86% S&P 500 Index 3,261.42USD +35.90+1.11% Generic 1st ‘DM’ Future 28,500.00USD +304.00+1.08%

14.697

Deutsche Boerse AG German Stock Index DAX 13,059.56EUR +77.59+0.60% Nikkei 225 22,971.94JPY -233.24-1.01% Shanghai Stock Exchange Composite Index 2,746.61CNY -229.92-7.72%

Stock investors lose N160bn as market opens week on a negative note …FGN saving bonds subscription opens Stories by Iheanyi Nwachukwu

i g e r i a’s s t o c k market opened this week on a negative note, sustaining the bearish trend seen last week. The market’s benchmark i n d i c a t o r d e c re a s e d by 1.08percent while the record positive return seen this year decreased to 6.30percent. All sectoral indicators closed in the red. The All Share Index (ASI) decreased to 28,533.40 points from 28,843.53 points while the value of listed equities on the Nigerian Bourse decreased from N14.857trillion to N14.697trillion, losing N160billion. Forte Oil Plc recorded the largest loss after its share price dropped from N20.6 to N18.55, losing N2.05 or 9.95percent, while Julius Berger Nigeria Plc

L – R: Olumide Bolumole, head, Listing Business Division, The Nigerian Stock Exchange (NSE); Oscar N. Onyema, chief executive 0fficer, NSE; Jude Chiemeka, head , Trading Business Division, NSE; Wole Obayomi, head of Tax, KPMG; Bola Adeeko, head, Shared Services Division, NSE and Ajibola Olomola – Partner, Deal Advisory, M&A Tax ; Financial Services & Regulatory Services, KPMG during a symposium tagged “Finance Act 2020” at the Exchange, Lagos.

followed, from N22.5 to N21.2, losing N1.3 or 5.78percent. UPDC REIT increased most from N3.1 to N3.35, adding

25kobo or 8.06percent, followed by UBN which advanced from N5.9 to N6, adding 10kobo or 1.69percent. In 4,752 deals,

Investment One boosts investors’ appetite with ‘Ziing’

arely one year after t h e ‘ Z i i n g A p p’ investment App was launched by Investment One Financial Services Limited, it has spurred the appetite of investors in both the capital and fixed income markets. Investment One Financial Services, formerly GTB Asset Management, a wholly owned subsidiary of Guaranty Trust Bank Plc, launched the investment application in Lagos, January last year. Ziing is an app powered by Investment One to ease savings, investments and reduce financial friction. The App was launched to the public on 25th of January 2019 with about three features which are zSave, zPlan and Fixed Income. Measuring the performance and impact of Ziing in Nigeria’s investment space, one year after its launch, Francis Ebuehi,

Executive Director (ED) Sales and Marketing, Investment One Financial Services Limited, said the App has helped thousands of Nigerians (home and abroad) save and become more investment savvy. “Within one year of launch, Ziing has had over 10,000 downloads on Android and IOS devices. Our plan for Ziing is to provide more investment opportunities and make the platform truly ‘amaziing’ for users’, he said. Ebuehi added: ‘’Today on Ziing, users can create target savings, make fixed income investment, trade Nigerian stocks, buy airtime and pay bills. Ziing is doing this by partnering with third parties to facilitate seamless experience on the platform.’’ The Ziing App, according to Ebuehi, is a complete solution package for all classes of investors available on the www.businessday.ng

mobile app, USSD and web platforms “Ziing is an App on your phone that essentially enables you to take control of your finances. It is your money buddy. It is an App that provides the user an array of financial services ranging from timely investment information to identifying available investment opportunities,” Ebuehi explained. A major difference between Ziing and other Apps so far introduced into the Nigerian financial space is its ability to address other financial needs apart from payment. Investment One Financial Services Limited, a leading player in the Nigerian financial services industry and a onestop shop for investors, offers services in asset management, pension fund management, stockbroking and trust services among other financial services.

equity dealers exchanged 251,591,615 units valued at N3.152billion. Zenith, GTB, FCMB, UBA, and FBN Holdings

were actively traded stocks. Market watchers expect this trend to continue into Tuesday trading session.

In another market development, the subscription for Federal Government of Nigeria savings bonds opened on Monday February 3, 2020. The 2-year FGN Savings Bond due February 12, 2022 has coupon rate of 5.91percent while the 3-year FGN Savings Bond due February 12, 2023 has coupon rate of 6.91percent. These bonds are tailored and targeted at retail investors with guaranteed quarterly interest payment and repayment of the principal at maturity. The subscription period for the 2 and 3 years tenored bonds runs from 8am on Monday February 3, 2020 till 12 noon on Friday February 7, 2020. The Savings Bonds will have most of the features of the existing FGN Bond plus other features/benefits to the bondholder. It will be backed by the full faith of the Federal Government of Nigeria and is therefore deemed risk free.

NSE, KPMG highlight implications of Finance Act 2019 on Capital Market

he Nigerian Stock Exchange on Monday February 3, 2020 hosted a symposium on the “Finance Act 2019”. The event for capital market stakeholders held at the Exchange in collaboration with KPMG Nigeria highlighted the implications of Nigeria’s Finance Act 2019. The Act, which took effect on February 1, 2020 has the objectives to promote fiscal equity, align domestic laws with global best practices, support MSMEs, increase government revenues and incentivize activities in the capital market. Speaking at the event, Oscar N. Onyema, Chief Executive Officer, NSE said, “The signing of the Finance Bill into law represents a landmark achievement for the Nigerian capital market. Since 2014, the Exchange

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alongside Securities and Exchange Commission (SEC) as well as other capital market stakeholders have been at the forefront of advocacy with policy makers and tax authorities for favourable tax structures for primary and secondary markets activities in the Nigerian capital market. The NSE, in its efforts to support the growth of the Nigerian economy and its issuers is, therefore, happy to collaborate with leading tax expert, KPMG to highlight the implications of these new rules and provide guidance on how to effectively navigate the provisions of the bill, especially as it relates to taxes.” In attendance at the symposium were investors, l i s t e d a n d p ro s p e c t i v e companies, and other capital market operators. Speaking on the Finance @Businessdayng

Act 2019, Wole Obayomi, P a r t n e r & H e a d , Ta x , R e g u l at o r y a n d Pe o p l e Services, KPMG said, “Finance Act 2019 is a landmark legislation that should be embraced by all stakeholders to ensure it achieves its laudable objectives. “The removal of multiple tax footprints for securities lending and real estate investment schemes is expected to stimulate activities in those segments of the market. The generous incentives for the small and medium enterprises (SMEs) in the Finance Act coupled with the launching of the Growth Board for capital raising by that sector from the Nigerian Stock Exchange, are timely interventions to drive the growth of the economy through the SMEs. Overall, the Finance Act 2019 is a welcome development,” he said.

Tuesday 04 February 2020

BUSINESS DAY

news

FG to review concession of silos across Nigeria Cynthia Egboboh, Abuja

ederal Government has disclosed plan to review the concession of silos leased to private firms across Nigeria. Muhammad Sabo Nanono, minister of agriculture and rural development, stated this during his inspection tour of facility at the 250,000 capacity metric tons silos in Jahun Local Government Area of Jigawa State, where he stressed that the government was ready to revoke the licence of any concessionaire who failed to meet the terms of its agreement with the ministry. Nanono in a statement signed by the director of information, Ezeaja Ikemefuna, said, “We are here to see some of the silos leased to the companies and see whether they are doing the job in accordance with the concession agreement. We will review all the concessions to see if they met the necessary conditions. If they do; we allow them to continue and revoke those who do not comply.” The minister, who noted that the silos were provided in different parts of the country for strategic reserves to enhance the food security programme

of the Federal Government, which is in line with President’ s agenda for the Agricultural Sector. According to Nanono, the facilities were also designed to mop up excess grains during the harvest season for preservation and price stability. In his remarks, the state governor represented by the Secretary to the Jigawa State government, Adamu Abdulkadir Fanini, who accompanied the minister on the inspection tour said the state government would key into the Federal Government’s policies and programmes in the agricultural sector, assuring that the state government would take advantage of the policy to create jobs and grow the economy of the state. In his brief on the facility to the minister, the regional director, North West in the ministry, Olusegun Owolabi, said all the activities at the site were being handled by the concessionaire; Martrix Ville Company, from staffing, maintenance and purchasing of grains for storage under the supervision of the ministry. The minister also inspected the 25,000 metric tons Gaya Silo Complex in Gaya Local Government Area, in Kano State.

Intra-Africa trade takes centre stage at CVL annual lecture Desmond Okon

hile talks around the African Continental Free Trade Area (AfCFTA) agreement seems to have ebbed, Intra African Trade and its implications for Growth and Economic Development on the continent would be the major focus of the 2020 edition of The Centre for Values in Leadership’s (CVL) annual lecture and international leadership symposium scheduled to hold in Lagos, February 6, 2020. Benedict Okey Oramah, president, African Export-Import Bank, will be the keynote speaker at the symposium with the theme ‘Intra Africa Trade: Growth and Economic

Development.’ The annual lecture series is regarded as CVL’s commitment to engendering conversations that will aid the initiation of policies that are business-friendly and capable of lifting the continent, particularly Nigeria out of poverty as well as growing leadership that can make these happen. Being the 17th in the series of International Symposium organised by the CVL, this year’s edition will have four panel discussions expected to expatiate on the theme of the day. “First panel will include the Minister of Trade and Investment in Nigeria as well as President of the Africa Business Roundtable Samuel Dossou-Aworet, Britania-U Managing Director, Uju Ifejika, and First Bank of Nigeria Holdings Managing Director

UK Eke. Also on the panel will be South Africa’s Deputy High Commissioner in Nigeria, Darkey Africa, and Mutual Benefits Assurance Chairman, Akin Ogunbiyi,” CVL said in a press statement. BusinessDay learns that the participants will be taken through a second panel discussion that will feature emerging enterprise leaders involved in trans-border ventures. While the Pan African Trade and Investment Committee of the AU will be addressed in the third panel discussion; the fourth and final panel discussion, young and emerging leaders will take the centre stage to share their visions of Trade and Investment in Africa. The lecture will hold at Muson Centre and several prominent personalities are

billed to participate in the symposium. These include the minister of industry, trade and investment, Niyi Adebayo, Joseph Sanusi, former governor, Central Bank of Nigeria, Darkey Africa, consul-general, South Africa, UK Eke, group managing director, FBN Holdings plc. Others are Pat Utomi, founder/CEO, CVL, and Akin Ogunbiyi, chairman, Mutual Benefits Insurance plc. Recall that in 2018, fortyfour African countries signed on to an African Continental Free Trade Agreement (AfCFTA), 28 of which are among the world’s Least Developed Countries (LDCs). The agreement was signed in Kigali, Rwanda on March 21, 2018 and has been described as a landmark agreement that may see tariffs removed from 90 percent of goods moving within the signatory areas.

Here is what it will cost you to commute in Lagos buses ... as riders protest in Ijora Joshua Bassey

he transportation fares applicable to the 65 buses released by the Lagos State government on new routes, to cushion effect of the ban on motorcycles and tricycles in some parts of the state, show that a commuter traveling to Ajah from Oshodi, will pay N500. This is about the same amount that the yellow-painted buses would charge on the same route, according to commuters. The fares on other routes as announced by the Lagos Bus Services Limited, operators of the state-owned buses are also as follows: Ikeja – Ogba: N100, Berger – Ogba: N100, Ikeja – CMS: N200, Obalende – Ajah: N250, CMS – Ajah: N250, Inner Marina – Ajah: N250 The state governor, Babajide Sanwo-Olu on Sunday directed the management of Lagos Bus Services Limited to deploy a fleet of 65 buses along major routes from Monday, January 3, to make up for the restrictions placed on the operations of motorcycles and tricycles in the metropolis. Major areas affected are Ikeja, Surulere, Apapa, Victoria Island, Ikoyi and some parts of Lagos Mainland. Hundreds of commuters were left stranded on various routes on Saturday, February 1, when the restrictions took effect, thus exposing the inad-

equacy of Lagos transportation system. Motorcycles and tricycles readily fill yawning gaps in the state’s public transportation system, especially in trafficinfested areas. But the state government believes that the buses would go a long way in ameliorating the hardship that commuters are facing as a result of the restriction order on motorcycles and tricycles. Managing director of Lagos Bus Services Limited, Idowu Oguntona, said the extension of the company’s services to these new routes would help reduce the vacuum created by the motorcycles and tricycles. He said that commuters would enjoy the pleasure and comfort of riding in the new buses along these routes, adding that more buses would be deployed by the company in the near future. Meanwhile, angry motorcycle riders and those in solidarity with them, on Monday morning, took to the streets in the Ijora/Apapa area of the metropolis to protest the restrictions placed on their operations. They were seen making bonfires with disused tyres around Ijora-Olopa area, and calling on the state government to rescind its decision. The protesters were eventually chased away by a detachment of police operatives deployed to restore calm in the area, who eventually arrested 24 of the protesters. www.businessday.ng

Prof. Mrs. Ifeoma Utomi

Prof Ben Oramah

FG pledges not to bow as it declares Safe Anchorage operations illegal AMAKA ANAGOR-EWUZIE

espite the decision of the Nigerian Senate to approve the existence of Safe Anchorage Area (SAA), operated by Ocean Marine Solutions Limited (OMSL), after its suspension by the Nigerian Ports Authority (NPA) in 2019, Chibuike Amaechi, minister of transportation, has declared SAA operations as illegal. Speaking with newsmen in Lagos on Monday on the progress made on the execution of the Deep Blue project after meeting with heads of agencies in the transport ministry organised by the Nigerian Maritime Administration and Safety Agency (NIMASA), Amaechi said the Secured

Anchorage operation was suspended because “it was criminal and illegal to create anchorage for purpose of providing security, which ordinarily should be the responsibility of the government. “I took the decision to stop the Safe Anchorage contract and not Hadiza Bala Usman, managing director of the NPA, because an individual cannot protect a country. It shows that there was a failure in the system.” According to Amaechi, the Federal Government has secured some security assets to tackle insecurity on the Nigerian waterways, even as he assured stakeholders that the government was working to address the issues of insecurity on the

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Nigerian waterways. In the next few months, he stated, the issues of insecurity on Nigerian waters would be reduced, if not eradicated. “You will agree with us that there was an upsurge of insecurity in the country and its becoming a bit alarming, I do not know how many of you can remember in 2016, we secured the approval of both Mr. President and the cabinet to introduce a maritime architecture, which is coming to fruition,” he explained. The minister further said the Israelis that were given the project would train Nigerians while the manning of the security assets would be done by Nigerian Navy, Army and police. “Though, it is within the @Businessdayng

domain of the Nigerian Navy to protect the waters, but we wanted other members of the armed forces to give them some support until we completely arrest the situation, before they can withdraw and allow the Navy to takeover,” he said. On his part, Dakuku Peterside, director-general of NIMASA, said with the arrival of some interceptor vessels, insecurity would be reduced, and assured that 80 percent of the gadgets would arrive before the end of June this year. “First, let me correct the impression by saying that we’re not handing over our waterways to be manned by Israelis. They will provide assets and train those who will man those assets on our waterways,” he said.

Tuesday 04 February 2020

BUSINESS DAY

news

Insecurity: Buhari silent, as Service Chiefs tenure expires Tony Ailemen, Abuja

xperts have expressed concern that despite the expiration of the tenure of Service Chiefs on January 13, 2020, President Muhammadu Buhari has remained silent on their status. But the President on Monday went ahead to inaugurate a committee to periodically review the security situation in the country. This is coming on the heels of recent call on the president by lawmakers to rejig the nation’s security architecture by firing the service chiefs. The inauguration of the committees was disclosed by leadership of the National Assembly on Monday, while briefing State House correspondents, after a meeting with President Buhari. President of the Senate Ahmad Lawan and speaker of the House of Representatives, Femi Gbajabiamila, who disclosed the committee’s inauguration, however, refused to name membership of the committee, but disclosed that the committee is made up of “members of the executive, legislature and the ruling party.” Both NASS leaders however were silent on the need to sack the service Chiefs as earlier postulated by their colleagues. According to Lawan, “We believe that it is imperative that we are able to provide those necessary equipment and welfare for the armed forces of this

country and the police, to ensure that they are able to operate and performed efficiently and effectively.” Analysts believe that the new move called to question the efficiency of the service chiefs, the inspector general of police and other security chiefs in the country. But Gbajabiamila noted that the president was as concerned as any other Nigerian on the need to tackle insecurity. According to him, “Is the President looking to do something about it?,The answer is yes.” He revealed that the question of security was uppermost in the president’s mind, adding, “He opened up to us and you must understand that some communications are privileged, but suffice to say that the President is concerned and he intends to do something about our challenges.” Speaking further on the Service Chiefs, the speaker said, “Opinions are divided; the generality of the opinion is that the service chiefs should go, that was evident in our debates in the House of Representatives and in the Senate, bus sometimes you don’t want a knee-jerk reaction “Many of us identify that something drastic has to be done, there’s also the school of thought that says since we are talking about banditry, kidnapping and murders, what have the armed forces got to do with that, anywhere in the world?

World Cancer Day: Lifestyle changes reduce risk of cancer ANTHONIA OBOKOH

i f e st y l e c ha ng e s including regular exercises, limiting alcohol intake and healthy diets can reduce risk of cancer and its prevalence in Nigeria, Oncologists advise. According to these experts, the top cancers that affect the Nigerians population are breast, cervical, prostate, colon and lymphomas cancers. World Cancer Day is obser ved ever y year on February 4. Cancer is the second leading cause of death around the world. The World Health Organisation estimates that over 100,000 Nigerians are diagnosed with cancer yearly, while about 80,000 die from the disease.

Under the theme ‘I Am and I Will,’ World Cancer Day 2020 explores an empowering call for personal commitment to reduce the growing impact of cancer. “This year’s theme is calling on all Nigerians to come out and inform the people about the reality of cancer. The disease is real; it is not caused by witchcraft or spiritual attack. It’s actually lifestyles and activities that predispose us to cancers,” said AliyuUsman Malami of the Department of Radiotherapy and Oncology, Usmanu Danfodiyo University Teaching Hospital, Sokoto, Nigeria. “I am calling on all Nigerians to change from a sedentary lifestyle,” he said, and further called for changes in dietary habits, including switching to foods low in fats

and calories, and increasing the levels of vegetable consumption. According to WHO, onethird of deaths from cancer are due to the five leading behavioural and dietary risks: high body mass index, low fruit and vegetable intake, lack of physical activity, tobacco and alcohol consumption. The agency says tobacco use contributes for approximately 22 percent of cancer deaths. Cancer is a result of abnormal growth of cells. This growth can be a contribution of both external factors and inherited genetic factors. Malami further said while cancer had been on a continuous rise in Nigeria, the reality was that the management of the disease was not improving “because we are

not serious.” “We are not yet there. The government is not doing enough,” he said. He noted that Nigeria with a population of 200 million population has only seven radiotherapy machines, and added that there is hardly any time that three or four are working concurrently. “One machine is supposed to serve 250 people in the population. Even if cancer treatment has been added to NHIS, the scheme has just covered less than five percent,” he noted. “The Federal Government should look at the centres, find a way to ensuring that all the department of oncology have been upgraded and supplied with machines at least two in each centre,” he said.

IGP orders seizure of vehicles illegally using covered number plates, sirens Solomon Ayado, Abuja

he Inspector General of Police (IGP) Mohammed Adamu, on Monday ordered state Commissioners of Police in the country to henceforth, seize all vehicles illegally using covered number plates, sirens, without permit. This is just as the IGP has directed that vehicles with spy number plates and illegal revolving lights should also be impounded and the offenders prosecuted. The IGP through the Force Public Relations Officer, Frank Mba, said in a statement that such illegalities foster security risks to the nation and the citizenry. “Sequel to the working visit of the Corps Marshal, Federal Road Safety Corps, Boboye Oyeyemi, to the Inspector-General of Police, at the Force Headquarters on Monday, the IGP ordered all state Commissioners of Police to forthwith impound all vehicles committing such offences. “To this end, all vehicles found to have Spy num-

ber plates not duly issued, using sirens, or revolving lights without permit or having covered number plates, will be promptly impounded. These practices are illegal and pose monumental security risks to the nation and its people,” the statement said. It explained that the Corps Marshal who visited the Force Headquarters in company of his management team sought for improved collaboration between the Police and the FRSC in key operational areas. “The IGP while responding, restated his commitment to the continued partnership between the Nigeria Police and the FRSC, especially in the areas of operations, training, intelligence sharing, and prosecution of offenders,” it added. “The IGP has commended the Lagos State Commissioner of Police, Hakeem Odumosu, for personally taking the charge against these unwholesome practices, especially the unauthorized concealment of number plates and other related offences,” Mba stated in the statement. www.businessday.ng

L-R: Mitchell Elegbe, managing director, Interswitch; John Obaro, managing director, SystemSpecs; Bukola Akinmoladun, managing partner, BMO and Co Chartered Accountants, and Deremi Atanda, executive director, SystemSpecs, at the unveiling of the SystemSpecs’ new brand identity and launch of Paylink by Remita in Lagos.

Attorney-General decries hate speech in public space Felix Omohomhion, Abuja

igeria’s Attorney-General of the Federation and Minister of Justice, Abubakar Malami, has decried the level of acrimony and slander that currently dominate the nation’s social media space. Malami said the consequences could be dangerous, noting that “no society will fold its arms to allow such ominous trend to go unchecked,” disclosing this on Monday at African Independent Television News Town Hall meeting on hate speech and media regulation bills held in Abuja. He urged Nigerians to use the opportunities provided by the information communica-

tion technology in promoting unity and national integration. Malami noted: “We need the social media more in the areas of enhancing national unity, patriotism, human capacity development, including entrepreneurial skills, and not for tearing the nation apart. “Some turned the platforms into avenues for committing heinous internet fraud and cybercrimes.” Represented by the Special Assistant on Media and Public Relations, Office of the Attorney-General of the Federation and Minister of Justice, Umar Gwandu, the Minister noted that the emergence and proliferation of information and communication technology tools have come with

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both positive and negative implications. “With the absence of gatekeeping process of the conventional media, individuals with neither the skills of information verification and no clues of what the reality is, take it upon themselves to be the purveyors of fake news, hatred and animosity,”’ he noted. “It is the role played by the conventional media which at all times is expected to be targeted at good governance, national integration and enlightenment of the society for the better that distinguishes the mainstream media from the predator miscreants that are bent on creating global information disorder characterised by misinformation, @Businessdayng

mal-information, disinformation and hate speeches; the natural consequence of which is societal disorder that blows ill-wind to the detriment of all,” he said. He maintained that it was a common knowledge that the media contributed immensely to the struggle for the nation’s independence and that the media has strived vigorously in the entrenchment of democratic governance and has been instrumental in the process of ensuring good governance through the fight against corruption, upholding the rule of law and keeping government accountable in line with Section 22 of the 1999 Constitution of the Federal Republic of Nigeria.

Tuesday 04 February 2020

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BUSINESS DAY

PHOTOFLASH The Impact Investing and Policy Landscape Analysis: Nigeria and Ghana

In spite of the increased awareness of impact investing with the development and investment communities, information on the impact investing sector remains limited. The Impact Investing and Policy Landscape Analysis: Nigeria and Ghana was written to address this gap and to propose policy recommendations. The analysis was conducted by Dalberg Advisors in collaboration with the Impact Investors Foundation. The report can be downloaded on the Impact Investors Foundation website https://impactinvestorsfoundation.org.

Afolabi Oladele, chairman, Impact Investors Foundation (IIF)

L-R: Wale Adeosun, CEO, Kuramo Capital; Innocent Chukwuma, vice chair IIF/ regional director, Ford Foundation, and Afolabi Oladele, chairman IIF

L-R: Maria Glover, projects lead, IIF, and Toyin Adeniji, executive director, micro enterprises, Bank of Industry L-R: Nneka Chime, associate principal, Crossboundary; Meghan Curran, West Africa director, Acumen; Natalie Beinisch, senior research & consultant, NMB plc; Inmaculada Soto Riba, economist, EU Delegation to Nigeria and ECOWAS; Nina Fenton, economist, EU Delegation to Nigeria and ECOWAS, and Teju Abisoye, executive secretary, Lagos State Employment Trust Fund

Research Team from Dalberg Advisors

Wiebe Boer, CEO, All On

L-R: Astou Dia, associate partner, and Anita Aigbogun, analyst

Maria Glover, projects lead, Impact Investors Foundation

L-R: Innocent Chukwuma, vice chair, IIF/ regional director, Ford Foundation, and Babatunde DurosinmiEtti, former commissioner, Lagos State Ministry of Environment

Tuesday 04 February 2020

BUSINESS DAY

news Nigerians get less value for voice calls... Continued from page 1

but that the call volume

and data volume will be slightly reduced rather than having an increase in price,” BusinessDay gathers from a source in the telecoms industry. According to the source, “Nigeria still pays one of the lowest VATs in Africa. Some other countries pay up to 1520 percent as VAT.” Gbenga Adebayo, chairman, ALTON, states, “Further to the assent of the Finance Bill by President Muhammadu Buhari, which reviewed VAT from 5 percent to 7.5 percent, ALTON wishes to notify consumers that our members will begin applying the new

VAT rate on all purchased telecommunication products and services with effect from February 1, 2020.” The Federal Government of Nigeria insists that the new Finance Law is “specially designed to create a truly enabling environment for business and investment by the private sector.” The new law is part of Nigeria’s plan to reform its taxation regulations, and align the country’s tax regime with global best practices in a way that will support micro, small and medium scale enterprises (MSMEs), in accordance with government’s economic reforms and ‘Ease of Doing Business.’

Edo crisis: Obaseki orders arrest of embattled... Continued from page 1 Ebenezer Onyeagwu (m), group managing director/CEO, Zenith Bank plc; Henry Oroh (3rd l), executive director, Zenith Bank plc, and Banji Fehintola (4th r), president, CFA Society Nigeria, with the University of Lagos team, winners of the 2019/2020 CFA Institute Research Challenge, sponsored by Zenith Bank in Lagos.

Nigeria misses out on exports boom from... Continued from page 1

Prime Minister Narendra Modi launched an ambitious ‘Make In India’ campaign to promote local manufacturing, foreign investment and lower barriers to business. Six months after, Foreign Direct Investment in India rose from $24 billion to $41 billion. Manufacturing giant Foxconn immediately announced plans to spend $5 billion on factories in the western state of Maharashtra, India. General Motors immediately announced $1 billion investment. Each month in 2019, the South Asian country earned over $25 billion from exports. It earned an estimated $300 to $330 billion in the whole of 2019, from exports. After cutting its massive fuel subsidies, which were planned to cost $14 billion in October 2005, Indonesia restructured its economy to be led by agriculture and auto industry. Today, it produces over 30 million tons of palm oil—the highest in the world— earning over $21.5 billion from it. From Bangladesh to India and Indonesia, countries are earning billions of dollars from non-oil exports, but policy choices in Nigeria show the country’s leaders are not thinking of this as a possibility. Today, the Nigeria-Benin Republic land border, which serves as an exit point of many export products, is closed with no signs of reopening. The reasons for the shut-down may be justified, but analysts believe the country’s non-oil export earnings are in for a plunge. Ede Dafinone, chairman, Manufacturers Association of Nigeria Export Group (MAN-EG), wonders what happens to the Nigerian economy should crude oil fortunes change suddenly.

Crude oil still made up over 70 percent of export earnings in nine months of 2019. As of 2016, when crude oil price crumbled at the global market, the Nigerian economy fell into recession, taking with it over 220 businesses, more than 200,000 jobs and 54 manufacturing firms. “The economy is still vulnerable to external shocks, notably fluctuations in global oil prices. This partly explains why two global credit agencies – Moody and Fitch— recently downgraded our economic outlook from stable to negative on the back of slow fiscal growth and increasing vulnerability to exogenous shocks,” Toki Mabogunje, president, Lagos Chamber of Commerce and Industry (LCCI), says. As of the third quarter of 2019, Ghana was the biggest importer of Nigerian products. It imported 17.18 percent of made-in-Nigeria products within the period, beating the European Union and China, according to the NBS data. This is no longer a possibility. Okhai Ehimigbai, export manager, Aarti Steel, which exports steel products and zinc ash, says his company has stopped export to the Economic Community of West African countries (ECOWAS) due to the closure of the border, disclosing that exporters are struggling to get vessels for export to the African market. He says export to Ghana by sea takes one month now as against two weeks or less through the land borders. At the moment, made-inNigeria products are scarce in the ECOWAS market because of the border closure, according to Nexportrade Houses Limited (NHL), a trade house that focuses on increasing and organising trade relations www.businessday.ng

among business groups in ECOWAS member states and African countries. Apart from border closure, the country now has no support for genuine nonoil exporters. The Export Expansion Grant (EEG), which is a practice in Brazil, China and many European countries, was suspended since 2013 and the process is yet to be fully reinstated. Even though there have been cases of abuse of the EEG by fraudulent firms, data have shown that export will rise when the EEG is given to genuine exporters. For example, non-oil export rose from a little above $1 billion in 2005 to $2.97 billion in 2013, when exporters enjoyed the EEG. At the moment, Nigerian exporters are struggling to compete with Chinese, Indian, and European counterparts even in the African market, BusinessDay was told. Many Nigerian exporters are not competitive owing to high production cost, and absence of support is not doing them much good. Moreover, the funding method adopted by the Federal Government shows the administration of Muhammadu Buhari is not too bothered by the non-oil export earnings’ concerns. According to the NBS Q1 to Q3 2019 data, major export food products were sesame seeds, cashew (fermented), cocoa beans (raw), cocoa butter, ginger as well as sea foods such as shrimps and prawns. Tens of billions have gone to rice farmers, but these cash crops that generate foreign exchange gets less support. Also, cash crops with long value chains and high export demand such as cocoa, rubber, wheat, and palm oil, among others, get less support than rice with one or two value chains.

The CBN said in 2019 that it had disbursed N30 billion to boost oil palm plantations. However, smallholder farmers, responsible for 90 percent of palm oil output, told BusinessDay that they were yet to access funds for expansion. “We only hear that on the radio, hoping to be remembered one day,” one palm oil miller in Imo State states. Moreover, as a sign that the current government is not building an exportoriented economy, the country has failed to make proper use of the National Quality Infrastructure to standardise exports. The European Union funded this with about 12 million Euros to better the standards of export products. Some progress was recorded, but most exporters have benefitted nothing from it, thanks to the Federal Government’s lack of interest. As at today, the European Union is yet to unban Nigerian beans and other crops, which it prohibited from entering its domain since 2015. After extending it in 2016 for three years, the ban was supposed to end in June 2019, but no seriousness has been shown by the country to ensure that the products are unbanned. The Nigeria Agriculture Quarantine Service says it is making efforts to ensure they are unbanned, but it is difficult to determine if exporters have learnt some lessons, considering that there is no standards facility in the country today. “The potential for growth is immense. But we cannot remain a nation with potential. In order to unlock the potential, we need to put in place appropriate policies and regulations,” Muda Yusuf, director-general, LCCI, states in the chamber’s economic outlook.

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seeking the arrest of Oshiomhole had been submitted. He had further threatened to deal with former labour chairman if he kept “disrupting activities” of Edo APC. Shaibu said the petition would also be submitted to the relevant authorities, including the Department of State Services (DSS) later in the day. The governor had earlier accused Oshiomhole of plotting to plunge the state into crisis, asking the IGP to call him (Oshiomhole) to order. Oshiomhole, who was instrumental to the emergence of Obaseki, fell out with the governor shortly before he declared his re-election bid. Their misunderstanding reached its height last year when the Edo State House of Assembly was divided along the line of their loyalists. The Edo State chapter of APC said the activities of the suspended National Chairman of the party, Adams Oshiomhole and his co-dissidents in the proscribed Edo Peoples Movement(EPM)werecausing violence and crises in the state. In a statement, the state’s publicity secretary, Joseph Osagiede, said Oshiomhole and his co-dissidents were hell-bent on pushing the state to the precipice with the intent of creating the impression that law and order had broken down in the state, so that a state of emergency would be declared by the authorities. According to Osagiede, Oshiomhole’s unholy romance with the EPM has continually threatened the peace in the state, causing bodily harm to Edo people and destruction of property worth millions of naira. He said, “The APC in Edo State has over time expressed worry over the activities of the suspended National Chairman of the Party, Comrade Adams Oshiomhole in clandestine attempts to cause violence and disrupt peace and safety in Edo State. “In the past few months, Comrade Oshiomhole, has repeatedly disregarded directives from the state government and other law enforcement agencies, including the Nigerian Police Force and the judiciary. @Businessdayng

“The issues took another turn for the worse at the weekend, when Oshiomhole along with his lieutenants in the proscribed Edo Peoples Movement (EPM) resorted to the use of explosives and other dangerous weapons in some parts of the state, thereby endangering the lives of lawabiding citizens.” Noting that the embattled National Chairman was desperate in his selfish attempt to remove Governor Obaseki, Osagiede said, “In his strong-headed approach to entrenching himself as a godfather in Edo State and oust Governor Godwin out of office, Oshiomhole has continued to fan the embers of division, promoting violence and disaffection among the genuine members and leaders of the APC in the state using imported mercenaries. “These actions, which by the least are despicable and condemnable, does not in any term represent the glorified position of a National Chairman of a party, who is expected to promote peace and unity. It’s even more painful to know that Edo is the home state of this same man who is ushering it into crisis. Which sane man puts his own house on fire? “As Governor of Edo State between 2008 and 2016, Comrade Oshiomhole would never have tolerated such acts of lawlessness in his usual bravado and egoistic style of operation.” He went further to note that “Comrade Oshiomhole has also continued to parade one Colonel David Imuse (rtd) as chairman of the APC in the state, in violation of a court order, restraining Col. Imuse from parading himself or anyone from dealing with him as chairman of the party in Edo State. “Comrade Oshiomhole orchestrated the State House of Assembly primaries to fix his stooges so as to impeach the governor and when this failed, he masterminded the crisis in the State Assembly, by housing 14 lawmakers-elect in Abuja, who should rather be in Edo representing their people. Though the seats of these dissident lawmakers have been declared vacant by the leadership of the House.”

Tuesday 04 February 2020

BUSINESS DAY

news

Aviation unions takeover Lagos Airport tollgate from I-CUBE IFEOMA OKEKE

orkers of the Federal Airports Authority of Nigeria (FAAN) Monday took over the management of the Murtala Mohammed International Airport access gate from the Integrated Intelligent Imaging West Africa Limited (ICUBE), a year after expiration of contract. The workers in their hundreds under the supervision of the four aviation unions besieged the access gate as early as 7am Monday, and took over the control of ticketing points from ICUBE managers. The workers after dislodging ICUBE staff, drafted staff of the commercial department to man the gates. Speaking with journalists, Abdulrasaq Saidu, one of the union leaders, and general secretary of Association of Nigeria Aviation Professionals (ANAP) who supervised the takeover, said management of access gate remained the sole responsibility of commercial department of FAAN, adding that politicians had messed up the system through illegal concession of revenue points at the airports. Saidu said concession of the access gate was fraudulent without a review of the contract for more than five years now, noting that the traffic of the route had greatly increased since the last exercise was carried out.

He alleged that some individuals in FAAN and the aviation ministry had been compromised over the access gate, saying government was losing revenue from there. The union leader explained that following series of meetings held with the aviation minister and FAAN boss at different occasions, it was made known to them that workers were going to take over the access gate and run it by FAAN commercial department to raise its revenue. Sarah Rimdams, the deputy national president of Air Transport, said workers came to recover back their revenue points to government as the contract with ICUBE expired last February. The company has been remitting N68 million monthly but there was need for upward review of the contract, Rimdams said, adding that commercial department of FAAN has taken over and will ensure that they exceeded the N68 million being remitted monthly by ICUBE. She disclosed that the access gate was being test run by FAAN to actually know how much could be generated monthly, saying it would definitely be more than the amount being remitted by the concessionsure. Reacting to the takeover, Toluwaleke Abajing, manager of ICUBE, told journalists that he was surprised to see workers and unions taking over the access gate in the early hours of Monday.

Event Xperience Africa wraps up as professionals engage event entrepreneurs BUNMI BAILEY

he second edition of The Event Xperience Afr ica ( TE X A2020) convened by one of the pioneers of the Nigerian event industry, Funke BucknorObruthe, ended last week in Lagos with Mo Abudu, CEO Ebonylife TV; Mai Atafo, creative director, Atafo; Steve Harris, business coach; Edi Lawani, Ceci Johnson, Osayi Alile, Chukwuka Monye, and others engaging young entrepreneurs on professionalism, creativity, and effective collaboration. Tagged ‘Rev up… Build… Grow... Thrive,’ the threeday conference was geared towards helping businesses understand and implement the right structures required to grow in the events industry. It featured panel sessions, curated classes, networking sessions with different speakers on topics such as the business of events management, leveraging technology in the event industry, hospitality, experiential events production, the craft of event photography and videography and more. To officially kick off the event, an opening cocktail party was held January 28, with delegates and event industry personalities from across Africa and the United States in attendance. Mo Abudu delivered the opening speech as she encouraged entrepreneurs to

have big dreams for themselves and their businesses. To engage the audience in panel discussions and presentations were various industry experts including Maria Pamela Nwonu (Nwando Signatures), Izobe Spiff, Do2tun, Ini Abimbola, Owen Omogiafo, Onye Ubanatu, Kunmi Ariyo, Yewande Rwang-Dung and sister Kemi (Co-Founders of Sara O Events), Jimi Tewe, and Sola Oyebade The grand finale of the event kicked off with teaching delegates on the essence of branding and the importance of selling one’s value to customers. This was done in a panel discussion themed ‘Branding, Sales and Marketing, Sell your Value’ by industry experts such as Mai Atafo, Adaora Mbelu, Bukky Akomolafe, Steve Harris, and Ayodotun Akinfenwa. Also discussed on final day were topics focused on Human Resources, Technology, and more. The conference which recorded over 700 attendees and speakers was hosted by Lamide Akintobi and Oluwaseun Olaniyan. Other speakers at the conference include Big H, Izobe Spiff, Emmanuel Oyeleke, Akeshi Akinseye (USA), Afi Amoro (Ghana), Mwai Yeboah (Zambia/Uk), Tedai Kevin Zhou (Zimbabwe), Christine Ogbeh, Tee A, Bankole Williams, Tomi Aluko, Edi Lawani, Do2tun, and many others. www.businessday.ng

L-R: Yewande Sadiku, executive secretary/CEO, Nigerian Investment Promotion Commission (NIPC); Herbert Wigwe, CEO, Access Bank plc; Godman Akinlabi, lead pastor, The Elevation Church/convener, Vantage Forum, and Bolarinwa Akinlabi, co-lead pastor, The Elevation Church, at the opening of the business exhibition at the 2020 Vantage Forum themed ‘’Africa’s 1.3 billion People Market: Harnessing Opportunities Through Business Innovation’’ in Lagos.

Adesina calls for inclusive growth, says ‘Nobody eats GDP’ HOPE MOSES-ASHIKE

… expects Nigeria’s economy to grow at 2.9%

frica’s economies are growing strongly, but growth alone cannot meet the needs of the continent’s poorest citizens, because “nobody eats GDP,” the African Development Bank’s (AfDB) president, Akinwunmi Adesina, said as he unveiled the bank’s flagship economic outlook recently. Adesina commented in the 2020 African Economic Outlook, which showed that the continent’s economies are growing well, higher than the global average. The report projected a steady rise in growth in Africa from 3.4 percent in 2019 to 3.9 percent in 2020 and 4.1 percent in 2021. According to the report, these figures do not tell the whole story. Across the continent, the poor are not seeing enough of the benefits of robust growth. Relatively few African countries posted significant declines in extreme poverty and inequality, which remain

higher than in other regions of the world. This is as the AfDB expects Nigeria’s real Gross Domestic Product (GDP) to rise to 2.9 percent in 2020 and 3.3 percent in 2021, according to the 2020 African Economic Outlook (AEO), which showed that the African continent’s economies are growing well. However, Nigeria’s growth depends on implementing Economic Recovery and Growth Plan (2017–20), which emphasizes economic diversification, the report said. In Nigeria, oil exports have improved, driving up foreign exchange reserves and creating an impetus for the central bank to intervene in the foreign exchange market. The current account is projected to remain in surplus in 2020, benefiting from improved oil revenues. Nigeria has many opportuni-

Lagos paramount ruler commends C&I Leasing for community job creation, youth empowerment

is Royal Majesty Oba Liazim Olumuyiwa Ogunbekun, the Onilekki of Lekki Town, in Ibeju Lekki Local Government Area of Lagos State, has commended C&I Leasing plc for its role in creating jobs and empowering the youths of his community. C&I Leasing is a subcontractor for an ongoing project at the Dangote Refinery located in Lekki Town, which is nestled along the Lekki Free Trade Zone. Speaking during a courtesy visit by C&I Leasing recently, Oba Ogunbekun acknowledged that out of 13 workers on site, the 11 riggers are all indigenes of Lekki Town while the remaining two are staff of the company. He said the community would continuously extend needed support to C& Leasing as the company had proved it was socially responsible since the project commenced. “We have been promised by so many companies in the past who came to carry out operations in this com-

munity, but none of their promises were ever fulfilled,” he said. “But C&I Leasing is a responsible organization. You have shown responsibility and integrity by empowering our youths with jobs and transferring useful skills to them. “Because you have considered the development in our community as important, I am pleased to welcome you today and promise to render the needed support during the course of this contract and possibly future ones.” In his response, Andrew Otike-Odibi, managing director/CEO of C&I Leasing, who was represented by Anthony Amadi, project manager, thanked Oba Ogunbekun for the warm welcome extended to the company. He said C&I Leasing had over time engaged in sustainable community development projects in the locations where it does business and is ready to take on an additional project that would directly benefit other social categories including women and children of Lekki Town.

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ties to transform its economy, particularly in agro-processing. Special agro-processing zones could promote agro-industrial development and employment. But insecurity could deter foreign investors, shrivel the domestic economy, and ultimately dampen prospects for economic growth. High unemployment could create social tensions. Rising public debt and associated funding costs could pose fiscal risks if proposed adjustments are not implemented, the report said. Inclusive growth occurred in only 18 of 48 African countries with data, the report revealed. According to Adesina, “Growth must be visible. Growth must be equitable. Growth must be felt in the lives of people.” The theme of the 2020 Africa Economic Outlook report, Developing Africa’s workforce for the future, calls for swift action to address human capital development in African countries, where

inclusive growth has been held back by a mismatch between young workers’ skills and the needs of employers. The bank’s flagship report states that increased investments in education is key as well as progressive universalism in education spending—setting high priorities for the poor and disadvantaged and focusing on basic education first where social returns are highest. Its recommendations include improving access to education in remote areas, incentives such as free uniforms and text books, banning child labour and improving teaching standards. To better match skills with job opportunities, the report recommends that governments need to develop a demand-driven education system in tune with rapidly emerging jobs in the private sector, including software engineers, marketing specialists and data analysts, the report says.

Signal Alliance appoints director of Tech, Innovation HARRISON EDEH, Abuja

ignal Alliance Limited has announced the appointment of Tolulope Idowu Idris as its director of Technology and Innovation. Tolulope is joining Signal Alliance from Serengeti OOH Limited where he was the managing director, and brings on board over 20 years’ experience in technical, operational, managerial and strategic leadership roles, to support Signal Alliance’s vision. Prior to this appointment, he had held senior positions in notable tech companies such as iTECO Nigeria Limited (member of TELNET Group) where he started his career in 1999 and rose to become g eneral manag er/group head, Managed Ser vices before moving to MTN Nigeria as an Enterprise Solution Value Sales Specialist and thereafter to CISCO Systems Nigeria as an Enterprise Account director. @Businessdayng

He has a first degree in Engineering from Obafemi Awolowo University, and Po st Grad uate D iplo ma in Business Management from Rivers State University of Science and Technology. He is also an alumnus of the Lagos Business School. Tolulope is member of the Institute of Directors (IoD). Commenting on the appointment, Collins O nuegbu, the executive vice-chairman of Signal Alliance said: “We are very delighted to welcome Mr. Tolulope Idris to the Manag e m e nt o f Sig na l A l l i ance. His appointment was based on his exceptional technical skills, entrepreneurial spirit, academic, professional and corporate e x p e r i e n c e s, w h i c h a re relevant to the needs of our Management. As we prepare for the next phase of our enterprise transformation, we are convinced that his skills will no doubt add significant value to our quest to become one of Africa’s leading technology integrators.”

Tuesday 04 February 2020

BUSINESS DAY

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BUSINESS DAY

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BUSINESS DAY

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Tuesday 04 February 2020

BUSINESS DAY

news ‘Nigeria can curb insurgency, security emergencies with ICT’ Jumoke Akiyode-Lawanson

xecutive vice chairman (EVC) of the Nigerian Communications Commission (NCC), Umar Garba Danbatta, says Nigeria, with appropriate deployment and use of telecoms and ICT resources can effectively curb insurgency and contain other emergencies. Speaking at the NCC headquarters in Abuja at the induction of the Commission to the membership of Forum of Spokespersons of Security and Response Agencies (FOSSRA), Danbatta affirmed that empirical knowledge of what ICTs could do in tackling numerous challenges explained the Commission’s insistence on compliance by all stakeholders to the guidelines governing SIM registration, and why NCC had been upbeat in getting the Emergency Communication Centres (ECCs) ready all over the country as directed by the Federal Government. Bassey Uket, a principal manager at the Commission’s special duties department, was NCC’s representative at the Forum. Danbatta recalled the collab-

oration between NCC and the security and other emergency response agencies, especially at the ECCs and suggested that many of the multi-faceted challenges could be addressed with scaling up the degree of deployment of electronic strategies. To underscore the imperative of electronic and digital communication systems in managing the nation’s security challenges, he stated, “As we are addressing the situation in one part of the country, you find escalation in another part of the country.” He gave example of the 112 Emergency Communication Numbers, which are routed to the ECCs, as “a practical implementation of a security system that is bringing succour to citizens in distress”. He said he is gratified that there is an increasing “interface between citizens who are in distressed security situation and virtually all security and other emergency response agencies connected to it.” The NCC boss described the ECCs as a well-conceived project, saying, “It is a project that has enhanced the capacity of agencies in the security governance sector to manage crises.” He informed the audience

that the Centres were wellequipped to address the purpose for which they were established, noting that 18 of the Centres located in state capitals had been completed, and assured that with the support of the Federal Government, “we are not going to stop. “We would like to express our commitment to continue with the remaining 18. We would not rest on our oars until all other 18 are fully functional because the ECCs have started attracting attention” and are quite central to the management of security in the country.” He emphasised that the ECCs had become a success story today because of the commitment of the Federal Government and the culture of dedication to continuity of strategic national projects by successive leadership of the Commission. Oluwatoyin Asaju, director, special duties at NCC, said FOSSRA, which was established six years ago by the Office of the National Security Adviser (ONSA), had performed well in coordinating public information activities of security and emergency response agencies and had helped to improve interagency collaboration.

Potentials of Nnewi Industrial hub up for review this week Daniel Obi

s part of efforts to draw attention to the economic opportunities in some of Nigeria’s industrial clusters and grow the made-in-Nigeria mindset, Ford Foundation and a group of experts and industrialists have come together to organise and sponsor an investment summit for Nnewi, a manufacturing hub located at South-eastern Nigeria. Pioneered by leading marketing communications agencies, TBWA/Concept Unit and C & F Porter Novelli, the investment summit, themed: Revitalising the Manufacturing Hub of Africa, is designed to leverage the already thriving industrial and commercial activities in Nnewi and harness them for the wider economic development of Nigeria. Expected to lead the conver-

sations at the inaugural edition of the summit, which will hold on February 6 and 7 2020 in Nnewi, Anambra State Nigeria include: former Presidential candidate and Development Economist, Kingsley Moghalu; Ike Chioke, CEO Afrinvest and Innocent Chukwuma, West Africa regional director, Ford Foundation. Speaking on the Summit, CEO, TBWA/Concept Unit, Kelechi Nwosu, said the Nnewi Industrial hub should further be developed and should be promoted as a model for economic growth in Anambra State and Nigeria in general. Nnewi is a unique town where young entrepreneurs and courageous artisans with limited formal education exploit their wit to create amazing stories of manufacturing and industrialization in Nigeria, Nwosu noted. “The overall agenda of the

summit is to draw the attention of stakeholders to the benefits of revitalisation and rebranding of Nnewi as an industrial hub in Africa by leveraging on its past glory and current potential. We are also expecting this Summit to start the formation of alliance development that will create a blended intervention programme involving Policy makers, Private investors and Donor Organisation (Philanthropists)” the marketing communications guru stated. Sponsored by the Ford Foundation in partnership with the Nnewi Chamber of Commerce and Industries and Anambra Broadcasting Service, the two-day Summit is envisioned to drive the growth agenda for young indigenous businesses by outlining how they can scale with the right exposure, branding and capacity building projects.

Don’t destabilise MOUAU, Niger Delta students warn trouble makers

undreds of students from tertiary institutions in the Niger Delta states Monday stormed Michael Okpara University of Agriculture Umudike (MOUAU) in solidarity with the vice chancellor, Francis Otunta. They immediately issued a stern warning to trouble makers to steer clear of the institution so as to allow both the Vice Chancellor and the Governing Council to execute their vision for the school in peace. Operating under the aegis of Niger Delta Students’ Union Government, the stu-

dents wondered why enemies of the region want to destroy the only University of Agriculture in the nine Niger Delta states all in the name of fighting a vendetta war with Otunta. In an address read by the president-elect of the Students’ body, Dauebi Joey Ekadi (Jnr), they warned people engaged in campaign of calumny and blackmail against the VC to desist forthwith or contend with the wrath of the students. They noted that ever since the Vice Chancellor implemented the directive of the

Federal Ministry of Education and the Governing council, on the proper placement of staff, some people had taken it upon themselves to malign the reputation of Otunta. “Is it a crime to promote excellence and enthrone due process and integrity in the running of the institution?” the students asked. The students commended the Vice Chancellor for his giant strides in the academic and infrastructural advancement of MOUAU in the last four years and urged him not to be distracted by “the enemies of the institution”.

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Tuesday 04 February 2020

BUSINESS DAY

POLITICS & POLICY

Oshiomhole’s promotion of violence, division will erode APC good legacies - factional Edo APC alleges IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

embers of the All Prog re s s i v e s C o n g re s s (APC) loyal to the state Edo Governor, Godwin Obaseki on Monday alleged that the national chairman of the party, Adams Oshiomhole is promoting violence which could erode the good legacies of the party in the state. The factional publicity secretary of the party, Joseph Osagiede made the allegation at a press briefing in Benin City He spoke on ‘Oshiomhole, EPM staring violence, crisis in Edo State’. Osagiede, who however, called on President Muhammadu Buhari and Inspector General of Police to call the national chairman of the party to order, said that the intervention would

help to sustain the good legacies the party had built over the years in the state. “We call on the presidency and the Inspector General of Police to call Comrade Adams Oshiomhole to order so that this destructive descent to violence does not erode the good legacies that have been built over the years by the All Progressives Congress. “The All Progressives Congress in Edo State has over time expressed worry over the activities of the suspended national chairman of the party, Adams Oshiomhole in clandestine attempts to cause violence and disrupt peace and safety in Edo State. “In the past few months, Oshiomhole, has repeatedly disregarded directives from the state government and other law enforcement agencies, including the police and judiciary, and in several cases, causing

Adams Oshiomhole

disruptions that have led to bodily harm to citizens, as well as the destruction of public and private property.

“It appears Comrade Adams Oshiomhole is hellbent on pushing Edo State to the precipice with the intent of creating the impres-

sion that law and order has effectively broken down in the state, so that a state of emergency will be declared by the authorities”, he said. He also alleged that the national chairman of the party was promoting division, violence and disaffection among leaders by using imported mercenaries because of his inordinate ambition to entrench himself as a political godfather in the state. Reacting, Samson Osagie, former member in the Federal House of Representatives described the allegations as baseless and childish. Osagie who said the state government was responsible for the attacks noted that there was no way it can deceive the people by its antics. “The state government has continued in error by seeking to put every blame on every other person, other than itself.

“The truth of the matter is that I do not know how they decided to put logic on its head, as the Governor who is the chief security officer in the state life has decided to blame other persons rather than itself. “He has threatened time without numbers on violence over time and the state government is moving around to accuse those who are being attacked for being responsible for the attacks. “Governor Obaseki and the state government at the moment have been so confused and irrational in taking their thoughts and actions to blame Oshiomhole for everything they have caused. “Suffice it to say that Oshiomhole or those supporting him in every of their public statements have not issued threats, so the state government and itself are the ones responsible for the attacks and the public is aware of this”,he stated.

South-West PDP laments FG’s inability to bring killer-herdsmen to justice

One killed, 8 others injured in Oyo council crisis

...charges govs to push Amotekun to the next level

REMI FEYISIPO, Ibadan

h e S o u t h - We s t chapter of the People’s Democratic Party (PDP) has lamented the inability of the Federal Government to curtail the growing insecurity in the country, describing it as weak and effeminate in preventing insecurity and bringing to justice rampaging killer-herdsmen attacking people across the country. This is coming as the umbrella party called on governors of the six states in the geopolitical zone to expedite action on the Western Nigeria Security Network codenamed Amotekun, by recruiting and deploying personnel to the nooks and crannies of the South-West region. The party in a statement signed by its Zonal Publicity Secretary, Ayo Fadaka, said the Presidency had remained weak and effeminate in preventing danger in the land, a development which it said was even attested to by the Senate last week. The PDP, however, encouraged the governors to take swift actions on the security and safety of the region, not-

ing that the encouragement became imperative due to the fact that “the nation today totters on the fringes of combustion that poses dire consequences to Nigeria and its people”. The statement read in part: “Therefore, it is time that the Amotekun initiative was pushed to its next level of operation through recruitment and deployment of personnel through the nooks and crannies of the South-West. “We state this after taking due cognizance of a press statement by the Miyetti Allah, the herders’ trade union taking responsibilities for the recent genocide in Plateau State, and further claiming that the entire nation is their possession. That statement is absolutely irresponsible and capable of inciting untoward responses from other sections of the country. “We continue to remain perturbed that in spite of so many acceptances of responsibilities for genocidal actions by Miyetti Allah, President Buhari’s government continues to fail in bringing these criminals to justice. “We, however, wish to educate the group that the South-West and even slightly www.businessday.ng

beyond, belongs to the Yorubas and no group or people can dispossess us of our heritage and this is supported by history. “We also call on the proper Fulani leaders to begin to speak out against the actions of these characters in the interest of our nation.” The PDP went ahead to urge the six governors of the South-West geopolitical zone to expedite actions on measures that will rid their communities of elements who pose threats to the safety and security of the people of the South-West. The party commended Governors Rotimi Akeredolu (Ondo); Kayode Fayemi (Ekiti); Gboyega Oyetola (Osun); Seyi Makinde (Oyo); Babajide Sanwo-Olu (Lagos) and Dapo Abiodun (Ogun) for inaugurating Amotekun. “We urge governors in the South-West to initiate security measures that will rid our communities of elements who pose a threat to our security and safety immediately. We also call on our Obas to begin to take concrete traditional security actions that will protect and maintain the peace of our region. Our peace is priceless and it must be maintained at every cost.”

....confusion reigns as some caretakers, sacked chairmen resume

he crisis rocking local government administration in Oyo state heightened on Monday with the killing of one person following a fracas that broke out between loyalists of the ruling People’s Democratic Party ( PDP) and the All Progressive Congress (APC). The friction also led to about eight people sustaining severe injuries. The deceased a middleaged man simply identified as Alajase is a member of the PDP from Surulere local government. While the injured are currently receiving treatment in an undisclosed medical facility in Ogbomoso, the son of the former governor Christopher Adebayo Alao – Akala, Olamiju who was among the elected council chairmen sacked by Governor Seyi Makinde, was allegedly attacked by some hoodlums when he was on his way to resume office. It was gathered that trouble started when the loyalists of both parties clashed at the Ogbomoso North Local Government Secretariat after hot exchange of words. The caretaker chairman appointed by Makinde, Ibrahim Ajagbe and the sacked elected chairman, Olamiju AlaoAkala, were at the council’s

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secretariat to resume office Monday morning when their supporters clashed. During the melee, dangerous weapons such as cutlasses, knives, iron rods, charms and heavy objects were used. Meanwhile, despite court order restraining both parties, caretaker committee Chairmen who were recently appointed by Governor Seyi Makinde on Monday resumed in their various local government areas. Also, some of the sacked chairmen resumed in their offices which led to fracas in many local councils. Oyo state government had last week obtained an injunction which restrained the Inspector General of Police, Muhammed Abubakar, Minister of Justice, Abubakar Malami, and the sacked local government Chairmen from forcefully taking over the council Secretariats in the state. Also restrained were the Commissioner of Police, Oyo State Command, Shina Olukolu, and the Oyo State APC chairman, Akin Oke. It will be recalled that local government Chairmen who were elected during the administration of immediate past Governor of the state, Abiola Ajimobi in May 2018, resumed at their various local government areas last Monday. Makinde while speaking during a meeting with the 33 @Businessdayng

Caretaker Chairmen of local governments and 35 chairmen of Local Council Development Areas (LCDAs) he appointed last in December declared that he did not meet any elected local government official when he came in as Governor of the state in May last year. He urged them to ignore the sacked local government Chairmen and return to their various local government areas. The appointed Caretaker Chairmen have, allegedly however, despite the injunction resumed their various offices as directed by Makinde. Those who allegedly resumed included caretaker Chairman in Oluyole Local Government, Olaide Popoola, and Caretaker Chairmen in Iseyin Local Government Area. Others were Caretaker Chairman in Oorelope Local Government Area, Yakub Ganiyu and Saki West Local Government Caretaker Chairman, Mudashiru Eruobodo and that of Aare Latosa Local Council Development Area (LCDA) Kazeem Oshoniyi. Caretaker Chairman in Oluyole Local Government Area, Popoola while addressing his supporters, advised Oluyole residents to shun act of hooliganism and join hands with Governor Seyi Makinde government and his administration for the progress of Oluyole LG and Oyo State in general.

41 BUSINESS DAY

Tuesday 04 February 2020

FINANCIAL TIMES

World Business Newspaper

Hudson Lockett, Nicolle Liu, Sun Yu and Naomi Rovnick

hinese stocks tumbled as traders returned from an extended lunar new year holiday, with the CSI 300 index of Shanghai- and Shenzhen-listed equities falling as much as 9.1 per cent on Monday to mark the worst opening in nearly 13 years. The drop came despite the central bank pumping Rmb1.2tn ($171bn) in additional liquidity into the financial system — its biggest one-day open market operation since 2004 — to help cushion the blow of the deadly coronavirus outbreak. The benchmark index closed 7.9 per cent lower, marking its worst day since August 2015, and more than four-fifths of listed companies were down by the maximum 10 per cent daily limit, according to data provider Wind. The CSI 300’s fall wiped off about $358bn in stock market capitalisation, according to a Financial Times estimate based on Bloomberg data. The brutal day for markets came as Hong Kong announced it would close 10 of its 13 border crossings with mainland China as it tries to halt the spread of the coronavirus outbreak that started in the city of Wuhan and extended worldwide. Carrie Lam, the territory’s chief executive, said the closure would not include Hong Kong’s airport, though the number of flights to the mainland would be reduced. She said the port at Shenzhen Bay and the bridge connecting Hong Kong to Macau would also remain open. Russia said it would ban foreigners arriving from most entry points in China and has imple-

Chinese stocks suffer worst day since 2015 on coronavirus fears Market closes down 7.9% as Hong Kong closes most border crossings to mainland

mented emergency measures that would allow it to deport any foreign citizens found to be carrying coronavirus. The measures will not apply to government officials, people with Russian residence permits or citizens of the Eurasian Union and those arriving at Moscow’s biggest airport. China reported 17,205 confirmed cases of the coronavirus and 361 deaths as of the end of Sunday. The number of infections exceeds the total during the outbreak of severe acute respiratory

syndrome, or Sars, in 2002-2003, which caused months of market turbulence in China. The sell-off was contained to mainland China as traders there caught up with the falls across global stock markets over the past 10 days. Other Asian equities were more stable, with Japan’s Topix falling 0.7 per cent. Equities notched moderate gains in Europe, where the Stoxx 600 index rose 0.2 per cent, after falling 3 per cent last week on escalating concerns over the virus’s eco-

nomic impact. Wall Street also made gains, with the S&P 500 rising 0.8 per cent in early morning trading, after its gains for the year were wiped out in a sharp sell-off in the previous session. The onshore renminbi weakened 1.2 per cent to Rmb7.0138 per dollar, falling back through the key 7.0 threshold and on track for its worst day since August. The less-regulated offshore rate was 0.3 per cent weaker at Rmb7.0168 against the dollar.

One trader at a brokerage in Shanghai said there were signs the so-called national team of Chinese state-run institutional investors was buying stocks to help underpin the market. China’s securities regulator also told mutual funds to limit net daily sales of large-cap stocks to Rmb100m and sales of small-cap stocks to Rmb10m, according to a Shanghai-based fund manager. “Our job is to keep panic selling to a minimum level,” the fund manager said. The People’s Bank of China also cut its seven- and 14-day reverse repo rates by 10 basis points each shortly after markets opened on Monday to 2.4 per cent and 2.55 per cent, respectively. That lowered the cost of shortterm loans from the central bank and boosted interbank liquidity through the seven-day rate for the first time since November. Iris Pang, Greater China economist at ING, said the PBoC had “done its part to limit market chaos” on Monday. “How long the virus will last is the key threshold for gauging the situation,” she said. Investors are concerned that the coronavirus epidemic will hit China’s economy, which is growing at its slowest rate in 30 years. Li-Gang Liu, chief China economist at Citi, forecast that first-quarter growth would slow to 4.8 per cent. The economy expanded 6.1 per cent in 2019.

Brussels issues warning to Boris Johnson over UK plans to diverge Michel Barnier says Britain must decide if it wants to stick to EU rules and standa Jim Brunsden, Sam Fleming and Sebastian Payne

russels has warned the UK it will never grant an extensive trade deal if Britain insists on diverging from EU standards, as Boris Johnson firmly rejected the bloc’s stance in a clash that will define the coming months of future relationship negotiations. Almost three days after the UK formally left the EU on Friday last week, both sides are anxious to lay out their initial positions on the mammoth trade talks ahead with the clock ticking down to the end of the Brexit transition period on December 31. Michel Barnier, the EU’s chief Brexit negotiator, said that Britain had to decide if it wanted to “continue to adhere to [the] EU social and regulatory model in future” or “seek to diverge”. “The UK answer will be fundamental to the level of ambition of our

future relationship and the UK must know this,” he said. He insisted the UK could not claim to be surprised by the EU’s demands, adding: “It will be up to the UK to decide.” Mr Barnier spoke just before a speech by Mr Johnson in which the UK prime minister set out his vision of a “Canada-style” relationship with the bloc that would break free from EU rules while pledging not to undercut “European standards” on environmental, social and commercial policy. “I hope our friends will understand that what is sauce for the goose is sauce for the gander. There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar,” he said at the Old Royal Naval College in Greenwich, south London. Brussels’ draft mandate for the future relationship talks, published on Monday, calls on the UK to conwww.businessday.ng

tinue to “ensure the application” of EU state-aid rules in the UK. Britain would also be required to stay in line with EU environmental and labour market rules as they stand at the end of Britain’s post-Brexit transition period. In exchange, the EU would be prepared to offer the UK what it describes as a “highly ambitious” trade deal including tariff-free, quota-free trade in goods. The EU also said that the trade deal it is offering would cover services, in an effort to minimise barriers in sectors such as telecoms and management consultancy. But Mr Johnson‘s insistence that he will not accept the bloc’s rules in a trade accord points to an early clash ahead of the trade talks formally commencing in March. With six months to strike a deal, both sides are wary that rapid progress will be necessary to avoid no deal in December 2020. Mr Johnson suggested that if the

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UK cannot strike a trade deal similar to Canada’s, he will instead pursue an agreement similar to Australia — in effect, a rebranding of a no-deal Brexit which would leave the two countries trading on basic World Trade Organization terms. Brussels also insists that the European Court of Justice must have a role in settling any disputes that arise in the future relationship over how to interpret EU law. Mr Johnson signed up to this in a political declaration he agreed as part of the UK’s withdrawal treaty with EU leaders last year, but on Monday he rejected any role for the ECJ. Mr Barnier said that the ECJ role was essential to future EU-UK security co-operation, notably when it came to sharing sensitive personal data. The EU is also demanding access to UK waters for its fishing industry on a similar basis as to now. Mr Barnier said that this issue was “inextricably” linked to the trade talks. Mr @Businessdayng

Johnson said he was willing to “consider an agreement” on fishing but “it must reflect the fact that the UK will be an independent coastal state”. Brussels is bracing for some of the most difficult talks it has ever held with another country, given that only 11 months remain to hammer out an agreement before the UK’s post-Brexit transition period expires. National governments are set to adopt the mandate later this month, finalising the bloc’s negotiating stance. Senior EU figures such as European Commission president Ursula von der Leyen have already said that it will be impossible to have the entire future relationship settled by the end of this year, and that a second phase of talks will be needed in 2021. Mr Barnier said that a trade deal could be settled this year if “there is sufficient will and sense on both sides”,but he warned that life after the transition period would inevitably be very different.

Tuesday 04 February 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Banks and fund managers come back for another bite at bitcoin Strong performance by specialist crypto funds has whetted traders’ appetites Eva Szalay and Laurence Fletcher

nstitutions such as banks and asset managers have long had a vexed relationship with cryptocurrencies, put off by reputational risks, lack of regulation and volatile returns. But a spell of better performance is drawing them deeper in. Dedicated cryptocurrency funds returned more than 16 per cent in 2019, according to a survey from Eurekahedge. In contrast, traditional hedge fund strategies yielded 10.4 per cent, according to HFR. “Bitcoin has a higher return on a one, three and 10-year basis than any other asset class,” said Steve Kurz, head of asset management at Galaxy Digital, a specialist cryptocurrency firm founded by billionaire investor Mike Novogratz, once of Goldman Sachs and Fortress. “When the returns are so high, investors will have to pile in.” But Wall Street has been hurt before. As the first rush in to cryptocurrencies pushed bitcoin to above $20,000 in 2017, banks launched projects to explore applications for blockchain, the underlying technology. Many of these projects stalled during the crypto crash the following year. Some big banks kept tabs on the area; JPMorgan, for example, has launched a digital coin (“JPM Coin”) that it aims to offer for payments between its customers. But so far, none has set up a dedicated desk to trade cryptocurrencies on behalf of clients. As prices move higher once more — bitcoin was up 31 per cent in January — interest is picking up again. Deutsche Bank published a report last month saying cryptocurrencies have “numerous advantages compared to traditional assets, which could lead more and more people to use [them]”. The German bank went even further, saying that plans by Chi-

nese policymakers to launch a digital currency could “erode the dollar’s primacy in the global financial market”. For specialised traders, crypto has been a rich hunting ground. In early 2018, one employee at a large electronic trading firm said his company made as much as $8m a day from hunting for price discrepancies in a market where individual retail investors were betting against the most sophisticated electronic trading firms on hundreds of unregulated exchanges. Crypto trading has been electronic from the outset, making it a natural fit for computer-driven firms that make profits from buying and selling at speed. Chicago-based DRW, for example, established a dedicated crypto arm called Cumberland; Mr Novogratz set up Galaxy Digital; while proprietary trading powerhouses such as Jane Street,

Susquehanna, Flow Traders and Jump all piled in. In response, CME Group launched the first regulated futures on a bitcoin index in December 2017, making it possible to make bets on falls in the currency for the first time. Until that point, family offices and private individuals who were holding bitcoin were lending these assets out to hedge funds to make short bets and charging handsomely for the privilege, according to Jan Strømme, chief executive of Alphaplate, a specialist crypto trading company. But as these large trading firms expanded in crypto, trading patterns shifted too. Instead of profiting from pricing inefficiencies, big firms now look to supply prices to exchanges where most retail clients trade, and make money from the spread between bids and offers. On top of that, these co-called

liquidity providers negotiate deals for large amounts of bitcoin privately among themselves, in the over-the-counter market. “There is a lot of fuss around bitcoin but at the end of the day it’s just another asset to trade,” said Max Boonen, who left his job as a fixed-income trader at Goldman in 2015 to start a crypto trading company called B2C2. He compares digital assets to exchange traded funds, saying “they will quickly become part of the investment landscape”. Costs for processes such as custody have come down, as have trading spreads, although they are still high compared with traditional markets. Bitcoin has become similar to mainstream investments like equities and bonds, said Mr Boonen, though he added that some institutions are put off by a lack of tools for mitigating counterparty credit

risk, such as having trades settled by a clearing house. Chris Zuehlke, Cumberland’s global head, said it was “only a matter of time before traditional banks get involved, perhaps as brokers between customers and liquidity providers like us”. Most market participants accept that the near-3,000 per cent average returns for crypto hedge funds in 2017 are unlikely to be repeated. But opportunities remain, say investors. Hedge fund Tyr Capital made double-digit gains last year, helped by trades such as betting the price of cryptocurrencies and their futures would converge. “As time goes by and more people like us get involved, these things start to disappear,” said Edouard Hindi, partner at Mayfair-based Tyr. “But there’s a good three to five years of very, very profitable trading.”

Citi suspends senior bond trader over alleged theft from canteen Paras Shah was one of the highest-profile traders in Europe’s junk bond market Robert Smith

itigroup has suspended one of its most senior bond traders in London after the US investment bank accused him of stealing food from the office canteen. Paras Shah abruptly left his post last month as Citi’s head of high-yield bond trading for Europe, the Middle East and Africa. The bank suspended Mr Shah after alleging he had stolen food from the canteen at its European

headquarters in Canary Wharf, London, according to four people familiar with the matter. Citi declined to comment. Mr Shah declined to comment over email, referring inquiries to Citi. The 31-year-old was one of the highest-profile credit traders in Europe, having joined Citi in 2017 after about seven years at HSBC. His job entailed matching buyers and sellers of junk bonds — debt from companies judged to be riskier borrowers — with two former colleagues telling

the Financial Times that he was a well-liked and successful trader. Mr Shah is likely to have received a seven-figure pay package, according to rival traders and junk bond investors, and was suspended weeks before Citi was due to pay bonuses to senior staff. Revenue in Citi’s fixed-income trading division surged 49 per cent in the fourth quarter of 2019, well ahead of analysts’ expectations, helping the bank hit its target for return on equity last year. Financial institutions and reg-

ulators in the UK have in the past harshly disciplined executives alleged to have engaged in personal misconduct such as theft, even involving small amounts of money. Japan’s Mizuho Bank fired a London banker in 2016 after he was caught stealing a part from a colleague’s bike worth about £5. In 2014, the Financial Conduct Authority banned a former BlackRock executive from senior roles in the UK financial sector after he was found to have repeatedly

dodged paying the train ticket for his commute to the City. Jonathan Burrows, who worked as a managing director at BlackRock Asset Management Investor Services, ended up paying £43,000 to settle the case when the extent of the evasion, which took place over several years, became clear. Mr Shah’s LinkedIn profile shows that he graduated with an honours degree in economics from the University of Bath in 2010, joining HSBC’s fixed-income trading division the same year.

Tuesday 04 February 2020

BUSINESS DAY

ANALYSIS

How Japan Inc became a target for activist investors

The country’s risk-averse corporate world is having to rethink shareholder capitalism Leo Lewis and Kana Inagaki

or decades, Tokyo Dome has been a centrepiece of the Japanese capital: the world’s largest covered baseball stadium is home to the country’s biggest team. The site boasts a theme park, a 1,000-room hotel and the world’s first spoke-free Ferris wheel. Its revenues have been tepid and its share price flat for six years. Yet no one seemed to mind. But last Friday, management of the 84-year-old stadium operator woke to find that Oasis Management, its second-largest shareholder, had almost doubled its stake to 9.6 per cent, and that it really does care about Tokyo Dome’s sluggish performance. A pugnacious activist investor that has taken on Nintendo, Panasonic and Toshiba, it issued a fabulously detailed 85-page presentation covering everything from the beer service in the stadium to the state of the hotel curtains — and urged a series of changes that would, says Oasis, unlock vast profit potential. Tokyo Dome’s management may feel under siege, but after a record year for activist campaigns in Japan, it is not alone. From DIY centres to TV broadcasters and blue-chip tech giants to robot makers, crematoriums and producers of fire hoses, companies are being forced to publicly engage with activists at a frequency and intensity Japan has never seen before. Controversial tactics including media campaigns aimed at shaming companies into action are being deployed by seasoned global activists such as Elliott Management and Third Point. Hostile takeover bids are on the rise. An even greater number of confrontations, say advisers, are happening behind closed doors. In a market where about half of the 3,700 listed companies are trading below book value, activists — already engaged in dozens of campaigns — see many more opportunities. Baseball saga: Tokyo Dome vs Oasis Target: Tokyo Dome Activist: Oasis Management After more than a year of behind-the-scenes engagement but little meaningful progress, Oasis last week publicly criticised the way Tokyo’s biggest baseball stadium is run. It launched “a better Tokyo Dome” campaign with detailed analysis of the way the company manages its stadium, theme park and hotel and draws attention to a range of upgrades that, Oasis claims, could almost double net income if implemented in full. Tokyo Dome said it plans to issue a written response to Oasis, now its second-largest shareholder. Global activist funds, emboldened by state-backed progress on corporate governance, a mounting pile of scalps and record years of share buybacks, have made the Tokyo stock market, for the first time, their highest priority outside the

US, according to Lazard research. The London Stock Exchange’s first initial public offering of 2020 will be the Nippon Active Value Fund — a £200m bellwether for the effectiveness of activism in Japan. Its toolkit will include takeover bids should the situation demand it. “In a world of historically low interest rates there are few developed places that feature equities trading far below their intrinsic values,” says US investor James Rosenwald, who will oversee the fund. Activism has transformed the Japanese market — so long an afterthought for global investors — into one of its more lucrative. And that has put scores of companies on notice. When US fund Third Point targeted Sony last year, demanding it focus on being an entertainment powerhouse, the pressure was such that the Japanese company’s chief executive, Kenichiro Yoshida, personally penned a seven-page letter explaining why the group would not spin off what Third Point founder Dan Loeb called its “crown jewel” image sensor business. This new insecurity, say chief executives and their advisers, is forcing some sections of ageing, risk-averse Japan to overhaul their views on shareholder capitalism. Last year Jamie Dimon, chief executive at JPMorgan Chase, appeared to call time on the priority of maximising shareholder profits, declaring the need to give equal weight to issues like the environment and workers’ rights. Yet in Japan, 2019 was the year the corporate world finally woke up to the importance of shareholders. “We think that activism is going to increase in Japan because you are looking at a shareholder base that is more global and taking a more global approach,” says Rich Thomas, who leads Lazard’s shareholder activism practice outside the US. There were 75 activist “events”

— defined as formal demands on managements by shareholders — in Japan last year, with $4.5bn in capital deployed. The 19 formallylaunched activist campaigns in 2019 were almost five times the tally four years earlier. The quantitative change is important, say activists and the companies facing them down, but last year also saw the start of a clear qualitative change. In the first phase of activism’s rise in Japan, between 2015 and 2018, the campaigns were quite narrow in their ambitions. They would concentrate on hoarders of cash and other companies’ stock or generally flabby balance sheets and demand share buybacks and raised dividends. Beer battle: Kirin vs FP Target: Kirin Activist: Franchise Partners Late last year, UK-based FP launched a campaign to persuade the Japanese brewer to focus on making beer instead of branching out into biotechnology, pharmaceuticals and cosmetics. Instead of seeking buybacks or raised dividends, FP pushed for a wholesale change in Kirin’s growth strategy. The group’s recent shift to the healthcare and pharmaceutical business follows a pattern of Japanese companies diversifying to offset a chronic decline in the domestic beer market, which peaked 25 years ago. These campaigns are now increasingly focused on the kind of big strategic changes that, they argue, could permanently unlock value. This wave of activism has been driven by several critical developments. The first, says Zuhair Khan, a senior portfolio manager at Union Bancaire Privée in Tokyo, has been the gradual improvement in governance at many Japanese companies. A 2015 code has given investors a state-endorsed language to argue for improvements

and forced company managements to accept that outsiders matter, says Mr Khan. There has also been a realisation among investors of the potency of their votes, which could in theory oust the entire board of a Japanese company at an AGM, or force an extraordinary shareholder meeting — the most feared scenario for any chief executive who does not want to be humiliated in front of investors. The power of the EGM was vividly illustrated last year when a boardroom crisis at the home fittings company Lixil forced shareholders to vote between competing slates of board nominees. After the abrupt ousting of Lixil’s chief executive, Kinya Seto, a group of long-term Japanese and foreign investors demanded the removal of his successor through an EGM. Mr Seto was eventually restored to his position after shareholders backed his proposal to install a new board. This example reflects a permanent shift in the balance of power, says Mr Khan. “Lixil sent a message that managements have to court shareholders for their vote. It used to be about shareholders saying ‘please give us more access’. The environment has changed. Increasingly companies [are] chasing the shareholders.” Equally important has been a sharp rise in hostile takeover bids — an extreme rarity in Japan just a year ago, but now very much a threat for listed companies. The increase in both accountability and hostile takeovers has been influenced by the 2014 introduction of a stewardship code that compels Japan’s biggest institutions from pension funds to banks and insurance groups to approach activism and hostile bids as investors with fiduciary duties rather than as cosy old friends of the companies whose stocks they hold. “Japanese companies are start-

ing to realise that hostile or unsolicited takeovers can often unlock value, and that is why it is becoming an option even for blue-chip companies,” says Kunihiro Mita, chief executive of Mita Securities, a midsized brokerage near the Tokyo Stock Exchange which has made its name in hostile bids in recent years. “Activists are becoming more sophisticated and their proposals are also becoming more rational so companies need to engage with them even if they don’t want to,” Mr Mita adds. Robot wars: Toshiba Machine vs Murakami funds Target: Toshiba Machine Activist: Murakami funds In January, a group of funds tied to Japan’s most famous activist Yoshiaki Murakami launched a rare hostile takeover bid for a former Toshiba subsidiary. The battle stems from Toshiba Machine’s decision to sell its stake in NuFlare to Toshiba — once its parent company — despite the fact that another bidder Hoya made an offer considerably higher. The case is closely watched as a pivotal corporate governance battle as Toshiba Machine has warned it may enact emergency anti-takeover measures to block the unsolicited ¥25.9bn bid. This remaking of Japan Inc rests on a critical structural shift: the changing role of banks. In the postwar period, conglomerates including Toyota and Toshiba expanded on the back of lending from banks, which in turn bought shares in their clients and dispatched executives to join their boards. Those dynamics have changed drastically, with the advent of negative interest rates and high liquidity where companies can easily turn to equity and bond markets to raise money. The governance push under Prime Minister Shinzo Abe

Continues on page 44

Tuesday 04 February 2020

BUSINESS DAY

NATIONAL NEWS

Iowa voters still torn as White House test looms Democratic candidates criss-cross state as caucuses remain too close to call Lauren Fedor and Courtney Weaver

ernie Sanders entered the 2016 Iowa caucuses as an underdog. Four years later, on the eve of the 2020 contest, Mr Sanders was playing the part of the frontrunner, criss-crossing the Midwestern state to growing crowds of supporters. On Saturday night, for example, an estimated 3,000 people — most of them young — attended a rally in Cedar Rapids for the 78-year-old Vermont senator, sipping Budweiser at a concert venue there as they listened to another tub-thumping speech from the candidate, followed by a performance from the indie rock band Vampire Weekend. In a crowded field that includes former vice-president Joe Biden, Massachusetts senator Elizabeth Warren and former South Bend, Indiana, mayor Pete Buttigieg, among others, Mr Sanders is hoping to rally a new cohort to the polls, drawing on his extensive support among young voters. “If the turnout tomorrow night is low, we are going to lose,” Mr Sanders told supporters at a Des Moines Super Bowl party on Sunday. “If turnout is high, we win.” Mr Sanders’s more moderate opponents also drew large crowds as they made their closing arguments to Iowa voters. After months — in some cases, years — of campaigning, Monday evening’s caucuses will be the first real electoral signal of who might emerge to challenge President Donald Trump in November. Yes, our main opponent is Donald Trump and the Republicans . . . but we have a 1 per cent in our party, too Michael Moore, film-maker and Bernie Sanders supporter On Sunday afternoon, more than 2,000 people packed into a high

school gym in Des Moines to hear Mr Buttigieg, 38, claim he is “just one day from victory in the Iowa caucuses”. The crowd repeatedly broke out in chants of “Boot-Edge-Edge” and “I-O-W-A, Mayor Pete all the way!” as Mr Buttigieg added: “I am also here mindful that even at this late hour, there is a lot of folks still making up their minds.” The Real Clear Politics average of statewide polls shows Mr Sanders in the lead with 24 per cent of the vote, followed by Mr Biden on 20 per cent, Mr Buttigieg on 16 per cent, Ms Warren on 16 per cent and Amy Klobuchar, a Minnesota senator, on 9 per cent. Yet the race is too close to call because of the complexity of the caucus system — in which voters realign on a second ballot if their first-choice candidate does not command 15 per cent in a given precinct — and voters’ propensity to remain undecided until caucus night. 24% Support for Bernie Sanders among Iowa caucusgoers, according to Real Clear Politics Political insiders had eagerly anticipated the publication on Saturday night of a poll conducted for the Des Moines Register and CNN. But the closely watched survey was pulled at the last minute, after the Buttigieg campaign raised concerns about its methodology. Surrogates for Mr Sanders warned supporters that the Democratic establishment would try to wrest the nomination from the Vermont senator once again, playing on grievances from the campaign against Hillary Clinton four years ago. Some of Mr Sanders’s online supporters claimed, without evidence, that the Des Moines Register poll had been pulled because it showed a growing lead for the senator. Michael Moore, the Democratic

activist and film-maker who has endorsed Mr Sanders, told a crowd in Cedar Rapids: “Yes, our main opponent is Donald Trump and the Republicans and all this, but we have a 1 per cent in our party, too. And they think they can buy their way on to the stage,” he said. The remark appeared to be a reference to a recent decision by the Democratic National Committee to change the rules to allow billionaire Michael Bloomberg into the next televised debate. Mr Sanders, Ms Warren and Ms Klobuchar zipped around the state over the weekend in an effort to make up for the previous week, when they had been stuck in Washington for Mr Trump’s impeachment trial. All three senators returned to Washington on Monday for closing arguments, but were expected to fly back out again in time for the caucus results to be announced. “I have got to get a week in two days,” Ms Klobuchar told supporters

at a women’s club in Cedar Falls on Saturday night, adding jokingly: “I’m not competitive at all. I mean, I didn’t notice that my opponents were running around the state.” After the trial caused her to miss a planned town hall on Friday evening in Des Moines, Ms Warren made a last-minute trip to a brewery in the state capital later that night. Hundreds of supporters crammed the bar and spilled on to the pavement outside, as her campaign staff removed tables to make room and bartenders announced they had run out of glassware. Ms Warren came to the bar straight from the airport after 10pm, wearing a campaign-branded hoodie and telling voters: “You’ve made me a better candidate. And you’ll make me a president.” Across the state, voters said they were torn between multiple candidates, some on opposite sides of the spectrum, as they considered who was best poised to take on Mr Trump

in November. Shelby Myers, a community college instructor in Cedar Rapids, said on Saturday she was still weighing the two moderate frontrunners, Mr Biden and Mr Buttigieg, and the more progressive duo of Mr Sanders and Ms Warren. “Sometimes I think we need a total shake-up like the revolution of Bernie. But then I think maybe not,” said Ms Myers. She sighed. “And then I’m back to my four.” Heidi Berkenbosch, 62, from Prairie City, said that after much deliberation, she decided this week to caucus for Ms Warren, who she described as the most electable candidate. “It’s not just who do I like, it’s who do other people like enough that they might get elected,” Ms Berkenbosch said. But she added that she might change her mind on caucus night: “If a whole bunch of people are going to somebody else, then I might think maybe that person is more electable.”

and asking for radical changes. But if we can ask [companies] to take steps in the right direction and they benefit from a rising share price on the back of that, perhaps that encourages them to do more,” he says. Companies’ reaction to activism has moved on from the blind panic of a decade ago. Many are still reluctant but pragmatic enough to engage. Bankers say company managements are becoming more attuned to shareholder complaints. In Sony’s case, the demand from Third Point was a popular one for sprawling Japanese groups: to simplify their business line-up so investors can better value the company. “We never thought the proposal [to offload the image sensor business] was strange,” says Sony’s Mr Yoshida, noting that other groups such as Toshiba and IBM had taken similar steps. “It’s a question we need to ask ourselves all the time.” While rejecting Third Point’s main proposal, Sony did subsequently sell its stake in medical

equipment maker Olympus and pulled the plug on its struggling PlayStation Vue video streaming service. Its share price has risen 60 per cent since Third Point’s campaign was revealed in April 2019. On occasions, pressure from shareholders has given chief executives cover to force through painful measures. “There are usually no big surprises in letters from shareholders since a CEO knows the business better,” says Yoshinobu Fujimoto, a partner at law firm Nishimura & Asahi, who specialises in shareholder activism. “But the CEO can sometimes use the letter from a shareholder as an excuse to make a difficult business decision.” There are, however, signs of a growing backlash from some companies. To thwart an approach from Japan’s most famous family of shareholder activists, the Murakamis, Toshiba Machine is trying to resurrect a “poison pill” defence — a legal mechanism used

by company boards to fend off an unwanted takeover bid. It has led some to fear that other companies will be dusting off their defensive plans. “Despite a recent decline in poison pill measures, there is concern that one major hostile incident would trigger an extreme reaction,” says Takeyuki Ishida, head of Japanese research at ISS. Another concern for investors is an amendment to the Foreign Exchange and Foreign Trading Act — the final details of which have yet to be announced — that would control overseas investments into companies whose operations are deemed to have a national security dimension. To qualify for exemptions from what critics have dubbed an “anti-activist bill”, foreign investors must agree not to propose the sale or transfer of business units at shareholder meetings, or place their own or related people on company boards — things that are bread and butter to activist investors.

How Japan Inc became a target... Continued from page 43 has also created strong pressures for banks to unwind their crossshareholdings, and for companies to disclose and explain their strategic stockholdings. “The influence of Japanese banks over corporations is waning,” says Haruo Nakamura, deputy president and head of investment banking at Mitsubishi UFJ Morgan Stanley Securities. “Equity investors are becoming more influential . . . but Japanese management are not deeply familiar with how they should manage [their] companies to align the interest of equity investors. That’s the challenge they face.” Critics argue that old loyalties have in the past allowed complacency. Higher governance standards increasingly mean that those firms with an inefficient balance sheet are being punished with lower share prices and face becoming targets for activists.

In the past two years shares in Tokyo Broadcasting System have fallen 27 per cent and the company has been on the receiving end of two separate investor campaigns, each calling on the media group to offload noncore holdings to improve returns for shareholders. “If you are going to be part of this whole corporate governance movement, you can’t really ignore companies like TBS. It’s such an egregious abuser of balance sheet,” says Joe Bauernfreund, chief executive of Asset Value Investors, which in 2018 called on TBS to sell its large stake in chipmaker Tokyo Electron. The proposal was rejected, but TBS did subsequently sell some shares in Tokyo Electron, leaving investors critical of the pace of its move. Mr Bauernfreund — whose UKbased fund has $505m invested in 30 Japanese companies — says sometimes the intention is to spark a reaction. “We’re not coming in www.businessday.ng

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Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 03 February 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 323,461.55 9.10 -8.08 248 9,972,689 UNITED BANK FOR AFRICA PLC 254,785.69 7.45 -6.88 287 18,501,651 ZENITH BANK PLC 624,790.23 19.90 -4.56 642 47,521,193 1,177 75,995,533 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 215,371.76 6.00 -8.40 289 16,489,202 289 16,489,202 1,466 92,484,735 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,434,399.76 119.60 - 142 1,341,431 142 1,341,431 142 1,341,431 BUILDING MATERIALS DANGOTE CEMENT PLC 3,065,587.28 179.90 - 56 94,744 LAFARGE AFRICA PLC. 244,838.49 15.20 -0.33 128 4,399,251 184 4,493,995 184 4,493,995 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 356,008.96 605.00 - 14 9,807 14 9,807 14 9,807 1,806 98,329,968 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 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 8,938.70 3.35 8.06 49 2,432,046 49 2,432,046 49 2,432,046 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 5 86 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 5 86 5 86 54 2,432,132 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 64,865.88 68.00 - 9 23,854 PRESCO PLC 49,850.00 49.85 - 11 11,632 20 35,486 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,650.00 0.55 3.77 8 505,500 8 505,500 28 540,986 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 39,428.55 0.97 1.03 71 5,210,474 U A C N PLC. 25,787.60 8.95 0.56 125 3,713,329 196 8,923,803 196 8,923,803 BUILDING CONSTRUCTION ARBICO PLC. 469.26 3.16 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 27,984.00 21.20 -5.78 26 290,773 ROADS NIG PLC. 165.00 6.60 - 0 0 26 290,773 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,468.48 0.95 - 10 56,877 10 56,877 36 347,650 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,594.61 0.97 - 3 14,550 GOLDEN GUINEA BREW. PLC. 220.45 0.81 - 0 0 GUINNESS NIG PLC 66,149.56 30.20 - 34 164,452 INTERNATIONAL BREWERIES PLC. 77,362.76 9.00 - 6 26,073 NIGERIAN BREW. PLC. 439,829.61 55.00 - 36 167,807 79 372,882 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 165,600.00 13.80 - 82 603,479 FLOUR MILLS NIG. PLC. 90,208.35 22.00 - 36 261,626 HONEYWELL FLOUR MILL PLC 8,406.01 1.06 9.28 9 319,935 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 39,741.58 15.00 - 15 133,874 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 142 1,318,914 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,218.56 9.70 -9.77 18 558,600 NESTLE NIGERIA PLC. 1,093,865.63 1,380.00 - 61 87,372 79 645,972 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 6,629.47 5.30 -3.64 39 1,941,996 39 1,941,996 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 20,249.43 5.10 - 18 43,925 UNILEVER NIGERIA PLC. 86,175.08 15.00 - 20 42,193 38 86,118 377 4,365,882 BANKING ECOBANK TRANSNATIONAL INCORPORATED 136,704.16 7.45 - 51 2,912,490 FIDELITY BANK PLC 59,977.83 2.07 -3.72 144 14,219,797 GUARANTY TRUST BANK PLC. 865,276.67 29.40 -2.00 282 35,817,974 JAIZ BANK PLC 20,035.69 0.68 -5.56 21 752,499 STERLING BANK PLC. 48,080.00 1.67 -9.24 759 10,953,985 UNION BANK NIG.PLC. 174,724.52 6.00 1.69 49 1,545,349 UNITY BANK PLC 6,896.71 0.59 1.72 45 2,418,476 WEMA BANK PLC. 25,844.89 0.67 -4.29 42 4,517,394 1,393 73,137,964 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 5,613.47 0.81 1.25 21 2,596,619 AXAMANSARD INSURANCE PLC 21,000.00 2.00 - 2 20,790 CONSOLIDATED HALLMARK INSURANCE PLC 2,845.50 0.35 -2.78 4 203,500 CORNERSTONE INSURANCE PLC 8,690.41 0.59 - 5 35,000 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. 1,904.09 0.26 - 9 149,739 LAW UNION AND ROCK INS. PLC. 3,308.17 0.77 10.00 15 7,184,478 LINKAGE ASSURANCE PLC 4,560.00 0.57 - 4 208,490 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 1 100,000 NEM INSURANCE PLC 12,673.21 2.40 - 8 104,640 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,906.58 0.54 - 1 5,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 10,000 SOVEREIGN TRUST INSURANCE PLC 2,386.54 0.21 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 1 2,727 WAPIC INSURANCE PLC 4,014.82 0.30 -9.09 40 1,163,126 112 11,784,109 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,835.43 1.24 - 4 605,879 4 605,879

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,410.00 1.05 - 1 100,000 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 1 100,000 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,480.00 4.24 -7.83 63 2,452,983 CUSTODIAN INVESTMENT PLC 35,291.19 6.00 - 6 492,067 540.00 0.36 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 36,238.96 1.83 -3.68 110 23,534,881 ROYAL EXCHANGE PLC. 1,543.61 0.30 - 1 10,500 401,815.00 38.25 - 12 14,509 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 14,700.00 2.45 -2.78 82 3,438,536 274 29,943,476 1,784 115,571,428 HEALTHCARE PROVIDERS EKOCORP PLC. 2,592.72 5.20 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 710.63 0.20 - 0 0 0 0 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 5,424.54 2.60 - 30 1,920,289 GLAXO SMITHKLINE CONSUMER NIG. PLC. 6,517.53 5.45 - 26 396,825 3,743.76 2.17 - 2 2,800 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,044.54 0.55 - 3 11,762 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 61 2,331,676 61 2,331,676 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 781.44 0.22 -4.35 4 2,346,000 4 2,346,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,206.13 0.41 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 321.84 2.98 -9.97 4 330,000 287.07 0.58 - 1 5,000 TRIPPLE GEE AND COMPANY PLC. 5 335,000 PROCESSING SYSTEMS CHAMS PLC 1,455.78 0.31 -3.12 9 835,600 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 9 835,600 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 21 207,513 21 207,513 39 3,724,113 BUILDING MATERIALS BERGER PAINTS PLC 1,956.31 6.75 - 1 300 BUA CEMENT PLC 1,225,889.62 36.20 -2.16 42 1,804,118 CAP PLC 17,500.00 25.00 - 9 18,988 244.37 0.46 - 0 0 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 1 5,075,050 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 53 6,898,456 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 CUTIX PLC. 2,483.46 1.41 - 2 1,900 2 1,900 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 8 5,246 GREIF NIGERIA PLC 388.02 9.10 - 0 0 8 5,246 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 63 6,905,602 CHEMICALS B.O.C. GASES PLC. 1,873.10 4.50 - 6 213,850 6 213,850 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 - 2 350,000 2 350,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 8 563,850 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 6 93,900 6 93,900 INTEGRATED OIL AND GAS SERVICES OANDO PLC 45,996.23 3.70 -0.54 61 1,903,658 61 1,903,658 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 21 49,392 CONOIL PLC 13,879.04 20.00 - 19 105,826 ETERNA PLC. 3,129.95 2.40 - 18 168,549 FORTE OIL PLC. 24,161.02 18.55 -9.95 44 685,279 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 3 1,171 TOTAL NIGERIA PLC. 36,328.84 107.00 - 29 78,836 134 1,089,053 201 3,086,611 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 1 300 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 1 300 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 5 1,750,000 5 1,750,000 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,328.25 1.12 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,781.64 4.05 -8.99 2 100,115 2 100,115 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,320.00 0.36 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 1 5,000 LEARN AFRICA PLC 933.45 1.21 - 5 94,677 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 517.69 1.20 - 0 0 6 99,677 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 563.62 0.34 - 5 113,757 5 113,757 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 1 100

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Tunji Owoeye: Evolving from major importer to support sufficiency in local food production CALEB OJEWALE

Owoeye

It became part of Elephant Group’s medium term plan to start producing locally, everything the company previously imported; from rice, to palm oil, and fertilizers. “We are excited to be able to transit from an agro trading company to an agro producing company,” he says. Background Owoeye attended the University of Ife, now Obafemi Awolowo University (OAU) where he graduated with a B.Sc (hons) degree in Demography. He subsequently trained as an accountant, qualified as a chartered accountant, and is became a fellow of the Institute of Chartered Accountants of Nigeria (FCA). He founded Olatunji Owoeye

& Co (Chartered Accountants) in 1993 and was first managing partner of the firm from 1993 to February 1994. A month later in March, he started Elephant Investments Limited which has now become Elephant Group Plc As CEO of Elephant Group, he oversees the affairs of the group across countries where the company operates in West and Central Africa. Owoeye has at different times been National President, National Cashew Association of Nigeria (NCAN) and National Vice President, Federation of Agricultural Commodities Association of Nigeria (FACAN). He was Nigerian representative of African Cashew Alliance (ACA) the umbrella body for cashew

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In the last two years, the mill has been upgraded from white rice mill to parboiled mill and its capacity has also been increased from 4 to 12 tons per hour

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inding business opportunities in Nigeria is often not the hardest thing for those in business, staying relevant in business, surviving policy inconsistencies and generally fragile economic conditions is usually more challenging. In his chosen field of agriculture and agro-allied services, for every area of deficit Nigeria had, Tunji Owoeye, managing director, Elephant Group Plc found an opportunity to do business. When some of those avenues seemingly got blocked either because of government policy or economic conditions, he would innovate rather than complain endlessly. For over a decade, Owoeye’s Elephant group plc was one of the major importers of rice into Nigeria, and he was even once national president of the Rice Importers, Millers, Distributors Association of Nigeria (RIMIDAN). “There was a time that together as importers, we were all keeping inventory of about 2 million tons of rice in this same country,” said Owoeye in an interview with BusinessDay. From major rice importer, he had to transform “overnight”, into a rice processor. Importation was relatively easier, and the cash flow was equally good but when the Nigerian government decided to tighten the noose on foreign rice, it became a matter of “innovate or die”. “It has not been easy. It’s not bread and butter, but I tell you it is all out of passion, dedication and the love to see Nigeria transit from an import dependent Nation to a producing Nation,” he says. He also explained that from the company’s perspective as one of the major importers, it was a matter of adjusting to produce locally, or closing shop. The company was not prepared to lose its market share of what it had then as importers. The company had brands that were already known in the markets, and had to decide whether to invest in local production of rice (and other products) or lose those brands completely. The decision was taken to invest in the value chain and according to Owoeye, “it has been a remarkable outcome”.

trade in Africa. He has been chairman, Board of Trustee National Cashew Association of Nigeria (NCAN), chairman, Rice importers Millers, Distributors Association of Nigeria (RIMIDAN), later becoming national chairman, Association of Rice Investors Group and then chairman, Farm inputs Suppliers association of Nigeria. He is a member of the Agriculture and food Security Policy Commission of the Nigeria Economic Summit Group (NESG), and a Transformational leader in the New Vision of Agriculture division of the World Economic Forum. Transiting from major rice importer to local producer With a prohibition on rice importation through land border and a discouraging 70 percent tariff to import through the ports, Elephant Group was faced with a grim future if it did not think of local production. In 2017, the company won a bid to revamp a rice mill in Portharcourt that belonged to the Niger Delta Development Commission (NDDC). It was a long lease for 20 years and the mill is projected to give an output of 36,000 metric tons depending on the number of hours put into milling. In the last two years, the mill has been upgraded from white rice mill to parboiled mill and its capacity has also been increased from 4 to 12 tons per hour. When there is pressure on demand, there is an increase in duration of milling hours from 12 to 18 hours. In the end, (annual) output is dependent on the number of hours put to work on a daily basis. According to Owoeye, the mill now even has a parboiling facility, which did not exist before its acquisition. Apart from rice, Elephant group has ventured into the cassava value chain. The company started in Oyo and Edo states, off taking cassava tubers from farmers and this is being done with support from the Central Bank of Nigeria (CBN) and Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL). The company guarantees off takes for farm harvests of thousands of farmers, processing their cassava into high quality cassava flour. The next phase according to Owoeye is to ven-

ture into other lines of cassava processing that could serve the adhesive industry, also, turning cassava into flakes for industrial users that des§ire it as such. Biggest challenge to business survival The main threat to survival of businesses in Nigeria is really about policy changes, according to Owoeye, and surviving those swings is a function of how skilful business owners are in adapting. “If you look at the change in policy from import to import substitution, and now to backward integration, all of these happened within 18 months thereabout,” he said. As he explained, it takes “having the boldness to face the challenges of such policy choices to remain in business”. The lesson for younger entrepreneurs, is according to him, staying on regardless of how difficult the terrain could be. At some point in time, there is going to be a turnaround, and when business owners learn to be resilient, support will eventually come. Staying relevant in business Before any entrepreneur can become relevant, Owoeye’s philosophy is that there first has to be a passion for the industry where they operate. When there are issues in any industry, or when there are policy issues, there is always an opportunity to be explored. For Elephant Group, he says what the company does is to strategically examine what the opportunities are in every seemingly bad scenario. As a company, situations are examined in the medium and long term, no short term strategies, and this he says, has given the company resilience to be able to come back following any economic or policy challenge. “In all of these, I think not being discouraged with the short term limitations and challenges is an advantage for businesses,” said Owoeye. “Also, being able to take advantage of the opportunities in whatever policies of government to support the businesses. In all of this, let me put it in one line, flexibility”. From his experience, entrepreneurs must be able to run the business on a flexible platform such that when situations change, they can quickly adapt, creating scenarios that will not put the company in a box.

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