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mid growing list of questions trailing the release of the result of the forensic audit into Oando plc and the attendant sanctions levelled against the company, BusinessDay has gained insight, through a letter to the chairman of Oando plc, Oba Michael Adedotun Gbadebo, into why the Securities and Exchange Commission (SEC) moved against directors of the company. The SEC had engaged Deloitte & Touche in 2017 to conduct a forensic audit of Oando plc fol-

0.74 10.52

Court restrains Commission from removing Tinubu, Boyo Stock investors price in possible risks

5Y 0.10

-0.01 12.12

14.41

NGUS nov 27 2019 361.38

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20 Y 0.03

14.26

14.54

NGUS may 27 2020 362.28

APAPA GRIDLOCK

54 Governor Babajide Sanwo-Olu’s promise: “I will rid Apapa of gridlock in the first 60 days of my government.”

Apapa: Reasons gridlock persists despite presidential order …logistics, abuse of standard operating procedure, trailer park delay fingered CHUKA UROKO, JOSHUA BASSEY & AMAKA ANAGOR-EWUZIE

Continues on page 38

Inside PayAttitude drives financial inclusion with first multibank USSD, app P. 2

NGUS aug 21 2019 360.93

Why SEC moved against Oando directors A Iheanyi Nwachukwu

fgn bonds

Treasury bills

Godwin Emefiele (m), governor, Central Bank of Nigeria (CBN), flanked by deputy governors, after he took the oath of office for another term of five years as CBN governor in Abuja.

Analysis

ach passing day presents frustrating scenarios showing why it is becoming increasingly difficult to find solution to the Apapa congestion and gridlock which, in recent times, have assumed embarContinues on page 38

Tuesday 04 June 2019

BUSINESS DAY

news FG offers N15bn Sovereign Green Bond at higher interest rate OLUWASEGUN OLAKOYENIKAN

heFederalGovernment of Nigeria on Monday offered for subscription by book build a Sovereign Green Bond worth N15 billion at a higher interest rate to finance someprojectsinrenewable energy, afforestation, and transportation in the country. Green Bonds, also known as Climate Bonds, are fixed income securities issued to finance projects that have a positive impact on the environment and provide solution to climate change, while book building is a method of offering securities to the public in a way to allow investors bid at various prices or rates within a band specified by the issuer. The debt instrument is the second issuance (Series II) undertaken by the Debt Management Office (DMO) on behalf of the Federal Government of Nigeria (FGN) after a successful debut Green Bond issuance of N10.69 billion in December 2017 which was well received by a wide range of investors. The Series II Green Bond, which is expected to mature in 2026, was issued at a coupon band of 14.40 percent to 14.50 percent per annum compared with the previous Green Bond offered at a coupon of 13.48 percent. The coupon band implies the range at which investors could bid for the instrument.

The issuance of the sevenyear tenor bond “is a further demonstration of the FGN’s commitment to the reduction of greenhouse gas emissions by 20 percent (unconditionally) by 2030, as outlined under the Paris Agreement signed on September 21, 2016”, the DMO said in a statement. As part of the book building process, the debt office said it would work with Chapel Hill Denham Advisory Limited, Capital Assets Limited, Rand MerchantBankNigeriaLimited, and Stanbic IBTC Capital Limitedasissuinghousestotheoffer. Consequently, the DMO stated that it started receiving applications for the offer through the issuing houses on Monday, June 3, 2019. The subscription window for the Green Bond is expected to close on Monday, June 10, 2019, while settlement would be made on June 13, 2019, or two days after the transaction date. The DMO assured that the bond is backed by the full faith and credit of the Federal Government of Nigeria, adding that proceeds from the offer would be solely used for “Green Projects as identified by Inter-Ministerial Committee on Climate Change, approved in the 2018 AppropriationAct,andassessed by Moody’s Investors Service”.

•Continues online at www.businessday.ng

Sanwo-Olu assures of speedy implementation of N873.5bn budget JOSHUA BASSEY

ive days after being sworn in as governor of Lagos State, Babajide Sanwo-Olu on Monday recorded a major first as he signed into law the state’s 2019 budget of N873,532,460,725 prepared by his predecessor, Akinwunmi Ambode, promising a speedy implementation. The budget consists of N393,841,387 recurrent expenditure or 45 percent, and N479,691,730,705 capital expenditure, representing 55 percent of the total. The 40-member state House of Assembly led by Mudashiru Obasa (speaker) had, after passing the budget in April, held back transmission of same to the executive for Ambode’s signature. No official reason was given by the legislature for its action. However, it became obvious that the lawmakers would not have Ambode sign the budget as they had earlier accused him of breaching constitution by spending funds not approved by the House. But pundits had linked the face-off between the lawmakers and Ambode to politics of the ruling All Progressives Congress (APC) governorship primaries of October 2, 2018, in which Ambode, against the

wish of the leaders of the party in Lagos, contested against the then anointed candidate and current governor, Sanwo-Olu. Sanwo-Olu could, however, nothavedelayedthesigningofthe budget any further as the budgetary cycle terminates in May every year. This means that for the new administrationtoeffectivelyfunction and draw from the state’s cofferswithoutbreachingtheconstitution,the2019budgetneeded to be signed into law. Before Ambode’s exit on May 29, governance in the state had slowed significantly, as some ministries, departments and agencies (MDAs) had some of their scheduled events put on hold or cancelled, in what was linked to lack of funds. For example, the annual ministerial briefings of the Ministry of Information and Strategy and the Lagos Corporate Assembly (interface with the business community) were cancelled outright. Sanwo-Olu, who assumed office last week, is seen to be hitting the ground running as he has taken first steps towards addressing major challenges in the state, including waste management, traffic flow, collapsed roads, drainages, Apapa gridlock, among others.

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

Babajide Sanwo-Olu (2nd r), governor, Lagos State, signing the Y2019 Appropriation Bill into law at Lagos House, Alausa, Ikeja, yesterday, with Obafemi Hamzat (2nd l), deputy governor; Hakeem Muri-Okunola (l), head of service, and Gbolahan Yishawu, chairman, House Committee on Appropriation.

PayAttitude drives financial inclusion with first multi-bank USSD, app …Partners banks, insurers, PFAs on payments services MICHAEL ANI

ayAttitude has developed the first multibank USSD and applications to facilitate efficient banking transactions in Point on Sales (POS), Automated Teller Machines (ATM) and mobile (person-to-person transactions) with just phone number. PayAttitude is a financial technology company that leverages on innovative technologies for payments and financial transactions with focus on mobile and digital payments. The products would also help to get on board the well over 36 percent of the populace who are currently unbanked, the fintech company said in Abuja, Nigeria’s federal capital. “Most Nigerian firms do not own the technology they use. In PayAttitude we seek to

change the story by building a foundation that we can say is Nigerian,” Agada Apochi, director/founder, PayAttitude, said. “By developing this product, we hope to contribute in driving the 80 financial inclusion target by 2020 as users of the solutions do need to visit the banking hall to get enrolled. They can also perform such other functions like request for payments, make safethirdpartypaymentsviatheir mobilephoneswithouttheuseof third party channels,” he noted. PayAttitude is a Fintech firm and owns patent for firstof-its-kind “push to receive” technology that enables telephone numbers to be used for payments for goods/service across all channels. With the firm’s multi-bank product, the phone number of a customer automatically becomes the bank account and can perform financial services.

Licensed by the Central Bank in 2013, the firm aims to onboard a minimum of 500,000 customers by 2019 year end and is partnering with commercial banks, insurance companies and health management organisations in delivering financial services across board. The partnership by the firm will enable it, among other things, provide solutions for merchants to receive payments electronically through the use of mobile phones; enable corporate organisations to authorise payments and create prepaid accounts with their mobile phones anywhere; enable holders schedule payments like airtime, bills payment and transfers for a future date automatically. It would also help in providing a platform for value added services such as bill

payment, transfer, airtime top-up and collection services as individuals can open and operate pension accounts. It would also allow holders and users of the product to conveniently buy insurance policies and pay their insurance premiums with their mobile phones and also provide them with access to health care facilities. According to Apochi, customers using the product currently have their bank accounts linked to about eight deposit finance institutions across the country including Access, Sterling, Fidelity, First Bank, Heritage, Polaris and the United Bank for Africa. Other banks’ accounts in the works to get linked include Ecobank, First City Monument Bank (FCMB), Stanbic IBTC, Unity Bank and Zenith Bank, the firm said.

Emefiele begins second tenure, to unfold new 5-year roadmap for CBN, economy Hope Moses-Ashike

overnor of the Central Bank of Nigeria, Godwin Emefiele, on Monday, June 3, 2019 formally assumed duty for a second term after subscribing to the relevant Oath of Office administered by Alice Karau, the apex bank’s secretary and director, Corporate Secretariat Department. This was sequel to Emefiele’s reappointment by President Muhammadu Buhari and confirmation by the Senate. Emefiele, who was received into the bank by the four deputy governors, was elated by the turnout of excited staff that thronged the

venue of the oath-taking ceremony chanting his name. In his remarks after the oathtaking ceremony, Emefiele expressed gratitude to God, President Buhari for nominating him, andtheSenateforconfirminghis reappointment.Healsothanked themanagementandstaffaswell as the media for their support during his first term in office. Emefiele said he would unfold a new roadmap for the bank and the economy in the days aheadafterseriesofconsultations with critical stakeholder groups. He charged all stakeholders to strengthen efforts at building a healthy and stable system in the best interest of Nigeria. Emefiele also reiterated the goal to make the CBN more

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people-focused, adding that the bank remained resolute in the belief that it must play an active role in supporting job and wealth creation in Nigeria. In reviewing the various efforts taken by the CBN to reduce weaknesses in the Nigerian financial system as well as support improved productivity of the economy, Emefiele said more work still needed to be done in building a stronger economy for the benefit of all. He said the pace of Gross Domestic Product (GDP) growth, at below the rate of Nigeria’s annual population growth at 2.7 percent, remained fragile. He, therefore, pledged that the bank would continue to collaborate @Businessdayng

with the fiscal authorities to strengthen growth and wealth creation in the country. “We must strengthen our efforts over the coming years to stimulate growth and job creation in critical sectors of the economy, which will help insulate our economy from shocks in the global economy,” Emefiele said. “We must also work to build a healthy and stable financial system that contributes to the growth of our economy, while preserving price stability,” he added. The CBN governor is expected to address a World Press Conferencenextweek,wherehe will unfold a new roadmap for theapexbankandtheeconomy.

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NEWS

Investment drive: GIZ leads investors’ tour of Edo Innovation Hub, production, creative centres

Transparency, accountability in governance take centre stage in ICAN

do State Skills Development Agency (EdoJobs), in collaboration with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH under its Skills DevelopmentforYouthEmployment in Nigeria (SKYE) programme, has concludedplanstohostover20private sector companies, investors, donor organisations and financial institutions to a working visit of various skills development and job creation initiatives in Edo State. Ukinebo Dare, senior special assistant to Governor Obaseki on SkillsDevelopmentandJobsCreation, andhead of EdoJobs,said the Governor Godwin Obaseki-led government was expanding centres for investors to key into the Federal Government’s development agenda. “We are really excited about our growing collaboration with GIZ through its Skills Development for Youth Employment (SKYE) programme. They are currently supporting our job creation initiatives in the state,” Dare said. The two-day event will give visiting companies and stakeholders the opportunity to tour the Edo Innovation Hub, Edo Production Centre on Sapele Road, Edo Food and Agriculture Cluster and the Edo Creative

Hub. These Centres show how far the state government has gone in building local capacities in innovation and technology for manufacturers,thecreativeindustry, and small-scale businesses. The highpoint of the event will be the launch of the Edo Production Centre. The Centre is a multipurpose facility created with a conducive environment to boost productivity for manufacturers and small-scale businesses. She said the Edo Production Centre and other centres in the state hold a lot of investment opportunities for companies interested in investing in the state. The state government recently signed the bill setting up EdoJobs into law to ensure the sustainability of these initiatives, geared towards creating wealth and boosting the Gross Domestic Product (GDP) of the state. The relationship between EdoJobs and GIZ’s SKYE programme is in their thematic areas, which cut across youth skills development,jobcreation,industrial manufacturing, and agriculture, all of which are tied to the Sustainable Development Goal (SDG) 8 -promotesustained,inclusiveand sustainable economic growth, full and productive employment and decent work for all.

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KELECHI EWUZIE ewly elected president of the Institute of Chartered Accountants of Nigeria (ICAN), Nnamdi Anthony Okwuadigbo, has pledged to champion the crusade for transparency and accountability in governance under his tenure as president. Okwuadigbo says in an era the economy virility and clout of any nation are inextricably bound to the degree of adherence to universally accepted ethical value, members of the accounting body must, in words and actions, remain the foe to deceits and champion of honesty. Okwuadigbo, who spoke in Lagos Monday during his investiture as the 55th president of the accounting body, said he would continue to offer constructive advice to all tiers of government to promote the culture of professionalism in the management of public resources, thereby facilitating the process of economic growth and development. Accordingly to Okwuadigbo, “We must raise the profile of our contributions to public policy processes beyond the submission of solicited or unsolicited memoranda to the various arms of government.” He further said under his tenure, he shall make sustained efforts towards providing robust

contributions to various relevant bills from the National Assemblies, adding that ICAN shall engage governments at all levels intensively on pertinent burning national issues. “We shall adopt appropriate technology tools to improve our processes. In this presidential year, we shall reinvigorate our E-learning facilities. This will be of benefits to our members in diverse locations to maintain and be up-to-date with their Mandatory Continuing Professional Education (MCPE). “We shall also adopt effectively our E-meeting platforms and facilities. If effectively utilised, the cost of Committee meetings will be reduced as well as travelling risks and inconvenience to our members attending meetings in Lagos from various destinations”, he said. The new ICAN boss disclosed that forming a partnership that would mutually be beneficial was a strategy his administration intends to pursue, particularly as they revamped ICAN professional examination syllabus. In his word, “In this review process, the Institute would seek the collaboration of accredited universities both to enhance the quality of their training curricula as well as an offer of a unique degree programme for chartered accountants.”

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Lagos plays host to Nigeria’s first West Africa gold confab IFEOMA OKEKE

s the Nigerian government continues to advocate a shift from petrodollar economy, the mining sector is readily coming to the fore, as the First West African gold conference holds in Lagos. The event, aims at strengthening West Africa’s gold value chain as well as enabling relevant policies and market infrastructure for the gold ecosystem by positioning Nigeria as pivotal to the sector’s development, will bring together 150 critical gold sector stakeholders from over 14 countries. The conference, being hosted by Nigeria’s first gold refinery, Kian Smith Gold Refinery, in collaboration with Noemdek, a Nigeria-based international advisory firm, comes up June 25-26. Themed the “Gold West Africa” conference, the event will help promote a strong West African public and private sector lobby around gold, put the region top of mind in gold mining, refining all that pertains to gold as well as spur economic growth for countries (Ghana, Burkina Faso, Mali, Cote D’Ivoire, amongst others) with gold. According to Nere Teriba, the managing director of Kain Smith Trade & Co Ltd, who noted that the Nigerian narrative on gold is

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advancing from ‘gold exploration and mining’ to ‘gold market and economy. She said: “The Gold West Africa Conference is focused on developing the gold value chain in the region towards establishing West Africa as a gold market centre. The development of the gold value chain in Nigeria has strong dependencies on gold, trade and monetary policies across ECOWAS and the geographical region of Sub-Saharan Africa.” The event promises a relevant conference agenda that speaks to each stakeholder and all those interested in the gold value-chain. On his part, Kolade Apata, the co-host, of the conference, said: “For the folks who are fortunate enough to attend the conference, they will quickly realize the investment opportunities available with the launch of the Gold Refinery. For example, Nigeria could easily become the jewelry and gold trading hub in West Africa.” West Africa has a rich gold economy. Previously, gold mining in the region was extensive and valuable and influenced social and economic institutions but the contemporary gold industry has been quite unsatisfactory although it has been thriving. The industry has the potential to unlock the West African region as the gold market centre of Africa.

Tuesday 04 June 2019

BUSINESS DAY

news Ex-NIMASA boss, one other bag 42-yearjail term each with option of fine Innocent Odoh, Abuja

ustice Mojisola Olatoregun of the Federal High Court sitting in Ikoyi, Lagos, on Monday, June 3, 2019, sentenced Calistus Obi, a former acting directorgeneral, Nigerian Maritime Administration and Safety Agency (NIMASA) to 42 years imprisonment. This was disclosed in a statement issued on Monday by Tony Orilade, acting head of media and publicity of the Economic and Financial Crimes Commission (EFCC), adding that also sentenced to 42 years imprisonment was Alu Dismas, an aide to Patrick Akpobolokemi, a former director-general, NIMASA. Justice Olatoregun found the defendants guilty on counts two, three, four, six, seven and eight, and sentenced them to seven years imprisonment each on each count. The Judge, however, gave the convicts an “option of fine” of N42 million on each of the count. Justice Olatoregun also imposed a N10 million fine on the third and fourth convicts: Global Sea Investment and Grand Pact

Limited. The convicts were arraigned on April 12, 2016 on an eight-count charge bordering on conspiracy, conversion, and money laundering to the tune of N136 million, the statement said. One of the counts read: “That you, Callistus Nwabueze Obi and Dismas Alu Adoon, on or about the 5th day of August 2014, in Lagos, within the jurisdiction of this Honourable Court, did conspire among yourselves to commit an offence to wit: Conversion of the sums of N111, 000, 000.00 (One Hundred and Eleven Million naira) property of NIMASA, knowing that the said sums were proceeds of stealing, and thereby committed an offence.” They both pleaded not guilty to the charges, thereby setting the stage for their trial. During course of the trial, the prosecution called eight witnesses and tendered several documents, which were admitted in evidence by the court. When the sentencing hearing began, prosecution counsel, Rotimi Oyedepo, urged the court to pronounce

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sentence prohibiting the crime and impose maximum sentence on the convicts, having allowed the court to go through the rigor of full-scale trial without taking advantage of Section 270, which would have saved the time of the court with accelerating the matter. He also told the court that Section 15(3) of the Money Laundering Prohibition Act had limited the discretion of the court in sentencing the convicts. He explained regarding the crime committed by the convicts, that the Section specifies that the “court shall sentence not more fourteen years and not less than seven years imprisonment”. He urged the court to order the convicts to make restitution or make compensation to the victim of the crime, which is NIMASA and order the return of the embezzled funds and a company, LA Diva Hotels and Events Limited situated at Plot 12, Phase 4, Cora Area, Asaba, Delta State, belonging to the first defendant, which forms part of the proceeds of crime as stated by the first defendant in the cause trial.

7 Nigerian entrepreneurs in Hague as global investors seek innovative start-ups ODINAKA ANUDU, Hague, Netherlands

lobal investors are in The Hague, the Netherlands, to seek innovative start-ups and entrepreneurs that require funding for expansion. Some of the investors willing to throw money into start-ups are Bank of America; BlackRock, a New York-based investment management corporation; the Carlyle Group, an investment group in the US, and SVB. Others are StartUp Delta, a Dutch start-up connector; the Dutch Pension Fund, and KKR, a private equity firm and asset manager. At least, seven chief executives of Nigerian start-ups are participating in the programme, which is world’s biggest gathering of creative and innovative entrepreneurs, investors and policy makers. Some of the Nigerian entrepreneurs participating are the chief executives of Livestock247. com, DrugStoc, Havenshill Synergy, Mother’s Delivery Kit, Snapshield International, Male Integrated Science, and AACE Foods. They are participating in the Global Entrepreneurship Summit that has 2,000 entrepreneurs, investors and policy makers willing to change the way

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... US calls for IP protection things are for better. Speaking at the opening reception of the GES in The Hague on Monday, Michael Pompeo, US secretary of state, said the entrepreneurs would have failed many times before becoming success stories. “People like you here you are a living proof that innovation is driven by competition and not by government,” he said, saying government leaders could bring value to entrepreneurs only if they would create the necessary environment for growth. For Pompeo, government must protect the physical and intellectual properties, saying property rights were the bedrock of successful economies. He said entrepreneurs needed the rule of law and the basic predicable environment to unleash their potential, saying President Donald Trump slashed taxes to support firms from all over the world to invest in the US. Mark Ruttte, prime minister of the Netherlands, said innovation and sustainability were key to development. He explained that strong countries were built on entrepreneurship and rule of law, adding that healthy competition and protection of intellectual property would benefit the world more.

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The GES’ theme ’ The Future Now’ is focused on critical sectors such as energy, agriculture and food security, health, water and connectivity. “True entrepreneurship can only flourish in a free and open society, a society built on rule of law,” Pauline Krikke, mayor of the Hague, said. “A better future is a matter for us all and you are people who are dedicated to do that,” she said, adding that passionate entrepreneurs used their creativity and talents to create a better world. The chief executive of Nigerian-based Liverstock247.com Ibrahim Maigari Ahmadu told BusinessDay that he was working to give life to the livestock industry in the country. “We are investing heavily in production of livestock. We give the herders feed, drugs and the market. We ask them to stay where they are and we give them market,” he told BusinessDay. Chibuzo Opara, co-founder of DrugStoc, said his firm ran a cloud-based, multichannel platform connecting manufacturers of medicines to hospitals and pharmacies. “We work with providers to bring solutions. We work to eliminate counterfeiting and give credibility to the market,” he said.

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Our children, our heritage: Let’s nurture them STRATEGY & POLICY

MA JOHNSON

he International Children’s Day is a day set aside by countries to celebrate children. The day is celebrated on various dates in different countries. Nigeria celebrates children’s day every 27 May. The law in Nigeria has set the age of a child as 18 years or below. To every Nigerian child, I say, though belatedly, “happy children’s day.” This article is dedicated to all Nigerian children for keeping faith with their parents, guardians and the government. Celebrating children for who they are is not just sufficient. The celebration is to bring awareness to all children that they are our future and that we care for them. Children are indeed our heritage and we owe it a duty to nurture them. Children are not only important to our country. They are equally important to our Creator and they form an integral part of the family system. The Holy Scripture tells us that “Lo, children are a heritage of the Lord; and the fruit of the womb is His reward. As arrows are in the hand of the mighty man, so are children of the youth.” Children are all entitled to fundamental human rights as reflected in the 1989 International Human Rights Treaty. International organisations

have been working with policy makers for good health care and education of children and to ensure that their rights are protected globally. You will recall the United Nation’s (UN’s) led initiative for the education of children on a global scale. Ban Ki-moon, then Sec Gen of the UN led initiative for the education of children. Firstly, he wants every child to be able to attend school by the year of our Lord 2015. Secondly, to improve the skill set acquired in the schools and finally, implementing policies regarding education to promote peace, respect and environmental concerns. Even the UN’s Sustainable Development Goal number 4 mandates all countries to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all by the year 2030.” Quality education is a fundamental human right and it is indispensable for the achievement of sustainable development. Today, most children in our society are disadvantaged and they cannot have access to quality education. On a daily basis, children face all sorts of challenges. It is most unfortunate that many children are ill-treated by those who are expected to take care of them. Children have experienced abuse, exploitation, and discrimination. They are used as labourers, immersed in armed conflict, living on the streets, suffering from differences be it religion, minority issues, and disabilities. The Child Rights Act prescribes punishment to parents who expose their children to various forms of abuse. Due to insecurity in most parts of the world and our country in particular, children are feeling the effect. But enforcement has always been the problem.

Nigerian children are in Internally Displaced Persons’ camps across the country. They are displaced because of insurgency, and most of them have suffered and are still suffering from physical and psychological trauma. When parents are displaced due largely to reasons bothering on insecurity, children will be also moved from their homes. Children are the future of our country. But when many children are deprived of decent living, one can safely say there is an attack on the future of our country. For goodness sake, over ten million of Nigeria’s children are out of school while hundreds of thousands are living on the streets. If indeed we say that children are our heritage, then it is the responsibility of parents, guardians and state governments to encourage them. Those in government at state and local levels must not pretend that all is well with children living on our streets. Parents have the responsibility to take care of their children. But if parents are not responsible for their own children, they have denied their faith and such act of neglect, according to the Holy Scripture, is worse than an infidel. Do all children living on the streets of the most populous country in Africa belong to unbelievers? I don’t think so. Even in many cultures in Nigeria, there is no such status as illegitimate child. So why have some parents chosen to adopt the “fire and forget strategy” by abandoning their children after birth. Some of these parents will tell you they cannot cope with the expenses of providing for their children because the nation’s economy is bad. So immediately any child from these parents can walk, he or she is on the

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...when many children are deprived of decent living, one can safely say there is an attack on the future of our country

streets making a living by any meanslegal or illegal. It is on the streets they pick all manner of habits. Then we all say, there is insecurity in the country. Some parents do not know where their children are currently residing. Neither do they know what their children do for a living. It is very sad. However, these parents expect their children to provide money for them to live on. What a terrible world? How then do we nurture our children? Parents must be aware of stages in the development of our children so that we do not expect too much or too little from them. Children must be encouraged to express their feelings and views on any subject matter. And their views and feelings must be respected. Equally, the society expects children to respect, give recognition to, and honour their parents and those in constituted authority. This is very scriptural. Every child living under his or her parent’s roof must respond to, accept and adhere to the rules his or her parents have set as guidelines. Children must obey their parents. This is not a thing for one moment, but it is for a life time. Children need to give their parents and the elderly respect and honour at all times. It is only when this is done that one can say that we are building a nation. It is only when this is done that we can say without any fear of contradiction that we are building a nation. Let me draw inspiration from Nelson Mandela by saying that history will judge us by the difference we make in the everyday lives of children. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

FinTech regulation in Nigeria: Too much of a ‘good thing’? Joseph Onele

Step in the right direction? ate last year, the Central Bank of Nigeria (CBN), in a bid to create a new regulatory and licensing regime for Payment System Banks (PSBs) in Nigeria, issued the Guidelines for Licensing and Regulation of PSBs in Nigeria (the ‘Regulation’). This article seeks to underscore the need for a regulation like the instant one, to always strike a balance, between the protection of the interests of consumers, while promoting innovation, growth and financial inclusion. It should be noted, however, this article does not attempt to pass ‘full judgement’ on the age-long fight for regulation preference or supremacyamong champions of performance-based or goal-setting regulation or even self-regulation over prescriptive regulation. For starters, the regulation attempts to accord with the National Financial Inclusion Strategy (NFIS) which seeks to reduce the percentage of Nigerians that are excluded from financial services from 46.3% in 2010 to 20% by 2020. While the intention behind the NFIS is quite laudable, it remains to be seen whether the seemly lofty goals of the NFIS will be achieved by 2020. The regulation came just after the CBN had reiterated the need to secure payment systems and curb fraudulent activities in the financial sector, while having in place, regulations that protect online, mobile and payment services in Nigeria. The regulation can arguably be attributed to the efforts of selected stakeholders in the industry, to develop efficient and reliable electronic payment systems in Nigeria.

While a read of the rationale for the regulation is likely to leave one with the impression that the regulation was made with the intention of protecting the financial system in Nigeria and in particular, protecting users of online, mobile and payment services, FinTech enthusiasts could argue that the regulation hardly takes care of the interests of both existing and potentials FinTech operating as PSBs. The position of the FinTech enthusiasts is better appreciated when one looks at the financial requirement for grant of the PSB license. Requirement for the PSB License: How onerous? Apart from the licensing, prudential regulation, risk management and corporate governance requirements imposed in the regulations, the financial requirement for grant of the PSB license has been great source of concern to FinTech companies. This is because for a PSB license to be given by the CBN, the applicant company is expected to demonstrate the ability or show through credible evidence and compelling documentation, that it can meet the minimum capital requirement of Five Billion Naira (approximately $13.9 million). For FinTech enthusiasts, the approximately $13.9 million mminimum capital requirement may come off as being on the high side, capable of stifling growth, kill innovation, militate against the actualization of the 20% exclusion rate by 2020 and by effect, the actualization of the financial inclusion contemplated under the NFIS. Towards effective regulation: Finding the balance regulation and innovation The foregoing in mind, there is a need to strike a balance between innovation and regulation of innovation. No doubt, the emergence of FinTech in our financial system accentuates some known risks within the financial system. Taking into consideration the fact that the banking industry www.businessday.ng

lost about N12.30 billion to various frauds in the banking system between 2014 and 2017, it is very expedient for financial sector regulators, and in this particular instance, the CBN, to come up with innovative ways of securing electronic transactions, while ensuring that such regulation does not stifle growth, kill creativity and murder ingenuity. FinTech companies have facilitated the expansion of electronic payments. They have also helped in providing financial services to previously unreached groups. The important role they play in the actualization of financial inclusion our society must be given the rightful mention and very much deserving of commendation. Hence, it augurs well that FinTech companies should not be inhibited through onerous regulations that discourage innovation and stifle growth. Given how closer our world is now, more than ever, susceptible to changing times with respect to disruptive innovation and impacts of the emerging technology, particularly, in the financial services sector or industry, it becomes pertinent for the CBN to ensure that a balance is reached in enacting regulations that cater for the interests of FinTech companies offering financial services, including payment services on one hand, and protection of consumers on the other hand, with a view to ensuring the development of a secure, competitive and innovative environment for electronic payments. This point even becomes more crucial should the CBN be wholeheartedly committed to the realization of the financial inclusion strategy and cash-less policy. Conclusively, suffice to say that the CBN will do well to strike a balance between having in place, a regulation that encourages the growth of innovations, while harmonising payment operations in Nigeria. This is because adopting dynamic policies and regulations for payment

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systems that are targeted at maintaining a delicate balance amongst all the industry players, FinTech companies and consumers as well as the general public, will ultimately bring about a friendly and blossoming environment, where innovation, growth and safe transactions can be guaranteed. Final remarks Given how closer our world is now, more than ever, susceptible to changing times with respect to disruptive innovation and impacts of the emerging technology, particularly, in the financial services sector or industry, it becomes pertinent for the CBN to ensure that a balance is reached in enacting regulations that cater for the interests of FinTech companies offering financial services, including payment services on one hand, and protection of consumers on the other hand, with a view to ensuring the development of a secure, competitive and innovative environment for electronic payments. This point even becomes more crucial should the CBN be wholeheartedly committed to the realization of the financial inclusion strategy and cash-less policy. Conclusively, it suffices to say that the CBN will do well to strike a balance between having in place, a regulation that encourages the growth of innovations, while harmonising payment operations in Nigeria. This is because adopting dynamic policies and regulations for payment systems that are targeted at maintaining a delicate balance amongst all the industry players, FinTech companies and consumers as well as the general public, will ultimately bring about a friendly and blossoming environment, where innovation, growth and safe transactions can be guaranteed. Onele is a Legal Practitioner based in Lagos. He wrote via – thejosephonele@gmail.com

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Tuesday 04 June 2019

BUSINESS DAY

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Jobs, jobs, jobs (2)

Rafiq Raji

was the keynote speaker at an economic dialogue on Nigeria organised by Konrad Adenauer Stiftung (KAS) and the Delegation of German Industry and Commerce in Nigeria (AHK) on 23 May 2019. Titled “Road to Economic Development: Challenges and Opportunities”, the dialogue was aimed at shaping the priorities of the incoming second administration of President Muhammadu Buhari. The following is the 2nd part of my speech. I also include some of the points raised by other participants. Happy people, good government In a matrix I presented at the dialogue, I identified the key issues the average Nigerian would consider to be “development”. A happy people have jobs, enjoy

good infrastructure and live in security. A good government is elected through a credible political process. And because corruption is frowned upon, a good government uses the revenue it earns to provide or facilitate what would make its people happy: jobs, infrastructure

and security. On the panel at the KAS economic dialogue, security was the number one priority for Dr Obadiah Mailafia, a presidential candidate in the 2019 elections. He related a story of the harrowing experience of a relative of his in violent clashes in his area of the north to justify this. Dr Mailafia also asserted the need for every Nigerian to be registered with the authorities. In other words, every Nigerian should have a national identity card. For Olaf Schmuser of Commerzbank, the government spend on

debt servicing was a major source of concern. In addition to highlighting the need to address the problem of power shortages, her forte, Onyeche Tifase of Siemens asserted the need to develop the country’s human capital; especially in light of our increasingly digitalised world and how information technology has democratised access, thus allowing Nigerians and indeed other Africans to be active participants. The cultural constraint on development was also an issue that resonated with her; albeit she reckons a shift in mindset towards one of excellence in our part of the world is inevitable. To achieve the things that would make the people happy, that is, jobs, infrastructure and security, a country must be able to attract investment. And for the state to do its part to bring this about, it must have the capacity to do so. Simply put, the two things needed to make the people happy and the government good, are investment and state capacity. Underpinning whether all these would be achieved in Nigeria, or in fact any other country, however, is culture. Incidentally, the culture of Germany, the sponsoring country of the economic dialogue, is an ex-

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To achieve the things that would make the people happy, that is, jobs, infrastructure and security, a country must be able to attract investment

cellent example of how a society’s culture is germane to development. Germany has a culture of excellence, precision and persistence. Such is its culture’s knack for precision that there are no two words in the German language for anything, one Nigerian employee of its consulate in Lagos tells me at the dialogue. Unfortunately, our culture cannot be similarly praised in regard of these values. And because culture is the foundation of everything else, which I show in my matrix by putting it at the bottom, it can be attributed for why Nigeria continues to flounder. In fact, I am convinced that the ongoing exodus of middle-class Nigerians to Canada and elsewhere abroad, is motivated not only by a desire for a better education for their children, but also to inoculate them against some of our bad cultural practices. True, they do not entirely escape it even while abroad. But they are better able to make informed choices with relatively little or no costs. That said, what is to be done in the immediate term? “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

How employees’ wellbeing drives organizational performance

Stephen Omojuyigbe

any organizations are used to the saying that the people are their greatest assets. Now, saying that is not enough if organizations have not taken time to create a culture that will promote the overall employees’ wellbeing. You will agree with me that the industrial revolution produced organizational philosophies that saw people as mere economic tools and resources. Indeed, this philosophy is inadequate in this knowledge worker age where organizations need to win the heart and mind of their people if they truly want to optimize their performance. Organizations that pay attention and care about the wellbeing of their people would definitely achieve a more lasting competitive advantage when compared to other organizations that are aloof in driving the wellbeing of their people. The research on this topic is quite clear and very compelling: your workforce’s wellbeing directly affects your organization’s bottom line. Generally speaking, wellbeing is all the things that are important to how we think about and experience life. It is balancing

work and life. Organizations have a direct impact on the wellbeing of their people. When companies embrace the opportunity to improve employee wellbeing, they create more engaging places to work and greater returns for the organization, they help strengthen their employees’ families and greatly increase their enjoyment of life. However, when organizations opt to ignore employee wellbeing, when they dismiss it as something that’s ‘none of their business’, they erode the confidence of those who follow them and limit their organization’s ability to grow. In a study by Gallup, it was shocking to discover that only 12% of employees strongly agree that they have substantially higher overall wellbeing because of their employer, and the vast majority clearly think that their job is a detriment to their overall wellbeing. There is an urgent need for organizations to change the narrative. While many companies continue to ignore the wellbeing of their people as if it is beyond their scope, they are making a critical mistake as research clearly indicate that employees with low wellbeing have low engagement and will quickly drag the organization’s performance down. The well-being of each person in your business is critical to achieving your organization’s goals and fulfilling its mission. Every day in your organization, some employees don’t show up, don’t give their best effort, erode your productivity, and cost you millions of revenues because they are struggling or suffering in important areas of their lives. Getting involved and helping them is in your corporate interest.

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In one poll, employees were questioned about whether their managers (organization) cares about them as a person, the result found that people who agreed with the statement: - Are more likely to be top performers - Produce higher quality work - Are less likely to be sick - Are less likely to change jobs - Are less likely to get injured on the job In another study Gallup conducted in the US, compared with employees who have low wellbeing, employees with high wellbeing have 41% lower health-related costs to the employer, a difference of $2,993 per person. For every 10,000 employees, this represents a difference of nearly $30 million. The same studies suggest the healthrelated costs for a 60-year-old with high wellbeing are lower than those for a 30-year-old with low wellbeing. Other findings from this study include: 1. Workgroups made up of employees with low career wellbeing are less likely to retain workers and have more incidents of workplace injury and theft. 2. Having employees who have high wellbeing improves an organization’s image and increases its positive effect on the community. Aside the study, now imagine the impact on your business if your employees are generally healthy and have stable marriages! It is very key that organizations should not only understand that they are in the business of boosting their employees’ wellbeing, but in addition, they should be able to use this knowledge as a competitive

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advantage to recruit and retain employees. They know it will be easier to attract top talent if they can show a prospective employee how working for the organization will translate into better relationships, more financial security, improved physical health and more involvement in the community. Final note Organizations shouldn’t just tell employees they care about their wellbeing. They must take actions if they want to see results. And this requires continual measurement, follow up and providing resources (training, job conditions, job designs) to help workers manage their wellbeing over time. Many of the most successful organizations have worked systematically to optimize their levels of employee engagement, they are now turning their attention to employee wellbeing to gain an emotional, financial, and competitive advantage. How important is building employee wellbeing in your organization? Over the years, through my propriety program, Master Your Life, (a training intervention that my company deploys to improve employee wellbeing) organizations have reported improved productivity and engagement; decreased absenteeism and transformed overall culture and energy in their workplaces. I invite you to let me know how I can support your quest for the improved wellbeing of your workforce. Let’s truly make our employees our greatest assets. Omojuyigbe is the Principal Consultant at Wellbeing Consulting Afri. He can be reached via: so@stephenwithaphlive.com and 08060473524

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Tuesday 04 June 2019

BUSINESS DAY

EDITORIAL Publisher/CEO

Frank Aigbogun editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua ASSIST. SUBSCRIPTIONS MANAGER Florence Kadiri GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

Ahead with direct funding of local governments, despite

he effort to institute direct funding of Local Government Councils scaled two tests at the end of May. The Supreme Court dismissed the objections of governors to the change and to their practice of dismissing elected LG executives. Chairmen of local governments in Oyo State refused to accept the peremptory dissolution of the elected councils by new Governor Seyi Makinde, citing a court injunction. Beginning June 1, Local Government Councils would receive their allocation of funds directly from the federal purse. The Nigerian Financial Intelligence Unit (NFIU) forcefully inserted itself into the mix to bring about this paradigm change. Understandably, the governors are up in arms, accusing NFIU of dabbling “into a matter that is beyond its mandate”, ridiculing the integrity of the governors and acting against the constitution. While there is indeed unease about the implications for federalism on both the for and against sides of the NFIU plan, the ayes have it overwhelmingly. Many citizens support the NFIU action because of

the failures of the LG system traced mainly to the governors. BusinessDay supports the measure for the many benefits it will bring, including contestation of the constitutional issues for clarity. For 20 years, the local government system has failed the country. Development does not happen at the arm of government closest to the people contrary to the intendment of the constitution and various reforms. Why? Governors turned the local governments into branch offices that have responsibility without accompanying financial and political authority. They withhold funds sent into the Joint Local Government and State Accounts and stultify political development at that level by appointing caretaker committees instead of allowing elections into the LGs. They dismiss elected local government councils. More than internal matters are involved in the NFIU action. It reflects the concerns of foreign governments and agencies about transfers and withdrawals traced to the local government funds that governors supervise. The NFIU stated, “Having realised through analysis that cash withdrawal and transactions of the State/Joint Local Government Accounts (SJLGA)

poses biggest corruption, money laundering and security threats at the grassroots levels and to the entire financial system and the country as a whole, the NFIU decided to uphold the full provisions of Section 162 (6) (8) of the 1999 Nigerian Constitution, as amended, which designated State Joint Local Government Account into which shall be paid allocations to the local government councils of the state from the federation account and from the government of the state. The amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state and not for other purposes”. With funds at their disposal, LG executives would have no more excuses for failure to deliver on their mandates. It should encourage healthy competition among LGAs, provide a platform for young politicians and allow them to build a track record of performance. It also follows best practice in most democracies. Top performers at LG level move on to higher levels of government as governors, senators and representatives. Some contest for the presidency with a solid record. More significantly, direct funding should make LGAs

work for the people as the arm of government closest to citizens. It should revive interest in governance at that level. If they are smart, the LGA executives should know that the implementation of this scheme is their opportunity to prove that democracy can deliver the goods to citizens, thereby averting the looming revolt of the poor. The matter of the alleged breaches of the constitution by the action of NFIU should excite our best legal minds. The governors are themselves not innocent of breaching the provisions of the constitution regarding local government funds and administration. Currently, many states have local government administrators because the governors refused to allow elections. BusinessDay’s support is not unconditional. We recommend that monies disbursed to LGAs should be published, as onetime Finance Minister Ngozi Okonjo-Iweala instituted years ago. Citizens and civil society organisations should monitor fund utilisation and be involved in defining priorities and programmes. LGAs should not see the development as “their turn to eat”. Let us test this new proposition for all the good it can bring.

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

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo

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Tuesday 04 June 2019

BUSINESS DAY

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When political will is not enough The Reformer

JOE ABAH

henever the public service is not working as well as it should, people often point to one overriding reason: lack of ‘political will.’ A bit like the term “restructuring”, Political will is a nebulous concept that means different things to different people. For many, it is the absence of clear commitment from the very top of government, often the President, to ensure that what should be done is done. However, I argue in this article that a clear intention, even from the number 1 citizen, that certain things should be done in certain ways, is often not enough. Faced with the rising cost of governance, President Jonathan set up the Oronsaye Committee to look at ways to “rationalise” the number of agencies, parastatals and commissions that the federal government has. The Committee had four main objectives in its terms of reference: provide a comprehensive listing of all agencies, parastatals and commissions; recommend which agencies should be scrapped; recommend the merger of agencies with duplicate functions, advice government on the agencies that should be commercially viable and which government should no longer make budgetary appropriations for; and make any other recommendations that will help to reduce the cost of governance. Apart from publishing a White Paper which rejected most of Oronsaye’s recommendations in 2014, not much was done by the Jonathan government on this. Not even implementing those recommenda-

tions that it had accepted and gazetted in a 2014 White Paper. Even before he took power in May 2015, President Buhari had, at various fora, highlighted the need to reduce the cost of governance by reducing the number of agencies and parastatals, in line with the recommendations of the Oronsaye report. He signified his intent in this direction by reducing the number of ministries from 31 to 24 in late 2015. The Oronsaye report submitted in 2012 had catalogued 541 agencies of the federal government. However, the Director-General of the Budget Office of the Federation announced in January 2019, that the 2019 Federal Budget had had to make provisions for more than 1,100 Federal Ministries, Departments and Agencies. So, a pertinent question to ask is: what happened to the “political will” to reduce the number of agencies, parastatals and commissions, both from the previous and current administration? Assuming that the intentions of Presidents Jonathan and Buhari to reduce the cost of governance by reducing the number of agencies and parastatals were honest and genuine, it is clear that even ‘political will’ from the very top is only a necessary but insufficient condition for reforms. This is especially the case in a federal democracy where power is distributed to various power blocks. Most agencies and parastatals are set up by law. They cannot be scrapped or merged without the National Assembly. The National Assembly will often raise the emotive issue of potential job losses and not take forward any such proposals. Conversely, the National Assembly has a perverse incentive to create more and more agencies, with scant regard to their impact on the wage bill and the cost of governance. Every legislator wants to show that they have “attracted” development to their area. They will therefore sponsor bills that seek the creation of yet another “university of education”, even though there is already a federal university, state university, polytechnic and college of education in their constituency. It is clear, therefore,

that ‘political will’, even by the President, is not enough to get any movement on this issue. Of course, things will be very different if we were in a military dictatorship. We are not and most informed Nigerians have no appetite to return to military rule. There is, therefore, a need to better define what we really mean by ‘political will’ when it comes to driving public service reforms in a democracy. I submit that in a democracy where power is distributed across various bastions, real political will has four main components: a capacity to understand a problem; the presence of a critical mass of people across the arms and/or tiers of government willing to do something about it; the power, commitment, resilience and insulation from the status quo to be able to do something about it; and a clear approach supported by the critical mass for tackling the problem. Where these are lacking, political will, even by the President, is insufficient. Although ‘political will’ is often made to sound as the panacea to every reform problem, it is one of the hardest things to get in a democracy with distributed power, using our criteria above. What then do we do? Do we wait for the occasional happy accident when circumstances may favourably align to produce the political will we need, or is there something else we can do about it? I would argue that in our current system, the ‘technical will’ of public servants presents an equally viable, if not a more viable, alternative. As I said earlier, most agencies are set up by law, with powers enshrined in statutes. A rather surprising fact that I learnt when I was a DirectorGeneral in the federal government is that, quite often, nobody actually stops the technocrat from delivering on their legal mandate. The limitation on actions is often placed by the technocrat him or herself, based on what s/he perceive that their principal may or not want. In reality, any politician will jump on the bandwagon and take the credit when the technocrat is doing well. On the other hand, the head of a government organisation is appointed but not told what to deliver. Government often

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Although ‘political will’ is often made to sound as the panacea to every reform problem, it is one of the hardest things to get in a democracy with distributed power

expects senior government officials to be sufficiently capable to use the laws setting up their organisations to deliver their mandate. When those laws are insufficient or are outdated, it is the responsibility of the chief executive to ask for more powers, first through the Federal Executive Council and then through the legislature. I would argue that it is technical will, perhaps even more than political will, that drove the improvements in NAFDAC under Dora Akunyili, in the EFCC under Nuhu Ribadu and in the Federal Inland Revenue Service under Ifueko OmoiguiOkauru. It is technical will, perhaps more than political will, that is currently driving the improvements in the National Bureau of Statistics, the Nigeria Extractive Industries Transparency Initiative, the Office of the Auditor-General of the Federation, the National Centre for Disease Control and the Consumer Protection Council. It is certainly technical will, much more than political will, that drove the modest improvements that I was able to make as Director-General of the Bureau of Public Service Reforms. In conclusion, political will is, of course, vitally important when driving reforms. It makes the life of the reformer a whole lot easier when it exists. Knowing that the reformer has support for their actions from the highest level of government insulates the reformer from distractions and unnecessary bottlenecks. However, in a federal democracy where power is distributed, true political will can be very difficult to get. Where it is lacking, as it very often is, the technical will of public sector chief executives can achieve a lot more than waiting for the happy accident of a convergence of political will, simply by making full use of their mandates and powers provided by law. They just need to conquer their own fears and choose legacy over the comfort of anonymity. Dr Abah is the former Director-General of the Bureau of Public Service Reforms. He is currently the Country Director of DAI, a global development company. The views contained in this article are personal to him and do not represent the views of any employer past or present.

Uncontrolled population growth in Nigeria: A personal narrative Emmanuel Unaegbu

here is the saying that ‘our strength lies in our population’. In many ways, yes. It is also true that our population can be a curse. In fact, Nigeria’s projected population growth seem to suggest the later. We don’t plan with our growing population in mind and thus questions what strength our population can mirror. But how is Nigeria’s population the issue? Last year, I came across the United Nations, World Population Prospects population data which projected Nigeria’s population to hit 793 million by 2100 (medium variant). My initial reaction was one of denial. But as I continued my research, I came across some population estimates: human population 196 million, median age 17.9 years, fertility rate 5.67 children per mother. A fertility rate of 4 children per mother means double population growth and a rate of 6 children per mother means triple population growth. Note the geometric progression. Thus, a fertility rate average of 5.67 implies that a couple (two people) will increase to more than 5 people (children) by the next generation. Now, factor this with a median age distribution of 17.9 years (young, sexually active, potential procreators) what you get is ‘boom’ population explosion. If I still had doubts about Nigeria’s population growth projection, it was cleared after a recent chat with a friend. Using instances of her immediate family (mostly residing in rural communities), she said three have 7 children or more, another

five have 6 children and many already with 4 and counting. The rather unfortunate thing is that most of the ‘women’ in her litany were still in their 30’s and some of them are already grandparents. While the problem of population explosion is more in rural area, the situation in urban area is also worrisome. While at a tertiary hospital in the heart of Abuja recently, something caught my attention. And that was the number of women either pregnant or carrying a child two years or less. So, out of curiosity, I decided to do a quick count of the total number of women who were either pregnant or carrying a baby below two years (visual estimates) while I waited in the out-patient department. Of the 73 women that I counted, 64 were either pregnant or carrying a baby; a whopping 88%. Right there was my shock. For our population to be our strength, we must think about today and tomorrow. China is able to harness the strength in her population as a result of planning. Canada in growing her population with migrants because of futuristic planning. The truth is that our unplanned population growth has damning consequences. According to a 2015 research publication ‘planetary boundaries: guiding human development on a changing planet’, we are within or have gone pass four of the nine control variable that defines these planetary boundaries. And scientific evidence clearly shows that human activities resulting from growing population and changing lifestyle is driving these variables beyond the safe limits. To conceptualise unplanned population growth, the large number of kids across the country that roam our streets are a direct consequence. Estimates indicate there are about 13.2 million children out of school. That is just one impact.

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Uncontrolled population growth has damning impact on existing infrastructure. It means uncontrolled migration. It means increased number of poor people; literally meaning failure to achieve Goal 1 of the SDGs. It means emergence of new diseases and number of people affected by such diseases. It means smaller and smaller land holding for subsistence farmers. It means increased resource consumption. It means increased instances of resource based conflicts. It means large scale depletion of our forests. It means increased number of climate change impact victims. Simply put, uncontrolled population has impact on the planet, our people and their prosperity. On the other hand, controlled population growth means a couple replacing themselves – having maximum of two children. Unfortunately, most families in Nigeria have three or more children. Reflecting the fact that Nigeria’s population is growing outside what is considered controlled. And this is happening amidst shrinking resources. But what is driving Nigeria’s population growth? Let’s discuss a few of them. Age at marriage. Early marriage means ‘she’ has longer period for childbearing. This is common with girls from poor, rural homes and are often not or minimally educated. And since human life abhors vacuum, she gets busy with warming her husband’s bed and bearing children for longer period. Poor knowledge and access of family planning. Access to culturally sensitive family planning programs can drastically lower (on a voluntary basis) fertility rates. But in many homes the woman may get the beating of her life for denying her husband sex. In fact society may tags her as going against

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natures command. Low participation of women in labour force. When people are involved with work, they tend to reduce the occasions for procreation. But in some cultures, women are not allowed to work at all. These social discrimination ultimately keep these women at home making babies one after the other. Rural versus urban family residence. Typical rural tradition support having many children. The more children a man has, the larger the portion of land he inherits. Additionally, children are seen as farm assets. But sadly, the land is shrinking; climate is changing and ecological burden heightening. Child survival perception. The fear of child death drives families to have more children. This is understandable considering that Nigeria’s under-5 mortality rate in 2017 was estimated to be about 100 per 1000 births. Thus, human tendency of risk averment means families will plan to have more children to compensate for a child’s death. Providing good public health facilities to keep children alive can restore child survival confidence. In conclusion, the need for controlled population growth is resultant from the fact that a ‘793 million people’ Nigeria is unsustainable and must be avoided because it will exacerbate hunger, poverty, inequality, land resource induced violence etc. which the global goals for sustainable development aim to reconcile. While God – the all-knowing - admonish the people to be fruitful and multiple and subdue the earth, this author posits that it must be done within reason. And public policy must lead the advocacy for lower fertility rate. Unaegbu writes from Abuja

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Tuesday 04 June2019

BUSINESS DAY

Media business Experts explain what brands; agencies should do in age of digital disruption Stories by Daniel Obi Media Business Editor

ver 40 seasoned experts and professionals from both divides of the brands and marketing communications industry in Nigeria gathered recently at the BRANDCOMFEST in Lagos to chart the way for the industry as digital disruption is increasingly shaping the future of the IMC industry. BRANDCOMFEST is designed to be the foremost thought-leadership platform for all stakeholders within the brands and marketing communications value chain. A convergence point for town and gown, the conference had in attendance, students of marketing and communications from various higher institutions of learning. Made up of eight sessions that ran for two days before climaxing in an award ceremony that recognised and rewarded brands, agencies and individuals that have contributed to the growth of the industry as well as project excellence over the course of the years, the conference witnessed the gathering of the best of the bests in different subsectors of the IMC industry in West Africa. According to Joshua Ajayi, Convener of the event and publisher of Brand Communicator Magazine, digital disruption is changing the face of brand and marketing communications across the world. “The brands and marketing communications industry in Nigeria is not left out as it is also witnessing fast-paced evolution stimulated by digital disruption-one of the major factors that led to the emergence of more areas of specialisation within its value chains and offerings. New trends, technologies and concepts like AI, Machine Learning, etc are increasingly shaping the future of this industry though Nigerian brands and agencies have yet to fully appreciate the importance of these.” Digital Disruption Speaking on the theme, Lampe Omoyele, Managing Director, Nitro

L-R: Ayeni Adekunle, O’tega Ogra, group head, Corporate Communications, BUA Group; Adetokunbo Modupe, founder, BHM Group; Joshua Ajayi, chairman/Group CEO, TPT International Ltd; Uche Ajene, Convener of Brandcomfest and publisher of Brand Communicator Magazine; Bolaji Okusaga, managing Consultant, Quadrant MSL; Adebola Williams, managing Consultant, Precise; Amaechi Okobi, CEO, RED|For Africa and, Group Head, Corporate Communications, Access Bank at the maiden edition of Brandcomfest at Muson Centre, Onikan, Lagos recently.

121 and Keynote speaker said beyond technology what people want is content and that is a challenge for marketers. He therefore urged marketers to understand what customers want, adding that customers no longer buy goods anymore but they are buying experience. He added that brands need to build community within the digital space, understanding that is not just about having a platform but providing contents on the platform that resonates. Similarly, Iquo Ukoh, Managing Director, ENTOD marketing, Jahswill Osondu, Executive Director, RocketShop and Bukola Akingbade, Managing Director, Neukleos in the panel discussion urged brands to look for ways to engage consumers and provide better contents online to read, structure their business model in such a way that it is in line with current market realities and pointed out that AI, Machine learning and others are some of the technologies most brands should deploy to enhance their business operation. Similarly, Patrick Gomes, Chief Executive Officer, DigiXplus said brands have to

be strategic in terms of the kind of content that they put out in the digital space and strategically engage their target market. Experiential Marketing Speaking on the topic, “The future of Experiential marketing in a technologically driven world,” Gbenga Afolabi, Group Managing Director, GDM Group and keynote speaker of the session said experiential marketing has evolved globally especially with technology playing important part in ensuring that consumers are adequately engaged and have a worthwhile experience as different from the popular roadshows that most Nigerian agencies still practice. As he called for a rethink, he pointed out that the conventional experiential style will still be there but moving forward it has to be technologically driven. Felix King, Group Managing Director, Oracle Experience advised that campaigns should begin and end with digital which should be deliberately done to build a community for the brand online, thereby fully engaging consumers and at the same time. In the same vein, Kehinde

ADVAN concludes plans to host Marketing Knowledge and Insight Week

dvertisers Association of Nigeria (ADVAN) has concluded plans to host its Marketing Knowledge and Insight Week. The programme which is in two folds is the Marketing Master Class tagged ‘Remaining relevant in 21st Century Marketing’ and the Chief Marketing and Communications Officers Forum. In a statement by the ADVAN Executive Secretary, Ediri OseEdiale said The Master Class is expected to hold on June 11, 2019, while the Chief Marketing and Communications Officers Forum will hold on June 13, 2019 on Vic-

toria Island and Ikeja respectively in Lagos. The Master class, according to the organizers will give insights on topics such as The Art and Science of Brand Building, Strategic Media Management, Digital Metrics that Matter and Effective Agency Management and Effective Business Communication. Facilitators for the Master class include Chief Marketing Officers/ Chief Commercial Officers, Heads of Marketing/Heads of Communication of ADVAN Member Companies, Heads of Agencies such as Alphabet Media Acadwww.businessday.ng

emy, a member of Media Independent Practitioners Council of Nigeria(MIPAN) and Digital Bananas ( Affiliate of the Digital Marketing Institute London). The Chief Marketing and Communications Officers Forum is titled ‘Business Growth in a Volatile Economy: Facts versus Myths.’ Speakers for the day are Baker Magunda the CEO of Guinness Nigeria and Doyin Salami, CEO Of Kainos Edge Consulting who was also a member of the Central Bank Monetary Policy Committee and member of the Economic Management Team of the Federal Republic of Nigeria

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Salami, Managing Director, Ideas House and President, EXMAN and Tunji Adeyinka, Group Managing Director, Rupublicom said brands are looking for solutions and the digital space is the quickest way to engage consumers. Out of Home Advertising For the OOH session, Chike Oputa, General Manager, Rapid Xtra delivered the keynote entitled, “The Future of Out of Home Advertising in the face of Digital Disruption.” Chike pointed out that the OOH industry is now digital-driven and more than ever clients demand what impact the placement of advert on a particular board will have on their brands. Corroborating the above, Adenike Olufade, Managing Director/ CEO, Digimage Consult said “If you are not digital OOH you will be left behind.” She added that the digital OOH has to be engaging to consumers as well. Kunle Adesina, Managing Director, Inventmedia and Babs Fagade, Managing Director, Ocean Outdoor, who are also members of the plenary session advised on the need to work

with Google analytics, etc, adding that there are so many data around us that industry players can make use of. On his own part, Samuel Ajiboye, Managing Director, Alpha & Jam said beyond the challenges, he explained that making the boards engaging will capture a lot of eye balls and at the end deliver great RoI for clients which data can be used to prove. The fourth session at the BRANDCOMFEST conference was centred on sustainability. To do justice to the keynote address for that session was Omobolanle Victor-Laniyan, Head of Sustainability, Access Bank. Speaking on the topic, ‘Sustainability and Effective Brand Building for the Future, Omobolanle called on brands to be more intentional in enshrining sustainability into the DNA of their business as consumers and customers alike will be loyal to such business in coming years. The PR session had the Chairman and Lead Consultant of TPT International, Adetokunbo Modupe as its keynote speaker. He expounded that disruptive innovation remains the critical life support that will define the future of Public Relations (PR) practice in Nigeria. He explained that “the future will be service driven as no one will own anything.” His paper was thereafter dissected by a panel of discussants made up of seasoned practitioners such as the moderator, Uche Ajene, Managing Consultant, Quadrant MSL; panellists, Amaechi Okobi, Group Head, Corporate Communication, Access Bank and Bolaji Okusaga, Managing Director, Precise Communications. Others include Ayeni Adekunle, Founder, BHM; Adebola Williams, CEO, RED|For Africa and O’tega Ogra, Group Head, Corporate Communications, BUA Group. The Panellists agreed with Modupe that strategic innovation holds the key to the future of PR and marketing communications industry in Nigeria and enjoined practitioners to brace up for the challenges of the ever changing world.

Promasidor underscores safety of workforce in its operations

romasidor, major player in Nigeria’s FMCG sector has assured that it will continue to ensure safety of its workforce as the company grows operations. “It is a policy to ensure the safety of workers and persons in our premises”, the managing director of the company, Anders Einarsson told the workers and guests at the Risk and Safety Day marked in the company last weekend. He described safety as absence of harm and freedom from risk and said that “for us in Promasidor, it is safety first and always as safety consciousness is a continuous @Businessdayng

phenomenon. Einarsson who was represented by his Head of Technical, Jean Robert said the company has over the years continued to improve on its safety consciousness. He also said that the company has stood tall in the eyes of Lagos State Environmental Protection Agency and other regulatory bodies. Also speaking to the workers, Lanre Eyinfunjowo, CEO of Doland Resources and services enlightened the workers that safety consciousness should not only be at workplace but homes too. He encouraged the workers to have extinguishers at home and also know how to use them.

Tuesday 04 June2019

BUSINESS DAY

Branding Our investments in gaming, lottery is driven by trust, transparency - Lambrakis International Lottery & Gaming Limited is a formidable player in Nigeria’s lottery and gaming market. Duly registered and recognised by regulatory bodies, the firm drives the operations of Naija Lottery and Bettabet.ng, a gaming platform. In this exclusive interview, Managing Director, Manolis Lambrakis speaks on the recent launch of Bettabet and exciting offerings for sports betting enthusiasts, the place of trust and the brand’s plans to deepen entertainment with new offerings for the lottery and gaming business. Excerpts… You have interest in the betting business. Speak to us about your mission in Nigeria started out as a computer engineer shortly after graduating from a Greek university where I studied computer science. I worked briefly as computer engineer in a couple of insurance and telecommunications. I’ve worked in almost all of the business sectors hinged on services. I have deep work experience spanning over three decades from working at Vodafone Group for 11 years but also in Deutsche Telekom recently, in Microsoft Greece as Country Services Director for 4 years. In 2010 I took interest in the lottery business. In the process, I was appointed Chief Executive Officer at Intralot Netherlands. At Intralot, we had double-staged lottery services, providing Gaming Systems, operations and Telecom services to the two state controlled lotteries in Holland, under very strict and controlled regulatory framework. I occupied the position for six years and remained in the lottery market as consultant until I become CEO in ILGL I came to Nigeria last December and since then I have been working on ensuring our operations at Naija Lottery stays on the path of growth. If you examine my years in business and as a professional, you will understand my transition from being a technical guy to becoming a well-rounded business guy. I have a sound knowledge of trends and operations of diverse lottery markets around the world. I’m bringing this deep experience base to the fore to change the face of lottery and gam-

Manolis Lambrakis

ing in Nigeria. What have you discovered as regards lottery operations in Nigeria considering your rich knowledge base? How is the knowledge shaping the operations of International Lottery and Gaming Limited? The lottery business in Nigeria is quite similar to other African countries. Although these markets are not as strong and mature like markets in Europe, we have a couple of very successful and competitive companies doing business in Nigeria. However, most of them offer single games. They are either sports betting

companies or lottery games ventures and it is too difficult to find varieties of games providing both entertainment and the opportunity to win. For instance, big jackpot lotteries aren’t available in the country. Similarly, it is interesting to note there is an absence of massive entertaining lotteries which inspires me for instance to spend some of my time on visiting a games store, play preferred games and have fun too. Customers should be able to place bets on different sports. At the same time, they should be able to spend on Keno and other virtual games, sit at a nice place and

socialise with other people in the process. Also, I have observed that Nigerians want to know what will be the outcome of games as well as pay-out. For instance, they are aware that if they bet N100, they can get up to N2,000 in return. At the time International Lottery and Gaming Limited was conceived and established, I had the vision to make the company the most trusted lottery and gaming brand in Nigeria. The vision is still very much alive. In clear terms, you need time to build trust. Before you earn people’s trust and confidence, you need to convince them that you are transparent. This is what we are trying to sustain with the launch of our Bettabet.ng. This is related to the fact that Naija Lottery is a few years in the market now and the business is prospering on trust. Although the presence was limited at the onset, now we have the funds to expand and establish presence pan-Nigeria. What experience(s) will the consumer have access to playing Bettabet? Bettabet is offering a different style of gaming. We have a presence now in the market that can be compared to what competitors have created. We run a platform that is beyond just declaring our presence. Customers will enjoy more personalised services because at the end of the day, if you do a checklist of what you receive as a player by playing with Company X or Company Y. there are certain points that endears you to our site or another. The site’s interface is user-friendly and attractive. Customers will also enjoy the best odds in the market. Upon accessing our

services, the consumer will not go through extensive processes in form of registration. We want the customer to have access to simplified registration and reliable means of payment and prompt payment You are offering a mouth-watering bonus of 150% to customers. What’s the reason behind this? The 150% bonus is a means of engaging with the customer. I understand that some gaming companies give varying bonuses on bets from 100% to 2000%. I think 150% is a good start for us because we want people to come to us and ask us about what we are selling. It is a means of getting customers to visit us because a lot of activities play out on our site. It is not limited to one game or sport; take for instance football because of its popularity. They can play games like Keno, 5/90, and a couple of Casino games that are very good. Also, we give the player the ability to walk around and it’s not just about winning or losing. Rather it’s about giving people an opportunity to stay with us. The Nigerian market is perhaps still a young market and gaming is at the introductory stage of its life cycle hence people are still learning. Do you subscribe to this? I disagree with this partially. One important thing that makes a product/service successful in Nigeria is the matter of trust. I believe people don’t trust brands as much as they should; they have perhaps lost confidence in certain brands because they don’t get desired results. You will find examples in local brands that have emerged successful through building and winning the hearts and minds of people with trust.

Polo unveils Frederique Constant’s timepieces, alluring to upwardly-mobile women

olo Limited, the foremost Luxury goods company in West Africa with over 25 years of track record in providing luxury products has introduced into the Nigerian market Frederique Constant timepieces, attractive to upwardly-mobile Nigerian women. This is irresistible to classy and tasteful women who want to stand out with timepieces that match different occasions. Frederique Constant, an established Swiss watch manufacturer based in Geneva, Switzerland and involved in all stages of watch production, from initial design, in-house development to final assembly and quality control came up with four fresh timepieces to the irresistible Classics Delight Automatic collection. The new Frederique Constant

Delight Collection is said to be designed with the perfect combination of elegance and contemporaneity demonstrated in its 33mm case design and bracelet shape perfectly fitting any woman’s wrist. The four new fresh models celebrating the feminine allure of Frederique Constant adding a touch of luxury thanks to the white or navy blue mother-of-pearl dials, applied silver color or rose gold-plated indexes set with 8 diamonds and to the central light grey or navy blue Guilloché decoration. Available in plain polished stainless steel or in two-tone rose gold-plated and steel case and bracelet the watch features hours, minutes and date with a window at 6 o’clock. Assembled by hand at the Frederique Constant manufacture in www.businessday.ng

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Switzerland, the Delight Automatic is said to be powered by the precise and reliable FC-306 automatic caliber and has a 42-hour power reserve. “As the hands sweep smoothly around the dial, you can rest assured that every component has been treated with care, crafted only by the most experienced Swiss watchmakers”. Frederique Constant produces up to 29 in-house calibers and it is planning to expand its production capacity thanks to its new 3’000 square meter manufacture opening this month. The founders and couple Peter and Aletta Stas started the company back in 1988 with the vision of creating high-quality mechanical Swiss watches with a more accessible price-tag allowing more people enjoy luxury.

Tuesday 04 June 2019

BUSINESS DAY

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Tuesday 04 June 2019

BUSINESS DAY

COMPANIES & MARKETS

Africa microfinance experts brainstorm on funding strategies for operators

COMPANY NEWS ANALYSIS INSIGHT

Pg. 19

MARKET

Portfolio inflows to emerging markets plunged 115 percent in May on renewed trade spat …emerging market stocks see biggest decline since 2013 unimpressive year-to-date perISRAEL ODUBOLA

formance of a number of stocks in the EM space.

apital flows to Emerging Market (EMs) in May 2019 shed a whopping 115 percent on renewed trade tensions between the world’s two biggest economies, United States and China. According to the Washingtonbased International Institute of Finance (IIF), EMs suffered a capital outflow of $5.7 billion in the fifth month of the year, compared with inflows worth $32.6 billion and $38 billion in March and April respectively. Equity outflows reached $14.6 billion in May, sparked by mounting US-China trade spat, making the month the worst for EM equity flows since the June 2013 Taper Tantrum, which saw equity outflows escalate to $22 billion. The $14.6 billion equity outflows comprised $7.2 billion and $7.4 billion from Chinese and Non-Chinese equities respectively. United States and China since July 2018 have been engaged in a trade war involving mutual placement of tariffs. United States’ President, Donald Trump, exercised authority

The listing of MTN Nigeria Plc, Africa’s biggest telecommunication firm by subscriber base, helped the Nigerian Stock Exchange (NSE) rallied for a while; however, profit-taking in the stock brought the market back to its lacklustre state. This underscores the need for present administration to implement market-moving reforms to drive the domestic bourse. Nigerian stocks contracted 59 basis points after Friday’s trading to worsen its year-to-date return to 1.15 percent, South African stocks has shed 5.61 percent since the year’s start, Ghana (-1.51%) and Kenya (-5.54%). Emerging market stocks are up 2.1 percent year-to-date thanks to 5.64 percent return in Egypt, 10.11 percent in Bombay, India, 11 percent in Brazil, 16.23 percent and 20.83 percent in Shanghai and Shenzhen, both in China. “We estimate our broader measure of net capital flows to Emerging Market was -$2.8billion in April. A $21billion decrease relative to March is further evidence of negative sentiments following increased trade tensions,” the global finance body said.

granted by Congress in the Trade Act of 1974 to impose $250 billion tariff on Chinese goods after the United States Trade Representative Office felt that Chinese trade practices disfavours US Exports. In retaliation, the Chinese imposed tariffs on U.S products of similar value, thereby launching the biggest trade war, which has wreaked havoc on emerging

economies. There is a clear distinction between the dynamics of debt and equity flows to the region in the review month. Debt flows worth $9 billion was received by the region in May, compared with equity outflows of $14.6 billion. Debt inflows to EM space contracted substantially in the review month from $24.2 billion

in the preceding month, with the level of debt flows driven by inflows to EM Asia ($4.9bn), EM Latin America ($2.1bn) and EM Europe ($1.2bn). The headwinds of trade spat between United States and China seems to have outweighed the tailwinds of United States’ Federal Reserves, dovish monetary policy stance, reflective in their

AGRICULTURE

No respite for Presco as profit declines in Q1 SEGUN ADAMS

resco, a producer of specialty fats and oils, has not had the best start to 2019 as bottom-line slowed by double digits in the first quarter of 2019 following the company’s unimpressive performance in 2018 full year. The performance of Presco in the first three months of 2019 was affected by weaker sales, an elevation in its Selling, General and Administrative expenses and a surge in its finance cost. The palm oil producer reported N2.14 billion as profit for Q1 2019, a 17.58 decrease from N2.6 billion posted in the corresponding quarter of 2018. Even though the Q1 2019 figure is the lowest in the last three years, analysis of company’s earnings in the first quarter of the last five years shows current figure as its second best without accounting for 2017 Q1. In Q1 2019, Presco recorded a 17 percent decline in revenue which fell to N5.51 billion from N6.59 billion it had in the same

period of 2018. Cost of sales for Presco dropped by 44 percent to N822.16 million resulting in a gross profit of N4.68 billion, 8.74 percent less than N5.13 billion for Q1 2018. Even though top-line shrank, gross margin showed an improvement in the review period with Presco retaining N85 from every N100 sales in Q1 2019 as against N78 from every N100 sales in Q1 2018 after deducting the cost of goods sold. Selling, General and Administrative Expenses grew to N1.57 billion in the three months to March 2019, 15.91 percent more than Presco had incurred a year ago. Other income for the agribusiness surged 145 percent to hit N84.24 million in the review period. Presco’s operating profit after accounting for the change in fair value of biological asset dipped by 16 percent in Q1 2019, as there was no loss or gain in the fair value of biological asset year-on-year in Q1 2019. A sharp rise in finance expenses by 86 percent weighed on

the company’s profit before tax which dropped to N2.58 billion in Q1 2019 from N3.43 billion in Q1 2018, a 48 percent decline in income tax for Presco could do little to turn the corner as profit after tax plunged 17.58 percent in Q1 2019.

Net margin, which shows how much net income or profit is generated as a percentage of revenue, dropped marginally to 38.88 percent in Q1 2019 from 39.41 percent in Q1 2018. Presco’s earnings per share

shed 17.69 percent to N2.14 in the quarter from N2.6 it previously stood at in Q1 2018. Shares of Presco remained flat at N58 per share at the close of trading on Friday.

L-R: Moses Ekpo, deputy governor, Akwa Ibom State; Udom Emmanuel, governor, Akwa Ibom State, his wife Martha, and Onofiok Luke, speaker, State house of Assembly, at the unveiling of the biography of the deputy governor of Akwa Ibom State titled “Trials and Triumphs” at the Ibom Resort and Golf Course in Uyo.

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

Tuesday 04 June 2019

BUSINESS DAY

COMPANIES&MARKETS THE COMPANIES AND ALLIED MATTERS ACT (REPEAL AND REENACTMENT) BILL 2019 – WHAT YOU NEED TO KNOW OU NEED TO KNOW PART 11 – COMPANY ADMINISTRATION

HAT YOU NEED TO KNOW

By Udo Udoma & Belo-Osagie

officer of the court and an agent of the company. An administrator is required to perform his/her functions as quickly and efficiently as possible.

BACKGROUND

Process of administration

The Companies and Allied Matters Act (Chapter C20) Laws of the Federation of Nigeria 2004 (CAMA) was enacted in Nigeria as a decree of the military government in 1990, and in the past 28 years, there have been no significant amendments to the CAMA. This is, however, all set to change if the Companies and Allied Matters (Repeal and Re-enactment) Bill 2019 (CAMA Bill), which was passed by the Nigerian Senate on 15th May 2018 and by the House of Representatives on 17th January 2019, is passed into law. In this series, which is scheduled to run for 12 weeks, Udo Udoma & Belo-Osagie will provide insights and digestible excerpts on the effect of key changes proposed by the CAMA Bill.

Within 60 days of appointment, the administrator is required to prepare a detailed schedule of assets and submit a copy to the person who appointed him. The administrator is also required to send a notice of their appointment to the company, obtain a list of the company’s creditors, and send a notice of their appointment to each creditor of whose claim and address the administrator is aware. The administrator is also required to publish a notice of appointment.

COMPANY ADMINISTRATION The CAMA Bill seeks to introduce company administration into the body of Nigerian company law. Administration is an insolvency process that involves the appointment of an administrator to manage the company’s assets, with a view to rescuing the whole or part of the company’s undertaking as a going concern. As an alternative to the finality of winding up, administration provides the possibility for a company to survive its financial troubles and continue trading as a going concern. Immediately the appointment of an administrator takes effect, no legal action (including legal proceedings, execution, distress etc.) may be instituted or continued against the company or the company’s property, except with the permission of the Federal High Court (the “Court”) or the consent of the administrator. This moratorium protects the company from enforcement proceedings and legal action from its creditors, thereby enabling the administrator focus on implementing measures that are aimed at rescuing the company. Even though the rescue of the business is the primary objective of administration, an administrator may pursue some other course which will yield a better result for the company’s creditors if the administrator is of the opinion that it is not reasonably practicable to rescue the company. The administrator may in fact decide that it is best that the company be wound up or explore a compromise with creditors through a creditors’ voluntary arrangement. How does a company go into administration?

the company; its directors; one or more creditors; the designated officer of the Court appointed to act as receiver; a liquidator upon the satisfaction of specified conditions; the holder of a floating charge in special circumstances; or a combination of any of the persons listed in (i) to (iv) above.

Administration can also be commenced out of court. This happens where an administrator is appointed by either the company itself, its directors or the holder of a floating charge that meets the stipulated conditions. Where an appointment is made out of court, the person that appointed the administrator is required to file a notice of appointment, and such other documents as may be prescribed, with the Corporate Affairs Commission (the “CAC”), and in some instances, the person is also required to file a notice of appointment and such other documents as may be prescribed, with the Court. The administrator The administrator must be a qualified insolvency practitioner, whose remuneration and expenses are payable out of property which is in the administrator’s custody, in priority to the claims of holders of a floating charge. Two or more administrators may be appointed jointly or concurrently. It is noteworthy that the administrator is not an agent of the person that appoints him; upon appointment, an administrator becomes an www.businessday.ng

Effects of administration While a company is in administration: ▪

▪ ▪ ▪ ▪

▪ ▪

A company can go into administration upon an order of the Court appointing an administrator. An application for an administration order can be made by: i. ii. iii. iv. v. vi. vii.

The administrator may issue a notice to an officer (or former officer), any founder or any employee (or former employee) of the company, requiring such person(s) to provide a statement of the affairs of the company. Having considered the state of the company’s affairs, the administrator would circulate a proposal to the creditors for achieving the purpose of the administration. Where the proposal is not approved by the creditors, the administrator will apply to the Court for further direction.

▪ ▪

every business document issued by or on behalf of the company or the administrator, as well as the company’s website, must state the name of the administrator and clearly indicate that the company is in administration; no resolution may be passed for the winding up of the company, and no order may be made for the winding up of the company, except in limited circumstances; all pending winding up petitions will either be dismissed or suspended, except in limited circumstances; a receiver appointed by the holder of a floating charge will vacate office; no steps shall be taken to enforce security over the company’s property or to repossess goods in the company’s possession under a hire purchase agreement, except with the permission of the administrator or the court; a landlord may not exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company except with the consent of the administrator or the permission of the court; the administrator may remove or appoint a director, whether or not the appointment is to fill a vacancy; neither the company nor an officer of the company may exercise management powers without the consent of the administrator; and the administrator is empowered to take custody of all the property to which he thinks the company is entitled.

Bringing administration to an end The appointment of an administrator expires at the end of a period of one year from the date on which the appointment took effect, except where it is extended by the court for a specified period (prior to expiration) or extended for a period not exceeding six months with the consent of each secured creditor of the company (and qualified preferential creditor(s) where applicable). Prior to the expiration of the administrator’s term (or any extension thereof), the court may, upon an application by the administrator or a creditor, order the cessation of the appointment of the administrator. Administration will also come to an end before the statutory period, where the administrator files a notice at the Court and the CAC, stating that the objective of the administration has been sufficiently achieved. Depending on the circumstance, an administration may also end through a public interest winding-up or upon the application of a creditor. Depending on the circumstance, an administration may lead to a creditors’ voluntary liquidation or the dissolution of the company. Udo Udoma & Belo-Osagie actively participated in the drafting of the CAMA Bill. Corporate Partner, Ozofu 'Latunde Ogiemudia was the chairperson of the Technical Advisory Committee set up by the office of the Senate President to advise on the CAMA Bill and the bill to amend the Investments and Securities Act 2007. Managing Associate, Christine Sijuwade was a member of that committee and led the drafting subcommittee on the CAMA Bill.

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Tuesday 04 June 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

FINANCIAL SERVICES

Africa microfinance experts brainstorm on funding strategies for operators IDRIS UMAR MOMOH

xperts in the business of Microfinance banks and institutions operations in Africa continent have converged in Benin City, Edo state capital to again brainstorm on better funding strategies for operators in the banking industry sub-sector. The workshop is the 3rd International Microfinance Workshop, organized by the Benin City Microfinance Leadership Forum and sponsored by LAPO Institute for Microfinance and Enterprise Development. Experts at the event include, Godwin Ehigiamusoe, managing director/ chief executive officer, LAPO Microfinance Bank Limited, Nigeria, Rene Azokly, COO & Representative of PAMIGA for West and Central Africa, Kimanthi Mutua, founder/chief executive officer,

K-Rep Group, Kenya. Others are Julius Mcharo, managing director, Victoria Finance Plc, Tanzania, Mohammed Attanda, executive director, Microfinance African Institutions Network (MAIN), Biodun Adedipe, chief consultant, B.Adedipe Associates limited, El Mansour Magah, director of Investment, PAMIGA, Tony Okpanachi, managing director/ chief executive officer, Development Bank of Nigeria (DBN), Rogers Nwoke, President, National Association of Microfinance Banks (NAMBs), Nigeria among others. The workshop with the theme,”Funding Strategies for Microfinance Institutions”, focuses on positioning Microfinance banks and Microfinance institutions for funding, working with investors and providing solutions to Microfinance institution funding challenges which

has been fueled by the increasing liquidity needs, inadequate capital base, weak corporate governance, ineffective risk management practice among others. In his welcome address , the managing director of LAPO Microfinance bank, Godwin Ehigiamusoe, noted that stringent conditions attached to access to foreign debts have led to very few institutions as recipients. Ehigiamusoe, opined that the case of funding for Microfinance especially in Africa, has remained that of “ water, water everywhere but not a drop available for many”. He said to attain desired scale in the operations of Microfinance in the continent, financing of various options and instruments such as affordable debts, equity, bonds and other financial instruments are required.

R-L: Abubakar Umar Ibn Garbai El-Kanemi, Shehu of Borno; Folashodun Adebisi Shonubi, deputy governor, operations, Central Bank of Nigeria (CBN), and Tijani Kanuriana Lawan, CBN branch controller for Maiduguri, during a courtesy visit on the Shehu by the CBN Deputy Governor, who was on an operational visit to Maiduguri.

CSR

eTranzact celebrate pupils, pledges infrastructure assistance DAVID IBIDAPO

hile some government primary schools remain in a dilapidated state, eTranzact international, in the Spirit of corporate social responsibility and children’s day celebration which was few days back pledged it’s support to making conducive, education process to Teslim Elias primary school. The MD, and his team visited the school with direct permission from the state government, sharing gifts (items not disclosed) to students in a bid to aid better learning process for the pupils. “One of the goals of our platform is growth and when we say growth, we think of the kids, “ Niyi toluwalope, MD CEO of eTranzact, told BusinessDay.

“There is need we support these schools with good infrastructures, learning materials to achieve better education and stimulate growth in the overall economy,” he added. The managing director also pointed that, Teslim Elias was picked by the Lagos State government as a school eTranzact could make a difference and impact positively to students. Speaking with Head Mistress of the school, she noted the challenges faced within the school premises. Most especially, she pointed out the disturbances of “area boys” within the environment, jumping over the school’s fences, especially when pursued by policemen. Also harassment of this set group of their students when returning home. This she noted led to the

abandonment of major projects within the school by a group of white men from India, due to the fear of being kidnapped by area boys. “We will go back with our team to discuss ways we can be of support to Teslim Elias, to provide facilities that would make conducive the school environment,” Mr Toluwalope pledged. The Head Mistress pointed the need for sick bays, staff room renovations amongst other things as major needs of the school. The BusinessDay top 25 CEOs, turnaround and transformation award winning company eTranzact, recognized the role of technology in building sound economy and the role the young generation can play in making this a reality.

CSR

L-R: Kanu Nwankwo,ex-international/ former captain , Supper Eagles of Nigeria; Beatrice Cornacchia, senior vice president, marketing and communications, Middle East and Africa, Mastercard ; Austin JJ Okocha, exinternational / former captain, Supper Eagles of Nigeria at the Mastercard UEFA Champions final live viewing in Lagos .. weekend. Pic by Pius Okeosisi

L-R: Ann Ihuoma Dozie-Enukora, immediate past chairman, DPR PENGASSAN; Senator Dino Malaye, jointly presenting the Integrity Man of the Year Award to Daniel Chimezie Okeke, chief executive officer, Express Concerns Limited/Chairman Swiss Spirit DANAG, Port Harcourt Organized by the National Association of Christian Journalists (NACJ) in Lagos recently.

Heritage Bank gives out N10m to innovation Lab winner HOPE MOSES-ASHIKE

eritage Bank plc has given the sum of N10 million to TREP LABSREALDRIP, which emerged winner of the HB innovation Lab/business accelerator programme. The maiden edition of HB LAB is a 12-week programme, expected to provide technology startups with enabling environment, resources and support required to innovate and accelerate impactful solutions with the potential to radically improve financial Inclusion/ Intermediation, agriculture and other related problems affecting critical sectors of the economy. The 1st runner up: LADIPO Market won N5 million, whilst Amazon gave the seven groups

each $10K worth of AWS Credit to host their site for the period of at least two duration. Speaking at grand finale of the event held in Lagos, Ifie Sekibo, managing director/ CEO, said, the programme comprised of a set of young men and women who have come together with their ideas of how best to solve different problems, be it social, be it economic problem that they have or the society have and use technology in one way or the other to be able to solve that problem. “We have to encourage them to do this especially if they want to be entrepreneurs of their own”, he said. How this is done is that the participants need to first within a lab setting which is a control setting develop this solution and www.businessday.ng

allow people view it, see if it is going to solve the problem and then come up with someone who will win an award for doing this. “The future lies in our youth. If we don’t begin to develop their minds on how to solve problems from now, we will probably leave them out there wild. We have mass talent in this country. All what we are trying to do is take from that talent and address specific problems within our society”, Sekibo said. The program is not necessarily for banking, some have things to do with medicals, some have things to do with fashion, some have to deal with wedding planning. At the bottom of every of this is the financial inclusive service and then how to solve the problem at the same time give financial inclusive service.

L-R: Ifunanya Obiakor, marketing manager, TG Arla Dairy Nigeria; Taiwo Fadairo, chief nutrition officer representing permanent secretary, Lagos State Ministry of Health; Nathaniel Adewusi, category manager (Powder), TG Arla Dairy Nigeria; Racheal Okonkwo, brand ambassador, Dano milk, and Edith Alagbe, representative of the chair, Nigerian Institute of Food Science & Technology (NIFST) Lagos state chapter, during the Dano farm-themed 2019 World Milk Day Celebration in Lagos.

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Tuesday 04 June 2019

BUSINESS DAY

Tuesday 04 June 2019

BUSINESS DAY

CEOINTERVIEW

ABAYOMI AWOBOKUN CEO, Enyo Retail & Supply

Interview with Private Sector Leaders

‘We are purely downstream retailers with no refining ambitions’ ABAYOMI AWOBOKUN is the Chief Executive Officer, Enyo Retail & Supply, a downstream marketing company. In this interview with FRANK UZUEGBUNAM, Awobokun talks about the 2nd anniversary of Enyo, managing retail prices across the length and breadth of Nigeria, downstream deregulation, amongst other issues. Excerpts:

nyo has just celebrated its 2nd year anniversary. What can you tell us about the past two years? I think the best way to start is to express gratitude to our shareholders and the board. When we started, there was a lot of negativity around the downstream sector. Despite that, we were able to get off the ground and raise capital. We have a great board led by our chairman, Tunde Folawiyo. In the early days, people were asking “Who are these guys?” But the board gave us legitimacy. The board is made up of experienced people in the oil and gas space. We launched our first station in August 2017 which was our Ibadan Olorun Sogo; our second was in Zuba, Abuja, and then we went to Kano as well. We tested the waters in a few cities and closed the year with five stations. We thought it was a huge achievement because we did not think we would have any station that year. In 2018, our focus was to roll out 25 and we closed the year with 40 and in 2019, we just continued along that growth trajectory. That is how the journey has been. It has been two years now and we still feel like we are a startup. The opportunity ahead of us is strong. With God on our side, we can tap into it. How will the lessons of the past two years help in navigating the future? The first lesson is that if you listen to the negative narrative around the downstream, you will miss the bigger picture, the contribution of the industry to the fabric of the community. There is also a lot of negative talk about regulators in the downstream. We found that the regulators are actually very collaborative, very understanding and also internationally aligned with what is going on internationally. Today, to get your licenses from DPR (INCOMPLETE SENTENCE). We have also learnt that customers appreciate respect, thus, when we build our stations, we ask for feedback. We see that customers can see all of the efforts or most of the things that we have put in. They can literally tell us what we have done well and those areas we need to improve. Those are some of the bigger lessons we have learned since starting this business. What do you consider the most important factor in running a business like Enyo? Integrity. I would say that we have built a brand that stands out because we designed from the ground up an honest brand. We train our teams to be honest. We are very harsh with members of our team that break that code. We invest a lot in our measuring instruments to ensure they are measured to be as accurate as possible. We did a research a couple of months ago asking customers what they like the most about Enyo and we are very proud that what came out strong was that “Our Litre is a

litre” which is a slogan we kept and we keep ourselves honest. If this is the expectation of customers, then we must not let them down. Integrity is more than just selling accurate measurements. Even in the design of the people systems, the design of financial systems, paying taxes, withholding taxes, getting licenses and working with regulators, I think an integrity focus in everything we do is the most important thing in our business. With benefit of hindsight, what are the things the management would have done differently? Looking back, I think we made some good decisions and we also made some false assumptions. One of the assumptions that we made is that the business is strongest only in the major cities. We are finding that it is not

‘‘

In ten years, what you will see is an Enyo that is a first-class, competitive and globally comparative fuels retail brand on the forecourt the case. We have found out that there are pockets of demand across the country that are not in Lagos. Aside from Ogun and Ibadan, we are quite active in Makurdi and we found it to be a great market. Perhaps two years ago, management would not have considered investing in the market but we found it to be a very strong market. It is the same for Calabar, where we are now rolling out and we have found it to be a very strong market with great opportunity. We have also improved on site selection and begun to use technology rather than emotion. We are strong in Enugu where we have opened in Garden Avenue, Trans-Ekulu and Ogui Road. In the early days, if you offered us Enugu, we would have said “Why not we focus on Lagos and Abuja?” Kaduna is a location we also found to be very welcoming as well as Kano. We are in Sharada. We are in the eastern bypass and are looking at other sites. So, one of the bigger lessons for us as management has been eliminating emotion in site selection and focusing on using technology. www.businessday.ng

How does your staff assimilate your customer-centric philosophy? We start with the way we hire; at Enyo we have an online assessment platform that seeks to bring the applicant through a process of appreciating that the customer is king, so our assessment is not reliant on your numeracy skills only but also very reliant on your appreciation of the exchange that should happen in retail outlets. That is where the power should lie. Once you go through that assessment and you are successful, then you join the team. The second thing we focus on is steady training and development - we like to say at Enyo that every person gets at least one hour of training every week, which is huge. We are talking about everybody from the attendants to the supervisors, to the station managers, all the way to the head office. The third thing that we are doing very uniquely is that we rarely hire into the head office without field experience. We did it once when we started but now, a lot of the people at the forecourt know that there is an opportunity to work in different roles in their career at the head office or in other parts of the business. That starts to engender a togetherness; everybody knows that this is one company, one destiny, and that permeates even to the field and the way they manage our customers.

So are you satisfied with the progress Enyo has made so far? I will be honest with you; the team says I am a difficult man to please. I have high expectations from the board. I am happy at the progress we have made but I am not satisfied. I think we can certainly do more in terms of rollout. There are opportunities knocking on our doors every day; we also do fuel supplies to companies. A lot of our clients are keen to see us do more on the line of innovation, reporting, understanding their energy needs. In all, I am thankful to the board and especially to the team. But I am not satisfied. Is it too early to ask what to expect in 10 years’ time? It is not too early. I have no doubt that in 10 years’ time Enyo Retail will be one of the bigger brands in the fuels retail space in Nigeria. I think the fuels retail space is going to change. It is already changing; there have been a few divestments and acquisitions, that is one way that the market is changing. Another way is that there are new entrants. We are one of them. You will also see some of the old entrants/old participants rebrand and reposition. So people say to us: you are making everybody buckle up. We are bringing back some innovative competition to the downstream which is great! So in ten years, what you will see is an Enyo that is a first-class, competitive and globally comparative fuels retail brand on the forecourt. You will probably see that the whole industry has also moved up with new names including our own. You will also see that some names you know today will disappear. Some will have new owners. That is already happening. There will be some rebranding and you would probably see a lot more professionalism right through the value chain and a lot more innovation. Many of these things, we will be responsible for but I also expect that others will contribute to that magic. Should we expect to see Enyo in the refining space even if it is on modular scale? I will be honest with you; in our current business plan, we are not refiners. We are retailers. We are keen to buy fuel from the best sources, we want to know and own the customer, to build a business that is intimate with the customer and initiate that exchange first with fuels but also allow partner companies use our relationship with customers to sell their own products, services and even use our facilities. Our current business plan sees us purely as retailers. We currently have no refining ambitions. How much of technology are you adopting in your operations? We started with a reporting platform which we bought from a company that developed the proprietary (RIGHT?). That, in the first

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instance, reports to us everything that is happening in the business. After that, we upgraded that into a point of sale platform that allows us to essentially build all our operations at the stations on a technology platform. That dovetailed into a supply and order management system that allows us to keep the stations wet and allows them to order their fuel electronically in real time. We are at the customer interface now where we have said to ourselves: “Enyo now runs efficiently on a technology platform but how can we ensure that the customer experience it as technology-driven company? Recently we started to pilot an initiative called: “ThankUcash” where with technology we are able to reward customers for patronising us. That is just phase one. What we see in the horizon includes a variant of self-service, a variant of deliver-to-home service, integrating patronage at the forecourt to rewards at our auto-center and also integrating patronage on the forecourt to rewards with other brands. Integrating with companies like LCC, the cinemas, food and beverage companies or leisure. All those are coming in the short term. So our technology philosophy has been in the first instance that it must work for us and make our business more viable but then very quickly, it must also work for our customers and make their lifestyle better. That is where we are going.

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Does the application of technology give you some numbers in terms of your customer base and projections? We do have numbers and we are probably the only ones with accurate numbers. Our stations are managing an average of over a 1000 vehicles a day. Some are doing 3000. Our lower stations are in the region of 900-1000 customers a day, which just gives us a sense of what is going on the forecourt. We are also able to track which vehicles come in and out of our stations. Sixty-two percent of the sales at our forecourt goes to public transport operators. If you come to the more residential areas, it goes down to 5 percent. Essentially public transport is huge in terms of traffic on the forecourt. Most of our stations sell 15-18 hours. We track when the station is open and when it is shut. We are converting close to 7 - 8 percent of the traffic that passes in front of our stations. The industry norm is 3 – 4 percent conversion which is why our stations are selling above the national average. Those are some of the numbers that make sense to the average man. There are other things like the hours the pumps run, the pump rate but those are a bit more technical. When we look at the business, our goal is to convert more people from just driving past the station to customers and to get them to buy more liters per transaction, so we build to induce that kind of condition.

Are there inherent problems trying to balance retail prices across Nigeria? We have not managed to balance retail prices, it is managed already. The government manages it through Petroleum Equalisation Fund (PEF) and we are aligned to the dictates of the government. For gasoline, for example, we opened our site in Enugu over Christmas 2018 and the station enjoyed incredible patronage. The reason was because we were told that quite a few of our competitors in the east sell above the regulated price. It never occurred to us once to do so. In some of our locations across the country, we sell below the N145 price number. Our business model is one that must be sustainable. To be sustainable, we need a good brand, so we never for once considered doing things that would create a negative reputation for the brand. In the South East, we are at even a discount to the control price in some places. It is the same thing in Owerri where we are opening now. We are also opening a station at Ifesincahi in Onitsha soon. The price games that have been played in the past are no longer fashionable. Indeed, it is difficult to replicate some of those tricks that have been done in the industry before. Your technology will struggle; the nature of the technology is that it makes you more transparent. From the head office everybody sees everybody, we can monitor what is happening on the field to a large extent and that is improving. We have CCTV at the stations and we are able to see how they sell and how they manage customers. So we have never had a price conversation in the company. For the deregulated products we have www.businessday.ng

a technology we use to manage what the prevailing competitive price is across every station and our goal is to be as competitive as possible. So sometimes, we are cheaper than the competition with little or no margin. That is our philosophy and we have just followed it. Do you think deregulation is the way to go for the downstream? I have no doubt in my mind that the country will benefit from deregulation. It certainly is a step in the right direction. I, however, caution that it should not be seen as a silver bullet. It should be very carefully implemented. All stakeholders, consumers especially, should be carried along. In some instances, you hear of palliatives; those too should be considered but any agenda that seeks to rush the country into deregulation should be carefully examined. Deregulation ultimately is a better use of our resources but what I would say is it is not a silver bullet and it should be carefully implemented with all stakeholders carried along. Do you have some partnerships? We have affiliates, sister companies, companies owned by some of our shareholders that altogether make us more competitive. One of them is Folawiyo Energy which is a strong downstream terminal business in Apapa. We have other retail businesses who are our partners too. One of them is Cars45, an online car retail business. You are going to start seeing a food and beverage outfit called Nuli in our forecourts. We signed with Bosch the international car spare parts company. We have our Vehicon and we have partners managing those Vehicon. We have Reelax and our partners are managing that as well. We recently signed on with Nigerian Bottling Company. We have partnered with RVRB and CCHub to bring about STEMCafe where we are providing an environment for kids to come and learn about science, technology, engineering and maths. Tell us the products and services you are most passionate about? I would say retail is where the passion is, opening up more stations, opening up in new neighborhoods, improving the quality of the stations, investing in design, receiving our customers better every time. Using technology to improve the conversation at the forecourt with our customers and also allowing that technology to improve their lifestyle and convenience. We are also growing our B2B business segment. We are now able to offer our online services to businesses. Just order your fuels online; you can track your delivery, pay online and we will deliver to you in 24 hours. We even have services where we do some equipment insurance and where we do testing for businesses to ensure that their generators or power units are not compromised from previous purchases of fuel. So if there is bad fuel, we do cleaning, we help dispose of used oil, used petroleum products. We have also started to roll out a very

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exciting brand called Vehicon, which is our own brand of vehicle maintenance. We have been training mechanics from day one twice or three times a year in batches of a hundred with Automedics. Our cooking gas, SL-Gas, which in full means Superior Liquefied Gas, is growing. As much as possible, we do not want to sell our cylinders, in alignment with the government policy. It is gaining traction. We have tricycles doing deliveries if you order online. We sell lubricants and apply them. We partnered with Eterna Oil and Gas. We retail their own brand of lubricant called Castrol. We have also trained our staff to apply the lubricants. Those are the areas we are focused on but retail remains our passion. What is your relationship with the various communities where you operate? The area we have chosen to impart knowledge is in the auto mechanic space. While the company was in its infancy, we started investing in training mechanics. We have 15 Vehicon sites open, and we have trained over 200 mechanics. We are not training them just to work or partner with us; we are training them because that sector is at risk of a skills gap especially as the global automotive industry gets more sophisticated. We could have young men and women on the street calling themselves mechanics who are not equipped to compete in the world they are operating in. In all the communities we operate, we have a very strong relationship with them. We have a team that ensures the community feels our presence; some of the things we do are done silently, including investing in infrastructure within the communities, being advocates of the people in pushing their requests and even supporting and working with the government in their effort to improve infrastructure in the areas where we operate. That is our modus operandi.

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Tuesday 04 June 2019

BUSINESS DAY

property&lifestyle Office Space

Opportunity for investors as Trinity Towers offers spaces for business, leisure

…broaches strong value propositions on security, capital appreciation, ROI CHUKA UROKO

or investors on the look out for a stable and secure environment for imnvestment, Trinity Towers is their next destination. This is a development where there is unity of three towers that have been combined into structural beauty and functionality to offer the best of environments for business and leisure. Beyond profit motive which is the hallmark of any business or investment, security of such investment is also critical. Every business or investment needs security and an environment where there is stability for it to thrive. This is just part of the value propositions that Trinity Towers offers investors. A huge project being developed and promoted by the City of David Church, a province of the Redeemed Christian Church of God (RCCG), Trinity Towers is located in the heart of the fast developing commercial centre of Oniru, Victoria Island, Lagos. Feelers from its promoters reveal that the project, which is a unique, innovative masterpiece and a meticulously designed mixed development

for commercial and leisure space, will be due for structural completion by the last quarter of 2019. The Grade A office complex is within easy reach of Lagos finest commercial and residential environments and has neighbours such as City of David Church, Four Points by Sheraton, Lagos Oriental Hotel, Exxon Mobil Headquarters, The Palms Shopping Mall, The Incubator and Get Arena. It is the first Tri-tower building in West Africa sitting on a transfer beam above five floors. Upon completion, the development will boast 13,320 square metres of contemporary real estate, spanning 12 floors with parking for 670 cars in the multi-storey car park, 5000-seater concert hall, indoor amusement for children, retail therapy for the shopaholic, two cinema halls, a gymnasium, rooftop swimming pool, helipad, medical centre, café and restaurant, multi-purpose halls, banking halls, and ATM Gallery. “Projects of this magnitude usually come with a lot of advantages,” Gbenga Olaniyan, CEO, Estate Links, told BusinessDay in an interview. He explained that, over time, it has been observed that traction

on a property increased once nearing completion or upon completion and that had been the case in some of the major projects in metropolitan Lagos. He added that “an entry into this best-in-class property with an opportunity to adjust to specification with early commitment into long lease option is, indeed, as good as an outright sale as an adult buyer practically holds the space beyond his life time.” Estate Links and Knight Frank are the lead marketing and lease agents on Trinity Towers and, according to Olaniyan,

the involvement of these two giants in commercial real estate in the leasing of West Africa’s first tri-tower office complex is a major plus for investors and security of their investment. There is stability of investment in Trinity Towers which implies that, unlike the common short lease arrangement, the long lease offering serves up security of investment as well as cuts out the cost associated with relocation, new premises renovation and fit-outs. The appreciation/annuity which this investment assures of means that a ’buy-to-let’

investor will expect to receive direct income as cash flow but over time also will witness capital appreciation as the property increases in value. “Besides predictability which helps with long term forecasting and budgeting while helping the tenant- owner with-stand economic volatility, there is also strong bargaining power for concessions and improvements. This means that early entrants will be able to dictate, to a large extent, the finishing on their floors as well as alterations within limits”, Olaniyan assured.

Home Ownership

How low income earners can own homes without bank loan, mortgage Israel Odubola

he rough terrain of Nigerian economy, reflected in stifled disposable income, relatively high inflation rate and high cost of living, has made home ownership a difficult task for low-income earners. Given these challenges, a large number of low-income earners have jettisoned plans of owning homes, even as

they struggle to meet the basic needs of life. Nigeria’s housing shortage is stuck between 17 and 20 million units, and has not seen any big improvement, despite various efforts of government to deliver housing facility to its teeming population. Moreso, deposit money banks and mortgage houses threaten low-income earners’ dream of becoming home owners given the high interest

rate charged on credit facility. But the long-desired goal of people in this category to become landlords is possible without applying for bank loan or mortgage as they can purchase landed properties at a relatively cheap price in underdeveloped areas with good prospects for capital appreciation. “The fact is that low-income earners lack the financial capacity to buy virgin

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land or finished houses in highbrow areas, but they can take position in the ones in low-urbanized areas with potentials for development,” Daniel Ojo, broker at HSAgency, told BusinessDay. Properties in these locations are relatively affordable, and come with flexible payment arrangements that make it easy for potential buyers to pay within a certain timeline, without feeling the pangs if they were to make an outright payment. Using Simawa, Ogun state, as example, the price of a plot of land (600 square metres) is about N700, 000, according to BusinessDay check, with a 5-year maximum payment plan. This implies that one will pay a fixed sum for a certain period, say 3 year (36 months) or 4 years (48 months) depending on his choice. While this encourages participation among low-income earners, however, long repayment period is often associated with high payment cost, meaning that individuals on a 36-month scheme will pay more than his counterparts on 60-month plan. Even at that, low-income earners can equally leverage

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cooperatives in their work place to finance their house plan. A cooperative is a group of individuals with specific common needs coming together to improve the economic status of their members. One good thing about cooperatives is that members are charged low interest for facility. People in this income group can leverage the opportunity by raising funding from cooperatives, in which the sum will be removed from their monthly pay bit by bit. “Pooling money from cooperatives to finance housing projects has worked for many people in Nigeria. In my view, it requires determination from the borrower to adjust his spending pattern to match reduced pay,” said Olumide Akinyemi, Project Manager at Josh Global Limited. With Nigeria’s population figure of about 200 million, in which 43.5 percent or 87 million live on less than $1.98 a day, the task of Buhari-led administration to work out plans for delivering affordable housing units to low-income Nigerians becomes more imperative in his second fouryear term. @Businessdayng

Property markets in UK recording new prices despite Brexit concerns

ike Nigeria where the real estate sector crept out of recession in the first quarter of 2019 despite election fears and slowing economy, property prices across regional markets in the UK grew by 0.9 percent in the 12 months to May 2019 despite Brexit concerns and the impact on the country. This is good news for investors, especially for the many Nigerian investors who have made significant investments in the country’s buy-to-let market, particularly in the London market. The recorded growth is an assurance that Brexit may not affect investments in the way many have thought. In Nigeria, the real estate sector recorded 0.98 percent growth to pull out negative growth territory where it had been in the last 12 straight quarters. The sector had been recording negative growth until the last quarter of 2019. Between April and May, the average price of a property across England, Scotland and Wales increased by 0.9 percent, matching May 2018’s growth of 0.8 percent and broadly in line with the 1.0 percent average over the last two years. On an annual basis, prices are just 0.1 percent higher than the same period last year, lifting from the 0.1 percent year-on-year decline in April. Despite the general slowdown in prices, four regions – Wales, the East and West Midlands, and the North West – have reached new recordhighs for prices of newlymarketed homes. Prices in Wales jumped 2.1 percent between April and May, and are up 4.1 percent compared with last year, whilst the East and West Midlands report similarly high year-on-year growth of 2.5 percent and 3.0 percent respectively. In the North West, prices increased by 0.7 percent in May, bringing the region’s annual rate of growth to 2.1 percent, whilst property prices in the North East were 2.6 percent higher than in 2018. Rightmove’s director, Miles Shipside, explained, “these increases are the result of a combination of strong demand, buyers’ affordability headroom, and a continuing shortage of suitable properties. “Agents in these areas say that Brexit concerns are not really on the agenda of homemovers; they are more concerned with satisfying their housing needs”. Continuing, he said, “activity breeds activity and a greater choice of fresh properties in these record-setting regions helps to spur buyers into action, especially if they have a property to sell. This in turn adds another new listing that might then tempt another buyer, in a virtuous circle.”

Tuesday 04 June 2019

BUSINESS DAY

property&lifestyle Investment

Why investors close eyes on REITs despite prospects, low hanging fruits

Water Leak Solution

Israel Odubola

e a l E s t at e In vestment Trusts (REITs) ought to provide investors with opportunity to diversify their portfolio in funds of various property types, thereby reducing investment risks and volatility, but unfortunately in Nigeria, investors shy away from this promising but underperforming asset class. Many investors see REITs as danger-zone considering the low performance of the Nigerian Stock Exchange, which has made the asset class less exciting to investors. This confirms the position of Najeeb Adeyemi, Head of Valuation at Lagos-based real estate consulting firm, Mustapha Ewenla & Partners, that investors shy away from REITs market because of its relatively low market value, small fragmentation and unattractive earnings figures. “REITs companies in Nigeria have not been doing well looking at their market value and financial performance. They are struggling for survival. You can’t expect investors to put their funds in an asset class they are uncertain about” said Adeyemi. REITs were introduced into Nigerian market 12 years ago, making it one of the oldest in Africa, but yet to gain traction in the country. It is still growing slowly despite a significant increase in the global market capitalization which an Ernest & Young report puts at approximately US$1.7 trillion, up from US$734 billion in 2010. There have, however, been attempts to grow this market as reflected in the modest 2 billion

Skye Shelter Fund floated in 2007. Others are Union Homes and Sun Trust which followed with 12 billion and 20 billion offerings respectively. UAC Property Development Company’s (UPDC’s) 2013 offering of 30 billion which declined to market capitalisation of 26.7 billion in May 2017 is the largest and most successful offering so far. Nigeria’s REITs market continues to lag peers unlike South Africa that has about 50 listed REITs, even as they are one of the top performing sectors on the Johannesburg Stock Exchange. The market value of the three listed REITs on the Nigerian Stock Exchange (NSE) is less than N50 billion, accounting for less than 0.4 percent of the NSE. In advanced stock markets

like the New York Stock Exchange (NYSE), REITs account for 2.5 percent to 5 percent of total market capitalization. Doing the analysis of listed REITs in Nigeria revealed that they all returned losses year-to-date, one-year and five-year. UPDC REITs lost 18.18 percent in value year-to-date, the biggest among peers, compared with Skye Shelter Fund (-19 percent) and Union Homes (-10 percent), underperforming the All Share Index (ASI), which has wiped off 10 percent in value. The stocks performed poorly in their one-year return, with UPDC bottoming with 46 percent decline, followed by Skye Shelter Fund down by 14.50 percent and Union Homes, which lost 9.96

percent in value. Going by their 5-year return, UPDC REIT lost a whopping 51 percent in value, trailed by Skye Shelter Fund down by 14.50 percent and Union Homes dropping by 14.48 percent, lagging the benchmark index that shed 24.83 percent in five years. This therefore signals that the investors shy away from Nigerian listed-REITs because of their weak fundamentals, and most importantly, these corporates have not been posting enticing figures that could catch the interests of investors. Union Homes REITs, which has released its 2018 scorecards, reported the lowest net asset value (NAV) of its portfolio in four years, buoyed by nonoccupancy of key properties.

Housing

Studio, single-bedroom apartments hunting in highbrow areas faces shortfall Temitayo Ayetoto

he yearning for studio and single-bedroom apartments within the highbrow areas of Lagos is facing an undersupply caused by real estate developers’ over-concentration on large-size luxury apartments, meaning that there are opportunities for investors in the development of such house-types. Young and single Nigerians who are beginning to get a good grip of their financial balance and desire to experience decent living enabled by amenities in environments like Ikoyi, Victoria, Lekki and Ajah are increasingly finding it difficult to access concise apartments as developers look the other way.

Infrastructure Maintenance With Tunde Obileye

Some of these studio or mini-flat hunters have grown weary of apartment sharing in the quest for an opportunity to express their personality in the style of living pattern of arrangement, colour theme, paintings and artistic decorations among their penchants. “So there is very high demand for one-bedroom. More than half of our population are young people who are unmarried. Yet, I haven’t seen developers putting that into consideration,” Chidinma Enyinnaya, Business Development Analyst at Realtor.ng, told BusinessDay. “Developers are just developing. I don’t think they are doing a lot of research because if you go around and see new structures and new www.businessday.ng

houses, they are like four, five and six bedrooms. You hardly find two, three or four bedrooms. The truth is that with our currency being devalued and the people’s income, it is very hard to afford.” Enyinnaya said developers’s response to the demand for single-bedroom apartments in those areas is the concept of shared apartments, a setting where a six-bedroom flat, for instance, may be divided and sublet as one-room to each individual. Although this option appears to suffice and is increasingly available, most people still prefer studio apartments while those who can actually afford the standard of Island living choose the family-tailored house of multiple rooms over shared apartments, Busi-

nessDay found. Joshua Moore, a business developer at Alpha Suite Limited, a service-apartment company offering short-let apartments ranging from studio to mini-flats and shared apartments said the occupancy rate in studio apartments was the fastest in all categories. However, the undersupply which has resulted into exorbitant prices might be deterring renters from taking on the apartments. “The problem is the cost. Housing in Ikoyi has always been a challenge because of the prices. Some single bedrooms don’t usually sell as much in Ikoyi because of the cost. The cost is not on the rent but on services like electricity,” Moore explained.

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ith the relentless advancement of the technology age, no area of work has been left behind. Anything and everything is being driven by technology or in the process of being developed. One area that has witnessed the development of technology to provide more efficient solutions is water leak detection. There are many types of solutions on the market to choose from and it can be difficult sometimes to determine which is best for purpose. As a result, facility managers should understand the different types of systems available. They should also be familiar with the benefits of deploying water leak detection technology, along with the relevant industry standards and emerging trends. Water has been responsible for the most damage in buildings and other similar structures. It is now commonplace for smoke alarms and detectors to be installed in homes and offices to alert occupants in the event of a fire. This technology has led to significant reductions in loss of life and property. However, when it comes to property damage, water is responsible for most damage more than any other cause. With such information, one would have expected water leak detection technology to be as widely deployed as smoke alarms and detectors, unfortunately, this is not the case. Investing in a water leak detection solution can provide the peace of mind that a facility is protected from water hazards ranging from a leaking pipe to pump failure or foundation water seepage. A wide range of water leak detection solutions are available, and they have become relatively affordable. Some of the different types of solutions that exist include: • Battery powered sensors with alarm signal • Primary powered system with battery backup • Sensors with an alarm signal and alert capability via an email or text message • Systems that are monitored by a third party who can alert the appropriate people • Systems with sensors, alarm signal, and water shutoff capability • Sensors that measure water flow @Businessdayng

• Contact sensors • Wicking sensors •Acoustical water flow measuring devices Perhaps the best systems are wireless with battery backup because they incorporate multiple sensors, a local alarm, and an automatic water shutoff valve and are monitored by a third-party service. Some automatic shutoff valve systems have at least one setback which is a build-up of scale and corrosion that cause shutoff valves to be difficult to operate. To address this problem, some systems have a function that exercises the shutoff valve. Care should be taken with wireless systems to ensure proper communication between the sensor and the head-end unit. Consideration for the distance between devices and the head-end as well as the type of construction that signals are passing through (drywall versus concrete for example) is important. Some systems have better wireless range than others. Most systems are batterypowered and, so, there is no need for a separate power supply and running wire to power the devices. For some of the water flow sensors, it’s now possible to detect when a faucet is dripping or toilet is running. The technology is largely based on software systems that are able to identify the different elements of water appliances. Relatively few standards exist for water leak detection devices and systems. When searching for a solution that best meets your application, facility managers should focus on performance, reliability, interoperability, and safety as key factors to consider. A water leak detection systemshould work as advertised. Pro ducts me eting a standard can offer the assurance that they meet at least a minimum set of requirements. Some manufacturers may go above and beyond the requirements of the standard to provide higher levels of performance and reliability. Certification to an applicable standard provides a baseline from which to compare products and assess price versus performance. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

Tuesday 04 June 2019

BUSINESS DAY

Recharging for peak performance

have run 100 miles nonstop and hiked up the highest mountain in Africa, Mount Kilimanjaro. My next project, in February 2020, is to run seven marathons in seven continents in seven consecutive days — the World Marathon Challenge. Running provides a space where I recharge myself, and I believe that as a leader you always need to be recharged. You need to pour from a cup that is overflowing. I am a psychologist by profession and started working as an occupational psychologist at a brewery. I then moved to a mining company to work in human resources, which is still the study of people in the world of work — how do we attract the right talent, develop them and retain them? My background as a psychologist has an impact on everything I do today, especially my ability to advise on how to effectively engage and motivate people by studying the human mind and emotions. By the time I came to Richards Bay Coal Terminal [in South Africa], where I now work, I was a manager in organisational development. My career aspiration was to become the next general manager of human resources. As I am a South African, and did most of my studies in South Africa, I felt I needed a global perspective on leadership. I had previously done an exchange programme in the US and wanted something different, so I went to Europe. During my research, I found the Executive Transition Program at ESMT Berlin and thought: “This is the programme that will give me a competitive advantage.” Most executive development

programmes are about developing people in executive roles, but the one at ESMT caters specifically to senior managers who are preparing to transition into executive positions, and to newly appointed executives. With that programme and the full scholarship I received from ESMT, the school became an obvious choice. The course consisted of three non-consecutive weeks of studies. When we were not attending classes in Berlin, we would go back to our countries to continue working while we read the coursework material for the next chapter. We started in October 2016 and finished in May 2017. The first block looked at the different pillars of general management — we covered human resources, finance and operations. During the second block, we focused mostly on strategy and innovation, then during the last block we combined all topics, looking www.businessday.ng

at an integrated approach to general management. There were about 25 of us in class, slightly more men than women, but with people from Russia, China, Malaysia and India, and different parts of Germany, of course. I was the only

wanted. The course heightened my emotional intelligence and I became much more aware of individual colleagues around me, the customers that I service and our partners. I also got to know my own leadership style better. In a

‘

Running provides a space where I recharge myself, and I believe that as a leader you always need to be recharged. You need to pour from a cup that is overflowing. person from an African country. I love travelling, so my studies were also a chance to explore other European countries. I took the chance to visit cities such as Paris, Rome and Venice before stopping in Berlin for my classes, where I would stay

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for a few days after classes had ended. The tools I developed on how to lead myself and others helped when I came back to work. Within a few months I was promoted to the general management position that I had @Businessdayng

nutshell, my approach is to be collaborative, charismatic and to lead by inspiration. I believe actions create a culture. As a leader, you are a brand. You are always in the spotlight, and need to be aware of that, without it leading to a state of panic of always having to be perfect. In the future, I want more global exposure either from a global advisory role or from gigs in public speaking. I might even consider moving to Berlin in the future. It would definitely take me out of my comfort zone — the very relaxed and slow-paced town of Richards Bay where I live, which is the opposite of Berlin. But what drives me now is the question of how I can give back. With the World Marathon Challenge, which my employer is funding, the goal is to raise roughly $330,000 for a school with 657 children between the ages of five and 15, one hour’s drive from Richards Bay.

Tuesday 04 June 2019

BUSINESS DAY

Why MBA students now read novels in class

t Pittsburgh’s Carnegie Mellon University, students at the Tepper School of Business are eating lunch in the expansive dining area of the new $201m campus building In a small seminar room upstairs, 30 MBA students have gathered to discuss What We Lose, a novel by an African-American author, Zinzi Clemmons, who grew up in Pennsylvania. This is the Tepper Reads book club, created to help its students — many of whom hope to be future business leaders — better empathise with people from backgrounds very different to their own. Tepper Reads is somewhat better resourced than a typical informal gathering of bookloving friends. Between meetings, students can listen to a podcast in which teaching staff from Carnegie Mellon’s English department discuss themes in the books under discussion. At this gathering, students are meeting the author — the university has paid to fly her over from her home in Los Angeles. One of the book club members is Jillian McCarthy, an academic programme adviser in Carnegie Mellon’s electrical and computer engineering department, who is studying for an MBA at Tepper part time. “I am a big reader so I was pleasantly surprised when I came here and found this happening,” she says, adding that the resources made available to the MBA students make the book club she runs in Pittsburgh look “amateurish”. Tepper Reads is a core part of Shift Programming, an addition to this year’s Tepper’s MBA programme that introduces literary and art criticism to business students to build their self-awareness and leadership skills. The curriculum includes learning improv techniques at a theatre in Pittsburgh and private dinners with former alumni and academic staff. Empathy classes are now a trend among business schools, with classes taught as lectures

and in small seminar groups on many campuses. But Shift takes the concept to another level by taking the teaching out of the classroom and into informal gatherings at the homes of faculty staff or on visits to local galleries. The course is optional for MBA students but has proved so popular that there is a waiting list for the 150 places. “We are the most human part of what can feel like a pretty mechanical degree experience,” says Leanne Meyer, executive director of the Accelerate Leadership Center at Tepper, who has led Shift’s development. “MBA students are often looking for that one right answer to a question to get a competitive edge,” she adds. “What we wanted to teach was that there is more than one way to think, so there might be three right answers. [The best student] is often the one who can make the best argument.” Art appreciation is another key element of Shift. Tepper has set aside space for the installation of a collection of wooden box structures with coloured bars. It was created by Francis www.businessday.ng

‘

What we wanted to teach was that there is more than one way to think, so there might be three right answers. [The best student] is often the one who can make the best argument Collins, a Carnegie Mellon fine arts graduate and owner of a San Francisco construction company Dream Builders. I join four students who are being shown around the installation by Elizabeth Chodos, director of the Regina Gouger Miller Gallery at Carnegie Mellon.

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She notes that Mr Collins is both an artist and an entrepreneur — he donated $100,000 to Carnegie Mellon in September 2018 to form the Francis and Erin Collins Miller Institute of Contemporary Art Fund, enabling contemporary art to be installed around the university — so she feels he is very appropriate for a business school exhibition. “My first task is to make the MBA students feel comfortable around the art,” Ms Chodos tells me afterwards. “There is this misperception that art is only for the few.” Understanding what an artist intended to do is also a very good way to stretch a business school student’s empathetic skills, Ms Chodos adds. “This is a living person communicating with living people through his art.” The students on the tour are less forthcoming, perhaps because art appreciation is a long way from their previous experiences in the corporate world. “It is not a comfortable experience,” says Marc Rosenberg, a former systems analyst for Verizon, who is in the second year of the full-time MBA. “But I would @Businessdayng

not be here if I wasn’t happy coming out of my comfort zone.” Some of the Shift students have struggled in the book group. Ms Meyer recalls that one student asked how he should go about reading Ms Clemmons’s novel. He had previously only read the necessary chapters in textbooks. “It was amazing how few have read fiction before,” she says. Ms Clemmons, who teaches at a college in LA when she is not writing, admits that meeting MBAs is helping her broaden her own outlook, adding that she was pleasantly surprised with the level of questions. “I like that they seem very open to creative paths, and I wasn’t expecting that,” she says. “I am pretty lefty, a socialist, but I am not afraid to talk to people who do not think like me.” For Ms Clemmons, Shift presents an opportunity to reach out to a group that could be agents of change. “These students are likely to have a disproportionate impact on the world,” she says. “So if I can encourage them to be more empathetic that might change a lot of things.”

Tuesday 04 June2019

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

‘Human capital devt, knowledge gap needed to achieve Nigeria’s competitive aspirations’ KELECHI EWUZIE

igeria, Africa’s largest economy can only achieve her desire of a new country that will compete with other first world countries by addressing growth stimulators such as Human capital development, Knowledge gap and aggressive attraction of investment. An industry expert has said. He observes that to restore the dignity of Nigeria and create the human resource capacity that will drive economic growth into the future, governments at levels in must pursue with single- minded focus issues around high level and functional (skillBased) education. Sam Ohuabunwa, president and chairman, Pharmaceutical Society of Nigeria opines that enthronement of public –private partnership and the encouragement of private investment in education especially vocational and tertiary education will go a long way in accomplishing this daunting task. Ohuabunwa while delivering the sixth public lecture at Crawford University, Igbesa, Ogun, observes that Nigeria’s educational system has suffered mostly from in appropriate planning and perennially poor funding; adding that despite all the talk about free education, handing over primary education to the local government is a misnomer.

According to him, “The current local government system in many parts of Nigeria cannot deliver the change in foundational education required to ignite the proposed revolution in our educational system” Speaking on the lecture title, ‘When

will Nigeria become a first world Nation?’ Ohuabunwa said Nigeria must quadruple its rate of digital technology adoption and application. “Nigeria must invest heavily in artificial intelligence and be active in the stratosphere.

L-R: Moshood Mayegun, Lagos Island Government Education Authority Secretary; Abiodun Esther Obidairo, Head Mistress, Olowogbowo Methodist Primary School; Aloiye Aigbonoga, Community Relations Manager and Ezra Nwachukwu, Engineering Supervisor, Operations both of Axxela Limited at the official commissioning of the refurbished Olowogbowo Methodist Primary School, Lagos Island and donation of books and school supplies in Lagos.

Related to this is the huge investment in research and development” he said. He further opines that if Nigeria must exit this third world status, she must exploit its areas of comparative advantage and unleash an export driven growth strategy centered on non-oil. On the factor around aggressive attraction of investment, Ohuabunwa said that the government cannot make this happen, no matter how much its tries. He called for the involvement of domestic investment backed by high foreign direct investment (FDI) To him, “Investment create enterprise, enterprise create jobs, jobs create wealth and wealth drives away poverty” He maintains that all government need to do is a sensible policy, creation of incentives and removal of government bureaucracy , adding that sustained application of these policies for a minimum of eight years will catapult Nigeria into a developed country. On his part, Isaac Rotimi Ajayi, vice chancellor, Crawford University, in address at the lecture said it is heart warming to have someone like Ohuabunwa give the lecture especially in a nation that has not only chosen to live in a voluntary oblivion of her history, as well as bereft of good example of people in our public space. Ajayi lauded him for the providing the require insight of “how” and the “when,” Nigeria would cross the threshold of mediocrity and move into the top echelon of statehood as a First World nation-player.

CIA’s students’ sugar research highlights Axxela commits to improve learning, significance of practical to active learning reading culture in primary education Temitayo Ayetoto

he research skills of students studying Cambridge International A level science at the Oxford Tutorial College has been put to test in a biology experiment which goal was to stress that theoretical knowledge isn’t enough for active learning without practical orientation. Having gone through a series of teaching on the active ingredients that make up generally consumed fluids, about 20 students were spread into groups of three, each jointly seeking to examine the concentration of glucose, sucrose and starch in the solutions before their tables in the equipped biology laboratory. Glucose is a simple sugar that the body produces mainly from carbohydrate and also from protein and fat. It is transported through the bloodstream to supply energy to all cells in the body. Sucrose is the common type of sugar sourced from plants and used with drinks many like coffee, tea, cereal and soft drinks among others. It is a natural compound that gives valuable energy but could be harmful when over-consumed. Starch on the other hand is a white, tasteless, odourless substance found in rice, corn, cassava, wheat, potatoes and many other vegetables. Based on A-level curriculum, the research took a semi-quantitative approach that gave

room to subjective estimation of the properties present in the solutions but also with an expectation of similar outcomes. Oluwasegun Shona, Biology tutor and observer said such experiment was important to gauge and improve the problem-solving ability of students in advance of the challenges they are to tackle at the tertiary level. “This is to give a rough idea of the concentration, which could be high, low or medium. When they get to the university, they will use more standard equipment to determine the actual amount,” he said. “We carry out project-based learning at Oxbridge. Even when you do this, you will still have to compare the results here with what you will have in research institutes to see the disparity. Eventually, they will have an idea of what the standard results are.” Considering that different students possess different levels of intelligence quotient, the most challenging aspect of Shona’s duties is being able to adjust to the level and nature of understanding, as well as the temperament of the individual learner. Oxford Tutorial College works with a belief that one of the best ways of learning is providing practical support which lays emphasis on experiential understanding. With this, students are expected to be able to plan experiments to solve problems. They should know what to look for in planning, the necessary statistics and how to analyse data.

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... Commissions, donates books to school Kelechi Ewuzie

xxela Limited says it remain committed to improve the learning habits and reading culture among our youth beginning from primary school education through investment in infrastructure development. In celebration of Children’s Day and in demonstration of its Corporate Social Responsibility Axxela commissioned the newly refurbished Olowogbowo Methodist Primary School, donated books for the school library and provided school supplies to the students. Aloiye Aigbonoga, community relations manager, Axxela Limited while speaking on the initiative said: “In line with our CSR efforts to give back to communities where we operate, we adopted and refurbished the school, upgraded the library”. Aigbonoga said the company is also proud to empower staff of the school by providing an improved workplace environment, as this initiative gets us closer to achieving the United Nations’

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Sustainable Development Goal 4 of Quality Education. The refurbishment project included general repairs of sixteen classrooms, replacement of all damaged windows, installation of new library bookshelves, restoration of the playground, provision of a fully-equipped sick bay, and replacement of all toilets and sewage system. On his part, Moshood Mayegun, Lagos Island Government Education Authority Secretary lauded the effort of Axxela saying, “We are indeed grateful to Axxela for its intervention that will go a long way in boosting the morale of the students, while giving them access to quality education with the much needed resources and facilities. The children of Olowogbowo Methodist Primary School can now learn in a more conducive environment, and we promise to make judicious use of the facilities Axxela has provided.” As part of the company’s unwavering commitment to improve the standard of living of its host communities, Axxela also recently commissioned the newly reconstructed Elegbata Sports complex, also located in Lagos Island.

@Businessdayng

Tuesday 04 June2019

BUSINESS DAY

EDUCATION ‘We want to strengthen capacity in STEM education among next generation leaders’ KELECHI EWUZIE

rincipal Consultant, Lonadek Inc, Ibilola Amao has reiterated committed to build an ecosystem of next generation leaders who are grounded in Science technology Engineering and Mathematics (STEM) to help Nigeria achieve her developmental goals. Amao said part of its goal for Nigerian youths help groom Stempreneurs, whereby these youth have foresight, insight and cross sight which would enable them see opportunities where many others see problems, issues and challenges and therefore are not left behind in the race of digital disruptions. Amao made this known at the 2019 Youth Empowerment and Restoration Initiative programme (Vision 2020) held at the University of Lagos Main Auditorium.

Students of Queen College, Yaba Lagos showcasing their Electromagnetic Induction Charger (EMI Charger) at the Vision 2020: 28th career counselling, industry awareness and youth empowerment programme recently held at Unilag.

According to her, “Our focus is Stempreneurs. We are telling them once they have potential talent and a passion in a particular area they can

Eternal plc advises government on school adoption programme, donates library to school Olusola Bello

ternal plc has advised the Lagos State Government to consider the school adoption programme by corporate organisations so that they would be able to contribute meaningfully to advancement of education in their areas of operations. Mahmud Tukur, managing director and chief executive officer of Eternal plc gave the advise at the commissioning of a renovated Library by his company and donated to Alapere Comprehensive Secondary School at Alapere in Kosefe Local Government area of Lagos State. The Eterna plc boss who was represented by Kudi Badmus, chief financial officer of the company said: “We hope that the government would be able to bring back the policy of adopting schools programme which the Federal Government had some years back where corporate organisations can adopt schools and based on the adoption they keep improving on the facilities and learning environment of that particular a school”. He said it is a policy I think Lagos State can adopt given the fact that there are so many schools but with limited resources as the principal has said “We hope the new administration of Babatunde Sanwo Olu can consider this through public

private partnership”, he said. According to the chief Financier Officer of the company we have now realised that the school needs more than the library to make the student study in a more conducive atmosphere and promised that Eterna plc would look at other arrears it can assist the school in the nearest future. In addition to the renovation of the library apartment, two computers and several books that cover various subjects, chairs and table for about 28 students were also donated to the school. She said the company actually wanted to donate library as it own Social Corporate Responsibility (CRS) that was why it looked at the school that is closest to its facility and it decided to come to the school, but having come here with a population of 1,200 students and seeing the facilities they have, we saw that they are still a lot that can be done. What we are currently discussing as members of Eterna plc is that rather than going through several routes, we can improve on the facilities that they have here; we all can see there is a lot of dilapidations, so we believe there is a lot more that we can do in this school as regards improving the facilities here. This is why we are thinking it would be better for the state government to see the option of the school adoption programme improving the lots of the schools. www.businessday.ng

make it an enterprise and start a business, they don’t need to graduate, they can start a business while still in school”. She said “We know that

conventional jobs are disappearing and see STEM and Entrepreneurship as a gateway to wealth creation. To fulfil the local content aspirations of resource rich emerging economies, youths must be engaged to have a conversion mentality. As we count down to the end of this 15-year programme our goal is to influence youth to become entrepreneurs and Stempreneurs through thinking out of the box in teams. Working to convert ideas in to bankable enterprises” The “Vision 2020: Youth Empowerment and Restoration Initiative” programme is borne out of a conviction of the management and staff of Lonadek Inc. to fill a gap in career counselling, industry awareness and youth empowerment. She however noted that the group would be launching a ‘STEMpreneur after School Initiative’ that would encourage members of the JETS Club who are more interested in Technology

and Innovation spread their wings, adding that “Our hope is to get young problem solvers working in teams to create jobs and opportunities for others”, Amao noted. “I am encouraged when citizens in the western world look to Africa for organic products, herbal remedies, essential botanical oils, natural cure for terminal disease. Nigeria requires a 360 on Process Technology, most especially in view of the issues of global warming and pollution. With mental health, safety and security becoming an issue, we need to apply STEM more creatively to address issues from as broad as joblessness, poor medicals, kidnapping to power supply” said Amao. According to Amao, from 2006 up to date over 83,000 youths has been empowered and several participants of the youth initiative programme have recorded excellence beyond expectations, through

career counselling, industry awareness and youth empowerment giving young minds direction and encouragement so that they can channel their energy into value-adding and constructive activities. “We are now resolving societal problems through STEM projects. Our Cedar STEM and Entrepreneurship Hub, strategically located in Yaba, the Silicon Valley of Nigeria is now engaged in International Computer Driving License (ICDL) Certification to empower Nigerians for global careers. “For the future benefit of Nigerians being active in STEM and digital disruption, we enjoin others to join hands with us as we develop the critical mass of human resources that would deliver solutions in the area of predictive engineering, predictive operations and predictive maintenance of digital assets in Energy, Power, Infrastructure, Manufacturing, Mining , Oil and Gas”, Amao said.

Good manners: Important attribute to holistic education and personal effectiveness

OYIN EGBEYEMI

he concept of etiquette is something that we could easily take for granted. In general, we tend to be very much fixated on some more obvious areas of development such as academic excellence, skills in extracurricular activities, career success, social status and many more. While these are great to have, softer skills such as good manners and etiquette are critical behavioural areas that help us interact with each other and within our communities appropriately. These also enhance our personalities and give good indications of our upbringing and views of life. They really go a long way in making people stand out as well cultured individuals. Polite behaviour and good manners should be no-brainers. However, there seems to be

a school of thought that politeness may be viewed as weakness, particularly in the dogeat-dog world in which we live. Some assume that people who imbibe this mode of good behaviour may be”push-overs” or will be taken advantage of. In spite of this, confidence and assertiveness carried out in a polite manner can replace rudeness in all situations. For instance, when people have opposing views on a certain topic of discussion, it is possible to have a healthy argument, get an understanding of different perspectives and agree or agree to disagree; all done with politesse. After all, human beings cannot always have the same opinions about everything; these are a factor of our unique environments and experiences. Another example is in the area of punctuality, which is something that we seem to struggle with in Africa. Being late to meetings and appointments is absolutely unacceptable behaviour, except in cases of extenuating circumstances, during which notice and updates should be given to attendees of the appointment. Arriving late is a very impolite way of sending a subliminal message to others who make the effort to arrive on time that the late comer’s time is more important than that of the other’s. Yet another example is in

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the area of table manners. We would be surprised that many adults do not know how to eat properly or use basic cutlery (forks and knives). While it is appropriate to eat our local food with our hands, table manners is an area that we should carefully take note of, especially when we are at formal dinner settings, consuming continental food. So, where do we start from to ensure that we exhibit good etiquette? We can always adapt our behaviour and soft stills, but with most things, it is best to start learning while we are young. Therefore, there is dire need to teach our children while they have the ability to learn and adapt to the various modes of exhibiting good behaviour. This way, there are higher chances of these soft skills sticking when children grow older and develop into adults, thereby making them more effective individuals. The truth is that learning good manners is not an overnight process; and we can very easily tell those within our social and work environments who were brought up with these skills: Those who greet politely, open doors, speak appropriately, know how to use cutlery correctly, and carry out all that they do with complete decorum and confidence. Good etiquette could even @Businessdayng

go a long way in securing jobs, interacting with clients, making social connections, meeting the right mate and making good friends. Doing things the appropriate way adds unquantifiable value in ways that we may not initially acknowledge, but would appreciate when results, connections and such general value creation as these mentioned above yield. Below are some of the advantages of good manners: • In the work place, professional manners get positive attention. While the basic skills on a particular job are critical, knowledge of the work is not all that is important. The manner with which the work is carried out; and in situations of teamwork, the mode and language used when interacting with colleagues go a long way. People who exhibit such are respected in the workplace. Those who rule with rudeness and inappropriate language and behaviour may be feared, but not necessarily respected. • Amongst friends, politeness could be the fuel to lasting relationships. When friends respect each other and interact in a polite manner, they are more likely to enjoy each other’s company. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Tuesday 04 June 2019

BUSINESS DAY

AVIATION GUIDE

in association with

Adding PH as part of our destinations shows our commitment to Nigeria’s aviation sector - Ozbek Yunus Ozbek is the General Manager of Turkish Airlines in Lagos, Nigeria. Yunus Ozbek was assigned as General Manager for Turkish Airlines Lagos office in 2018. He joined the company in Turkish Airlines Houston office as a sales and traffic agent in 2013 and after working there for three years, got assigned as regional sales operations Manager for Turkish Airlines Miami office. He was responsible for sales operations when opening Turkish Airlines Miami, USA and Cuba, Havana offices in the past, both successfully opened and still operating and currently responsible for opening Turkish Airlines Port Harcourt route. In this interview with IFEOMA OKEKE, he speaks about the airline’s plans in Nigeria. How long have you managed the Lagos hub and how has the experience been? got assigned to our Lagos station in November 2018 and I was looking forward to it because Lagos is the biggest city in Africa. It is also the most dynamic city, so managing such a big operation here and being around lots of opportunities with the possibilities to make a change got me excited. The experience has met my expectations so far and I am looking forward to doing more here in Lagos. What are the recent developments with Turkish Airline? Turkish Airlines is the national flag carrier of Turkey. Described as Turkey’s “rising star”, Turkish Airlines started its journey in 1933 with just five aircrafts. Today, its serves with a passenger and cargo fleet of 336 aircraft. The substantial growth it has achieved puts Turkish Airlines among the top airlines of the world. By the end of 2020, the fleet of the carrier including cargo is expected to reach 500 aircrafts. Turkish Airlines is opening more international gateways across the world for its passengers than any other airline, currently offers a wide range of flights to 304 destinations in 122 countries. The airline has had a rising performance in its passenger potential for more than ten years, carried 10.4 million passengers in 2003. This figure rose to 29.1 million, 32.6 million, 39 million and 48.3 million passengers in 2010, 2011, 2012 and 2013, respectively. In 2014, an impressive period of growth saw this number rise to around 55 million. The number of passengers carried in 2015 was 61.2 million, and this increased to 62.8 million by the end of 2016. While the number of passengers carried by the flag carrier reached to 68.6 million in 2017, Turkish Airlines’ total Load Factor improved by 4.7 points up to 79.1 percent, while international Load Factor increased by 5 points, up to 78.4 percent, during January-December 2017 period. During January-April 2018, increase in demand and total number of passengers was 21 percent and 24 percent, respectively, over the same period of last year, and the total number of passengers reached to 23 million.

Yunus Ozbek

For how long have you been in the aviation industry and what impresses you about the industry? I have been in Aviation for about eight years now. The most exciting part of the industry is how it has become possible for people to travel and visit any part of the world. There are thousands of reason we travel and when the travel experience is good, it becomes a part of the journey therefore, it becomes your memories. Making this possible and getting the feedback from our valued passengers is impressive. Tell us about the new plan to operate from Port Harcourt and how the operations will be managed? Port Harcourt is a very important city for Nigerians and the investors. We want to make it more accessible for passengers by bringing a direct flight with no stops anywhere else. It will be four times weekly, with a nonstop flight from our beautiful hub, Istanbul Turkey. Currently, we know a lot of passengers are

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forced to go to Abuja or Lagos by car, bus or domestic carriers to fly out but starting June 24th, 2019, this will not be needed anymore. We fly to more countries than any other airline in the world, with over 300 destinations. Passengers will simply choose where they want to go, book it and enjoy the services we offer while getting to their final destination. Will there be special offers for those flying from Port Harcourt? Yes, currently we have very competitive prices from Port Harcourt. In addition, we offer a Corporate club that Corporates can be a part of and take advantage of the benefits. On top of that, we will offer student fares, seaman fares and plenty other offers for all kinds of travellers. As winner of the Europe Best Airline awards since 2011 until date, what sets your airline apart in the aviation industry? Turkish culture is known for its hospitality. This is one of the key factors of our success because anyone that flies with us is a guest and we do all it takes to ensure our guests are happy. On top of this excellent natural advantage, we have a highly professional management, passion and love for the work we provide. These, create a recipe for success. How many passengers has Turkish Airlines transported from Nigeria this year? Since January 1st 2019, we have carried over 78,000 passengers which is relatively low because the traffic was slower due to elections but now traffic is great because there is a great trust in Nigerians and Nigeria. What direction do you see Nigerian aviation industry heading in the next five to ten years? Nigerian aviation will be the most dominant in the region. If you look at Nigeria`s geographical location, it’s a natural hub for Africans. Nigeria’s economy is growing, population is rising and more investors from all around world are investing in Nigeria. All these factors move aviation industry to get bigger and better. We are happy to be a part of this growth as currently we are not only having daily passenger flights from Lagos and Abuja but also a cargo flight from Kano as well. Adding Port Harcourt as our 4th destination in Nigeria as an airline that flies to

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more countries than any other airline in the world, it shows our commitment and ambition for Nigeria and its Aviation industry. Turkish Airlines has placed emphasis on service delivery. Could you tell us about the service standards you have in place and what kind of trainings you have for your employees? As a member airline of Star Alliance, IATA, ICAO and other organizations, we have very high standards when it comes to trainings and getting the right policies in place to be able to provide the best service possible. We have a training center for our staff called Turkish Aviation Academy. In this facility, we provide trainings for our staff as well as other airlines. It’s a fully equipped facility with teachers and professionals that will present you with certifications when your training is done successfully. Are you worried that Nigeria’s unstable economy might affect your expansion plans? I am very confident in Nigeria`s economy, there is a great potential here and an incredible young population with lots of smart people that can drive it further so for that reason I am not worried. Nigerians are outgoing, they love to travel, go beyond and discover. The future of aviation industry in Nigeria is very bright. In addition to Port Harcourt, what further expansion plans does Turkish Airlines have? Currently we do not have any other expansion plans in Nigeria but Nigeria is a very promising country and its growing fast so I strongly believe this will change sooner than later. How do you define exceptional service? To me an exceptional service is when you do something from the bottom of your heart and expect nothing in return. We have this culture and understanding in Turkey and it is one of our most important strengths. Like I said earlier, we do see all our passengers as our guests and we have such big respect for them, making them happy and comfortable is in our genes. So with proper trainings, rules and regulations an exceptional service comes naturally.

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Tuesday 04 June 2019

BUSINESS DAY

BDTECH

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E-mail: jumoke.akiyode@businessdayonline.com

Vodacom’s robotics training for students, a step towards Nigeria’s technology evolution Stories by Jumoke Akiyode Lawanson

odacom Business Nigeria has reiterated its commitment to ensuring that Nigeria keeps pace with the evolution of telecommunications technologies. To achieve this, Vodacom organised the second edition of the annual Inter-School Robotics Training Workshop for students across nine Lagos secondary schools. Wale Odeyemi, managing director for Vodacom Business Nigeria, says: “As an organisation, our aim is to help empower the next generation, with relevant technical skills in order to drive positive change in the Nigerian economy through the use of communications technologies.” Odeyemi says: “As the world progresses further into the fourth industrial revolution, there has never been a better time to infuse some much needed STEM training in the education sector through such initiatives as the annual Inter-School Robotics Training initiative. This initiative fur-

ther demonstrates Vodacom’s support for education at the grass root level to encourage further budding of aspiring youths who are interested in participating in the digital revolution. Among the schools that participated in the one-day workshop were;

Dansol High School, Avi-Cenna, Holy Child College, Edgewood College, and Adrao International School. Others were; Rainbow College, Greensprings International School, D-Ivy College, Halifield College and Chrisland College. The participating students ages

12 to 15, received firsthand opportunities to immerse themselves in the complexities that surround the Internet of Things (IoT) and how these will shape society in the near future. As part of the programme, students were taught how to build, program, and control various kinds of robots which are being used to perform numerous functions in today’s world. This demonstrated the essential use cases of such technologies in everyday life, ranging from manufacturing to transportation, as far as even securing lives and property. The inter-School Robotics Training Workshop provided participants the opportunity to explore various ways in which technology is shaping the world around them. The training covered areas such as Robotics, Artificial Intelligence (AI), the Internet of Things (IOT) and Virtual Reality (V.R.). The students were also equipped with useful mechanical and programming skills which can be honed and developed as they progress through the various levels of education. Edgewood College Lekki came top in the

competition that took place after the training, while Holy Child College Obalende and ADRAO International School, Victoria Island were first and second runners-up respectively. Participants in the workshop commended Vodacom for introducing them to the world of robotics as this has opened them to the opportunities that lie ahead in the future. Josephine Aghedo, a student from Edgewood College, said: “I found the workshop educative and inspiring. It has given me a glimpse about what being a computer engineer means and how I can help the world with knowledge gained, thanks to Vodacom for this great opportunity.” Vodacom Business Nigeria recently partnered with eBusiness Life Limited for the 2019 edition of the International Girls in ICT Day celebration held in Lagos. Girls in ICT Day is an initiative of the International Telecommunication Union (ITU) designed to sensitise young girls on the need to take up careers in Information and Communication Technology (ICT).

Western Digital reinforces commitment to Nigerian data market …Increases product portfolio and offerings

estern Digital Corporation, a global data infrastructure company, has reinforced its commitment to the Nigerian market with the introduction of a range of data storage solutions. The products are poised to expand Western Digital’s existing product portfolio in Nigeria and allow local consumers access a wide range of WD®and SanDisk®-brand products. Speaking during a media interactive session in Lagos recently, the company executives stated that there is particular focus on this market, as Nigeria has ample market which needs to be adequately serviced. The SanDisk Extreme™ microSDXC™ UHS-I card, the first 1TB card in the world; SanDisk Ultra Loop™ with capacities of 32GB, 64GB and 128GB; and the SanDisk® Ultra Trek™ USB 3.0 also available

with capacities of 32GB, 64GB and 128GB are all now available and enhance overall drive capacity and performance for customers across Nigeria. Each product was specifically tailored to address capacity needs and provide convenient onthe-go, reliable storage solutions for customers. With the widest range of data storage products which are totally managed and built Western Digital, the introduction of an extended product portfolio has been described by stakeholders as a step in the right direction. Nigel Edwards, vice president of sales for EMEAI, described Nigeria as an important market for the company. “Western Digital creates environments for data to thrive; we help our customers capture, preserve, access and transform data. As a country with a significant percentage of digi-

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tal savvy individuals, Nigeria is an important country for us. “ Edwards also said that the company’s aim is to create value to consumers and stakeholders by providing innovative storage solutions. “One thing we see are the endpoints of where technology is now going, where it is being used and where people need their storage. With 4.2 Exabyte of data transitioning through mobile devices each year and it is growing at an exponential rate, the industrial sector, internet of things, automotive industry, smart city, all of these things are what we would see in the next 10-15 years driving massive amounts of data. Western Digital as a corporation is strategically placed to service all of these business areas today with our portfolio of products,” He said. Edwards who said that efforts are being made to curb grey market

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practices has said the company’s priority is to ensure the safety of its customers. “It is critical for us that the consumer is protected, we would do whatever it takes to make sure that the consumer is protected. It undermines the market if there is a lot of counterfeit in the market,” He said. Corroborating him, Gerry Edwards, director of marketing for EMEA Western Digital, explained that the new products would enhance diversification of Western Digital’s offerings in Nigeria. He said, “We understand the magnitude of this market, which is why we have expanded our distribution channels, so that more people can have access to our products. Nigeria has millions of individuals who use data digitally, one way or the other - we have recognized this opportunity and provided storage

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solutions for their needs. We offer high-performance, high-capacity and high-quality storage solutions to fit the increasingly digital lifestyles of consumers.” Also speaking, Ghassan Azzi, senior sales manager, Africa for Western Digital, said that the company is constantly building relationships and has a solid support structure for its distributors to discourage grey market practices. “Western Digital offers peace of mind for customers. What Western Digital does is to enable people, we enable to have our storage and our technology. Efforts to curb grey market practices has been very effective. Being on the ground, building relationships, establishing distribution networks, going to visit those guys, having a marketing plan with us has been very effective to make sure those guys buy from us, buy the original products.”

Tuesday 04 June 2019

BUSINESS DAY

BDTECH

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Eko Innovation Hub to boost Nigeria’s tech ecosystem Stories by JUMOKE AKIYODE-LAWANSON

echnology is the key driver to fast-growing economies globally, creating smart economies with technology-driven innovative solutions, leading to the creation of new jobs that previously never existed. This idea of a technology-driven growth is the key motivation for Victor Afolabi, the founder and CEO of GDM Group to develop a new innovation hub – Eko Innovation Hub for the incubation of startups in Lagos – the heart of the country’s economy. Tech hubs are a vital part of the entire start-ups ecosystems by providing platforms and opportunities for collaborations and building support structures that are important to the growth of new startups. Lagos over the last few years has become one of Africa’s city with a robust tech ecosystem; it is currently the city with the highest number of technology hubs on the continent. It is in keeping up with this fast-growing paradigm of technology driven economies, that the new Eko Innovation Hub was launched

on Tuesday, 28th May 2019, aimed at discovering, incubating and curating new startups that will create new technological-driven solutions and add better value to an already growing tech ecosystem on the continent. The primary objective being to transform the tech and innovation landscape in Nigeria and by extension, Africa. Afolabi, the brain behind the new hub says he is motivated by the need to create an enabling environment for young people to develop innovative solutions and

create employment while leveraging technology, and for him, Lagos provides the perfect setting to launch this idea. “We saw in the Lagos manifesto an agenda to make the State a 21st century economy. The only way to create a 21st century economy is to make sure you are creating businesses and solution to problems that are driven by innovation and technology,” he said during the launch of the new hub. It will be noted that Nigeria recorded the highest

L-R: Nigel Edwards; vice president of sales, EMEAI, Western Digital, Ghassan Azzi; senior sales manager, Africa, Western Digital and Tareq Husseini; senior sales director, Africa and Turkey, Western Digital at the media briefing session on the extended product portfolio, held in Lagos recently.

Technology, key to unlocking potentials in diary industry – Experts

xperts in the dairy industry have stressed the importance technology plays in harnessing the huge opportunities in Nigeria’s dairy industry. This discussion is coming at a time when large dependence on pastoralists and house hold women for production of dairy are making output low in Nigeria, considering the country’s population. Experts have therefore called for bridge in knowledge gap through technology to aid modern processing, marketing and consumption of dairy in Nigeria. Speaking during Tetra Pak Lagos Workshop, Aruna Oshiokamele, managing director, Tetra Pak, West Africa said technology is now a very important part of our lives and diary is not left behind in the fourth industrial revolution, adding that Nigeria is already jumping on the bandwagon even though it is not at the same pace with other countries. “We believe that with the right nutrition, knowing the

growth of tech hubs in Africa, expanding by 40 percent in two years between 2016 and 2018. The Eko Innovation Hub is designed not just to add to the growing figures of local tech hubs, but to provide a much-required platform for startups to scale through the challenges of their incubation period – a bold and audacious initiative for the country’s tech community. A game changing initiative Most of the existing hubs primarily provide workspaces and basic facilities

right breeds to use for generating milk, helping with transportation and storage amongst others are ways technology will help with managing the huge potentials we have to harness in the dairy industry. “Dairy is a very important aspect of our lives and at Tetra Pak, dairy has been very important for us and we believe this is a very good time to show how we can together with the people in the industry harness the opportunities we have in this vast industry. So, we decided to bring everyone together to discuss on the next step when it comes to the whole facets of the dairy lifestyle we have in Nigeria,” Oshiokamele said. On measures put in place to help push feedbacks from the workshop to the right channels, he said the first step is what Tetra Pak is doing with the workshop. “Through this workshop, we are bringing experts to talk about the opportunities and challenges we have in this industry and the next is to discuss with everyone on how to make www.businessday.ng

use of those opportunities. “The good thing with Tetra Pak is we have been around for over 60 years and we have a very vast knowledge when it comes to managing diary in various parts of the world and that is what we will bring into this conversation. We are committed to this,” he explained. The MD further explained that the consumption of diary is very low in Nigeria and the intention of Tetra Pak is to improve and increase that consumption because from a health point of view, dairy is very important. Also speaking at the event, Mosunmola Umoru, technical adviser, (Youth and Gender) Federal Ministry of Agriculture and Rural Development (FMARD) said some of the ways to address the challenges of low production of diary in Nigeria are intensifying production locally, bridging knowledge gap, access to effective funding and intensifying modern daily processing, marketing and consumption.

including power and internet services, with a few more providing support platforms for the growth of the startups operating from there. But for Eko Innovation Hub, it is imperative to become a partner in the progress and success of the startups, by providing shared services including legal, finance, tech, marketing, and PR services among others. In doing this, the hub gets a stake (equity) in each business. This means that startups who are admitted have the time to focus on their businesses and are not worn out by bureaucracy, as the hub essentially takes over most of the bureaucratic processes, allowing the businesses focus more on the success of their ventures. This is a game-changer for potential start-ups. For most Nigerian startups, the stage between concept to commercialisation is mostly the defining stage of the journey, where many eventually get it wrong. The new innovation hub is simply saying, “focus on building your products and business, while we take care of the other things for you!” Babajide Sanwo-Olu, the governor of Lagos State also

graced the occasion of the launch – to endorse the initiative and reiterate his administration’s commitment to leveraging technology in delivering the megacity dream. In his statement, SanwoOlu said; “Technology is the way to go, it is the way of the future and it is the way the entire universe is going to, and everybody is using technology to develop everything that we need. We believe that from here, things around the theme concept that has to do with the environment, education, transportation and health innovations would be developed. People from here would come and give us innovative ideas to solve our transport problem; ideas with which they think locally but act globally,” he added. Also, important to note, is that the Eko Innovation Hub is a private investment, to run independently, without any government funding. The launch of the hub is a welcome development to add to the growing technology ecosystem in the country and it is expected that it will run with full steam once to deliver the vision of the founder.

Tecno launches Pouvoir 3, new big battery smartphone

ecno mobile has taken into consideration, Nigeria’s electricity/power supply shortage and has unveiled a new addition to its Pouvoir series which is known for its huge battery capacity. The new Tecno smartphone, Pouvoir 3, features an enormous 5,000mAH battery for users to enjoy up to four days of non-stop fun and usage in just a single charge. Highlighting the key features of the Pouvoir 3 in relation to its numerous benefits for the user, Jesse Oguntimehin, public relations and strategic partnerships manager, Tecno, said; “Being from the stables of the Pouvoir series that is known for its incredible battery capacity and performance, the Pouvoir 3 proudly delivers on battery life, with 4 days uninterrupted standby performance. With the 5000mAh battery being the focal point, the Pouvoir 3 device takes the user to a place of utmost

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comfort and satisfaction with an impressive battery charge that can last for an extremely long time,” The new powerful addition to the Pouvoir family comes with a high performing glossy design that is light weight, slimmer and sleeker than its predecessors. The device also comes with a 6.2-inch notch screen and super full view that projects images better –which is a substantial improvement from its predecessor, the Pouvoir 2. The Pouvoir 3 is integrated with new age smartphone technology and is packed with an ex-

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emplary array of new features such as: Face unlock, fingerprint sensor for optimised security, AR emoji and wireless FM radio. Tecno Pouvoir 3 dons a 13MP (megapixel) front camera and 13MP rear camera, has a large internal storage of 32GB ROM+ 2GB RAM and runs on Android 8.1 OS based on HiOS 4.1, which guarantees an overall fluid performance. The company also announced that there is an ongoing Pouvoir competition where fans can win prizes when they buy the new device which entitles them to a scratch card. “What you see is what you win. Take a picture of your scratch card and post it on your Facebook, Instagram or Twitter page with the hashtag #OneCharge4DaysOn and you could win the Grand Prize of a 24/7 Solar Power Energy Inverter & Power Back Up Battery, a Generator, Power Bank and other gift items,” The company said.

Tuesday 04 June 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE OIL

GAS

PETROCHEMICALS

Market Insight Companies Commodity Tracker Policy

POWER

Like fund managers, Nigeria needs to reconsider oil-based portfolios STEPHEN ONYEKWELU

edge funds and portfolio managers are reviewing assumptions that oil prices will rise and liquidating bets because the U.S.-China trade war paints a gloomy global economic outlook and Nigeria needs to see this as an invitation to act. Data compiled by Reuters show that money managers have reduced their net long position over the four weeks to May 21. Net long refers to a condition in which an investor has a portfolio consisting of more long positions than short positions in a given asset, market, portfolio or trading strategy. Investors who are net long will benefit when the price of the asset increases. The net long concept can also be applied to Nigeria economy’s dependence on oil. Africa’s biggest oil producer holds a net long position on oil. Unlike fund and portfolio managers who can move swiftly, Nigeria is unable to do so. Nigeria will find itself in a precarious situation if escalating U.S.-China trade tensions drastically weaken oil prices. It is widely known that Nigeria relies heavily on crude oil exports which account for over 90 percent of export earnings and over 70 percent of govern-

ment revenues. A sharp decline in oil prices has the potential to threaten Nigeria’s economic recovery while disrupting exchange rate stability. The potential decline in foreign exchange reserves from lower oil is likely to weaken the Naira consequently translating to rising inflationary pressures. “Consumers and businesses will feel the heat as inflationary pressure mounts, while the drop in foreign reserves may complicate the Central Bank of Nigeria’s efforts to defend the Naira” Lukman Otunuga, research analyst at FXTM told BusinessDay in an emailed response. For fund and portfolio managers, the change in the net long position in the week to May 21 was almost exclusively due to liquidation of bets that prices will rise, not the opening of fresh short positions that prices will drop, OilPrice. com, an online oil intelligence and news platform reported. Portfolio managers have been selling lately Brent Crude and WTI Crude, as well as U.S. gasoline futures, but they have been buying U.S. heating oil and European gasoil, possibly expecting increased demand for heating oil and gasoil in the run-up to the new shipping fuel regulations by the IMO

starting January 2020, according to Kemp. Nigeria needs to do something similar and start liquidating its net long position on oil by intensifying efforts at economic diversification. Nigeria’s economic potential certainly lies beyond oil with a strong focus on agriculture. With a very youthful population and fertile land, the nation has the potential to create employment through agriculture which will not only result in food security but support

economic growth. “While there is no single silver bullet to solve our economic problems as such, it is my strong belief that for Nigeria to fast track its economic growth rate there has to be deliberate and sustained investments in basic infrastructures, particularly power and transportation; human capital; agriculture; and healthcare” Adekunle Olumide, a retired diplomat who served on various United Nations’ social and economic desks.

When Nigeria develops the ability to export agriculture products across Africa and the globe, this will reduce the reliance on oil ultimately insulating the nation from oil-induced external shocks. While other non-oil sectors such as telecommunications, Information Communication Technology and even manufacturing have the potential to elevate the nation, heavy investments in infrastructure are needed to make this possible.

Why Nigeria’s refineries are in a terrible shape - Kachikwu STEPHEN ONYEKWELU& DIPO OLADEHINDE

be Kachikwu, minister of state for Petroleum Resources, has explained why the country’s four refineries in Port Harcourt, Warri and Kaduna are still terrible shape despite huge investments and many attempts to make them productive. In an interaction with journalists including BusinessDay, the minister who is usually at the forefront, mostly representing and speaking on behalf of President Muhammadu Buhari who also doubles as the minister of petroleum resources admitted that the refineries are still performing poorly and that it is one area the administration did not deliver its mandate on. Kachikwu explained that the first problem the administration had when it came on board was that the refineries were not even functioning or producing at all and because of the apparent huge fuel scarcity it was a major challenge for him “because if I have to wait for vessel each time to meet the delivery timelines we always have a problem.” “The pipelines that were supplying petroleum products had all being destroyed, and the previous government had then entered into a contract to buy products by ves-

sels however the cost of those vessels supplying were more than the crude that was being supplied so it wasn’t making any financial sense,” Kachikwu said. Kachikwu narrated that with the president permission he cancelled the contracts and challenged Nigerians who were concerned to use their own money to repair the pipelines and if after three months its works the Nigerian National Petroleum Corporation would pay or give maintenance contracts to the companies. “By March 2016, the refineries started producing not obviously by 90 percent capacity but at least they were adding close to 2 or 3 million barrels. However the years of Turn www.businessday.ng

Around Maintenance (TAM) were all a failed exercise as billions and billions of naira were spent and every time the thing packs up,” Kachikwu said. The NNPC has four major refineries, two in Port Harcourt, Rivers State, which combine to form the Port Harcourt Refining Company (PHRC) with a combined installed capacity of 210,000 barrels per stream day (bpsd); the Kaduna Refining and Petrochemical Company Limited (KRPC) with an installed capacity of 110,000 bpsd; and the Warri Refining and Petrochemical Company Limited (WRPC) with an installed capacity of 125,000 bpsd. All the refineries have a combined installed capacity of 445,000 barrels

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per day. After series of deliberation, Kachikwu explained how he created a business model whereby investors can invest in the refineries and make the refinery to start working at about 90 percent capacity which would move production from an average of 50,000 bpd to an average of 300,000 bpd. The profit from it would be used to offset the loan taken over a period of four to five years which was the next best situation because the best situation would have being sell the refineries. “The president approved it however as at that time I left as GMD of NNPC and handed over. NNPC owns the refineries so the minister’s role is not to come in and head the negotiations with investors on how refineries are run, the minister’s work is to push for policy approval and make sure they stay on track,” Kachikwu said. Kachikwu said as chairman of the board, he worked hard in pushing NNPC on this but it didn’t deliver however by December last year, when he got worried NNPC were not meeting the mandate that are expected from the refineries he called a meeting and tried to resolve the meeting with investors themselves over the contractual terms. “I thought I did, eventually NNPC @Businessdayng

still rejected the terms we agreed. So when people say I didn’t deliver I don’t know what else they were expecting from me,” Kachikwu said. Kachikwu explained that the future of refining is not in public sector but in private sector which was why they supported Dangote wholeheartedly. “I have visited the refinery about four times some of my guys have been their over 20 times and we set a timeline working with them as if it was a public sector project. So they have never being that kind of corporation before, Kachikwu said. As uncertainty continues to surround their proposed rehabilitation, Nigeria’s refineries extended their losses, recording an operating deficit of N133.9 billion from January 2018 to January 2019. According to data compiled from Nigeria National Petroleum Commission (NNPC) within a thirteen month period, the three refineries incurred a combine operating deficit of N133.9 billion. In spite of promises by successive governments to improve the performance of the refineries and commit significant resources to their rehabilitation, the four refineries continue to operate at zero percent capacity utilisation, as data from NNPC 2019 monthly bulletin showed.

Tuesday 04 June 2019

BUSINESS DAY

ENERGY INTELLIGENCE Bill to cripple OPEC gets Trump’s Whitehouse support, should Nigeria be worried? ISAAC ANYAOGU

hese days, the biggest risk facing the oil market rarely comes from geo-political shocks including chaos in the Middle East – not that this is not a factor still - tweets from Donald Trump, president of the United State has the capacity to send prices reeling as much as a bomb going off in Tehran could. Against the backdrop of Trump’s frequent rants against OPEC for keeping oil prices too high, it was recently reported in the foreign press that a senior member of the Trump Whitehouse, supported the bill that will make it illegal for foreign nations to work together to limit fossil fuel supplies and set prices – the chief task of OPEC - demands more than a cursory introspection. Republican and Democratic lawmakers who can’t even agree on the weather came together and through the House Judiciary Committee passed the No Oil Producing and Exporting Cartels Act, commonly known as NOPEC, clearing the bill for a vote before the full House of Representatives the same day their counterparts in the senate supported the move. The NOPEC Act was initially and introduced in June 2000 as a congressional effort to address the issue that, under federal law, foreign govern-

ments cannot be sued for predatory pricing or failing to comply with US antitrust laws. It would protect consumers against collusion and predatory pricing by foreign governments and international cartels, such as the Organization of the Petroleum Exporting Countries (OPEC). OPEC is concerned The NOPEC bill has never featured on the agenda of OPEC since it was introduced into the US congress in 2000 but the organisation has spoken against it publicly. Since 2016 when the influence of shale oil bequeathed unto the oil markets the stability of mercury, and OPEC began meeting twice a year to place a cap on oil supply and monitor compliance of caps placed, the organisation has grown increasingly worried about the bill. Last year, it threatened to ditch the US dollars in

the international oil market. In private, OPEC has expressed grave concern. According to a March report by Bloomberg, Suhail Mohammed Al Mazrouei, the United Arab Emirates oil minister and the former president of OPEC, told some U.S. financiers that if the NOPEC bill becomes law, the cartel would stop working and therefore every member would raise production to maximum capacity, causing a crash in oil prices. What does it mean for Nigeria? Analysts say the impact on Nigeria will not be severe. “I don’t really think the impact in Nigeria will be that great if the bill is passed but we should be worried because it signals the world is finding alternatives to oil and the influence of OPEC is waning” said Ayodele Oni, energy lawyer

and partner at Bloomfield Law Firm. If the bill is passed, the biggest impact is that it could lead to lower oil prices which will negatively impact Nigeria’s revenue currently heavily reliant on oil. Revenues are already trending downwards with a fall in oil prices from $70 per barrel in November to around $62. Nigeria’s 2019 budget is based on a benchmark price of $60 per barrel. According to the latest quarterly review of Nigeria Extractive Industries Transparency Initiative (NEITI), Federal Account Allocation Committee (FAAC) disbursements between January and March 2019 dropped to $1.929 trillion as against N1.938 trillion disbursed for the same period in 2018. “Oil prices were above $80 per barrel in October 2018 but by December 2018 they had dropped to $57 per barrel. Average oil price for the first quarter of 2019 was $63.17 per barrel. Average oil price for year 2018 was $71.06 per barrel,” NEITI said in its review. NEITI in its report said the combined net disbursements from the Federation Allocation Account Committee (FAAC) to the 36 states and the Federal Capital Territory, Abuja, in 2017 and 2018, can hardly fund the 2019 budgets of 35 states. Low oil prices would please the US consumers and Donald Trump but it could also hurt shale produc-

ers who benefit from higher oil prices. “The NOPEC seeks to eliminate a key legal defence that U.S. energy companies have long relied on as a bulwark when caught between the competing dictates of the U.S. antitrust laws and the legal requirements of the foreign jurisdictions in which those companies often do business,” says Lucian Pugliaresi is President of the Energy Policy Research Foundation, Inc. (EPRINC), a public policy think tank located in Washington, DC. Pugliaresi raised the concern that retaliation could occur with OPEC and aligned nations taking U.S. companies to local courts. The bill which seeks to eliminate sovereign immunity a long standing common law and statutory defence which protects U.S. assets from capricious behaviour abroad, may hurt the United States too. This also brings into focus, Nigeria’s continued membership in groups like OPEC without being clear on a strategy of how it will benefit national interest. The power centre of the current OPEC is in Riyad and other gulf countries have more stakes in the cartel. Nigeria is Africa’s biggest producer but its sector is crises-prone and delivers little value for millions of its people who are dirt poor, justifying the call for a strategic engagement with OPEC.

Nigeria’s petrochemical refineries VAT contribution maintains downward trend in Q1 2019 DIPO OLADEHINDE

etrochemicals and petroleum refineries contribution to Nigeria’s value added tax basket has maintained its downward trend in the first quarter of 2019 by dropping further by 17.06 percent to N956 million compared to N1.1 billion in the fourth quarter of 2018, according recent data published by the National Bureau of Statistics (NBS). According to data from NBS, the q1 2019 figures of Petrochemicals and petroleum refineries VAT contribution showed the sector its yet to pick up from hitting a five year low of N4.70 billion to the VAT pool, full year 2018 which is 57 percent less from a high of N8.10 billion in 2014. VAT is a function of value creation in any sector of the economy. A falling VAT means the sector is shrinking and creating less taxable

value. Performance data of Nigeria’s refineries show they have been performing below installed capacity. Wummi Iledare, Petroleum professor at University of Cape Coast’s Institute of Oil and Gas said Nigeria’s declining VAT at a time when the price of oil is rebalancing passes very negative signal and warning that the worse could be ahead if urgent actions are not taken. Africa’s biggest oil producer’s petrochemicals and petroleum refineries contribution to the VAT pool has been falling since 2015, from N7.10 billion to N5.20 billion in 2016 and N4.81 billion in 2017. “Nigeria lacks stability and investors want their money in a place where they are sure of their investment. They prefer to have 10 percent return on investment in a place where the situation is not volatile, than a place where they get 100 percent but is very volatile,” Charles Akinbobola, an energy www.businessday.ng

consultant in a Lagos-based oil and gas firm, said. Petrochemicals are components derived from oil and gas that are used in daily products such as plastics, fertilisers, packaging, clothing, digital devices, medical equipment, detergents and tyres. They are becoming the largest drivers of global oil demand, in front of cars, planes and trucks, according to a major study by the Paris-based International Energy Agency (IEA), ‘The Future of Petrochemicals released in 2018’. According to IEA, “Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then. They are also poised to consume an additional 56 billion cubic metres (bcm) of natural gas by 2030, and 83 bcm by 2050.” “Our economies are heavily

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dependent on petrochemicals, but the sector receives far less attention than it deserves,” Fatih Birol, the IEA’s executive director, said. “Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. In fact, our analysis shows they will have a greater influence on the future of oil demand than cars, trucks and aviation,” Birol said. Nigeria built three petrochemical plants in Eleme, Warri and Kaduna. These plants have combined capacity to produce 240,000 metric tonnes of polyethylene, 130,000 metric tonnes of polypropylene, and 18,000 metric tonnes of carbon black per annum. However, a few years of operation and all the plants became moribund. A research conducted by the University of Benin, Nigeria, identified the reasons for collapse @Businessdayng

of the petrochemical plants to include irregular importation of feedstock, poor maintenance and lack of technical and managerial capacity. Despite being one of the largest producers of crude oil in Africa in the last four decades, Nigeria has consistently struggled to keep its refineries functioning optimally without success. Over the years, stakeholders have agreed that oil and gas sector can best be described as the goose in the Nigerian economy. If it is well nurtured and fruitful, the spin-offs can lead to a transformation of the economy. Unfortunately, despite this key role that the sector is expected to play, it has over the years failed to meet the yearnings of many ordinary Nigerians in terms of engendering the pivotal economic transformation and development of the country.

Tuesday 04 June 2019

BUSINESS DAY

OFFGRID BUSINESS

Investment

Hungary’s planned renewable energy powered agric city holds lessons for Nigeria DIPO OLADEHINDE

enewable energy is becoming an increasingly important alternative source of energy in the agricultural sector which is why Hungary has revealed plans to build a new carbon-neutral greenhouse-filled farming city that will be powered by renewable energy sources, a development Nigeria can learn from. Despite its huge agricultural potentials, Nigeria easily losses one third of its agricultural crops to either total lack of energy or unreliable electricity, a problem renewable energy can easily solve because its better alternative since its relatively cheaper, non-exhaustible and environmental friendly source of energy. Hungary, a country with an average population of 10 million people is proposing a €1 billion (£877 million) agricultural center which cover 330 hectares – equivalent to 500 football pitches for the border between Hungary, Austria and Slovakia. According to Hungry’s ministry of agriculture, the new region will be home to a complex of greenhouses for the year-round cultivation of herbs and vegetables such as aubergines and tomatoes. It will also be the location of “Europe’s largest onshore fish farm”, as well as the requisite cold

storage and logistics facilities. The settlement will be carbon neutral, meaning that the carbon dioxide produced in its construction and over its lifetime will be offset or eliminated entirely. Hungary’s minister of agriculture István Nagy told Bloomberg that the development would signal an “epoch change for agriculture” as German developers FAKT and energy providers EON are collaborating with the Hungarian government on the project. EON will be supplying the renew-

able energy to power these farms. This will be mainly in the form of solar and biogas, reported Bloomberg. Geothermal plants, a form of sustainable power that uses energy from the earth, will be used to provide cooling. “Sustainable, reliable and yet affordable energy solutions are essential for shaping the living and working spaces of the future.” EON director Alexander Fenzl told Bloomberg. About 1,000 homes for workers will be located in a new residential area, complete with a kindergarten

and elementary level school, as well as shops and hotels. “With the project we want to set a standard for the sustainable integration of work and living in Europe,” said FAKT CEO Hubert Schulte-Kemper. The development in Hungry holds much lesson for Nigeria whose painful wastage is not limited to the fruit alone but also include livestock, vegetables and other agricultural products as a result of lack of energy in the country. Over the years, Nigeria produces so much food crops but most of them are

lost during harvest and others are lost as a result of poor handling and poorer storage facilities. So much emphasis had been placed on intensive land clearing, fertilizer distribution and other inputs, at highly subsidized costs with very little or no attention paid to energy demand in the Agricultural sector. Whereas, no matter the tonnage of food farmers produce, if are unable to store them or add value to this food product by partial or full processing, there will still be food shortage and scarcity. Nigeria’s main sources of electricity which could have provide solutions are not producing sufficient energy to meet the country’s demand. And for many decades, homes, businesses, industries and farmers have faced the big challenges when accessing electricity as Farmers require nearly continual energy to increase farm produce. Data from National Bureau of Statistics (NBS) showed the contribution of the agricultural sector waned to 21.91 percent from 26.15 percent percent in Q4 2018. Stakeholders have emphasis that Renewable energy will be key to Nigeria’s economy which needs quick and stable growth over a few decades if it is to create jobs for its 21 million unemployed citizens and lift 87 million people out of extreme poverty.

10 years later, off-grid solar industry delivers power to millions ISAAC ANYAOGU

ince 2009 the off-grid solar energy has delivered quality energy services to hundreds of millions of people, something traditional electricity utilities had been unable or unwilling to serve, say World Bank analysts Dana Rysankova and Russell Sturm in a report for the organisation. The report said that in 2009 offgrid solar was almost completely unknown as Lighting Africa kicked off in Kenya. Today the industry is thriving across sub-Saharan Africa, Asia, and beyond. While in 2010 only six products met Lighting Global Quality Standards –today nearly 40 million units of over 150 quality verified products have been sold. A gray market of less reliable products also flourishes alongside, the report observes. The impact of this growth is seen in Nigeria in thousands of new connections established daily in rural areas where grid electricity is non-existence. With over 80 million people without energy access in Nigeria and the utilities burdened by liquidity constraints, the off-grid en-

ergy sector is poised to close the gaps. “The off-grid energy sector has been succeeding primarily on commercial terms, with over $500 million in investment pouring into the sector in the past two years. Electrification in Sub-Saharan Africa is now out-pacing population growth – which is largely attributed to off-grid solar expansion,” says the report. New businesses have been created and it has helped stir competition. “One of the signs of a healthy dynamic is increasing levels of competition. These competitive forces stimulate innovation, efficiency, and

reach, strengthening an industry’s long-term viability and building market resilience. The story of the older and more mature solar PV manufacturing sector provides context for the younger off-grid solar industry: In 2012 alone, at the peak of the solar PV manufacturing industry’s shake-out period, some 40 companies closed operations and another seven companies were absorbed or acquired by other companies in the sector. And yet, today, that industry continues its upward path and has been the forebearer and enabler of a global

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

energy revolution in the electricity sector, the report said. The report said the attractiveness of the off-grid solar sector has always been its ability to deliver social impact in a financially viable way. These returns have motivated impact investors and DFIs to support early stages of the market’s development. In the past two years, more commercial investors have entered the market, driven by prospects of financial returns. Meanwhile, governments and development-focused investors have been increasing pressure on companies to reach faster, farther and deeper into the markets. The result has often been competing pressures to deliver both profitability and social impact in unrealistic timeframes; such promises frequently belie the early-stage nature of these markets. The World Bank report now cautions that there is need to apply a dose of realism in the pursuit of energy access goals. “Social objectives must be considered in light of unit economics and pricing constraints, while speed of growth targets, will need to realistically reflect real-time learnings from the market and allow

for refinements. “The business models that have enabled the off-grid solar industry to reach previously unbanked, remote customers need time to mature before they can be stresstested in an accelerator. It’s a steep learning curve for these companies, but developing a firmer focus- on operational efficiency, an exceptional grasp of the nuances of local markets, adaptive management, and clear communication- will help the industry to navigate the challenges of next-stage growth.” It said that is key to buy investor support for management that targets fundamental performance over a singular focus on growth. Development-focused investors can engage with governments to build the enabling environment that can reduce the costs and risks of doing business, all the while engaging local financial institutions to establish a sustainable source of local currency. The Governments and their development partners can intelligently use public finance to support the industry to reach remote markets that cannot be served on a fully commercial basis.

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

Tuesday 04 June 2019

BUSINESS DAY

FEATURE

Enhancing capital inflow to Africa, Nigeria: The Ocorian Model SEGUN ADAMS

apital flow into Africa and more specifically, Nigeria, remains a crucial factor to the at t a i n m e nt o f t h e United Nations’ Sustainable Development Goals (SDGs), adopted by all United Nations member states in 2015. A decade and half to the deadline set for achieving the SDGs, a dearth of capital threatens the attainment of the SDGs on the African continent. As confirmed by a 2018 SDGs Index and Dashboards report from the SDG Centre for Africa, Africa faces more critical challenges than any other region in the world in terms of achieving the SDGs, partially because of poor finance. Yet, policy makers on the continent are not aggressive in formulating policies that will accelerate the flow of investments into the continent through the private sector. For Nigeria, the private sector faces difficulty in accessing capital to fund crucial projects due to several challenges, which the business environment presents. The difficulty in accessing capital by businesses is a hindrance to attainment of the SDGs. It was on this note that Ocorian, an alternative investment, corporate and institutional investment, private client and international growth service provider, gathered over 100 financial experts and investors to deliberate on the challenges facing the continent and International Financial Centres (IFCs) as they seek to unclog the investment pipeline to African countries, including Nigeria. At the maiden edition of the Ocorian forum held in Lagos, IFCs were identified as instrumental to improving access to capital for businesses as well as abating the fears of foreign investors who are wary of committing resources to African enterprises due to the lack of structures and processes. It was observed at the event that there is an increase in the level of participation of developmental financial institutions (DFIs) and private equity in Africa. However, a lot of private equity funds require well-regulated and conducive jurisdictions to invest. Over the years, Mauritius has stood out as a preferred destination for the domiciliation of private equity funds in Africa due to the investment friendly framework that exists in the country. This is a model, which African countries including Nigeria should explore to increase the inflow of capital. The problem of poor gover-

Richard Arlove

nance was a focal discussion point during the recent forum in Lagos. Participants identified and agreed that it is the biggest impediment to foreign investment on the continent, discouraging the inflow of funds. According to experts at the event, poor governance manifests in two forms: in the political sphere and at the corporate or organisational level. Poor policy formulation, coupled with a lack of transparency and political instability arising from weak governance, increases cost and risk for foreign investors. However, the focus of discourse was corporate governance culture in Nigeria and Africa. Richard Arlove, regional CEO, Africa, Middle East and Asia (AMEA) of Ocorian, noted that corporate governance was not deeply rooted in Africa. “The issue has become even more urgent especially when you realise that there has been a shift from foreign aid to private equity in the quest to fund critical projects that have the capacity to drive the continent’s developmental targets,” Arlove said at the event. He stated that a lot of businesses in Africa now leverage

private equity funds compared to several years back, and that the trend required a greater level of transparency to earn the trust of investors with funds to grow startups and existing businesses. The regional director of the fiduciary and corporate services provider said, “Investors are keen on being able to trace how their fund will be deployed in the business so they can be assured that

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Investors are keen on being able to trace how their fund will be deployed in the business so they can be assured that they can recoup their fund

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they can recoup their fund.” Unfortunately, in Africa governance is often seen as a pain. For instance, a lot of businesses cluster most of the responsibilities of governance on the founder who would act as the chief executive officer, chief financial officer, chief operating officer and occupy many other roles. The unintended effect of such a practice, coupled with a lack of proper bookkeeping, is that potential investors are discouraged by the absence of transparency in the business processes. The solution to this, according to Arlove, is corporate governance. He further explained that businesses in Africa need to jettison the family-run model and become more flexible to attain full potential and maximize growth opportunities. ‘’If you want your business to be part of an International Finance Centre, then you need to have an independent board, you need to have audited financial reports, you need transparency. All of this is what corporate governance entails,’’ he said. Arlove believes the issue is not about paucity of funds to support businesses in Africa but more

about improving corporate governance practice so that more capital can become accessible. ‘’On one side, you have many private equity firms today with money lined up, looking for good projects to invest in. On the other, you have many entrepreneurs who need these funds, but there is no match,” he added. Delivering the opening remark at the event, Tonye Cole, founder, The Nehemiah Youth Empowerment Initiative and former executive director and co-founder, Sahara Group, drew attention to the role of the investment banking community in the attainment of the Sustainable Development Goals (SDGs). Cole said: “The financial and economic liberation of Africa and Nigeria specifically, is critical for business growth. I have over time worked with the team in charge of meeting the Sustainable Development Goals 2030 target for the economy. The United Nations estimated the capital required for the period to be $11.5 trillion. The issues related to poverty, hunger and malnourishment and zero access to basic healthcare are some of the global challenges.” A highlight of the forum was a panel discussion themed: “Adding Value to International Business in and out of Nigeria - the role played by an International Financial Centre”. The panel discussion was moderated by Nousrath Bhugeloo, regional head, Ocorian AMEA, Business Development. Panellists included: Wola Asase, head of Syndication and Trade Finance, Africa Finance Corporation; Tokunboh Ishmael, co-founder/managing director, Alitheia; Adesuwa Okunbo, partner/managing director, Syntaxis Capital Africa; Ari Sengupta, group managing director, Chicason Group; Richard Arlove, regional director, AMEA, Ocorian The panel emphasised the need for companies to build sustainable businesses by seeking capital from the most efficient sources for growth. Ocorian enhances enterprise value and protects investors by using financial centres. It facilitates the flow of African-focused funds into different industries and sectors including high impact funds for projects or businesses that prioritise social and environmental impact. The Ocorian Forum, previously known as the ABAX Forum, serves as a platform to exchange views and promote thought leadership around the key questions of enterprise value and investor value driven by IFCs. An earlier edition was held in Abidjan this year.

Tuesday 04 June 2019

BUSINESS DAY

INTERVIEW

Despite challenges, we remain focused in creating values that impact humanity FEMI AKINTUNDE, an Industrial Engineer, is the Group Managing Director and Chief Executive Officer of Alpha Mead Group. In this interview, he speaks on what the many awards his company has won, including the recent BusinessDay Top 25 CEOs Awards, mean to them. Besides being acknowledgement of what they are doing and also encouragement for them to continue to do what they are doing, Akintunde says the awards mean much more to them. He speaks with CHUKA UROKO, Property Editor. Excerpts: Recently, you were recognized as the Next Bull in the Top 25 CEOs and Next Bulls Award organized by BusinessDay in collaboration with the Nigerian Stock Exchange. What does that award mean to you as an organization? e really appreciate that award, more so when it is coming from a credible voice that is recognizing enterprises that are doing very well. There are so many funny awards out there and when they invite us, we don’t bother to show up. But when you hear about credible media platforms like BusinessDay Newspaper and Channels Television, which you have studied over time and seen how much they are respected for their credible voice, you can take what they say which people believe in. We really appreciate what BusinessDay is doing or has done in that respect and what they are doing to promote business enterprise in Nigeria. This is because it is through research that we will be able to fish out valuable contributors to the economy in Nigeria. We believe that the more we acknowledge the contribution of such enterprises, the readier they are willing to do more. The award for us means that irrespective of the situation we are going through as a nation, there is still opportunity for us to turn things around. For us to be able to do that, we must come together and play with our first team and doing this means identifying the team players, putting them forward and supporting them by creating an enabling environment which is what businesses need from government. We believe entrepreneurs in Nigeria can do far more if the government creates the enabling environment and a level playing field for everybody to participate. Government institutions need to work well and do what government is set up to do. That is the only time when government interface with the private sector can lead to meaningful result.

also recognize that the awards are not the reason we will stop doing what we are doing or get distracted. Our focus is more on where we are going and the goals we have set for ourselves to achieve.

BusinessDay Top CEO Award is not the only one your company has received so far. Tell us about those other awards and why you think you really earned them The first award we got was from Shell and that came when we were just one year old. We were recognized by the oil company as the Best Safety, Health and Environment Compliant Contractor in the infrastructure group. That was very encouraging because it meant that a company of less than one year old was able

Femi Akintunde

to put a system together and implement same within one year. This is a multi-national company where the standard is very high. It meant too that, for us to start that way, we would go very far and so, it was a very good encouragement for us. We have also got award from the facility management association as the best stakeholder in the industry. In 2013, we got an award from Michael Porter, a Professor of Corporate Competiveness at Harvard who came to Nigeria and worked in partnership with the Tony Elumelu Foundation which ranked us the 16th fastest growing companies among 50 that were identified that year. That same year, the Entrepreneur of the Year (EY) award came up and we were recognized in the emerging business category in West Africa. That award meant so much to us because, of all the companies considered and, we as a company from real estate, a sector that is not among the top performers, were chosen. This is not a sector that everybody will focus on. So, the award meant a lot to the real estate industry and more to us as a company. Over time, we have got awards from the Nigerian Society of Engineers (NSE) which was also a recognition from the technical angle of the work we do. University of Lagos has also recognized the work that we do. So also has the University of Ibadan. We have seen different recognitions coming from different ways in the course our journey as a business. Another award that was of significant importance to us was the one from European CEO Award www.businessday.ng

which was organised by a group in UK that recognized best facilities management companies of the year. That was in 2014. We came out tops among the three they considered from Nigeria, Dubai and South Africa. We were told that we came up tops because we had been able to sustain our ISO certification yearon-year for five years in a difficult operating environment like Nigeria. One other significant award for us is the one we received from the London Stock Exchange (LSE) which is a recent event. We were recognized as one of the companies to inspire Africa. This was a result of a research by top-rated research houses such as PwC, the LSE themselves and Asoko Insight. We were identified among 350 companies that will inspire Africa. How do you react to these awards and, in specific terms, how do the affect what you do? When we get these awards, what they mean to us is an acknowledgement of what we are doing and also an encouragement for us to continue to do what we are doing. But in the midst of all these, what we don’t do is not to allow ourselves to be distracted by the awards and recognitions. We acknowledge and recognize the awards, but at the same time we believe that we are still far from where we are going to. We see a gap in the space where we play and that space has to be filled. That is the value we want to create. We want to create wealth and impact Nigeria. So, if while we are doing all that these recognitions are coming in, we have to receive and acknowledge them, but we

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Awards generally come with encouragement and even excitement. But there are challenges too. How are you taking up the challenges that come with these awards? Our focus is on the growth of our company and the industry at large. But let me also point out that you cannot do what we are doing without having fans and foes around you. There are people who are there as obstacles; there are others who are there for different reasons—to cheer or to constitute nuisance along your way. If you want to play big, you must meet a lot of challenges on your way. We are conscious of all that and we factor them into our journey. For purposes of clarity, where, specifically, are the areas you want to make the impact you talk about? We want to provide quality service to our customers; we want to make them happy; we want to focus on our core business; we also want to create quality work space; quality living environment and contribute to housing solution for Nigerians; contribute to health management services that support the real estate sector. These are the areas where we want to make impact. We want to create quality real estate and infrastructure assets. We also want to support government’s infrastructure maintenance initiatives. As we go along, we meet the challenges that every other person meets. What will differentiate us from the others is how we are going to confront and surmount those challenges. All the issues are there—lack of finance, poor institutions, government policies, difficulty in getting resources, high cost of input, low infrastructure stock. All these problems will not go away overnight. They are part of everyday lives of companies and their managers. What differentiates us is how we have been able to identify those problems and been able to address them while we are advancing the cause of our organization towards achieving our goals. So, the challenges are there just as detractors and cheerers are also there as part of the market. The FM industry in Nigeria is still suffering from slow growth. Given your passion and position as lead@Businessdayng

er in the industry, what advice do you have for other players on how to grow their businesses? The FM is a good industry with ample opportunities. It is estimated that the value of the industry globally is $1.15 trillion and it is expected to contribute between 5—7.5 percent to GDP in a standard environment. But in Nigeria, its contribution to GDP is less than 1 percent. So, if you estimate the size of Nigerian GDP which is approximately $400, it means that the value of the industry in Nigeria is very insignificant. This means that the demand gap is there. What we have not done as practitioners is to fill the gap with supply. To fill that gap, we need capacity in terms of people with the right skill, finance, competent people, institutionalized systems, processes, standards and technology. To acquire all these require a lot of money. The money you need, you can get it through shareholders investment, through debt or you create it through retained earnings or profit. But we know how difficult it is to make profit in this country. Even debt through banks is not there and where it is available, it is difficult to get. The service environment in Nigeria is very difficult and this is why businesses are rising and falling. The capacity to create wealth is not there. This is not peculiar to Nigeria. Even foreign players are affected. Many players here cannot cope with the environment. Many have really gone. Some foreign firms that came to play in this environment could not cope and so they have gone back. Some of them came wanting to acquire businesses like us as launching pad, but what we discovered was that if they could not understand the enviromment, the associastion wouldn’t work. We have therefore told ourselves that if it is just one thing we should showcase as a pride of this country, we will do that and ensure we do it well. This is why we are branching out to showcase what we have to the rest of the world. We are now in 11 African countries. In those countries, they see us as super-stars, bringing something new from within Africa. We are very proud of that but it is a challenge of leadership. We have taken FM to that level and we are projecting both value and Nigeria as a country. That can also bring big and good businesses. So, if the issue is about Alpha Mead voice being heard more, you can understand why. It is a tough environment but you need to develop the power to deal with it.

Tuesday 04 June 2019

BUSINESS DAY

Live @ The Exchanges Oando: Federal High Court restrains SEC from removing Tinubu, Boyo Stories by Iheanyi Nwachukwu

he Federal High Court sitting in Lagos has restrained the Securities and Exchange Commission (SEC) from removing Wale Tinubu and Omamofe Boyo as Group Chief Executive Officer (GCEO) and Deputy Group Chief Executive Officer (DGCEO) of Oando Plc respectively. The Justice Mojisola Olatoregun court granted an interim injunction following an application by the embattled GCEO and DGCEO. The duo had applied for enforcement of their fundamental rights. The court also restrained SEC, its servants or agents from taking any step concerning the commission’s letter dated May 31, 2019 in which it barred Tinubu and Boyo from being directors of a public company for five years. The Securities and Exchange Commission (SEC) on Sunday night informed the public of the constitution of an Interim Management Team to be headed by Mutiu Olaniyi Adio Sunmonu. SEC said the interim management is to oversee

the affairs of Oando Plc, and conduct an Extra Ordinary General Meeting on or before July 1, 2019. Also, the Interim management, according to SEC is to appoint new Directors to the Board of the Company, who would subsequently select a Management Team for Oando Plc. The Commission however reiterated its commitment to maintaining the integrity of the capital market. Oando got an Order Of Interim Injunction restraining the 1st Respondent (SEC), its servants, agents employees and/ or privies from taking any step concerning and or acting on its decision contained in its letter of 31st May 2019 imposing a fine of N91,125,00 on the 1st Applicant and barring the 1st and 2nd Applicants from being directors of the public companies for a period of 5 years pending the hearing and determination of the Applicants’ Motion for Interlocutory Injunction. Also, the court granted Oando interim injunction restraining the 2nd Respondent (Mutiu Olaniyi Adio Sunmonu) from acting as the head of the interim management of Oando Plc pending the hearing and determination of the Applicants’ Motion

for Interlocutory Injunction. Also, granted was an order staying and or suspending the execution or the enforcement of the 1st Respondent’s decision contained in its letter of 31st May 2019 imposing a fine of N91, 125.000 on the 1st Applicant and barring the Applicants from being directors of public companies for a period of 5 years pending the hearing and determination of the Applicants’ Motion for Interlocutory Injunction. The Federal High Court also granted an order of interim injunction restraining the 1st Respondent, its servants and its agents from directing, requesting any agency of government to act upon its decision contained in its letter of 31st May 2019 pending the hearing and determination of the Applicants’ Motion on Notice. Stock investors at the Nigerian Bourse on Monday priced-in possible risk to the company’s future. The share price of Oando Plc was down 9.52 percent in early trading on the Nigerian Stock Exchange (NSE) after the Securities and Exchange Commission (SEC) unveiled its findings from an investigative report on the company.

SEC, EFCC strengthen collaboration

he Securities and Exchange Commission (SEC) and the Economic and Financial Crimes Commission (EFCC) have agreed to collaborate in combating crime in the Nigerian capital market. This agreement was reached when the Management of the SEC met with the Management team of the EFCC at the EFCC Corporate Headquarters in Abuja weekend. Acting DG of the SEC, Mary Uduk who led the team, said the visit was necessary in order to close ranks in the

face of re-awakening of Ponzi schemes, cybercrime and other fraudulent activities that have engulfed the market in the last few years. Uduk also stated that the visit was aimed at revisiting the Memorandum of Understanding (MoU) signed between the SEC & EFCC on January 19, 2017. According to Uduk some areas where the MoU seeks Cooperation of both Agencies includes training, secondment of middle cadre officers of the SEC to the EFCC and those of the EFCC to the SEC, cross boarder

asset seizure, repatriation of stolen funds from the Capital market and prosecution of offenders amongst others. “We have had reasons to work together on some cases in the past. There is no better time for the SEC and EFCC to collaborate more closely than now” she added. Responding, the Acting Chairman of the EFCC, Ibrahim Magu thanked the Executive Management of the SEC for the gesture and stressed the need to strengthen collaboration between both agencies.

Union vows to continue protest if Gwarzo is reinstated HARRISON EDEH, Abuja

taff of the Securities and Exchange Commission (SEC) on Monday in Abuja vowed to continue protest if the Federal Government goes ahead to reinstate the suspended Director General of the commission, whom the National Industrial Court last Thursday ordered his reinstatement. The staff had in the morning on Monday June 3 in Abuja protested an attempt to reinstate the suspended director general. BusinessDay findings showed that Gwarzo is yet to resume work, even as the

union had vowed to resist any attempt of his possible resumption of duties at the commission, raising concerns of infringement on corporate governance, which the administrative panel of inquiry headed by the Permanent Secretary Mahmoiud Isah Dutse indicted him for abuse of office and corruption. Nelson Olegeh, Chairman, Association of Senior Civil Servants of Nigeria (SEC), Abuja branch led the protest as he alongside other union members urged the Federal Government to revisit issues raised by the panel and not do cherry picking. Speaking to BusinessDay on the sidelines of the protest, the Chairman said, “After the court judgment last week,

we had from a reliable source that he was going to resume back to SEC so as a union we held a meeting and decided that with what is on ground, we cannot allow him to return to SEC because during his time a lot of crisis was in the system before he was suspended” He states further that, “We equally felt that his coming back to the Commission will be disastrous and that is why we called our members out this morning to show that grievances to tell the Ministry of Finance, since we don’t have a board and the President to be aware that as a union we will resist any move from any quarter to reinstate him as DG and SEC is better without him.”

Tuesday 04 June 2019

BUSINESS DAY

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Tuesday 04 June 2019

BUSINESS DAY

news Why SEC moved against Oando... Continued from page 1

lowing the receipt of two petitions from Alhaji Mangal Dahiru and Ansbury Incorporated. Excerpt from the result of the forensic audit was released on Friday, May 31, 2019 on the website of the SEC. In the letter to the chairman of Oando plc, seen by BusinessDay, SEC alleged that it observed certain infractions of securities laws by some members of the Board of Oando plc, adding that the findings of the Commission were communicated to Jubril Adewale Tinubu, the group chief executive officer of Oando plc, by a letter dated July 10, 2017. SEC claimed that findings from the forensic audit revealed corporate governance lapses, failure of internal controls, incidental issues arising from the sale of a subsidiary, suspected market abuse, related party transactions, payment of interim dividend despite liquidity constraints, false disclosure, non-disclosure of beneficial ownership, and tax-related issues. The SEC, consequently, directed Oando plc to pay N8.45 million to the Commission for publishing what it termed untrue statements in its 2012 financial statement, in violation of rule 3(4) of the SEC rules and regulations, made pursuant to the Investment

and Securities Act (ISA) 2007. The SEC also directed Oando plc to pay N7.85 million to the Commission for publishing what it called untrue statement in the 2013 financial statements, in violation of same rule stated above. Oando plc is also to pay to SEC the sum of N42.75 million for non-disclosure of related party transactions in its 2012 financial statements, in violation of Rule 39 (1&7) of the SEC rules and regulations, 2013 made pursuant to the ISA 2007. Furthermore, Oando plc is to pay N30.62 million to the Commission for alleged nondisclosure of related party transaction in its 2014 financial statements, in violation of Rule 39 (1&7) of the SEC rules and regulations, 2013 made pursuant to the ISA 2007. SEC named eight directors of Oando plc that it expects to collectively pay N145.76 million. They are Akinrele Ademola (N24.35 million), Ammuna Alli (N11.95 million), Yusuf Njie (N3.11 million), Ike Osakwe (N24.35 million), Oghogho Akpata (N28.97 million), Tanimu Yakubu (N24 million), Sena Anthony (N11.25 million), and Oba Adedotun Gbadebo (N20 million). SEC asked Oando plc to convene an Extra-Ordinary General Meeting (EGM) on or before July 1, 2019 to appoint

new directors and articulate remedial measures for the observed corporate governance lapses. “For certificate of untrue statements of material facts in the 2013, 2014, and 2015 financial statements of Oando plc in violation of Section 60 (2 (b) (ii) of the ISA 2007, Mr Jubril Adewale Tinubu (Group Chief Executive Officer) and Olufemi Adeyemo (Chief Finance Officer) are ordered to pay the sum of N91.125 million each to the Commission,” SEC further said in the letter. All monetary penalties referred to above by SEC are expected to be paid to the commission immediately, it said. SEC barred Tinubu and his deputy Boyo from being directors of public companies for a period of five years “for improper conducts in managing the affairs of Oando plc to wit: market abuse, related party transactions not conducted at arm’s length, misstatements in financial statements and inaccurate disclosures in the financial statements of Oando plc”. On Sunday night, the SEC informed the public of the constitution of an Interim Management Team to be headed by Mutiu Olaniyi Adio Sunmonu. SEC said the interim management is to oversee the affairs of Oando plc and conduct an Extra Ordinary General Meeting on or before July

1, 2019. It said the team is to appoint new directors to the Board of the company, who would subsequently select a management team for Oando plc. But on Monday, the Federal High Court sitting in Lagos restrained the SEC from removing Wale Tinubu and Omamofe Boyo as group chief executive officer (GCEO) and deputy group chief executive officer (DGCEO) of Oando plc, respectively. The Justice Mojisola Olatoregun court granted an interim injunction following an application by the GCEO and DGCEO. The duo had applied for enforcement of their fundamental rights. The court also restrained SEC, its servants or agents from taking any step concerning the commission’s letter dated May 31, 2019 in which it barred Tinubu and Boyo from being directors of a public company for five years pending the hearing and determination of the applicants’ motion for interlocutory injunction. Also, the court granted Oando interim injunction restraining the 2nd respondent (Mutiu Olaniyi Adio Sunmonu) from acting as the head of the interim management of Oando plc pending the hearing and determination of the applicants’ motion for interlocutory injunction. Meanwhile, stock investors at the Nigerian Stock

Exchange (NSE) on Monday priced in possible risks to the company’s future following the development. The share price of Oando plc was down 9.52 percent in early trading on the Nigerian bourse after the SEC unveiled its findings from an investigative report on the company. The stock, which opened at N4.20 on Monday, lost 40 kobo to N3.80 at the close of trading by 2:30pm Nigerian time, bringing the company’s share value to its lowest level since November 30, 2016. According to the letter to the Oando plc chairman, seen by BusinessDay, the findings from the investigations include: corporate governance lapses – SEC said there were several corporate governance lapses stemming from poor Board oversight. These include irregular approval of directors’ remuneration, directors’ participation in matters in which they had declared interest, unjustified disbursements to directors and management of the company, failure of the Audit Committee to hold meetings with management, internal auditors and external auditors. Also on failure of internal controls, SEC said Oando plc failed to establish an effective system of internal controls as required under section 61 of the ISA 2007 over its financial reporting, thereby compromising the integrity

Apapa: Reasons gridlock persists despite... Continued from page 1

rassing and disturbing

dimensions, despite a subsisting presidential order to clear them without delay. Apapa gridlock has become intractable, defying short-term solutions as reflected in presidential orders and several stakeholders’ meetings, committees and taskforces comprising army, navy, police, residents, business owners, and maritime trade unions. BusinessDay findings show that besides poor state of infrastructure in and around Apapa, logistics problems as well as human factor manifesting in corruption and compromises are also critical factors that contribute significantly to what Apapa was yesterday and what it is today. By reason of its statutory functions, though it is one of the 20 local government areas in Lagos State, Apapa is Federal Government’s property from where the government rakes in hundreds of billions of naira in revenue from operations of its agencies at the two seaports in the area. The Federal Government has very strong presence at the two ports with its agencies collecting money for it. The Nigerian Customs Service (NCS) alone, in 2018, collected a total sum of N1.2 trillion in revenue for the government. It also made a total of 5,235 seizures with duty paid value (DPV) of N61.5 billion following its anti-smuggling operations.

The 2018 revenue was N164.8 billion more than that of 2017, which was N1.037 trillion. The NCS, in the last three years, has generated about N3.1 trillion in revenue and much of these revenues come from its activities at the Apapa ports, yet government does not have the political will to invest even 10 percent of this revenue into making Apapa what it is supposed to be as a port city. Borini Prono, the contractor handling the Tin Can Trailer Park, has been on that project for almost 10 years, citing lack of the needed funding from the Federal Government. The non-completion of that park, which can accommodate 400 trucks, is a major factor contributing to the gridlock. Added to this lack of political will to invest in Apapa are the vested interests which come in various forms, making solution to Apapa very difficult, if not impossible. Owners of tank farms scattered all over the port city as well as haulage operators would do everything humanly possible to keep Apapa perpetually down to their selfish advantage. When on May 22, 2019 the presidency gave a 72-hour ultimatum for trucks to vacate all roads and bridges leading to Apapa and followed it up with the setting up of a presidential taskforce to enforce the ultimatum, Apapa residents, business owners and their friends thought the end had come for gridlock. They were mistaken www.businessday.ng

of the company’s financial controls and reporting as revealed by the misstatements in the financial statements, high number of related party transactions and unjustified disbursements to directors. On incidental issues arising from the sale of a subsidiary, SEC noted that in 2013, Oando plc reported the sale of its subsidiary, Oando Exploration and Production Limited (OEPL), to Green Park Management Limited without obtaining the approval of the Commission, “(in violation of the provisions of the Investment and Securities Act (ISA) 2007) and the consent of the Minister of Petroleum (as required under the Petroleum Act, 1969)”. “The purported sale of OEPL enabled Oando plc to report a profit instead of a loss, thereby misstating its Financial Statements in 2013 and 2014 and consequently misleading investors. This ‘fictitious’ profit reported in 2013, enabled Oando plc to declare dividends,” the letter to the chairman read. It noted that “the 2013 misstated accounts and quarterly reports of Oando plc were included in the 2014 rights circular, thereby misrepresenting the financial status of the company to the public in violation of Section 86 of the provisions of the ISA 2007”.

•Continues online at www.businessday.ng L-R: Solomon Ikeanyi, vice president, direct custody and clearing, Citi Bank; Amidu Akinyemi, representative of First Registrars Limited; Funmi Ekundayo, MD/CEO, STL Ťrustees Limited; Damilola Ajayi, MD/ CEO, Vetiva Funds Management Limited; Gilbert Okoye, representative of Securities & Exchange Commission, and Oyelade Eigbe, head, funds management, Vetiva Funds Management Limited, at the ExtraOrdinary General Meeting of DV Balanced Fund in Lagos.

because the situation has worsened ever since. The police and Lagos State Traffic Management Authority (LASTMA), who are members of the taskforce charged with enforcing the presidential order, are not only overwhelmed by the enormity of work to do, but are also handicapped. “We would rather have a voluntary compliance of the truck operators with the presidential directive to vacate the bridges and roads around Apapa because of the logistical challenges associated with forceful towing of the trucks,” a LASTMA official, who craved anonymity, told BusinessDay on phone, Monday. One of such challenges, the official explained, has to

do with availability of towing vehicles for such massive operations, disclosing that the authority did not have in its kitty the number of towing vehicles required for such large-scale operations and, therefore, relied on private towing van operators, who demand payment upfront. Aside from the upfront payment, the private towing van operators are also unreliable as theyhave,manytimes,refusedto showupattherighttime,thereby frustrating the operations. “The trucks are tightly parked close to one another. This makes it difficult to drive in the towing vans in-between to tow the trucks,” said the official, who added that many LASTMA operatives had been

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wounded by the truck drivers, whom he alleged have on them dangerous weapons, including knives. The official also lamented the lack of adequate parking spaces for towed trucks. “Truth is that LASTMA does not have enough space to keep the trucks if we were to tow all the ones still lying on the roads and bridges,” he said. Another reason for the persisting gridlock, according to truck owners, is Federal Government’s perceived double standards in the application of the new Standard Operating Procedure (SOP) developed to guide traffic management in Apapa. This, the truck owners alleged, was why the new task@Businessdayng

force is struggling with traffic management, making motorists and port users continue to surfer long travel time. Remi Ogungbemi, chairman, Association of Maritime Truck Owners (AMARTO), who described the SOP as selective, said it was bound to fail from inception. “The Federal Government’s Standard Operating Procedure directed the new taskforce to give priority to and allow free access to trucks belonging to companies such as BUA, Flour Mills of Nigeria, Honeywell, Dangote as well as sided trucks, reefers, silos, fish trucks and flatbed trucks.”

•Continues online at www.businessday.ng

Tuesday 04 June 2019

BUSINESS DAY

news Presidency contradicts self, says ‘Buhari did not approve State Police’ Tony Ailemen, Abuja

residency has declared that President Muhammadu Buhari Monday only received a report on the reform of the Special Anti-Robbery Squad (SARS), and requested that the report be studied and a white paper produced within three months. According to a statement signed by the senior special assistant to the President on Media and Publicity, Garba Shehu, “President Buhari’s specific directive is that a three-man panel be set up to produce the white paper. “The report of the white paper committee will form the basis of the decisions of the government on the many recommendations, including the setting up of State and Local Government police made by the Ojukwu panel.” He stated, “Until a white paper is produced, it will be premature and pre-emptive to suggest that the recommendations contained in the report have been approved by the President in part or whole.”

A statement earlier signed by the Attah Esa, deputy director (information) at the Presidential Villa on Monday, had indicated that the President gave approval for the establishment of State and Local Government Police. According to the earlier statement, the President directed the Inspector General of Police, Mohammed Adamu, Ministry of Justice and the National Human Rights Commission (NHRC) to work out modalities for the implementation of the report of the Presidential Panel on the Reform of the Special AntiRobbery Squad (SARS), within three months. Esa stated, “The President gave the directive while receiving the 2804-page report from the Panel headed by Tony Ojukwu, executive secretary, NHRC, at the State House.” The report of the Panel, which is in Four Volumes, had among other things recommended the dismissal of 37 police officers from the force and the prosecution of 24 officers. The Panel also directed the IGP to unravel the identity of 22

officers involved in the violation of human rights of innocent citizens, as the police was directed to pay compensation of various sums in 45 complaints and tender public apologies in five complaints, and to obey court orders in five matters. The Panel recommended the establishment of State and Local Government Police and the renaming of SARS to AntiRobbery Section (ARS), which was its original name and to make the section operate under the intelligence arm of the Police. President Buhari had while responding stated, “I am very happy with the work of the Panel andIthankthePanelmembersfor working hard towards the realisation of the Presidential Directive. ‘‘I believe that the Report of the Panel and recommendations contained therein would go a long way in redressing the grievances of the complainants, ensure accountability on the part of the Police Officers in discharging their responsibilities and facilitate the various Police reforms being introduced by this administration.

‘‘I want to assure you and all NigeriansthatthisAdministration willcontinuetofulfilitsobligations of promoting and protecting human rights of Nigerians, and will give the National Human Rights Commission all the support required to ensure full implementation of the recommendations contained in its Report. ‘‘In addition, we will strengthen the operations of the Commission to enhance its effectiveness and capability to resolve cases of human rights violations. ‘‘This administration is consciousoftheroletheCommission plays in ensuring security and stability in the nation through the resolution of complaints of human rights violations, which if neglected, could result into major security challenges. ‘‘As you are aware, I have recently approved the reconstitution of the Governing Council of the Commission. The names of the Council members will be submitted to the National Assembly for confirmation before the inauguration of the Council in line with NHRC Act, 1995 (as amended).

Nigeria’s huge population, opportunity for social, economic development - UNPFA Felix Omohomhion, Abuja

he Un ite d Nat io n s Po p u l a t i o n Fu n d’s (UNPFA) resident representative in Nigeria, Eugene Kongnyuy, says the huge population of Nigeria, made up of youths under 25, is an opportunity for the country to transform its socioeconomic potentials into sustainable development. Kongnyuy, who spoke at the launching of National Youth Policy Document in Abuja, said with an estimated population of over 198 million people and the most populated country in Africa and the seventh most populated in the world, Nigeria was in a position to translate the massive population to developmental strides. Kongnyuy, who was represented on the occasion by Omolaso Omosehin, head, LLO, said, “This youthful population presents enormous opportunity for the country to transform its social

L-R: John Ebvodaghe, registrar/chief executive, Institute of Chartered Accountant of Nigeria (ICAN); Nnamdi Okwuadigbo, president and chairman of council, ICAN, and Rasaq Jaiyeola, immediate past president, at the investiture of Nnamdi as the 55th president of the ICAN in Lagos, yesterday. Pic by Olawale Amoo

Global airline profits squeeze over slow demand, rising costs IFEOMA OKEKE

nternational Air Transport Association (IATA) has announced a downgrade of its 2019 outlook for the global air transport industry to a $28 billion profit (from $35.5bn forecast in December 2018). That is also a decline on 2018 net post-tax profits, which IATA estimates at $30 billion. The business environment for airlines has deteriorated with rising fuel prices and a substantial weakening of world trade. In 2019, overall costs are expected to grow by 7.4 percent, outpacing a 6.5 percent rise in revenues. As a result, net margins are expected to be squeezed to 3.2 percent

(from 3.7% in 2018). Profit per passenger will similarly decline to $6.12 (from $6.85 in 2018). “This year will be the tenth consecutive year in the black for the airline industry. But margins are being squeezed by rising costs right across the board—including labour, fuel, and infrastructure. Stiff competition among airlines keeps yields from rising. Weakening of global trade is likely to continue as the US-China trade war intensifies. This primarily impacts the cargo business, but passenger traffic could also be impacted as tensions rise. Airlines will still turn a profit this year, but there is no easy money to be made,” Alexandre de Juniac, IATA’s directorwww.businessday.ng

general/CEO, said. In 2019, the return on invested capital earned from airlines is expected to be 7.4 percent (down from 7.9% in 2018). While this still exceeds the average cost of capital (estimated at 7.3%), the buffer is extremely thin. Moreover, the job of spreading financial resilience throughout the industry is only half complete with a major gap in profitability between the performance of airlines in North America, Europe and Asia-Pacific and the performance of those in Africa, Latin America and the Middle East. “The good news is that airlines have broken the boomand-bust cycle. A downturn

in the trading environment no longer plunges the industry into a deep crisis. But under current circumstances, the great achievement of the industry—creating value for investors with normal levels of profitability is at risk. Airlines will still create value for investors in 2019 with above cost-ofcapital returns, but only just,” de Juniac said. The high price of fuel from 2018 ($71.6/barrel Brent) will continue in 2019 with an average cost of $70 per barrel Brent expected. This is 27.5 percent higher than the 54.9 per barrel Brent in 2017. Fuel costs will account for 25 percent of operating costs (up from 23.5% in 2018).

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and economic landscape into inclusive and sustainable development. “Focusing on the development of young people in Nigeria is essential. The National Youth Policy document 2019 - 2023 being launched today will provide the framework for programming for, and investments in young people in all facets of development. “The staff of UNFPA, Federal Ministry of Youth Development and Sport and some relevant MDAs, had worked tirelessly to strengthen this document to meet the needs of young population in Nigeria. I commend the participatory and consultative meetings with various stakeholders across the length and breadth of the country and the international partners, to forge consensus on strategies to reap the economic and human development potentials of young people the country for sustainable development.”

Tuesday 04 June 2019

BUSINESS DAY

NEWS

Industrial park: FG commences Impact Assessment for N200bn project

s the Edo State government puts finishing touches for the kick-off of the Benin Industrial Park project, the Federal Government has commenced the public engagement for the park’s Environmental and Social Impact Assessment (EIA). In a statement, permanent secretary, Ministry of Environment, said the public display on the EIA, which runs for 21 working days starting from Monday, June 3, 2019, will allow for information and comments on the ESIA draft report submitted by the Edo State government. The ministry notes, “In accordance with the provisions of the Environmental Impact Assessment (EIA) Act E12 LFN, 2014, which makes it mandatory for proponents of all new major development activities to carry out Environmental Impact Assessment (EIA) of their proposed projects, the Federal Ministry of Environment hereby announces a 21 working days Public Notice for information and comments on the ESIA draft report submitted by Edo State government.” The Federal Government says the proposed project will involve development of industrial processing and non-processing zones, which includes auto-

mobile zone, construction and building materials zone, mineral zone, agro and food processing zone, among others. “The project will be provided with state-of-the-art infrastructure such as site grading roads, power, water, communications, drainages, sewage treatment plant, effluent treatment plant, storm water drains on a total land take of 996.72Ha. The proposed project is planned to be implemented in phases to facilitate the flow of investment and to recalibrate the development of infrastructures, especially the vertical infrastructure to the market needs,” the statement said. The permanent secretary explains that the public display will hold from June 3 – July 1, 2019, between 8:00am and 4:00pm daily, and the display centres include Edo State Ministry of Environment and Sustainability; State Secretariat, Benin City, Edo State; headquarters, Ikpoba-Okha Local Government Area, Ologbo, Edo State; Federal Ministry of Environment, Benin City, and Federal Ministry of Environment, Environment House (Brown Building), Independence Way South, Central Area, Abuja-FCT.

Getty Images, APO Group partner to extend integrated services to Africa, Middle East Temitayo Ayetoto

etty Images and APO Group have merged efforts in a strategic partnership to extend innovative integrated text, photo and video services to companies operating in Africa and the Middle East. The two companies penned their agreement at an official signing ceremony at the Getty Images headquarters in London. The collaboration from one of the world leading visual communications, Getty Images and media relations consultancy, APO Group, is the first of its kind in these regions. It will combine Getty Images’ unique capabilities with APO Group’s world-class media relations to help organisations connect their compelling stories with new audiences. Serving nearly one million customers in almost every country in the world, Getty Images is a trusted and esteemed source of visual content in the world, servicing the media, corporate and advertising sectors. Its digital asset management and distribution services optimise efficiency and content syndication for hundreds of partners globally. Since its formation in 2007, APO Group has risen to be the most influential and reputable media relations consulting firm in Africa and the Middle East through its pioneering press release distribution and innovative monitoring solutions. Its global advisory services allow organisations from all over the world to harness the potential of media by developing strategic communications plans that help to build positive connections with key audiences. According to a state made available to BusinessDay, Africa, in particular, represents a significant

growth opportunity for customers of both organisations. “With its population set to double by 2050, it will be home to 40 percent of all humanity by the year 2100. By working together in the region, Getty Images and APO Group can help raise the profile of Africa on an international scale,” the statement said. With over 300 diverse clients such as Facebook, Uber and Hilton – as well as 57 of the leading global PR Agencies – APO Group has doubled its turnover in the last two years. Getty Images and APO Group are also united in their passion for sport. APO Group is the main official sponsor of World Rugby’s African Association, Rugby Africa, while Getty Images is the official photographer or photographic partner to over 80 of the world’s leading sports governing bodies, leagues, and clubs, including the Fédération Internationale de Football Association (FIFA), the International Olympic Committee (IOC), National Basketball Association (NBA), Union of European Football Associations (UEFA) and National Hockey League among others. In 2018 the duo worked together to increase the international exposure of the Rugby Africa Gold Cup competition– a qualifier for the 2019 Rugby World Cup. “In APO Group we are confident we have a great partner to develop our presence in Africa and the Middle East,” said Lee Martin, Senior Vice President, Global Strategic Development at Getty Images. “They are the market leader in their field, and have deep knowledge and expertise of corporations and media across the regions. We look forward to an exciting collaboration that will help us break new ground in untapped markets that are full of potential and opportunities. www.businessday.ng

L-R: Ayodele Onawunmi, Azubike Emodi, Jewel Okwechime, Niyi Adenubi, Nonso Okpala, Olatunde Busari, Gbeminiyi Shoda, Samuel Onyishi, Bolaji Adewumi, Gbenga Omolokun and Suleiman Lawal, all executive board members of the VFD Group plc, at the company’s 3rd annual general meeting in Lagos.

VFD Group declares dividend of N2.20 per share

hareholders of VFD Group plc have commended the Board, management and staff of the financial services group for recording an impressive performance in 2018 in spite of the challenging macroeconomic and regulatory environment. The commendation was given at the third annual general meeting (AGM) of the Group and first as a Public Limited Company held on May 31, 2019 in Lagos. At the meeting, the shareholders approved the financial results of VFD Group and payment of a cash dividend of N2.20k per ordinary share for the year ended De-

cember 31, 2018. This translates to a total amount of N251.5 million. Going by its audited accounts for last year, VFD Group’s profit before tax (PBT) rose by 1,034 percent to N687.39 million as against N60.62 million in the preceding year. Gross earnings grew by 394 percent to N2.9 billion from N445.01 million for the same period in 2017. Commenting on the development and the financial results of the Group, Segun Faloye, a shareholder, expressed delight on the Group’s dividend payment. According to Faloye, “This is an excellent result achieved by VFD Group and we are delighted

with the performance of the board and management of the company.” Presenting his report, Olatunde Busari, chairman of VFD Group, said, ‘’In 2018, we focused on strengthening our corporate governance structure by the expansion of the board to 13 members and appointment of notable directors with requisite pedigree and experience to drive the long term objectives of the group.” He also noted, “The equity raise in December 2018 reflected investor confidence in the Group, its board of directors and growth trajectory.” Also speaking at the AGM,

Nonso Okpala, group chief executive of VFD Group, said, “The group is poised to commence phase II (2019 – 2023) of its 13 year growth strategy, wherein the group will focus on gaining significant investment in a commercial bank and Insurance Company, whilst significantly growing total shareholders funds to N100 billion and listing the group on the Nigerian Stock Exchange.” VFD Group is financial services focused proprietary investment company with interests in microfinance banking, currency exchange, asset management, real estate and international remittance.

FG boosts adult literacy centre with learning materials

Banks’ risk aversion intensifies as credit to real estate hits 4-year low

he Federal Ministry of Education weekend boosted its Adult Literacy Centre at the Federal Government College (FGC) Otobi, Benue State, with additional instructional materials for learners. It would be recalled that during the inauguration of the centre in April, Sonny Echono, permanent secretary in charge of the ministry, had pledged to make additional supplies to the centre following the upsurge of learners that nearly overwhelmed the materials provided initially. Making the presentation of more learning materials at the centre, Echono said the Federal Government was determined to reduce illiteracy in the country through the establishment of the literacy centres across the country. Represented by an assistant director, Office of the Permanent Secretary, Abosede Olayiwola, the permanent secretary regretted the high illiteracy rate in Nigeria. He said over 60 million Nigerians were within the illiteracy bracket and commended the learners for their enthusiasm in acquiring basic education. “Please don’t stop until you get there, trouble your facilitators until you are able to communicate in writing and reading. With this basic education,

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you can do your businesses effectively, make demands from your leaders and even conduct bank transactions,” he said. He described illiteracy as both social and human right issue and called on the learners at the Pilot Centre to remain committed and take their studies with all seriousness. Speaking on behalf of the learners, Ikamokwu Ebenyi, commended the government for establishing the learning centre in their community and providing them with learning materials. Ebenyi said they were overwhelmed with the gesture and commended the permanent secretary for fulfilling his earlier promise to them during the inauguration of the programme. Earlier, the principal, Federal Government College, Otobi, Gabriel Amudipe, commended the permanent secretary for fulfilling his promise to the learners, adding that he would host the first batch of the learners with the 134 new enrollees at the end of the year to a diner party. Also speaking during the presentation of the learning materials, a traditional ruler in the community, Samuel Idoko, tasked the learners to make judicious use of the materials and the opportunity before them to acquire basic education.

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sizeable number of real estate firms prefer pulling funds through equity to debt to execute projects given the risk-averse attitude and cautious stance of Nigerian deposit money banks to the sector. Despite the real estate sector getting out of the woods as it broke its 12 consecutive quarters of decline by recording 0.93 percent growth in the first quarter of 2019, banks’ confidence in the sector waned as credit allocation to real estate tumbled to its lowest level at 3.92 percent in four years. Sectoral credit allocation to real estate shed 0.2 percentage point quarter-on-quarter and 2.49 percentage point yearon-year. Of the N15.21 trillion combined credit dissipated to 17 sectors by the Nigerian deposit money banks, real estate got N596 billion in the first three months to March 2019, N26 billion or 4 percent lower than N622 billion received in the preceding quarter. Folorunsho Bankole, deputy managing director at Stable Shelters Development Limited, explained that banks prefer funding projects with a short payback period that allowed them recoup their money faster than projects with long gestation @Businessdayng

period like housing. “Debt financing is very rare because banks don’t give,” Bankole said, saying, “Requirements attached to loan facility are numerous. At the end of the day, they tell you that the risk assessment of your project is not viable. Funding real estate is not a bank’s thing.” Bankole maintained that only top players who have a robust relationship with the management team of banks enjoy cheap access to bank credit, a disadvantage to an average developer. Rotimi Olu-Steven, a broker at International Real Estate Partners, submitted that banks’ unwillingness to provide credit to the real estate sector reflected low confidence in the sector, as the 0.93 percent growth recorded was still fragile, and people’s disposable incomes remained stifled. Analysis of banks’ loans and advances to the sector in full year 2018 upheld the experts’ position of shrinking banks’ support for the sector as regard provision of credit. Eight Nigerian lenders - Access Bank, UBA, First Bank, Zenith Bank, FCMB and GTBank - jointly gave loans and advances worth N623.3 billion for real estate projects in 2018, N60 billion or 90 basis points lower than N683.3 billion dissipated in the previous year.

Tuesday 04 June 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

GEORGE PARKER, SEBASTIAN PAYNE AND JIM PICKARD

Donald Trump touches down for charged UK visit

S president Donald Trump has arrived at Buckingham Palace at the start of a threeday state visit, which is fuelling political disarray in the UK as Tory leadership contenders vie to succeed Theresa May as prime minister. Downing Street confirmed on Monday that Mr Trump and Mrs May would not hold a formal bilateral one-to-one meeting during the visit, amid signs of tensions between the two leaders on a range of issues including Brexit, China and trade. Meanwhile Mrs May’s allies are braced for the possibility that Mr Trump will find time for a private tête-à-tête with his friend Boris Johnson, the former foreign secretary and leadership contender, whom he has tipped as an “excellent” future prime minister. The prime minister’s office said Mr Trump and Mrs May would hold talks on Tuesday in the cabinet room accompanied by their delegations. Jeremy Hunt, foreign secretary, will be among those attending from the British side. Although the prime minister will later take Mr Trump on a tour of the Churchill War Rooms, the wartime leader’s underground bunker, there would be no formal one-to-one talks, according to officials at Downing Street, who insisted there was nothing “unusual” about that.

Mr Trump’s arrival comes amid tensions with Mrs May; the US president has praised Mr Johnson, but criticised the prime minister’s handling of Brexit and her plan to let China’s Huawei take a role in Britain’s 5G network. The prime minister’s spokesman rebuffed Mr Trump’s accusations that she had mishandled Brexit negotiations in Brussels and that Nigel Farage, Brexit party leader, should be given a key role in future talks. “The prime minister has worked hard throughout to secure the best deal for the UK,” her spokesman said. There are also big differences between the two leaders on trade. Mrs May’s spokesman confirmed the prime minister was opposed to opening up key parts of the British economy in a future US/UK trade deal, including the National Health Service and the agricultural sector. Woody Johnson, US ambassador to the UK, said on Sunday that all aspects of trade would be “on the table” in future talks. “We have said we will not be lowering our environmental standards,” Mrs May’s spokesman said. The prime minister, who will stand down as Conservative leader on Friday, in April signalled her approval for the participation of Huawei in Britain’s 5G network, although no formal decisions have been taken.

Trip sparks a debate among Tory leadership contenders over future relations with US

Air safety agencies rush to draw up rules for flying taxis Several companies aim to begin services within the next 5 to 10 years JOSH SPERO, SYLVIA PFEIFER AND NICOLLE LIU

viation safety agencies around the world are rushing to draw up regulations for flying taxis, with a wave of companies promising to be ready to launch services within the next five to 10 years. In Europe, aviation regulator EASA said it was preparing a set of tests to ensure the safety of both the vehicles and the software that will run them. It said its approach to flying taxis, which is at an early stage, would cover operations and maintenance, the competence of operators, noise pollution, and making sure that the software used by the taxis is scrutinised “with the level of robustness needed”. “This new certification approach would allow EASA to understand how the software behaves in different circumstances,” it said. In the UK, the Civil Aviation Authority has set up a virtual space where flying taxi companies can test their technology, while China’s regulator has authorised five companies to explore airworthiness standards and certification by the end of the year. The market for transporting humans around cities could be worth $674bn by 2040, according to a 2018 study by bank Morgan Stanley, and transport company Uber wants to launch an “Uber Air” aerial ride-

sharing network by 2023. There are more than 170 companies developing aircraft powered by electricity, consultancy Roland Berger found earlier this year, half of which are for urban air taxis. Manufacturers say that the first air taxis will have human pilots, before they create artificial intelligence powerful and safe enough to fly the aircraft by itself. The Civil Aviation Authority of China also recently issued draft guidelines that suggested China will develop regulatory standards and co-ordinate demonstrations of UAV by 2020, then build an actual aviation management system by 2035. Regulators are also giving developers the ability to explore how their tech will work in cities. In May, the UK’s CAA announced it had created a virtual “sandbox” for organisations to test their technology. Of the first six, one was innovation charity Nesta, which will explore the future of urban drone use in the UK; another was Volocopter, which is developing its own urban air taxis. Another project in the CAA’s sandbox was from Altitude Angel, which is developing an unmanned traffic management system for automated drones, akin to air traffic control for aeroplanes. The Morgan Stanley study envisaged the market starting as “an ultra-niche add-on” to established www.businessday.ng

US president Donald Trump meets Queen Elizabeth at Buckingham Palace, London on the first of his three-day visit to the UK © PA

A number of leadership contenders, including Mr Hunt and home secretary Sajid Javid, have shared the security concerns expressed by Mr Trump about the possible role of the Chinese telecoms equipment company. In a sign of the president’s willingness to enter into the British political fray, minutes before Air Force One touched down, the US president hit out at London mayor Sadiq Khan. Mr Khan on Sunday labelled the president “one of the most egregious examples of a global threat . . . using the same divisive

tropes of the fascists of the 20th century to garner support”. In response, Mr Trump said in a tweet that Mr Khan, with whom he has feuded for years, was “a stone cold loser who should focus on crime in London, not me”. The president’s long-delayed visit is timed to coincide with the commemoration of the 75th anniversary of D-Day. White House officials have made it clear that the president’s principal interest for his time in the UK is in his encounters with Britain’s royal family, rather than leaders of its tattered political establishment. He will be shielded

from the British public throughout the trip. Ahead of Mr Trump’s arrival, Mrs May said it would be a “significant week for the special relationship” and highlighted the strong security ties between the UK and the US. The president’s state visit will mark the 113th occasion on which Queen Elizabeth has given such an accolade to a world leader in the course of her reign. On Wednesday Mr Trump will take part in D-Day anniversary events in Portsmouth before heading to Ireland and France.

Inflation poses headache for new ECB chief economist Ireland’s Philip Lane could downgrade economic outlook in his first week in the job CLAIRE JONES

he European Central Bank’s Philip Lane starts his first day at work on Monday at a crucial moment for the eurozone as signs of economic weakness re-emerge and questions grow about the bank’s ability to tackle them. Mr Lane, the bank’s new chief economist, faces the immediate challenge of preparing for Thursday’s monetary policy meeting in Vilnius where he will present updated forecasts — and could downgrade the outlook. In the longer term he must grapple with the question of whether the central bank should rip up its current doctrine to combat years of too-low inflation. Mr Lane’s predecessor Peter Praet cut growth and inflation projections in March and some economists are concerned that conditions have worsened since then, a trend that could be exacerbated by the escalating US trade war. The economic gloom comes at a time when personnel changes at the top of the bank have triggered a debate about fresh policy measures and the scope for further stimulus. On Thursday the ECB is expected to release details of how it will price its next auctions of cheap long-term loans and discuss whether changes

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in its interest rate policy are needed. But with its president Mario Draghi set to depart in October, his potential successors are jostling for position by proffering alternative policy approaches. “It is a difficult time for any central bank, especially with the trade war intensifying,” said Anatoli Annenkov, economist at Société Générale. “There is doubt about what the central bank can do.” Mr Lane, hitherto the Central Bank of Ireland’s governor, succeeds Mr Praet who became a key ally of Mr Draghi and backed up the ECB president’s use of unconventional monetary policy to fight the eurozone crisis. A eurozone rate-setter since becoming Ireland’s top central banker in 2015, the softly-spoken economist received his doctorate from Harvard and has developed a reputation for academic rigour during his time on the ECB governing council. The inflation challenge Mr Lane faces as he begins his eight-year term is becoming more pressing: at 1.3 per cent, the five-year on five-year inflation swap rate — an important measure of market expectations — hovers way below the ECB’s target of below but close to 2 per cent. “With inflation continuing to lack any convincing signs of an upward trend and downward risks increasing, @Businessdayng

there is a chance that the inflation projections are nudged lower [on Thursday],” said Ryan Djajasaputra, an economist at Investec. “Such a result could prompt the [ECB governing council] to question whether an adjustment to policy is required.” If inflation stays low, it will fall on Mr Lane’s shoulders to shape the bank’s intellectual response in an era where central banks are facing serious threats to their authority. Adam Posen of the Peterson Institute recently said at a farewell for Mr Praet that central banks were increasingly threatened, not only by rightwing populist attacks on their independence, but also by a “low interest rate, low investment, low risk-taking environment . . . in which we cannot seem to get inflation up”. The ECB is “particularly vulnerable” because of “the incomplete monetary union in Europe”, Mr Posen added. Mr Lane can use a toolbox of policy options that was expanded by his predecessor, and ECB officials believe the bank still has room to inject fresh stimulus. The ECB’s commitment to price stability, enshrined in EU law, mandates that the bank cut rates further or restart the expansion of quantitative easing — under which the bank has so far bought bonds worth €2.6tn — in the event of sustained weakness.

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Tuesday 04 June 2019

NATIONAL NEWS

Amgen drug takes aim at cancer ‘master switch’ Researchers may have found way to target gene implicated in cancers HANNAH KUCHLER

mgen, the world’s largest biotech company, has discovered a drug to target a supposedly ‘undruggable’ gene mutation, potentially paving the way for a new cancer treatment. The California-based biotech company presented very early data on its research into drugging the protein made by the ‘KRAS’ gene — a mutation of which is found in many cancers including lung and colorectal — at the American Society for Clinical Oncology on Monday. Greg Friberg, Amgen’s vice-president of global oncology development, said researchers had been studying ‘KRAS’ for decades because it was one of the master switches that turned a cell cancerous, known as an oncogene. “The mutations allow [cancerous cells] to survive in the face of stresses, to not follow the rules, to not die when they’re supposed to and to become immortal,’ he said. “That’s what a cancer is: your cells become immortal.” Researchers had struggled for years to find a way to hook a drug on to the KRAS protein because it is round like a tennis ball. By using Xray crystallography — which Dr Friberg describes as a kind of “Polaroid for the microscopic environment” — Amgen’s team had found a secret groove that they could then search for a drug to target. The drug targets only one of the rarer types of KRAS mutation, G12C,

which is found in 14 per cent of nonsmall cell lung cancers and 2 to 5 per cent of other tumour types. The phase 1 study is a very early look at whether the drug will work in patients who have tumours with the specific KRAS mutation. It had a mixed response in patients: the drug shrunk five of the ten lung cancer tumours to a degree that is called a ‘partial response’, with larger doses having more impact. Four of the lung cancer patients had their tumour stabilise but it grew in one patient. Amgen does not yet know why the response from lung cancer patients was mixed or why colorectal cancer patients did not respond. Dr Marwan Fakih, a professor at the department of medical oncology & therapeutics research at the City of Hope, a clinical research centre in California, who presented the study at Asco, said he hoped that after further investigation, the drug would help patients. “While there’s been significant progress in treating solid tumour cancers overall with targeted therapies, patients with the KRAS G12C mutation have not benefited from these advances,” he said. Geoffrey Porges, an analyst at SVB Leerink, estimated that the drug had about a 35 per cent probability of success in lung cancer patients. But he said it could generate $2.3bn in total revenue by 2028, a forecast which pushed him to slightly increase his price target for Amgen, from $185 to $187 a share.

Top banks push ahead with digital coins for 2020 Move draws on four years of research into uses of crypto technology LAURA NOONAN

hirteen of the world’s biggest banks are preparing to launch digital versions of major global currencies in 2020 after years of research convinced them that the technology underpinning cryptocurrencies could be used to make trading less risky and cheaper. The UBS-led research on a “utility settlement coin” (USC) has been in the ether since 2015, when banks decided to investigate whether wholesale banking could be made more efficient by deploying distributed ledger technology (DLT). DLT, which is used in blockchain networks, enables participants to instantly share information on an open-access ledger which can never be altered or erased. The technology could theoretically replace reams of paperwork and processing, but banks must first confront legal and regulatory hurdles on everything from risk management to privacy before deploying it widely. “When we started out . . . this project has basically been about R&D, we didn’t know if the characteristics [we wanted to achieve] were possible,” said Rhom Ram, head of Fnality, the new venture into which the banks and exchange Nasdaq have just invested £50m to create a market infrastructure to transfer value digitally. “The funding signals that it is possible,” he added. “The investors believe it is possible based on the evidence they have seen.” Hyder Jaffrey, head of strategic investments at UBS’s investment bank, said the research showed the

USC would soon be used for clearing and settling trades and could ultimately prove “transformational” for trading. “We see a way of actually reducing the risk significantly in the post trade world,” he said, referring to the settlement, credit and counterparty risks banks take on between the time that trades are instructed and when the money and assets actually change hands. “All of these things play into costs, operational efficiency and the balance sheet.” Lee Braine, an executive at Barclays’ chief technology office, said his bank’s confidence in the project’s viability had “meaningfully” increased since it joined the effort a year-and-a-half ago. Other big banks involved in the project include Santander, BNY Mellon, MUFG, Credit Suisse, KBC, ING and Canada’s CIBC. The USC will begin life with 14 owners and members, and will be denominated in major global currencies including the US dollar, yen, euro and sterling. Every unit of a dollardenominated USC will be backed by a traditional dollar at the Federal Reserve, and the same model will be used with other currencies, ensuring the value of the coin is stable. Its initial applications will be in relatively niche areas, such as creating a market infrastructure that allows the coins to be used to meet margin requirements in derivatives trades. Mr Ram said while at present it took at least a day for such requirements to be satisfied, using the USC the process could become almost instantaneous. www.businessday.ng

Viktor Vekselberg’s inclusion on the sanctions list surprised many in Moscow, where he is considered far less close to Vladimir Putin than others who were not targeted © Bloomberg

Russian billionaire pushes back over US sanctions Viktor Vekselberg seen as pro-US but presence at Trump inauguration stoked controversy HENRY FOY

n January 2017, Russian billionaire Viktor Vekselberg took his seat at the inauguration party for US president Donald Trump, and spent the evening marvelling at the seismic political shift in a country he had made his second home. Fifteen months later, Mr Vekselberg was placed under crippling sanctions by Mr Trump’s administration. He was banned from doing business with US citizens, effectively cut off from the western financial system, barred from the country and left unable to visit his daughter and grandson in New York. “My whole life I have tried to be an international person . . . I brought my entire family to the US,” he told the Financial Times in his first major interview since the sanctions were imposed. “I would never have predicted the reaction, the situation that I am now in.” Mr Vekselberg was a frequent visitor to the US, resettled his family there and is seen by many as the most prominent pro-American Russian businessman. He is one of the highestprofile casualties of the breakdown in relations between Russia and the

US after Moscow’s 2014 invasion of Crimea and alleged meddling in the 2016 US presidential election. But Mr Vekselberg insists he has had no involvement in such activities and was targeted simply because “I am Russian. I am rich. And yes, I know [Russian president Vladimir] Putin. Today, it is enough.” “People [in Russia] say ‘you have so much Russian business here, you are a Russian celebrity, you are not under European sanctions. Why are you worried about it?’,” he added. “But for me this is a total crisis of my life. This is not about money, not about business. This is my personal situation . . . For me the whole world was about opportunity. Now, what can I do?.” Mr Vekselberg, who built a $14bn empire from aluminium, oil and engineering assets, was sanctioned in April last year by the Office of Foreign Assets Control, the Department of the Treasury unit that oversees the US measures, alongside six other Russian tycoons who it said “benefit from the Putin regime and play a key role in advancing Russia’s malign activities”. His inclusion surprised analysts and businessmen in Moscow, where he is considered far less close to Mr Putin than other oligarchs who were

not targeted. “The surprising name on the sanctions list is that of Vekselberg. He is seen as one of the old oligarchs from the 1990s and not so close to the Kremlin,” Anders Aslund, a former economic adviser to the Russian government and senior fellow at the Atlantic Council, wrote at the time. “Of course I have met with Mr Putin,” Mr Vekselberg told the FT. “But many people have met him, more regularly, or have more subjects to discuss with him. Many people say to me that there must be something else.” Some point to his efforts to seek co-operation between the US and Russia, including helping to organise part of a Russian state visit to Silicon Valley and his role as an unofficial liaison on technology industry issues. They suggest his US activities made him too prominent at a time of intense speculation about Russia’s alleged attempts to infiltrate the presidential election. Mr Vekselberg stoked the controversy by attending Mr Trump’s inauguration just as the allegations were swirling. The recently concluded report by special counsel Robert Mueller did not find evidence of a conspiracy between Mr Trump’s campaign and Moscow.

Blackstone seals record $18.7bn private real estate deal US group to buy Singapore-based GLP’s US warehouses JAMES FONTANELLA-KHAN AND STEFANIA PALMA

lackstone has struck the largest private real estate deal in history, with the alternative investment manager agreeing to buy the US warehouses portfolio of Singapore-based GLP for $18.7bn, including debt. The transaction, announced on Sunday, follows a prolonged bidding war for the asset against ProLogis, said one person informed about the deal. GLP’s collection of industrial warehouses across the US, comprising about 1,300 properties, will further expand Blackstone’s real estate business and solidify the US group’s position as one of the world’s largest diversified property owners. Once the deal is completed, Blackstone will add about 179m sq ft of urban logistics assets, nearly doubling its existing US industrial footprint. Globally, the US group has acquired more than 930m sq ft of logistics since 2010. Blackstone’s acquisition comes at a time of growing interest in

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warehouse and logistics businesses as investors bet on the rise of online shopping. Amazon, the world’s largest ecommerce company in terms of revenue, is GLP’s largest tenant. Ken Caplan, global co-head of Blackstone real estate, said: “Logistics is our highest conviction global investment theme today, and we look forward to building on our existing portfolio to meet the growing ecommerce demand.” GLP will use gains from the sale “to return significant value to their investors and for further reinvestment in the US”, said a person familiar with the company’s thinking. Stephanie Lau, a senior analyst at Moody’s, said that if gross proceeds — which she said totalled about $1.87bn considering GLP’s 8 to 10 per cent stake in the three funds sold to Blackstone — were used for deleveraging, “obviously it would be a credit positive”. “The company has been seeing higher leveraging after privatisation,” said Ms Lau, referring to GLP’s delisting from the Singapore Exchange in January 2018. According to Moody’s calcula@Businessdayng

tions, GLP’s net debt at the end of last year was 13 times ebitda on a look-through basis. “We are looking for the company over time to deleverage towards around nine times or thereabouts,” she added. GLP, which is controlled by a consortium of investors from Asia and the US, had explored listing its US unit, according to people informed about the matter. “GLP’s initial strategy was to pursue an IPO,” said one of the people. “However, it soon became clear that this transaction with Blackstone would provide the best value for GLP’s investors.” As part of the GLP deal, Blackstone, which will also assume $8bn in net debt, will split the acquired assets into two different units controlled by the US group. Following the sale of most of its US assets, the Singapore-based company will focus on expanding in the US, as well growing its operations further in China, Japan Latin America and Europe. Blackstone sold its European warehouse company Logicor to China Investment Corporation, the Asian country’s sovereign wealth fund, for €12.25bn in 2017.

Tuesday 04 June 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

FCA probes Citigroup links in insider dealing case

Regulator passed new information during trial of Walid Choucair and Fabiana Abdel-Malek BARNEY THOMPSON

he UK’s financial regulator is investigating alleged links between a Citigroup employee with access to “price-sensitive information” and a multimillionaire trader who has been named in connection with an insider dealing trial, a court has been told. The Financial Conduct Authority was passed information this month that the Citigroup employee spoke to an intermediary of Alshair Fiyaz, a trader who owns the St Tropez polo club, Southwark Crown Court heard on Monday. The FCA has identified an individual who is “consistent” with the profile of the employee, using the tip-off and other information, such as telephone contact. The claim emerged during the trial of Walid Choucair — once a friend and associate of Mr Fiyaz — and Fabiana Abdel-Malek, a former compliance officer at UBS. Mr Choucair and Ms Abdel-Malek are both accused of insider dealing in relation to five attempted mergers between June 2013 and June 2014. The FCA alleges that Ms AbdelMalek would access confidential information on deals UBS was working on and pass them to Mr Choucair. He would trade on that information and bet that the share prices of the target companies would rise, netting £1.4m in profit.

The pair deny the charges. Insider trading carries a maximum seven-year sentence. Mr Choucair instead said he was prompted to trade by sharing ideas, legitimate market colour and information from journalists with an informal network of traders, including Mr Fiyaz. The court had previously heard that the defendant and Mr Fiyaz would talk nearly every day to discuss potential investments. Mr Fiyaz has not been charged with any offence and is not named on the FCA’s indictment, He was not in court to respond to the evidence the court heard on Monday. The FCA received the information about the possible Citigroup source on May 14, in the middle of the trial, the jury heard. The regulator approached Citigroup several days later to make inquiries about two of the mergers in question. Asked by his lawyer, Richard Wormald QC, on Monday whether the fact that Mr Fiyaz “may have had an insider” at Citigroup supported his version of events, Mr Choucair replied that it “potentially provides an explanation” as to the true source of his ideas for placing trades. In particular, Mr Choucair went on to describe a meeting between him and Mr Fiyaz at the Four Seasons hotel in London in July 2014, at which they discussed the potential takeover of Targa Resources, another of the five attempted takeovers that are central to the trial.

Alphabet shares slide on Google antitrust probe News of tougher line from US regulators also hits other tech stocks MAMTA BADKAR

ech stocks were dragged lower on Monday led by Alphabet, which briefly fell into bear market territory as the US justice department prepares an antitrust investigation into Google raising fears of regulatory scrutiny for the sector. Shares in Alphabet, Google’s parent tumbled as much as 6.7 per cent to $1,032.04 falling to the lowest in five months and down 20.4 per cent from its April high of $1,296.97. Bear markets are defined as a 20 per cent decline from a recent peak. At pixel time the stock trimmed its losses to trade 6.2 per cent lower. The justice department recently won jurisdiction for a probe into the company from the Federal Trade Commission. Google’s rivals have long lobbied the US antitrust enforcers to take action against the company. The FTC previously investigated Google for possible antitrust violations but settled in 2013 without taking major action against the company. Kevin Rippey, an analyst at Evercore ISI, said while the new antitrust investigation is “unlikely to reverse the previous investigation’s findings as it relates to search” its Android and app

store could come under scrutiny. “We believe this could be an area where US investigators take a much closer look than previously, given the now far greater importance of the mobile ecosystem vs 2011,” he added as he cut his price target on the stock by 4 per cent to $1200. Fears of regulatory probes also hit other big tech names like Amazon, which fell 3 per cent to $1,718.81, while Facebook tumbled 4 per cent to $170.60, Netflix slid 1.5 per cent to $337.98. Apple was the only Faang stock to buck the decline and traded 0.7 per cent higher. The broader NYSE Fang+ Index, which includes the original Fang stocks along with others high profile tech names like Twitter, Tesla, Nvidia and Alibaba, declined 1.9 per cent. In contrast however, chipmakers rallied on Monday with the S&P 500 semiconductors and equipment index up 1.4 per cent. The gains were underpinned by a 6 per cent jump in Advanced Micro Devices after it announced a multiyear partnership with Samsung. The sector’s advance on Monday a 17 per cent tumble in May when trade fears dragged chipmakers lower. www.businessday.ng

Walid Choucair, above, and Fabiana Abdel-Malek are both accused of insider dealing in relation to five attempted mergers between June 2013 and June 2014 © Bloomberg

Stocks stable, bonds climb as trade tensions escalate PHILIP GEORGIADIS AND ALICE WOODHOUSE

S and European shares were stable as sentiment in equity markets improved throughout Monday despite a wider rush for safety as government bonds and other haven assets rose amid escalating economic tensions between the US and China. The S&P 500 traded 0.2 per cent higher soon after the opening bell, while the composite Stoxx Europe 600 recovered from earlier loses to trade flat. Stocks suffered their worst month of the year in May as trade tensions amplified global growth concerns, sending investors piling into the government bond market. US sovereign bonds continued their rally on Monday, with 10year Treasury yields briefly falling below 2.1 per cent for the first time since 2017. China stepped up its counter-

offensive in the trade conflict over the weekend, announcing it would establish a blacklist of foreign companies that harm the interest of Chinese groups, while separately state media reported that Beijing was investigating FedEx. “The series of actions over the weekend means that China’s ‘long march’ has begun,” said Iris Pang, economist on Greater China for ING. “We take this seriously. It means that the trade war has not only become a technology war but also a broad-based business war.” On Monday, the stand-off spilled into other sectors, as China’s Ministry of Education issued a warning to students and scholars who plan to visit the US. European banks suffered, as low interest rates typically impact their profitability. The Stoxx index tracking the sector fell nearly 1 per cent to leave it more than 20 per cent lower this year, with Deutsche Bank hitting a new record low. Japan’s Topix was down 0.9 per

cent to its lowest level since the start of January, while Australia’s S&P/ASX 200 shed 1.2 per cent. Hong Kong’s Hang Seng index was flat, and the CSI 300 of Shanghai and Shenzhen stocks rose 0.1 per cent. Concerns over trade tensions spread beyond equities markets. The yen, which is seen as a haven in times of uncertainty, was flat on the day but holding around its strongest level against the dollar since mid-January, and gold climbed 0.8 per cent to hit a twomonth high. Investors reacted with dismay at the end of last week when Donald Trump opened up another trade front by threatening tariffs on Mexico over migration. Neil Mackinnon, global macro strategist at VTB Capital, said: “Policy volatility translates into market volatility and, not surprisingly, incentivises real-money investors to adopt defensive portfolio decisions.”

Kier profit warning sends shares tumbling 40% Pressure mounts on construction business and restructuring costs spiral GILL PLIMMER AND PHILIP GEORGIADIS

hares in Kier plunged 40 per cent on Monday as it warned that profits would be about £40m lower than expected, adding to fears over the health of the UK outsourcing and construction sector. In an unscheduled trading update, Kier said it expected underlying operating profit for the year to June 30 to be £40m lower than analyst estimates of £169m. It also warned that net debt would be significantly higher than expected, raising concerns that the company would need to sell assets or launch a second rights issue just months after investors shunned a £264m emergency cash call. The announcement sent shares in Kier tumbling to 158.6p in early trading — its lowest level in almost two decades. John Moore, senior investment manager at Brewin Dolphin, said the company was in “a dark place”. “At the turn of the year the business set out its financials, trading performance and future plans

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as part of its unsuccessful rights issue, only to now say that this information was largely wrong. It has broken trust with investors, which does not bode well,” he said. Kier has annual revenues of £4.5bn and employs more than 20,000 people at its construction and support services divisions. It has contracts for Britain’s highspeed rail project, and the Highways Agency, as well as collecting rubbish for local authorities. The group ran into trouble after ramping up debt through a series of acquisitions including Mouchel, May Gurney and McNicholas. The strategy, aimed at boosting revenues, has already felled other contractors including Carillion, which collapsed last year. Rival government supplier Interserve is in the hands of its creditors, Amey has been put up for sale by owner Ferrovial, while Mitie and Capita are seeking to rebuild following a series of profit warnings. Kier is under new management after Haydn Mursell was forced to quit as chief executive following the botched rights issue. Andrew Davies, who had been lined up as @Businessdayng

a successor to take over Carillion before it collapsed, joined from Wates as chief executive in March and is midway through a strategic review. The findings should be set out on July 30, the company said. Kier said revenue growth at its building division would be lower than forecast, knocking £25m off its operating profit, while costs from a restructuring programme would be £15m higher than expected. This year Kier had to revise up its net debt by £50m as at December 31 to £180.5m after an “accounting error”. In March it reported a first-half pre-tax loss and slashed its interim dividend. Its rights issue at the end of 2018 left banks and brokers nursing losses after they were forced to take up the stock. Stephen Rawlinson, analyst at Applied Value, said Kier’s update failed to provide sufficient information to evaluate the business “financially or strategically”. “They don’t know where the bottom is yet, that’s the problem,” he said. “The story is about simplification, but it’s not yet clear what that means.”

Tuesday 04 June 2019

BUSINESS DAY

ANALYSIS

FT How blacklisting affects the inside of a Huawei smartphone

Chinese giant is highly dependent on the US for chip design and other equipment YUAN YANG

wo weeks after Huawei was put on a blacklist that prevents US suppliers from selling components to the telecoms company, companies across the world are still working out the ramifications. Last week, Huawei told the Financial Times that the Trump administration’s decision to put the company on its “entity list” would affect about 1,200 US suppliers. Huawei bought roughly $11bn in components and services from US companies last year. The ban has had significant consequences for Huawei’s suppliers. As well as prevent-

ing US companies from selling directly to Huawei, it also stops third-party companies from selling products with more than one-quarter US-originated technology to Huawei. Analysts say companies are likely to dispute what products fall under the resale ban. The uncertainty over the effects of the ban has led some phone operators to delay the launch of new Huawei smartphones while they make further assessments. In the UK, EE and Vodafone have “paused” the launch of Huawei’s 5G smartphones, while two of Japan’s largest mobile phone carriers, SoftBank and KDDI, have also suspended presales of the new Huawei P30 phones. Huawei is highly dependent on the US for the design of the chips it uses in its smartphones and telecoms equipment. Even though Huawei uses its own in-house chip design unit — HiSilicon — to design “system on a chip” chips for its high end smartphones, HiSilicon requires US-made software to make the designs. Moreover, HiSilicon and oth-

er chip designers use core chip architecture patented by ARM, a UK-based company owned by SoftBank that has said it can no longer license its designs to Huawei. Google has already said it will stop supplying Huawei with software for the Android operating system that runs threequarters of the world’s mobile phones. Fortunately for Huawei, its main producer of smartphone chips, Taiwan’s TSMC, has said it will continue to supply the company because it does not think it is in violation of the US ban by using US-made chip fabrication equipment to make Huawei’s chips. But in addition to relying on TSMC for HiSilicon’s chips,

Huawei also uses memory chips made by Micron and Seagate, both US companies. When it comes to telecoms equipment such as mobile masts, Huawei relies on logic chips called field-programmable gate arrays (FGPAs) made by US company Xilinx. The other major FGPA suppliers, Intel’s Alterra and Lattice Semiconductor, are also US companies. Huawei has built up semiconductor stockpiles in anticipation of the ban. Market research firm CLSA estimates the company has six months of smartphone inventory and nine to 12 months of 5G base station inventory. Although China’s government has been pushing hard for selfsufficiency in semiconductor design and manufacturing in light of a previous US ban that crippled Huawei’s competitor ZTE, there are barely any domestic options for Huawei to turn to after its inventories run out. Analysts reckon China is more than 10 years behind in designing high-end logic chips of the kind used in Huawei’s switches and routers. www.businessday.ng

FT Executive Education Rankings 2019: top schools revealed Leaders in this growing sector include Swiss school IMD, Stanford and Spain’s Iese ANDREW JACK

MD and Stanford are the world’s leading providers of executive education courses and Iese offers the best bespoke “custom” programmes developed for corporate clients, according to the FT’s 2019 rankings. Iese of Spain scored just ahead of IMD of Switzerland, HEC of France and Stanford of the US in the combined ranking, which assesses the overall performance of the world’s top business schools that have taken part in this year’s Executive Education Custom and Open rankings. Jean-Francois Manzoni, president of IMD, which has consistently ranked in recent years as the top-rated open-enrolment provider, said: “We have shown a great deal of consistency in our pursuit of excellence. We recognise that we must continue to innovate to try to stay a step ahead and be true to our mission of developing leaders who transform organisations and contribute to society.” Jonathan Levin, dean of Stanford’s Graduate School of Business, which has risen sharply to be joint top in open-enrolment this year, said: “Our programmes offer a really immersive experience for participants, a chance to connect with faculty, each other, get exposed to a whole new set of ideas and up to date with what’s going on in the world.” The rankings, based primarily on ratings provided by students and companies which have participated in the courses, include assessments of course design, faculty, teaching methods and facilities. They provide insight into the training needs from employers and executives in an increasingly diverse and competitive market. Unicon, a network of over 100 business schools offering executive education around the world, estimates that its members alone generate $2bn in annual fees, which has been growing by about six per cent annually in the past few years. Alongside business schools, there has been sharp growth in rival training courses offered by consultancy firms including McKinsey and PwC, as well as online providers such as Coursera. Franz Heukamp, dean of Iese, said: “At a time of digital and organisational transformation, we are helping people think about who they are and what they want their organisations to be. Executive education is a way to stay ahead. Other providers are expanding but the market is expanding more quickly. We have less of a potential conflict

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of interest. The demand is still bigger than the growth in supply.” The open-enrolment rankings are based on 10 criteria used by participants and six on data submitted by the schools, each of which can be analysed in the full table. Among the top 12 elite providers, only the University of Michigan’s Ross business school, Iese and Washington University’s Olin have more female than male participants. Insead of France ranks top for international participants coming from outside its region, and Iese for diversity of faculty by nationality and gender. Ross is rated highest for teaching methods and faculty, and Olin for course design. Top for customised programmes: Iese Iese in Barcelona is number one for the fifth consecutive year. Positive reviews from client companies in the corporate survey were important in taking it to the top spot. The school was first for preparation and new skills and learning; second in several categories, including faculty, aims achieved and value for money; and highly ranked for faculty diversity and international participation in the business school survey. Brazil’s Fundação Dom Cabral is top for facilities, with an attractive campus in Nova Lima, a new site with coastal views near Rio de Janeiro, and another in Belo Horizonte, shared with the masters programme of international partner Skema. FDC is also eighth overall in the custom ranking, in the middle of the top tier of schools. Lower scores for growth, faculty diversity and international clientele are among the few areas keeping the school from achieving a higher position. Highest entrant : AGSM at UNSW AGSM at UNSW Business School is the highest new or returning entrant, coming in at 43rd this year. Clients of the school were strongly positive about the future use of the lessons learnt. Other schools that are either returning or new to the custom executive education rankings include Copenhagen Business School and the Indian School of Business. The latter was ranked top for executive education in the Asia-Pacific region in 2011. Biggest rise: Sabanci Sabanci University School of Management in Istanbul has moved up 20 places to 58th — the biggest rise this year. Sabanci, which has a strong focus on research, was founded in 1999 as a graduate school of management and later added undergraduate @Businessdayng

programmes. Other schools that made big leaps include University of Arizona: Eller, which rose 19 places, and three schools that rose 18 places: Ceibs, Insper and Skema Business School. Top for overseas programmes: London Business School LBS is top for overseas programmes and makes a strong showing overall, coming seventh in the custom ranking. Its placing in this category highlights the large number of programmes implemented for clients in more than one country. Relationships with partner schools are another element that adds value to business schools’ offerings, and LBS has a strong set of partnerships, helping it to achieve a ranking of third in this category of the business school survey. Joint top for open programmes: IMD IMD is top for the eighth consecutive year but this time is tied with Stanford. The Swiss school does well for the diversity of faculty, whose quality is ranked second highest. In one student’s words: “The IMD high-performance leadership programme addresses different aspects related to leadership than other traditional programmes: aspects that connect to personal and psychological mindsets, [and] how to improve performance through behavioural change.” Joint top for open programmes: Stanford For the first time, Stanford tops the open ranking, though jointly with IMD. Stanford received strong scores in the participant survey, with the highest rank for the quality of participants and aims achieved. One participant says: “The Stanford Executive Program was intense while enjoyable, with a great environment between students, faculty and staff. Being at Silicon Valley allowed me to get deeper on innovation and the new economy.” Top for course design: Washington: Olin Washington: Olin is top for course design in this year’s open ranking. This school is 12th overall, and comfortably in the group of top-performing schools. One participant says: “The Women’s Leadership Forum made sure that participants were from different companies or places and that no one organisation had more than six people in the class. This was really good because the organisational ‘groupthink’ was less likely to happen. We also could see how other places functioned.”

Tuesday 04 June 2019

BUSINESS DAY

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Tuesday 04 June 2019

BUSINESS DAY

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Tuesday 04 June 2019

BUSINESS DAY

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Tuesday 04 June 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 03 June 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 222,157.66 6.25 2.46 114 2,774,459 UNITED BANK FOR AFRICA PLC 217,166.33 6.35 1.60 155 4,706,370 ZENITH BANK PLC 635,779.00 20.25 0.75 257 8,843,607 526 16,324,436 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 249,472.28 6.95 -1.42 96 4,112,582 96 4,112,582 622 20,437,018 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,780,426.48 136.60 0.07 198 1,465,587 198 1,465,587 198 1,465,587 BUILDING MATERIALS DANGOTE CEMENT PLC 3,404,693.38 199.80 0.15 149 1,283,534 LAFARGE AFRICA PLC. 161,077.95 10.00 -0.99 74 2,208,246 223 3,491,780 223 3,491,780 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 294,222.28 500.00 -9.07 25 113,403 25 113,403 25 113,403 1,068 25,507,788 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 - 1 95 1 95 1 95 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 1 95 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 2 4,423 OKOMU OIL PALM PLC. 70,589.34 74.00 - 6 3,300 PRESCO PLC 58,000.00 58.00 - 1 45,000 9 52,723 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,770.00 0.59 - 7 185,838 7 185,838 16 238,561 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 794.19 0.30 - 3 30,446 JOHN HOLT PLC. 182.90 0.47 - 1 755 S C O A NIG. PLC. 1,903.99 2.93 - 1 308 TRANSNATIONAL CORPORATION OF NIGERIA PLC 46,745.19 1.15 -0.86 49 3,766,474 U A C N PLC. 18,008.10 6.25 -8.09 138 24,334,114 192 28,132,097 192 28,132,097 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 26,004.00 19.70 -9.84 17 119,869 ROADS NIG PLC. 165.00 6.60 - 0 0 17 119,869 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,897.59 1.50 - 10 144,100 10 144,100 27 263,969 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 8,690.74 1.11 9.90 9 259,500 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 106,233.57 48.50 - 11 2,826 INTERNATIONAL BREWERIES PLC. 171,917.24 20.00 - 33 33,045 NIGERIAN BREW. PLC. 463,820.32 58.00 - 59 2,710,740 112 3,006,111 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 83,000.00 16.60 -1.48 61 711,697 DANGOTE SUGAR REFINERY PLC 144,000.00 12.00 -0.83 69 597,750 FLOUR MILLS NIG. PLC. 57,405.31 14.00 2.94 93 1,440,333 HONEYWELL FLOUR MILL PLC 8,643.92 1.09 -0.91 36 1,244,623 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,079.22 14.75 -9.23 42 628,873 UNION DICON SALT PLC. 3,321.07 12.15 - 1 100 302 4,623,376 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,566.31 10.95 - 16 34,200 NESTLE NIGERIA PLC. 1,157,278.13 1,460.00 0.69 25 102,616 41 136,816 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,815.75 3.85 -9.41 17 635,475 17 635,475 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 32,359.39 8.15 0.62 25 458,197 UNILEVER NIGERIA PLC. 178,095.17 31.00 - 64 1,389,022 89 1,847,219 561 10,248,997 BANKING ECOBANK TRANSNATIONAL INCORPORATED 184,412.99 10.05 -9.87 41 1,385,988 FIDELITY BANK PLC 49,257.15 1.70 1.19 58 2,837,760 GUARANTY TRUST BANK PLC. 921,195.91 31.30 -0.95 183 33,986,838 JAIZ BANK PLC 14,142.84 0.48 4.35 51 5,356,630 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 69,097.00 2.40 4.35 559 3,610,689 203,845.27 7.00 2.19 55 1,717,827 UNION BANK NIG.PLC. UNITY BANK PLC 8,182.54 0.70 -1.41 10 225,000 23,916.17 0.62 -3.12 29 2,278,443 WEMA BANK PLC. 986 51,399,175 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,573.93 0.66 - 7 54,848 20,790.00 1.98 - 8 170,457 AXAMANSARD INSURANCE PLC CONSOLIDATED HALLMARK INSURANCE PLC 1,707.30 0.21 -8.70 21 3,498,715 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 2 2,825 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 1,228.00 0.20 - 0 0 GUINEA INSURANCE PLC. INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 - 5 138,418 LAW UNION AND ROCK INS. PLC. 1,976.31 0.46 - 2 100 LINKAGE ASSURANCE PLC 4,000.00 0.50 - 1 25 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 -9.09 7 525,292 NEM INSURANCE PLC 11,775.52 2.23 - 12 151,450 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,691.28 0.50 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 3 105,650 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 - 7 794,873 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 2,800.00 0.20 - 1 100 SUNU ASSURANCES NIGERIA PLC. UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 6 281,980 WAPIC INSURANCE PLC 5,353.10 0.40 - 29 1,806,209 111 7,530,942

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 3,086.96 1.35 - 6 126,000 NPF MICROFINANCE BANK PLC 6 126,000 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 1 70 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 2 23,911 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 3 23,981 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,000.00 3.50 -3.58 39 1,345,912 CUSTODIAN INVESTMENT PLC 35,585.28 6.05 - 1 100 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 31,684.34 1.60 -0.62 78 70,558,374 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 2 17,500 430,103.22 42.00 - 14 1,056,230 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 12,780.00 2.13 -5.33 81 4,933,759 215 77,911,875 1,321 136,991,973 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 4 596,500 4 596,500 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 2 527 2 527 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,575.00 5.05 - 1 500 9,148.46 7.65 -10.00 33 2,179,933 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 3,933.54 2.28 - 15 533,875 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,063.53 0.56 - 15 129,168 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 1 25 65 2,843,501 71 3,440,528 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 852.48 0.24 -8.33 21 5,441,365 21 5,441,365 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 20 648.00 6.00 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 0 0 1 20 PROCESSING SYSTEMS CHAMS PLC 1,643.62 0.35 -7.89 22 1,489,815 9,996.00 2.38 - 0 0 E-TRANZACT INTERNATIONAL PLC 22 1,489,815 44 6,931,200 BUILDING MATERIALS BERGER PAINTS PLC 1,912.83 6.60 -0.75 30 676,007 21,770.00 31.10 - 4 4,918 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 197,152.51 15.00 - 34 271,416 FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 MEYER PLC. 313.43 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 0 0 1,156.20 9.40 - 0 0 PREMIER PAINTS PLC. 68 952,341 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,730.05 1.55 -3.12 29 1,883,696 29 1,883,696 PACKAGING/CONTAINERS BETA GLASS PLC. 37,497.90 75.00 - 6 2,635 GREIF NIGERIA PLC 388.02 9.10 - 0 0 6 2,635 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 103 2,838,672 CHEMICALS B.O.C. GASES PLC. 1,565.08 3.76 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 1 65 1 65 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 88.00 0.40 - 3 99,455 3 99,455 4 99,520 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,628.30 0.26 -7.14 24 1,273,449 24 1,273,449 INTEGRATED OIL AND GAS SERVICES OANDO PLC 47,239.37 3.80 -9.52 250 27,145,333 250 27,145,333 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 63,104.17 175.00 - 3 1,517 CONOIL PLC 15,266.95 22.00 - 26 44,062 ETERNA PLC. 4,760.13 3.65 - 9 34,995 FORTE OIL PLC. 35,036.74 26.90 -2.18 63 849,509 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 2 200 TOTAL NIGERIA PLC. 55,002.54 162.00 - 8 11,769 111 942,052 385 29,360,834 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 2 59,350 TRANS-NATIONWIDE EXPRESS PLC. 342.26 0.73 - 1 110 3 59,460 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 3,014.25 1.45 - 1 500 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 1 500 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 163.30 0.27 8.00 1 100,000 1,033.74 1.34 - 5 32,630 LEARN AFRICA PLC STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 849.88 1.97 9.44 8 1,307,753 14 1,440,383 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 464.16 0.28 - 3 68,650

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Tuesday 04 June 2019

BUSINESS DAY

POLITICS & POLICY Presidency makes u-turn, says ‘Buhari did not approve State Police’ Tony Ailemen, Abuja

re s i d e n c y h a s declared that President Muhammadu Buhari Monday only received a report on the reform of the Special Anti-Robbery Squad (SARS), and requested that the report be studied and a white paper produced within three months. According to a statement signed by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, “President Buhari’s specific directive is that a three-man panel be set up to produce the white paper. “The report of the white paper committee will form the basis of the decisions of the government on the many recommendations, including the setting up of state and local government police made by the Ojukwu panel. He stated that “Until a

white paper is produced, it will be premature and preemptive to suggest that the recommendations contained in the report have been approved by the President in part or whole. A statement earlier signed by the Attah Esa, the Deputy Director (Information) at the Presidential Villa on Monday, had indicated that the President gave approval for the establishment of State and Local government Police. According to the earlier statement, the President directed the Inspector General of Police, Mohammed Adamu Ministry of Justice and the National Human Rights Commission (NHRC) to work out modalities for the implementation of the report of the Presidential Panel on the Reform of the Special Anti-Robbery Squad (SARS), within three months. Esa stated that “The President gave the directive while

Muhammadu Buhari

receiving the 2804 pagereport from the Panel headed by Tony Ojukwu, Executive Secretary, NHRC, at the State House. The report of the Panel, which is in Four Volumes had among other things recommended the dismissal of 37

he Ninth Ondo State House of Assembly on Monday inaugurated new principal officers of the House as Bamidele Oleyeloogun from Ifedore State Constituency and Ogundeji Irolu, were both re-elected Speaker and Deputy Speaker, respectively. After the reading of the proclamation from Governor Oluwarotimi Akeredolu on the floor of the House on Monday, the Clerk of the House, Bode Adeyelu which preceded the inauguration of the Ninth Assembly, the members immediately went to the poll, electing principal officers of the House. Other principal officers elected for the Ninth Ondo

House of Assembly include; Jamiu Maito (Akoko North West 1) Majority Leader ; Adesanmi Oladiji (Ondo East) Deputy Majority Leader; Adeyemi Olayemi (Owo II) Chief Whip; Festus Akinferanye(Ileoluji/OkeIgbo) Deputy Chief Whip and Toluwani Borokini(Akure South 1) Whip. The remaining offucers are: Abayomi Akinruntan (Ilaje 1) Parliamentary Secretary ; Akintomide Akinrogunde (Okitipupa 1) Deputy Parliamentary Secretary; Rasheed Elegbeleye (Akoko North East ) Minority Leader and Tomide Akinribido (Ondo West 1) Deputy Minority Leader. Addressing the House after the election, Oloyeloogun thanked his colleagues for supporting him to continue as

facilitate the various Police reforms being introduced by this administration. ‘‘I want to assure you and all Nigerians that this Administration will continue to fulfill its obligations of promoting and protecting human rights of Nigerians, and will give the National Human Rights Commission all the support required to ensure full implementation of the recommendations contained in its Report. ‘‘In addition, we will strengthen the operations of the Commission to enhance its effectiveness and capability to resolve cases of human rights violations. ‘‘This administration is conscious of the role the Commission plays in ensuring security and stability in the nation through the resolution of complaints of human rights violations, which if neglected, could result into major security challenges.

Lagos Assembly urges CP to curtail cults war in Ikorodu

Speaker, deputy speaker return as ninth Ondo Assembly inaugurated YOMI AYELESO, Akure

police officers from the force and the prosecution of 24 officers. The Panel also directed the IGP to unravel the identity of 22 officers involved in the violation of human rights of innocent citizens while the police was directed to pay

compensation of various sums in 45 complaints and tender public apologies in five complaints, and to obey court orders in 5 matters. The Panel recommended the establishment of State and local government police and the renaming of SARS to Anti-Robbery Section (ARS) which was its original name and to make the section operate under the intelligence arm of the Police. President Buhari had while responding stated that “I am very happy with the work of the Panel and thank the Panel members for working hard towards the realization of the Presidential Directive ‘‘I believe that the Report of the Panel and recommendations contained therein would go a long way in redressing the grievances of the complainants, ensure accountability on the part of the Police Officers in discharging their responsibilities and

...writes congratulatory letter to Sanwoolu speaker of the Ninth Assembly, saying the Eighth Ondo House of Assembly passed 45 bills and the Ninth House should be supported to achieve more feats in its duties. Oloyeloogun assured that he would be transparent in the course of leading the House, just as he announced a four-week recess to enable new members of the House prepare for the task ahead. He later adjourned the first plenary sitting of the House of Assembly to July 8th, 2019. BusinessDay reports that the Ninth Assembly has 23 All Progressives Congress (APC) members, while the Opposition parties,the People’s Democratic Party (PDP) and the Zenith Labour Party (ZLP) have two and one members, respectively.

Iniobong Iwok

he Lagos State House of Assembly Monday charged the Commissioner of Police in the state, Zubairu Muazu, to curtail the activities of cult members in Ikorodu Area of the state. The House also agreed to write a congratulatory letter to the new Governor of the state, Babajide Olusola Sanwoolu. The gang war in Ikorodu followed an urgent Matter of Public Importance raised by the Majority Leader of the House, Sanai Agunbiade during plenary Monday. Agunbiade had informed the House that the gang war by cultists in Ikorodu Constituency 1 of the state was affecting the peace of the area. He stated that the gang war

among rival cults members in Ikorodu has made life unbearable for the people of the area, saying that it had led to several deaths in the area. The Majority Leader added that the rampaging cult members have turned Ikorodu to a theatre of war. According to him, “Once it is 6 pm, people in Ikorodu Constituency 1 comprising Ikorodu North and Central areas of the state would be afraid of going about their normal businesses. “I want the House to call on the Commissioner of Police in the state to intervene in the violence going on in Ikorodu and control the activities of the cultists so that peace could return to the area,” he said. In his response, the Speaker of the House, Mudashiru Obasa, stated that it was not

out of place to call on the Commissioner of Police to arrest the situation in Ikorodu area and return normalcy to the area. Obasa then ordered the Clerk of the House, Azeez Sanni to write the Commissioner of Police to curtail the activities of the cult members in Ikorodu Area, and this was supported by all the members, who adopted it as the resolution of the House through a voice vote. The Speaker further sought the support of the members of the House to write a congratulatory letter to Governor Babajide Olusola Sanwoolu to formally welcome him to the state. He added that it was necessary for the House to welcome the Governor to the state since he had just resumed duty and wish him a successful tenure of office.

Taraba Assembly Re-elect Abel Diah as speaker for the third time Okowa warns political office holders against nepotism, sectionalism Nathaniel Gbaoron, Jalingo

araba State House of Assembly, on Monday, elected Abel Peter Diah as the Speaker of the assembly for the third time. He was unanimously elected by the 24 members of the house who were all in attendance for the inugurationof the 9th Assembly Diah was elected along side Muhamed Danladi Gwamfo the member representing Yoro state constuency, as the Deputy speaker of the house The re -elcected Speaker is

from Sadauna Local Government Area of the state and he represents the Mbamga Constituency. Mark Useni from Takum 2 Constituency nominated the Speaker while John Bonzina from Zing Constituency seconded the nomination. There was no opposition to the motion. The Speaker was then sworn in by the House Clerk, Mela Orngu. Diah in turn swore in the other members. Both the Speaker and the deputy are members of the Peowww.businessday.ng

ple’s Democratic Party (PDP). In his inaugural speech, Abel Peter Diah who appreciated the members for the renewed mandate also pledged to do his best. “I must say that I am indeed very indebted to all of you for your singular show of love. I whole heartedly accept the renewed mandate today and I wish to further pledge the best of my service to each one of you and the entire good people of Taraba.” The House of Assembly has, however, adjourned sitting till 10th June, 2019.

Francis Sadhere, Warri

elta State Gove r n o r, I f e a n y i Okowa on Monday warned political office holders against nepotism and sectionalism, saying that he will not tolerate any of his political office holders who is found guilty of the above. Okowa who gave this warning during the swearingin of the Secretary to the State Government, Mr Chiedu Ebie at the Unity Hall, Asaba, said, “sectionalism and nepotism

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must not have a place in the thoughts, choices and actions of those who will work with me.” “I want to assure all Deltans that this administration will continue to run an all-inclusive government whether in terms of appointments or projects distribution; we have only just started; Deltans should trust us to do the right thing, and do it we shall and I wish to emphasize that appointments into this administration will be based on merit and geographical spread, not on emotions, @Businessdayng

sentiments or for the sole purpose of political patronage,” he said. Governor Okowa continued, “we are in a hurry to get things done and cannot afford to lose precious time; therefore, this is not the time for apprenticeship; we shall be going for men and women, who are conversant with governance, understand our policy direction and require minimal supervision to do their work; it shall be a good combination of youth and experience to ensure that governance goes on seamlessly.”

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BUSINESS DAY Tuesday 04 June 2019 www.businessday.ng

Kennedy Uzoka: Expanding the frontiers of UBA as ‘Africa’s global bank’ CALEB OJEWALE

he United Bank for Africa (UBA) has an ambitious vision, one reflected in its slogan of being “Africa’s Global Bank”. The bank’s most recent footprint in Africa was in Mali at the beginning of the year, followed by a formal launch of its United Kingdom subsidiary in February. As the bank itself noted, it has been intensifying its African footprint with the establishment of UBA Cameroon, UBA Cote d’Ivoire, UBA Uganda, UBA Sierra Leone, and UBA Liberia as well as the acquisition of a 51 per cent interest in Banque Internationale du Burkina Faso, which was the largest bank in the country with 40 per cent market share. Currently, UBA has 18 African subsidiaries, contributing about 20 per cent of the Group’s balance sheet, with a target of contributing 50 per cent. Currently leading this vision for “Africa’s Global Bank” is Kennedy Uzoka, Group Managing Director/CEO of UBA. He has over two decades of experience covering Core Banking, Corporate Marketing Communications, Strategy, and Business Advisory Services, and is responsible for leading the development and execution of UBA Group’s long-term strategy. The journey to becoming UBA’s CEO Since August 1, 2016, Uzoka has held the position of Group Managing Director/Chief Executive Officer; he is also Member of the Executive Management Committee, Executive Director of United Bank for Africa Plc. He started serving as Deputy Managing Director/ Deputy Chief Executive Officer, Executive Director of the Company in 2012. As Group Deputy Managing Director and CEO, UBA Africa, he had the responsibility of managing the Group’s country subsidiaries across 18 countries in Africa, as well as supervising three key strategic support areas in Digital Banking, Information Technology, and Personal Banking. As Deputy Managing Director, he was the Executive in charge of the Group’s businesses in New York and London. He is a Member of the Risk Management Committee (as of August 2016), and Member of the Finance and General Purpose Committee of the Company. He was appointed Executive Director and Director of Human Resources of the Company in May 2010, in which role he oversaw Human Capital, Corporate Communication, Company secretariat, Corporate Services, Legal services, UBA Academy, UBA Foundation and UBA Properties. He was Head, Strategy and Business Transformation of UBA Group and Regional Bank Head, South Bank (covering over seventeen states in Southern part of Nigeria). Before the merger of Standard Trust Bank with UBA Plc in 2005, he was General Manager, North Bank covering all the states in the Northern part of Nigeria including the Federal Capital Territory. He was also Chief Marketing Officer Federal Capital Territory (FCT), Chief Marketing Officer, Lagos and a Co-Managing Executive Officer with the responsibility to co-manage the entire bank. He is an alumnus of international institutions such as the Harvard Business School in Boston, United States; International Institute of Management Development (IMD) in Lausanne, Switzerland; and the London Business School, United Kingdom. He obtained a Bachelor of Science degree in Mechanical Engineering from the University of Benin and a Masters of Business Administration degree from the University of Lagos. He is a Board Member of Central Securities Clearing System (CSCS) Limited; Fellow of Chartered Institute of Credit Administration (ICA); Director in Financial Institutions Training Center (FiTC); Registered Professional of Financial Reporting Council of Nigeria; Member

Uzoka

of Institute of Directors (IoD). Performance of UBA under his watch UBA’s financial performance has been stable, and in a number of indices, improved

month, BusinessDay reported that it indicates maintaining its ‘Outperform rating’ on UBA and increase price target by 8 per cent to N13.9 following UBA’s Q1 2019 results which

under Uzoka as the bank’s CEO. At the end of 2016 when Uzoka took charge towards the fourth quarter, the bank’s Profit After Tax (PAT) was N72.3 billion. By full year 2017, PAT increased to N77.5 billion, and sustained this growth at the end of 2018 with N78.6 billion. Key highlights of the bank’s 2018 results show its gross earnings rose by 7.04 per cent, from N461.6 billion in 2017 to N494 billion. Impairment charges declined largely by 86.2 per cent, from N32.9 billion in 2017 to N4.5 billion in 2018 while net interest income reduced by 0.96 per cent. Profit Before Tax (PBT) increased slightly by 1.9 per cent, from N104.2 billion in 2017 to N106.8 billion while Profit After Tax (PAT) was marginally up by 0.65 per cent at a record of N78 billion against N77.5 billion in 2017. The bank’s total Asset of N4.869 trillion against N4.069 trillion in 2017 was an increase of 19.67 per cent. The value of assets changed in a unique way, when in the first quarter of 2019, UBA joined the elite club of banks with total asset above N5 trillion. Following an FBNQuest research last

surprised positively relative to forecasts. “On the back of the upgrades to our forecasts, we now expect the bank to deliver a 2019E return on average equity (ROAE) of 19 per cent, c.100bps higher than management’s 18 per cent guidance for the year,” read the report. It also stated that the bank’s current valuation

level (2019 P/B multiple of 0.4x or a 41percent discount to the sector’s 0.7x multiple) looks compelling when compared with peers and justifies a more positive view on the stock. Following the conclusion of the general elections in Nigeria and the dissipation of associated political risks, the report stated management is more positive on the bank’s loan growth prospects for H2 2019. In addition, the bank’s financial soundness indicators, mainly capital adequacy, loan-to-deposits and liquidity ratios that stand at 24 per cent, 48 per cent and 50 per cent respectively as at the end of Q1 2019 are amongst the best in the sector. “At current levels, we see an upside potential 107 per cent in the shares,” the report noted. Looking to the future Three weeks after the UBA group launched its operations in Mali, the bank repeated the feat in London, the global financial centre where UBA UK was formally launched. This was sequel to the authorization of the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) for UBA UK Limited to carry out full scale wholesale banking across the United Kingdom. The value of European trade with Africa is quite significant, and has been opened up as a viable market to be explored by UBA. The European Commission reported in 2017, EU imports of goods from Africa (which is mostly driven by primary goods) stood at EUR 131 billion, although they had been as high as EUR 187 billion in 2012. On the other hand, European exports to Africa as at 2017 stood at EUR 149 billion, with 72 per cent of these goods exported from the EU to Africa being manufactured goods. Even the UK on its own was the 7th highest European exporter of Goods to Africa, with a value of EUR 9.77 billion, and was the 5th European importer of goods from Africa with EUR 14.68 billion, having a trade deficit of EUR 4.9 billion with the continent. The British Office for National Statistics (ONS), in its 2016 report on trade and investment relationship with Africa, also noted that UK’s trade balance with Africa returned to deficit in 2012 following an increase in imports. Uzoka in an interview during the launch noted that before UBA got to the UK, and with the kind of license it had before, if a business in any of the (African) Anglophone countries was transacting with a partner in England, they had to deal with another bank. “Today, with our wholesale license, that is now a thing of the past. UBA is interconnecting businesses in Africa with not just United Kingdom but across the world,” he said. As Uzoka explained, what has been done is to create a UBA one-stop-shop that whether a business is in Ghana, Nairobi, or elsewhere in Africa, by approaching any UBA branch in their countries, transactions will be consummated without going through third parties. With its increasing international presence (within and outside the African continent), Uzoka says UBA is positioning to service the flow of cash and investments throughout Africa.

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