BusinessDay 04 Jul 2019 by BusinessDay

Buhari suspends Ruga settlement plans ...National Livestock Transformation plan remains voluntary for states TONY AILEMEN, Abuja

resident Muhammadu Buhar i on Wednesday ordered the immediate suspen-

sion nationwide of the Ruga settlement project initiated by the Federal Government. Ebonyi State Governor Dave Umahi confirmed

NIGERIA’S FARMER-HERDER CONFLICT the suspension of the project after a meeting of the National Economic Council committee on farmers/

herders’ clashes chaired by Vice President Yemi Osinbajo and some governors representing each of the

six geopolitical zones at the Presidential Villa in Abuja. Umahi said the committee had to deliberate on the approved pro-

gramme of the National Economic Council (NEC) and the Federal Government tagged ‘The National Continues on page 38

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AirPeace Dubai flight set to shake up competition on route …offers 53% price slash …experts caution on route choice IFEOMA OKEKE he commencement of AirPeace’s flight to Dubai on Friday will ignite competition on the Lagos-Dubai routes, experts have said. The airline, Nigeria’s largest carrier, is already seeing good patronage on its inaugural flight to Dubai as the airline offers passengers almost 53 percent slash in ticket price from its competitors. Experts also envisage crash

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Inside How Nigerian economy will benefit from AfCFTA P. 2 AWB seeks men as allies in #Youtoo movement to advance cause of African women P. 39

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CBN rolls out guidelines to boost lending to real sector Banks to maintain minimum loan to deposit ratio of 60% Defaulting banks’ CRR to rise by 50% of shortfall Ndu Ughamadu, NNPC GGM external relations; Mele Kyari, NNPC GMD designate; Tunde Akinpelu, MD, NCTL, being given an executive tour of Aiteo Eastern’s E&P Co’s mobile business office & expo centre by Victor Okoronkwo, GMD, at the just-concluded Nigeria Oil and Gas Summit, Abuja, sponsored by the pan-African energy group.

hope moses-ashike

he Central Bank of Nigeria (CBN ) on Wednesday rolled out new guidelines to deposit money banks (DMBs) aimed at boosting bank lending to the real sector. In a circular to all banks with reference number BSD/DIR/ GEN/MDD/01/045, dated July 3, 2019 and signed by Ahmad Abdullahi, director, banking operations of the CBN, the apex bank required all DMBs to maintain a minimum Loan to Deposit Ratio (LDR) of 60 percent. Loan to deposit ratio (LDR) is a ratio between a bank’s total Continues on page 38

Thursday 04 July 2019

BUSINESS DAY

news SEC reduces cost, timelines for transmission of shares IHEANYI NWACHUKWU

etermined to reduce the quantum of unclaimed dividends in the Nigerian capital market and encourage beneficiaries of deceased investors to step up efforts to claim such dividends, the Securities and Exchange Commission (SEC) has further reduced the time, processes and costs of the transmission of shares from a deceased to a beneficiary. This effort will ensure seamless transmission and claim of a deceased’s shares by heirs and administrators, it said. In an amended draft on the operating framework for the transmission of shares, SEC reduced the timeline for the transmission of the deceased’s shares from three weeks to one week. Going by that, registrars should now ensure that shares of a deceased are transmitted within a week of receiving the request from the administrators or executors. The registrar is also required to transmit the Letter of Administration to the Probate Registry within 24 hours of receipt of the same for verification. The administrators/executors are, however, required to provide a letter of introduction introducing themselves as the legal representatives of the estate. The letter should also indicate the names, ad-

dresses, signatures and BVNs of the individual administrators/executors, SEC said. Also required are original death certificate from the National Population Commission (NPC) for sighting, original probate letter or Letter of Administration for sighting or the certified true copy (CTC) from a Notary Public. Others are a copy of the newspaper advert placed by the court or gazette, any evidence of ownership of the investment, i.e., CSCS statement(s) of the deceased, original share certificates, dividend stub or dividend warrants or bank statement(s) showing receipt of dividend(s) into the account(s) of the deceased. “Where the administrator/ executor cannot provide these requirements, the registrar may require confirmation through insurance, indemnity or interview,” SEC stated. “The fees chargeable for transmission of shares by registrars are being limited to one percent of the total value and additional five percent Value Added Tax (VAT) for shares of N5 million and below and 0.5 percent of the value and five percent VAT on shares above N5 million with a maximum chargeableamountofN200,000, excludingVAT.Also,feeschargeable for confirmation of probate or letter of administration shall not exceed N12,000,” it said.

•Continues online at www.businessday.ng

Crisis hits Reps over minority leadership … as Gbajabiamila allegedly turns down PDP nominees James Kwen, Abuja

he House of Representatives was Wednesday thrown into crisis that led to attempts by some members, believed to be of the People’s Democratic Party (PDP) extraction, to snatch the mace over the Minority Leadership positions. This is as Femi Gbajabiamila, speaker of the House, allegedly turned down the letter sent to him by the leadership of the main opposition PDP nominating Kingsley Chinda as the Minority Leader from Rivers State, Chukwuka Onyema from Anambra State as the Deputy Minority Leader, Yakubu Barde from Kaduna State as the Minority Whip, and Muriano Ajibola from Oyo State as Deputy Minority Whip. Gbajabiamila however read the letter he said was sent by minority parties in the House signed by about 99 out of the 147 members nominating Ndudi Elumelu from Delta State, Minority Leader, Toby Okechukwu from Enugu State, Deputy Minority Leader, Gideon Gwani, Minority Whip, and Adesegun Adekoya Deputy Minority Whip.

Despite protests from PDP members, citing various House rules, Gbajabiamila ruled them out and accordingly declared Elumelu Minority Leader, Okechukwu Deputy Minority Leader, Gwani, Minority Whip and Adekoya Deputy Minority Whip. Reacting, the aggrieved Chinda group said the nomination of Elumelu and company as the principal officers for the minority party would not stand, stressing that some colleagues of his must had ambushed them. Brandishing the correspondence sent by PDP and received with acknowledgement from the Office of the Speaker on June 26, the lawmaker said a series of inter party meeting was held among the opposition parties where all the issues of nomination were rectified. He said: “The issue is that of the minority leadership. It is the standard practice in parliament that minority leadership comes from among minority parties and the correspondence is always sent by the major minority party, in our case that was followed.”

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

L-R: Abidemi Adeboye, zonal head, business banking division, Lekki, Access Bank plc; Oamen John, MD, Faultless Finish Limited; Chizoma Okoli, executive director, business banking, Access Bank, and Segun Adeniyi, head, Africa Fintech Foundry, at the Creative Sector Loan Forum organised by Access Bank.

How Nigerian economy will benefit from AfCFTA ODINAKA ANUDU

ehinde Ajala, a Lagos-based exporter, was excited on Wednesday morning when he got wind of President Muhammadu Buhari’s decision to sign the African Continental Free Trade Area (AfCFTA) agreement. He had always wanted to penetrate the East African market but several barriers in the bloc meant his decision hadn’t materialised. He knew that Buhari’s refusal to sign the trade treaty would cause other African countries to impose subtle restrictions on products coming from Nigeria. “Now I can export to any part of the continent,” Ajala boasted. “I can, from Nigeria, provide logistics services to any firm in Africa without in-country restrictions.” President Buhari will sign the AfCFTA at the Extraordinary Summit of the African Union in Niger on July 7. “Nigeria is signing the AfCFTA Agreement after extensive domestic consultations, and is focused on

taking advantage of ongoing negotiations to secure the necessary safeguards against smuggling, dumping and other risks/threats,” the Nigerian Presidency said on Twitter late Tuesday night. Buhari had refused to sign the AfCFTA since 2018 owing to protests by manufacturers who believe it would harm the sector. Studies, however, show that AfCFTA will remove barriers to trade and services. In simple terms, a Nigerian lawyer can render services to clients across the continent without barriers. Again, Nigerian businesses, traders and consumers will no longer pay tariffs on a number of goods produced and traded within the continent. Also, it will now be easier for small and medium-sized enterprises to supply inputs to larger regional companies. The South African example might help. Due to free trade, large car makers in South Africa source leather for seats from Botswana and fabrics from Lesotho, under the preferential Southern African Customs Union trad-

ing regime, a United Nations Economic Commission for Africa’s document shows. Un d ou b te d ly SM E s, which form 85 to 90 percent of business in Africa, often struggle to penetrate big markets. But they can now tap into regional export destinations and use them as stepping stones for expanding into overseas markets. The AfCFTA seeks to liberalise trade among African countries. It is targeted at a ‘borderless’ Africa, with an eye on a single market for goods and services on the continent. Experts believe it is easily the largest trade agreement since the World Trade Organisation (WTO) in 1994 and a flagship project of Africa’s Agenda 2063, targeted at creating a single market for 1.2 billion people and exposing each country to a $3.4 trillion market opportunity on the continent. “We maintain that the AfCFTA would improve trade among African countries and provide opportunity for Nigeria to export to other African countries,” Babatunde Ruwase, president, Lagos

Chamber of Commerce and Industry (LCCI), said in Lagos on Wednesday. The treaty is expected to raise Africa’s nominal GDP to $6.7 trillion by 2030 and will liberalise 90 percent of products manufactured in Africa. This means that a country can only protect 10 percent of its local industries. The AfCFTA officially came into force on 30th May, 2019 when the required number of ratifications – 22 – was obtained, making the agreement a binding international legal instrument. Proper operations, however, are yet to start. The Gambia had the two months ago completed the number of countries ratifying the trade agreement to 22. South Africa, Ethiopia, Sierra Leone, Lesotho, Burundi, Namibia, Guinea Bissau, and Botswana, among others, had earlier signed up. Proposed improvements in customs clearance times and logistics in AfCFTA regime are expected to support perishable nature of most agricultural food products.

•Continues online at www.businessday.ng

The hidden potential of Nigeria’s app/software development market JUMOKE AKIYODE-LAWANSON

he United States of America, with its $21.3 trillion economy as at 2019, spends less than $100 million importing software and makes much more than $500 billion exporting software. But Nigeria, with its $397.2 billion economy as at 2018, spends as much as $2 billion importing software about 80 percent of which already exists, developed locally. Although these software have been designed and built in country, local software receives very little to no attention

Analysis in terms of acceptance and patronage. In 2013, when the Nigerian mobile app market was valued at $1 billion at the mobile app summit, James Rutherford of Nokia Corporation said “the sub-$100 smartphone is steadily becoming a reality globally”. “Low-end smartphones are increasingly available and these types of mobile phone will likely grow at a compound annual growth rate (CAGR) of 15 percent over the coming

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years,” Rutherford said. This forecast became even more evident in reports by GFK retail and technology Nigeria which listed Nigeria as the third highest tech device growth market globally in 2015, with a 13 percent growth between 2014 and 2015. According to the report, sales of technology devices rose from $5.1 billion in 2014 to $5.7 billion in 2015. Gaming apps have so far spurred the rapid growth of mobile software applications, as Nigeria’s appbased mobile gaming market was in 2018 valued at $21 million (US) and is estimated @Businessdayng

to be worth $53 million (US) by 2022, according to Statista. com, an online research tool. With app developers earning 50-70 percent of retail price via the app store platforms of Apple, Windows, Google, Blackberry, Nokia and others, incubating young genuine developers could have significant multiplier effect domestically, as more and more technology-inclined youths look to app development and software programming.

•Continues online at www.businessday.ng

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NEWS

Annual ALP Seminar series held in Lagos

he 2019 edition of Akindelano Legal Practitioners annual ALP Seminar series held recently in Lagos with the theme ‘Role of FinTech and Digital Finance in Nigeria’s Economy.’ The seminar kicked off at 9.30am with a video presentation by Kobi Bendelak of InsurTech Israel, in which he explained how the insurance industry could benefit from FinTech, and made mention of the investment funds available for the development of advanced technologies in the insurance industry. Thereafter, Ronke Kuye of SANEF made a presentation about the progress of financial inclusion in Nigeria, and concluded that there were about 36 million adult Nigerians (mostly females) who were currently excluded from the mainstream of the financial community. She remains however optimistic that through the current network of financial agents and the planned increase SANEF will attain its target of full inclusiveness by the end of 2020. SANEF(SharedAgentNetwork Expansion Facility) is a project powered by the Central Bank of Nigeria (CBN) and a number of government financial organisationssuchasDepositMoneyBanks (DMB), Nigeria Inter-Bank Settlement Systems (NIBSS) , Chartered

Institute of Bankers of Nigeria, licensed Mobile Money Operators and Shared Agents with the primary objective of accelerating financial inclusion in Nigeria. Her presentation was followed by a series of panel discussions moderated by ALP’s John Delano. The first involved Emezini Afiegbe (Women’s World Banking), Esaie Diei of Efina (Enhancing Financial Innovation and Access) and Kuye (Sanef). According to Efina’s data, majority of Nigeria’s population (61.9%)liveinruralareasandavailable financial services are usually informal. 50 million adults do not have accounts at a formal financial institution, 41.6% of the adult populationarefinanciallyexcluded whilealmost10%(9.4m)relysolely on informal finance The second panel discussion on The Challenges for the FinTech and Digital Finance in Nigeria featuring Degbola Abudu of Capricorn Digi; Folu Majekodunmi of Asseco and Adejumo. The panellists concluded that chief among the challenges were the lack of protectionforintellectualproperty, afalteringeducationsystem,which fostered a lack of understanding even amongst Agents of the opportunity available; Suspicion and lack of trust of the populace for any finance related services and lack of funding.

Rivers Revenue Board vs NDDC: N50bn tax case gets messy as RIRS initiates contempt proceedings with jail risk against NDDC top 4 IGNATIUS CHUKWU

he N50bn tax case between the Rivers State Internal Revenue Service (RIRS) and theNiger Delta Development Commission (NDDC) seems to have got messy as contempt proceedings have begun in Port Harcourttocommittopmembers of the interventionist agency to jail for contempt of court. The NDDC was accused of unsealing its premises without court order whereas the sealing was done with court order over N50bn tax demand. The initiation of contempt proceedings confirmed to BusinessDay by the RIRS executive chairman, Adoage Norteh, is part of Suit No. OHC23//2019: RSBIR vs NDDC, Prof. Nelson Brambaita, acting managing director, Chris Amadi (acting executive director finance and administration), Adjogbe Samuel (acting executive director project), and Kaltungo Moljengo, director of legal services. Contempt breaches do not carry fine but jail sentences. This may become an issue in a case between a PDP state and the APC-controlled federal agency. There is already feisty relationship between the Rivers State government and the NDDC, but the executive chairman has always appealed to observers to divorce the tax matter from politics. Details available to BusinessDay indicated that following an application by the Rivers State Board of Internal Revenue (RSBIR), the High Court of Rivers State has granted the service of Form 49, order of committal on Brambaifa, the Ag MD; Chris Amadi (acting executive director, finance and administration); AdjogbeSamuel(actingexecutive director, project); and Kaltungo

Moljengo (director, legal service), all of NDDC by substituted service over alleged disobedience of the order of the court. According to the affidavit filed by RSBIR earlier, Form 48, notice of consequence of disobedience of order of the court had been served on the Acting MD and the other three officials of NDDC and theeventsthatgaverisetothecontempt proceeding are as follows. According to findings, on the 17thofApril,2019,thecourtordered that NDDC is indebted to RSBIS to the tune of N50bn being outstanding tax liability owed the Government of Rivers State by NDDC with respect to PAYE, Withholding Tax andothertaxesallegedlyunpaidfor the period, 2012 to 2017. The court also ordered the issuance of a warrant authorising RSBIR to seal any land and or any other property belonging to NDDC in order to recover the said sum of N50bn owed by NDDC, it was gathered. It further ordered NDDC to pay the sum of N20m as cost incidental to the recovery of the amount owed. On the 23rd of April, 2019, RSBIR executed the order and sealed three property in Port Harcourt belonging to NDDC. On the 24th of same month, NDDC was said to havehadameetingwithRSBIRand after the meeting wrote a letter to RSBIRrequestingthattheirproperty should be unsealed by RSBIR. Sources said after the said letter meetings were held by NDDC and RSBIR in the course of which NDDC allegedly agreed to make payment on account as a condition for unsealing their premises and through their tax consultant and acting MD allegedly offered an amount that was accepted by RSBIR, after which they offered to make payment shortly. www.businessday.ng

L-R: John Delano of ALP; Chinenye Mba-Uzoukwu, Infographics Nigeria Limited; Yinka Aderombi, Leadway; Konstantin Tsanis, Wema Bank; Emeka Okoye, Cymantiks; Ade Atobatele, Gboza Gbosa, Technology Limited; Olayode Delano, ALP, at the 8th instalment of the ALP Seminar Series organised by AkinDelano Legal Practitioners; themed ‘The Role of Fintech and Digital Finance in Nigeria’s Economy’ in Lagos, recently.

Experts urge for innovation, market development policies for insurance industry growth ... as NAICOM blames directors, firm’s inefficiencies Modestus Anaesoronye

takeholders in Nigeria’s insurance industry have been urged to focus on innovation and market development policies to drive the sector’s growth. They believe the insurance industry has huge potentials, and therefore requires collaboration of the operators and the regulators as well as government to unlock its growth. Doyin Salami, CEO, Kainos Edge Consulting, who spoke on the theme “Regulation, Innovation and Business Growth” at the 2019 National Insurance Conference held in Abuja, said the insurance industry must be ambitious and drive policies that focus on innovation and market development. Salami also noted that the relationship between the regulator and the operator must be robust, where

operators could honestly and frankly talk to the regulator for the betterment of the industry. According to Salami, regulations must focus on driving innovation so that the market can open up for new products, partnerships and new consumers. To the operators, he noted that the regulated must be honest and transparent in their dealings to be able to enjoy good relationship with the regulator. He also said insurers were not innovative creators, urging that they domesticate successful innovations from other markets, but give it global outlook. Mohammed Kari, commissioner for Insurance, who recalled some of the market development initiatives being driven by NAICOM under the Market Development and Restructuring Initiatives (MDRI),

NEWMAP spends N1.6bn to compensate erosion victims IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

uthorities of Nigerian Erosion and Watershed Management Project (NEWMAP) says it has so far spent the sum of N1,627,897,362,69 billion to compensate 2,980 project affected persons. Salisu Mohammed Dahiru, national coordinator of NEWMAP, disclosed this in Benin City during the 10th Environmental Outreach Public lecture/environmental awards ceremony organised by the publisher of Environment Outreach Magazine, Noble Akenge. Dahiru,whodeliveredthepublic lecture with the theme, “Managing Land Degradation in Nigeria: The Challenges, Actions and Remediations,” also disclosed that 1,558,62 hectares of environmentally degradedsiteshad,asatFebruary2019, been recovered in the country. He said the hectares were among the 21 first wave of sites including activities in the Northern states with 94 percent average physical progress. Dahiru, who explained that the sites were reclaimed through civil works, bio-engineering and other measures, said two sites were completed and commissioned in Enugu, 56 new sites designed and cleared for implementation across

first states while 20 sites had been stabilised and reduced in severity. TheNEWMAPbosssaid30sites projects were targeted in year 2020 while other states were at the verge of commissioning completed sites. According to Dahiru, 20 sites have been stabilised and reduced in severity, 30 sites as project target this year. Two sites in Enugu have been commissioned while other states are focused on commissioning completed. “Currently, 1,558,62 hectares reclaimed as a result of civil works, bio-engineering and other measures, 702 hectares reported in June 2018. Increase due to rehabilitation of degraded land in Kano, Sokoto and Gombe states. “Advances have been made by new states in areas of clearance of needs assessment and other studies to key into the project. The states have stepped up activities in providing sensitisation and awareness to members of the community and stakeholders within the state government,” he said. He, however, said the sum of N11,226,293,496 billion counterpart funds had been released to the project while $442,473,811,77 billion, representing 96.5 percent, had been disbursed.

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said the challenge with the industry was policy resistance. If directors of insurance companies play their roles effectively, there will be less work for NAICOM because everything will ordinarily fall in place, Kari said. He however said it was unfortunate that some directors, instead of blaming their managements for nonperformance or other issues about governance, they blame NAICOM. They blame us for non-payment of dividend, non-payment of claims, no growth of premium and all that, the commissioner said jokingly. Tunji Oluyemi, managing director/CEO, Tespauruth Consulting, a discussant at the panel session, said innovation and market development policies were key to insurance business growth, supporting Doyin Salami’s position that these were growth keys.

He said the Tier-based capitalisation policy earlier initiated by NAICOM was a well thought out policy that considered capital utilisation, risk management as well as capacity. He said the new capital regime, which requires companies to shoreup their paid up capital, was going be a bit daunting and demands more innovations to make the capital work. Owolabi Salami, executive director, Allianz Nigeria, said the policy on new capital being driven by NAICOM was for the good of the industry, stating that chief executives must put on their thinking cap for innovations and creativity to grow the business. Rotimi Okpaise, actuarial expert at EY Nigeria, said a key policy that would impact positively on insurance and drive growth was awareness that brings out the value proposition in insurance.

Gallant Graces promotes personal grooming, development among girls David Ibidapo

n an expedition to Tarkwa Bay Government Secondar y School, Gallant Graces, a foundation birthed by JSK Consulting Group, led its team to educate secondary school girls on basic etiquettes necessary while they journey through the path of leadership. Gallant Graces Foundation headed by Janet Adetu, etiquette expert, MD/CEO of JSK, lauded the need to impacting lives on leadership, etiquette, grooming, and manners and about them living their dream. “Our girls are nation builders and we can’t do anything but make sure we look behind us as we watch our nation grow and help them reach their goals and fulfil their purpose,” Adetu told BusinessDay in an interview. Speaking on why it is important they visited Tarkwa Bay Secondary School, Adetu highlighted major challenges faced by the school, stating how isolated from the real world the school was, hence the need to mentor these students occasionally. Constrained by river surrounding the school, sand and @Businessdayng

virtually no means of transportation within the geographical location, corps members show little or no interest to be posted to such school, thereby reducing the chances to learn proper manners and limited to peer influences, which in most cases “are village like,” she noted. Among deficiencies noticed among the students were shouting, bad sitting postures, poor dressing and character flaws to mention but a few. This Gallant Graces Foundation sought to address under the acronym “GOLD”- grooming (hygiene, personal care, and presentation), Opportunity (Mentorship, Scholarship and Angel networking), Leadership and Decorum. Speaking on the motivation to start up a foundation, Adetu explained that during the course of her training at JSK Consulting, “some of the girls I talk with come to me telling me they are shy, having low self-esteem, and not confident,” feeling they need help to overcome these challenges. “Boys need the same grooming, however, we are focusing on girls today. We will do something to promote the boy grooming in the nearest future as this is the major issue confronting them,” she explained.

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If you can’t join them, beat them: How to disrupt higher education in Nigeria

David Hundeyin

here is a small group of young people I am part of here in Lagos who support and mentor each other as we try to make something of ourselves without a 9 to 5 job. We call ourselves entrepreneurs to feel better about our struggle to scale our various small businesses and live like the responsible adults we are supposed to be. Whenever we meet to whine and moan about Nigeria, we generally end up moaning in unison about one thing in particular – staffing. Before going further, I must clarify that this is not a “Nigerian youths are ignorant, lazy and entitled” article. The performance of young Nigerians in more supportive environments clearly shows that the problem is not with the aptitude or intelligence of Nigerian graduates as individuals. Nevertheless, there is a problem. Across our mix of professional services and creative endeavours, the common recurring complaint in our merry little group is that the general quality of entry-level labour one can get in Nigeria is dire. We frequently trade stories about dealing with basic comprehension and literacy issues, attitude and cultural mindset problems, ethical problems like plagiarism, and lack of initiative. One and all, we agree that Nigerian universities and polytechnics woefully fail to provide students with even the most basic skills to make them employable or competitive in the world they graduate into. Nigerian higher education is ripe for disruption The problem of pitifully low-quality higher education does not affect gradu-

ates and their employment prospects alone. As the world moves further away from the 20th Century natural resource extraction model into an economy of ideas, the economic performance of a country will have an even higher correlation to the productivity of its workforce. Currently our already abysmal productivity per capita is inflated by oil exports. When that is no longer a thing, all we will have is the knowledge and enterprise of our population to create value that the rest of the world will want to pay for. What that means is that if we do not find a way to overhaul tertiary education in Nigeria, whether we will have an economy in future will be decided by what comes out of the EKSUs, BUK’s, Uniports and Ambrose Alli’s of this world. These and our other under-resourced, unproductive and poorly managed higher institutions will somehow have to mold the talent to power a 21st Century knowledge economy to compete with Kenya, India , China, Vietnam, Indonesia, South Africa, Brazil... And we all know what kind of track record they have in fostering innovation and developing ideas. Between 2007 and 2008, I spent a year at Igbinedion University in Okada, Edo State, where I had a firsthand taste of the Nigerian university experience. My insistence on using a laptop in class and recording lectures with the webcam, in lieu of handwritten notes got me into a fair bit of trouble. In the year 2007, in a country that already had cheap computers, nationwide ATM coverage and wireless internet service, I was still supposed to use a pen and notebook to jot down Mr. Lecturer’s dictations word for word. During exams, I was then supposed to regurgitate said ramblings word for word. Or else. Through no achievement of my own, I was able to leave and find my way to an actual university offering a world class program outside Nigeria. Most Nigerians are not so lucky. There are Computer Science students who are forced to learn outdated programming languages like FORTRAN with a pen and paper for four whole years. Upon graduation, they are

awarded a degree that should mean that they can “code.” In reality they then have to start all over again with their “real” education on Udacity and Coursera . Meanwhile at the same time, their contemporaries in Asia and Europe are already accepting offers from Silicon Valley and pitching their startup ideas to investors. As a matter of economic priority and selfish individual interest therefore, it is time to do something about Nigeria’s horrendous higher education. If we maintain the status quo, we might as well start learning how to drink crude oil in preparation for a world where we offer no value to anyone outside West Africa. The government cannot be part of the solution because as usual, it will either show complete disinterest or put forward a plan that will take decades to implement. And then fail to implement it anyway. This leaves it to the private sector to save Nigerian students. Private sector-led university, not private university As I alluded to earlier, even expensive private universities function as slightly more efficient replicas of their state-owned cousins. They also havean emphasis on learning by rote, systemic suppression of ideas and an over-the-top deification of hierarchy and authority. Worse still, most private universities in Nigeria are run by religious organisations, each with their unique agenda, be it turning a profit, forbidding students from eating meat, creating a restrictive secondary school boarding house atmosphere, and especially trying to stop adults from having sex with each other for some reason. In some cases, graduates of these institutions turn out even less prepared than their publicly educated counterparts because in addition to being just as technically inept, they are also emotionally underdeveloped after years of being trapped in sterile, Bible-thumping echo chambers. Rather than churches and rich individuals, the proposed network of new tertiary institutions that will save

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As a matter of economic priority and selfish individual interest therefore, it is time to do something about Nigeria’s horrendous higher education

Nigeria’s economic future will be 100 percent funded by endowments from industry consortiums, family offices and HNIs. They also will be operated by transparent industry boards on a not-for-profit basis. Rather than wasting their considerable annual CSR spends on donating computers and mosquito nets that will only be resold on the black market,organisations in every major industry will donate to an endowment fund to build field-specific universities or technical colleges training students at the same level as their peers around the world. Admission will be strictly meritbased, using an entry test modeled on the American SAT standard. Fees will be charged based on individual student financial assessments and capped at $1,500 per session, with scholarships, grants and research funding available where applicable. A guiding principle of all institutions within this network willbe to avoid any cultural baggage associated with university in Nigerian including cultism, sexual harassment, rape, religious extremism and antisocial behaviour. The resultant pool of fit-for-purpose graduates will not only plug the significant labour gap, but help these industries transition alongside Nigeria’s post-oil economy. The telecoms and IT industry for example will have a STEM-focused university offering world class Web/App Development and Engineering programs. Their focus will be completely rational and data-driven, which means that their core KPI is to benchmarkstudents to global IT standards – possibly even awarding degrees or certifications from international institutions. The syllabi will filter out whatever does not contribute toward the goal of graduating individuals whoare ready for the present and future world of work. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng/ David Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance. He tweets @DavidHundeyin.

How MultiChoice continues to enrich lives by supporting Sickle Cell Patients

hy did they not carry out a blood test before getting into a serious relationship? Why did they carry on with the relationship knowing their blood is not compatible? Why are they complaining when they chose to punish their children? stop! Stop with the assumptions. There is a lot of stereotype and stigma that comes with being diagnosed with sickle cell.’ Sickle cell anaemia (sickle cell disease) is a disorder of the blood that causes red blood cells to become misshapen. This is due to an inherited abnormal hemoglobin (the oxygen carrying protein in the red blood cells) which occurs when both partners are carriers of the disease, but the gene is not active because it is recessive for instance, AS. The most well-known form of Sickle Cell Disease (SCD) and in most cases, more severe than others is homozygous hemoglobin. Other common variations include sickle haemoglobin and sickle beta thalassemia (Hb SB thal). The abnormal haemoglobin upon deoxygenation transforms the red blood cell to a dense and rigid ‘sickle’ cell. The blood cells of someone with sickle cell are fragile thus making them prone to rupture. The reason behind the ‘anaemia’ is a result of the decreasing oxygen (hémolyses), this gives the disease the name Sickle Cell Anaemia. Patients with sickle cell suffer from severe pain because the sickled cell can block vessels resulting to the damage of tissues and organs.

Impaired circulation of oxygen leads to a lack of oxygen in the tissues which in turn leads to low oxygen levels, increased acidity or low volume of the blood. These conditions occur because of injury to the body’s tissues, dehydration, or anaesthesia. SCD is characterised by chronic haemolytic anaemia, increased susceptibility to infections, organ damage, and intermittent episodes of vascular occlusion that result in acute and chronic pain. All of these complications compromise the quality of life for the person with SCD, as well as for the family. Helping each patient attain optimal quality of life is the goal of palliative care, and this occurs through open and effective communication. Conversely, all too often, poor communication occurs between patients and health care professionals, which results in suspicion and mistrust. Patients perceive themselves labelled as drug seekers; making them feel that the medical community is merely tolerant of them. These patients believe they are confronted by an unsympathetic system and hence respond to health care professionals in a hostile fashion. For the reasons above, MultiChoice has been involved in aiding and raising awareness of SCD and the risk of producing an offspring with SCD. Over the years MultiChoice Nigeria has partnered with the Sickle Cell Foundation Nigeria (SFCN) to use channels on DStv and GOtv to raise awareness of the disease and raise funds for the Foundation thereby promoting

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good health and better well-being. The health care system in Nigeria is usually not able to provide all that is needed by patients, nor do they have the avenue to raise awareness concerning most of the disorders that we have a tendency to possess in our society. However, with the support from MultiChoice, SCFN (Sickle Cell Foundation Nigeria) has been able to reach out to more people based on the subscribers’ people who have access to DStv and GOtv. Documentaries on SCD have been aired giving viewers an understanding of the disease. Bringing a child into this world to go through this type of physical, mental and emotional pain; medication; stigmatisation or to be reprimanded for something out of their control can be prevented and avoided if and when you educate yourself on genotypes. By seeking to encourage such actions MultiChoice has provided support to SCFN by sponsoring their workshops, community outreaches and seminars. A major problem ‘sufferers’ in Nigeria face is an inadequate health care system that can attend to and provide their needs. Carriers also face this problem because when one goes to get a blood test, the results produced may be wrong caused by lack of satisfactory equipment and enough specialists. For these reasons MultiChoice sponsored the training of psychologists in 2009 and sponsored the 18th edition of the Sickle Cell Genetic Counselling Course that attracted participants from different parts of Africa. A lot

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Abigail Vaughan of individuals tend to overlook Sickle Cell awareness, but they do not understand the danger that comes with not being aware of the complications caused by this disease. MultiChoice’s commitment to the development and improvement of the quality of life for those battling SCD-including possible carriers is an ethical framework in which this organisation has been able to find a balance between the economy and the ecosystem. Individuals as well as organisations have a duty to act in the best interests of their environment and society as a whole. MultiChoice’s assistance to SCFN is not solely concentrated on the disease alone but also ensuring that the foundation is able to get to their patients when an emergency occurs by providing 2 cars and 1 bus in turn aiding operations. It is highly beneficial for the carriers’ well being and that of the offspring to be educated about this disease by paying attention to the documentaries aired on DStv or GOtv concerning SCD. Go for sickle cell genetic counselling, take this disorder seriously because neglecting this aspect of your life leads to adverse effects in the long run.The bad tends to outweighthe good if we are being realistic. Vaughan is a Marketing Intern at MultiChoice Nigeria

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Thursday 04 July 2019

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The capacity to absorb foreign direct investment may be more important than attracting it

Uyiosa Omoregie

he urgency and importance of attracting investment capital to Nigeria was stressed at a recent colloquium. “Capital is very shy and does not like being harassed. You cannot harass private capital and expect to grow the economy. In fact, government should find a way of bringing in shy capital rather than chase and harass it away.” The speaker said. The original Petroleum Industry Bill (now broken into four separate Bills) was first presented in the year 2000. The 19 years of delay without passing the Bill created uncertainty in the minds of potential investors, who value clarity and predictability. One estimate is that more than $120 billion worth of investment was missed out on, because investment was either withheld or diverted due to the uncertainty surrounding the Bill. The economist, Ayo Teriba has stressed the importance of foreign direct investment (FDI) into Nigeria.

In a 2018 paper titled ‘Harmonization of Fiscal and Monetary Policies in Nigeria’, Teriba stated: “Nigeria must build foreign reserve buffers to insure and insulate the macro economy against adverse shocks… To build up reserves, Nigeria could attract large brownfield foreign direct investment (FDI) into all state-owned enterprises (SOEs) in energy, transportation, and social infrastructures. Saudi [Arabia] seeks US$200 billion from FDI inflows into 16 sectors that were lined up for privatization in May 2017. Nigeria could easily seek US$1 trillion or more because much larger infrastructure networks are required to serve Nigeria’s 200 million populace than Saudi Arabia’s 40 million populace.” According to the United Nations Conference on Trade and Development’s ‘World Investment Report’, FDI into Nigeria 2018 was worth $2.2 billion (a 36 percent decline). Ghana was the most favoured West African destination for FDI in 2018 ($3.3 billion), previously Nigeria was favourite. Poor economic growth prospects in developed nations had made sub-Saharan Africa a promising destination of FDI. There was an increase of about 50 percent in FDI to Sub-Saharan Africa between 2005 and 2012. In 2012, the American bank J.P Morgan added Nigeria to its government-bond index for emerging markets; up until then, South Africa had been the only African country on that list. A large

increase in the contribution of FDI to economic growth (GDP) in Nigeria occurred just after Nigeria’s transition in 1999 from military rule to democratic governance. By 2005, FDI inflow into Nigeria accelerated after Nigeria and the Paris Club reached an agreement for $18 billion debt relief package. But the question some economists ask: how effective is FDI and what ensures that it benefits the host country? Researchers have provided evidence that suggests a bi-directional relationship between economic growth and FDI inflows to Nigeria. They explain that FDI encourages growth, more growth also encourages more FDI: a positive feedback relationship. However, the efficacy of FDI in generating economic growth is limited by the level of infrastructure and human capital development in Nigeria. The International Monetary Fund defines a foreign direct investment enterprise as: “an enterprise (institutional unit) in the financial or non-financial corporate sectors of the economy in which a non-resident investor owns 10 percent or more of the voting power of an incorporated enterprise or has the equivalent ownership in an enterprise operating under another legal structure.” FDI can also be thought of as a composite bundle of capital stock, know-how and technology that can (through labour training, skill acquisition/ diffusion and the introduction of

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Researchers have provided evidence that suggests a bi-directional relationship between economic growth and FDI inflows to Nigeria. They explain that FDI encourages growth, more growth also encourages more FDI: a positive feedback relationship

alternative management practice/ organizational arrangement) augment the existing stock of knowledge in the recipient economy. FDI can only be productive when the host country has a minimum threshold stock of human capital. A study showed that an increase in FDI leads to higher growth in countries with well-developed financial markets compared with countries with poorly-developed ones. Local conditions (absorptive capacities) are important factors contributing to the effect of FDI on economic growth. Host country absorptive capacities describe the domestic firms’ ability to respond successfully to new entrants, new technology and new competition. Research show that FDI can promote economic growth by itself (directly) but also indirectly via its interaction terms: a strong positive interaction effect of FDI with human capital and a strong negative interaction effect of FDI with the technology gap on economic growth in developing countries. The flow of FDI into a developing country is also affected by certain factors or conditions present or absent in the host country: the political system, economic system, public and private sector transparency. Dr Omoregie is a petroleum economist and management analyst. He can be contacted at uyiosaomoregie@yahoo.co.uk

Practical agriculture, vocational education, and the school curriculum

griculture was once the mainstay of the Nigerian economy. Before the discovery of oil, commercial farms blossomed and farming was seen and practiced as the main occupation. The North had cotton, groundnuts and other products. The East had Palm Oil, while the Southwest had Cocoa. Agriculture laid the foundation for Nigeria’s industrialization, contributing the largest share to an economy that was experiencing very boisterous growth. However, after the discovery of oil, with its increased production and the huge revenue which it attracted, less and less attention began to be paid to agriculture. Nowadays, most people in Nigeria, particularly the youth, are not interested and do not want to engage in farming any longer. Most young people and unemployed graduates today are only interested in white-collar office jobs. Unfortunately, there still exists the misconception that farming is a profession for the poor and illiterate, which entails grueling toil in the farmland, with a mere pittance as returns. These notions have been fuelled over the years by lack of proper training for those who go into agriculture, causing them to demonize and abandon the venture. This leads to an ageing farming population. Nigeria’s population is currently growing faster than there are farmers to feed the nation. Nevertheless, agriculture still remains the largest sector of the Nigerian economy. It employs two-thirds of Nigeria’s working population. Agriculture accounts for approximately 22 per cent of Nigeria’s GDP. Our priority now should be to get young Nigerians acquainted with the nitty-gritty of agriculture at an early age, introduce them to the business aspect of agriculture and also ignite the interest of school students in agriculture

and encourage them to pursue agriculturerelated occupations. One such initiative that aims to accomplish the above-mentioned objectives is the recently launched ‘Green Schools Initiative’ by Notore Chemical Industries - one of Nigeria’s leading agro-allied company. This initiative rallies stakeholders in the agricultural and educational sectors to expand the secondary school curriculum with the intention to get students more involved in the practical aspects of agriculture within dedicated farmlands in their respective schools. According to a Managing Director/CEO of the company, it will involve Notore partnering with secondary schools across Nigeria to establish demonstration farms that will be used to teach students modern agricultural techniques and best practices. The hands-on approach of demonstration farms accelerates the adoption of international best practices, which will give the students a competitive edge over their counterparts in other sectors. The initiative it has been said will start off with 120 unity schools and top state-owned colleges across the country, with plans to significantly increase the number of participating schools. This is certainly a worthy initiative that should be highly commended and encouraged indeed! Private schools, the private sector, other non-governmental organizations, and other extension agencies can also emulate such a novel initiative. This will help to inculcate the love of agriculture and farming among the Nigerian youth. Another important area of the Nigerian educational system that needs to be given serious attention is the inclusion of Vocational Education and Training in the school curriculum. In Nigeria, there is too much emphasis on university education and merely acquiring

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paper/academic qualifications, not bearing in mind whether the holder possesses the required knowledge and skills. Nigerians generally have this mentality that a university degree is more important than technical/ social/vocational training. We live in a society that places a high value on white-collar jobs and ‘professionals,’ a society where blue-collar work is considered as low status. Parents want their children to pursue careers that will enable them maintain or even increase their high status. They want their children to get highpaying professional jobs. They see Vocational Education as ‘secondary’ and ‘not important.’ They just want academic success for their children. Many schools even place a high premium on college admissions and gaining admission into top ivy-league universities. This has reduced the economic opportunities for those who are more work oriented. It is therefore very necessary and important that parents be re-educated and enlightened regarding the value of occupations that are not high on the social status scale. The inability of our educational system to provide youths with the demands of industries has led to increased frustrations. This further validates the fact that Vocational Education brings both immediate and lasting economic returns for the country and its citizens. Schools in Nigeria need to introduce Vocational Education and Training into their curriculum. By doing so, it will assist students to develop skills that can be of benefit to them in the future. Until Vocational Education is taken seriously, only then will the economy become better. Vocational Education and Training can contribute to the reduction of poverty, hunger and unemployment. It can also help people become self-reliant. Vocational, entrepreneurship, or skill

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Daniel IGHAKPE acquisition programs include training in skills such as: agriculture; tailoring/sewing/ fashion designing; cooking and baking; photography; video editing; hair styling and making; barbing; musical instruments training; cobbling; make-up and gele tying; carpentry; painting; plumbing; and so on. It can help students to build up their talents and also enable them to be self-reliant, or otherwise to secure well-paying jobs that can help them take care of themselves and their families. There is a huge necessity for Vocational Education and Training in the school curriculum. It is vital for educational institutions to provide resources needed to teach Vocational Studies in schools. It is significant for parents, educators and even the government to note the relevance of scholars studying Vocational Education. It provides students with life skills to become productive entrepreneurs, as it breeds creative and innovative ideas. In the long run, it impacts on the economy and increases personal freedom. (Some of the content of this write-up (specifically on ‘vocational education’) was sourced from the website of Greensprings Schools – with oral permission sought). Igbhakpe writes from FESTAC town, Lagos. Contact: danighakpe@gmail.com.

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Thursday 04 July 2019

BUSINESS DAY

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Beyond the unnecessary rejections at embassies, dear citizen, leadership, check your conduct

on e are th e days when you were confident of a v i s a a ft e r going to America for the first time on the B1/B2 platform because, your next need for a visa is in two years and you do not need to appear. Today, the case is different, fellow citizen, you must show up! Show up to defend your need for a long planned vacation, show up to explain why you think you need to go to ‘God’s own country’ and most recently, show up to be refused ‘the’ visa. A woman got her baby’s US passport few hours after delivery but took the same baby weeks to get a Nigerian visa. The said woman had to reschedule her flight 3 times... Oh beloveth nation, who hast beleaguered thee for so long? S e v e ra l p e o p l e w h o have genuinely travelled to America easily for years and have returned and not overstayed, are now conveniently being denied

by the American embassy. How do you get treated unethically in your own country because you want to visit another? A director in a reputable firm, who has travelled to America consistently for the past 10 years, got refused visa recently and his wife and children were given. Dear Consulate, they were meant to go on a holiday… without daddy? How? Why? We complain of being treated dishonourably at some foreign embassies in Nigeria but what could be more disheartening than the way fellow countrymen in other countries find it convenient to treat their fellow country mates badly. For instance, it has become a norm that it takes months to get a Nigerian passport or a renewal abroad. It is so bad that Nigerians abroad prefer to fly to Nigeria to renew their passports. Nigeria seems to be stuck in a circle of ineptitude and shameful conduct both home and away. ‘Home’ because getting a passport in Nigeria isn’t smooth either. Will it be wrong to imply

that behavioural defect is a major challenge deterring the altitude of the nation Nigeria both from the government and the governed? Is bad behaviour now the standard we must accept and internalise? Countries are trending for ground breaking innovations and unmatchable feats, Nigeria, in what do you trend? Talking about bad behaviour, Ewohime Akpovweta recently damaged 5 cars parked within the environs of the Nigerian high commission in London. Bad behaviour right? Yes! We agree but bad behaviour is also denying your fellow country man the privilege of having something that signifies he is your fellow country man, a Nigerian passport...A Nigerian Visa. In all of the global belief on the perception about Nigeria, it is worrisome that the ministry of foreign affairs hasn’t been vocal enough on these issues. It is a reason to worry. Is it therefore fair to conclude that the Nigerian government does not really care about its citizens both home and away?

There have been issues raised concerning the challenges facing the High commissions, challenges like funding. The recent shutdown of some foreign missions could be evidence that foreign missions are underfunded. If this is the case, what is the Nigerian government for example, doing about this? It is amazing how Americans care for their citizens even when the child’s parents are not citizens. Nigerians are known for imbibing cultures better than the owners, smarter in project executions, amongst the top 10 in reputable hospitals and organisations locally and more internationally. Can this same intelligent attributes be spread individually across the nation? Can the government value the lives of the citizenry by protecting and supporting it as pledged whether home or away? Can the honour and glory of this exceptional homeland truly be upheld? So help us God! “Amen” I hear you say but your faith without works is dead. Act!

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New US-Sino trade truce: Tougher talks, more economic damage

Dan Steinbock

espite the White House’s efforts to lobby other countries against Huawei, President Trump also said that US companies can supply the technology giant, which the US, Department of Commerce blacklisted last month. After Osaka, the negotiators face challenging obstacles, despite still another temporary timeout. Deep bilateral disagreements prevail about major structural issues. But what’s the current economic impact of the new trade truce? Limited short-term impact on China In China, the most recent US tariff hikes on $200 billion of Chinese US exports is expected to penalize about 0.1% of China’s GDP growth in the coming year. That is enough to create significant concern, but not sufficient to cause substantial damage – yet. Even if the US would impose 25% tariffs on all goods from China, the largest Chinese companies would likely adjust, thanks to their domestic focus. As the US-based Standard & Poor’s has stressed, half of the rated Chinese companies are state-owned-enterprises (SOEs), which operate in sectors with

limited US exposure. Moreover, the vital property sector is also reliant on domestic demand. Nevertheless, the secondary effects of a protracted and broader trade war could prove more challenging over time. In China, such a scenario could mean greater shifts in supply chains, currency volatility, eroding market confidence. Despite Trump’s bravado, the US economy is far from immune to tradewar damage, however. In fact, the trade wars’ adverse impact is only beginning to bite in the US. Broader impact on US industries In the US, the tariff increase from 10% to 25% on $200 billion of Chinese imports could directly penalize some 0.3% from growth in the coming year. Typically, US companies that garner a significant share of their revenues from China will take the most severe hits. That’s why Trump wants China to buy “tremendous” amounts of farm goods. US farm sector has suffered the most of retaliatory measures, while the White House’s $12 billion bailout package for farmers has failed to soften the blow. In fact, the Trump administration has worked itself into a double-bind. If it piles up another bailout of $15 to $20 billion, it might prove too little too late in the farm sector, while other industries could demand similar packages. The damage is spreading to advanced industries, which include semiconductor giants, such as Micron Tech and Texas Instruments (40% to 60% of revenues from China), and other technology conglomerates, including Apple and TTM Technologies (about 20%), and consumer and auto companies, such as NIKE and Cooper-Standard (10% to 20%).

The White House is pressuring US firms to move their supply chains away from China. Reportedly, Apple is considering diversifying15% to 30% of its capacity away from China. Yet such proposed moves would come with a huge cost. None of the new country destinations can offer a high-level technology and logistics infrastructure that would be comparable to that in China. So the costs of these firms will climb, which will penalize their global competitiveness. Worse, today China is the world’s largest and most rapidly-growing marketplace. If US companies reduce their presence in China, they are taking a cut in their most vital future source of income. That’s why Trump said in Osaka that US companies can – for “time being” – supply Huawei. These giants, particularly Intel and Alphabet (Google) have lobbied intensively for Huawei, which is their major client and a substantial source of revenues. Moreover, Qualcomm and Broadcom and US semiconductor and technology sector would be hit by the loss of Huawei orders. Collateral damage in US economy With continued trade tensions, the damage is spreading in the U.S. economy. As the fiscal stimulus impact is fading, private investment is softening and uncertainty increasing. US economic growth is likely to remain below 2.5% in 2019 and decelerate to 1.8% in 2020. As the impact of the Trump tax cuts and other one-time benefits will diminish, US economy will be more vulnerable to a recession risk, even a major market correction. Worse, if the talks fail and the White House will choose to expand tariffs against all Chinese trade, it will be harder

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Worse, if the talks fail and the White House will choose to expand tariffs against all Chinese trade, it will be harder for US firms to pass on costs to consumers, which will penalize these companies’ competitiveness

for US firms to pass on costs to consumers, which will penalize these companies’ competitiveness. If US would raise tariffs against all Chinese imports, US growth could plunge below 1 percent in 2020 – at the eve of the midterm election. Global economic prospects Global economic integration is typically measured by trade, investment and migration. After a decade of slow recovery, each indicated progress. But since 2018, the Trump administration’s tariff wars have effectively undermined the expected global recovery. World investment remains sub-optimal. World trade has suffered extraordinary decline. World migration has plunged and the number of globally displaced now exceeds 70 million people – far more than after World War II. Of course, there is still a chance to salvage the US-China trade talks. That, however, would require a substantial reassessment of the US stance and objectives. China will not sign a trade deal that is predicated on unilateral geopolitical objectives rather than economic realities. The final outcome cannot be based on coercion. It must rely on a mutual effort at a sustained reconciliation that will reflect both countries’ sovereign interests and the compelling long-term economic realities of the global economy. • The original, shorter commentary was released by China Daily on July 1, 2019 Dr. Dan Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup.net/

Electricity paralysis: From whence cometh our help?

s it is clearly written in Psalm 121, the question in all lips about our electricity conundrum is ‘From whence cometh our help’? This is because, the situation has become totally hopeless and it is has gone beyond the DISCOs, the usual suspects in this matter. We blame the DISCOs because they relate directly with us. After all, it is the face that is close to the palm that receives a slap, just like the tree at the roadside receives countless matchet-cuts from restless passersby while only the person whose feet step into the stream is likely to be drowned! ( I am in a proverbs mode today). More than 5 years ago, I was so exasperated about this electricity affair that I had to ask the DISCOS,‘when should we start dancing? Or rather giving the stories flying around here and there, shall we ever dance?’ (DISCOs; when shall we start dancing; Ik Muo, BusinessDay, 11/2/14). As it was 5 years+ ago, so it is today: disconcerting stories are still flying around, making it doubtful if we would be on the dancing floor in this generation. Join me to browse the media space on recent electricity related stories. Here we go: ‘Power grid suffers total collapse; TCN may expel Discos’( 1/7/19). That was the 8 total collapse in 2019 and ‘The governmentowned Transmission Company of Nigeria, which manages the grid, blamed electricity distribution companies for the system failure, which it said occurred at 9.10 am’on Sunday, 30/6/19. During the last collapse in May, the TCN said it might have been caused by the failure of the generator in one of the facilities! So, TCN uses generators? The more you seek, the less you find! Then, this one: ‘The Abuja Electricity Distribution Company (AEDC), explains reasons for cutting off power supply during rainfall, saying it does so to save lives, properties and to protect its equipment’( 30/6/19). At least the Abuja big men are lucky to receive explanations. Where we, the ordinary citizens reside, they cut the damn-thing with reckless abandon and without any explanations whatsoever. This also makes it clear that in other to improve power supply, we should banish rainfalls but the electricity generators will then tell you that poor rainfall is adversely affecting

power supply! Let’s move on: ‘Despite 208 Electricity Line Items In 2018 Budget, A Nigerian Community Lives In Darkness’: this is due to the bizarre procurement process in which MDAs are empowered to procure and install electrical infrastructure ‘The Federal Ministry of Agriculture has seven transformer related line items. The Federal Ministry of Education was given eight, seven of which have no identified location. IN the Federal Ministry of Health, there was a project to deliver a 300 KVA transformer to an unnamed location. The Federal Ministry of Information and Culture, which is chiefly concerned with shaping public opinion about the government, is empowered to provide one transformer. Even the Ministry of Labour and Employment…’ has its own share! Then: ‘A prolonged blackout looms in parts of Lagos and Enugu states as the TCN suspended some facilities of the Enugu Electricity Distribution Company and the Ikeja Electricity Distribution PLC from the national grid’ .(27/6/19). Late last year,(20/12/18, The Daily Trust commented on the endless blame-game over the electricity shortage across the country ‘when government accused the Discos of low investment in their networks’. Minister of State for Power, Works and Housing Mustapha Shehuri said that” Generation capacity has improved; transmission has improved; but the distribution companies are not taking power from the transmission company.” Two days previously( 18/12/18), it was reported that‘THERE is palpable fear by electricity generation companies, GENCOs, that output may not improve in 2019. They had expected to see a working template from government for improved activities but which has not been made available’. On 1/5/19, Professor Adesoji Adesina,during the2019 First Award Winners’ Lecture of the Nigerian National Merit Award (NNMA) at the University of Lagos said ‘it may take 2,000 years for Nigeria to get steady electricity’. However, mercifully, theElectricity distribution companies (Discos) in Nigeria have said it will take about $100 billion – approximately N36 trillion, worth of investment in Nigeria’s power sector over a period of 20 years for the country to

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enjoy stable electricity supply.(23/6/19). Twenty whole years! Meanwhile, ‘the nation’s power generation dropped to 3,390.7 megawatts on 1/7/19 as seven plants, including three built under the National Integrated Power Project, sat idle’ while on 17/5/19, ‘Zimbabwe’s Minister Of Power(was) Sacked Over 8-hour Outage’ Daily( 17/5/19). Just 8 hours? Has anybody been rebuked, ordinary rebuke, over woeful electricity matters, even when power outage disrupted presidential functions? You have seen why Nigerians now resort to Psalm 121. I know that God is all knowing, all powerful all capable and VERY compassionate but I don’t know whether you have received this message which I have received several times, even this week: God cannot do for you what you can do for yourself! I don’t know whether this has any Biblical roots but it is good that we bear it in mind as we continue to ponder on this national calamity( next week). Other matters: BOS…Too early in the day I don’t know about others, but my major challenge in this column-writing business is that most often, there are so many issues begging for attention that even a daily column would not be enough. I am not a fan of the political class, irrespective of party affiliation, because they are all birds of the same feather, propelled by gluttonous avariciousness. My views on the recent elections that brought the BOS of Lagos, among others into power, are in the open sphere. But I was VERY glad on 20/5/19 when he, as a governorelect, declared publicly that he would end the Apapa gridlock within 60 days. Within me, I said: here goes a man who has his plans worked out and who is sure-footed. Despite the order from Abuja on the Apapa gridlock and the fact that trailer parks built by Ambode were almost ready, I believed it was a bold and enviable paradigm in governance. I took a mental note to write on that statement and its strategic implications for Lagos governance in the next four years. However, there was a shocking and embarrassing volte-face from the same BOS, who has become a full-fledged governor. On 19/6/19, exactly one month after the First BOS Declaration, he did the Second BOS

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ik MUO declaration, where he denied the former, stressing that he promised to review the gridlock, not end it! And while the first declaration was on the cozy grounds of Wheatbaker Hotel, Ikoyi, the second one was from the Rocky Mountains of Abuja. What is this review all about and why should it take him 60 whole days just to do an ordinary review? Why did he not deny the 60-day quit notice to Apapa traffic madness when it was first made by the press, which is now accused of putting words into his mouth? Anyway, our people say that if a bird discharged 20 droppings within one second of perching, then it would be a deluge when it settles down to real business. I hope this will not be the pattern of promise reversals and denials in the next 4 years. And that reminds me about how he and his principal rode roughshod over Ambode. I have no sympathy for ‘Ambo’ because as our people would say, the snake usually goes down through the route it went up. The force that threw him up also threw him down. However, our people also warn the second wife to always remember that the cane with which the first wife was flogged is still behind the oga’s chair. And when you worship an insatiable god, the god will, after taking everything from you, come for you! And a god that ask a man to gratify him sexually, actually wants the man’s head. That was in those days because these days, ‘man de chop man’!

Ik Muo, PhD. Department of Business Administration, OOU, Ago-Iwoye, Ogun State muoigbo@ yahoo.com ;muo.ik@oouagoiwoye.edu.ng ; 08033026625

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Thursday 04 July 2019

BUSINESS DAY

cityfile Motorcycle operators want Obiano to lift ban

L-R: Chinenye Ilechukwu; Foluso Ajayi; Femi Oshinlaja of Fego94 Alumni with Amos Akinpelu, principal, Federal Government College Odogbolu and Abimbola Ogunba, president, Fego94 Set Alumni, at the commissioning of Solar Power System for Renovated Water Station & Dinning Hall Give-Back Projects for Alma Mata in celebration of Fego94 Set 25th Anniversary.

Taraba: Kidnappers now risk death penalty …as new law awaits governor’s assent WAHEED ADUBI

idnappers in Ta r a b a n o w risk death upon conviction, as the House of Assembly has amended the state kidnapping and abduction prohibition act 2010, to introduce death penalty and life imprisonment for offenders. Charles Maijankai, majority leader and member representing Karim Lamido 1 constituency,

moved the motion for the amendment of the act, on Tuesday. The motion was seconded by Bashir Mohammed, the minority leader of the house during plenary. The speaker, Abel Diah said that the bill, upon its assent by Governor Darius Ishaku would become kidnapping and abduction prohibition amendment act 2019. Diah, who represents Mbamnga constituency, said that the bill would

ensure protection of residents of the state against kidnapping. According to the speaker, the new bill has amended section three, four, seven and eight of the 2010 act. The bill stipulates that any person found guilty of kidnapping or abducting a person or by other any means of instilling or tricking another person with intent to demand ransom or compel another person to do anything against his wish shall be sentenced to

death. He explained that the person shall also forfeit all property and proceeds traceable to him or her to the state government. The speaker also said that any person who attempts to kidnap shall be sentenced to life imprisonment while any person who willfully permits his building or premises to be used for the act shall be sentenced to life imprisonment without an option of fine.

Lagos Flood: Mother, child sleeps in toilet JOSHUA BASSEY

he heavy rain experienced in Lagos State for over five days had forced a 50-year mother, Abosede Adeoye, and child to sleep in a toilet. The five days rain generated flood that submerged Abosede’s house located at Odubanjo, Igando, a Lagos suburb, near a dumpsite by Oko-filling station bus stop. Since the daily rain started last week, homes in different parts of the state have been taken over by flood, forcing many families to vacate their houses. It was gathered that the

dumpsite at Igando has blocked major drainages and fences, which spread to Abosede’s home within the community, forcing them to be sleeping in toilet. “I have been in this community for the past eight years with my child. For years now, this is how we’ve been living here and it’s affecting my health, including the health of my child. “The place is no longer conducive for us, but we can’t even afford another place. Whenever it rains, I and other women used to fight over right of space in the toilet, but most of the women allow me to use the toilet because of my age. www.businessday.ng

“I am married, but my husband is very old, too old in fact. All the property I moved with into this community had been destroyed. If we go out to work and it starts raining, we start to worry and panic. We know there wouldn’t be a place for us to sleep. It means a night of trouble, cold and mosquitoes. “When we return home to see our homes flooded, we go to bed hungry. There will be no place to cook. Sometimes, I cook and eat in the toilet,” she said. The woman said that the community seriously needed government intervention to make them have

a sense of belonging. “We pray that God should touch our government. We badly need their help,” she said. Aside the flooding, which appeared to be the community’s immediate problem, residents in the area also complained of stench from dumpsite causing sicknesses, while pigs and snakes have become part and parcel of the community. The area is known as Zone One community under the Igando Estate Phase 3 CDA, which comprises six streets, Odubanjo, Alamu Olaleye, Ovwighoyoma, Kajola, Ogunmer and Otunba Oladokun.

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ommercial motorcyclists in Anambra, otherwise called ‘Okada’ operators, have appealed to Governor Willie Obiano to lift the restriction imposed on their operations in Awka and Onitsha metropolis since July 2018. The operators made the appeal in separate interviews in Onitsha, Tuesday, said that the ban had brought economic hardship on them and their families, having lost their only source of livelihood due to the ban. The state government banned the okada operations on July 1, 2018 as part of the measures to check crimes in the two towns. Sunday Ofoke, state secretar y, Motorcycle Transport Union of Nigeria, said that the union was willing to partner with the government on security, should it lift the ban. Ofoke said: “We are begging the government to have mercy on us and reverse the directive because many of us are dying of

hunger. If there is anything they want us to do in terms of security, we are ready to do it. They should just call us back. “But if you look at it, after the ban, we still record crime, so they should just consider us and call us back.” Another okada operator, Arthur Nwankwo, regretted that government had yet to fulfill its promise to give out mini-buses to replace okada. Nwankwo said that he resorted to loading passengers for commercial tricycle (keke), following his inability to buy a bus to replace his motorcycle. He said, “I had yet to recoup the money I spent to buy the Okada before government announced the ban. Since then, I have tried to get a bus for transport business, to no avail.” Efforts made to get the reaction of Clement Chukwuka, the managing director of the state Small Business Agency, regarding the pleas by the okada operators, were unsuccessful.

2 arraigned over theft of machine parts

wo men, who allegedly stole some parts of a printing machine valued at N12 million, have been arraigned at an Ikeja Magistrate Court. The defendants: Samson Simon, 28; and Adeniran Babatunde, 23, who live in the Abule-Egba area of Lagos State, are standing trial on a two-count charge of conspiracy and stealing. The two defendants, however, pleaded not guilty to the charges. The prosecutor, Benson Emuerhi, told the court that the defendants committed the offences on May 16 at No. 33, Moyo Agoro Street, Ogba, Lagos, at 12.30 p.m. Emuerhi said that the defendants conspired together with others still at large to steal some parts of printing machine belonging to the complainant, Dapo Jibodu. He said that the defendants stole motors, panels, and compressors from a printing machines valued at N12 million. @Businessdayng

“The defendants, who on the pretext of repairing the printing machine, claimed that the items were stolen without giving any concrete evidence,” the prosecutor said. Emuerhi said that the defendants were apprehended after a complaint was lodged by and Dapo Jibodu to the police at SARS’ office in Ikeja. According to the prosecutor, the offences contravene Sections 287 (10) and 411 of the Criminal Law of Lagos State, 2015. The chief magistrate, O lufunke Sule-Amzat granted the defendants bail in the sum of N250,000 each with two sureties each in like sum. Sule-Amzat ordered that the sureties must be blood relations of the defendants, and be gainfully employed. She said that they also should show evidence of tax payment to the Lagos State government. The case was adjourned until October 21.

Thursday 04 July 2019

BUSINESS DAY

BUSINESS TRAVEL Bristow Nigeria develops human capacity for the aviation industry in Nigeria Stories by IFEOMA OKEKE

ristow Helicopters (Nigeria) Limited, one of the leading global provider of industrial aviation services has once again taken a significant step towards its on-going initiatives and commitment to training and human capacity development in the Nigerian aviation industry. In an exclusive partnership with the Nigerian Content Development and Monitoring Board (NCDMB), and in furtherance of its commitment to the development of local Nigerian capacity and content, Bristow is investing over N100 Million towards the training of 20 qualified Nigerian National graduates at the Nigerian College of Aviation Technology (NCAT), Zaria. The NCAT training is designed to provide necessary Aircraft Maintenance Engi-

neering skills to the trainees at the end of a 90-week rigorous Airframe, Power Plant and

abridged Avionics course. According to Bristow, over 80 graduate candidates were

initially selected for this program. This was done in collaboration with the NCDMB

Ibom Air visits NAMA: Fola Akinkuotu, NAMA MD, (left) presenting a gift to George Uriesi, chief operating officer, Ibom Air, as director of finance and Accounts, NAMA, (middle) Aniefiok Umoh looks on.

through a series of tests as part of the overall selection process. 20 candidates emerged on merit following which Bristow has offered full sponsorship of their training at NCAT. According to Obafemi Joseph, the Bristow Manager for Nigerian Content Development, “Bristow is delighted to be part of this initiative as it will assist in developing local human capacity in the Nigerian aviation industry and also help in meeting the identified skill gap within the industry” Dapo Oyeleke, the managing director for Bristow also stated that, “Bristow will continue to invest heavily in the training of staff and also assist in the development of exceptional human capacity to the benefit of the aviation industry in Nigeria and the country as a whole. “In the current year, Bristow has already committed well over N250million to the train-

ing of our staff in line with our commitment to excellence and also in pursuit of our desire to continue to strengthen our team in such a manner that proactively prepares us for the challenges of the future. This is a continuous process in our drive to continue to attract and retain the industry’s best and provide secure employment through the long term,” Oyeleke commented. It is also noteworthy that in the first quarter of 2019, Bristow, as part of its corporate social responsibility and in support for the Federal Government of Nigeria’s policy on the ease of doing business donated a block of two classrooms and also commissioned a borehole water project at the Nigeria Immigration Service training school in Kano, alongside the donation of 100KVA solar powered system at the Nigeria Immigration Service training school in Ahoada, Rivers State.

KLM takes sustainable aviation to the next level with its “Fly Responsibly” initiative ISAGO audit has reduced bureaucracy in

LM Royal Dutch Airlines on the 29th of June 2019, marked the 100th day before its 100th anniversary taking place on 7 October this year with a festive event at Amsterdam Airport Schiphol, where it announced its intention to join hands for the future of aviation. Today, in an open letter, widely published, KLM invited all industry stakeholders to join hands in pursuit of a more sustainable future for aviation, under the banner “Fly Responsibly”. On 7 October, KLM will become the world’s first airline still operating under its original name to mark its 100th an-

niversary. KLM has reached this auspicious milestone because it is committed to seizing opportunities, accepting challenges, connecting with partners and embracing new technology. This special moment 100 days before KLM 100th anniversary was planned to coincide with the arrival of KLM’s first Boeing 787-10 dreamliner. While having already 13 B787-9 dreamliners in operation, KLM now starts adding B787-10’s, growing to a total of 28 dreamliners. The fleet renewal program is an important element to achieve the ambitious sustainability targets.

The arrival of this aircraft from the Boeing factory in the USA is facing some small delays. It’s expected though to arrive in the next few days. The delivery process sometimes runs into minor issues or other small holdups which is the case now. Pieter Elbers, President and CEO of KLM comments: “Over the past hundred years, KLM’s entrepreneurial spirit and quest for innovation have played a pioneering role in the aviation industry. Our centenary is an opportunity to reaffirm our commitment to our ambition: to become the most customer-centric, innovative, and efficient Eu-

ropean network carrier with a deep-rooted determination to address the challenges that lie ahead. “Starting today, we will reach out and share our best practices and tools, all we have learned about sustainability, with all our competitors. We value competition, but not when it comes to the sustainable development of aviation. Starting today, we will offer all airlines our CO2ZERO carbon compensation programme free of charge and free of KLM branding. And in return, we invite others to join us and share their best practices for the benefit of a more sustainable future.”

South African Airways, Emotions DMC promotes Destination Mauritius in Nigeria

outh African Airways (SAA) Nigeria and Emotions DMC, a Destination Management Company have struck a partnership deal to woo Nigerian travel agencies to sell destination Mauritius to Nigerian travellers. The partnership deal was signed at a workshop for top selling travel agents in Lagos which was organized by Africa’s leading Airline, South African Airways and Emotions DMC. Kemi Leke-Bamtefa, South African Airways National Marketing Manager, recommended travel agents

to sell the airline beyond South Africa, identifying Mauritius as one of its strongest routes. “Mauritius is one of our strongest routes. It is a recognized tourism destination in the world and SAA have two flights daily to Mauritius from our hub in Johannesburg. The beauty of Mauritius is it’s visa on arrival for Nigerians, and when you are traveling on SAA you don’t need a transit visa,” Leke-Bamtefa stated. She explained some benefits of flying SAA to Mauritius, “when you fly SAA from Nigeria to Mauritius, you can combine the two destinations www.businessday.ng

on one trip, which allows your journey to be seamless. You can also enjoy the net fares option for group travels on SAA.” Mauritius is stunning. From the white sand beaches, waterfalls, rocky mountains and richness in cultural diversity to incredible hospitality, it has become a top destination for family vacations, group travellers, wedding and conferences. David Collard, Emotions DMC Managing Director, said that Emotions as a Destination Management Company, is a “one stop shop” to be the eyes and ears of clients when

they arrive Mauritius. According to David Collard, “Mauritius for Nigerian travellers remain a growing market in the travel industry and we hope to double it. Our objective is to allow our customers to feel the soul of Mauritius”. “Mauritius is very safe, whether it is family vacations, honeymoon or business, you can leave your hotel rooms and mix with the locals on the streets. It is amazing that Nigeria’s high season happens to be Mauritius’ low season, which makes the destination perfect for genuine travellers,” he added.

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ground handling operations - MD SAHCO

he Managing Director/Chief Executive Officer, Skyway Aviation Handling Company PLC (SAHCO), Basil Agboarumi has highlighted the critical roles being played by IATA’s Safety Audit for Ground Operations (ISAGO) in Ground Handling and Airline operations in Africa. Basil Agboarumi, who was one of the keynote speakers during the just concluded maiden edition of GSE & RAMP-OPS Africa event in Casablanca, Morocco said ISAGO has standardized ground handling operations through its audits thereby ensuring safety of aviation across the world. While speaking on the topic titled ‘Effectiveness of ISAGO in Managing Ground Handling Services for Airlines Benefits for Africa’, he said ISAGO audit has eliminated Multiple Audits per Ground Service Provider (GSP) and Individual Airline Auditing Systems, increased safety in aviation by ensuring standards which has led to reduction in air accidents unlike what was obtainable before the existence of ISAGO. Agboarumi stressed that the introduction of ISAGO audit has given room for audit sharing thereby driving down the number of redundant audits and also improving operational safety, Standardization across multiple operations, reduction of incidents @Businessdayng

in ground operations and enhancing company’s image and reputation. Apart from ensuring safety in aviation, Basil stated further that ISAGO has a lot of other benefits, some of which include promotion of efficiency and quality service delivery through innovations and technology, lowering operational cost by eliminating multiple audit which enables ground operators and airlines to focus their resources on operations, to ensure implementation of Safety Management System (SMS) in operations. Paul Drever, the chairman of the conference, said the GSE AND RAMP -OPS conference was organised to bring together the buyers, users and manufacturers of GSE to explore how to drive the sector forward. He went on to discuss the operational challenges in airside operations in Africa and how GSE is used in the continent and how it can be improved. The event which took place in Sofitel, Casablanca had other speakers from across the world, amongst whom were David Burgess of Swissport, Tafadzawa Zaza of Air Zimbabwe, Dimitrios Sanos of IATA, Danny Vranckx of Aviaco GSE, while there were exhibitors of world known GSE’s ,such as Air Marrel, Blissfox, Mulag, Transtec Overseas amongst others.

Thursday 04 July 2019

BUSINESS DAY

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Thursday 04 July 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Chellarams suffers ₦N2.8bn loss amid mounting competition, rising cost

Pg. 18

Markets

Foreign investors rotate into money market as Nigeria risk heightens DAVID IBIDAPO

ecently, a group of analysts were torn between whether or not to take positions in stocks given how cheap they were. They would later agree to invest in a safer asset class preferably money market instruments. Justifying this claim is a trend witnessed in Nigeria’s foreign capital importation data released by the National Bureau of Statistics (NBS) which revealed increased exposure of FPI’s into money market instruments against other asset classes in Q1 2019. Nigeria’s capital importation in Q1 2019 rose to its highest in six years and gained the most on a quarterly basis since Q3 2017 as carry trade increased in 2019. While 84.21 percent was accounted for of capital imported through foreign portfolio investment, a CAGR analysis revealed that in the last 6 years in Q1 periods, inflows into money market instruments had accelerated 116 percent year on year, while 3 percent into the bond market year-on-year. However this isn’t the case for the equities market has over the period, investments have decelerated by 22 percent. Also, the last five fiscal years has seen foreign portfolio investor’s exposure in the Nigerian money market rise at an average of 71 percent in value annually

against the bond and the equity market. The equity market which stood worst off during the period recorded a decline in FPI’s exposure by 32 percent on the average in value while the bond market by 20 percent. “This trend shows that investors still remain sceptical towards investing in the equity market due to the exchange rate system in which we operate and exposures of companies listed in the equity market to shocks in the economy,” Gbolahan Ologunro, analyst at CSL stockbrokers told

BusinessDay. “Investors are rotating their funds into that which they know is safer for them which are the money market instruments,” Ologunro added. This signals however the perceived heightened risk position of Nigeria by foreign investors on the back of some economic challenges. Some analysts also blame foreign investors’ rotation on CBN’s Open Market Operations in the money market which has been termed aggressive over the years. “The CBN has been issuing

lots of OMO bills which are being bought by foreign investors. The amount of OMO bill as at Q1 2019 so far was close to about $16 billion,” Abimbola Omotola, macroeconomic and fixed income analyst at Chapel Hill Denham told BusinessDay. Typical in the nature of money market instrument is the fact that they are short dated, hence vulnerable to rollover risk which the major downside risk, to this end “upon maturity, the CBN would continue to offer attractive interest rates to keep the foreign investors invested in Nigeria,” Omotola

added. Meanwhile, trends witnessed in the last six years have shown that foreign portfolio investors are proved wariness towards duration risk and most especially towards equity risk. “Investors are favouring the short term instrument now above bonds as well as equity partly because of macro outlook which has dampened the appetite for equities as well as the relatively high inflation outlook,” Omotola explained. Analysis of average daily yields of Nigeria 1-year T-bill against 2 and 10 year bonds revealed that in the last 6 years, average yield on 1 year T-bill stood at 14.35 percent against 14.25 percent and 14.10 percent of benchmark maturities. Going forward, analysts anticipate a sustained trend in money market instruments against stocks and bonds given the exposure of listed companies to macroeconomic shocks. “There is low apathy from FPI’s in picking up equity investments in the domestic economy. Cost of equity is quite high and just very few companies are able to deliver ROE far above cost of equity to investors, hence less attractive to foreign investors.” Ologunro explained. The returns of the stock market in dollar term since the global financial crises has been negative due to fact that Nigeria equity market has not been able to rebound to a significant level of FPI investments in the equities market.

Markets

Portfolio flows to emerging markets hit 5-month high of $40.8bn …Nigeria’s net capital flow worsens ISRAEL ODUBOLA & SEGUN ADAMS

ortfolio inflows into emerging market after suffering its worst decline last month on the back of the trade dispute between world’s two biggest economies, rose to its highest value in five months to June 2019. Figures from the Washingtonbased International Institute of International Finance (IIF) revealed that inflows worth $40.8 billion hit the emerging market last month, driven by strong investors’ appetite for Chinese equities. While equities flows jumped to $12.6 billion in June, from massive outflows of $14.6 billion last

month, debt inflows also surged 213 percent to $28.2 billion in the sixth month, from $9 billion in the prior month. Chinese equities rebounded from negative $8.7 billion in May to $5.8 billion in June, accounting for nearly half of total equity flows. Debt flows accelerated to its highest level in five months buoyed by strong inflows to EM Asia ($18.3bn), EM Latin America ($5bn), EM Europe ($3.5bn) and EM Africa and Middle East ($1.5bn). The global finance body maintained that the surge in portfolio inflows signals that investors are positioning for a favourable outcome from trade talks between

United States and China, adding that the dovish monetary policy stance of major central banks also contributed to the fast pace of flows to emerging markets. The space’s net capital flows, which is the difference between how much a country invests outside and amount other countries invests in its, worsened to $18.6 billion in May as trade dispute intensified in the month, some 9 percent uptick from $17 billion in April, driven by China and major oil producers, Russia and Saudi Arabia. Net capital flows to Africa’s biggest economy, Nigeria, though positive, slowed in two straight months to $700 million in May

reflecting that Nigerians are investing less in foreign economies. Meanwhile Donald Trump, President of the United States of America on Monday said talks with Chinese President Xi Jinping had already commenced. The pair met over the weekend at the G-20 summit in Osaka, Japan and agreed to play down the tariff war whilst engaging in conversations towards lasting solutions. Consequently previous restrictions on Chinese manufacturer, Huawei, were relaxed. The Morgan Stanley International Capital (MSCI) emerging market index, which tracks performance of equities in the space rose gained 0.86 percent on Monday

(July 1), the most in two weeks, in the first trading session since Group of 20 Summit in Osaka, Japan. In June, Chinese stocks rose the highest among emerging peers covered by BusinessDay. The Asia giant saw its equities market rise 7.28 percent. Egyptian stocks rose 3.26 percent while South African bourse recorded an improvement of 3.21 percent. Conversely, Nigerian equities dipped by 4.96 percent in the month as the variance with emerging peers widened on the heels of investor apathy which intensified in the latter part of the first half of 2019 on the diminished growth prospects of Nigerian companies.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

Thursday 04 July 2019

BUSINESS DAY

COMPANIES&MARKETS Industrial Goods

Chellarams suffers ₦N2.8bn loss amid mounting competition, rising cost OLUFIKAYO OWOEYE

hellarams Plc posted a net loss of N2.8bn for the full year ending on 31st March 2019, as the dairy, industrial chemicals and machinery player continue to battle intense competition from other big players. Chellarams, makers of Oldenburger, Regal and Real milk brands in its results revealed that soaring cost of sales hurt margins leading to a net loss. Despite a 28percent rise in sales to N11.2bn, cost of

sales ballooned by 55percent to ₦10.7bn from N6.9bn in the previous year leading to a Gross Profit decline of 71percent to N527m. However, the dairy maker reported strong sales growth in its FMCG business line which includes its joint-venture dairy business, Chellarams-DMK Limited. The segment was the strongest in all of its business lines with 123percent sales growth to N2.95bn. The industrial Chemicals business line also performed strongly with 70% sales growth to N4.1bn. However, the growth was not enough to offset a signifi-

cant rise in costs as the company declared a pre-tax loss of N985m in its FMCG segment due to higher cost of sales of N3.1bn on revenue of N2.9bn. Chellarams did not report any activity in its bulk milk ingredients and Cycles segments respectively. The company noted in its financial statement that it has discontinued its US dollar denominated term loans and entered a new term loan agreements denominated in Nigerian Naira. The company had earlier this year launched a new food drink “Real Active Malted Food drink”

L-R: Olusegun Oyundoyin, associate professor, special education, University of Ibadan; Adebimpe Oluwawumi, co-convener, IEIEPC; Oyeyinka Oluwawumi, director and convener, IEIEPC; Olushola Olujonwo, chief statistician/head of planning, Lagos State Office for Disability Affairs (LASODA); Kelechi Lazarus, special education facilitator, and Olufemi Fakolade, department of special education, University of Ibadan, at the IEIEPC-RCCG Liberation Area Special Education Case Conference in Lagos.

Industrial Goods

Sarsoli targets industrial exploits on ISO 9001:2015 Certification MIKE OCHONMA

arsoli Industrial Company Ltd was recently presented with PECB Canada ISO 9001:2015 Certificate for successfully completing and complying with the requirements of ISO 9001:2015 Standards and hopes it will use the latest feat to further its industrial growth. The milestone certificate presentation ceremony was well appreciated by the management and staff of the organisation according to company sources could not have come at an auspicious time like this when many manufacturing companies are facing numerous challenges, leading to permanent closure of some of the worst heat in the face of harsh operating environment. According to the general manager of Sarsoli Indus-

trial Company Ltd, Baskaran Thiyagarajan,”the implementation of the ISO 9001 standard was rigorous but has helped us to design our system such that nobody is found wanting with respect to their tasks. We have been able to integrate the requirements of the standards into our system which has improved our efficiency and output lately.” Also giving more insight into the nitty-gritty and processes that culminated into Sarsoli getting the award, John Aderibigbe, managing consultant of DU&T Consulting while presenting the certificate to the general manager, emphasized that the certificate is not an award for keeps. He rather described it as a symbol that the company’s system is compliant with the requirements of the ISO 9001:2015 and Sarsoli expect-

ed to maintain the certificate by reviewing their processes, getting customers feedback and analyzing it; conducting internal audit and management review as well as taking continuous corrective actions. By implementing the ISO 9001:2015 standards, it can help organizations improve the way it responses to both an internal and external environments and bridges the gap between the organizational existing processes and international best practices. Experiences have shown that no organization implements any of these international standards without experiencing positive change in terms of improvement in their processes, strategies, customer satisfaction, and reduction in errors as well as an increase in corporate profitability.

Banking

Banking Industry records ₦1.5 trn in Stage 3 Loans due to IFRS BALA AUGIE

ollowing the adoption IFRS 9, as of December 2018, 10.9% of the loan book representing ₦1.5trillion was in stage 3 according to the recently released Banking Industry Report by Agusto & Co. Stage 3 loans are loans with objective evidence of impairment at the reporting date. In the previous period, Stage 3 loans can be assumed to be “individually impaired or non-performing loans”. In 2017 non-performing loans was ₦1.3trillion, this accounted for 9.5% of the loan book. The 15% increase in stage 3 loans in 2018 compared to 2017 is evidence of the deterioration of the loan assets recognized by

Nigerian banks, this is largely due to the fact that most companies are yet to recover from the economic recession particularly the impact of the foreign exchange rate crises. The Industry’s Stage 2 loans and advances as of December 2018 were ₦2.9 trillion; this represents 22% of gross loans. In prior periods, Stage 2 loans can be assumed to be “past due but not impaired” and it amounted to ₦793 billion in 2017. Although Stage 2 loans do not have objective evidence of credit loss, these loans should be monitored closely to ensure that it does not deteriorate to Stage 3. If after 90 days, there is no longer evidence of a significant increase in credit risk, such loans could be transferred

back to Stage 1. Comforting, however, the banking Industry has provided for 87.35% of the industry’s nonperforming loans. Agusto & Co. in its recently published 2019 banking report also revealed that the Banking Industry’s total loans declined by 2.8%, this is largely due to the repayment by some customers and the cautious approach by banks towards extending further loans due to weak macro-economic climate. In the near term, Agusto & Co expect a reduction in NPL ratio but this will not be significant. We also expect that there will be no significant growth in the Industry’s loan book as banks will continue to be risk-averse in the face of harsh operating terrain.

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L-R: Jesse Abiodun Olubanjo Otegbayo, CMD, UCH Ibadan, presenting the NHEA HMO of the Year 2019 Award to Total Health Trust (THT) team - Abiola Adelusi, head, membership and underwriting; Abimbola Sobade, head, internal audit; Henry Ogunsanya, head, call centre, and Gideon Anumba, head, provider management, at 6th Annual Nigeria Healthcare Excellence Awards 2019 in Lagos.

L-R: Abdullahi Umar, director, VDT Communications; Bimbo Ikumariegbe, deputy managing director/COO; Tunji Bello, former secretary, Lagos State Government; Aderinola Talabi, director, and Biodun Omoniyi, MD/ CEO, VDT Communication, at the official launch of VDT 4G LTE- Advance Data Service in Lagos.

CIBN leverages technology to bridge learning challenge, deliver e-learning SEGUN ADAMS

he Lagos state branch of the Chartered Institute of Bankers of Nigeria (CIBN) is leveraging technology to bridge learning challenges faced by young and aspiring bankers with the recent launch of its e-learning platform. With the advent of several digital platforms for learning and the current level of technology adoption across the world, continuous innovation in line with the recent technology advancements and adoption is considered the catalyst for educational advancement. “With the level of adoption of technology all over the world, it is often said that technology is no longer a competitive advantage. The adoption of technology is also in line with the strategic priorities that we set out when we took over the mantle of leadership earlier this year,” said Peter Ashade, chairman of the Lagos branch of the CIBN

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at the launch of the e-learning platform. According to Ashade, the e-learning platform will help create divergent membership base for the institute. “Historically, close to 70% of the members sitting for our examination resides in Lagos, thus limiting our membership and the efficacy of our strategic objective as an institute at large. “The trickle-down effect of increased membership will then be increased revenue for the institute as the prospective members who would otherwise not have enrolled in the institute will now take advantage of this opportunity,” Ashade stated. Mesiah Uche Olowu, the president of the CIBN on his part lauded the centre for taking a proactive move with the e-learning platform, stating that content is the critical factor that separates the institute from other professional bodies in Nigeria. “We need transformational leaders,” said Olowu @Businessdayng

who pledged that the national secretariat will collaborate with the Lagos chapter on e-learning. The launch of the e-learning platform, which was developed in conjunction with CIBN technology partner, Edutech from the Venture Garden Group have lectures in form of texts, audio recordings, video recordings, online games and other simulated classroom learning features. The e-learning platform creates flexibility for members, especially student members that have suspended their participation in the CIBN examination as a result of time factors due to increase work demand at their various organisations either financial or non-financial. It is expected that the platform will significantly increase the membership drive capacity of the Lagos branch of the institute, as the access to quality study for its exam is made available to all in every part of the world thereby compressing the time, place and cost for students

Thursday 04 July 2019

BUSINESS DAY

COMPANIES&MARKETS

OIL & GAS

Seplat makes case for ANOH gas project at LSE MICHAEL ANI

eplat Petroleum Development Company Plc has identified the Assa North-Ohaji South (ANOH) gas processing project as very bankable and capable of boosting Nigeria’s domestic gas supply significantly. A Seplat team led by the company’s chief executive officer, Austin Avuru, gave an in-depth presentation on the company’s gas business to investors, sector and financial analysts during its 2019 Capital Markets Day at the London Stock Exchange (LSE) recently. Seplat’s chief financial officer, Roger Brown’s Investor Relations team organised the forum to apprise investors of the company’s gas business with emphasis on the ANOH

gas processing project. In a presentation titled ‘Stability, Performance, Growth,’ the team of six presenters provided the audience with comprehensive information on the company’s existing gas business, market outlook and anticipated ANOH growth trajectory. The ANOH gas processing project is managed by Anoh Gas Processing Company (AGPC), an incorporated joint venture (IJV) between Seplat and the Nigerian Gas Company. AGPC shall develop a 300 Mscfd midstream plant on OML 53 to process future wet gas production from the upstream unit. During his introductory presentation, Avuru highlighted that the ANOH gas processing plant would be the first stand-alone midstream joint venture business between the

Nigerian National petroleum Corporation (NNPC) and a company in the private sector. With the ANOH project, Seplat aims to be the largest supplier of gas to the domestic market. The Seplat CEO added that: “By the time we commission the ANOH project, we will be able to produce 850 Mscfd. “Overall, the gas business was not attractive in 2010 and some years after. Seplat however took a conscious decision to invest in the gas business upon the price of gas inching up as ‘willing buyer willing seller’ commercial terms became possible. The company is uniquely situated within existing gas pipeline network, and therefore leveraged on this to significantly expand its Oben gas plant. The revenue from the expanded Oben gas plant has been impressive motivating the company to seek further investment in gas.”

L-R: Valentine Osuorah, human resources manager, Boulous Enterprise Limited; Chigbo Okeke, head of business, Avant Halogen; Adora Neboh, group head, human resources, Troyka Group; Niyi Aromolaran, founder, The Nehemiah Place, and Kenneth Nta, head, human capital, Halogen Group, at the Avant Halogen organised Career Fair at the Academy Halogen, Ikeja GRA, Lagos

TELECOMS

MTN rewards hackathon challenge winner with $15,000 cloud facility credit SEYI JOHN SALAU

24 year old Computer Science graduate, Richard Igbiriki from Bayelsa State has won the MTN Nigeria hackathon challenge for developing ‘BloodShare’, a mobile app that provides hospitals with location-based blood donors, allowing patients to quickly find donors in times of emergency. MTN rewarded Igbiriki efforts with a cheque of N100, 000; a laptop, $15,000 Cloud Facility Credit, and access to receive pre-equity funding up to $25,000 from Chinook Capital Investment Fund, in the just concluded MTN Nigeria 2019 edition of ‘21 Days of Y’ello Care’ held at the company’s head office in Ikoyi, Lagos. One of the highlights of this year’s 21 Days of Y’ello care was a hackathon challenge where

young software developers were tasked to create critical solutions to solve health challenges leveraging technology. The annual event provided an opportunity for MTN employees to participate in various community projects. Guided by the theme, “Creating a Brighter Future for the youths,” this corporate social responsibility initiative was focused on youth empowerment, with special focus on developing Nigeria’s burgeoning tech ecosystem for greater impact on national development. Ferdi Moolman, MTN Nigeria’s CEO, said by dedicating several hours towards reaching out and partnering with schools, skill acquisition centres and communities shows how much the communication company’s staffers cares about its host communities.

“Visiting one of the schools brought home the realisation of how blessed we are to live, work and operate in Nigeria. We are here today to count our blessings and celebrate the opportunity to give back to our communities where we serve. This is the real spirit of MTN and what we are about,” said Moolman. Another laudable highlight of this year’s initiative was the focus on raising public awareness on mental health. An 8km walk was held in Lagos, Abuja and Kano attended by hundreds of MTN staff in conjunction with the Lagos University Teaching Hospital Suicide Research and Prevention Initiative. MTN also held a digital media training session for a select group of young Nigerians to educate them on how to become suicide prevention media advocates.

REAL ESTATE

Rent Small Small absorbs furnisure, maid easy to provide end-to-end services to customers IFEOMA OKEKE

ent Small Small Ltd, a prop-tech platform, providing unique rental solutions to Nigerians has absorbed Furnisure and Maid Easy, in order to provide endto-end services of all lifestyle needs. With this development, Furnisure and Maid Easy, a cleaning, fumigation and laundry service will now operate as a consortium under Rent Small Small . Also, the team at Furnisure and Maid Easy will be fully integrated into Rent Small Small team with Naomi Olaghere acting in full capacity as the Vice President, Operations of Rent Small Small. Rent Small Small which also

seeks to improve home-seekers rental experience and increase home-owners occupancy rate will through this absorption, join forces to provide a comprehensive network of integrated services that will better serve the property, furniture/appliance and cleaning service market. Speaking on the absorption, Tunde Balogun, the chief executive officer of Rent SmallSmall, debunked earlier reports implying that the companies merged, stating that it is an absorption that will enable clients get access to rent-to own-furniture, appliances as well as cleaning services under Rent Small Small. “Contrary to reports of a merger, this is an absorption move that will help create an end-to-end service for all lifewww.businessday.ng

style needs with a large practice team of experienced staff who are dedicated to serving the needs of emerging and growth oriented real estate and lifestyle market in the country. “For us, it will always be about the customer. We assure you that our pricing, product and support procedures will remain unchanged for now, and we intend to incorporate the best features for all our services in the future,” Balogun said in a statement issued by company. He disclosed that the integration work has begun with a key focus on developing and enhancing business processes for more than four industries (Real estate, Furniture and Appliance, Cleaning and Fumigation, Moving services).

Abbey Akinoshun (m), employment law consultant/independent nurse consultant, London; Oyedokun Ayodeji Oyewole (7th r), president/chairman, Institute of Information Management (IIM) Africa; Kate Anolue (6th r), Mayor of London Borough of Enfiled; Meic Pierce Owen (5th r), former chair, Information and Records Management Society (IRMS), and members of the IIM Africa Professional and Honorary Fellows at the 2019 Institute of Information Management (IIM) Africa annual lecture, induction and investiture, at the University of East London, Water Lane London, recently.

L -R: David Jones David, award-winning actor/singer; Chidi Egwu, brand manager, Life Lager; Umunnakwe Nwajiakor, winner of Aba Regionals; Chimaroke Chimex, winner of Aba Regionals; Austine Okweni, Regional Trade marketing manager, Aba, and Bright Chimezie, Highlife Music Veteran, at the Aba regional knockouts for Hilife fest 2019.

TECHNOLOGY

Digifypro seek support in nurturing Africa’s next generation unemployed digital talent JONATHAN ADEROJU

igifyPRO Nigeria, a not-forprofit initiative facilitated by Digify Africa (a digital skills academy based in South Africa) and supported by Facebook, has called on media agencies and corporate organizations to take up the opportunity in its effort to create the next generation of digital talents. According to Program Director of DigifyPro NG, Florence Olumodimu this will not only help reduced the level of unemployment among talented journalist but also provide participating companies a hungry set of well-trained young talents ready to make an impact. “Since its launch in 2014, DigifyPro has gone from strength to strength and won a number

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of awards along the way. We organised a 8-week intensive digital marketing bootcamp, which started in Johannesburg over five years ago has impacted many young people by kick-starting over 200 careers in the digital world, with critical skills needed within the digital economy,” she said. She noted that Feedback from the participants of DigifyPro Cohort 1.0 and a Cohort 2.0 has been positive and is proof that this initiative is a much-needed one for young graduates, the industry and Nigeria as a whole. “In the intensive 8-week bootcamp supported by Facebook, trainees learn about the full spectrum of digital marketing from SEO to content marketing. They are also given exposure to the industry with weekly live briefs @Businessdayng

set by agencies, where trainees are able to conceptualise campaigns and show off their talents to prospective employers. Most importantly, in the 8 weeks they are given job readiness skills to ensure that they are able to thrive in the workplace and offer value to their employers.” Explaining further she said, “Past participants of DigifyPro NG have had the priviledge of working at some of the biggest agencies in Nigeria such as Fuel Communications, Leo Burnett Lagos, DigitxPlus, IProspect, Nitro121, Isobar, Business School Netherlands Nigeria, X3M Ideas, Teras Doxas, WebCoupers, QVT Media, BrandEye Media, Etu-Odi Communications, Isobar, AMNET, DKT Nigeria, BlueBird Communications, to mention a few.

Thursday 04 July 2019

BUSINESS DAY

RESEARCH&INSIGHT

In association with

A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

briu@businessday.ng

08098710024

Why government should prohibit child labour ADEMOLA ASUNLOYE

lthough the universal proposition that the basic needs by humans are food, clothing and shelter still remains, reproduction is somewhat beginning to be considered same, especially in Africa. One arguable basic need in every marriage is the fruit that proceeds thereof—children. While that may be technically correct, there is need to give every child the life and opportunity to reach their full potential. Before now, the likelihood of the death of a child before age 5 was high. Available records show that 70 percent of children or more are likely to be involved in child labour and 20 per cent more likely to be murdered. However, these figures have been drastically reduced through programs and initiatives on child protection, child education, child health, child nutrition, child hunger and child livelihood, among others. Consequently, children born today have better chances than at any time in history to grow up healthy, educated and protected. Globally, an estimated 7.7 billion people are living in the world today. This year has recorded an estimated 70 million births daily and another estimated 215,ooo births on July 01 2019. Despite the global efforts being made to address child labour, children born today are still likely to face these challenges. Child labour, which is regarded as a work carried out to the detriment and endangerment of a child, in violation of international laws and national legislations, is a major challenge faced by most children today. It either deprives children of schooling or requires them to assume the dual burden of schooling and work. Worldwide, 218 million children between the ages of 5 and 17 years are in employment. Among them, 152 million are victims of child labour; almost half of them, 73 million, work in hazardous child labour. In absolute terms, almost half of child labour (72.1 million) occurrences are found in Africa; 62.1 million in Asia and the Pacific; 10.7 million in America; 1.2 million in the

Source ILO-IPEC, BRIU

Arab States and 5.5 million in Europe and Central Asia. In terms of prevalence, 1 in 5 children in Africa, or 19.6 per cent, is in child labour, whilst the prevalence in other regions is between 3 per cent and 7 per cent: 2.9 per cent in the Arab States (1 in 35 children); 4.1 per cent in Europe and Central Asia (1 in 25); 5.3 per cent in the Americas (1 in 19) and 7.4 per cent in Asia and the Pacific region (1 in 14). Almost half of all the 152 million children who are victims of child labour are aged between 5 and 11 years. Also, 42 million (28 per cent) are between 12 and 14 years old; and 37 million (24 per cent) are between 15-17 years old. Hazardous child labour is most prevalent among the 15-17 years old. Nevertheless, up to a fourth of all hazardous child labour (19 million) is done by children less than 12 years old. The chart below shows the breakdown of child labour by employment status.

Among the 152 million children in child labour, 88 million are boys and 64 million are girls. In addition, 58 per cent of all the children in child labour and 62 per cent of all the children in hazardous works are boys. Boys appear to face a greater risk of child labour than girls, but this may also be a reflection of an underreporting of girls’ works, particularly in domestic child labour. This may be true in societies where access to girls or women is restricted as it is in the Middle East

sional inquiry into the topic is generally considered to have begun about a century ago. While legal definitions of child maltreatment vary by state, four types are generally recognized: physical abuse, sexual abuse, neglect (including educational neglect, medical neglect, and other forms), and emotional maltreatment. From 1990 to 1994 in the United States, the number of cases of child abuse or neglect that were either substantiated (founded according to state law or policy) or indicated (suspected but not substantiated) rose from 861,000 to 1,032,000, reaching a rate of 15 per 1,000 children under the age of 18 in 1994. From 1994 to 1999, the trend reversed, with the number of cases dropping to 829,000, translating to a rate of 12 per thousand in 1999. The number of cases increased slightly from 1999 to 2001; then it levelled off until 2006, with the rate staying fairly constant throughout that period. After a sharp drop in both the rate and number of maltreated children (excluding duplicate cases) from 2006 to 2007, the number and rate of maltreated children continued to decline until 2012, when both began to rise again. In 2017, there were approximately 674,000 maltreated children substantiated in the United States, a rate of 9 per thousand. Young children experience higher rates of maltreatment than older children, the analysis of available records has shown. In 2017, children 3 years and younger had a maltreatment rate of 15 per 1000, compared with 10 per 1000 for children ages 4 to 7, as well as 8 per 1000 for ages children aged 8 to 11; while it was 7 per 1000 for children aged 12 to 15, and 5 per 1000 for children aged 16 to 17 years. Key facts 1 in 5 women and 1 in 13 men reported having been sexually abused as a child.

Source: childtrend, BRIU

and North Africa. Child labour is concentrated primarily in agriculture (71 per cent), which includes fishing, forestry, livestock, herding and aquaculture; for both subsistence and commercial farming; 17 per cent in services; and 12 per cent in the Industrial sector, including mining. The chart below shows the weekly average of hours worked by children (ages 7-14) who are economically active in some African countries. Another problem faced by today’s children is child maltreatment which has lingered for years but profes-

12734BDN

Source: World Bank, BRIU

A quarter of all adults report having been physically abused as children The rate of substantiated child maltreatment is remarkably lower in 2017 than in 1990, having fallen from 13 per 1,000 children to 9 per 1,000. Rates of physical, sexual, and psychological or emotional abuse have declined substantially since 2000, while rates of neglect have declined the least. Younger children between the ages of 0 to 3 years are maltreated at higher rates (thrice) than older children in 2017.

WIDE OPEN MINDED RMB Nigeria. Solutionist Thinking.

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Rand Merchant Bank Nigeria Limited is an Authorised Financial Services Provider

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We believe in stretching ourselves. In broadening our horizons and embracing the unconventional to consider every possibility. Solutionist Thinking means deliberating together and collaborating with our clients to unlock exceptional prospects for the future. It’s the magic that inspires everything we do.

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Thursday 04 July 2019

BUSINESS DAY

Investor

In association with

Helping you to build wealth & make wise decisions NSE All Share Index

Market capitalisation

NSE Premium Index

N11.721 trillion

Week open 21 – 06–19)

31,924.51 29,851.29

N13.155trillion

29,851.29

Week close (21– 06–19)

29,851.29

N13.206 trillion

29,966.87

Year Open

2,241.37

The NSE-Main Board

1,456.29 1,230.10 1,251.12

NSE ASeM Index

NSE 30 Index

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

782.29

1,245.28 1,255.68

366.01

125.65

602.91

251.53

1,953.45

1,088.24

2,410.09

366.87

123.75

622.33

253.23

1,965.27

1,087.80

1,058.27

782.29

Percentage change (WoW)

0.39

-0.58

1.71

0.00

Percentage change (YTD)

-4.66

9.17

-13.11

-1.45

0.24

0.23 -11.39

-8.04

-1.51 -2.16

-1.64 -16.89

0.68 -16.21

0.61 -12.03

-0.04

-0.58

-12.12

-12.36

First half results to determine stock market direction Iheanyi Nwachukwu

hile stock trading on the first day of this second half (H2) of 2019 began on a lackluster note, the direction of the market going further into H2 period will be largely determined by the half-year (H1) result of companies expected to be released on the Nigerian Stock Exchange (NSE) in coming weeks. The stock market took-off into the second-half (H2) of 2019 on a negative note as investors maintained their bearish stance on equities. Stock trading in the just ended month of June left negative footage after recording an approximated loss of about N480billion. “Half year results of listed companies will largely determine market direction early in the new quarter, while policy direction as determined by economic managers will play a major factor in the health of the general market,” Vetiva research analysts said in their July 1 equity market report. They do not rule out the possibility of bargain hunters picking some of the counters due to attractive price levels. FSDH research had in their monthly economy and financial market outlook for June expected

the following factors to drive performance of the equity market in the short-term : strategic positioning ahead of earnings season, crude oil price above $70 per barrel, and stability in the foreign exchange market. The analysts asked investors to position in stocks that have good fundamentals, history of good dividend payment and are currently trading below their fair value. “We see opportunities in the banking, consumer goods, building materials, and oil and gas

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sectors of the equity market”, the analysts added. Meanwhile, pursuant to the post-listing requirements of Nigerian Stock Exchange (NSE) for quoted companies, many companies have commenced the closed period for trading in their shares in respect of the audited financial statements for the halfyear ended June 30. The close period is the time period between the completion of a listed company’s financial results and the announcing of these results to the public.

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It is intended to prevent trading in a company’s shares by its insiders ahead of the public dissemination of its financial results. In addition to the announcement of their closed periods, the companies have officially disclosed dates for their scheduled board meetings. The Board of Directors of GTBank Plc is scheduled to meet on Wednesday July 24, to consider the audited financial statements for the half-year ended June 30. Issues relating to half-year

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dividend may also be discussed at the meeting. Banks audited financial statements for the half year period are expected to be submitted to the Central Bank of Nigeria for approval, prior to the release of the results on the floor of the Nigerian Stock Exchange. T h e B o a rd o f T ra n s c o r p Hotels Plc has scheduled its meeting to hold on July 15 to consider among other things the unaudited financial statement of the company for the period ended June 30, 2019. Also, in the run up to the announcement of Seplat Petroleum Development Company Plc half year (H1) results, the company had on June 28, 2019 announced the commencement of a closed period from Monday July 1, 2019 to end 24 hours after the release of the financial results. The Board of Directors of Transnational Corporation of Nigeria Plc has scheduled its 76th Board meeting to hold on July 16 to consider among other things the unaudited financial statement of the company for the half-year ended June 30, 2019. Ikeja Hotel Plc has its Board meeting scheduled on Friday July 19 to receive and consider among other business, the draft secondquarter (Q2) financial statement of the company and the payment of interim dividends on the Q2 accounts.

Thursday 04 July 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment Views

Investor’s Square

The bulls hold sway, NSEASI up 0.4% w/w

entiments on the domestic bourse recovered from the preceding week’s bearish pangs as the NSEASI along with three of the five sector indices we track closed the week in the green. The main index added 0.4percent week-onweek (w/w) to 29,967points while YTD return recovered to -4.7percent. Although, the domestic equity market started the week on a bearish note and recorded three consecutive daily declines till mid-week, the arrival of the bulls in the last two trading days birthed the weekly gain recorded. Meanwhile, market capitalization rose N50.9billion to N13.2trillion. The Consumer Goods Index led the gainers with a 3.2percent w/w gain that was driven by upticks in NB (+9.6percent) and UNILEVER (+2.9percent). The Banking (+0.2percent) and Oil & Gas (+0.7percent) indices also trended northwards as bargain hunting in GUARANTY (+6.8percent), ETI (+5.8percent), WEMA

more accommodative Liquidity position stayed at a comfortable level in the prior week as the CBN gets more accommodative, holding off OMO auctions for the third consecutive week, despite the influx of maturing OMO Bills (a total of N210.2billion hit the system on Thursday). The only sizable outflows for the week was in the form of weekly wholesale FX funding sales on Monday and FGN Bond auction conducted on Wednesday. In all, average interbank funding rates (OBB & O/N rates) trended lower throughout the week, to close at 4.3percent. The buoyant liquidity status and the lack of primary market issuances continued to spur most banks to stay active at CBN’s Standing Deposit Facility (SDF) to deposit excess funds throughout the week. Elsewhere, the elevated level of liquidity and the continued refusal of the CBN to float an OMO auction gave the bulls a leg to run at the secondary Nigerian Treasury bills market. Accordingly, rates declined

(+1.5percent) and OANDO (+1.3percent) buoyed sentiments. On the other hand, the Insurance (-1.5percent) and Industrial Goods (-4bps) indices emerged as the week’s laggards as bearish sentiments in AIICO (-4.4percent), NEM (-1.3percent), WAPCO (-0.8percent) and DANGCEM (-0.5percent) dampened indices performance. Market breadth saw an improvement, closing the week at 1.6x, as 24 stocks advanced while 15 declined. In the week ahead, we expect sentiments to be caught between, bargain hunters that are taking position ahead of the Q2 earnings season while seeking fundamentally sound stocks trading at cheap valuations, and market pessimists that are awaiting clarity on the polity environment. Money Market: CBN gets

sharply as average yields fell by 33bps w/w by to close at 12.13percent. However, the total value of bills transacted moderated by 7.9percent w/w to circa N2.0trillion. This week, we expect market sentiments to remain guided by the level of liquidity in the system. Also, we expect the CBN to resume its liquidity tightening stance owing to the already high level of liquidity in the system. We expect the system to be awash with inflows from OMO maturity, NTB maturity, June 2019 Bond maturity, retail FX refunds and the May-19 FAAC payment to States & Local Governments. Aside from a potential OMO sales, other liquidity drains are expected to be in the form of NTB auction, weekly wholesale and biweekly retail FX funding sales.

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Bond Market: Investors’ appetite for longer tenor instruments remain strong In the Bonds space, the Debt Management Office (DMO) successfully conducted its Jun-19 bond auction during the week, offering N100billion – shared between re-opened 5-year (N30billion), 10-year (N40billion), and 30-year (N30billion) notes. The DMO allotted 96.84percent of the initially offered amount via competitive bids while allotting an additional N13.5billion of the 10-year notes on a noncompetitive basis. Total demand at the auction remained positive, with the competitive bid-to-cover ratio at 1.6x though lower than the last May-19 auction of 2.7x. However, most of the demand was for the 10-year and 30-year notes (Bid to cover ratio: 10year; 1.5x and 30-year; 2.0x) while demand for the 5-year note was also positive at 1.3x the offered amount. Notably, marginal rates at the auction cleared higher compared to the last auction in May-19; 5-year note up from 14.11percent to 14.30percent, 10-year note up from 14.24percent to 14.50percent and 30-year note up from 14.49percent to 14.68percent. Meanwhile, activities in the domestic secondary bond market were bullish as average bond yields fell circa 29bps w/w to close the week at 13.9percent. Notably, the total value of bonds traded was up 78.7percent w/w to N667.2billion. The bullish performance was on the back of the anticipated bonds maturity which spurred the buying interest of re-investment hopefuls. Additionally, the increasing dovish signals from the CBN and the absence of OMO sale further supported trading sentiments. Nigerian sovereign Eurobond market also witnessed some buying interest in the previous week as the continued recovery in global crude oil prices provided suppor t for the bullish sentiment. Consequently, yields on FGN dollar bonds moderated across the curve and average yield declined by 15bps w/w to 6.42percent. Similarly, interest in Corporate Eurobonds was positive but weighed by the jump in yield that trailed First Bank Nigeria Ltd early redemption announcement. Thus, the average yield for the segment advanced by 48bps w/w to 7.5percent.

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators? Let us know and investor will help you investigate and report back. E-mail: iheanyi.nwachukwu@businessdayonline.com

Airtel Africa IPO: Still on Meristem Research valuation

irtel Africa Plc is intending to raise approximately $750million through an Initial Public Offering (IPO) on the London Stock Exchange (Primary Listing) and the Nigerian Stock Exchange (Secondary Listing). The total amount the company expects to raise from the IPO is approximately $750mn if the over-allotment option is exercis e d, or $682million assuming no overallotment. The decision to exercise the over-allotment option depends on the level and nature of demand during the book building process. The shares offered will represent between 14percent and 18.9percent of the issued ordinary share capital upon completion of the UK Admission, dependent on the offer price and assuming no exercise of the over-allotment option. The shares are being offered only to qualified institutional investors and high net worth individuals (HNIs). It is important to note that the Nigerian Admission is dependent on the UK Admission while the UK Admission is not conditional on the Nigerian Admission. Hence, there is no assurance that the Nigerian Admission will occur on the date listed above or at all. The proceeds from the issue of the ordinary shares will be directed towards the reduction of debt, in particular, to achieve a targeted Leverage Ratio of 2.5x, based on Underlying EBITDA for the year ended 31 March 2019 and composed of a targeted net debt to Underlying EBITDA ratio of 1.6x and a targeted finance lease obligations debt to Underlying EBITDA ratio of 0.9x. Company Overview The company’s business segments are divided into three main areas: Mobile Voice, Mobile Data, and Airtel Money. Asides the above, the company also offers enterprise and Value-Added Services (VAS) in the fourteen (14) countries in which it operates. Mobile Voice: The mobile voice segment, alongside the mobile data segment, constitutes the core areas of the company’s business. The company offers local, national and international call services through tailored offerings to its small, medium and high usage subscribers. The mobile voice segment is the largest contributor to revenue, representing 62.2percent as at

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year end 31 March 2019. Mobile Data: The Company offers mobile data services through 2G, 3G and 4G technologies. It has increased the focus of its mobile data services offerings to its 3G and 4G networks which may be bundled together with its voice service offerings. The data segment contributed 22.2percent to group revenue in year end March 2019. Together, the mobile voice and mobile data segments accounted for 94.8percent of total revenue and 92.7percent of underlying EBITDA. The company sees the data and mobile money segments as long-term drivers of value hence, it has employed various strategies to drive mobile data and mobile money adoption across its markets. Airtel Money: The company offers mobile money services to its customers across the all its 14 operating countries. Through partnerships with local institutions, the company ha s p rov i d e d f i na n c i a l solutions (mobile wallet) that enable bill payments, funds transfer and receipt, as well as microloans to its customers. The Airtel Money business line accounted for 5.2percent of revenue and 4.1percent of underlying EBITDA as at year end March 2019. Risk Factors In its listing prospectus, the company highlighted several risk factors associated with its business and the operating climate across its markets which will be briefly highlighted below. We also highlight the risks associated with the Nigerian offering as indicated in the prospectus. Risks relating to the Nigerian Offer a) There is no assurance that the Nigerian offer will be completed or that the admission into the NSE will occur on 4th July 2019, as the Nigerian offer is dependent on the UK admission. The procedures for crediting and allotment of shares to Nigerian @Businessdayng

investors participating in the Global offer are different from the procedure for Nigerian investors participating in the Nigerian offer and may take longer. Although the UK admission is expected to proceed as planned, any delays as listed above might delay the Nigerian admission. b) Differences in the characteristics of the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE) could affect the price of the shares. Some of the Group International differences such as trading volume and liquidity, trading hours, and investor bases could affect the price of the share on any of the exchanges. Hence, fluctuations of the share price on the LSE could materially affect the price on the NSE and vice-versa. c) Shareholders participating in the Global offer may also choose not to move their Shares from the LSE to the NSE and the impact of this could negatively affect the liquidity of the stock on the NSE. The ability to reposition shares (transfer shares) from the NSE to the LSE and vice-versa can also impact liquidity of the stock on either exchange. d) As future dividend declared by the company will be denominated in dollars, shareholders are vulnerable to exchange rate risks since the currency for the Global investor is Pounds and for the Nigerian investor is Naira. Furthermore, fluctuations in exchange rate between Naira and Pounds could materially and adversely affect the prices of ordinary shares listed on the NSE. A depreciation of the US Dollar in relation to the Naira will reduce the value of the investment in ordinary shares or any dividends in foreign currency terms. Valuation We valued Airtel using a combination of the Enterprise Discounted Cashflow Model, Equity Discounted Cashflow Continues on Page 23

Thursday 04 July 2019

BUSINESS DAY

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Analysis

Growth projections set NAHCO on path of challenge to deliver …to acquire N3.3bn worth of new Ground Support Equipment by year end

established towards meeting the objective of harnessing the opportunities of the Air, Land & Sea logistics. NAHCO Free Trade Zone Limited (NFZ), which is the first airport based free trade zone in the country was established by NAHCO Group to drive the free trade zone initiative of the government at the airports; while NAHCO Energy & Infrastructure Limited (EPI) (NAHCO EPI) was established to tap into the opportunities in the power sector and infrastructure in Nigeria. “So far in 2019, we started strong on increasing revenue but we have room for improvement on efficiency. Administrative costs reduced by 17percent due to efficiency in resources utilisation”, Fagbemi said. The company expects that by this year end there will be more reduction. “The rise in the operations cost has been largely due to frequent infrastructure failure at the airport, aging equipment leading to increased maintenance. With the injection of new Ground Support Equipment (GSE) and ongoing improvement of airport facilities operating cost will reduce materially,” she said. The company’s operational figures across its services indicate that there is a clear path to growth. “We will continue to grow this and also implement certain strategies to change the

narrative of the financials before the end of the year,” the GMD further stated. Though, Fagbemi-led management team resumed in December 2018, they have been able to achieve a lot within the past six months. Some of the achievement include: commendations from four leading Airlines: Air France KLM, Lufthansa Emirates, and Ethiopia Airlines. Among others, the company currently pursues a 5-year Business Transformation Plan. They are building new Nahco hinged on 5 pillars of transformation to be delivered over the next 5 years. The strategic pillars are targeted at Operational Excellence, Digital Transformation, People and Culture Transformation, Organic and Inorganic Growth, and Diversification. Among other ongoing initiatives, the company’s planned investment in procurement and renewal of Ground Support Equipment is gaining traction. In the first phase, the acquisition of N1.5billion in GSE with delivery will be completed by July 2019; while in the second phase and N1.8billion of GSE procured and delivery will be completed before the end of the Financial Year. The management has successfully completed negotiations of the conditions of service with union - yielded increased industrial harmony; and has among others increased number of NAHCO operations ISAGO certified airports to three (3). In the six months period, the Third Country EU Regulated Agent (RAS) was issued to validated NAHCO operations in Lagos, Abuja, Port Harcourt and Kano; even as the Mainland Cargo Options opened seaport operations in same period. The new management of NAHCO is deliberate in improving and turning around the company, adding that the focus is majorly on initiatives that will deliver operational efficiency and change the financial situation of the company. The changing landscape of Africa’s aviation landscape shows top 10 countries cover 77percent of the total air traffic in the continent. The average passenger load factor across the African market as of 2017 has remained 75.5percent; while as at 2017, Egypt has been the largest aviation market in Africa, covering four out of top 10 country pairs as a market. This implies that with robust regional passenger growth outlook, Africa will have substantial requirement for qualified aviation personnel to drive the anticipated growth.

b) A low asset turnover implies that the company is not efficiently utilizing is assets to generate revenue, particularly when compared with its local competitor, MTN Nigeria, which had an asset turnover of 0.74x as at Q12019. The company has indicated its intention to adopt an asset light model which it has begun implementing by embarking in strategic disposal of some of its ownerships of its tower assets. c) The company employs a decent dividend pay-out policy of a minimum of 80percent of free cash flow at the country level as long as its leverage ratio (net debt to Underlying EBITDA) remains between 2.5x to 3.5x, subject to

regulatory, statutory and monetary restrictions. However, the company is currently in a retained loss position of $456billion and is currently undergoing a court approved capital reduction scheme in the U.K in order to resolve this position. Risk relating to group structure The company possesses a substantial amount of debt as well as certain protective covenants which may affect its ability to incur or guarantee additional debt in the future. As at 31st March 2019, the company had a debt stock of $3.62billion as well as lease liabilities of $1.22billion which weighs heavily on its operating cashflows.

Iheanyi Nwachukwu

he Board and management of NAHCO Plc paid a courtesy visit to the Nigerian Stock Exchange (NSE) last Tuesday July 2 and presented the Facts Behind the Figures report to capital market stakeholders. In her presentation at the Exchange, Olatokunbo A. Fagbemi, GMD/CEO, NAHCO Plc noted that the African Aviation landscape has been on a steady growth in recent years, and the Nigerian Market has also witnessed similar growth and shown resilience amidst the tough economic terrain. The Nigerian aviation market has also witnessed similar growth and shown resilience amidst the tough economic terrain. In all of this growth, NAHCO has remained the preferred handler for the mail and cargo traffic in the country. This growth was also welcomed with significant expansion on number of Domestic and International Routes, with NAHCO taking advantage of a number of these expansions, Fagbemi said. She noted the company’s commitment to its clients and customers, even as they are committed to stand by their value proposition to deliver optimum returns to our investors. “The Nahco Group continues to invest in various businesses to expand and diversify revenue,” the GMD told the teeming audience which include stockbrokers, financial/markets analysts and investment bankers. NAHCO which currently services 36 Airlines and has served 15 Airports has continued to be a leading aviation service provider in Nigeria since 1979. Its services are in Passenger Handling, Cargo Handling, Aircraft Handling, Passenger Facilitation, Aviation Training and Crew Transportation. The year 2018 was a peculiar one for the company. Although increased topline, there were several factors that impacted the bottom line, the GMD said. Revenue grew by 19percent, from N7.9billion in 2017 to N9.8billion in 2018. In the same period, gross profit rose by 27 percent, from N2.3billion to N3.2billion; Operations Cost increased by 16 percent, from N5.6billion to N6.7billion; administrative cost increased by 21 percent from N N2.3billion to N2.9billion, while profit before tax (PBT) declined from N 503million to N 600million in 2018. At N3.20 per share as at Monday July 1,

L – R: Jude Chiemeka, divisional head, Trading Business, The Nigerian Stock Exchange (NSE); Olumide Bolumole, divisional head, Listing Business, NSE; Olatokunbo Fagbem group managing director/CEO, NAHCO Plc; Olumuyiwa Olumekun, executive director, NAHCO Plc and Adeoye Emiloju, chief finance officer, NAHCO Plc during the Facts Behind the Figures presentation to the capital market stakeholders at the Exchange in Lagos.

the company’s stock has lost 12.3percent of its value at the beginning of this year and has underperformed the NSE All Share Index (ASI) which yielded negative returns of -5.78percent this year. The company said it will deliver efficiencies that will ultimately increase the bottom line and provide returns to its shareholders. In line with this set target, NAHCO has committed to deliver better financial performance in the coming years starting with 2019 projections. At the Facts Behind the Figure presentation at The Exchange, the company showed a projected revenue of N13.52billion in 2019, which represents 27 percent increase against 2018 level while projected gross profit of N6 represents 47percent growth against 2018 position. “We believe this growth projections set us on the path to challenge ourselves and work on delivering efficiencies and improving performance,” the GMD said. The NAHCO Group continues to invest in various businesses to expand and diversify revenue. The Group established Nahco Aviance Ground Handling Services to provide aviation services and ground handling to airlines. Its Mainland Cargo Options Limited (MCO) was

Airtel Africa IPO: Still on Meristem... Continued from Page 22 Model, Dividend Discount Model and the Justified P/E approach. We utilized Nigeria’s 10year Treasury bond yield of 14.29percent as the riskfree rate. For our beta computation, we relevered the average emerging market unlevered beta for telecommunication of 0.81 with Airtel’s leverage profile. We used an Equity risk premium of 11.21percent, using the average of the historical approach and the country-based ratings approach. Thus, we believe our cost of equity of 24.04percent adequately reflects the external and internal factors associated with the company due to its varied operations across different markets.

Using a blend of various valuation methods, we arrived at a fair value of N375.53 (83 pence) for the offer. We therefore advise that investors bid between the N363 –N375.53 price range Further Considerations We highlight the following considerations: a) The company possesses decent growth prospects across its operating markets, particularly in Nigeria which is the single largest contributor to company revenue, at 35.9percent, and is key to the company’s strategy of driving revenue growth. However various operational risks existing in some of its markets, as highlighted above, may pose significant risks to the health of the overall business.

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Thursday 04 July 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Overview on Arbitrators’ impartiality and duty to disclose

he recent decision of the English Court of Appeal in Halliburton Company (Halliburton) v. Chubb Bermuda Insurance Ltd (Chubb). & Ors [2018] EWCA Civ. 817 has raised serious discussions, debates, and, depending on one’s views, uncertainties on the questions of an arbitrator’s impartiality and duty to disclose certain information to parties in an arbitral proceeding. The effect of the Court of Appeal’s decision is underscored by the fact that notable arbitration institutions, including the Chartered Institute of Arbitrators, the London Court of International Arbitration and the Court of Arbitration of the International Chamber of Commerce have each sought and obtained the permission of the United Kingdom Supreme Court (UKSC) to appeal the decision. The UKSC will hear the substantive appeal later this year. The case arose following an explosion at the Deepwater Horizon Oil Rig owned by Transocean Holdings LLC (Transocean). Halliburton was engaged to provide cementing and well-monitoring services to BP Exploration and Production Inc. (BP), the lessee of the rig. As expected, affected

L-R, Hon. Justice Bode Rhodes-Vivour, Seni Adio, SAN, Chairman, NBA Section on Business Law; and Femi Gbajabiamila, Speaker, House of Representatives, during the just concluded 13th Annual Business Law Conference in Lagos.

third parties made claims against Transocean, Halliburton and BP. Prior to the explosion, Halliburton and BP had purchased excess liability insurance from Chubb. Halliburton and Transocean both negotiated and agreed settlement terms in relation to the claims against them. Thereafter, Halliburton made a claim on its insurance policy with Chubb, who refused to pay, contending (among other things) that the settlement was unreasonable.

Consequently, Halliburton commenced arbitration proceedings against Chubb, pursuant to the relevant provisions of the insurance contract between both parties. Under the said contract, arbitration was to be held in London by three arbitrators, one chosen by each party. The presiding arbitrator was to be chosen by the arbitrators appointed by both parties or by the High Court, where both parties are unable to agree on the choice of the presid-

ing arbitrator. Due to certain reasons, the arbitrators appointed by both parties were unable to agree on the choice of the presiding arbitrator. Thus, the High Court appointed “M”, who incidentally was Chubb’s preferred arbitrator. Prior to his appointment by the High Court, “M” disclosed that he was currently acting as an arbitrator in multiple arbitrations involving Chubb, and the number of times he was appointed by

Chubb to act as arbitrator in arbitral proceedings concerning it. Subsequently, “M” accepted appointments to act as arbitrator in two separate disputes arising from the explosion at the Deepwater Horizon Oil Rig. The first dispute involved arbitral proceedings commenced by Chubb against Transocean, whilst the second dispute involved arbitral proceedings commenced by Transocean against another insurance company. Instructively, “M” did not disclose these subsequent appointments to Halliburton. When Halliburton learnt of “M”’s appointments, it ultimately asked that “M” should resign his appointment as presiding arbitrator. Following “M”’s refusal to resign, Halliburton commenced proceedings at the High Court of England and Wales (the “High Court”) for his removal by the High Court. During the proceedings, it became clear that Chubb was relying on similar arguments in the arbitration commenced against it by Halliburton and the arbitration initiated by Chubb against Transocean. The decision of the High Court turned on the issue of apparent Continues on page 28

LinkLegal launches in Nigeria, set to provide investment support services

inkLegal Consulting (LC), a general legal practice, providing investment support services among others, to foreign and domestic investors in Nigeria has been launched. With focus on three areas: investment support, advisory and Peace and Security, LC recognises the urgent need for dedicated investment anchorage services in Nigeria, today. Speaking during the launch of the company at Eko Hotels, Lagos, Ademola Abass, founder and CEO, LinkLegal Consulting and former special adviser to the governor of Lagos State on Overseas Affairs and Investment (Lagos Global) said the idea of setting up LC is to assist investors in Nigeria who have lots of needs. Some of these needs Abass mentioned include identifying legal partners, talking to the right people

Ayuli Jemide, Vice Chair, NBA Section on Business Law, during his presentation of the NBA-SBL Scorecard at the just concluded conference in Lagos.

in government who can liaise between investors coming into Nigeria and their Nigerian counterparts, what to expect from the government and getting the right documentations, amongst several www.businessday.ng

other needs. He assured that LinkLegal will assist investors obtain necessary documentations and provide lot of services to ensure foreign investors in Nigeria go through a very seam-

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less process when they are trying to invest in the country. “An investor comes to Link Legal, they want information on what is available in the country and you will be surprise to know that a lot of investors don’t actually know which areas to invest in Nigeria. We provide them with laws and policies and how it applies to investors in Nigeria and the processes of investing in Nigeria. “We will assist them when they want to obtain permit. Some of them who have established in Nigeria often need to expand their businesses, or they are been disturbed one way or the other in their business premises, we have an after-care service which supports already established investors in terms of helping them obtain a land or leading them in the right @Businessdayng

direction on who to contact when they want to renew payment. It is a wide-range of services we will be providing,” he said. Abass explained that with the experience he gathered working with the Lagos State government as the special adviser on Overseas affairs and investment, he will provide services that will ease investment processes to clients. On what informed the name ‘LinkLegal’ he said, he recognises the link between investment and security and the name only depicts that law could be linked to a lot of things. “It is a new business and we have to learn a lot of things and we will face a lot of challenges companies face in Nigeria but I am sure there will also be a lot of things to smile about,” he added.

Thursday 04 July 2019

BUSINESS DAY

THEBAR

LegalBusiness

SOOB Partner, Yemi Akangbe set to lead Lagos Bar

partner at the law fir m of Sofunde, Osakwe, Ogundipe & Belgore (SO OB), Omoyemi Lateef Akangbe has emerged Chairman of Nigeria’s premier bar, that is the Lagos branch of the Nigerian Bar Association (NBA). Akangbe who emerged Chairman during the first-ever branch elections via electronic voting, polled 440 (56.8%) of the 774 votes to beat his closest rival, Adebola Lema who garnered 311 votes or 40.2%. Bolatumi Animashaun came a distant third with 23 votes or 3%. Some of the new Chairman’s agenda for this administration include: a career development center to serve as data hub and a platform for liaison between the

unemployed or underemployed and potential employers; CLE & Mentorship initiative based on collaborations with training providers which would come at highly subsidized rates to enable members obtain career defining certifications; as well as a law firm mentorship initiative Speaking about his plans, the new Chairman stated that the center will also be a repository for employment related information and will provide support for prospective law firm entrepreneurs. “We have obtained firm commitments from a number of experienced law firms who have agreed to provide effective and strategic mentorship for upcoming lawyers and law firms,” he said, concerning the law firm mentorship programme,

NERC consultation paper on the development of a regulatory framework for electricity distribution franchising in Nigeria Continued from last week e. Other Considerations. ranchisee and Independent Electricity Distribution Networks The Consultation Paper indicates that the distribution franchisee shall be required to operate and maintain electricity distribution infrastructure as well as invest in distribution infrastructure. Section 62 of the EPSRA indicates that, where any entity is to undertake the distribution of power of 100kw or above, such entity shall obtain a distribution licence from NERC. Thus, to the extent that the distribution franchisee is obligated to install, operate and maintain distribution infrastructure, it would be essential for the Regulator to confirm if the Franchisee would be required to obtain distribution licenses when distributing power of more than 100kw. Additionally, we observe that the franchise arrangement is similar to the Independent Electricity Distribution Networks (“IEDN”) permitted via the NERC IEDN Regulations 2012. Under the IEDN Regulations, an IEDN is defined as distribution network not directly connected to a transmission system operated by the system operator. By section 6 of the IEDN Regulations, NERC may grant a licensee the exclusive right to construct, own, operate and maintain a distribution system in a designated geographical area

within the area of operations of a Disco (please note that IEDN is also permitted to have its own generation component). The IEDN framework and the franchise arrangement have very conspicuous similarities in that both concepts are geared towards encouraging investment in distribution infrastructure to unserved and under-served areas within the Disco’s area of operation. Thus, the franchise arrangement when promulgated into law would cast doubt as to the relevance of the IEDN structure. To avoid a duplication of frameworks, NERC would have to consider the applicability of both concepts in the NESI. Tariffs The Consultation Paper states that the NERC shall approve Multi Year Tariff Order (“MBSO”) tariffs for areas covered by the Distribution franchisees with the Franchisee being able to gain a premium where it provides additional power to the Disco. It would be essential for NERC to undertake adequate customer sensitization for customers who would be paying for electricity within franchise areas particularly as such customers may be paying more tariffs than other customers not covered by a franchise arrangement. Implications of the Consultation Paper on the NESI

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Sale of Stranded Power: The Generation Companies have accused the Discos of rejecting power supplied to the Discos as result of the Discos not having adequate evacuation infrastructure. This has led to the grid having excess volumes of stranded power and as a result inefficient collection and loss of tariffs across the power sector value chain. With the Consultation Paper, NERC is seeking to bridge the gap between the Discos and the consumers by ensuring that the latter is provided with improved access to electricity and eventual purchase of such stranded generation capacities. Improved Generation Capacity The Consultation Paper seeks to increase the generation capacity of the country by encouraging distribution franchisees to also sell generation capacity to the Discos. The implication of this the Disco would have more power which can be supplied to a larger number of offtakers (provided that the distribution infrastructure is put in place. Additionally, in the event of grid failure/system collapse, the Disco have an alternative off grid sources of power which can be supplied to customers. We envisage that small thermal plants as well as renewable power plants would play a major role in this regard. Improvement in NESI Liquidity: The illiquidity issues running across all levels of the NESI are mainly based on collection losses

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and inadequate remittances from the Discos. It is reported that for the year 2018, the average rate of disco remittance to the Nigerian Bulk Electricity Trading Company stood at 25.5% per cent monthly for power sold to such disco. To the extent that the aim of the Consultation Paper is to improve access to electricity as well improve metering and collections, the franchise arrangement could potentially improve the rate of collections of the Discos. However, the risk of collection and payment would be transferred from the Discos to the distribution franchisee and as such the franchisee would to come up sufficient measures to ensure efficient collection of revenues. Uncertainty as the role of the Meter Asset Providers and the IEDNs: The Consultation Paper appears to make redundant, the roles of the Meter Asset Providers and the IEDNs since the distribution franchisees can undertake and perform the obligations of both entities. Justifiable concerns on duplication and redundancy would make investors wary of their investments in those two entities and as such, it would be crucial for NERC to clear outline what the roles of the Distribution Franchisee would be under this framework. Blurred Lines between Generation/Distribution Licences and Franchisees: The Consultation Paper seems to create an uncertainty regard@Businessdayng

ing the ability of the franchisee to sell and distribute power (above 1mw/100 kw respectively) without the need to obtain a generation or distribution licence (as applicable). It would be essential for NERC to address this point from a regulatory standpoint to avoid any conflicts in this area, Conclusion Whilst the franchise arrangement seeks to achieve a “Win-Win” situation for the Discos, the Franchisee, the customers and the NESI, it remains to be seen, however, how the industry stakeholders, particularly, Discos and the customers will react to this development. Unarguably, the electricity sector requires more funding and infrastructure, there is some tendency for Discos to treat this development with great suspicion. Additionally, the uncertainties created by the Consultation Paper would also need to be addressed in the regulation to be released by NERC. This notwithstanding, it is quite commendable that the Franchisee is required to have electrical distribution management expertise and the capacity to invest resources into the upgrade as well as expansion of the distribution system. One can only hope the Distribution Franchise Model, if and when allowed to finally come into operation, will be given the right business environment to thrive, without jeopardising the interests of Discos, while taking into account the concerns of all other stakeholders.

Thursday 04 July 2019

BUSINESS DAY

INDUSTRYFILE

LegalBusiness

ADR: Experts advocate mediation as litigation constraints economic growth

CHUKA UROKO

lternative Dispute Resolution (ADR) as a legal phenomenon is, increasingly, gaining traction among members of the bar and bench, individuals, institutions and sundry disputants as it is gradually but steadily being realised that litigation is not only a legal albatross, but also a major constraint to economic growth and destroyer of business relationships. It was against this backdrop that experts who gathered for the 4th edition of Oakwell Partners annual Mediation Conference in Lagos recently advocated mediation for quick, timely and peaceful resolution of disputes among parties. Besides quick, timely and peaceful resolution of disputes through which frayed nerves are calmed and business relationships are salvaged, mediation, according to the experts, is an economic growth enabler. In his keynote speech at the conference with the theme, ‘Mediation: Adding Value, Improving Deals’, Abubakar Danlami Sule, MD/CEO, Keystone Banks Limited, highlighted the pitfalls of litigation as a court process. According to him, that traditional problem-solving method tends to be binary because of its adversarial nature, adding that courts are generally limited to money remedies and, on rare occasions, to specific remedies

L-R: Justina Lewa, Council Member, NBA-Section on Business Law; Seni Adio, chairman, NBA-Section on Business Law; Andrew Goodman, guest speaker; Osarieme Ezekiel, managing partner, Oakwell Partners, and Osaigbovo Ezekiel, Partner &Practice Director at Oakwell Partners

such as interdict (court order). “What is more worrisome about litigation is not the conflict, but the destructive nature of the process reflected in lost opportunities to businesses, and destruction of business relationships,” he added, pointing out that though there are other techniques of settling disputes including negotiation, conciliation and good offices, mediation is known to be preferred as it allows parties to have control over the agreement to be reached. “Mediation has been recog-

nized as an economical, faster, and more amicable alternative to either arbitration or litigation in resolving disputes; its use has appeared to receive little resistance owing to its onfidentiality and opportunity to salvage business relationships,” Sule posited. Other benefits of mediation, according to him, include clarity of the third party’s neutral role; flexibility in procedures, effective communications among others. Alex Okoh, Director General, Bureau of Public Enterprises

(BPE) agrees, sharing their experiences at the courts over the privatization and commercialization of public assets many of which, he disclosed, were under litigation in various courts in the country. “Legal issues constraints economic growth; assets that are tied down by legal issues could be freed through mediation, leading to growth in the economy,” Okoh noted, pointing out that litigations and arbitration have posed serious challenges to government’s privatization

objectives. “Defending legal action is a source of distraction ; it causes distraction to realizing the objectives of privatization, ” he added, citing the Eleme Petrochemical Plant as a clear case of privatized public asset embedded in legal issues and therefore defeating the objective of the privatization—economic growth. Andrew Goodman, a mediator in UK for 25 years and a visiting lecturer at Dubai University Real Estate who was the guest speaker at the conference, also highlighted the benefits of mediation, stressing that the best approach to disputes was not to go to court at all. He described mediation as an open justice system which enjoys confidentiality that most businesses want. “This is a voluntary process that does not commit the disputants to any particular outcome and ensures that people don’t even know about the dispute”, he said. Oakwell Partners managing partner, Osarieme Ezekiel, had, in her opening remarks, noted that mediation was the way to go, contending that businesses did not have any business in court. She urged parties to disputes to embrace mediation in order to save time and money, and also avoid the destructive nature of litigation. “It is good that disputes are settled in a way that business relationships are not destroyed,” she counseled.

GLOBALREPORT

Slater and Gordon taps into fee-sharing deal with LegalDefence app

he law firm of Slater and Gordon – which has long coveted the position of the UK’s b e s t- k n o w n l e ga l brand – has signed an exclusive fee-sharing deal with an app developer. Subscribers to LegalDefence pay between £19 and £24 a month and receive 25% off Slater and Gordon legal fees. In return, the firm receives a third of membership fees. Subscribers get access to UKbased ‘qualified legal advisers’ via smartphone 24 hours a day, and to a chatbot named ‘Gordon’ which can answer common legal questions. Additional features include a library of self-help legal documents and the ability for a member to send a photograph of intended prosecution to their lawyer in the event of a driving offence.

According to LegalShield, the US company behind the app, members frequently seek help with will-writing, conveyancing www.businessday.ng

and employment law, but no areas of the law are excluded. LegalShield says it wants to widen access to legal support,

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claiming that a third of UK workers who experienced a ‘legal situation’ in the past two years did not seek professional help. @Businessdayng

LegalShield was established 47 years ago after its founder had a car accident and struggled to pay his legal costs. The company – then called the Sportsman’s Motor Club – was set up to reimburse members for legal fees relating to road accidents. Some 1.7 million people in the US now use its app. It reached the UK in pilot form late last year. UK managing director Mike Roberts said it has ‘over 500’ UK subscribers so far. He added: ‘It will take a while before the company really becomes financially viable. It will be slow growth, not a boom.’ He added that the company’s greatest challenge is ‘making people aware that the law is for everyone’. ---LAW SOCIETY GAZETTE

Thursday 04 July 2019

BUSINESS DAY

PHOTOFILE

LegalBusiness

More photos from the 13th Annual Business law Conference which held in Lagos from June 26th -June 28th, 2019.

L-R: Seni Adio, SAN, chairman, Nigerian Bar Association-Section on Business Law (NBA-SBL); Femi Gbajabiamila, speaker, house of representative and Babajide Sanwo-Ola, governor, Lagos State, at the opening ceremony of the 13th annual business law conference in Lagos.

L-R: Jonathan Taidi, NBA General Secretary, Conference Chair, Dr Adeoye Adefulu, NBA President, Paul Usoro, SAN, Babajide Sanwo-Ola, governor, Lagos State, Seni Adio, SAN, chairman, NBA-SBL, Femi Gbajabiamila, speaker, house of representativeand hon Justice Bode Rhodes-Vivour

Babajide Sanwo-Olu, governor, Lagos State, at the opening ceremony of the 13th annual business law conference in Lagos.

NBA President, Paul Usoro, SAN.

L-R: Fola Akande of Cadbury, Miannaya Essien, SAN and Mena Ajakpovi

L-R: BusinessDay Law Editor, Theodora Kio-Lawson, Kalu Ubosi and Efeomo Olotu of George Etomi & partners

Overview on Arbitrators’ impartiality and duty to disclose Continued from page 29 bias and disclosure in arbitration appointments. Specifically, the High Court was asked to determine whether (and if in the affirmative), to what extent, an arbitrator may accept appointments in multiple arbitration proceedings involving the same or similar subject matter, and the arbitrator’s disclosure obligations in such circumstances. The High Court rejected the argument that “M”’s involvement in the three identified arbitrations would render him biased, or give rise to bias so that his ability to act independently was (or could be) impaired. This position was [essentially] endorsed by the Court of Appeal which held that while “M” ought to have disclosed his subsequent appointments to the parties in the first arbitration, a “fair minded and informed observer having considered the facts” would not reach a conclusion of a real possibility that “M” was biased. It is instructive to note that the Court of Appeal did not consider the failure to disclose fatal. Rather, the court relied on the test of a fair minded and informed observer. The Court of Appeal’s reasoning and conclusions have been severely criticized. See for example – Paul Stanley “Halliburton Company v. Chubb Bermuda In-

surance Ltd. (available at http:// s3-eu-west-2.amazonaws.com/ sqe-essexcourt/wp-content/ uploads/2018/05/08152814/ hburton.pdf ). Paul Stanley’s criticisms of the position taken by the Court of Appeal can be summarized as follows: (i) the Court of Appeal did not consider that international arbitration is largely unregulated and there is great incentive for an arbitrator to act in a particular way to ensure repeat business. In particular, the author noted that “professional arbitrators who accept or seek multiple appointments from one party have an incentive not to bite the hands that feeds them”; (ii) recourse against an unfavourable award is extremely limited necessitating the need to ensure fairness in the arbitration process; and (iii) arbitrators in overlapping disputes are likely to have seen evidence which will be known to one party only, effectively compromising the integrity and fairness of the process. Undoubtedly, these are valid concerns, and it would be interesting to see how the UKSC will rule. From a Nigerian law standpoint, arbitrators’ duty to disclose circumstances that give rise to justifiable doubts as to the arbitrator’s impartiality [or independence] is provided for in section 8(1) of the Arbitration www.businessday.ng

and Conciliation Act (ACA); and section 10(1) of the Lagos State Arbitration Law, respectively. The decision of the Federal High Court (FHC) in the case of Gobowen Exploration & Production Limited v. Axxis Petroconsultants Limited (Suit No. FHC/L/ CS/1661/2013) is illustrative of the importance attached to an arbitrator’s duty to disclose. In this case, the FHC annulled an award because one of the arbitrators failed to disclose his family relationship with the lead counsel of the party who appointed him. (For a full analysis of the decision, please see: Abimbola Akeredolu and Chinedum Umeche, “Arbitrators’ impartiality and independence: commentary on Gobowen v Axxis, Arbitration International, Volume 34, Issue 1, March 2018, Pages 143-148). Similarly, the case of Nigerian National Petroleum Corporation (NNPC) v. Total E&P Nigeria Limited & 3 Ors. (Suit No. FHC/ABJ/CS/390/2018) involved an application to disqualify the presiding arbitrator from further participation in the arbitral proceedings and to set aside a partial award issued by the tribunal, on the basis, inter alia, that the presiding arbitrator did not make certain disclosures upon his appointment. Although the FHC, rightly, in our view, de-

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clined jurisdiction to entertain the suit, issues pertaining to the arbitrator’s failure to disclose and alleged bias featured prominently in the case. A recalcitrant party can derail the arbitral process by challenging the appointment of an arbitrator for a number of reasons. The judge in NNPC v. Total E & P was evidently confronted with this situation and deprecated the applicant’s attitude in these words : “I have noted that the Notice of Arbitration… was dated and issued as far back as 16 June, 2015. I have also noted that … the Joint Terms of the Appointment of the Arbitrators, was reached by the parties on 25 April 2016. These are periods of well over 3 years respectively, yet no appreciable progress has been made on the substance of the dispute… All the delays are occasioned by the Applicant [NNPC]’s unrelenting challenge to the constitution and functioning of the arbitral tribunal”. Worse still, even an award can be annulled by a court on the basis of an arbitrator’s failure to disclose a conflict of interest as seen in Gobowen’s case. These situations undoubtedly undermine the arbitration process and ultimately diminishes the functional utility of arbitration as a preferred means of @Businessdayng

resolving [commercial] disputes. The importance of ensuring impartiality [or seeming impartiality] is important to any adjudicatory process, especially arbitration. In the English case of R. v. Sussex Justices ex parte McCarthy [1924] 1 K.B. 256, Lord Hewarty CJ, observed that it is ‘of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done’. A proactive approach should therefore be adopted in dealing with issues pertaining to arbitrator’s impartiality, independence and conflict of interest generally. That said, there is a need to ensure that parties do not take advantage of the emphasis on impartiality, independence and conflict of interest generally to unduly delay arbitral proceedings. The International Bar Association Guidelines on Conflicts of Interest in International Arbitration (as updated from time to time), even though non-binding, is a useful guide for arbitrators and parties to evaluate impartiality, independence, and disclosure obligations in any given situation.

Chinedum Umeche, FCIArb, is a Senior Associate and the Team Lead of Banwo & Ighodalo’s Litigation, Arbitration and Alternative Dispute Resolution Practice Group.

Thursday 04 July 2019

BUSINESS DAY

INTERVIEW

‘Fourth revolution, Africa’s opportunity to solve problems through technology, partnerships’ In a bid to further leverage technology to provide durable experiences for businesses, customers, Access Bank Plc just concluded Africa Fintech Foundry (AFF) Disrupt Conference 2019 targeting over 8000 delegates. In this interview, ADE BAJOMO, Executive Director, IT & Operations, Access Bank Plc explains the rationale behind the conference. He also shares with KELECHI EWUZIE plans to encourage the next generation of entrepreneurs, techprenuers and innovators to share their ideas globally. Excerpts: What is the Africa Fintech Foundry (AFF) Disrupt Conference 2019 all about? frica Fintech Foundry Disrupt 2019 is the second edition of the conference. The first edition was in 2017, where we welcomed roughly 1000 participants. The Disrupt conference goes with the Access Bank DNA; we leverage technology to provide durable experiences for both businesses, and the customers we serve. Welcoming over 8000 delegates, Disrupt 2019 is the largest innovation conference ever held in Africa. We created Disrupt because we realised that digital technology is driving the fourth revolution and that the building block of digital is data. Data is transforming the way we think and everything we do. Access Bank is a Nigerian financial institution that’s at the forefront of driving businesses, growing the economy, and ensuring that we provide a unique value proposition to customers in terms of service and customer experience. As you know, customer experience is everything. The fourth industrial revolution is the first revolution that Africans are actually participating in. Africans are using global technology and partnerships to solve huge problems. If we can facilitate and build an ecosystem where both young and old innovators are encouraged to solve the various sectoral problems we have, that would drive us toward driving economic growth, creating jobs, and so on. These building blocks are the basis for Disrupt 2019 theme, Digital Gold Rush: Building a Sustainable Tech-Economy. Technology is driving a paradigm shift. So all businesses are evolving in both their services and their operations. Banking is not going to be excluded from that global shift, so financial institutions must be at the heart of these changes, disrupting themselves, and working with people who want to disrupt operations to see how we can evolve. This disruption is purposeful, and working to create value within the economy. So, Africa Fintech Foundry has decided to keep the conferences going because they add value to society, the economy, and the entire financial services

tracts investment for Fintech. We need to do more as an industry and across board.

Do you think the Fintech Disruptive move is gender-biased? I don’t see the Fintech movement as being gender-biased. However, I don’t think there are enough women in the industry and the irony is that some of the best minds I’ve come across in technology are women. At Disrupt 2019, there was a section specifically for women, geared at encouraging more women to come on board and emboldening those already on board, to share their experiences as techprenuers. There are insights that only a woman would have. If you can empower women, you empower generations to come.

Ade Bajomo

industry. By inviting seasoned professionals in their various fields across the globe, to share from their wealth of experience, we ensure that there is significant depth in terms of thought leadership in technology at Disrupt. We also want people to connect, think, meet, discuss, discover, dream, and learn, but also, to actually implement the things they learn. This is a conference that encourages operators in the Fintech space to think and connect to the ecosystem. The conference provides an opportunity for people to hear how industry experts are leveraging technology in this disruptive world. The speakers were well-selected from across the world. There were master classes in block chain, which focused on enduring solutions. These master classes were from reputable industry experts who are leaders in their own spaces. The conference was also an avenue to showcase world-class start-ups. Africa Fintech Foundry runs an accelerator programme, which finds people with great ideas www.businessday.ng

and technology solutions that work to solve real problems. When we find these start-ups, we incubate them by providing the resources necessary for them to grow and develop. This year, we picked five Fintech innovators to compete for a prize. The innovators’ work with AFF Disrupt is useful because it encourages innovation, participation and a deepened thought process, and it exposes the innovators products to the global market. These programmes will encourage the next generation of entrepreneurs, techprenuers and innovators to share their ideas globally. This is in line with Access Bank’s drive since we operate in over 15 locations around the world. We take the ideas to where the problems and people are. How would you assess the contribution of the Fintech Industry to Nigeria’s economy? Globally, there were about $120 billion worth of investments for Fintechs in 2018. Less than one percent of that figure came to Nigeria. If we

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look at our share, Nigeria was competing primarily with Kenya and South Africa, though Morocco and Egypt are fast coming up as investment destinations too. Nigeria has not done badly, we have attracted some interesting flows and we need to continue to attract those flows within our market. However, the ingredient needed to attract investment is an enabling environment. Nigeria has an attractive demography, with interest in having their problems solved. There are various problems which need solutions in our country. Nigeria has financial inclusion, agriculture, and health service challenges, amongst others. There are a plethora of problems to solve. Who are the best people to solve these problems other than Nigerians? We understand those issues better than anyone else. As I said before, it is interesting to note that the fourth revolution is the first time Africans are solving their own problems by leveraging global technology and partnerships. The government is very active in providing an environment that at@Businessdayng

What needs to change from a government and Fintech perspective in the race to catch up with disruptive technology? From a national perspective, if you look at our ecosystem, the most important asset is people. Nigeria has the numbers, but are they sufficiently trained? Do they have the expertise needed to take the economy to the next level? If we say every business has to go digital, the country does not currently have enough qualified people. We have to take deliberate steps to train far more technical people. A lot of people are scared of technology. They believe technology displaces jobs; I believe it is the other way round. Technology creates new jobs. However, we need to retrain, reskill, and retool. We’ll continue to see augmented decision making in this generation. If Nigeria doesn’t train enough technical people and developers, we are going to be left behind in this revolution that everyone is talking about. It will be a shame because this is the first revolution in which we are getting a chance to solve our problems for ourselves. As we are going digital, we have to train security personnel and people on artificial intelligence, because the next war will be fought digitally. The government needs to create that enabling environment. There are governments that are deliberately doing that through tax incentives, knowing that through this, jobs will be created that solve economic problems in a sustainable way.

Thursday 04 July 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Sahara Power plans to increase electricity generation to 5,000MW … supports energy demand growth in SSA Stories by Olusola Bello

ahara Power Group says it will continue to implement its expansion plans t h ro u g h i nv e s tments in diverse energy mix and partnerships to enhance the capacity of the power sector in order to meet the anticipated energy demand growth in sub- Sahara Africa (SSA). Kola Adesina group power managing director who disclosed this at the Oil and Gas Council’s Africa Assembly in Paris, said the SSA region needs to build “robust capacity” to respond to “disruptors” in the energy sector by way of economic growth, rising demand in Africa, shifting energy mix, changes in the market structure and dynamics, the growing share of private investment in Power, and in increased Regional Power Pooling. The International Monetary Fund (IMF) World Economic Outlook reports that SSA growth is set to pick up from 3% percent in 2018 to

3.5% in 2019, before stabilizing at close to 4% over the medium term. About half of the region’s economies are expected to grow at 5% or more, which would see per capita incomes rise faster than the rest of the world on average over the medium term. “As a foremost energy provider in Sub-Saharan Africa, Sahara Power Group is committed to its target of increasing the Group’s gen-

eration capacity to 5,000MW via different energy mix. This, in addition to other innovative interventions across the value chain in the region is being driven by ongoing investments and partnerships,” he stated. Sahara Power Group is the largest privately owned vertically integrated power company in sub-Saharan Africa. The Group comprises including Egbin Power Plc (largest

‘Nigeria will work to improve compliance with OPEC+ cuts’

igeria, whose crude production exceeds its quota under an OPEC/ non-OPEC supply accord, is working to improve its compliance, its OPEC representative, Folasade Yemi Esan, has said. But Esan left open the possibility that Nigeria could receive a higher quota when OPEC ministers meet later in the day to decide the future of the 1.2 million b/d supply cut agreement, which expired Sunday. Sources had told S&P Global Platts that Nigeria and South Sudan could request looser production ceilings. Nigeria had been exempt during the first two years of the OPEC/non-OPEC production cuts, due to the volatility of its output stemming from disruptions in the Niger Delta, only receiving a quota for the current round of cuts, which went into force in January. “A higher quota is not the essence,” Esan said at a press conference held at the OPEC Secretariat. “If we wanted higher quotas, we would not have exited the exemption.” But later, pressed on whether Nigeria would keep its output cap of 1.69 million b/d under the deal, she said: “We are working very hard Olusola Bello, Team lead,

to keep that ceiling, but if for any reasons the ceiling is increased, we will keep to whatever ceilings we get.” Nigeria, Africa’s largest producer, pumped 1.86 million b/d in May and 1.95 million b/d in April, according to Platts’ monthly survey of OPEC production. Country officials have previously disputed production figures from some secondary sources used by OPEC to track compliance, including Platts, saying that some of the volumes include condensate, which is not covered under the quota. But much of Nigeria’s recent surge comes from the start-up of the deepwater 200,000 b/d Egina field, which came online December 29. And official data from stateowned Nigerian National Petroleum Corp. show that the country’s oil and condensate production is averaging around 2.3 million b/d, with officials having previously pegged condensate output at about 400,000 b/d, meaning about 1.9 million b/d of production is crude. “There are other existing projects that will increase production, as well, over the next six to 24 months, a Nigerian delegate told Platts on condition of anonymity,

Graphics: Joel Samson.

conceding that other ministers may not be amenable to a request for a higher quota. Esan, who is filling in as Nigeria’s OPEC representative since President Mohammed Buhari has yet to name a new cabinet, said some of Egina’s production could yet be classified as condensate. “Not all wells are fully functional, she said. “We are trying to define the composition of this field,” she added. As for non-OPEC South Sudan, its petroleum and mining ministry reports production of about 180,000 b/d, above its quota of 130,000 b/d. The country, which has seen its oil sector suffer from years of war, recently appointed Awow Daniel Chuang as its new minister of petroleum and mining, after President Salva Kiir reshuffled his cabinet. Its oil prospects have brightened following a peace pact signed by Kiir and rebel faction leader Riek Machar in September, with the government aiming to reach 350,000-400,000 b/d by 2020. Any proposals for higher quotas could receive a cool reception to their requests, with the OPEC/non-OPEC coalition seeking to maintain production discipline.

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private thermal power plant in SSA), Ikeja Electric (one of the largest privately run power distribution companies in SSA) and First Independent Limited. Sahara Power has five power plants across several locations with capacity totaling 2040MW, with potential for generation into the subregion through the West Africa Power Pool. Adesina, whose presentation focused on :“Power

Sector - Shifting Patterns and Rising Challenges – An Operator’s Perspective”, said amid the expected energy demand growth in the SSA, the sector needs to tackle low electricity access and consumption, low Creditworthiness due to current tariffs, Inadequate Power Infrastructure and Insufficient Regulatory, Policy and Institutional Frameworks. “Half of Africa’s population lives without access to electricity. The industrial sector is responsible for more than two-thirds of SSA’s total energy use. Average Electricity consumption is about 150kWh per capita. Coal is still the largest fuel source for generation in SSA”, he stated. In Africa, there are changes in the market structure and dynamics in the power sector because of a shift from a centralized, government-owned, to private sector participation. Already, vertical unbundling – the process of ‘unpacking’ integrated utilities into separate generation, transmission and distribution companies has been the preferred option for countries

including Nigeria, Ghana, Africa, Uganda, and Zimbabwe. Also, there is the emergence of management contracts, commercialization, IPPs, and electricity regulatory and legislative amendments. These reforms have had the most significant impact on renewable energy and energy efficiency in the region. “A key trend is that there is an increase in investment in the power sector by independent power producers (IPPs), private companies and entrepreneurs, as well as development finance institutions (DFIs) speeding up the process of bridging this gap”, Adesina explained. “There is a growing interest in regional power pools across the continent and this could be adopted as a strategy to deal with the unevenly distributed energy resources and Africa’s energy problems. More affordable tariffs and an optimal generation capacity could be developed in the power sector through infrastructure linkages of power utilities and the regional power pools”, he added.

Consumers Complaints Commission warns Discos over group disconnection

he Federal Competition and Consumer Protection Commission (FCCPC) has warned electricity distribution companies (Disco) not to engage in mass disconnection of customers saying it was not the best way to solve the issues of debts occasioned by estimated billings. The organization said it was illegal for the disco to disconnect a customer that is legitimately paying his bills simply because some other customers refused to pay because of the outrageous bills given to them. Babatunde Irukera, the commission’s Chief Executive, expressed the displeasure at the Customers’ Engagement Town Hall meeting organised by the Eko Electricity Distribution Company(EKEDC) in Lagos. Irukera called for aggressive metering to curb the estimated billings. The FCCPC boss commended the management of Eko Disco on their prompt and effective complaints resolution within its network, which he said also said helps build consumers’ confidence. He said there was no acceptable combination of facts that would justify the group disconnection of electricity consumers where there were

some of the consumers that might have paid their bills. According to him, there was absolutely no reasons for any distribution companies to disconnect consumers on the account of `group disconnection’, no matter what the case may be, adding that FCCPC would continue to push for the elimination of this unfriendly and aggressive attitudes of DisCos. The group disconnection of consumer’s electricity, without consideration for those paying their bills, he said is an abuse of consumers’ rights. Irukera said that the objective of the Town Hall meeting was to engage electricity consumers directly to facilitate dialogues and proffering solutions to difficult consumer issues on electricity. He said his organisation expected DisCos to listen to consumer’s complaints and understand their grievances in order to improve their service delivery. There is no justification for billing consumers for power that was not received or consumed, he pointed out. “An estimated billing is an abuse; we used to have an estimated billing in Nigeria before the DisCos came on board, and it was not as contentious and

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discriminating as we have it now,” he said. Consumers he said refused to pay their bills because the estimated billings were “arbitrary and crazy” and therefore urged DisCos to follow the estimated billing methodology as stated by law, which makes it rational and reasonable. DisCos, he stated should be responsive and sensitive in addressing consumers’ complaints. “I expected EKO Discos to build on its effective metering schemes to create transparency in addressing the estimated billings. We are also planning to bring all the power stakeholders such as the Nigerian Electricity Regulatory Commission (NERC), Generating Companies of Nigeria (GENCO) and Distribution Companies (DISCOs) together to address challenges confronting the sector.” Adeoye Fadeyibi, the Chief Executive Officer, EKEDC, said the company had improved tremendously on its customer service delivery system within its operations. Fadeyibi, who was represented by Joseph Ezenwa, the chief finance officer of the company, said that EKEDC had the responsibility to satisfy its customers.

Thursday 04 July 2019

BUSINESS DAY

ENERGYREPORT Stakeholders say investments in Oil and Gas sector discouraged by tax burdens Stories by Olusola Bello

takeholders in the oil and gas industry, especially oil servicing subsector, have cried out saying the tax burden they are carrying is discouraging investments in the sector and demanded that the government makes some adjustments so that they can get some relieve. The stakeholders who spoke on “Nigerian Content and Creating Conducive Business Environment” said local content is good but companies must be encouraged to grow, adding that the country has done well with the establishment of local content policy which has improved the participation of local companies when it is viewed from the perspective of where country is coming from. One of the panellists at the Nigerian Content Seminar organised by CWC, organisers of Nigerian Oil and Gas Conference and Exhibi-

L-R: Bashir Bello, general manager, Business and Government Relations, Shell Companies in Nigeria; Simbi Wabote, executive secretary, Nigeria Content Development and Monitoring Board, and Peter Costello, vice president, Shell Nigeria and Gabon, at the opening ceremony of the 2019 edition of the Nigeria Oil and Gas Annual Conference and Exhibition in Abuja recently.

tion taking place in Abuja, Godwin Izomor, group managing director and chief executive of MV Vowgas Group, said the Nigerian Content Development Fund put in place to help local companies is good but that the government should encourage

companies to grow and not stiffen them with draconic tax policies. The fund he said is good but small when compared to the level of investments required in the Nigerian oil and gas industry and therefore demanded it should be

Crude oil pricing, production, key for revenue generation in Nigeria, Says new NNPC boss

he newly appointed Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Mele Kyari, has said crude oil pricing and volume of production are key factors in ensuring sustainable revenue generation for the country. Kyari, said this in Vienna, while addressing journalists on the sidelines of the 176th Meeting of the OPEC Conference. The new NNPC boss, who is Nigeria’s OPEC National Representative, was represented at the meeting by Bala Wunti. Furthermore, Kyari assured the global audience that Nigeria would continue to support the declaration of cooperation that has helped in restoring stability in the global oil market. “Through the Declaration of Cooperation, greater stability is restored globally. Nigeria believes that having the right price and volume can support our aspiration and ensure a sustainable revenue generation,” he said. According to Kyari, a continuation of the declaration was the way to go. He said a six-month extension was too short a time and would not have the required impact in curbing uncertainty and volatility which existed before the

cooperation “So a nine-month extension is the way to go, considering the objective of the declaration, that is why Nigeria supports the initiative and is also grateful that big nations are committed to it,” Kyari said He further expressed the commitment of the NNPC in revamping refineries, noting that incountry refining of crude through multiple channels and collaboration would ensure the nation becomes a major petroleum product exporter by 2020. “ Ni g e r i a’s o b j e c t i v e at today and tomorrow’s OPEC is to support the declaration of cooperation that has so far succeeded in the restoration of global oil markets stability.” Meanwhile, OPEC has approved in principle a nine-month rollover of its output cut agreement at the same levels, two sources told S&P Global Platts, as the producer group seeks to shore up prices in the face of flagging demand growth. The deal now must be approved by OPEC’s 10 non-OPEC partners, including Russia. Russia’s energy minister, Alexander Novak, has already endorsed a nine-month extension of the cuts, which expired Sunday. www.businessday.ng

The 24-country OPEC/ non-OPEC coalition had agreed in December to a 1.2 million b/d supply cut accord that ran through the first half of 2019. Tepid demand growth forecasts and surging US oil production has kept a lid on prices, prompting the producer bloc to discuss an extension. However, a charter that would have made permanent OPEC’s market management alliance with its non-OPEC partners has been taken off the table for now, due to Iran’s objection that OPEC was allowing too much influence to producers who are not bound by the organization’s bylaws and commitments. “Further consultations are needed,” one source said. Also Monday, OPEC approved another three-year term for Secretary-General Mohammed Barkindo, two sources said. Barkindo, who has held the post since summer 2016, has shepherded the producer group through two and a half years of output cuts and has made a mark for himself with his international diplomacy. The secretary-general serves as OPEC’s public face and spokesman, as well as overseeing the organization’s secretariat in Vienna.

increased. The companies he said were supposed to be encouraged to grow as opposed to the current situation where most of them are being overtaxed. He advised the Nigerian Content Development and Monitoring Board (NC-

MDB) to intervene on behalf of local companies. In other countries, according to him, governments help bail out companies from problems but the situation is not the same in Nigeria, adding that banks and policymakers are creating problems for the companies. “There are so many opportunities in the Nigerian oil and gas industry but these opportunities could only be translated into so thing meaningful if the government provides a proper environment for the locals to operate. So we appeal to the government to give the companies breathing space,” he said. Dele Aikhionbare, Head, Business Development Eroton Exploration and Production, in his own contribution, said the country had done well, looking at where she is coming from, saying that in the past if one looks, at contracts awarded in the oil and gas industry they were awarded to foreign companies but now the situation has changed. Their footprints have reduced.

He said many Nigeria companies can march their foreign counterparts in so many areas now. The industry and the government he said need to sit down and look at areas where there are gaps and close them through business-friendly policies. In his own contribution to the discussion, Olayinka Oluwatimimehen, group chief executive, Amazon Energy, said the greatest threat to the local companies was lack of continuity because of bad investment climate. He said there are over 4000 trained engineers in Nigeria that have deep water capabilities and needed to be continually engaged. But Obinna Ofili, general manager, Nigerian Content Fund (NCDF) said the fears raised by Godwin Izomor were being addressed in order to provide a conducive environment for ease of doing business. He encouraged the promoters of local companies to put in place proper corporate governance structure in order to attract more investors.

Oil markets await two vital decisions

il prices moved higher on the eve of a highly anticipated meeting between Donald Trump and Xi Jinping, which could result in a breakthrough in trade negotiations, an agreement to resume talks, or a collapse and subsequent increase in tariffs. On Monday, OPEC kicks off its meeting in Vienna. “The next few days will provide a muchneeded dose of clarity for the oil balance over the coming months,” PVM’s Stephen Brannock said in a note. “Market bulls will be (hoping) that the G20 summit will provide a trade breakthrough ... All the while, the supply side of the oil coin continues to display bullish signals,” he added. Europe sprinting to keep Iran on board. European governments will “double down” on efforts to keep economic ties alive with Iran, in an effort to keep the nuclear deal on

life support, according to the Wall Street Journal. The EU has tried to develop a financing mechanism to circumvent U.S. sanctions but few foreign companies are willing to do business in Iran. Iran said that it would breach limits on uranium stockpiles as soon as this weekend. The last-ditch effort looks set to fail. U.S. to assemble naval watch in Persian Gulf. The U.S. is hoping to enlist other nations in an effort to keep an eye on the Persian Gulf, according to the Wall Street Journal. The U.S. would contribute ships and aircraft but operational control would be headed by another nation. The plan aims to present deterrence to Iran, securing oil shipment lanes through the Strait of Hormuz. Saudi investment to bring Russia on board. Saudi Arabia is set to invest $5 billion in Russia this year, and many

analysts believe that Saudi investments are inducements to keep Russia on board with an extension of the OPEC+ production cut agreement. Philadelphia refinery set to close. Philadelphia Energy Solutions may permanently shut down its damaged refinery, decimated from a series of explosions last week. PES may try to sell the complex as well. Drillers use gas for electricity. Permian drillers are beginning to use some of their surplus gas to power their operations, a practice that will save on costs, reduce flaring and emissions, according to Bloomberg. Kinder Morgan wins court decision for gas pipeline. Kinder Morgan won a court decision that will allow them to move forward with a natural gas pipeline, easing the company’s way to plan its own route and acquire land without a landowner’s consent.

Chevron put out Ojumole well 1 fire after causing devastating effects to environment

hevron Nigeria Limited (CNL), was able to put out the fire at the Ojumole Well No. 1 in Ondo State, after several weeks it burnt with devastating effects on the environment. The company thanked all the stakeholders, including the neighbouring communities, Ondo and Delta State governments, regulatory authorities and security agencies that worked with the NNPC/CNL JV to ensure that the fire incident caused by third party interference, was safely put out.

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Esimaje Brikinn, CNL’s general manager Policy, Government and Public Affairs, stated that “accredited independent environmental consultants have been continuously monitoring the environment since the incident occurred with support from regulatory agencies. In addition, CNL employees are on site and normal activities are ongoing in the area.” According to him, CNL is currently diligently working on all the requisite post-incident activities, which would be consistent with the relevant @Businessdayng

environmental laws, regulations and guidelines. Esimaje reiterated CNL’s commitment to protecting people and the environment, emphasizing that CNL placed the highest priority on the health and safety of communities neighbouring its areas of operation, its workforce and the protection of the environment and its assets. “We continue to conduct our operations safely, reliably and efficiently, with the utmost consideration for the protection of people and the environment,” he remarked.

Thursday 04 July 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

consumer spending

VAT increase to hurt consumer spending BALA AUGIE

n air of melancholy surrounded Kunle Badmus as he sat on a chair in his office, while contemporaneously staring into space like a sorcerer trying to foretell someone’s destiny. The 51-year-old civil servant has come to the realization that he will be paying for more for goods and services as government plan to hike Value Added Tax (VAT). The proposed hike will increase sufferings of the people because low-income earners spend the large chunk of their income on those taxes, according to Badmus. “ This is not the right time to take such a decision, a lot of civil servants are grappling to survive and even the takehome pay no longer take us home,” said Badmus added. Nigeria will increase the rate of value-added tax to 7.5 percent from the current 5 percent in 2020 as Africa’s biggest oil producer seeks to shore up falling revenue. “We have developed a strategic revenue growth initiative, which we have started to implement,” Ahmed said. “Our target is to increase revenue to 65 percent minimum in 2019 so that in the next three years, we are able to attain

80-85% of our revenue target,” said Zainab Ahmed, former Minister for Finance. While West Africa nation with a population of 200 million people wants to shore up revenue and shrink fiscal deficits to compensate for the sudden drop in crude oil price that tipped the country in its first recession in 25 years, analysts see the proposed policy doing more harm than good to the economy. Because of lower income households spend a greater share of their income on consumption than higher income households do, the burden of VAT falls on the former. Dairy, Confectionary, Baked foods, bottled water, Juice, carbonated categories, and the drinks industry will be hit by the hike. There could also be increased inequality because VAT (like any other consumer tax), do not tax the returns (such as dividends and capital gains tax0 from new investment. Ayodeji Ebo, managing director and CEO of Afrinvest Securities Limited said the main strategy should have been to use technology in widening the tax net rather than squeezing consumers, adding that the informal sector should have been the target of government. “It will compromise dis-

posable income and costs of goods and services will go up and purchasing power of the poor will be eroded,” said Ebo. Ebo added that if there are no measures to improve business activities, then the new hike could lead to a slowdown in economic activities. President Muhammadu Buhari’s economic policies are causing more pains than ease to manufacturers and importers, raising concerns on how his administration intends to lift 100 million people out of poverty. For instance, the exchange rate for Customs duty has increased from N306 per dollar to N326/$, as clearing agents said the new rates would definitely add to the cost of clearing cargoes from Nigerian ports and the prices of goods in the market. With the proposed increase

in the rate of VAT, combined with the new custom rates, the poor’s purchasing power will be eroded because the tax burden will be shifted to them in the form of higher prices. The aforementioned is a double whammy for a country that took the baton from India to become home to the highest number of people in extreme poverty in the world. Some 87 million Nigerians live on less than $1.90 a day, and the imposition of additional taxes could result in the figure balloon. The economy has been growing sluggishly as Gross domestic product in expanded by 2.01 percent in the three months through March from a year earlier, according to recent data from the Office of the Bureau of Statistics (NBS). Consumer inflation for the month of May stood at 11.40

percent, below the Central Bank of Nigeria (CBN) target range of 6 and 9 percent. The average consumer is not in a strong position to withstand the additional tax burden. Government should focus more on growing the economy rather than overburdening the people with a tax increase, according to Johnson Chukwu, managing director and Chief Executive Officer of Cowry Asset Management Ltd. “The trade sector will be affected and whatever gains are made from the new minimum wage will be wiped out by the hike,” said Chukwu. Omotola Ambibola, Associate Investment Research analyst at Chapel Hill Denham Limited said that rather than increase VAT, the government should ensure compliance at all level because more taxes are collected from urban areas

with low poverty rates than the rural areas. “Although the hike will reduce some of the fiscal deficit, the downside is that it will hurt consumption and the economy given that the formal sector that are already taxed will bear the burden,” said Ambibola. Sectorial distribution of Value Added Tax data for the first quarter of 2019 reflected that the sum of N289.04 billion was generated as VAT in the first quarter of (Q1) 2019 as against N298.01 billion generated in the last quarter (Q4) of 2018 and N269.79 billion generated in Q1 2018 representing 3.01 percent decrease quarter-on-quarter and 7.13 percent increase year-on-year. Other manufacturing generated the highest amount of VAT totaling N31.42bn and closely followed by professional services that generated N24.31bn, commercial and trading generated N14.92bn while mining generated the least. It was closely followed by pharmaceutical, soaps & toiletries and textile and garment industry with N59.88m, N201.58m, and N298.14m generated respectively. Experts say there need to research on how the poor spend their money even though the government wants to shore up revenue and shrink fiscal deficit.

MALLS

Consumer firms resort to sale marketers to gain competitive advantage, widen presence BUNMI BAILEY

n a sunny Saturday afternoon, Dipo Akinwole, a Lagosbased banker went to Shoprite for groceries shopping. While at the stall, he noticed that there were sales representatives or marketers for almost all brands of products displayed at the stall. These sales representatives were wooing him to patronage their products, which were displayed on each stand. Just as he was about to get his usual brand of close up toothpaste- Colgate- sales rep approached him and convinced him to buy her product. This recent development or trend is not only noticed in Shoprite but other retail outlets like Spar, Hullmart, Prince Elbeano etc. Consumer firms like PZ Cussion, Unilever, Nestle, Evans, GSK Nigeria etc.

are trying to combat competition using sales marketers. Charles Igbinidu, MD, CFO and Associates said, “There is some much competition in the market for different

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products now. In marketing, we say people spend money on brands, not on products. They spend money on brands that they are aware of and can trust.”

“A lot of new products are coming into the market and the marketers are trying to give consumers the opportunity to experience their products so that there will be increased patronage. They are also around the retail stalls to create awareness for those brands and encourage people to make buying decisions in flavour of their products,” Igbinidu further said. Nikky Oke, a Wawu washing detergent soap sales marketer at Shoprite said that she is trying to increase the patronage of her products by creating awareness and advertising it to consumers. “The consumers want to more about a particular product like the benefits,” Oke said. The marketers who usually run in shifts are usually spotted by standing beside or in front of their products. The weak purchasing power of consumers in the

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economy is affecting sales in retail outlets and this may have led to the introduction of sales marketers to boost sales and demand. For example, Shoprite Nigeria recorded its slowest sales growth in years as it struggled to grow sales in an economy battling declining consumer spending. For the first time, Shoprite Nigeria recorded a single digit increase in sales as turnover grew by only 4 percent in 2018 compared to 50.4 percent recorded in 2017. According to Ayorinde Akinloye, consumer goods analyst at Lagos-based CSL Stockbrokers, the word of mouth is becoming a crucial part of driving sales. “The bottom line is, there are a lot of product brands in the market today trying to get an edge over others. It now requires not just having wonderful packaging or being cheap, @Businessdayng

you need marketers who can convince shoppers about your product,” Akinloye said. “Sometimes, people are undecided about which brand to buy and then walking into the store, they meet a sale marketer who convinced them to try out a particular product and that could just be a new customer for them,” Akinloye further added. Despite the fact that the Nigerian economy recovered from recession in the second quarter of 2017, per capita income is yet to improve. According to the International Monetary Fund (IMF), income per head declined nearly by half to $1,994 in 2017 from $3,268 in 2014. “It is just a way of enhancing their revenue. Usually, marketers sell products manufactured by other organisations. So the more consumers, the more money the stalls make,” Igbinidu said.

Thursday 04 July 2019

BUSINESS DAY

Retail &

consumer business

COMPANY

Coca-Cola heightens competition in Energy drink market, gets green light to sell own drink orating consumers, after a hectic day’s job. Major players in the energy drink market include Monster Drink from Coca-Cola, Bullet Energy Drink from the stables of Sun Mark Limited, Red Bull an energy drink sold by Red Bull GmbH, an Austrian company, and Power Horse by S. Spitz GmbH, another Austrian company. Energy drink producers are now positioning their brands based on product innovation and repackaging at the backdrop of rising concern over consumers’ health. The value proposition for energy drinks is the fact that it enhances mental and physical performance because of the ingredients, the chief of which is caffeine. This has raised concerns among many on the health implications of caffeine. Brand owners are now claiming to have reduced the caffeine content. But despite the reductions, the products have remained in controversy due to their cardiovascular risk, as the producers have not deemed it necessary to warn consumers or even state the composition of the chemicals in their products labeling. Product innovation and repackaging taking place in the energy drink market has also forced the producers to bring the products closer to consumers, through the direct marketing approach, as well as adopting the in-door display methods in stores to attract consumers’ patronage. The brands have also adopted the signing of celebrities and football stars to help put their brands in consumers’ faces.

OLUFIKAYO OWOEYE

oft drink giant, Coca-Cola, has received an approval to market its new trademark energy drink across the globe. Coca-Cola and Monster Beverage Corp announced in a joint statement that the arbitration tribunal looking into whether Coca-Cola violated the terms of a 2015 agreement with Monster not to sell its energy drink as it would put the company in direct competition with Monster Energy drink ruled that Coca-Cola can continue to sell and distribute Coca-Cola Energy, including in markets where it has already been launched and is free to launch the product in new markets globally. Coca-Cola launched the energy drink in April as part of efforts to provide healthier alternatives to consumers who had grown weary of its fizzy soda. The new Coke energy drink contains caffeine, Guarana extracts, and B vitamins and is targeted at 18 – 35 year age group. The launch has drawn it into direct competition with market leaders Red Bull, Lucozade, and Monster energy drink which Coke holds a 16.75% stake in and remains its largest shareholder Monster Beverage is also considering expanding its business line beyond energy drink. At a shareholder’s meeting last month, Rodney Sacks, CEO, Monster Beverage said the company was looking to

grow its portfolio into different categories beyond energy drinks. “We do have an appetite to look at alternative brands and to develop more beverages in the non-alcoholic … as well as the alcoholic market,” he said. “There are other products in alcohol, whether on the malt side, hard seltzer

or hard alcohol/spirits side, they may be a good opportunity … it’s something we would certainly be open to,” Sacks added. In recent times, there has been an increase in the number of energy drinks in the Nigerian market. The brands usually come in varying sizes and they are regarded as energy-giving drinks, capable of re-invig-

GROCERY ITEMS SHOPRITE (N) SPAR (N)

Golden Morn (500g)

820

Omo washing powder detergent (160g)

130

115

“

(1kg)

1,500

“

“ (400g)

400

345

Milo cereal (320g)

1,100

955

(400g)

350

305

Golden penny sugar cubes (500g)

350

320

Knorr seasoning cubes meat flavour (400g)

535

670

Milo sachet (200g)

530

475

“

chicken flavour (400g)

550

670

“

(500g)

900

1,035

Royco seasoning cubes meat flavour (200g)

225

210

Bournvita sachet (200g)

430

460

220

215

“

1,115

“

Sunlight washing detergent

“

“ chicken flavour (200g)

“

750

“

(500g)

1,025

Peak full cream sachet (380g) 1,100 1,120 Close-up toothpase (55g) 170 155 “

“

(900g)

2,700

2,800

“

(140g)

320

295

Loya full cream sachet (900g)

2,350

2,150

Macleans toothpaste (140g)

300

270

“

1,350

1,015

“

Tin

Tin (400g)

“

Team Lead: Bala Augie, Olufikayo Owoeye; Analyst: Bunmi Bailey; Graphics: Fifen Eyemisanre Famous www.businessday.ng

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Thursday 04 July 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

The ‘Rocket Science’ of automating Nigeria’s judicial system FRANK ELEANYA

hen in 2018, the Supreme Court, led by Walter Onnoghen, said beginning from July 2018, it would phase out manual filing and serving of process and ensuring that communication between judges, court staff and lawyers as well as between lawyers, would be through electronic means, it was hailed across board as the first step towards launching the judicial system finally into the 21st century world. The Supreme Court went ahead to make good its promise going as far as initiating a campaign to design case management software intended for every court in Nigeria and a legal mail for all lawyers in Nigeria. The apex court said it will serve processes by electronic means (Legal Mail) on all matters. While the initiative was a first of its kind in Nigeria’s justice system novel, it has however not been cascaded to include every court. BusinessDay visited the website of the Supreme Court http://supremecourt.gov.ng/, and could not access it because the server was down. A lawyer who wants to remain

anonymous in order to speak freely, said while he is aware of the new service but yet to access the Legal Mail service, he has also not seen anyone who has used it. Several lawyers also confirmed they were unable to use it. Many Nigerian courts have some of the most outdated work tools manned by secretaries and court clerks whose proficiency in technology paused with the typewriter machine and who are deeply entrenched in the minutiae of existing protocols. A recent visit to a magistrate court at Sabo Yaba, Lagos, revealed that most of the secretaries still use the typewriter machine for letters and other documents required of them. The filing of process in lower courts like the high court and customary courts

(courts of first instance) where cases begin, are still done by physical presentation at the registries. Even payment of cash and service through court bailiffs are all manually executed. Judges still write judgments with their hands. Trust in the Nigerian judicial system is at an all-time low with lawyers and individuals frustrated by the extremely slow-pace of justice delivery in the space. Apart from dragging legal matters far longer than they are expected, it is equally responsible for the near prohibitive cost of getting justice, it is very time consuming as well as supports the festering of corruption and the need for paper trail means there is always vital data missing in the end. Importantly, it is out of

step with the internet society. By embracing the internet, countries like Turkey for instance, have transformed the data aspect of the judicial system, resulting in faster service delivery, more transparent and cost efficient system. The Turkish UYAP e-judicial system which goes as far back as 2012 links together all judicial institutions in Turkey and it provides the possibility for the whole judicial process to be carried out through an electronic document flow. The system currently has 1.9 million users, and it has resulted in annual savings of approximately $100 million, as well as significant environmental benefits, as it allows for a virtual paperless working environment. Australia is also considered a global leader in au-

CALEB OJEWALE

egend in Nigeria, has it that Aba is the go-to place for any manufacturing need, particularly for items related to clothing; from actual cloths to footwear, the same one would find almost anywhere in the world. In 2017, Kosiso Anekwe, CEO of Edubridge visited the industrial city where ‘anything can be made possible’, hoping to meet tailors and inform them of a training opportunity on digital skills. “I brought out my phone, searched for tailors in Aba, and I couldn’t see a single one,” said Anekwe. The implication, as he observed is that, when one needed to do business with a businessperson in Aba, they would either have to travel by air, or several hours by road. On arrival, they would still have to go through a tortuous process of searching and filtering till they found whomever they considered a good match

create a stronger presence through the internet and digital skills to be provided by Google. “We had done this for a very long time, not knowing one can stay in his office while doing business with people overseas,” said Onyebuchi Nwigwe, president, Association of Tailors and Fashion Designers in Abia State, impressed at the new possibilities offered by the training. The Google Digital Skills for Africa program was launched in Aba to enable businesses in the industrial cluster, give more visibility to their businesses, and get more patronage. The program, which was announced in 2016, offers training courses to help individuals and communities to develop and grow digital skills, find jobs and advance in their careers. The program provides free online courses, tools, and in-person digital training to students, educators, job seekers and businesses. “When your business

CALEB OJEWALE

is online, you don’t need to carry your products to Lagos, you can put them online and get patronage,” said Chris Ezem, Secretary to the State Government (SSG) who represented Okezie Ikpeazu, Abia State Governor, at the Google Digital Skills for Africa launch in Aba. According to him, with the digital training, businesses can get the needed visibility, also highlighting that youth corps members have a lot to gain at the programme if they get the knowledge and help business owners apply it when they cannot do it themselves owing to time constraints. It will also be a way for the corps members to be self-employed. Google’s Aderemi-Makinde reiterated this, saying “we are working with NYSC corps members to be able extend this.” “We need the average businessman to be able to use these technologies, learn and continue using even after we’ve left,” she concluded.

ll over the world, businesses fold up more frequently than can be imagined, and global technology company, Hitachi Vantara, says this can be largely attributed to poor data management. Companies that properly harness and manage data will see longevity, as a proactive approach is needed to keep up with the constant advancements in technology taking place. Speaking at ‘Hitachi Insight Day’ in Lagos, Issam Hijazi, Hitachi Vantara’s Solution Engineer on Big Data and Internet of Things (IoT), said that digital transformation is a necessity for organisations if they want to compete in the global market. “Digital transformation has changed the way businesses interact with customers, using new technologies like block chain, machine learning, artificial intelligence, IoT, and all other trending solutions,” said Hijazi. He further noted that in a competitive market, data is a precious asset for organisations, and that those who have it and know how to use

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

lawyers who may already be overstretched to take time out. There can also be capacity problem. With these in mind, companies like eBay and Nominet have developed solutions such as online dispute resolution systems that have inspired some countries to replace the physical courtroom with a judicial service operated over the internet. Automation may also be a two-edged sword according to Samuel Eleanya, founder of LawNigeria, a legal research firm. “It has demonstrable potential to speed up justice delivery where there is already a culture that attaches severe consequences for abuse of judicial processes,” he said. “Delay in movement of cases through the court is down to many factors but one of the heavy hitters is the physical overwhelming of judges with ‘motions’ and ‘mentions’ connected to cases that are never decided substantively a large number of which as frivolous, merely initiated to annoy or blockade perceived opponents or fish for information or stampede a desirable outcome; instead of to seek redress that could not be obtained through other legitimate means like alternative dispute resolution.”

Digital transformation in Africa hinges on data management – Hitachi Vantara

Aba businesses get Google’s digital skills training to ‘go global’ for their business need. However, if those businesses already had an online presence, all of this stress could have been eliminated. This would make life easier for those who want to do business with Aba people, while also earning those in Aba more business opportunities. “What we want to do is use the power of internet to help people grow their businesses,” said Mojolaoluwa Aderemi-Makinde, head, Brand & Reputation, SSA at Google during the launch of Google Digital Skills for Africa program in Aba recently. “Our goal is to work with manufacturers in Aba. We saw a lot of the great work in one of the clusters and we want to work with them to amplify their work, giving more visibility to these SMEs.” As noted by Seember Nyager, Google’s policy and government relations manager for SSA, made in Aba is already known, but with digital skills, those in the manufacturing clusters can

tomating court documents and processes. The country has moved all administrative records in its various registries online. While automating the Supreme Court may be the right step, it should be seen to be working and spiral down to the lower courts to make the filing process faster at every level. “The next step should be a comprehensive case management system for courts and judges to help record proceedings, calendars for case updates, and for coordination between the various organs of the court,” said Enyiome Madubuike, a legal compliance advisor tech companies like Quidax and Korapay. Beyond cascading the automation is the burden of convincing lawyers and court clerks of the need to give up their old ways of doing things and embracing digitalization. Part of the challenge is that the old ways sustains a system of bribery and corruption in the judiciary. To get a case file to move faster and be assigned to a particular judge, lawyers often have to bribe the clerks and secretaries. They also get to ‘motivate’ the bailiffs to serve processes. Training can also be an issue, as it requires judges and

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it will succeed. However, organisations who have data but are unable to utilise the necessary tools, experience, and patterns to achieve their purpose are powerless. Digital transformation is more about having all systems interconnected with one another. It is also about applying advanced machine learning to predict the future, customers’ behaviour and maintenance, without losing money or revenue. Hijazi added: “they say data is the new oil, but I think it’s much more than that. Oil, is a chemical substance that if once used, holds no value; it depreciates. But data is something that can be used repeatedly, without depreciating.” According to Hijazi, in order to manage data effectively, organisations can leverage Hitachi Vantara’s solution, PENTAHO, as it gives end-users an end-toend consistent experience. “PENTAHO will enable businesses by driving their systems without organisations having to rely heavily on its skilled IT individuals. It will also ease the life of data scientists when they want to collect data and prepare it more efficiently,” he commented.

Thursday 04 July 2019

BUSINESS DAY

POLITICS & POLICY Delta governor swears in eight commissioners as exco members Mercy Enoch, Asaba

overnor Ifeanyi Okowa of Delta State, yesterday swore in first batch of eight commissioners as members of the state executive council. The swearing in of the eight commissioners came just a day after the governor swore in five special advisers into office. The governor, at the swearing-in ceremony of the commissioners at Government House, Asaba, said fairness, equity and justice are trademark of his administration that all political

appointees must imbibe, and emphasised that his administration has zero tolerance for sectionalism and nepotism. The commissioners, who took oath of office were Flora Alatan, James Augoye, Basil Ganagana, Peter Mrakpor, Patrick Muoboghare, Festus Ochonogor, Chika Ossai, Patrick Ukah. The governor, who congratulated the commissioners, observed that the expectations of Deltans were high and urged them and other political appointees to see themselves as people who are representing the entire Delta people in the cabinet. “You are there to serve their interests, because, the

L-R, Mahmood Yakubu, chairman, Independent National Electoral Commission (INEC); Muhammed Mustafa Lecky and May AgbamucheMbu, both national commissioners of INEC, during the review of the 2019 general election with civil society organisations, in Abuja. picture by TUNDE ADENIYI.

task before us is huge; we have set the goal of building a Stronger Delta predicated on Prosperity, Peace and Progress”, he said. Continuing, he said, “It is true that each of you was nominated from a Local Government Area, but the moment you become a commissioner, the entire Delta becomes your constituency and as such, you must be fair to all and be responsive to the needs and aspirations of all and sundry.” He admonished the commissioners to embrace the concept of team leadership and collective responsibility even as he warned them against operating in isolation or be a one man riot squad. He advised them to employ and deploy the knowledge, skill and experience of the civil service personnel that work with them do as to succeed. Responding on behalf of all the commissioners who were sworn-in at the occasion, Muoboghare thanked the governor for choosing them to be members of his team to build a stronger Delta. He promised that they would discharge their duties with the fear of God and be fair to all Deltans.

Bode George calls for scrapping of INEC Iniobong Iwok

labode George, a former deputy national chairman of the main opposition People’s Democratic Party (PDP), has advocated for the immediate scrapping of the Independent National Electoral Commission (INEC), while accusing the commission of being one of the major contributors to political crisis in the country. George stated this Wednesday, at a press conference he addressed at his residence in Ikoyi, Lagos, noting that the move was necessary as part of efforts to save the country because the commission was no longer representing the will of the citizens. He said that recent elections conducted by the current set up of INEC did not reflect the will of Nigerians as most of them ended controversially in court. According to him, “The country’s electoral process is very flawed, distorted, mangled, fractured, dishonest, primitive, savaged

by deliberate human intrusions. Thus, where the wish and the will of the people prevail, the crucial essence of democracy is thus fulfilled, as a result of these overt flaws in the electoral process as represented by INEC. “We are all basically disenfranchised as none can guarantee that the votes cast are sacrosanct. Everything is tampered with in the desperation to seize victory at any cost. “The mandate of the people is flung into the dump site. And the danger crawls closer. How then do we restore order? How then do we restore sanity? We must be sincere. INEC must be dismantled in its entirety. It is presently compromised, partisan, wrapped in selfconsuming incompetence,” George said. He, however, said to address the problems, the commission must be retooled, revamped and overhauled to align with the profiles of such institutions as witnessed across the world where the full complement of the electronic system had long replaced the stone-age system www.businessday.ng

of manual collation, among others. George, who is a leader of the PDP in Lagos State spoke at the press conference also attended by former Minister of Transport, Ebenezer Babatope, lamented the high level of insecurity in the country currently. The PDP chieftain said the current security crisis in the country pose a threat to the continue unity of the country and advocated for a stringent action by the president to solve the problem. “The upsurge of bandits and kidnappers are the latest evils threatening the stability of our nation, we are now being pushed to the brink. All kinds of faceless actors are now turning our present situation into a free for-all hatemongering, reckless populism and sheer profiteering. “It should not be this way; our leaders should not be stampeded into panicky, unreflective actions, let the ruling party, the opposition, the non-partisan and everyone else step back from the brink and withdraw into a more reflective, more sobering position,” he added. https://www.facebook.com/businessdayng

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Thursday 04 July 2019

BUSINESS DAY

NEWS Financial inclusion: Fintechs, banks push to develop ‘Finclusion’ blueprint at 2019 DigitalPay Expo Jumoke Akiyode-Lawanson

inancial institutions and technology industry experts are ready to take on a new aggressive push to drive financial inclusion targets in Nigeria and Africa, as they plan to gather at this year’s DigitalPay Expo to discus and showcase ways of promoting the financial inclusion agenda in Nigeria and other emerging economies. The 2019 Digital PayExpo, scheduled to hold in Lagos from July 9 – 11, serves as a platform to highlight all the real, relevant and unique issues with regards to payment services and financial technology. The event organiser, Intermac Consulting Limited, a technology company that services financial institutions and systems, says the 2019 Digital PayExpo conference and exhibition will attract one thousand participants seeking information, knowledge and market potential opportunities for their products and services. “With a view of developing a blue print for a clear

pathway for payments in Nigeria and Africa, this edition is designed and guaranteed to bring together acclaimed international speakers and decision makers in the digital space from various continents: Europe, Asia, America, the Middle East and of course Africa,” the company says in a statement. With experts to discuss the theme: Finclusion: Aligning Expectations with the (DES) Business Case, the conference has already attracted over 40 sponsors and exhibitors, over 1,000 delegates and over 16 seasoned speakers from financial organisations. Speaking at a media parley to announce the conference, Haulat Musa, market and events associate, Intermac Consulting, who represented Jacqueline Jumah, managing director, Intermac, said: “Financial inclusion, at its most basic level, starts with having an account (Financial Institution account or Mobile Money Market Wallet), but it doesn’t stop there, people can only fully benefit when there is regular usage.

LCCI urges the president to appoint minister of petroleum MAURICE OGU

agos Chamber of Commerce and Industry (LCCI) has urged President Muhammadu Buhari to appoint a qualified minister of petroleum in his next cabinet, unlike in the past where the ministry did not had a direct minister. This plea was contained in the media briefing on the state of the economy by the LCCI in Lagos, Wednesday. While applauding the President on the recent change in the leadership of NNPC as a way of injecting new and fresh ideas into the corporation, the Chamber urged the President to shop for a seasoned technocrat with the requisite experience and knowledge of petroleum industry to serve as the minister of petroleum, as against a regular politician. Babatunde Paul Ruwase, president, LCCI, while explaining the Chamber’s position, said the Chamber was deeply concerned and worried about the slow pace of the much-needed reforms in the oil and gas industry. According to Ruwase, the much advocated reforms in the industry would accelerate the

much-needed growth in the industry, thereby opening the industry to more investments. “We believe that the industry would grow better under a technocrat and seasoned petroleum minister and help accelerate the growth of the economy,” Ruwase said. Having a qualified minister of petroleum, the Chamber believed, would better coordinate the activities of the industry much better than “just a minister of state for petroleum.” The Chamber also decried President Buhari’s refusal to sign the Petroleum Industry Bill (PIB) into law, which would have paved the way for clarity, accountability and transparency in the industry thereby paving way for more foreign direct investment (FDI). The signing of PIB into law holds a significant role into the petroleum industry, as there would be checks and balances among the leadership of the sector. For the refineries, the Chamber called on the President to intensify his efforts at attracting private investments in refineries and ensuring the total overhauling of the four refineries so as to put them back on track of production.

Okada patronage, failure of Nigeria’s transportation system MIKE OCHONMA

he menace of commercial motorcycle operators, popularly called Okada, on the road and the recurring road traffic crashes sometimes resulting in loss of lives as a result of recklessness on the part of the operators is an indication of failure of the transportation system in Nigeria, Corp Marshal of the Federal Roads Safety Corps (FRSC), Boboyemi Oyeyemi, says. Speaking as a guest speaker Wednesday at the maiden transport lecture series titled ‘Transportation And Road Safety Management: Achieving The Sustainable Development Goals (SDGs) in Nigeria organised by the School of Transport, Lagos State University, Ojo, the FRSC Corp Marshal said only big city commercial buses were ideal for the movement of people in a smart city like Lagos. He said it was an aberration and strange that in an era and time like this, many Nigerians had resigned to fate patronising Okada riders and risking their

lives on a daily basis due to the glaring failure of the country’s transportation system, occasioned by complete failure of the road infrastructure in many parts of the country. Describing Lagos as a metropolitan city with a fast growing population, he lamented that there was no commensurate infrastructural facility to cater for the increasing number of residents in the state. Oyeyemi called for the utilisation of other modes of transportation like a functional rail and water transportation, adding that paying a great attention on these sectors would prolong the life span of the roads as well as curtail the nuisance caused by the untrained, unprofessional and unregulated Okada commercial riders. Although the number of Okada crashes was not disclosed, the corps marshal also lamented that apart from the fatalities there are also other security implications whereby many unscrupulous elements are using motorcycles to commit crimes, including kidnapping.

Falcon to celebrate 25 years of corporate excellence

oard and management of FalconCorporationLimited issettomarkher25thyearin businessoperationwiththetheme, Falcon: 25 Years of Corporate Excellence. Thefirmwillcelebrate25years of growth, achievement and contribution to the development and expansion of the Nigerian economy. The Falcon 25th Anniversary event is aimed at hosting key industry stakeholders within the energy and gas sector, the Board and Management of Falcon, partners, investors, customers and members of staff. The event is set to hold in a warm and conducive atmosphere of conviviality that offers entertainment and networking opportunities. It would provide a platform to appreciate the support and commitment of both external and internal stakeholders, at the Civic Centre, Victoria Island, Lagos. Falcon Corporation (registered originally as Falcon Petroleum Limited) was founded 25 years ago by two individuals,

Professor Joe and Mrs. Audrey Ezigbo. Joe was for many years a senior lecturer with the University of Nigeria, where he rose to the rank of a professor, occupying several positions of responsibility within the academic system, while Audrey was a multiple Masters’ degree holder purposefully pursuing a dream to build a global enterprise. Both,smittenbythepassionto build and develop platforms that would be significant contributors to national economic growth and development. With a humble beginning in the oil and gas operation, very little funding and minimal manpower, the founders set an irrevocable standard frominceptionthatdemonstrates excellentindustrypracticesbased on international industry bench mark. This has kept the operation excelling with optimum output. Falcon Corporation Limited is a leading privately held, wholly indigenous company that holds a diverse portfolio of prime investments in oil and gas, energy and infrastructure.

Buhari makes first appointments ... approves Aghaeze, Omoboriowo as PA, photography Tony Ailemen, Abuja

resident Muhammadu Buhari on Wednesday approved the appointments of Sunday Aghaeze and Bayo Omoboriowo as his personal assistants (PAs) in charge of photography. The appointments are the first approved by the President since his inauguration for the second tenure on May 29, 2019. The appointments are contained in letters signed by the Secretary to the Government of the Federation, Boss Mustapha. The letters state as follow: “I am pleased to inform you that President Muhammadu Buhari has approved your appointment as Personal Assistant to the President (State Pho-

tographer).” Aghaeze and Omoboriowo were firstappointedin2016bythePresident to the same post, where they served till the reappointment. The President has been heavily criticised for not making any appointment since he was sworn in, even as most of his aides have continued to carry out official assignment. BusinessDay gathers that those who chose to stay away while awaiting official letters have been recalled and are seen daily carrying out their official assignments despite the fact that they are yet to be officially reappointed. Aghaeze, an award-winning photojournalist, prior to his appointment, was a photo editor with ThisDay Newspapers in Abuja. www.businessday.ng

L-R: Eric Okoruwa, MD, PAC Capital Limited; Dolapo Atekoja, chairman, PanAfrican Capital Holdings; Lola Oshiafi, MD/ CEO, Truebond Global and Investment Limited; Obafemi Hamzat, deputy governor, Lagos State, and Chris Oshiafi, CEO, PanAfrican Capital Holdings, at the PAC Holdings Forum 2019, themed: The Earth, Our Business and Our Future, in Lagos.

Apapa: Trailer Park half-empty as trucks persist on bridges, roads CHUKA UROKO

lmost two weeks after the Presidential Taskforce on the Apapa Traffic Gridlock ended its two-week extension to complete its work, Apapa bridges and roads are still largely occupied by trailers and tankers while the Trailer Park on Apapa-Oshodi Expressway is half-empty. Theparkonwhichconstruction has been ongoing since the past 10 years was declared open recently whenVicePresidentYemiOsinbajo cametoinspectthefacilitydesigned to accommodate about 500 trucks along with other projects within the port city. Motorists and Apapa residents had thought the visit of the Vice President and the phantom opening of the Trailer Park would bring the Apapa story to end or, at least,

reduce it considerably. But at the construction site on Wednesdaymorning,BusinessDay found out that the ‘opening’ of the park was a mere smokescreen aimed to pacify the visiting Vice President and to make him believe theparkwastrulyreadyforusewhile it was not. “If not for orders from the Presidency which is insisting that the trucksshouldleavetheroadsforthe park, we don’t want them to come in here because we are still working,” a Borini Prono official told our reporter at the site. The official, who did not want to be named, lamented federal government’s delay in releasing money for the speedy completion of the park which, he recalled, was started during Musa Yar’Adua regime. “We are even using our money to do some of the things we

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need to do here and this is affecting payment of workers salary,” the official disclosed. Workontheinfrastructurefacilities at the park was still on-going as the time of our visit. Workers were seencastingcolumnsontheshoreline protective wall; they were also working on the electric poles, the toilet facilities and water boreholes. Only a few trucks were littered on the park and they were said to beempty,asthoseladenwithgoods were not allowed into the park. It remains to be seen what the taskforce has achieved since it was setupfollowingadirectivebyPresidentMuhammaduBuharionApril 25, 2019. Though the taskforce has beenabletoachieveafree-one-lane forotherroadusersonApapa-Ijora Bridge,thatfree-one-laneisneither predictable nor reliable. Attempts to reach Kayode @Businessdayng

Opeifa, executive vice chairman of the taskforce on phone for his comments, were futile as his line “is unreachable at the moment.” Apapa residents, business owners and motorists are not only surprised and worried that the trucks have continued their occupation of the bridges, they are also angry. “We cannot settle for one-laneontheroadsandbridges; thetrucksshouldleavecompletely,” Bode Karunmi, vice chairman, ApapaGRAResidentsAssociation, fumed in a telephone interview. Karunmi noted that both the truck owners and other road users are tax payers, arguing that if LASTMA could impound his car forwrongparkingontheroad,they should also impound the trucks that are parked almost permanently on the bridges and roads in Apapa.

Thursday 04 July 2019

BUSINESS DAY

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Thursday 04 July 2019

BUSINESS DAY

news CBN rolls out guidelines to boost lending... Continued from page 1

loans and its total deposits. The ratio is generally expressed in percentage terms. If the ratio is lower than one, the bank relied on its own deposits to make loans to its customers without any outside borrowing. The circular titled ‘Regulatory Measures to Improve

Lending to the Real Sector of the Nigerian Economy’, as seen by BusinessDay, said “all DMBs are hereby required to maintain a minimum Loan to Deposit Ratio (LDR) of 60 percent by September 30, 2019”. It said the ratio “shall be subject to quarterly review”. The CBN said these mea-

sures were intended “to ramp up growth of the Nigerian economy through investment in the real sector”. “To encourage SMEs, retail, mortgage and consumer lending, these sectors shall be assigned a weight of 150 percent in computing the LDR for this purpose. The CBN shall provide a framework for classification of enterprises/businesses

that fall under these categories,” it said. The apex bank warned that failure to meet the stipulated minimum LDR by the specified date “shall result in a levy of additional Cash Reserve Requirement equal to 50 percent of the lending shortfall of the target LDR”. Cash Reserve Ratio (CRR) is a specified mini-

mum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is set according to the guidelines of the central bank of a country. It added that the CBN would continue to review developments in the market with a view to facilitating

greater investment in the real sector of the Nigerian economy. It said the letter was “with immediate effect”. The CBN has in recent times been somewhat desperate to increase lending to critical sectors of the Nigerian economy but analysts say an economy fraught with risks has tamed lending appetite.

Buhari suspends Ruga settlement... Continued from page 1

Livestock Transformation Programme’. “Mr President has suspended the implementation of Ruga programme, initiated and being implemented by the Federal Ministry of Agriculture and Natural Resources, because it is not consistent with the NEC and Federal Government-approved National Livestock Transformation plan which has programmes of rehabilitation of displaced IDPs resulting from the crisis, and also development of ranches in any willing state of the federation. The word is willing state of the federation,” Umahi said. Prior to the suspension, the Federal Government had awarded contracts for the creation of the Ruga settlements for herdsmen, beginning with a pilot plan in the selected states, with a budget of N136m per state. Condemnations had trailed the planned Ruga settlements following misgivings and ill feelings about the project which had been viewed as an attempt at advancing the alleged “Fulanization” of

the country. Several Nigerians, including former President Olusegun Obasanjo and Nobel laureate Wole Soyinka, had criticised the project, even as states opposed to the project had issued a statement to the effect that they had no lands for Ruga in their domains. Speaking on the National Livestock Transformation plan, Umahi said “its beauty is that what NEC and FG approved is a voluntary programme to all the 36 states who may like to participate”. “So, it is not compulsory, it is for any state that is willing to key into the programme. Any state that is interested in this programme is required to bring up a development plan that is geared towards the implementation in line with our own programme here that is unique to his state based on the challenges that he has in respect of the crisis. That’s the decision of this committee,” he said. Garba Shehu, senior special assistant to the President on media and publicity, in an earlier

AirPeace Dubai flight set to shake up... Continued from page 1

in price on the routes as Emirates Airline, the only airline that operates direct

flight from Lagos to Dubai, is currently offering promos to passengers on the same routes. Despite the promo price on Emirates, BusinessDay’s checks show that a return ticket on Lagos-Dubai route using high-end airlines such as Emirates and Qatar Airways costs between N310,000 and N400,000, whereas AirPeace is offering its passengers between N155,000 and N175,000 for a return ticket on the same route, representing a 53 percent price slash. This huge reduction in ticket price is seeing summer passengers booking for tickets as AirPeace currently records almost 80 percent load factor on its first flight to Sharjah. While AirPeace is not flying directly to Dubai like its competitor Emirates, it is

making provision for a complementary bus to convey its passengers from Sharjah to Dubai which is within a space of 40 minutes. The airline is also leveraging its new aircraft, Boeing 777, the same aircraft Emirates also uses, to drive patronage on the route. While AirPeace will operate three times weekly to Sharjah (Tuesdays, Fridays and Sundays) from only Murtala Muhammed International Airport (MMIA) Lagos, Emirates operates two daily flights from both MMIA and Nnamdi Azikiwe International Airport, Abuja. With the planned commencement of operations on this route, AirPeace would be offering travellers from Nigeria the opportunity of connecting 23 other destinations from the United Arab Emirates. The destinations that could easily be connected from Sharjah international airport include Riyadh, Madina, Jedwww.businessday.ng

Tayo Orekoya (l), managing consultant, CITC Global Consulting; Foluke Michael (2nd l), CEO/founder, CYCDI; Ayodeji Oluwadare (2nd r), creative director, CYCDI and Ronald Kayanja (r), country director, United Nations Information Centre (UNIC), presenting Solution17 Global Youth Development award to Wole Soyinka at the launch of IC2030 for his contribution towards youth developPic by Pius Okeosisi ment in Africa, at the Solution 17 official launch in Lagos.

statement justifying the Ruga settlement, had noted that “it has six pillars through which it aims to transform the livestock production system in Nigeria along market-oriented value chain while ensuring an atmosphere of peace and justice”. “Ruga Settlement that

seeks to settle migrant pastoral families simply means rural settlement in which animal farmers, not just cattle herders, will be settled in an organized place with provision of necessary and adequate basic amenities such as schools, hospitals, road networks, vet clinics, mar-

kets and manufacturing entities that will process and add value to meats and animal products,” Shehu had said. He had also gone on to list the plans to include “economic investment, conflict resolution, justice and peace, humanitarian relief and early recovery,

human capital development and cross-cutting issues such as gender, youth, research and information and strategic communication”. “In all, the Federal Government will not impose on any state government regarding its land,” he had said.

dah, Beirut, Delhi, Colombo, Dhaka, Mumbai, Kathmandu, Moscow and several others. However, experts have raised concerns on whether the carrier will survive on the route, especially competing with well-established carriers such as Emirates and Etihad Airways. Their doubts are coming after efforts by domestic carriers such as Medview and Arik on Dubai route failed in less than two years of operations. These domestic airlines were unable to sustain operations of international routes over lack of equipment, inadequate foreign exchange, unfriendly laws by host country and huge debts. However, while admitting that he is aware that the challenges would be daunting, Allen Onyema, chairman, AirPeace, restated that the airline was well prepared to ride the storm. “Before you go into any business, you need to study the business and the environment. You have to know that

airline business, for example, is a risky one. What are the factors that have made many airlines in Nigeria to fall by the way side? You really need to know where you are coming from; where the other airlines are coming from and what has been responsible for their failure,” he said. He revealed that AirPeace drew strength from the very strong support it continues to receive from its bank, Fidelity Bank, which he said “has been very supportive and it is because we pay back our loans”. He said the airline’s driving force was to disprove the notion that Nigeria is a failure in the global airline industry. “We have decided to make the difference. We want to prove that we are different and that we are a very resilient people in Nigeria. We have very resourceful people. They have not been given that opportunity to rise; we are also contending with international aviation politics that is trying to bring Nigerian airlines

down,” he said. “So, we decided to do things differently, both in the way we run our affairs and in the way we expand. We decided to acquire the single-aisle planes for our domestic operations and we have acquired the widebody planes for our international long haul flights,” he added. However, John Ojikutu, aviation security consultant and secretary general of the Aviation Safety Round Table Initiative (ASRTI), thinks Sharjah is a wrong route to start with. “Sharjarisaconnectingpoint, not a hub. Which airline would AirPeace be partnering with? CanAirPeacecompeteinairfares with airlines on that route? Time will tell,” Ojikutu said. “Whichever airline goes into code sharing may have to reduce its frequencies to Nigeria or to AirPeace’s final destination; at what cost to the airline or to Air Peace? Either way, the cost of airfares to the passenger will be the determi-

nant factor,” he said. He suggested that the best or only option for Nigerian carrier on international routes is direct to London or any state east coast or central state of US as these are the major routes of Nigerian travellers. “Fifty percent of passengers on Middle East airlines are Europe- and US-bound. If you go Europe and US, you are in better standing than going east and you are very likely to reduce the 50 percent Europe and US-bound on the Middle East routes Going east as a start will be in competition with all Middle East airlines and east, and central African airlines for the remaining 50 percent,” he said. “The question AirPeace needed to ask before venturing on the route is: out of the 2 million international outbound passengers from Nigeria, how many are eastbound beyond the Middle East? How many is it targeting to Middle East and beyond in the code sharing?” he asked.

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Thursday 04 July 2019

BUSINESS DAY

NEWS Nigeria now meets N1.2bn daily rice demand on back of ABP - farmers Onyinye Nwachukwu, Abuja

igeria’s rice farmers said on Wednesday that the Anchor Borrower Programme (ABP) of the Central Bank of Nigeria (CBN) has helped meet the N1.2 billion daily rice need in the country, cutting down substantially, the millions of dollars import bill on the economy. Aminu Goronyo, national president of Rice Farmers Association of Nigeria (RIFAN), who spoke in Abuja on behalf of his colleagues, said apart from the Anchor Borrower Scheme, foreign exchange restriction on the importation of rice into the country also helped. At a press meeting to debunk what he called false allegations by one Christopher Kajere who claimed that the association owed its contractors/suppliers. Goronyo noted that since 2015, “no naira has been converted to dollars to import rice into the country.” He said this proactive measure by the CBN has helped Nigeria in becoming self-sufficient in rice production and thus conserve foreign exchange. Kajere, who claimed to be a RIFAN contractor, had petitioned President Buhari that he was not paid after supplying inputs to the rice farmers under

the ABP. But Goronyo said this claim was false, as the petitioner’s name could not even be found on RIFAN’s list of suppliers and service providers. He explained that the CBN did not deal directly with RIFAN suppliers or service providers and as a result, had no business with the individual. He further stated that the aggrieved petitioner was not found on the list of the 30 RIFAN suppliers and service providers after a thorough check. Goronyo said bedsides, RIFAN did not deal with individuals but corporate entities which get paid after meeting the terms of engagement for the supply of inputs or services. “All information suggests that the petitioner is unhappy with the gains made with the Anchor Borrower Programme of the CBN, including creating jobs and cutting down huge imports,” he said, reacting to the Kajere’s petition to the President. Goronyo said Kajere lacked the capacity to operate as a RIFAN supplier because he did not follow the proper channels of engagement expected of RIFAN suppliers and service providers. He also emphasised that RIFAN did not use contractors as the petitioner identified himself.

MTN’s wholesale infrastructure firm, 10m jobs: NECA wants FG to GlobalConnect becomes an operating company encourage manufacturing, SMEs Jumoke Akiyode-Lawanson

lobalConnect, a fairly new wholesale infrastructure company (InfraCo) belonging to MTN Group, has now become an operating company (OpCo) with a mission to make sure people are connected securely and make the highways of telecoms accessible and available across the region. MTN announced this new development on Wednesday, sayingtheOpCo,headquartered in Dubai, would continue to be led by current CEO, Frédéric Schepens. MTN GlobalConnect was established in 2017, as the main driver and commercial vehicle for the consolidation of MTN’s internationalandnationalmajor wholesaleactivities,withreliable solutions for fixed connectivity and international mobile services (SMS, signalling, roaming and interconnect). To further enable its growth, and in line with the group’s strategic focus on wholesale, the operational structure of GlobalConnect was revised, resulting in its establishment as an Opco. Commenting on the devel-

opment, MTN Group COO, Jens Schulte-Bockum said, “I am pleased that after less than two years of operation, MTN GlobalConnect has exceeded expectations, growing its customer base and revenue ahead of targets. I have no doubt that the team, led by Frédéric will continue to build on their gains to drive value to our operations, and lead MTN’s ambition to build Africa’s leading wholesale company.” Offering the most complete backbone network in Africa, the companyprovidesreliablesolutions for fixed connectivity and international mobile services and is the single-entry point to the largest network infrastructure on the continent Furthermore,thecompany’s robust MTN.net and IP/MPLS network includes 47 multinational points of presence, 29 countries across the MEA region (Middle East & Africa), 14 Submarine cable, more than 100,000km of national and metrofibrenetwork,31multinationalNetwork-to-Networkinterface enabling connectivity to global networks, a backbone capacity in excess of 3Tbps peering with major content providers.

JOSHUA BASSEY

igeria Employers’ Consultative Association (NECA) says the Federal Government should implement policies and programmes that will encourage manufacturing as well as lift Small and Medium Scale Enterprises (SMEs) to create job opportunities in the economy in line with its 10 million jobs projection. Timothy Olawale, directorgeneral of NECA, who spoke with journalists Tuesday in Lagos, believed this was one of the measures to lift 100 million Nigerians out of poverty, as envisaged by the government. The Central Bank of Nigeria (CBN) recently plans to create 10 million jobs within the next five years. The CBN governor, Godwin Emefiele said the initiative fell within President Muhammadu Buhari’s resolve to lift 100 million Nigerians out of poverty through job creation and economic diversification. According to Olawale, government should put sufficient intervention programmes in place to ensure

that if executed it will create the expected job opportunities. “The plan to create more jobs is what Nigerians expect from the government. It is good but it is the parameters or strategies used that will make it feasible,” he said. He explained that government must develop and encourage manufacturing sector by promoting entrepreneur and small-scale business as engine of economic growth, adding that the development of manufacturing and entrepreneurship would have a multiplier effect on job creation and the economy. “Government must ensure adequate power generation and distribution. Entrepreneurs need electricity to produce and work because they are self-employed. With constant production, jobs will be created,” he said. He also urged the government to promote skill development programmes for graduates and non-graduates to enable them establish businesses without government employment.

AWB seeks men as allies in #Youtoo movement to advance cause of African women Temitayo Ayetoto

he African Women on Board (AWB) are seeking men as allies in its #Youtoo movement to ensure all hands are on deck in dealing with violence against women and advancing the cause of African Women. The call for support comes on theheelsoftherecentfootageshowing one of Nigeria’s youngest senators, Elisha Abbo, violently beating a young woman at a sex toyshop in Abuja. The body, condemning the unruly act, said it was important to set an example of bringing an individual in power to justice, particularly in a charge of violence against women. The Board noted that the Nigerian society appears to work in tandem with a system that encourages the violence against as many not only tend to invalidate the confessionsofvictims,butalsowear the victims of abuse the burden of blame. AWB vowed to work alongside a whole force of courageous minds to ensure Senator Abbo faces the justice deserving for his actions, saying it will call for jail time, fines and his impeachment from office. Stating that men are need in the pursuit of women cause, AWB in a statement made available to BusinessDay demanded that women be included in the heavily-male saturatedhallsofpowerandahigher presence and power behind women’scausesforequityandjustice. “In this movement that AWB is wielding to advance the causes of African women, our focus is not just on this specific violent incident with Senator Abbo. We are also agonizingly disheartened by the recent Busola Dakolo interview, wherein she shares in detail an account of being raped by Pastor Biodun Fatoyinbo; but the issue

is far greater than these moments. Adeptly,weknowthatthesemenare justtoday’sfaceofatwistedsystem,a syntheticfabriclacedwithblindeyes in the countless cases of violence against women.” Particularly, the movement vowed to go after the individuals whobacklashedDakolo’stestimony male and female and those who excuse the violent manifestations of the anger of men. In this type of social environment,AWBbelieveswomenhaveto constantlypolicethemselvestoexist inaculturethatviewsthemasguilty and deserving of violence. According to the board, the shift in western culture which has sped up by movements like #metoo and TIMESUPwasyettotakerootonthe African continent. “But we still need something that works. We must ask ourselves, what kind of society gives men who witnessviolencebeingdoneagainst womenreasontodecideit’snottheir business. Why are we siding with oppressors?” AWB said. “There is no neutral position, when the attacker is on one side victimizinganother.Wearetalkingabout the survival of our people. This is a societal,culturalandbusiness-based issue. If you continue to hurt half of your population, your industry, your workforces, then you bind your own handsfromachievinggrowth.” The vision of a prosperous and outward looking Africa that was forgedattheturnofthemillennium and the start of the internet age is now in danger of being eroded again, by the archaic and barbaric perpetuation of unchecked male power within our society, it said, noting that instead of debating the veracity of survivors’ testimonies, as often done with the #metoo movement, the focus on individuals, meaning #Youtoo can be an agent, an activist in the zeitgeist for equality for all. www.businessday.ng

L-R: Fola Lasisi, president, Nigerian Academy of Engineering; Alfred Okoigun, GMD, Arco Group plc, his wife, Julie; Greg Thomopulos, chairman, Emeritus, Stanley Consultants, and Olu Akinyanju, Ocean Marine, Government College Ughelli Old Boys Association, at a dinner hosted by Okoigun in honour of Thomopulos who was inducted as a Fellow of Nigerian Academy of Engineering in Lagos, recently.

Senator weeps, apologises for slapping nursing mother OWEDE AGBAJILEKE, Abuja

lisha Abbo, the 41-yearold senator that physically assaulted a nursing mother at a sex toyshop in Abuja, has tendered an unreserved apology. In an emotion-laden voice, the embattled senator said the incident couldn’t be used to judge him. Addressing a press conference in Abuja on Wednesday, he sought for forgiveness, saying his religious upbringing does not condone gender-based violence. This comes as the Inspector General of Police, Mohammed Adamu, and the Senate commenced investigation into the matter. In a 10-minute video that has gone viral, the 41-year-old People’s Democratic Party (PDP)

... as Senate, police probe incident lawmaker, dubbed the youngest Nigerian senator, is seen slapping the nursing mother repeatedly at a sex toyshop in Abuja. Thoughthevideosurfacedonline on Tuesday, the incident was said to have occurred on May 11, a month before Abbo was sworn in on June 11, 2019. TheSenateadhoccommittee, which is chaired by a former governor of Ebonyi State, Sam Egwu, has two weeks to submit its report. This followed a point of order raised by Uba Sani (APC, Kaduna) on the floor of the Senate on Wednesday. Speaking under Order 14 of the Senate Standing Order 2015 (as amended), he urged the Senate to take decisive action on the issue to redeem the image and

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credibility of the upper legislative chamber. According to him, he has received over 100 phone calls both from within and outside Nigeria less than 24 hours after the video surfaced online. He said: “The senator’s action has gone a long way in tarnishing the image and credibility of this distinguished Senate. As a member of this Senate, my own credibility is at stake just like other people here. “It has caused a lot of pains for me and a lot of women around the world not only in Nigeria here. “I therefore call on this distinguished Senate to take a decisive action to redeem the image of this Senate. Between yesterday till this morning, I have received nothing less than 111 (phone) calls, not @Businessdayng

only from this country but even from outside the country.” The motion was seconded by Michael Opeyemi Bamidele (APC, Ekiti), even as Senate President, Ahmad Lawan said the probe will enable all parties state theircase.SenateMajorityLeader, Abdullahi Yahaya and Senate Minority Leader, Enyinnaya Abaribe spoke in the same vein. Other members of the panel include Oluremi Tinubu (APC, Lagos), Matthew Ughoghide (PDP, Edo), Stella Oduah (PDP, Anambra), Dauda Haliru Jika (APC, Bauchi), Mohammed Sani Musa (APC, Niger) and Danladi Sankara (APC, Jigawa). Senate president, Ahmad Lawan who presided over the session, explained that while it remains an allegation, the matter would be investigated and all sides given fair hearing.

Thursday 04 July 2019

BUSINESS DAY

ECONOMIC MONITOR A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

briu@businessday.ng

08098710024

The salient message in first quarter 2019 capital importation TELIAT SULE

importation of $2.61 billion or 41 percent; it was 26 percent or $1.63 billion in February while in March 2018, capital importation stood at $2.06 billion or 33 percent. Abuja topped the table in the first quarter of 2018, as it attracted $3.54 billion representing 56 percent. Lagos, the nationâ&#x20AC;&#x2122;s commercial centre, pooled $2.66 billion which translated to 42 percent. Akwa Ibom, $43.62 million; Ogun, $24.81 million and Oyo, $8.63 million completed the top five capital importation destinations in Q1 2018. Anambra, Adamawa, Bauchi, Benue, Borno, Kano, Delta, Rivers, Cross River and Enugu were the other states of interest to investors in Q1 2018 when measured by capital importation.

egardless of the anxiety that greeted the 2019 general elections, the Nigerian economy was able to attract $8.49 billion as capital importation in the first three months of this year. When compared with $6.30 billion that came in the first quarter of 2018, then, we can assume that investors might have concluded that the worst was over for Nigeria as investment inflows into the country, measured by capital importation, improved by 35 percent over corresponding period in 2018. Capital importation in the first quarter of 2019 amounted to 49 percent of the $17.44 billion brought in as capital importation for the entire 2018 fiscal year. Given that there is some stability in the system, particularly with the retention of the governor of the Central Bank of Nigeria (CBN), and because some ministers and appointees that served in the first term of President Muhammadu Buhariâ&#x20AC;&#x2122;s term might come back, hope brightens on the horizon that the Nigerian economy will do better in the remaining three quarters of this year. If this tempo is maintained for the remaining quarters, the economy could attract about $34 billion by year end, a significant leap over what was brought in the last six years. Which sectors benefited the most in Q1 2019? Investors were mostly interested in shares, banking, financing which attracted $2.4 billion or 28.32 percent; $2.85 billion or 33.60 percent as well

Source: NBS, BRIU

as $2.14 billion or 25.21 percent of the capital imported during the first quarter respectively. These sectors accounted for 87.13 percent of the whole capital importation into Nigeria during the reference period. Other sectors are at the fringes. Production and manufacturing got $418.44 million which amounted to 4.93 percent of the capital importation in the first quarter. Servicing attracted $409.48 million translating to 4.83 percent; agric got $124.26 million which amounted to 1.46 percent during the first quarter. Investors spread their risks across three major sectors in the first quarter of 2019 as against two sectors in the corresponding period

in 2018. Last year, 60 percent of the capital importation went into shares while 18.73 percent went into banking the first quarter. Financing which was third on the scale of priority of investors only attracted 7.7 percent while servicing got 5.21 percent of entire capital importation in the first quarter of 2018. In Q1 2019, shares, financing and banking were the epicentre of capital importation. Destinations of capital importation: what did we learn? In the first quarter of 2019, investors bet on 21 states of the federation and Abuja, the Federal Capital Territory (FCT), whereas in the first quarter of 2018, the states of interest to inves-

tors were just fourteen and Abuja. To governors and their cabinet members, the states of preference to investors as shown by their ranking on capital importation should be a signal of the extent of the ease of doing business in each state, the amount of investment opportunities available, security provisions and how much collaboration investors could get from local businesses in the forms of partnership, equity contributions, among others. Lagos and Abuja led other states as the two economic blocs got 98 percent of the entire capital importation in Nigeria in the first quarter of 2019. Lagos got $4.77 billion representing 56.29 percent while Abuja attracted $3.58 billion representing 42.26 percent. Rivers attracted $41.4 million; Adamawa, Benue and Cross River, got $25 million each; Imo, $3 million; Ogun, $2.21 million; Kaduna, $2.16 million and Kano, $1million. Others are Borno, $576,796; Oyo, $249,968; Kwara, $200,000; Bauchi, $99,980; Niger, $67,156; Akwa Ibom, $55,035; Anambra, $50,000; Delta, $40,000 and Ondo, $26,000. When appraised by the monthly trend, capital importation in January 2019 stood at $1.83 billion or 22 percent of the value imported. It was $2.02 billion in February or 24 percent, and $4.64 billion in March or 55 percent. The gradual increase shows that confidence in the Nigerian economy got boosted as the general election approached when investors might have re-evaluated their risk for Nigeria before and after the elections. The same trend was not exhibited in the first quarter of 2018. January 2018 recorded the highest capital

Source: NBS, BRIU www.businessday.ng

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Capital importation: which bank is the market leader? Most of the capital importation in the first quarter of this year came in through Stanbic IBTC Bank, Standard Chartered and Rand Merchant Bank. With $3.61 billion, Stanbic IBTC Bank controlled 42 percent of the capital importation market in the first quarter. It was trailed by Rand Merchant Bank through which investors brought in $1.37 billion representing 16 percent of the whole transactions. Standard Chartered Bank controlled 13 percent of the market with $1.07 billion. Citi Bank controlled 9 percent with $770.65 million while Access Bank claimed 8 percent of the market share with $649.51million. First Bank attracted $299.2 million representing just 4 percent of the market. Union Bank controlled 3 percent while United Bank for Africa, Zenith Bank, Ecobank Bank and Guaranty Trust Bank attracted just between 1 and 2 percent of the capital importation market in the first quarter of 2019. Incentives needed to attract significant interest into the agric sector With agricultural sector not yet a priority sector to investors as measured by capital importation, there is need for the federal and state governments to come up with initiatives that will make the sector attractive to foreign investors. In the first quarter of 2018, the agric sector got just 2.08 percent of the total capital imported into the country. Again, in the first quarter of 2019, only 1.46 percent of the total capital importation went into the agric sector. This is a sector the offers endless opportunities to local and foreign investors particularly as the country has the biggest market with young population in Africa. It also has the potential to help reduce the level of unemployment as well as poverty in the country.

Thursday 04 July 2019

BUSINESS DAY

GARDEN CITYBUSINESS DIGEST

NNEW outlines latest efforts to drive women to business limelight in oil region IGNATIUS CHUKWU & SAM ESOGWA

emale business owners in Port Harcourt have been advised to look for opportunities waiting to be explored around their operational environment. Already, the NECA Network of Entrepreneurial Women (NNEW) now led by Njideka Ebisi, an successful academic and entrepreneur, outlined how NNEW in Port Harcourt in the last one year, worked with support from Partnership Initiative for Niger Delta (PIND) through LITE AFRICA in creating a Business Enabling Environment (BEE) For women in the informal sector of Rivers State. She spoke at the entrepreneurship training in its PH secretariat, saying, “Through this project the organization hoped to tackle issues such violence against women in

their places of business, double taxation and inequitable stall allocation. These were issues identified as major set backs for business women in Port Harcourt.” Also, she said NNEW in collaboration with major stakeholders such as the Rivers State Ministry of Women Affairs, and the local government officials were able to come up with administrative procedures and policy documents to help address these issues . “We hope to get these documents to the necessary arms of government so that they can be passed into law.” In this, she stated, NNEW has been able to inaugurate two ‘Gender Desk’ officers; one in Port Harcourt City Local Government area, and the other in Obio Apkor Local Government Area. “These officers have being trained with the help of FIDA on how to manage and report cases of vi-

PORT HARCOURT BY BOAT

NNEW state chairperson for Port Harcourt, Njideka Ebisi and national president, Modupe Oyekunle

olence against women in their place s of business. NNEW also runs a registered, strong and

viable cooperative and savings society where women can save and access loans at reasonable

interest rates.” The national president of NNEW, Modupe Oyekunle, while delivering a lecture , said the training, which was geared towards educating the participants on the dynamics of business growth, was part of the quarterly network meeting of the group. In her lecture she told the participants to dream big and endeavour to discover their purpose, steps she said are basic and essential for them to excel in their businesses. According to her, the growth potentials or key success factors include scientific research expertise, production process and innovation capacity, adding that it is important to know the key success factors in one’s industry in order to draw a perfect strategy map for success. In a chat with newsmen, Ebisi said that the essence of the quarterly meeting was to

Big money for small business: Women can now get N50m zero-interest loans

IGNATIUS CHUKWU

he 2019 World SME Day celebration remained scanty and dull until banks started speaking, revealing several loan portfolios that most small and medium enterprises (SME) operators hardly knew about, especially in the south-south and east part of Nigeria. The event was organised in Port Harcourt by the Small Enterprises Development Agency of Nigeria (SMEDAN) with support from the Manufacturers Association of Nigeria (MAN), Rivers/Bayelsa chapter. Many said the notice was short by the sheer power and networking abilities of a board member, Ekama Emilia Akpan, made the hall almost filled to capacity at MAN House on Danjuma Drive close to Trans-Amadi. The interest started growing big when Zenith Bank’s Queenderline Ohanugo, a top marketer, took the floor and mentioned single digit interest rate in some SME loan products in their bank instead of 24 per cent and above. She said it was part of CBN policies to boost SME sector. “Collateral has been removed; interest rate has been reduced to single digit (9%) instead of 24% and above; limit of loan has been increased to as high as N10m; secuiritisation has been allowed to be by personal guarantee plus domiciliation with the lending bank so proceeds of the business will be banked in the lending bank. Then lien can be placed on equipment procured with the loan.”

bring female entrepreneurs together to share their experiences. She said that the group has over 30 members in Rivers State while many other women have indicated interest to join. Njideka called on Rivers women to take advantage of innovations in information technology to expand their businesses. “Women in Rivers State should wake up and do their business in a structured way, at a level where they will have opportunities,” she said. One of the participants, Ada Gold, in a chat, described the training as eye-opening, adding that it has broadened her vision to expand her business and take it to another level. She thanked the organizers for their effort. Observers said NNEW in PH has fought hard to rescue women entrepreneurs from harassment and violence that confront them daily in most markets in the city.

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L-R: Ekama Akpan (SMEDAN board member) and Adawari Peppe (MAN chairman, PH)

As if this was not enough teaser, FCMB threw the hall into hysteria when he mentioned a ‘She-Venture Loan Scheme’ of between N500,000 and N50m without interest. Leonard Obitte, a relationship manager in the bank, said: Often, its not finance that is the major problem of an entrepreneur but key information, contact, awareness, etc. FCMB has loans without collateral that range between N20,000 and N5m. We have She-Venture loan of between N500,000 and N50m for businesses owned by a woman or run by a woman. It is zero-interest loan package. It is tenured for three months and renewable only once, after which the beneficiary can then switch to normal loans. We have mentorship programmes and other packages to support SMEs. Tax knowledge is critical to a business person or SME operators. Many are in the dark as far as tax is concerned.” Mercy Ikeji, President of Dezionite www.businessday.ng

Consulting, a consultant with the Bank of Industry, added to the spilling heads of the audience when she too mentioned opportunities in the bank which SMEs in the south-south may not have explored. The Shell LiveWIRE-trained entrepreneur and consultant said; “Accessing fund is desirable but knowing how to utilize it is more critical. Dezionite processes loan applications for applicants. We help persons understand how to handle loans and attitudes of SME operators. Unnecessary expenditure is bane of SMEs; salaries that are not needed, office furniture that does not add up, etc. Your business must have a structure and this is important. You must thus have a well-structured business plan. Loans are possible especially for South-South business operators.” A contribution to the goings-on, Patrick Idoko, wondered why banks still struggled to create loan securities

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It is the best collateral because no customer can escape his BVN even in the whole of West Africa

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when Bank Verification Number (BVN) system is there. “It is the best collateral because no customer can escape his BVN even in the whole of West Africa. Banks can place a lien on it for anybody that is still paying his loans. Nigeria can link up with the West African Bankers Union to track any person who leaves Nigeria due to loan. Use institutions to nominate people for non-secured loans, else, beneficiaries will say, it is government money and will refuse to pay.” This led to a clamour by SMEs in the region who felt these opportunities were not being made open to the people. The NASME member, Felix Obazee, said “We ought to be close to SMEDAN but they are not here in this region”. He urged banks and agencies to get close to the people of the region, saying there was no government impact in the lives of business people especially on ease of doing business. The MAN boss in the two states, Adawari Michael Pepple, former senator, calmed the nerves people and made it clear that running an SME was not an easy task. He said a bigger meeting would be held soon to get more input. The SMEDAN board member and former national Vice President of MAN, Ekama Akpan, said SMEDAN is doing much, especially in the north and west, and needs to be encouraged to do more in the south-south/ east. “There is a lot available but state governments in the region should help to create awareness to their people on these opportunities.” The DG of SMEDAN, Dikko Umaru Radda, in an address presented on his behalf, explained the mandate of the agency including stimulating, monitoring and coordinating the development of the MSMEs sub-sector. He mentioned others but called for a bank for SMEs.

Thursday 04 July 2019

BUSINESS DAY

Investing in Rivers State Turkish Airlines and Port Harcourt needed each other Ignatius Chukwu

y the end of next year, Turkish Airlines, which started 86 years ago with mere five airplanes, will have 500 in the air, and may increase from 122 countries currently. For that reason, the airline is in search of more viable routes; it is already the airline with the largest number of international routes. It has three destinations in Nigeria: Lagos, Abuja and Kano. So, Port Harcourt, presented itself as a bride to the airline to explore. Expansion dream is on the air for Turkish Air and PH is the heart of the oil region, no matter what anybody says. On the other hand, the Port Harcourt International Airport at Omwagwa was in need of a new suitor

in the form of an international airline. The international airport, which is the third busiest airport in Nigeria, began to decline, like many other aspects of the Garden City business life. By March, 2019, three international airlines; Germany’s Lufthansa based in Frankfort, the

French airline (Air France) based in Paris, and a private airline, Cronus Airline, shuttled the West African Coast and Central African countries. By April 2019, only Lufthansa was left. The shocking departure of the French Airline with its clout of associated companies left the Port Harcourt International Airport reeling. Reasons were adduced as to the cause of this sudden contraction. Explanations were made that international travellers made up mostly of business executives and oil company workers had left the Garden City and the oil region due to insecurity. For over a decade, Port Harcourt or the oil region had de-marketed itself through kidnapping and later general violence highlighted by beheading and invasion of business premises in demand for revenue.

Some multinational CEOs were abducted and huge sums paid out as ransom. Many closed down their businesses in anger while some departed and left their businesses in the hands of others. The result was passenger drought on the international route. The outcome was the departure of international airlines and businesses that flock around them. Beyond that, other man-made factors helped to de-market the PH airport. Most departing branch managers of the Federal Aviation Authority of Nigeria (FAAN) talked to airport correspondent in confidence. The recurring decimal was the decay in facilities. One said: “How come that the airport lacks banks and ATM machines, standard business centres and other facilities for the comfort of travelers?” The stretch of road between the domestic and international wings posed another eye-sour. The rebuilding of the international wing which was commissioned around October 2018 looked superb but the patched and smoothened short road in-between soon washed off. Now, it has turned into a piece of embarrassment. Life has however returned to the international airport. The Rivers State governor, Nyesom Wike, has done his best to lure life back there. He has promised to dualise the road right from the Airport Roundabout to

the end. He has also promised to provide street lights and other enhancers, though he blamed the FG here and there (for allegedly refusing him to do them), which is understandable; based on the fierce politicking between two governments. The governor took a front row in welcoming another international airline to Port Harcourt. He led his entire protocol and government leadership to the airport. He walked up to the staircase of the plane to welcome the Senior Vice President of Turkish Airlines, Karem Sarp. The General Manager of Turkish Airlines for Lagos and PH, Yunus Ozbek, ensured that traditional dancers (the Okrika water masquerade) and important dignitaries were on hand to make the maiden landing a memorable moment. The fire team demonstrated its readiness by spraying water in cascades on the taxiing plane to display a unique image that dazzled the eye. Speeches and assurances were eventually made by the government people and aviation leaders, all celebrating the maiden flight. The rest is for business to commence as the Turkish Airline is expected to make two landings in PH every week. Many persons said they hoped this would start a turn-around for good for Port Harcourt and for the oil region once more; but, the culprit, insecurity, still sits pretty and untamed, out there.

How Rivers deploys ICT for service-delivery; IGR, biometrics on top • Captures 44,435 public servants across 79 ministries • So far registered 5,342 tax-paying organizations and 101, 500 individual taxpayers. Ignatius Chukwu & Innocent Eteng

he Rivers State says it has made giant strides in moving its services from analogue to digital systems that have fasttracked service delivery in a changing world. Experts in the state ICT unit working silently for other agencies have opened up a bit to show their sterling contributions and innovations that be behind most of feats being seen daily in administration in the state in recent times. This may have justified the notion that information and communication technology (ICT) has long been identified as having the potential to better the lots of developing countries like Nigeria if fully maximized, especially in driving business opportunities, pushing for inclusion, fostering transparency, and impacting areas like healthcare, the financial sector, agriculture, and manufacturing. Thus, writing for the World Economic Forum in 2015, Fredrik Jejdling, President and Regional Head for Sub-Saharan Africa at Ericson, a Sweden-based ICT service provider, said to achieve this impact in developing countries, ICT must not be left in the hands of private individuals and for-profit corporations alone but governments at all levels must utilise ICT.

For the Rivers state government, this seems to be a truism and so in the past two years, it has invested in ICT with the aim of making it central in governance processes and to ensure effective service delivery across all sectors. “This conscious and deliberate effort is geared towards creating a knowledge-based economy, improvement of service delivery, creation of jobs and opportunities for the teeming youth population,” says Maple Dappa, Media Consultant to the Rivers State ICT Department. These investments have basically centered on the Development and deployment of database management and administration system in the areas of public service, tax collection, the education sector, court-related processes and activities as well as the development and deployment of an employment portal. Impact on public service, tax collection and education In the Rivers State Public Service, for example, the government developed an online portal called “Rivers State Public Service Management Information System” (RivPuSMiS). The portal works as a platform to capture the biometrics of public servants and their employment history in order to plan and monitor the public service system. Since it came into effect two years www.businessday.ng

ago, the system has successfully captured 44,435 public servants across 79 ministries and 1,031 of them identified as retired between January and May this year, Dappa says. For years, Rivers State was plagued with stories of multiple taxations, tax evasion and avoidance, tax refunds, poor tax administration. To tackle this, the government introduced the Rivers State Tax Management Information System (RivTaMiS), an online platform that provides taxpayers and tax administrators a convenient and effective means of paying and managing taxes and tax information. It also enables task payers to own and have their task records. Set up as a collaboration between the Rivers State ICT department and the Rivers State Internal Revenue Service (RSIRS), by May this year, the platform had registered 5,342 tax-paying organizations and 101, 500 individual taxpayers. Out of this

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number of paying organizations, 2800 have filed annual returns and 408 making tax clearance certificates via the RivTaMiS platform. In education, the Rivers State Education Information Management System (RivEMiS) was set up to remove a hitherto existing manual system that made the management of the sector rigorous At present, RivEMis is used to manage the procedures for registering a new school, renewing existing registrations, schools’ inspection and approvals, transfer certificates, registration for State-wide Examinations like the Basic Education Certificate Examination (BECE) and certificate printing. Beyond that, it tracks the registration of private and public schools, enrolment of pupils and students in both private and public schools. According to Ibifuro Asawo, the Senior Special Assistant/Lead Consultant on ICT to Gov Nyesom Wike on ICT, the result has been the tracking of 4,335 schools, with 2,618 being private schools while 1,717 are public. About 67,523 candidates who have registered for state’s 2019 Basic Education Certificate Examination in 867 private and public schools across the 23 local governments of the state have been captured using the system. Scaling employability In its 2017 unemployment data report, the National Bureau of Statistics @Businessdayng

(NBS) placed Rivers as the state with the highest number of unemployed. The report said out of 4.3 million people constituting the state’s working population, only 1.91 million were employed full time and working 40 hours per week. This wounds up to about 41.8 percent unemployment rate. To turn this tide, in 2017, in collaboration with the Ministry of Employment Generation and Empowerment, the state’s ICT team created RivsJobs, an online portal that serves as a convergence point for employers of labour and jobseekers. “Upon appropriate research and findings, the Rivers State Jobs (RivJobs) website was developed and deployed as an online platform that connects job seekers with prospective employers. “The key agenda is to create a robust online portal that connects employers to talents and serves as the dashboard for monitoring job creation and employment activities in the state. “The RivJobs portal enables employers and companies to register and advertise for available jobs while allowing job seekers to find suitable opportunities for employment. To further improve the chances of getting job seekers their preferred jobs, various employability trainings were conducted for registered jobseekers,” says Asawo.

Thursday 04 July 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Tyler Perry steps out as ultimate (black) icon at the BET awards 2019 with rousing, inspiring speech

INTELS Empowers 80 Women via Fashion Design and Tailoring

Stories by ONUWA LUCKY JOSEP

hough embroiled in its many issues with the Nigerian government, largely occasioned by political differences between its principal and the federal executive, INTELS Nigeria Limited is yet endeavouring to do the needful with its Women Empowerment Programme Scheme Synergy (WEPSS). It says it does this to add value to the lives of Nigeria’s women. The scheme just graduated a fresh batch of 80 women. At the graduation ceremony

huge living out of fashion. So invest your earnings in the business. There will be enjoyment as the years go by”. “From the little you will start with, you can multiply and employ people. Do not let the training you have acquired here go down the drain”. “If you apply yourself well to what you have learnt and develop yourself even more, you will certainly be a success story”. Nancy Freeborn, the WEPSS Project Head said apart from the

held at the Federal Lighter Terminal, Onne, on June 21st, INTELS general manager legal and corporate services, Mike Epelle, expressed delight with the impact of the programme on beneficiaries since inception. He described the programme as one that “the management of INTELS holds very dear to its heart”. He further revealed that “It was the dream of the wife of the founder of INTELS that there should be something for women to achieve gender balancing, and that was how this programme started”. In advising the beneficiaries to make the necessary sacrifices required to put the skills acquired to good use, he had words of wisdom the women would do well to apply: “Many people are making a

tailoring skills, the programme also inculcated critical soft skills including personal hygiene and how to run successful businesses after graduation. She implored the graduands to “Make INTELS proud by putting to use the skills that you have acquired,” adding that it gives the company “a lot of joy when we go on our follow up exercise and see people who are really putting into use the skills they have acquired.” WEPSS was established in 2013 as a corporate social responsibility (CSR) PROGRAMME OF Intels. Its vision is to empower 5000 women from all the different parts of Nigeria over a 20 year period, primarily through training in fashion design and tailoring. So far its achieved one fifth of that vision with more than 1,000 women already trained.

araji Henson’s introduction: “You are a brilliant visionary that embodies what the African American Dream truly is. You, Sir, are an icon living. I am deeply, deeply honoured to present the 2019 BET Ultimate Icon Award to my dear, dear friend, Mr. Tyler Perry”. From my heart, I want to say thank you. I couldn’t help but think about my mother. I remember being a kid about five years old. She would take me into the projects with her when she played cards on Friday night with a bunch of women. Now these women didn’t have more than a 12th grade education, but they were smart Black women. They were powerful Black women. They had great stories to tell. And I was a 5year old kid sitting down playing with my matchbox cars, listening to them talk about their men, their relationships and their pains. And when one of them would get really sad, another one would come and make a joke and they would all start laughing. I didn’t know I was in the Masterclass for my life. I would get home and my father would be beating my mother and doing all kinds of things and saying all kinds of stuff towards her, and he would leave the room and I would walk in and I would imitate one of those women and she would start laughing. There was a power in that that I didn’t really get. Until I got older. I remember being about 11/12 years old and on my way to my new school, and I got to this intersection. I had to walk past pimps, prostitutes, walk through literally a graveyard. Get to this intersection, six-lane intersection. There was a man there saying “Will someone help me cross? Will someone help me cross?” And there were all these people that kept passing by him and I said “O, I will help you cross”.

So he told me he was going to my school, and he was going to sell candy there; that’s how he made his living. So I helped him cross the street to get there. We became good friends, his name was Mr Butler. That moment reminded me of my mother, bringing her out of pain and into laughter, to help her cross. My first 10 movies were all about her subconsciously; wanted her to know that she’s worthy, wanting Black women to know that you’re worthy, you’re special, you’re powerful, you’re amazing. All of that was about helping her to cross. When I started hiring people like Taraji and Viola Davis, and Idris Elba; they couldn’t get jobs in this town but God blessed me to be in a position to be able to hire them. I was trying to help somebody cross. When I built my studio, I built it in a neighbourhood that’s one of the poorest neighbourhoods in Atlanta so that young Black kids can see that a black man did that and they can do it too. I was trying to

help somebody cross. The studio was once a Confederate Army base, and I want you to hear this; which meant that there were Confederate soldiers on that base, plotting and planning how to keep 3.9million Negroes enslaved. Now that land is owned by one Negro. It’s all about trying to help somebody cross. When everybody was fighting for a seat at the table talking about the ‘OscarsSoWhite, OscarsSoWhite,’ I said, ‘Y’all go ahead and do that,’ but while you’re fighting for a seat at the table, I’ll be down in Atlanta building my own, because what I know for sure is that if I can just build this table God will prepare it for me in the presence of my enemies. Rather than being an icon, I want to be an inspiration. So thank you BET, my new family, thank you everybody. I want you to hear this, every dreamer in this room, there are people whose lives are tied into your dream: Own your stuff! Own your business, own your way!

40 Choba pupils share N4m scholarship from Dufil Prima

ufil Prima Foods recently gave out N4 million in scholarships to 40 junior secondary and primary school pupils in Choba, Rivers State, Choba being the host community for its factory in Rivers State. The funds meant for meeting the children’s educational needs, including tuition, books, etc. were awarded to 10 pupils from the four public schools in the community – two junior and two secondary schools. The schools benefitting from this gesture are Community Junior Secondary School; Olobo Premier College; Universal Primary Education (UPE) and State Primary School. Temitope Ashiwaju, The Group Public Relations and Events Manager of Dufil Prima Foods who handed

the cheques to the beneficiaries at a ceremony in Port Harcourt, said the gesture was borne out of the need to reward academic excellence and spur the pupils to do more. He said it was Dufil’s way of adding value to the lives of residents of its host communities, education being one of the pillars of Dufil’s corporate social investments. He said Dufil would stop at nothing to ensure every child is supported to become the best they can be. www.businessday.ng

“Dufil Prima Foods is passionate about education”, he said, “and we will continue to support education in Nigeria through scholarships and other social investment initiatives”. Mrs. Susan Ejiohuo who is the Desk Officer, Debate, Quiz and Competitions of the Rivers State Universal Education Board, praised Dufil for the scholarships even as she urged other companies and organisations to emulate the gesture to complement governments’ efforts. Ms. Lebura Favour of UPE Primary School who responded on behalf of other beneficiaries thanked Dufil and promised to make the best use of the support. Nigerian kids love Indomie. It’s nice to see Indomie love them back. And there’s nothing wrong with us wanting to see more.....

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Thursday 04 July 2019

BUSINESS DAY

Corporate Social Impact

Who Spoke at Your Graduation? Do You Remember? (3)

Robert F. Smith (Net worth: $5 billion) “You will encounter people in your life, as I have, who will want to make you feel like you don’t belong, but when you respect your own body of work, that’s all the respect you need. In the words of the great Quincy Jones and Ray Charles, ‘Not one drop of my self-worth depends on your acceptance of me.’ You are enough.” –Morehouse College

Jeffrey Lurie (Net worth: $2.1 billion) f I can add anything even remotely useful on your graduation day, it’s simply about the extraordinary power of unconditional love, of resilience, empathy and gratitude – and of maintaining a childlike sense of wonder and curiosity about the world with both an open mind and an open heart. Even in this digital, data-driven age – and perhaps especially in this age – those are the enduring values that make us truly alive and human. They’re also fragile things, yet they empower us to make a difference, each in our own way, in our families and communities, our country and the world.” –Clark University

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Lynsi Snyder (Net worth: $3 billion) “You may face new distractions as you leave this place and enter the workforce. The pursuit of success, the love of money or even being consumed with approval of others on social media will be tempting. It will be easy to compromise your values — to be influenced by what you read in the media surrounding political views, going with the flow or being silent about issues that matter. It is tempting to become complacent in a world that seems helpless, but this mindset can pull you away from the truth.” —Biola University

David M. Rubenstein (Net worth: $2.9 billion) “You are going to take your whole life and build your reputation, and you can destroy it in five minutes. You will be tempted to cut corners many times. Do not do so. Think about all the people who have tried to cut corners and what happened to them when they were caught. And you should always remember that your reputation is something you can never get back, so always be certain to comply with ethics. Also, remember to give back to society. My view is that the people that give back to society are the people that enjoy life the most.” –The Wharton School at University of Pennsylvania, MBA for Executives

Blackstone’s Schwarzman Gives $188 Million to Oxford University

tephen Schwarzman, head of Blackstone Group LP, has given 150 million pounds ($188 million) to the University of Oxford, the latest in a string of mega-donations to higher learning. The contribution is the largest in the university’s 800-year history, according to a person familiar with the gift. The money will help pay for a new humanities building and for the creation of a new institute for the study of the ethics of artificial intelligence, the person said. The Financial Times earlier reported the donation. It’s the latest outsized donation from Schwarzman, who emerged as a major philanthropist in 2008 with $100 million to the New York Public Library. In October, he gave $350 million to help establish a college of computing at the Massachusetts Institute of Technology. His name will

also be on a campus center at Yale University and he created the Schwarzman Scholars program at Tsinghua University in Beijing to educate future global leaders about China. The donation is unusual for U.K. universities, whose fundraising efforts trail their counterparts in the U.S. When hedge fund manager David Harding gave 100 million pounds to Cambridge University in February, it was at the time the biggest single private gift to a U.K. college from a British philanthropist. Teaching in Oxford dates back to at least 1096, according to the university’s website. It was formally recognized by the early 13th century and has educated 27 British prime ministers including Theresa May, and her potential successor Boris Johnson. (Culled from Bloomberg)

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Saying It and Doing It, the Example of Afe Babalola

e quote hereunder from an article written by one Daniel Ighakpe and published in BusinessDay of Wednesday, June 19th, 2019. We thought it good to excerpt it because it mirrors the kind of spirit we expect a lot more Nigerians to evince on an ongoing basis: “Many palliative measures have been recommended to reduce the suffering of the poor. For example, in an interesting 3-part “Viewpoint” column in the Vanguard newspaper written by a prominent Nigerian, Sir Aare Afe Babalola, which was published consecutively in the Vanguard newspaper of Wednesday December 26,

2018; January 2, 2019; and January 9, 2019; Sir Aare Afe Babalola, who is the founder of a well known private university in Nigeria, Afe Babalola University, Ado-Ekiti (ABUAD), highlighted the importance of giving/generosity/philanthropy, in allevi-

ating the suffering of the poor in Nigeria. “In this regard (of philanthropy and generosity), Sir Aare Afe Babalola himself can be said to be doing very well. For example, in The Guardian of Tuesday, October 16, 2018, the management of the Afe Babalola University, Ado Ekiti, was reported to have awarded automatic employment to 72 first class graduates of the university. It was also reported that the founder of the university doled out N250,000 and a plot of land each to all the graduating students of Agriculture to start their farming projects. Such acts of generosity are to be highly commended”. “Indeed” is all we can add.

SC Johnson Earns 2019 Best Workplace Recognition in India and Nigeria

C Johnson recently announced that the company’s global operations in India and Nigeria have earned 2019 Best Workplace recognition by Great Place to Work®. SC Johnson India earned the No. 44 spot among large organizations while SC Johnson Nigeria ranked 2nd on the list of small to medium-sized organizations. “I am proud of both the India and Nigeria teams for continuing to be recognized among the best places to work,” said Fisk Johnson, Chairman and CEO of SC Johnson. “These recognitions reflect their commitments to creating great work environments and their dedication to company values.” This marks the third consecutive year the India operation has appeared on the Best Workplace list and the sixth time dating back to 2010. Mean-

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while, SC Johnson Nigeria is making its fifth overall appearance on the Best Workplace list. SC Johnson Nigeria was also recognized for best practices in the category of Leadership. The Nigeria and India teams join SC Johnson Central America, Italy, Greece, Switzerland, Canada, Turkey, Mexico and United Kingdom as Best Workplaces in 2019. SC Johnson has also earned Best Multinational Workplace recognition in Asia, Latin America and Europe. These awards and placement in the rankings are determined by the results of an employee opinion survey and information provided about company culture, @Businessdayng

programs and policies. In the United States, SC Johnson has been included 30 times in Working Mother magazine’s list of the “100 Best Companies” for its programs and benefits that support working parents including paid family leave, schedule flexibility and advancement of women. The company also received a perfect score of 100 percent on the Human Rights Campaign Corporate Equality Index in 2019. This HRC honor marked the 14th time the company earned a perfect score and its 17th year of recognition on the workplace equality list. (Culled from3BL Media) (For feedback, contact us at csrmomentum@gmail.com/ 08023314782)

Thursday 04 July 2019

BUSINESS DAY

MADE in aba India’s shoe industry holds lessons for Aba Gbemi Faminu

b a i s Nig e r i a’s major footwear manufactur ing hub, estimated at over N120 billion. The activities and value of the industr y are big enough to affect Nigeria’s economic development and encourage trade relationships with other countries. There are lessons Aba shoemakers can pick from their Indian counterparts. Just like Nigeria, India, one of the fastest growing emerging markets, has its shoe manufacturing hub located in various areas in the country. In 2017, the country was among the top 12 exporters, s h i p p i ng ou t p ro d u c t s valued at $1.7 billion in 2017 and accounting for approximately 2.7 percent of the total global footwear output. The government of India recently established the Indian Footwear Leather and Accessories Development Programme (IFLADP) that grants 20 to 30 percent subsidy for micro, small and medium enterpr is es for capital e x p e n d i t u re p u r p o s e s which include building a plant and buying machinery. Furthermore, to encourage the business owners, Rs2,600cr is set aside as a special package for fuelling the leather and footwear industr y, while no less that 300,000 p e o p l e a re t ra i n e d o n government sponsorship annually. But funding has b e e n a maj o r i s s u e t o Aba artisans. Banks are n o t i nt e re st e d a s t h e y complain that Aba artisans do not have good business models. The Indian shoe industry focuses on supplying domestic demand with citizens patronising locals more than imported products. I n d i a’s f o o t w e a r industry is driven by technological innovation, which helps to improve effi ci e n c y a n d ou t put. D u c e r e Te c h n o l o g i e s in India invented a technology known as ‘L eChal’ w ith which it produced sports shoes with GPS. The shoes are Bluetooth-enabled and they can connect to the smartphone with the software to use for free,

just as Google Maps on the cell phone or mobile device, according to Innovation Hacking Lab, an online infor mation web. The shoes often vibrate and inform the us er ab out dire ctions, p rovid ing inf or mat ion on the distance walked, the calories burned and the number of steps taken along the way. K r i s p i a n L aw re n c e, co-founder, said in July 2 0 1 8 t hat t h e p ro d u c t also helps the visually impaired. “We understood this idea and we realised that it could really help the visually impaired or people with other needs because it works without a n y au d i o o r p hy s i c a l distractions. It feels very liberating because you do not have to look at your phone or be tied to anything. The shoe works instinctively. Imagine if someone touches your right shoulder, your body reacts naturally to turn r i g h t , a n d t h a t ’s h o w LeChal works,” Lawrence said in an interview with A F P Ne w s, q u o t e d b y innovat ionhackinglab. com. The company had an initial investment of $250,000 in 2011 and raised $2.5 million until 2013. This is the kind of www.businessday.ng

innovation needed in Nigeria’s industrial hub, analysts say. Experts say Aba shoe industry is still laced with hand-made artistry, which mostly re quires much human labour and accommodates less technology. “The role of government in innovation cannot be too stressed,” said Ike Ibeabuchi, a Nigerian manufacturer. “The private sector can drive it, but government can help in terms of funding and the right environment,” he said. Indians patronise Indian shoes, though t h e re i s n o re st r i c t i o n to purchasing imported p ro d u c t s. C o m p l i a n c e to the Executive Order 003 established by

the president must be strengthened by Ministries, Departments and Agencies (MDAS). T h e O rd e r re q u i re s MDAs to grant preference to local manufacturers of goods and service providers in the procurement of g oods and services to the extent of about 40 percent. This is meant to enable local firms to expand, create jobs, especially for the youth, and generate wealth. Products from Aba are gaining traction in the militar y, but more is needed to encourage domestic consumption regardless of the influx of foreign products. “But it is also about q u a l i t y ,” s a i d O n y e k a Charles, a Lagos-based

…We understood this idea and we realised that it could really help the visually impaired or people with other needs because it works without any audio or physical distractions. It feels very liberating because you do not have to look at your phone or be tied to anything. The shoe works instinctively. Imagine if someone touches your right shoulder, your body reacts naturally to turn right, and that’s how LeChal works,” https://www.facebook.com/businessdayng

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surveyor. “Give us good quality a n d w e w i l l p a y ,” h e added. Furthermore, branding and marketing strategy must be indigenous and domesticated. Findings reveal that ar tisans in Aba brand their products ‘made in China’ in order to bo ost market reach and improve patronage locally and globally. While it might serve its function, it kills the p ro s p e c t s o f b o o s t i n g Nigerian- made products and their impacts on local economy. Shoemakers will need to work on rebranding a n d re p a ckag i ng t h e i r products for higher and wider consumer attraction/acceptability. “Branding is important because it helps to change the perception of consumers who think that Aba products are inferior,” said Amanchukwu Nwankwo, a shoemaker in Aba. The industry is in need of foreign investors and partners in order to foster the much desired growth, development and recognition. Ken Anyanwu, national secretary, Association of Leather and Allied Industrialists of Nigeria (ALAIN), told BusinessDay in Aba that entrance of foreign investors and partners @Businessdayng

would enable the industry to compete globally and make funds for expansion easily accessible. With the presence of foreign investors, stakeholders in the industry will be exposed to trainings that will inspire innovations and new designs, including exposure. More so, in 2017, the Indian Parliament passed a bill to promote the footw ear industr y and raise its standard to the international level. It came up w ith the Footwear Design and Development Institute Bill to establish and declare the Footwear Design and Development Institute as an institute of national importance for promotion and development of quality and excellence in education in this area. It therefore raised a standard for those aiming to export their shoes. Analysts see this as a welcome development, but add that implementing it in Nigeria will require engaging all the stakeholders, while providing fool-proof incentives for artisans. For example, Indian government followed it with assistance to exportoriented factories. Experts believe that Nigerian can achieve that when it is ready to compete.

Thursday 04 July 2019

BUSINESS DAY

NEWS

Viathan commissions Compressed Buhari suspends Ruga settlement plans Public sector reforms central to ... as Osinbajo, governors meet on food security Natural Gas plant they had no lands for Ruga in their driving economic growth - Enelamah Tony Ailemen, Abuja

n an effort to leverage pensions for infrastructure development, Viathan has recently completed the construction of a Compressed Natural Gas (CNG) plant operated by GasCo Marine (a member of the Viathan Group) and located in OkeSokori, Abeokuta, Ogun State. The plant, which has an installed capacity of 144,000SCM per day, extends virtual pipeline for gas supply to emerging corporates in one of the fast growing industrial hubs in the SouthWestern region, with the ultimate objective of enhancing productivity and easing the cost of doing business for medium scale enterprises in the real sector. Backed by InfraCredit’s guarantee, Viathan Group successfully accessed the local debt capital markets for the first time in 2017, issuing a debut a 10 year NGN10.0bn corporate infrastructure bond, with part of the proceeds utilized to finance the construction of the CNG plant; the bonds were fully subscribed by Nigerian pension fund managers. This further affirms the appetite and commitment of local pension funds to providing domestic credit to the private sector to finance long term, impactful infrastructure projects. The successful financing of this plant from the debt capital markets also affirms InfraCredit and pension funds’ commitment to supporting new infrastructure that will provide access to cleaner and affordable energy supply for commercial, industrials, and households, in line with Nigerian government’s aspiration of reducing environmen-

tal pollution and conserving foreign exchange utilization on imported fossil fuels. The plant is expected to increase the utilization of natural gas as feedstock to power plants and manufacturing plants by providing gas to areas without pipeline infrastructure (virtual pipeline). This will reduce gas flaring and Green House Gas (GHG) emissions, thereby promoting environmental sustainability, as companies and vehicles switch from expensive diesel to cleaner and affordable gas. Gasco aims to target up to 1 million vehicles/trucks to switch to natural gas from diesel and petrol thus increasing its market share, whilst the mother station will account for 15% of established plant capacity in the Southern region. The project has led to the creations of direct and indirect employment. The construction of the CNG mother station led to the creation of 137 new jobs; during the construction phase, a total of 20 skilled workers and 80 unskilled workers, including 40 male and 40 female workers were employed. Post construction, 37 permanent jobs were directly created across various management levels within the organization. This is line with InfraCredit’s mandate to enable efficient capital allocation and productive investment of domestic pension fund assets into supporting new infrastructure development that will create jobs, protect the environment, reduce poverty and promote local economic growth.

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ederal Government on Wednesday bowed to public pressure on the Ruga settlement it had initiated, as President Muhammadu Buhari ordered the immediate suspension of the project nationwide. Prior to the suspension, the Federal Government had awarded contracts for the creation of the Ruga settlements for herdsmen, beginning with a pilot plan in the selected states, with a budget of N136 million per state. Ebonyi State governor, Dave Umahi, confirmed the suspension after a meeting of the National Economic Council Committee on Farmers/ Herders clash chaired by Vice President Yemi Osinbajo, and some governors representing each of the six geopolitical zones, at the Presidential Villa. Umahi stated that the committee had to deliberate on the approved programme of National Economic Council (NEC) and Federal Government, tagged, “The National Livestock Transformation Programme.” Condemnations had trailed the programme following misgivings and ill feelings about the project, which had been viewed as an attempt at expanding the alleged “Fulanization” of the country. Several Nigerians, including former President Olusegun Obasanjo and Nobel laureate, Wole Soyinka, had criticised the project, even as states opposed to the project had issued a statement to the effect that

domains. According to Umahi, “Mr President has suspended the implementation of Ruga programme, initiated and being implemented by the Federal Ministry of Agriculture and Natural Resources, because it is not consistent with the NEC and Federal Government approved National Livestock Transformation plan which has programmes of rehabilitation of displaced IDPs, resulting from the crisis and also development of ranches in any willing state of the Federation. The word is willing state of the federation” Speaking on the National Livestock Transformation plan, Umahi said “its beauty is that what NEC and FG approved is a voluntary programme to all the 36 states who may like to participate. So, it is not compulsory, it is for any state that is willing, will key into the programme. “Any state that is interested in this programme is required to bring up a development plan that is keyed towards the implementation in line with our own programme here that is unique to his state based on the challenges that he has in respect of the crisis. That’s the decision of this committee.” Garba Shehu, senior special assistant to the President on Media and Publicity, in an earlier statement justifying the Ruga settlement, noted, “It has six pillars through which it aims to transform the livestock production system in Nigeria along market-oriented value chain while ensuring an atmosphere of peace and justice.

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Hope Moses-Ashike

ublic sector reforms put in place during President Muhammadu Buhari’s first term will be central to driving sustainable economic growth, according to Okechukwu Enelamah, co-founder, African Capital Alliance (ACA), and former minister of trade, industry and investment. Some of these reforms include the Treasury Single Account (TSA), the IntegratedPayrollPersonnelInformation System (IPPIS), and the Voluntary Assets and Income Declaration Scheme (VAIDS)thathasincreasedthenumber of taxpayers from 13 million to 19 million, which has curbed some leakages. Others include the ease of doing business drive, pioneer status incentives alongside other policies to accelerate industries and enterprises. Enelamah spoke recently at the annual Economic and Business breakfast conference organised by Rand Merchant Bank Nigeria (RMBN) in Lagos. He admitted that Nigeria had the right and attractive fundamentals for a sustainable growth, highlighting the country’s strong population base and growth,andabundantnaturalresources. However, he believes a lot more needs to be done both from the public and private sectors to harness these resources and drive robust economic growth. In President Buhari’s second term, the former minister expects the government to drive full-fiscal responsibility through revenue growth and fiscal discipline. He also expects

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bolder investments in infrastructure to close the infrastructure deficit gap. According to the former minister, Nigeria has an infrastructure deficit of over $100 billion that needs to be fixed over the next few years. Onthis,hecalledformorepartnership with the private sector noting that the government cannot do it alone. To drive private sector participation and investment, he also expects accelerationintheexecutionoftheeaseofdoing business policies especially expanding incentivesthatreallymattertoinvestors. On industrialisation, he expects the government to aggressively roll out Special Economic Zones (SEZ) and industrial parks. Enelamah called for more interventions and support from the government to the agriculture, healthcare, education, and insurance sectors as well as continued financial support for Micro, Small & Medium Enterprises (MSMEs). In his welcome address, Michael Larbie, CEO, RMB Nigeria & Regional Head West Africa, noted that efforts to reposition Nigeria’s economy to deliver growth above population growth rate and also create jobs is a key focus worth pondering on by policy makers. He noted that Nigeria’s economic growth in the last five years does not reflect the strength and productive potential of the country’s exciting real sector. As such, he concluded that the opportunity to change course and usher Nigeria into inclusive and sustainablegrowthdoesindeedexistif the right operating environment and policies are instituted.

Thursday 04 July 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper TOMMY STUBBINGTON

uropean government bonds rose across the board on Wednesday as investors bet that Christine Lagarde’s nomination to be the next president of the European Central Bank will extend an era of ultra-loose monetary policy. Bond prices had already rallied strongly in recent weeks, stoked by a growing conviction among investors that outgoing ECB boss Mario Draghi is readying interest rate cuts and a revival of the bank’s bond-buying quantitative easing programme. Ms Lagarde’s appointment, which has to be rubberstamped by the European Parliament, is expected to bring more of the same. “Markets are unfamiliar with her academic monetary leanings,” said Seema Shah, chief strategist at Principal Global Investors. “Yet, going by her previous support of Draghi’s decisions to introduce innovative monetary policies, they are making the safe assumption that she is in the dovish camp.” Bond yields, which move inversely to prices, fell deeper into negative territory on Wednesday morning. The yield on Germany’s 10-year bond, which serves as a benchmark for the region, hit a record low of minus 0.397 per cent, just a whisker above the ECB’s deposit rate of minus 0.4 per cent. France’s 10-year yield sank further below zero, touching minus 0.09 per cent. Two-year yields across the entire eurozone are now sub-zero. Italian bonds were the strongest in the pack, boosted further by news that the populist government has avoided censure from the EU over its newly revised spending plans. Ten-year Italian government debt yields have sunk to just under 1.7 per cent — the bonds’ strongest level since the government was formed last year. Chart showing 2-year sovereign

Bond investors cheer Christine Lagarde’s nomination for ECB IMF chief seen as dovish and likely to prolong era of ultra-loose monetary policy debt in the eurozone The expected drop in benchmark interest rates is a boost for investors who have bulked up on bonds but some fear it also places pressure on the region’s banks and insurers, a concern the ECB has been keen to rebuff. The potential for further stimulus also buoyed markets beyond the eurozone. Ten-year Treasury yields fell slightly to 1.95 per cent, while futures indicated an 0.3 per cent opening gain for the S&P 500. In the UK, gloomy services sector data added to the bond rally, with 10-year gilts lower at 0.687 per cent. Investors are now pricing in a stronger than even chance of a rate cut from the Bank of England by the end of the year. Bank governor Mark Carney acknowledged the deteriorating outlook in a speech on Tuesday, saying “intensification of trade tensions has increased the downside risks to global and UK growth”. For the ECB, a sputtering economy and persistently low inflation have shifted the stance. Mr Draghi, who is due to leave the bank at the end of October, said last month that unless there were improvements in the inflation outlook there would be a fresh bout of stimulus, including the possibility of more QE. Some investors think policymakers could act as early as the ECB meeting later this month, particularly if the US Federal Reserve

‘Muted’ pace of job growth may suggest economic uncertainty has begun hitting labour market

S private-sector hiring failed to pick up as much as expected last month, according to new data that come amid a debate over whether the Federal Reserve will cut interest rates to help support the longest US economic expansion in history. Private payrolls increased by 102,000 last month, from an upwardly revised 41,000 in May, according to ADP. However that was shy of economists’ expectations for 140,000 jobs, according to a survey of economists by Reuters. Large companies, defined as those with 500 or more employees, led the way with 65,000 hires, while midsized companies were close behind with 60,000 jobs created. However, small businesses shed 23,000 jobs. The report comes ahead of Friday’s official non-farm payrolls report, which includes private and public sector employment, and is expected to show hiring rebounded following a meagre 75,000 jobs in May. Paul Ashworth, economist at Capital Economics, said the

“muted” increase to private payrolls “suggests that the deterioration in the broader economy has now spread to the labour market”. Labour market and other data have turned up soft adding to worries that Washington’s multi-fronted trade war is hurting business confidence. Indeed, data released by the C o m m e rc e D e p a r t m e n t o n We d n e s d ay s h ow e d t h e U S trade gap ballooned to $55.5bn in May, from $51.2bn the previous month — and foreign trade could weigh on economic growth in the second quarter. The Fed last month adopted a more dovish stance and pointed to possible interest rate cuts in the future citing rising “uncertainties” about the economic outlook. Fed chair Jay Powell has warned that risks to global growth have increased in recent weeks. Markets are betting the central bank will cut rates this year to support the longest US economic expansion since at least 1854. A separate report from the labour department showed the number of Americans filing for unemployment benefits slipped last week to 221,000, compared with 229,000 the previous week. www.businessday.ng

has already eased policy by then, as widely expected. “The nomination of a more hawkish president would have posed a significant risk to the market but Lagarde is probably more dovish than the departing president himself: an advocate of QE, of fiscal policy being used to aid monetary, and in the past of more European integration,” said Ben Lord, a bond manager at M&G Investments. European leaders’ decision to pick the IMF managing director for the ECB’s top job means the selection of a more hawkish candidate, such as

German central bank president Jens Weidmann, has been avoided. “A Lagarde appointment would remove any reticence that Draghi could have felt in announcing a major easing package at the September 2019 meeting only shortly before a new ECB president comes into post,” wrote Rabobank analyst Lyn Graham-Taylor, in a note to clients. “This is because Lagarde seems not to be deemed a hawk.” Mr Graham-Taylor expected a 0.2 percentage-point cut in ECB rates by the end of the year. Investors have continued to pile into negative-yielding government

debt even though it locks in nominal losses over periods of a decade or more. Mr Dowding said that many eurozone bonds looked like good value compared with even more deeply negative interest rates on excess cash deposited at the ECB — unlike in the US where longer-term yields have dropped below short-term interest rates. He said: “Twelve months ago people were talking about interest rates starting to move higher. It now seems as if everyone has given up. No one is expecting rates to go above zero on a five-year view.”

Donald Trump to nominate Fed critic to the central bank’s board

US private-sector job gains miss Wall Street estimates in June MAMTA BADKAR

Pick of Judy Shelton comes as the US president escalates attacks on the Federal Reserve KIRAN STACEY AND MATTHEW ROCCO

onald Trump has nominated a prominent critic of the Federal Reserve to serve on its board, as the president continues to take a combative stance towards the US central bank. Mr Trump announced on Tuesday that he would nominate Judy Shelton, an economic adviser to his 2016 presidential campaign, to the board of the Fed, alongside Christopher Waller, director of research at the St Louis Fed. Ms Shelton, who is currently the US representative on the board of the European Bank for Reconstruction and Development, has previously made headlines for her outspoken views on what she called the “Soviet power” of the Fed. She told the Financial Times in May that if appointed to the Fed board she would ask “tough questions” about whether it should maintain its rate-setting

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powers. “How can a dozen, slightly less than a dozen, people meeting eight times a year, decide what the cost of capital should be versus some kind of organically, market supply determined rate?” she said. Ms Shelton has also long been sympathetic to the gold standard, which the US fully abandoned in the early 1970s in favour of a flexible exchange rate for the dollar. She told the FT she wanted a new Bretton Woods-style conference to reset the international monetary system, replacing the current regime, mostly based on floating currencies. “If it takes place at Mar-a-Lago that would be great,” she added, referring to the president’s golf club in Florida Last month she told the Washington Post she thought interest rates should be cut “as fast as possible”. Her criticisms echo those of Mr Trump himself, who has frequently attacked the Fed and its @Businessdayng

chairman Jay Powell — whom he nominated — for keeping interest rates too high. Last month he accused the Fed of acting “like a stubborn child” in raising rates too quickly over the past few years. Mr Waller has not spoken publicly about interest rate policy, but his boss at the St Louis Fed, James Bullard, was the only member of the Fed’s policy setting committee to vote for a cut last month. Mr Trump nominated both Ms Shelton and Mr Waller after his previous candidates — Stephen Moore and Herman Cain — withdrew from contention. Both Mr Moore and Mr Cain withdrew amid opposition from Senate Republicans, who would have needed to approve the nominations. Both were accused of lacking experience and independence from Mr Trump. Mr Moore was also criticised over his views on poverty and women, while Mr Cain has previously been accused of sexual harassment — accusations he has denied.

Thursday 04 July 2019

BUSINESS DAY

NATIONAL NEWS

Lagarde set to inherit lingering Draghi influence at ECB IMF head lacks economics training but her political skills could prove useful bank’s helm. CLAIRE JONES Frankfurter Allgemeine Zeitung decried her appointment as a or all her blockbuster billing, “missed opportunity” for the ECB the nomination of Christine Lagarde as the eurozone’s and a loss for Berlin. The German top economic official has raised daily said Mr Weidmann “would more than a few eyebrows at the have been a suitably qualified European Central Bank’s head- candidate . . . from a professional and personal point of view” and quarters in Frankfurt. Ms Lagarde is a lawyer who called him “one of the losers of the has no formal economics train- Brussels game of personnel poker”. However, there is a logic to her ing. While that is also true for US Federal Reserve chair Jay Pow- appointment: some think Ms Laell, the International Monetary garde has several strengths that few Fund’s managing director has no other candidates offered. Having pioneered unprecexperience of working in a central edentedly loose monetary policy bank either. Few can deny that she lacks in the past decade, central banks the policy expertise that has are trying to push politicians to made incumbent Mario Draghi play their part in stimulating the world’s developed economies. so successful. But Mr Draghi’s influence Some commentators argue that Ms is set to live on after he steps Lagarde’s first-rate diplomatic skills down — having recently laid the could help to cajole politicians into groundwork for fresh stimulus, he taking on more of the load for liftis likely to spend the final months ing growth. “The hope is that she can conof his term locking his successor tribute, in her own way, to a shift in. Ms Lagarde will probably inherit a policy mix of record-low towards a more proactive fiscal interest rates until at least the policy in Berlin,” said Frederik middle of next year and possibly Ducrozet of Pictet Wealth Managea substantial expansion of the ment. “It won’t be easy, but it may ECB’s bond-buying quantitative have been more difficult with other candidates.” easing programme too. And she has experience in Melvyn Krauss, a senior fellow standing up to some of the world’s at Stanford University’s Hoover Institution, said: “Ms Lagarde has toughest leaders — a necessary absolutely no track record and skill in an era when central bankers there are all kinds of uncertainties face attacks on their independence created by her appointment. Mr from both extremes of the political Draghi will use this as a reason spectrum. “She has the wit to withstand to push for a new round of QE any institutional controversy,” said ASAP.” Marco Mazzucchelli, an Italian This inheritance could make it hard for Ms Lagarde to make banker. “She is the woman who her own mark on European mon- makes men look silly if they are etary policy. ECB insiders note not consistent and morally sound.” Ms Lagarde has spoken out on that in spotting crises — and in broader social issues from income designing the policy response — she would need to rely heavily on inequality to climate change and members of the economics team. female empowerment — one “She will not have the intellec- of her most famous lines as IMF tual force to steer the governing managing director was that the council,” said one person with financial crash would not have knowledge of both the ECB and happened if it had been “Lehman Sisters, not Lehman Brothers”. the Fed. The biggest question is how However, others say her track record suggests she may prove she would respond if the region’s effective. A person who worked troubles worsen. Ms Lagarde once quipped that closely with her at the Fund said her eight years in handling econo- glass ceilings were often more like mists there had prepared her well. glass cliffs — women are only ever “There was a lot of chatter when called in “whenever the situation is she joined the IMF about whether really, really bad”. While economic she would be able to handle the conditions are not too dreadful economics, she has turned out to yet, she will join at a time when be one of the most effective leaders the eurozone faces a trade-driven global slowdown. we have ever had.” The IMF’s annual reviews of Winning over economists is the region’s economy were ultranot the only problem facing Ms Lagarde, who will begin the job on dovish, consistently backing Mr November 1 if she wins approval Draghi’s rate cuts and stimulus measures. But that stance owed from lawmakers. Another will be handling the more to members of the fund’s ECB’s German contingent, ag- European department than Ms grieved at missing out on the Lagarde herself. The appointment of former top job yet again. It was widely economics professor Philip Lane assumed in Germany that if Ms Lagarde was to scoop any EU job, as the ECB’s chief economist looks it would be Commission president. even wiser now. Ms Lagarde is The German press frequently likely to rely heavily on Mr Lane touted a pairing of Ms Lagarde in and other key ECB officials, such Brussels and Bundesbank chief as economists Massimo Rostagno Jens Weidmann at the central and Frank Smets, to shape policy.

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Deutsche Bank faces restructuring costs of up to €5bn Plan to shrink investment bank set to push lender to net loss for this year OLAF STORBECK

eutsche Bank’s plan to radically shrink its investment banking division is expected to drive Germany’s biggest lender to a net loss this year and cost as much as €5bn, according to three people briefed on the matter. The biggest shake-up of Germany’s largest bank in more than two decades will also see the lender lower its minimum target for its common equity tier one ratio, a measure of balance sheet strength, a fourth person briefed on the plan said. Chief executive Christian Sewing has been under intense pressure from shareholders to fix the troubled investment bank that has been at the vanguard of Deutsche’s global ambitions during the past 20 years. The restructuring plan, which will be put to the bank’s supervisory board on Sunday, will lead to as many as 20,000 job cuts being cut and more than €50bn of assets hived off into a bad bank. With the overhaul set to result

in a restructuring charge of between €3bn and €5bn, Deutsche is expected to report a net loss this year, the people said. Analysts currently forecast Deutsche, which has been unprofitable for three of the past four years, to generate a profit of just under €1bn in 2019. Mr Sewing, a Deutsche veteran who has led the bank for just over a year, wants the lender to pivot from the more volatile investment banking and trading to more stable businesses such as retail banking and asset management. Under the plan, the 49-year-old chief executive is aiming to cut Deutsche’s annual costs by about €4bn by 2022, according to one of the people, a sharp increase from its current target of €1bn for this year. However, the bank is not preparing to raise more capital to foot the restructuring bill, one of the people said. Raising fresh equity would be highly dilutive to existing investors, who have seen the stock sink to a record low. A decision not to raise more capital will see the Deutsche’s common equity tier one ratio fall below its current minimum target of 13 per cent of its risk-weighted

assets. The bank is preparing to announce a new minimum ratio of 12.5 per cent, a person briefed on the matter said, although the actual ratio will stay above the new target even as the bulk of the restructuring costs are absorbed. A one percentage point reduction of the ratio unlocks €3.5bn in capital. The ratio stood at 13.7 per cent at the end of the first quarter. The European Central Bank and other regulators were comfortable with Deutsche’s new target because the ratio will still be about one percentage point higher than the regulatory minimum, another person added. Deutsche, which has 91,500 employees and €347bn in risk-weighted assets, declined to comment. The axe is expected to fall hardest on Deutsche’s Wall Street operations, with Mr Sewing preparing to shut the bank’s unprofitable US equities trading business and slim down its rates division, the people said. Garth Ritchie, head of the investment bank, is expected to depart in a change that will see Mr Sewing assume control of the ailing division, two people briefed on the matter said.

Andrea Orcel set to launch €100m lawsuit against Santander Spanish bank withdrew offer to make the star banker its chief executive earlier this year DAVID CROW

ndrea Orcel is set to launch a €100m lawsuit against Santander after the Spanish bank withdrew its offer to make him chief executive earlier this year. Mr Orcel’s lawsuit, which was sent to Santander in recent days, alleges that the Spanish bank breached his contract and demands that the company hires him as its CEO or pays damages totalling €100m, according to two people who have seen the document. The lawsuit will not be filed or made public until Santander has had a chance to review its contents, one of the people said. A spokesperson for Mr Orcel declined to comment, as did a spokesperson for Santander. Santander withdrew Mr Orcel’s job offer in January just four months after it announced his appointment. The bank said it had

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reversed course after concluding it could not justify paying him a sign-on package worth up to €50m to reimburse him for deferred compensation he would forfeit by quitting his previous job as head of UBS’s investment bank. At the time, Santander said that the cost of reimbursing the Italian-born banker for UBS shares earned during his time at the Swiss bank would be “significantly above the board’s expectations”. However, the FT has reported that the tense negotiation over Mr Orcel’s sign-on package was but one factor in the bank’s decision to reject the Italian-born banker. Santander’s executive chairman, Ana Botin, also started to doubt her decision to hire him after the pair sparred over what level of public profile he would have after joining the bank. Mr Orcel had already quit his job at UBS when Santander rescinded its offer and was working @Businessdayng

a period of gardening leave, meaning the Spanish bank’s decision left him unemployed. The former head of UBS’s investment bank had been expected to launch legal action against Santander. In an interview with the FT earlier this year, the Italian banker revealed he had hired a legal team and sent a warning shot to the Spanish bank: “I’m not known to be a person that lets go, especially when I think that the right thing to do is to not let go.” The €100m claim for damages is calculated by adding the potential earnings that Mr Orcel missed out on after the job offer was rescinded, as well as legal fees and other costs, according to one person briefed on the lawsuit. It could prove highly embarrassing for Santander if it were forced to pay anything near that sum, given that its stated reason for withdrawing Mr Orcel’s offer was that it could not justify paying him half that amount.

Thursday 04 July 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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Martin Wolf accepts the Gerald Loeb Lifetime Achievement Award ‘My views have changed as the world has changed — but my values have not altered’

MARTIN WOLF

n June 27, at a ceremony in New York, Martin Wolf, the FT’s chief economics commentator, received the Gerald Loeb Lifetime Achievement Award for distinguished business and financial journalism. Timothy Geithner, former US Treasury secretary, gave the speech of introduction for Martin. After accepting the prize, Martin delivered the following speech. I never planned to become a journalist. At the age of 41, in 1987, I still expected to pursue the career as a policy-oriented economist I had begun at the World Bank in 1971. Then, quite unexpectedly, the then editor of the Financial Times, Geoffrey Owen, who had published some letters and articles of mine, in my then capacity as director of studies for the Londonbased Trade Policy Research Centre, asked me whether I would like to be chief economics leader writer. I hesitated and then accepted. I knew I could write arguments and that I had plenty of opinions. I also thought it would be enjoyable. So, indeed, it has proved. I was chief economics leader writer until 1996 and have been the FT’s chief economics commentator ever since. Commentary is not reporting. I admire the integrity and persistence of my reporting colleagues. But the commentary I write requires somewhat different qualities: above all, the ability to create clear — and, one

hopes, sound — arguments upon important issues. The urge must be to clarify. The clarity of one’s reasoning should help readers achieve comprehension even if they disagree with the arguments and those even turn out to be mistaken (as occasionally happens). My opinions have altered as the world has unfolded. I make no apologies for this. Those who have not changed their opinions over a lifetime do not think. But my values have not altered. I inherited them from my parents, both refugees from Hitler’s Europe. I believe in democracy and so in the obligations of citizenship, in individual liberty and so in the freedom of opinion, and in the Enlightenment and so in the primacy of truth. The role of the fourth estate is, in my view, to serve these great causes. I am proud to have been one if its servants. May I thank the Loeb Awards for this great honour given to me and also the FT. I thank my good friend Tim Geithner for having introduced me so kindly. I thank the FT for being a superb publication and for having given me such a wonderful home for so long. I especially thank a succession of supportive editors. May I finally thank my readers. They keep the FT alive by their subscriptions. These readers understand the difference between news and lies, and between analysis and propaganda. They are keeping the flame of truth alive in dark times. I am grateful. We are grateful.

Italy dodges EU budget disciplinary process News sparks fresh rally in Italian government bonds MEHREEN KHAN, HANNAH ROBERTS AND PHILIP GEORGIADIS

taly has dodged a fresh disciplinary process from Brussels over its rising debt levels after Rome’s anti-establishment government promised to trim its budget deficit over the next two years. The EU’s college of commissioners on Wednesday decided not to trigger an excessive deficit procedure — which could ultimately result in sanctions — putting an end to weeks of negotiations between Brussels and Italy’s Eurosceptic coalition. To avoid the EDP, Rome’s government has promised to trim back its 2019 budget deficit by €7.6bn or 0.42 per cent of GDP, pushing the deficit down to 2.04 per cent and ensuring the country is not in breach of eurozone budget rules. Italy has also provided Brussels with assurances that its 2020 draft budget will be compliant with the rules but has not yet laid down the measures it will take. Pierre Moscovici, commissioner for economics, praised Rome’s finance minister for “a very significant effort” on shrinking its budget deficit through spending cuts and higher revenues.

“An EDP is no longer warranted”, said Mr Moscovici. “I am satisfied that we finally could, through dialogue, reach a sufficient level of correction. This is good news for Italy and the euro-area”. Luigi Di Maio, Italy’s deputy prime minister, welcomed the decision and congratulated prime minister Giuseppe Conte “for his work at the EU tables”. “An infringement procedure, which could have fallen on this country, thanks to the Democratic Party, has been avoided. Italy did not deserve it and today’s announcement provides justice to Italy and this government”, said Mr Di Maio. Negotiations with Rome mirror a similar deal brokered between Brussels and Rome at the end of last year over Italy’s draft 2019 budget. Since then, the Italian economy briefly fell into recession and has suffered slowing growth — pushing up the country’s debt burden. Italian government debt rallied on Wednesday’s news, sending the yield on its short term bonds back negative. The yield on 10-year bonds, which moves inversely to prices, fell 17 basis points to 1.71 per cent, hitting the lowest levels since 2017, according to Reuters data. www.businessday.ng

S&P 500 hits record as stocks and bonds rally in tandem Cartel has propped up the oil price but has done so at the expense of market share PETER WELLS, MICHAEL HUNTER AND SIDDARTH SHRIKANTH

he S&P 500 found itself within a whisker of the 3,000 mark, opening in record territory on Wednesday morning alongside a rally for global stocks and bonds as investor expectations for looser monetary policy at major central banks grew. The US equities benchmark was up ¼ of 1 per cent in early trade at an intraday record and less than 20 points away from reaching the 3,000 mark for the first time. The Nasdaq Composite was up 0.2 per cent, while the Dow Jones Industrial Average added 0.2 per cent Wall Street closes early today ahead of the Independence Day public holiday tomorrow, giving US investors one final opportunity to take positions ahead of Friday’s hotly anticipated jobs report. Bond yields, which fall as prices rise, also took out key levels. The yield on the 10-year US Treasury was down 1.7 basis points at 1.9601, taking it beyond a previous nadir in June and to its lowest level since November 2016.

The yield on 10-year German Bunds fell to a fresh record low, down by as many as 3.4 basis points to minus 0.399 per cent, while yields on UK government debt also pushed their way to multiyear lows as Bank of England governor Mark Carney struck a cautious tone in a speech. Moves in the bond market were spurred by expectations for looser monetary policy at central banks, while weak data and concerns about underlying economic growth also boosted demand for safer assets. In particular, investors were assessing the nomination of Christine Lagarde, the managing director of the International Monetary Fund, as the next president of the European Central Bank. “While Christine Lagarde may implement small changes at the margin, we expect her to continue the ECB’s super-accommodative ways,” said David Lafferty, chief market strategist at Natixis Investment Managers. The Europe-wide Stoxx 600 gained about ¾ of 1 per cent to reach its highest level since June 2018, with consumer stocks setting the pace and offsetting declining

energy stocks, which struggled as Brent crude bounced back only modestly after posting its biggest fall in a month in the previous session. Frankfurt’s Xetra Dax 30 rose 0.6 per cent, with London’s FTSE 100 climbing 0.7 per cent Oliver Blackburn, a portfolio manager at Janus Henderson Investors, said: “Markets are likely to be relieved that the hawkish Jens Weidmann [president of Germany’s Bundesbank] has missed out on the [ECB] role.” Investors were also continuing to measure comments from Mark Carney that “a global trade war and a no-deal Brexit remain growing possibilities not certainties”, leading to deepening expectations that the BoE could consider cutting rates, rather than looking to an increase as its next policy move. UK government debt passed notable milestones during the wider rally for sovereign bonds as the BoE governor’s words continued to resonate and more weak UK data added to the picture. The composite purchasing managers’ index showed a contraction for June, reading under 50 at 49.7.

Brevan Howard set for big gain as bond rally bet pays off Jersey hedge fund on course for best half-year returns since financial crisis LAURENCE FLETCHER AND LINDSAY FORTADO

edge fund Brevan Howard is on track for its best halfyear performance since the aftermath of the credit crisis, thanks to bets on plunging US bond yields over the past two months. Jersey-headquartered Brevan, run by secretive billionaire Alan Howard, saw its main fund gain 9.5 per cent this year to June 21, according to people who have seen the numbers. That includes a rise of more than 4 per cent last month. It means the fund is on course for its best half-year returns since the first half of 2009, and would just pip the profits it achieved during the European debt crisis in the second half of 2011. Also profiting from falling bond yields is New York-based Caxton Associates. Its main fund is up

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about 10 per cent this year, according to a person who has seen the numbers. The increases have largely been driven by the funds’ bets on lower bond yields. The US 10-year Treasury yield has tumbled from 2.69 per cent at the start of the year to less than 2 per cent this week, with much of the dip coming in the past two months. Yields fall as prices rise. “It’s been the big trade,” said one macro hedge fund manager. “It’s [a trade driven by] the move by the ECB and Fed to indicate easing” of monetary policy. Brevan’s results mark a remarkable turnround for the firm. A record of making money every calendar year, including gains of more than 20 per cent in both 2007 and 2008 during the financial crisis, helped it grow to more than $40bn as one of the world’s biggest and most influential hedge funds. @Businessdayng

But three calendar years of losses between 2014 and 2017 has seen assets tumble as clients have lost patience and pulled out their cash. That has reduced the firm’s assets to $6.8bn. However, Brevan surprised many in the industry last year with a rise of 12 per cent in its main fund and big increases in a separate portfolio run by Mr Howard, thanks in part to him correctly betting that Italian bond yields would rise amid concerns about the country’s debt pile and its spending policies last spring. A number of macro funds have been betting on falling bond yields this year. After starting on a gradual downward path earlier in the year, the trade kicked into gear over the past two months when bond yields dipped in response to more dovish comments from the Federal Reserve.

Thursday 04 July 2019

BUSINESS DAY

ANALYSIS FT Societe Generale chairman admits it was too slow to fire French bank’s shares are one of the worst performers in Europe’s banking sector he chairman of Société Générale has conceded the French bank was too slow to cut jobs at its struggling securities trading unit, as it tries to regain investor confidence following a collapse in its share price. The Paris-based lender announced 1,600 job cuts in April following several quarters of poor performance at its investment bank as part of a push to reduce its annual costs by €500m. Shares in SocGen have fallen almost 40 per cent over the past year, underperforming almost all European lenders even including its ailing

trading operations as they contend with record-low interest rates, poor trading conditions and stiff competition from US-based rivals. Deutsche Bank has drawn up plans to cut up to 20,000 jobs, which could be announced as early as this month, while BNP Paribas, the French lender, has pledged to accelerate its cost-cutting programme. Mr Bini Smaghi said most of the 1,600 bankers made redundant would leave the company by the end of the third quarter and hinted the lender was prepared to make further cuts if market conditions continue to deteriorate. “I think if we’re able to show we can deliver, this is a method we can

German rival Deutsche Bank. Asked how he would respond to investors who think the French lender should have started shrinking its investment bank sooner, Lorenzo Bini Smaghi told the Financial Times: “It’s true: maybe it was not quick enough.” SocGen shares suffered a sharp sell-off following a profit warning in January. Mr Bini Smaghi said the torrid market conditions at the end of 2018 prompted the lender to implement “drastic” steps to shrink its investment bank, including pulling out of some businesses entirely and shrinking others, such as its bond trading unit. Despite not moving quickly enough to pare back the investment bank in the past, Mr Bini Smaghi said the lender was “making [a] correction” and was “now at full speed”. He added: “The plan was already going in that direction. But we wanted to accelerate it. Unfortunately it coincided with the market shock at the end of 2018, which led to a profit warning. So the market was confused; maybe we did not communicate well enough. “Clearly our [initial] three-year plan, which was made public at the end of 2017, was based on assumptions that were too optimistic. So we saw this, and we addressed it.” SocGen is one of several European banks in the throes of restructuring its

apply if the environment changes for the worse,” he said. The SocGen chairman said that the cuts at the investment bank would free up funds to invest in higherreturning parts of its business such as its international operations in eastern Europe and Africa, its asset-backed financing unit, and insurance. The Italian economist, who was on the executive board of the European Central Bank between 2005 and 2011, forecast that US investment banks would also face tough decisions on headcount if the Federal Reserve cuts rates this month as markets expect. “The environment is getting relatively worse for the US than us [in Europe]. Interest rates are going to go down. They are getting into our environment, in which we have been living for quite some years now,” he said. He said there were “no talks at present” about a merger between SocGen and UniCredit, which have long been rumoured to be exploring a tie-up. He added that major banking consolidation in Europe was unlikely for at least two years. And he insisted that SocGen chief executive Frédéric Oudéa, who has led the bank since 2008, was the right person to run the bank after his contract was extended by four years with the backing of more than 96 per cent of investors.

DAVID CROW

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Huawei: still fighting for survival despite Trump truce The Chinese telecoms group is determined to accelerate efforts to become self-reliant JAMES KYNGE, YUAN YANG AND SUE-LIN

isitors to the Shenzhen headquarters of Huawei — the Chinese company that has been at the centre of the US-China trade war — are struck by the ubiquity of one photograph. It is displayed on the walls of the reception, in the coffee shop and on cardboard prints handed out by Ren Zhengfei, the company’s founder and chief executive. The grainy, black-and-white image shows a second world war Soviet plane that has been so badly damaged by enemy fire that it has gaping holes in its wings and body. “I felt that it was quite like us. We are riddled with bullets from the US,” Mr Ren said. But the former soldier in the People’s Liberation Army is not seeking victim status. His affinity with the photo derives from a different reason; in spite of its shot-up state, the plane did not crash and instead managed to fly home. Huawei is similar, argued the 74-year-old entrepreneur who founded the company with seed capital of just $5,000 in 1987. It will also manage to “fly home” in spite of all the flak hurled at it by the US administration of President Donald Trump. At the weekend, Mr Trump called a partial ceasefire in those hostilities telling the G20 meeting in Osaka that US technology companies — banned from supplying Huawei since May — would be given a qualified go-ahead to restart sales of products “where there is no great national emergency problem”. This could mean they may be able to supply some of the chips, software and other components critical to the world’s largest telecoms equipment company. Yet the bruising battle between Huawei and Washington — and the distrust it has created — is expected to further reduce the reliance on US suppliers, which analysts say is already a trend within China’s tech sector. Mr Trump’s weekend comments are unlikely to do much to reverse that, with many in the US believing that his move could undermine national security. “The US is helping us in a great way by giving us these difficulties. Under external pressure, we have become more united than ever, ” Mr Ren said in an interview before the dramatic weekend U-turn. “If we aren’t allowed to use US components, we are very confident in our ability to use components made in China and other countries.” In an 80-minute discussion in a cavernous hall adorned by doric pillars and statues of Aphrodite, the Greek goddess of love, Mr Ren touched on a wide range of topics. He spoke of Huawei’s links to China’s

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military, allegations that his company has used its networks to engage in espionage and charges that it violated US sanctions by dealing with Iran. He was more reticent on the detention of his daughter Meng Wanzhou in Canada. And a question on whether he would answer a phone call from Mr Trump — were it to come — led to a flurry of evasive manoeuvres. Mr Trump, he was sure, was “very busy” and “I don’t understand English”. Yes, he supposed, interpreters could be found but they “don’t know much about politics, while I specialise in electronics”. Another issue, he said, was that Mr Trump was “somebody and I am nobody really”. Pressed further, he said that in any case, “I am busy patching up holes [in Huawei’s business] and may not have time to talk”. In spite of such reticence it is clear that Mr Trump, more than anyone else, holds Huawei’s immediate future in his hands. This reality was underscored when the US president signalled a potential softening of the ban on American companies selling to Huawei. The blacklisting imposed in May by Washington represented a body blow to China’s most prominent technology company. It meant that about 1,200 US suppliers of components and intellectual property to Huawei and its 68 affiliates would have to stop such sales — along with overseas firms that shipped items containing more than 25 per cent US-made content. Huawei bought $11bn in components and services from US suppliers last year out of a total procurement bill of $70bn. Yet in technology terms the disruption would be even greater. As Mr Ren said, if even one out of a thousand key parts is missing, a piece of telecoms equipment will cease to work. As a result Mr Trump’s comments at the G20 were welcome. In an emailed response Mr Ren told the Financial Times: “President Trump’s statements are good for American companies. Huawei is also willing to continue to buy products from American companies. But we don’t see much impact on what we are currently doing. We will still focus on doing our own job right.” It is this phrase — “doing our own job right” — that is key, analysts say. They believe it amounts to Huawei swapping out reliance on US-made inputs as fast as possible. “President Trump’s softening stance on Huawei is an important lifeline for the company,” says Dan Wang, technology analyst at Gavekal Dragonomics, a research firm. “Nonetheless, Huawei will try to design out US components and continue to build its own capabilities. It can’t allow its survival to be contingent on US political actions.” Reducing reliance on the US was a @Businessdayng

theme Mr Ren returned to repeatedly during the interview. He spoke with the urgency of a man who, at that time, risked losing his company once several months of inventory ran out. “We are looking for alternatives [to US-made technology],” he said. “We are developing our own components and we have strong expertise in doing so, which will enable us to survive.” He ticked off a list of areas most vulnerable to disruption from a rupture in the US supply chain and then detailed where he thought Huawei stood in terms of being able to replace or develop its own components, service and intellectual property to plug any gap. “We don’t have too many problems with chips, as we can create most of what we need,” he said. “We don’t have big problems with our hardware. But there is some impact on our software systems.” Independent analysts had a less optimistic view. Huawei’s Achilles heel is in chips, according to Credit Suisse, including radiofrequency varieties used to broadcast mobile signals for phones; and field-programmable gate arrays (FPGAs), critical to telecoms equipment such as 5G base stations. Both areas are dominated by US suppliers for which there are no obvious alternatives who manufacture on a similar scale. Software is another key vulnerability. Two-thirds of the cyber security software tools used in Huawei products come from US suppliers, according to executives at the Chinese group, who declined to be identified. Nevertheless, Mr Ren appeared confident that solutions could be found. “Even if the [US] continues to cut off our supply of these things,” he said, “we will be able to get the ‘holes’ fixed and catch up.” Another weakness is the reliance of Huawei’s smartphones on Google’s Android operating system. As a replacement, Mr Ren talks about repurposing a homegrown operating system, called Hongmeng, to install in its mobile phones and support an ecosystem of apps. This process of localisation and substitution that Mr Ren describes goes far beyond Huawei alone. “Made in China 2025”, a signature policy of President Xi Jinping, was launched in 2015 with the aim of making China a technological superpower. It envisages global leadership in 10 core sectors including “newgeneration information technology”. Made in China’s goals of achieving high levels of “self-sufficiency” in such industries — by substituting foreign technology with domesticallydeveloped alternatives — have made the blueprint deeply unpopular in the US and Europe. In recent years, China’s state media has downplayed the programme, but Huawei’s strategies now chime with Beijing’s industrial policy.

Friday 05 July 2019

BUSINESS DAY

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Thursday 03 July 2019

BUSINESS DAY

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Thursday 04 July 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Thursday 03 July 2019 Company

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 234,598.49 6.60 1.54 158 6,470,626 UNITED BANK FOR AFRICA PLC 208,616.47 6.10 -2.40 271 34,116,726 ZENITH BANK PLC 604,382.51 19.25 -1.03 477 28,192,148 906 68,779,500 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 226,140.34 6.30 -2.33 263 20,043,960 263 20,043,960 1,169 88,823,460 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,626,749.91 129.05 0.08 91 720,640 91 720,640 91 720,640 BUILDING MATERIALS DANGOTE CEMENT PLC 3,016,169.81 177.00 -0.22 48 134,138 LAFARGE AFRICA PLC. 213,428.29 13.25 6.00 171 6,306,722 219 6,440,860 219 6,440,860 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 311,875.62 530.00 - 5 3,747 5 3,747 5 3,747 1,484 95,988,707 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 59,142.42 62.00 -3.12 32 966,913 OKOMU OIL PALM PLC. PRESCO PLC 52,000.00 52.00 - 12 6,879 44 973,792 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,410.00 0.47 -7.84 28 2,100,327 28 2,100,327 72 3,074,119 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 794.19 0.30 - 4 75,578 JOHN HOLT PLC. 182.90 0.47 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 43,493.35 1.07 -1.83 105 8,088,757 17,575.91 6.10 -6.87 71 1,037,638 U A C N PLC. 180 9,201,973 180 9,201,973 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 26,334.00 19.95 -8.90 20 245,243 ROADS NIG PLC. 165.00 6.60 - 0 0 20 245,243 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,637.75 1.40 - 11 598,772 11 598,772 31 844,015 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,231.85 1.69 - 2 21,965 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 104,700.30 47.80 - 23 526,699 INTERNATIONAL BREWERIES PLC. 146,559.45 17.05 - 16 324,131 NIGERIAN BREW. PLC. 483,812.57 60.50 - 49 232,949 90 1,105,744 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 87,500.00 17.50 0.57 105 1,877,102 DANGOTE SUGAR REFINERY PLC 132,000.00 11.00 2.80 40 391,114 FLOUR MILLS NIG. PLC. 57,405.31 14.00 - 42 481,450 HONEYWELL FLOUR MILL PLC 8,088.80 1.02 0.99 33 1,263,651 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 2 386 NASCON ALLIED INDUSTRIES PLC 37,886.97 14.30 -2.05 17 1,822,031 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 239 5,835,734 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,096.76 10.70 - 13 157,924 NESTLE NIGERIA PLC. 1,066,122.66 1,345.00 - 35 19,070 48 176,994 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,803.24 3.84 - 14 232,926 14 232,926 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 27,396.29 6.90 2.22 24 602,279 UNILEVER NIGERIA PLC. 183,840.17 32.00 4.23 23 323,051 47 925,330 438 8,276,728 BANKING ECOBANK TRANSNATIONAL INCORPORATED 183,495.51 10.00 -2.91 54 1,039,931 FIDELITY BANK PLC 47,518.67 1.64 -1.20 83 5,504,503 GUARANTY TRUST BANK PLC. 882,935.38 30.00 -0.17 274 12,495,091 JAIZ BANK PLC 13,848.20 0.47 -2.08 8 366,970 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 66,217.96 2.30 -0.43 608 32,089,448 UNION BANK NIG.PLC. 203,845.27 7.00 - 30 1,580,999 UNITY BANK PLC 7,013.60 0.60 -7.69 14 1,127,134 WEMA BANK PLC. 24,687.66 0.64 -1.54 23 748,340 1,094 54,952,416 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,573.93 0.66 - 8 77,124 AXAMANSARD INSURANCE PLC 21,000.00 2.00 - 8 2,000,000 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 7.14 4 257,500 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 3,093.20 0.21 - 76 133,150 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,123.80 0.29 - 0 0 LAW UNION AND ROCK INS. PLC. 2,320.02 0.54 - 0 0 LINKAGE ASSURANCE PLC 5,680.00 0.71 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 -9.09 4 300,385 NEM INSURANCE PLC 11,986.74 2.27 - 7 115,950 1,547.90 0.20 - 0 0 NIGER INSURANCE PLC PRESTIGE ASSURANCE PLC 2,691.28 0.50 - 4 32,500 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 - 3 61,500 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 - 8 126,400 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 - 1 107,521 WAPIC INSURANCE PLC 6,289.89 0.47 9.30 21 332,694 144 3,544,724

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 2,469.57 1.08 - 5 12,920 5 12,920 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,140.00 3.57 - 38 275,667 34,114.81 5.80 -4.13 8 587,156 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 31,684.34 1.60 - 45 4,952,668 1,131.98 0.22 - 0 0 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 412,182.26 40.25 - 22 130,822 13,800.00 2.30 - 36 606,396 UNITED CAPITAL PLC 149 6,552,709 1,392 65,062,769 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 852.75 0.24 - 8 1,005,000 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 8 1,005,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 534.15 0.54 -10.00 4 44,542,671 4 44,542,671 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 9,492.94 4.55 -9.90 2 50,900 12,197.94 10.20 - 22 299,737 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 4,054.30 2.35 -1.67 9 713,019 987.56 0.52 - 1 9,000 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 1 200 35 1,072,856 47 46,620,527 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 2 3,200 648.00 6.00 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 0 0 2 3,200 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 - 5 375,151 9,996.00 2.38 - 0 0 E-TRANZACT INTERNATIONAL PLC 5 375,151 7 378,351 BUILDING MATERIALS BERGER PAINTS PLC 2,028.76 7.00 - 8 21,328 19,250.00 27.50 - 18 80,431 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 190,580.76 14.50 3.57 36 676,394 FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 MEYER PLC. 313.43 0.59 - 2 12,006 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 2 6 1,156.20 9.40 - 0 0 PREMIER PAINTS PLC. 66 790,165 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,483.46 1.41 0.71 30 1,968,181 30 1,968,181 PACKAGING/CONTAINERS BETA GLASS PLC. 33,173.14 66.35 - 9 102,344 GREIF NIGERIA PLC 388.02 9.10 - 0 0 9 102,344 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 105 2,860,690 CHEMICALS B.O.C. GASES PLC. 1,889.75 4.54 9.93 4 107,974 4 107,974 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 - 1 1,000 1 1,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 92.40 0.42 - 0 0 0 0 5 108,974 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,565.68 0.25 8.70 21 1,400,946 21 1,400,946 INTEGRATED OIL AND GAS SERVICES OANDO PLC 49,104.08 3.95 8.22 36 361,947 36 361,947 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 56,974.05 158.00 -9.71 22 187,758 CONOIL PLC 15,024.06 21.65 - 0 0 ETERNA PLC. 4,760.13 3.65 - 13 32,499 FORTE OIL PLC. 35,166.99 27.00 - 75 522,675 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 4 915 TOTAL NIGERIA PLC. 50,249.23 148.00 -1.33 28 77,660 142 821,507 199 2,584,400 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 20 1 20 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,918.01 4.95 - 17 51,387 TRANS-NATIONWIDE EXPRESS PLC. 342.26 0.73 - 0 0 17 51,387 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,972.68 1.43 - 5 86,379 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 8 15,687 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 13 102,066 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 1 3,500 1 3,500 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 9.68 3 709,204 LEARN AFRICA PLC 1,041.46 1.35 - 21 505,425 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 793.79 1.84 -0.54 7 315,007 31 1,529,636 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 497.31 0.30 - 4 28,500

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BUSINESS DAY Thursday 04 July 2019 www.businessday.ng

Regulatory agencies: Revenue collectors or business facilitators? Odinaka Anudu, Joseph Maurice Ogu & Gbemi Faminu

auritius, a tiny African country, deserves all the accolades it gets. According to the 2019 World Bank Doing Business Index, the time needed to register property has decreased more than 12 times since 2005. Similarly, the time needed for business incorporation has decreased almost 10 times as a result of four reforms in starting a business. The Indian Ocean island nation progressed from 25th to 20th in 2019 as a result of radical economic reforms which included introduction of a five-year tax holiday for local companies collaborating with the Mauritius Africa Fund for the development of infrastructure in special economic zones. The report shows that top 20 economies, for example, share few international good practices. In the area of starting a business, 13 of these economies have at least one procedure that can be completed online in 0.5 days. In the areas of construction and land administration, all top 20 economies’ mandatory inspections are always done in practice during the construction of a warehouse, and the majority have comprehensive geographic coverage. Nigeria made positive steps in World Bank Doing Business ranking in 2018, jumping 24 places to 145th as a result of Vice President Yemi Osinbajo-led reforms. The following year, however, the country regressed by one step, meaning that no positive impact was made in real terms. It is almost impossible to take a prominent place in any global doing business index without examining the role of regulatory agencies. The reason is that the buck of registering a business or property, collection of taxes, and trading across borders, among others, stops at the tables of regulators. Without doubt, regulatory agencies are important. The National Agency for Food and Drug Administration and Control (NAFDAC) has made visible efforts to regulate and control the manufacture, importation, exportation, advertisement, distribution, sale and use of food, drugs, cosmetics, medical devices, chemicals and packaged water in Nigeria. Without NAFDAC, unscrupulous Nigerians would have killed millions of citizens with fake drugs and food products, analysts say. The Standards Organisation of Nigeria (SON) has helped to standardise and regulate the quality of all products in the country. Other regulators have proved their relevance in driving the Nigerian economy. However, it is clear that the majority of Nigerian regulators pay more attention to revenue generation than business facilitation. In February this year, the Apapa Area 1 Command of the Nigeria Customs Service said it generated N404bn in 2018 as against N350.9bn generated in 2017. Bashir Abubakar, Customs area controller of the command, said the amount

realised was 95 percent of the 2018 revenue target of N426.1 billion. Just last month, the Customs ran to town with the news that the export value through Apapa and Tin-can, all in Lagos, rose to N258 billion in 2018, which was a 35.5 percent rise from N166 billion recorded in 2017. Also last month, the Nigeria Ports Authority announced revenue of N67.19 billion for three months ended March 31, 2019. For the Customs, the NPA and the federal government, these were all pieces of good news. But are they for businesses in Apapa area that are delayed by lack of functional scanners and poor call-up system? “Is it about generating billions in Apapa to the detriment of industries whose raw materials stay in Apapa and the ports for days before arriving factories?” a manufacturer asked. Cocoa farmers lose revenue due to delays in Apapa and Tin Can, but the business community says the Customs, NPA and federal government pay more attention to getting revenue than realising the vision of earning foreign exchange and broadening the economy. At a recent conference, the Ogun State chapter of Manufacturers Association of Nigerian (MAN) concluded that the gridlock in Apapa has raised production costs, as members often pay unnecessary demurrages due to delays of getting containers out and in of Apapa. “If Nigeria does not want to collapse its economy, then the Apapa gridlock has to be solved urgently,” the association said. Also, the National Environmental Standards and Regulations Enforcement Agency (NESREA) was established in 2007 to ensure compliance with environmental laws.

The agency, which is under the Ministry of Environment, has the power to establish and enforce administrative penalties, seal and close down premises or facilities whose activities pose imminent threat to life and property even while a warrant or court order is being sought from court. At an interactive session between the agency and the Manufacturers Association of Nigeria (MAN) recently, some manufacturers complained that they had to pay almost N2 million on air quality and air toxic clearance, audit report, and N1 million to NESREA-listed consultants to get clearance. Even with the consultants, delays have become inevitable, thereby stalling delivery of raw materials to factories, manufacturers said. Today in Nigeria, the functions of regulatory agencies overlap. For instance, NAFDAC and the SON have similar regulatory roles for food and beverage firms. Neither accepts the tests done by the other. And the processes, including registration, take time and money. “There are some regulatory agencies that are not consistent with the ease of doing business. Some of these bother on high regulatory compliance cost, lack of clarity in regulatory requirements, and overlapping regulatory functions, among others,” Babatunde Paul Ruwase, Lagos Chamber of Commerce and Industry (LCCI)’s president, said at a recent interactive forum with regulators in Lagos. “It is imperative to minimise the burden of regulation on investors if the private sector must play the desired role of wealth and job creation as prescribed in the Economic Recovery and Growth

Plan (ERGP),” he added. Understandably, with dwindling government allocation to regulatory agencies, revenue drive seems to be inevitable. But should that drive come at a cost to businesses that lay the golden eggs? Recently, NAFDAC raised the fees for registration, lab analysis, change of company’s name and package size extension, among others, which it imposed on operators of small and medium scale enterprises (SMEs). Kudos to the agency for suspending them after the outcry of the business community. However, this shows that government regulators still do not appreciate that doing business in Nigeria is tough. Businesses in Nigeria pay 54 taxes across board in Nigeria, according to tax experts. They provide their own power, water, land and infrastructure. Yet, they pay all the levies and fees even when struggling. Analysts say that regulators must begin to put human face to whatever decision that they take. They urge government to seriously harmonise the functions of these regulators and merge the ones that play similar roles. More so, bureaucracy in registering businesses in some of the regulatory agencies needs to end. SMEs trying to register new products sometimes tell tales of woes in the hands of regulators, complaining that they pay a lot of money, yet are forced to wait for months before getting approved numbers. Simple technology can enable regulators to automate their processors and generate numbers within 48 hours. Perhaps, embracing technology can help reduce woes piled on businesses by regulators.

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