BusinessDay 05 Feb 2019 by BusinessDay

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ull or partial privatisation of the state-owned oil company Nigerian National Petroleum Corporation (NNPC), removal of subsidy on petroleum

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NNPC privatisation, stable power top presidential candidates’ agenda for energy sector F

DIPO OLADEHINDE

FGN BONDS

TREASURY BILLS

NGUS DEC 24 2019 366.24

Buhari says less on state-owned oil company

products, and provision of stable power are among issues topping the agenda of candidates in the presidential election this month. Nigerians will on February 16

vote a president for the next four years, in an election that experts project will shape the future of the oil and gas industry, not only because Nigeria is Africa’s

biggest oil and gas producer, but because what happens in the country impacts the rest of

Continues on page 38

More businesses cry out after BusinessDay article exposes FX scheme ... As CBN claims “there is no room for arbitrage” LOLADE AKINMURELE

hen Charles Azubike (not real name) and his team did the costing for an international donor-funded community project, it was premised on the prevailing foreign exchange rate of N360 per US Continues on page 38

Inside Africa to see over $10bn infrastructure IPO from telecom, media, P. 2 technology in 2019 L-R: Patience Oniha, director-general, Debt Management Office; Oscar Onyema, chief executive officer, Nigerian Stock Exchange (NSE); Folorunsho Alakija, executive vice chairman, Famfa Oil Limited; Toyin Sanni, author of ‘Riding the Eagle’, and Mary Uduk, acting director-general, SEC, during a book launch in Lagos, yesterday. NAN

2 BUSINESS DAY NEWS

OLUWASEGUN OLAKOYENIKAN

Africa to see over $10bn infrastructure IPO from telecom, media, technology in 2019 …MainOne among top firms fingered for deals

elecommunications, media and technology infrastructure Initial Public Offerings (IPO) as well as mergers and acquisitions deals in Africa are predicted to generate an estimated $10 billion in 2019. This was predicated on a growing investor appetite and valuation growth, which will also see Nigeria’s MainOne benefit from the deal. TMT Finance exclusively reported last week on the $1 billion sale of South African datacentre firm Teraco Data Environments to US private equity firm Berkshire Partners. TMT Finance has said that it expects 2019 to be a record year for investment and M&A deals in TMT infrastructure in Africa with many large deals planned, particularly by telecom infrastructure providers looking to make public flotations to tap into public investment fund appetite and fuel further growth plans. These include leading regional

African digital and mobile telecom infrastructure operators Liquid Telecom, IHS Towers, Eaton Towers and Helios Towers Africa, all of which have been hiring investment banks to arrange for IPOs and are expected to float or consolidate their sector in the next 12 months. National operators including Towerco of Madagascar and Wananchi of Kenya have also recently hired investment banks for sales, while large regional subsea cable businesses, such as Seacom of South Africa and MainOne of Nigeria, are also thought to be weighing up sale and investment options. Teraco was reported to be valued at 22 times its 2018 EBITDA of $4045m, reflecting outstanding growth expectations comparable with European and US datacentre businesses. TMT Finance reported that the sale of the Permira-owned datacenter also attracted interest from global industry players Equinix and Digital Realty in a highly competitive sale and market. Leaders from the largest African

telecom, media and technology companies, investment banks and investors are meeting to assess the latest investment opportunities at the annual TMT Finance Africa in Cape Town 2019 conference on March 28. Over 60 key speakers have been announced for the event, which features CxOs and senior executives from Vodacom, MTN, Helios Towers Africa, CSquared, Dark Fibre Africa, Seacom, Angola Cables, Standard Bank, IFC World Bank, DLA Piper, Rand Merchant Bank, WIOCC, Paix Data Centres, BCX, European Investment Bank, Investec Asset Management, GreenWish Partners, Convergence Partners and others. Key sessions at the senior executive-only event include telecom leadership Africa, digital infrastructure Africa, media, powering mobile tower, data centre and cloud, mergers and acquisitions, investors, broadband, financing TMT, fintech and mobile money, and smart city.

Investors shrug off risks to Caverton earnings despite air mishap IHEANYI NWACHUKWU

quity investors in Caverton Offshore Support Group Plc (Caverton) waved off any form of possible risks to the Group’s earnings as they chose to hold onto the shares on Monday, February 4, 2019, on the Nigerian Stock Exchange (NSE) where the company is listed. Their ‘hold’ decision came despite last weekend’s incident in which a Caverton helicopter carrying Vice President Yemi Osinbajo to a campaign rally of the All Progressives Congress (APC) crash-landed in Kabba, Kogi State. CavertonHelicoptersisasubsidiary of Caverton Offshore Support Group Plc, a company listed on the NSE. The share price of Caverton remained unchanged at N2.20 kobo at the end of trading on the NSE, an indication of investors’ continuing interest in the company. With a year-todate (YTD) increase of 14.6 percent, Caverton stocks have outperformed the NSE All Share Index (ASI), which has fallen by 2.18 percent this year.

The Caverton Helicopter skidded during landing, with all 12 people aboard the chopper safe. The incident was blamed on unusual weather. The Accident Investigation Bureau (AIB) has launched an investigation into the accident. Meanwhile, Caverton Group, while restating its commitment to Osinbajo’s safety, said in a tweet the vice president has received a new chopper from Caverton Helicopters. “A true statement of our commitment to safety and professionalism. Vice President Professor Yemi Osinbajo continues his campaign flying with Caverton,” the tweet read. Caverton is listed on the support and logistics subsector of the NSE services sector. The company has N7.371 billion in market capitalisation and shares outstanding of 3,350,509,750 units. In the financial year ended December 31, the company paid a final dividend of 15 kobo per share to its shareholders. Incorporated in Nigeria as a private limited liability company on June 2, 2008,CavertonOffshoreSupportGroup Plc became a public limited liability

Tuesday 05 February 2019

MTN expects 20% surge in earnings after settling dispute with CBN

L-R: Pramath Sinha, founding dean, Indian School of Business (ISB), Hyderabad; Okechukwu Enelamah, Nigeria’s minister of industry, trade and investment; Aliko Dangote, president/CE, Dangote Group, and Rajat Gupta, former managing director, McKinsey & Company/co-founder, Indian School of Business, during a courtesy visit to Dangote at the Head Office of the Dangote Group, yesterday.

MODESTUS ANAESORONYE

www.

company on July 4, 2008. The principal activity of the Group is the provision of offshore services to the oil and gas industry. It commenced business on July1,2008.Theinterestsofthedirectors are stated in the Memorandum and Articles of Association of the company. The issued and fully-paid share capital of the Group as at December 31, 2017 shows that 64 corporates own 2,362,835,245 units of Caverton Offshore Support Group shares representing 70.52 percent of the company’s entire equity holdings. Eight foreigners hold 5,070,000 units or 0.15 percent, and nine directors hold 657,720,462 units or 19.63 percent. There are 1,628 individual shareholders in the company accounting for 264,219,840 units or 7.89 percent of the entire holdings. Five trust and pension funds hold 56,248,600 units or 1.68 percent, two foundation and schools hold 200,000 units or 0.01 percent, while six nominees hold 3,372,703 units or 0.10 percent of Caverton entire equity holdings.

•Continues online at www.businessday.ng

frican telecoms giant, MTN Group, expects an upsurge in earnings for the last financial year across its 21 markets after resolving US$8.1billion dispute with the Central Bank of Nigeria (CBN), even as it faces another court hearing over a separate $2 billion tax dispute later this week. The largest wireless carrier by subscribers in Africa said in a statement Monday that its earnings per share rose by at least 20 percent in 2018 more than the 182 cents in the prior financial year, indicating an improved profitability for the company. For the 12-month period to December 2018, headline earnings per share (HEPS) are expected to increase by 36.4 cents, while attributable earnings per share (EPS) are projected to inch up by 49.2 cents from 246 cents, according to MTN. The results would be published on

March 7, MTN said. Despite the announcement, shares of the South African company reversed previous gains recorded on the Johannesburg Stock Exchange (JSE) to close at 2.54 percent lower as of 4:00 pm in Nigeria. The mobile-phone company has since August last year been battling with the Nigerian authorities where it has its biggest market to pay a total claim of $10.1 billion over an alleged illegal repatriation of shareholders’ funds from the country and tax default, causing the company to lose 20 percent of its market value. CBN reached an agreement with MTN last December after the telecom company paid $53 million on the basis of new information received that showed no wrongdoing by the firm regarding most of the repatriations. However, MTN is yet to resolve its $2 billion tax dispute as another court case has been fixed for February 7.

Nigeria loses N576m as ban on catfish export shrinks market

...unable to fully address SRT documentation requirements after 2 submissions JOSEPHINE OKOJIE

he persistent ban by the United States (US) on Nigeria’s smoked catfish (siluriformes) and all fish products export is responsible for the loss of about N576 million ($1.6m) the country would have earned in the last one year if the ban was not in place, BusinessDay’s calculations show. Currently, Nigeria exports about 100 metric tonnes of catfish yearly to the US, Canada and Europe out of its 316,727MT annual aquaculture production, the Nigeria Catfish Association says. The loss of N576 million is being recorded at a time the Federal Government is mouthing support for agriculture and says it is is serious about making the sector the largest foreign exchange earner. An average price of catfish exported to the United States is $16 per kg. 1,000kg is equivalent to a tonne; therefore, 1,000kg multiplied by 100 tonnes gives 100,000kg. To get the value in monetary terms, we multiplied $16 by 100,000kg, which is equal to $1.6 million (N576m). “The development has affected catfish production and the country is losing a lot of revenue it would have generated since the ban was enforced,” Oloye Rotimi Olibale, president, Catfish and Allied Fish Farmers Association of Nigeria (CAFFAN), said from his Ibadan farm in a telephone response to BusinessDay questions. “Lots of fish farmers took loans from deposit money banks to invest in processing in order to take up opportunities in export but now with the ban since a year ago, most of them are unable to meet their loan obligations,” Olibale said. He stated that the ban is killing the fish industry in the country and is a big threat to the Federal Government’s diversification drive through the sector. He blamed the government for not taking prompt action in addressing the issue and ensuring that the ban is lifted within the shortest possible time.

The US had initially placed the ban for failure of the Nigerian government to fully provide answers to the information requested in a document called the Self Reporting Tool (SRT) before the due date. According to the United States Department for Agriculture (USDA), the SRT is a prerequisite for trade and it is the process of determining whether a country’s food safety inspection system is equivalent to that applied domestically in the US. Nigeria is yet to fully provide these answers after submitting the SRT document for the second time, the US Food Safety says. “Nigeria has failed to fully address information requested in the Self Reporting Tool (SRT) and FSIS’ review of its May 2018 submission showed that equivalence requirements had still not been met,” said Veronika Pfaeffle, public affairs specialist, FSIS – USDA, in a statement. “FSIS will continue to work with Nigeria if they want to continue to pursue the process to be deemed equivalent. Until that time, Nigeria will not be eligible to export these products to the US,” Pfaeffle said. The ban, which has since taken effect in March 2018, has also shrunk market access for fish farmers in the country, as Europe and Canada are now also rejecting Nigeria’s catfish export as well, BusinessDay learnt. The development has made catfish farmers to start counting their losses as their profit margins are fast declining owing to cancellation of future contracts to supply African diaspora in US, Canada and Europe. “It has been difficult for us catfish farmers since the ban. Most farmers have now shifted into other businesses because export is where the market is for catfish production,” Richard Agetu, co-founder, Richsi Nigeria Limited, makers of Ejazuki smoked fish, told BusinessDay. “Our profit margins have shrunk tremendously because we generate it mainly from our export sales. A fish we sell for about N1,000 here is being sold between $14 and $18 in the US,” Agetu said.

•Continues online at www.businessday.ng

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Nigeria’s noble role in the world STRATEGY & POLICY

MA JOHNSON

have always known that “Africa is the centerpiece of Nigeria’s foreign policy.” There is no doubt that Nigeria has a noble role to play in global affairs as she is the most populous black nation in the world with a population of about 200 million people. The country, popularly referred to as the “giant of Africa,” would have loved to obey one of the legs of the Great Commandment aptly stated in the Holy Book- “you shall love your neighbor as yourself.” But unfortunately, challenges emanating from her domestic environment have given rise to controversies on the effectiveness of Nigerian foreign policy in recent times. Indeed a few Nigerians want to know the focus of Nigerian foreign policy in the past four years. Perhaps, an attempt to know the focus will illuminate the minds of Nigerians as to the ends to be achieved. So, if what we have today as our foreign policy is placed side by side with strands of Nigerian foreign policies of the 1970s and early 1980, a lot of doubts will be cleared. The Nigerian Institute of International Affairs (NIIA) recently organized a one-day conference to assess Nigeria’s foreign policy under the current administration of President Muhammadu Buhari (PMB) within the period 2015 and 2019. It was a gathering of intellectuals, and other dig-

nitaries as well as professionals from the broad spectrum of the society. From various papers presented and perspectives of individual presenter, one could see that their arguments were fired by some level of patriotism depending on different parameters used for assessment. It would be hard for a country undergoing economic and political challenges to have a solid ground to contest the argument that her foreign policy is experiencing a low turn for some years. The reason is not farfetched as to why there are so many challenges facing Nigerian foreign policy. It’s the cumulative effect of poor governance over the years in the country that has given birth to insecurity, economic mismanagement and widespread corruption. These negatives have affected the noble role expected of Nigeria within the international arena. Let’s consider Nigerian foreign policy within the ECOWAS and AU. Unless one wants to shy away from telling the truth, Nigeria cannot do without ECOWAS. In the same vein, ECOWAS cannot do without Nigeria. Why do I say so? Nigeria is the largest economy within the ECOWAS and the AU. Most ECOWAS and AU states are facing economic and integration challenges. Most times Nigeria had intervened in a couple of intrastate and interstate crises which has defined most of the countries within the West African sub-region and the African continent. So, Nigeria’s hegemony within the continent of Africa is prominent. It’s because Nigeria’s current economic strength and political stability will not support her foreign policy either at the sub-regional or regional level, that is why Nigerians are saying that the country needs political stability to allow for meaningful economic development.

When one considers Nigeria’s foreign policy within the context of Africa Continental Free Trade Area (AfCFTA), Nigeria has not done well. Yes, at the time the issue of AfCFTA came up in 2018, it wasn’t in the best interest to sign the treaty. If truly Nigeria is the “giant of Africa,” how long will it take the country to put her house in order to be part of the AfCFTA? Leadership has to be from the front, not from behind. In a way, one can say without fear of any contradiction that the Buhari-led government has not rocked the boat in the international environment. A nation whose economy is very fragile since 2015 till date cannot play an “activist” role in the continent of Africa and beyond. I was discussing with an associate about the economic diplomacy of the country known as the Nigerian Economic Diplomacy Initiative (NEDI) which was launched in April 2018. He hasn’t heard about NEDI. This is an initiative of the Ministry of Foreign Affairs and the Federal Ministry of Trade and Investment, the Nigerian Investment Promotion Commission and the Nigerian Export Promotion Council. Essentially, “the initiative aims at spurring economic growth and development through facilitation of market access, foreign direct investment, cross border trade and recruitment of skilled Nigerians in diaspora for national development.” Most Nigerians are not aware of this initiative because politics is trumping economic activities of the government since the last quarter of 2018. I see this economic diplomacy initiative as a policy only on paper. From the security angle, it would be hard to say that the Boko Haram phenomenon is not at cross purposes with Nigerian foreign policy when some countries have been warning

‘

A nation whose economy is very fragile since 2015 till date cannot play an “activist” role in the continent of Africa and beyond

their citizens from traveling to certain parts of the country. Truth is, insecurity has indeed impacted negatively on Nigerian foreign policy. Insecurity has driven away many investors and it has partly contributed to raising the cost of doing business in the country. The fight against corruption is one of the main thrust of PMB’s foreign policy. Although, a prophet does not have an honor at home, the perception of the world about PMB’s regime in fighting corruption is satisfactory. That is why PMB has been honored by the AU and the country tasked with designing a road map on reduction of corruption within the African continent. The Transparency International report on 2017 corruption perception indicated however, that Nigeria ranked 146 out of 180 countries. The organization claims that corruption is getting worse in Nigeria. Only posterity will judge PMB correctly. For some time, Nigeria has not been very active in the international community. In order to pursue the goal of economic independence, the country must use its foreign policy tool for national development. That is why it’s good for the NIIA and the Ministry of Foreign Affairs to continuously engage Nigerians by pushing out necessary foreign policy information. This effort if sustained will renew the interest of Nigerians in their country’s foreign policy. Good ideas on Nigerian foreign policy abounds everywhere. They may occasionally come from outside the official channel. So, Nigerians must be carried along on foreign policy issues. Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

The Nigeria auto industry part II – The implications of our decisions

BAMBO A. ADEBOWALE

he Goodluck Jonathan government and now this one has a desire to kickstart the sluggish auto industry. A strategy was developed and a policy was introduced. So far, 54 licences for an installed capacity of 406,000 vehicles have been issued by the National Automotive Design and Development Council (NADDC). The government argues that the policy works, but I’d say only on paper. In reality, it is far from being the solution. When the auto policy was announced, interest was 12%, Naira was N162: $1 and everyone could access forex. Now, interest rates are 14%, Naira is $367 to the dollar and rubber, steel and plastic products are all on the “41 item” list, excluded from buying forex at the CBN rate. As much as the government would argue that it has stopped the pressure put on the naira by stopping the demand for US dollars, a counter argument is that it has in one fell swoop, almost killed off the very industry that it is trying to develop – an industry that directly supports the economy. In its stead, smuggling

has increased, unemployment is rife amongst car dealers and older cars have flooded the market, bringing with it, more technically unsound vehicles and more clandestine methods to avoid duties and levies. The current situation in the auto industry throws up a worrying picture (see below). Imports have fallen, so you can be sure that the hike in duty to defend local production will kill imports – and the revenue generated by Customs – and that is a lot of money for NCS to lose! The current problem Nigerians will more likely purchase a used, but trusted brand, than a new and relatively expensive, but unknown brand. This invariably means “tokunboh” (imported, used). The Naira being less than half the value when the auto policy was introduced in 2013 hasn’t helped. In addition, the government has increased the duty on vehicle imports. Ironically, while the Nigerian government was increasing duty on vehicle imported, Benin Republic reduced transit charges - by up to 27% (in March 2017). This encouraged the import of vehicles through the Autonomous Port of Cotonou in transit to Nigeria. In 2013 - the year the Nigeria auto policy was released, 37% of the 800,000 used cars imported into sub-Sahara Africa were to Benin republic (see below). If you want any further proof, you will find that the “Customer of the Year” in the auto industry are the banks (who finance the sale of cars) and the oil companies (that are liquid and have net dollar positions). So, why don’t the numbers add up with 11m vehicles on the roads and Nigerians being discerning shoppers? Well, the government didn’t factor in the cultural issue and ignored the obvious.

Take the city of Ibadan. It has an estimated 10,000 Nissan Micras (see below). This 1.1Litre engine car will cost you less than N1m (used) and has fuel economy, is easy to procure parts/ service, has road maneuverability and a robust 2nd hand market are common comments by the drivers – things that NADDC should consider when giving out licenses, because there are 10,000 Micras that need support – and that’s in Ibadan alone! For a different reason, NADDC is failing to recognize the economic importance of our mindset. For reasons that are mostly urban myths, theOpel (left below) and VW Golf (right picture below) ply the 56km stretch of road from Ajah to Epe in Lagos State. The Opel Astra “F” (manufactured between 1991 and 1998) and the 2nd generation VW Golf MK2 (manufactured between 1983 and 1992) have an estimated age of 26yrs and their production has stopped, but are the vehicles of choice. What happens when the drivers no longer find the parts – and why has this also been missed by the NADDC? These “theories” are matched by common knowledge that the preferred vehicle for carrying gravel is the Mercedes Benz 911 or the Bedford TJ series; that the vehicle for carrying cement blocks is the Land Rover Defender 90; that the passenger vehicle within towns is the VW “Kombi”(outside town it’s the Hiace). The Volvo 200 series station wagon and Peogoet 404 Pick-up are the preferred vehcles for carrying tomatoes or plantains on “last mile” deliverier to Oyingbo, Wuse and Mile Onemarkets and the Honda Accord is allegedly the car with the highest likelihood of a ball joint disalignment. Shouldn’t we be aligning our policies to posi-

tion these brand OEMs to establish plants and support our industry here in Nigeria? The Combustion engine dilemma The 54 licenses in issue from NADDC are for combustion engine (CE) vehicles. In the meantime, more than nine OEMs and a dozen or so cities have announced the ban or phase out of CE vehicles in favor of electric vehicles (EV). Volvo, Ford, VW Group, Land Rover have all made such announcement. Toyota’s R & D expects the internal combustion engine to be dead by 2050 and power only about 10% of cars as part of hybrid systems from 2040. In 2017, 783 000 Electric vehicles were delivered during the 1st half of 2018 – an increase of 66 % over the same period last year. The cities of London, Paris, Madrid, Athens and Mexico City are planning to end diesel engine vehicles. So, in 20years time, Africa will probably be the only place producing combustion engine cars. I once heard an argument that even if most OEMs switched to EVs, Africa still has a large enough market to support investment in CE vehicle assembly. This would have been a valid argument based on how slow we are on take up of technological advances. However, the argument is flawed because the OEMs are the same ones that would have exported CKDs/SKDs to Africa – and I don’t think they will continue the production of CE parts just to satisfy our inability to convert.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Adebowale is chair of the automobile section of the Lagos Chamber of Commerce and Industry

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Ghana – Assessing the ‘one district, one factory’ policy Rafiq Raji

ana Akufo-Addo, the president of Ghana, is a great speaker. English audiences listen in awe to his speeches, marvelling at his mastery of their mother tongue. His fellow citizens did not stand a chance against his charm. He defeated an incumbent to the coveted position he now occupies with relative ease. His oratory was not all that won the votes of the majority of his compatriots. He sold a dream of an industrialised Ghana that would look beyond aid to development. At the time, during the campaigns and almost momentarily after he was sworn into office, analysts wondered about the realism of pursuing such adjudged follies as his “One district, One factory”, “One village, One dam” proposals. Still, as highfalutin as they sounded, the citizenry drank the Kool-Aid with relish. And to his credit, he was not just selling a dream. He meant to realise it. Bear in mind, this is not the first time such an experiment would be attempted in Ghana. And even for planned economies in the East like China, which underpinned the failed first trial, the authorities there have since learnt the wisdom of allowing market forces to determine certain

things. Clearly aware of the scepticism, Yofi Grant, chief executive of the Ghana Investment Promotion Centre, told the Financial Times, a British newspaper, in September 2017, that “this time around it’s going to be private-sector driven, with government only playing a facilitatory role.” Slow progress Has this been the case more than a year afterwards? There has not been as much progress as envisaged by the authorities. Speaking to the Financial Times in October 2018, Joyce AwukuDarko Osei, head of the transformation unit at the finance ministry, which prepared the current government’s “Ghana Beyond Aid” development framework, avers poor co-ordination is one reason why progress has been slow. “Only 600 of more than 1,000 factory proposals have been evaluated,” she tells the Financial Times. And she refutes the populist garb put on her prinicipal’s intentions. “The idea…is that private businesses can request government assistance (feeder roads, power supply, access to credit, etc) to make factories viable”, she adds.Still, how likely is it that there would be an industrial venture worthy of investors’ capital in every district? What do analysts think? Malte Liewerscheidt, Vice-president for West Africa at Teneo Intelligence in London tells New African that“at about half-time of Akufo-Addo’s first term, the ‘1 district 1 factory’ policy has still to get off the ground. As of October 2018, a mere 18 factories of varying size have been built in the 216 districts. The sluggish progress on one of the government’s flagship policies makes it rather unlikely that the stated target will be achieved by 2020. Teneo’s Liewerscheidt actually ques-

tions “whether [this] ‘shotgun approach’ to industrialization will yield sustainable results”. In the view of Verner Ayukegba, principal analyst for sub-saharan Africa at IHS Markit in London, the desirability of industrialisation to tackle such social challenges like high youth unemployment is not the subject of contestation but rather the somewhat impracticable approach. For instance, “factories need support infrastructure and other support services which is impossible to have in all districts”, says IHS Markit’s Ayukegba, reckoning “the concentration in Accra, Tema, [and] Takoradi is likely to continue. There is also the issue of affordability. With public debt at more than 60 percent of gross domestic product (GDP), can Ghana afford more indebtedness in pursuit of these ambitions? Mr Ayukegba is unequivocal: “No! They’ve had to display immense creativity to get the Chinese to finance key projects with strong IMF [International Monetary Fund] opposition.” China has agreed to fund various infrastructure projects to the tune of $19 billion, in a deal signed during a state visit by President Akufo-Addo in early September, ahead of the Forum for China-Africa Cooperation(FOCAC) meeting in Beijing.More significant for the Chinese, though, is the estimated 960 million metric tonnes of bauxite reserves worth about half a trillion dollars when processed into aluminium that they hope to exploit in the 26,000 hectare Atiwa forest in southeastern Ghana. In a first phase, Sinohydro Corp Ltd paid the authorities $2 billion in November as part of a barter deal to fund road projects in exchange for refined bauxite. The authorities also plan to tap the eurobond markets for as

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As of October 2018, a mere 18 factories of varying size have been built in the 216 districts

much as $5 billion to $10 billion before end-2018; being the first tranche of its proposed century bonds of $50 billion, an amountalmost equal to the current size of the economy. The government is probably banking on crude oil revenues to meet its debt obligations. But at an expected production level of 250,000 barrels per day by 2020, that is even as twice as much could be added soon after, it is unrealistic for the administration to bank its hopes on oil in this regard. That said, there are early indications of interests by foreign manufacturing capital allocators. In early September, the government signed a memorandum of understanding with Sinotruck International, a Chinese maker of heavy-duty vehicles, to build an assembly plant, which would initially produce about 1,500 trucks annually, with room for further expansion. The deal was struck not too long after Volkswagen, the German automaker, announced it was in talks with the government to build an assembly plant in the country as well. Refine policy, set realistic targets Without a doubt, there is a strong imperative to grow the manufacturing base. That is, even as crude oil production is expected to boost growth for a while, with the IMF projecting an average growth rate of about 6 percent in 2018-22; after an average acceleration of about 7 percent over the past decade. Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Worrying trend in government, business relations Ayobami Adekojo

ecent experiences of private businesses point to a worrying trend in relations between government and private businesses. Government agencies are resorting to multiple taxation of private businesses as a means to increase their revenue base. In October 2018, insurance companies at a one-day seminar decried the multiple taxation they were being made to pay, and asked the industry stakeholders to unite against what they termed as “a threat to the well-being of the industry”. For the two financial years before 2018, insurance companies had lost N23 billion to multiple taxation. A Leadership newspaper investigation revealed that, “Apart from paying tax on management expenses, short term lending, among others, insurers were also mandated to pay tax on claims...meaning that, the higher the claims paid by an underwriter, the higher the tax to be paid on such claims.” At a seminar in July last year the Apapa, Lagos branch chairman of the Manufacturers Association of Nigeria (MAN), Mr. Olakunle Obadina, complained that its members were being taxed multiple times by regulatory agencies of the Lagos state government. It appears Nigeria’s insurance companies and MAN are not the only ones bedevilled by this anomaly, even telecommunications operators under the Association of Licensed Telecommunications Operators of Nigeria (ALTON), are equally overburdened. Early 2018, ALTON raised objection to the Amended Taxes and Levies Order, 2015, claim-

ing that the Act failed to fix the taxable rates, and had led to the imposition of new arbitrary levies and charges on telecom firms by state governments. ALTON chairman, Mr. Gbenga Adebayo, said his association believe the amended Act engendered the institution of multiplicity of taxes across different levels of government, adding that “The industry is also burdened with enactment of laws at the state government level to legitimise spurious levies and charges on our members, which negates the ease of doing business in Nigeria.” It didn’t take long before the import of this objection to the amended Taxes & Levies Act became clearer. In a letter to MTN Nigeria in August 2018, the Central Bank of Nigeria (CBN) ordered the firm to refund the sum of $8.1billion being dividends the apex bank claimed MTN repatriated overseas between 2007 and 2015. CBN alleged the Certificates of Capital Importation (CCIs) issued on behalf of some of MTN’s offshore investors for the remittance of foreign exchange were illegally done by some of its bankers, and without the approval of the CBN as required by law. The Attorney General of the Federation’s office would back CBN in this attack with allegation MTN was owing $2 billion in back taxes, for a period of over ten years and related to foreign equipment brought into the country and payment to suppliers of said equipment by MTN. Joining the train to take a bite at MTN, last week Thursday, the Kogi State Internal Revenue Service (KGIRS) for the second time, shutdown MTN Nigeria’s facilities over claims that the telecommunications giant failed to pay tax obligations to the tune of N120 million to the state government.

On these three occasions, MTN vehemently denied any wrongdoing. In the case of CBN, MTN refuted all allegations and sought judicial intervention on the matter, challenging the apex bank’s actions. In a statement, MTN claimed that no dividends have been declared or paid by it, other than those it did pursuant to the CCIs issued by its bankers and with the approval of the CBN, as is required by law. MTN also countered the Attorney General’s claim with a report in August showing results of an internal assessment that revealed $700 million paid to tax authorities. After the AGF rejected this assessment, MTN took the matter to court to seek redress. The case was later slated for hearing on December 3rd, 2018, and remains so. What the claims by insurance companies, ALTON, MAN and these three experiences of MTN point to is a worrying predatory trend where government agencies at state and federal level either make arbitrary laws or circumvent existing ones as an excuse to prey on organisations that are doing genuine business. The Kogi state government is demanding from MTN the immediate payment of Social Service Contribution levy, Employee Development levy and annual rent for Right-of-Way on fibre optics cable, without the Minister of Finance’s recommendation as is required by the Taxes and Levies Act. MTN’s Corporate Relations Executive, Tobechukwu Okigbo, in a statement said, the organisation has on multiple occasions furnished the KGIRS with documentary evidence proving the telecommunications giant full compliance with extant state laws on the matter. “At this stage, the demands of the KGIRS, if honoured, amounts to multiple taxation and the arbitrary shut down of our base transceiver

stations and harassment of our partners will stand in the way of a reasonable resolution”, according to Okigbo. These arbitrary actions by agencies of some states and federal government are deterring Foreign Direct Investments (FDI) inflow into Nigeria. Already the country has lost its top destination spot for FDI in Africa, trailing South Africa, Morocco and Kenya in Ernst & Young’s latest Africa attractiveness report, titled ‘Turning Tides’. In light of the perception the MTN vs CBN issue was creating in the eyes of foreign organisations looking to invest in Nigeria, the CBN at every opportunity allayed the fears of stakeholders, eventually resolving the issue “amicably and equitably”. Officials of the Nigerian Communications Commission (NCC) are said to be in talks with Kogi state top officials to resolve the MTN Kogi shutdown. At the insurance seminar in 2018, stakeholders had asked the federal government to review the tax regime that concerns the sector, a request which the Federal Inland Revenue Service (FIRS) assured the insurers was already being looked into. Though these are commendable steps, still, this is not the way to treat organisations that have become a strong part of the backbone of the Nigerian economy. This worrying predatory trend where every government agency at the state and federal level view private organisations as the proverbial national cake and therefore wants to take a bite at them to raise their internal revenue is bad for business and has to stop. Ayobami Adekojo is the Communications strategist and public affairs commentator. He wrote via adekojoayobami8@gmail.com

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Tuesday 05 February 2019

Executive Order 7, CSR and the duty of government

ix firms breasted the tape early in January in a new CSR-for-tax scheme to provide roads. The first enrollees in the Road Infrastructure Development and Rehabilitation Investment Tax Credit Scheme will construct 794.4km of roads in 11 states across the six regions of the country. Executive Order No.007of2018: Road Infrastructure Development and Refurbishment Tax Credit Scheme, Order, 2019 comes with so much promise but also deserves scrutiny. The pioneer firms are Dangote Industries Limited, Lafarge Africa Plc, Unilever Nigeria Plc, and Flour Mills of Nigeria Plc. Others are Nigeria LNG Limited, and China Road and Bridge Corporation Nigeria Ltd. They will build 19 roads in return for a tax credit from the government. Roads listed are 1. Construction of AshokaBajoga highway in Gombe state; 2. Reconstruction of DikwaGambaru Ngala Road in Borno State; 3. Reconstruction of BamaBanki road in Borno State; 4. Rehabilitation of Sharada road in Kano State; 5. Rehabilitation of Nnamdi Azikiwe Expressway/ Bypass in Kaduna State; 6. Reconstruction of BirninGwari Expressway in Kaduna State 7. Reconstruction of Birnin-

Gwari – Dansadau road in Kaduna State 8. Reconstruction of MakurdiYandev-Gboko road in Benue State 9. Reconstruction of Zone Roundabout – House of Assembly Road in Benue State; 10. Reconstruction of Obajana-Kabba road in Kogi State; 11. Reconstruction of EkukuIdoma-Obehira road in Kogi State; 12. Construction of Adavi EbaIkuehi-Obeiba-Obokore road in Kogi State; 13. Reconstruction of LokojaGanaja road in Kogi State; 14. Ofeme Community Road Network and Bridges in Abia State; 15. Rehabilitation of ObeleIlaro-Papalanto-Shagamu Road in Ogun State; 16. Reconstruction of Sokoto Road in Ogun State; 17. Reconstruction of ApapaOshodi-Oworonshoki-Ojota Road in Lagos State; 18. Construction of Bodo-Bonny Road & Bridges across Opobo Channel in Rivers State; 19. Rehabilitation of Benin City-Asaba Road in Edo State Nigeria’s Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme positions as a Public-Private Partnership intervention. It seeks to enable the Federal Government “to leverage on private sector funding for the construction or refurbishment of eligible road infrastructure projects”; to

do so in an efficient and effective manner “that creates value for money through private sector discipline” and guarantees participants “timely and full recovery of funds” expended in the prescribed manner. The Scheme will run for ten years. A Management Committee for the scheme would have the Minister of Finance as Chairman and that of Works as Deputy Chairman. The Permanent Secretary of the Finance Ministry will run the Secretariat. Executive Order 007 also provides that “Participants shall be entitled to a single uplift equivalent to the prevailing Central Bank of Nigeria Monetary Policy Rate plus two (2) per cent of the Project Cost. The uplift shall not constitute taxable income in the hands of a Participant or Beneficiary and shall be utilised as a credit against Companies Income Tax payable.” Firms have to register with the Committee to be eligible to participate. Approved project costs translate to Road Infrastructure Tax Credit. The caveat is that no firm can use Road Infrastructure Tax Credit that surpasses 50 percent of its tax assessment for a given year. The government in its wisdom removed this limitation for projects in Economically Disadvantaged Areas. The scheme allows for tradeability of the tax credit. Companies can sell their tax credit to other firms or a securities exchange. The buyer will, in turn, register with the Manage-

ment Committee. Companies can also roll over their tax credits to the following year. Sales of tax credits depend on the approval of the Committee. There are issues with the order. On the upside, Executive Order 007 will unlock the social responsibility of the private sector in deploying its entrepreneurial drive to contribute to societal upliftment. It should enable firms in various industrial centres to come together to provide access roads lack of which has been a deterrence to productivity. It should thus boost infrastructure development in the country. The Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) Order, 2018 (its official citation) is at heart an economic empowerment scheme. It passes federal funds as a tax credit for infrastructure to firms and groups of which the President approves. It is thus intensely political. What makes a road “eligible” is nebulous underExecutive Order 007. It requires greater rigour in the definition of terms and measurable parameters here as access to this credit and approval of infrastructure depends on “eligibility” of the road projects that companies choose to execute.

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Why Coca-Cola acquired 100% of Chi Ltd Pg. 14

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

DEALS

FEDA to support African businesses with $100m from Afreximbank HOPE MOSES-ASHIKE

ith $100 Million Afreximbank Commitment, Fund for E xport Development in Africa (FEDA) Positions to Support African Businesses. The op erationalization of the newly-created Fund for Export Development in Africa (FEDA) m ov e d i n t o h i g h g e a r Sunday the holding of t h e p re - i n c o r p o rat i o n meeting of the Board of Directors in Cairo. FEDA, a wholly-owned d e velo p m e nt- o r i e nte d subsidiar y of the African Export-Import Bank (Afreximbank), has been set up to implement the Bank’s Equity Investment Programme by providing seed capital to companies in Afreximbank’s key focus sectors, including agri-business; manufacturing; consumer and retail; financial services; technology; travel and tourism ; transport and logistics; and industrial parks. It will invest across all market segments but will have its greatest focus

on small and mediumsized enterprises. The long-term objective of FEDA is the provision of equity capital and related financial, nonfinancial and support services to operators in Africa’s tradable and support sectors, with emphasis on activities that support intra-African trade and value-added exports. The Fund, which has been set up with an initial $100-million commitment, will also seek to leverage on the role Afreximbank has played in mobilising trade finance into Africa to also mobilise foreign direct investment (FDI) into the continent. Addressing the pre-incorporation meeting, Prof. Benedict Oramah, Chairman of the Board of Directors of FEDA and President of Afreximbank, said that the fund would expand Afreximbank’s offerings to include vital equity investments that would boost intra-African trade. Philip Kamau, Chief Executive Officer (CEO) of FEDA, said that a feasibility study conducted for

L-R: Sunday Gbenjo, president, Entrepreneurs’ Organisation ( EO), Lagos; Catherine Buckingham, manager, Global Membership development, EO; Safa Shareef, regional director, Middle East, Pakistan and Africa ( MEPA), EO, and Lere Baale, president-elect, EO, Lagos, at the reception for Entrepreneurs’ Organisation( EO) Global Executives in Lagos

Afreximbank had identified a funding gap which was inhibiting intra-African trade. FEDA had, therefore, been set up to provide equity and to leverage FDI to help close that gap. He announced that FEDA would start invest-

ment activities in 2019, with a target to invest $10 million during the year. It was also targeting to raise $450 million in FDI during the period. In addition to Oramah a n d Ka mau , t h e o t h e r members of the Board of Directors are: Jean-Louis

Ekra, former President of Afreximbank; Vishwanathan Shanker, Partner and CEO of the private equity fund Gateway Partners and former Board Member and CEO for Europe, Middle East, Africa and America at Standard Chartered Bank; Sidi Ould

Tah, Director- General, Arab Bank for Economic Development in Africa ; and Deji Ali, Non-Executive Director, Asset and Resource Management Company Limiter, Niger i a, w h i c h wa s na m e d the Best Fund Manager in Nigeria in 2018.

INSURANCE

Kenyan insurers diversify into real estate to boost earnings as Nigeria lags BALA AUGIE

henever interest rates are falling, some Kenyan insurers diversify into real estate, especially when there is a sharp rise in the price of homes and rental income. On the other hand, Nigerian insurance companies have invested as much in housing and real estate as they rely on interest from government securities, dividend income, and corporate bonds to add impetus to investment income. But yields and interest rates are subject to the vagaries of macroeconomic shocks. For instance, bond yields were high while prices fell high between 2015 and 2017 when a precipitous drop in the price of crude oil tipped the country in its first reces-

sion. In short, there was an inversion of the yield curve those periods. Financial institutions in Africa’s largest economy made money from treasury bills in 2017 when yields hovered between 18 percent and 22 percent. However, T-bill yields began to fall in the first six months of 2018, albeit it started to rise and it is now between 14 percent and 17 percent. Insurance firms usually channel premiums from their clients to government securities, shares and real estate from which they look to earn interest. Of course more worrisome is that the Nigeria’s economy has been growing sluggishly as it GDP expanded by 1.80 percent in the third quarter of 2018, below 2.10 percent figure as at the last quarter of 2017. The stock market

has been beaten down throughout 2018 and the selloff has spilled into 2019 as investors fret over the outcome of the forthcoming election while the continuous rate hike by the United States Federal Reserve forced investors to dump emerging and developing market assets for the save heaven of dollar assets. Despite susceptibility of yields and bonds to the above systematic risk, insurers do not see the housing and real estate market attractive enough for them to invest in and earn higher returns. This is because there has not been a significant rise in the price of homes and rental income as a tough and macroeconomic environment is taking a toll on consumers and companies. Nigerians are getting poorer and cannot afford decent homes while

office occupancy rates are just picking up as many firms are not renting office apartment as they did during the pre-recession period. “Many tenants are not paying rent as at when due and it difficult ejecting the recalcitrant ones,” said Fola Lawal, Chief Financial Controller at Old Mutual. “A house of N100 million in Lekki will fetch a rent of N5m, that’s just 5 percent. Treasury bills will fetch 16 percent tax, without stress. Insurers were not investing in real estate when other sectors offered more attractive return on investment,” said Lawal. Despite insurers allure for fixed income investment, they earn less in investment income. For instance, investment income of 15 largest quoted insurers that have released third quarter

2018 results stood at N20.15 billion, this compares with N118.8 billion incomes from treasury bills raked in by First Bank Holdings Plc. Little wonder combined average net margins of all listed 23 firms fell to 12.15 percent in September 2018 from 20.12 percent as at September 2017. Also, combined net income dipped by 3.54 percent to N20.54 billion in the period under review as against N21.29 billion as at September 2017. Jide Orimolade , former CEO and managing director of Law union and Rock Plc said that retail life business is growing very well in Kenya like individual life policies, burial expenses compared to Nigeria that the only product assisiting the life business is Group life. “You need long term funds to be able to play in

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: CHINEDUM ONYEMA

the housing market,” said Orimolade. Kenya, with a population of 51.68 million and GDP of $98.26 billion, has an insurance penetration of 2.80 percent, thanks to expanding middle class and young population. On the other hand, Nigeria, with a population of 180 million people and GDP of $414 million, has insurance penetration of less than 1 percent, as the sector continues to struggle with a myriad of challenges like apathy for insurance, poor corporate governance, poor regulations, and tough and unpredictable macroeconomic environment. Lack of capital that has hindered Nigerian firms from taking on more risk prompted policy makers to be more aggressive on recapitalization as investment returns of insurers are ebbing.

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Tuesday 05 February 2019

Business Event

BANKING

Why Coca-Cola acquired 100% of Chi Ltd ODINAKA ANUDU

oca-Cola has officially announced its acquisition of Chi Limited in a dealthatconsolidatesthe former’spositronasanundisputed leader in the drinks market. Financial details of the deal were not disclosed at a news conference in Lagos on Thursday, but Coca-Cola’s 40 percent acquisition in 2016 was said to be around $230 to $250 million. Analysts think the deal could be around $500 million to $600 million. The acquisition is targeted at building billion-dollar beverage brands in Nigeria that will expand to many parts of Africa, said Peter Njojo, president of Coca-Cola Company in West Africa. The acquisition involves Chi’s segments such as juice, dairy, snacks, retail and ice tea, and does notcoverothersubsidiariessuchas

thefarmsandthepharmaceuticals. Coca-Cola has already launched Hollandia in South Africa and is launching in Kinshasa and Ghana. “You may wonder why we have an interest in Chi Limited. The brand Chi Limited has built in the Nigerian market over the yearsresonatewithconsumersand make a lot of sense,” Njonjo said. “Ourobjectiveistoofferawider rangeofproducts.Wewanttogrow Chi and Coca-Cola into a billiondollar business.” “We strongly believe that the brands from Nigeria can grow into billion-dollar brands. It is also a testament to our commitment to Nigeria.” He said acquisition of Chi Limited is also celebration of entrepreneurship of the founder of the beverage maker. Chi Limited acquired 40 percent of Chi Limited in 2016 and pledged to extend it to full own-

ership in three years. With this acquisition, Coca-Cola leads the soft drinks and carbonates market and will consolidate its share of the yoghurt and sour milk markets. Chi Limited led yoghurt and sour milk products in 2018, operating an effective distribution network nationwide, through which it leads many food and drink products such as fruit juice, and so has ensured strong popularity for its Hollandia brand, said Euromonitor International in its September 2018 report. “For us, coming here at this point when everybody is nervous isatestamentofourcommitment.” Njonjo said Coca-Cola will invest more in the staff and plant in Chi Limited and will retain the staff of the latter. He said Coca-Cola will leave the Chi brands as they are and will not make immediate changes on the products.

L-R: Bridget Oyefeso-Odusami, head, marketing and communications, Stanbic IBTC; Mrs Funke Amobi, group head, human capital, Stanbic IBTC; Abisoye Ajayi-Akinfolarin, founder, Pearls African Youth Foundation; Yinka Sanni, chief executive, Stanbic IBTC Holdings PLC; Kemi Adetiba , movie director, and Onyeka Akumah, CEO, Farmcrowdy, at the 2019 Stanbic IBTC Youth Leadership Series, in Lagos. Pic by Pius Okeosisi

MARKETING

Why Businesses need to invest in Digital Marketing to boost ROI ISRAEL ODUBOLA

ncreasing revenue and improving return on investment (ROI) are an essential focus of every business, and the emergence of the digital market comes as a blessing to improve the overall ROI of business. Digital marketing is growing leaps and bounds and it is a boon for businesses, as it generates enticing results within a short amount of time. In the past, generating leads through traditional medium yielded positive outcomes, but these strategies have largely been replaced by digital marketing, which has brought a revolution with immense benefits. Putting in the necessary time, effort and initial investment to develop a result-driven digital marketing strategy from scratch can save businesses a significant amount of money in the long term. Eric Siu, Chief Executive Officer of Single Grain, a reputable digital market agency in the United States, stated in an article titled “11 Companies killing it with their Digital Marketing Campaigns”, attributed the tangible improvement in ROI of Zappos, American Express & Mint to their dynamic digital marketing strategies. According to Siu, Mint, a web-based financial management service for the United States and Canada, created by Aaron Patzer, the company was obscure at first. However, this company committed to a digital strategy publishing hundreds of high-quality content pieces from informative blog posts to viral, attention-grabbing infographics to grow their business. This effort attracted a massive online following and generated close to $170 million before being sold to Intuit. In another report titled “Digital Trends for Nigeria in 2018” published by Terragon Group, Nigeria is the most mobilized country in the world with most of the internet traffic coming from mobile devices. According to the report, digital marketing is moving at a faster pace than ever before, delivering ROI with micro-influencers, adding that digital market would further sustain relationships for continual growth and expansion, and this is an area

where Nigerian businesses can leverage on in ROI push. The following are reasons why it is expedient for businesses in Nigeria to invest in digital marketing to a secure stable ROI. A Much More Precise Audience Traditional media marketing has a very limited impact on clients. This is because using traditional platforms cannot segregate audiences as much as digital media can. Google analytics, Facebook Audience Manager and Twitter Audience Insights are great digital tools that can help ascertain precise target audience and enables businesses to focus on them to obtain positive results. Measuring Result is Much Easier Digital tools that use digital marketing metrics can help businesses determine how effective their strategy is, and shows whether a business is close or distant to achieve its projected return on investment. A typical example is Adext Al, which automates the optimization of the entire digital campaigns of a business. This audience management tool utilizes Artificial Intelligence and Machine Learning to digital advertising and finds the most suitable audience or demographic group for an ad. This tool has the capacity to optimize every single ad about 480 times each day. Furthermore, partnering firms are assured of better cost per conversion or lower cost per sale for all their accounts and campaigns. This upheld the findings of Digital Trend Report that digital solutions which provide lead generation, customer engagement and acquisition can bring the best returns on investment for performance marketing. Pushes up Sales Revenue Digital marketing actions are based on strategies studied that can help reach the target audience at the right time. A good digital marketing strategy for companies would help among other things relate (via email marketing, marketing automation, and lead nutrition; sell (through scores of leads, inbound sales, and customer relationship management) as well as analyze (through various software metrics and statistical analysis).

More Economical and Efficient It is somehow costly for businesses to print new materials every time they wish to amend existing content or add something new to it. Digital marketing enables companies to always stay up to date as they can change anything they want at any time they want it, consequently leading to a win-win situation in the long run. In addition, this form of marketing is more eco-friendly as it averts occurrences of having huge unused printed materials. Visibility & More Accessibility Once an organization starts using digital tools to promote businesses it boosts their visibility tremendously. We are in the digital age where the best way to reach across to potential clients is to go viral. Going viral enables businesses to reach the desired demographics anywhere in the world. Fred Devito, Co-Founder, Exhale Enterprises Inc, once said that a business needs to understand their customers down to an individual level to truly deliver quality personalized services and this is realizable through digital marketing. On the average, internet user spends more than 6 hours on the internet, according to the Terragon’s Digital Trend report, and this would most likely increase in subsequent years. Traditional marketing aims to generate reach and visibility but the internet does it better. Edge over Competitors Having a business this time around cannot be imagined without any competitors. Thus, having an edge over them is very important to lead the market. Though at times it is better to follow closely the strategies of rivals to be in the race, and sometimes surpassing them in terms of gaining an advantage is the best strategy to lead. Having an investment in digital marketing is a good start. Altogether these factors, along with several others ensure that businesses stay strong in turbulent times. In order to ensure the same, it is recommended that they consult the services of a reliable digital market partner, who delivers the best result to boost ROI.

L-R Pearl Uzokwe, director, governance and sustainability, Sahara Group, Bethel Obioma, head, corporate communications, Sahara Group, Cherie Blair, chair, Omnia Strategy, and Kola Adesina, group managing director, Sahara Power Group, during a meeting on partnership between Sahara Group and Omnia Strategy towards promoting the SDGs in Africa in Davos, Switzerland.

L-R: Ashok Israni ,regional chief marketing officer, Globacom Limited; Bisi Koleosho , deputy chief operating officer, technical, Globacom; Sanjib Roy; group chief technical director, Globacom; Nasiru Abubakar, editor, Daily Trust Newspapers; Noble gwe , CEO, 360 NOBS/Stylevitae; and Charles Jenaruis ,regional director, west Africa, marketing communications, during the presentation of Glo business direction to media executive in Lagos. Pic by Pius Okeosisi

Oladimeji Ojo, moderator, author and Poet, Panelist, author of Afonja The Rise, Tunde Leye, Elizabeth Ajayi, retired chief lecturer in history at the Adeniran Ogunsanya College of Education, Lagos, Nigeria, Kunle Kasumu, TV presenter, Channels TV, Tunde Kekani, Cinetograoher executive producer at Mainframe Productions at the Launch of the book, Afonja The Rise written by Tunde Leye at MUSON Centre, Lagos.

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Odunayo Oyasiji

By Perchstone & Graeys’ private client’s department

Navigating the contractual roadblocks to estate planning

eople tend to measure their success by the milestones they attain during their lifetimes. The usual markers are: levels of wealth, power, and influence. However, over time, most who amass some measure of wealth and success undergo a shift in focus. They become more concerned with leaving something behind that endures long after they are gone. In other words, in the natural order of things, most will someday ponder on their legacy. This desire to leave something tangible behind in some well thought out and organized form, creates the need for appropriate estate planning. Estate planning involves preparation for the transfer of assets from someone who owns the assets (a grantor) to the intended “inheritors” or beneficiaries (grantees). Such transfers most commonly take place through Wills and Trusts. Whilst most grantors rest in the assurance that their legacy will be given effect exactly as planned, in reality numerous agreements which they have entered into during their lifetimes often diminish the likelihood that they will have their posthumous wishes realized. Many potential grantors don’t realize that the contracts they enter during their lifetimes, could place restrictions on their ability to transfer their assets when they are gone. The legal principle that sums up the predicament of many a grantor, is that you cannot give what you don’t have. This may appear commonsensical, but if not appropriately taken into consideration, its effects are multifold. Firstly, the grantor cannot have his/her wishes followed to the letter. Secondly, it makes the

grantor’s transferable assets uncertain and vulnerable to misappropriation. The challenges to intentional and successful estate planning can be surmounted by coordinating your estate/wealth management plan with a review of all relevant contracts entered during your lifetime. This can only be accomplished by engaging a sound legal practitioner who has experience in company law, real estate practice, banking law, and even family law. This is because many agreements entered in these areas have clauses limiting or regulating the asset owner’s ability to dispose of or transfer his/her assets. Individuals interested in preparing a wellthought-out estate plan must avert their lawyer’s mind to any such agreements that may affect their ability to transfer their assets to intended beneficiaries. A few estate planning tools are commonly used in estate plan-

Reason for a demand guarantee

ust like letters of credit, demand guarantee plays a major role in protecting the interest of parties and ensuring that business is transacted both locally and across borders without the fear of being duped. Performance of obligations under a contract is key- especially to a party that has parted with money. For example, Mr A resides in Nigeria and wants to import a car from Japan. Mr A gets in touch with Mr B who sells cars in Japan. They both agree on the terms of contract of the sale of the car. Mr A who is the buyer/importer can request for a demand guarantee from Mr B who is the seller. The function of a demand guarantee in the foregoing scenario is to protect the buyer (who might have paid fully or partially) in a situation where the seller in Japan fails to perform his obligations under the contract. The buyer can then present the demand guarantee and get paid by the bank. How it works An exporter or seller approaches his bank for issuance of a performance guarantee in favour of the buyer. The bank carries out the instruction of the seller based on some terms and

after collection of its charges. Difference between a demand guarantee and letters of credit Letters of credit offers protection for the seller in that payment for the goods bought is secured upon presentation of the documents stated in the letter of credit. The documents are usually evidences of performance of the underlying contract. It must be noted that the letter of credit itself is independent of the underlying contract and payment is made once conforming documents are presented. However, a demand guarantee seeks to protect the buyer against the risk of non-performance, late performance or defective performance of the underlying contract. The liability of the bank is primary under the demand guarantee and the beneficiary must be paid once a demand is made. The demand guarantee enjoys independence from the underlying contract as the bank cannot look into the performance of the underlying contract to determine if it will pay or not. A demand guarantee focuses more on the protection of the interest of the buyer while a letter of credit is more interested in securing payment for the seller.

ning, with each tool presenting its own unique advantages and challenges. For instance, one could set up a company for the sole purpose of acquiring assets or some other singular objective not associated with actual commercial enterprise. This is perfectly legal and referred to a special purpose vehicle, or “SPV”. An SPV can acquire/hold assets on behalf of a real person for tax, control, and other regulatory reasons. SPVs are commonly used by high and average net worth individuals as proxies for purchasing assets discreetly. However, SPVs can be limited by the terms creating them as well as by company law. What

Meaning This is a very useful instrument in commercial transactions. It is also called bank guarantee. It comes in different forms and types depending on the use. That is why we have for example- performance bond/guarantee, tender guarantee or bid guarantee, advance payment guarantee or stage payment guarantee, retention bond/guarantee and maintenance guarantee. It is similar to letters of credit in some waysespecially due to the fact that it is independent of the underlying contract between the parties. The guarantor (bank) must honour the guarantee once the beneficiary makes a demand. It is usually demanded by a party to serve as a form of protection in a situation where the other party refuse to perform his obligations as agreed. The rights and duties of parties to the demand guarantee are usually governed by Uniform Rules for Demand Guarantees (URDG), 2010. Reason for a demand guarantee Just like letters of credit, demand guarantee plays a major role in protecting the interest of par-

this means is that SPVs though very useful, are not fool proof, and some ‘standard’ company agreements entered into may actually undermine their usefulness. To avoid this, the grantor’s lawyer must have access to both the estate planning instrument, and all the SPV’s corporate documents and agreements. Another frequently deployed tool of estate planning is the ‘trust’ mechanism. A trust is an arrangement where one person is appointed to hold property, on behalf of another or others. The trustee cannot use the property for his personal enjoyment, and neither does the person who has appointed him. Assets given to a trustee to hold and manage no longer forms part of the testator’s estate and as such care must be taken not to include those assets when planning to dispose of assets via a Will or other estate planning mediums. When two or more persons co-own a property, that is known as joint ownership. This kind of arrangement is common between husband and wife. As part of a joint succession plan, joint ownership could reduce tax liability, attorneys’ fees, etc. What many people fail to realize is that generally, joint ownerships comes with right of survivorship. This means that when one of the joint owners dies, the property does not become part of the deceased’s estate; rather, the other owner continues to own the property,

with the last surviving owner becoming the full owner. So, if the intention is for ‘Mr. & Mrs.’ for example, to retain the power to pass on their own share of property to a beneficiary of their choice when they are gone (rather than the surviving partner taking all), they should consider creating an arrangement where each party has distinct ownership of their own share of the property with no right of survivorship. This arrangement is legally known as tenancy in common. Finally, many ‘routine’ financial agreements such as those associated with some pension accounts, insurance policies, and other receivable agreements already stipulate what should occur upon the demise of a person. Usually, the documents will make provisions for who the intended beneficiary of the policy will be. Some of these kinds of transfers operate outside the ambit of a Will or other testamentary document that the grantor may have prepared. A comprehensive estate plan, in addition to considering many of the above planning tools, should provide for the wellbeing of the grantor and his or her spouse and dependents in the event of long-term incapacity, illness or death. In order to achieve this, it is important to ensure that the estate planning document of the grantor is properly drafted with the support of a well-seasoned legal practitioner.

ties and ensuring that business is transacted both locally and across borders without the fear of being duped. Performance of obligations under a contract is key- especially to a party that has parted with money. For example, Mr A resides in Nigeria and wants to import a car from Japan. Mr A gets in touch with Mr B who sells cars in Japan. They both agree on the terms of contract of the sale of the car. Mr A who is the buyer/importer can request for a demand guarantee from Mr B who is the seller. The function of a demand guarantee in the foregoing scenario is to protect the buyer (who might have paid fully or partially) in a situation where the seller in Japan fails to perform his obligations under the contract. The buyer can then present the demand guarantee and get paid by the bank.

mand guarantee and letters of credit Letters of credit offers protection for the seller in that payment for the goods bought is secured upon presentation of the documents stated in the letter of credit. The documents are usually evidences of performance of the underlying contract. It must be noted that the letter of credit itself is independent of the underlying contract and payment is made once conforming documents are presented. However, a demand guarantee seeks to protect the buyer against the risk of non-performance, late performance or defective performance of the underlying contract. The liability of the bank is primary under the demand guarantee and the beneficiary must be paid once a demand is made. The demand guarantee enjoys independence from the underlying contract as the bank cannot look into the performance of the underlying contract to determine if it will pay or not. A demand guarantee focuses more on the protection of the interest of the buyer while a letter of credit is more interested in securing payment for the seller.

How it works An exporter or seller approaches his bank for issuance of a performance guarantee in favour of the buyer. The bank carries out the instruction of the seller based on some terms and after collection of its charges. Difference between a de-

BUSINESS DAY

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TALKING POINTS The Brexit Is Coming 60%: The United Kingdom’s Confederation of Business Industry estimates that just 60% of the country’s companies have prepared contingency plans to face the effects of Brexit + Lead Entrepreneur 63%: Venture capital firm First Round analyzed its portfolio companies and found that the firms led by at least one female founder performed 63% better than those with all-male founding teams. + Big Money $4 trillion: The United States’ municipal bond market is valued at $4 trillion, among the largest fixed income markets in the world. + What’s an Idea Worth? 19%: Facebook invested 19% of its sales on research and development in 2017. + Great Potential $13 trillion: In a study looking at the application of artificial intelligence, McKinsey found that the technology could create $13 trillion in new global economic activity by 2030.

After a conference, put all those business cards you collected to use

e all know the networking benefits of going to a conference. But to reap those benefits, you have to follow up with the people you met. Luckily, a small amount of effort can help you maintain those new connections. Block an hour on your calendar as “processing time” after the conference. Go through your briefcase, pockets and travel bag, and gather all the business cards you collected from others. Then capture each person’s details in an app or spreadsheet, and identify your goal for the relationship. Separate people into three

brain, which can lead to new insights. If you still feel stuck, give yourself more material to work with: Read about the topic you’re tackling, take a field trip to observe other people’s solutions to similar problems or talk to experts. Above all else, give yourself time. You’ll have a much better chance of success when you let creative thoughts percolate.

categories: those you have a specific reason to follow up with, those you’d like to build a deeper relationship with and those who are generally interesting but don’t fall into the other categories. You can’t invest equally in all connections, so send quick notes to the people in the first and third categories, and spend time figuring out how to connect on a deeper level with those in the second.

(Adapted from “How to Follow Up With People After a Conference,” by Dorie Clark.)

Don’t just have a to-do list — timebox it

It’s in our DNA FirstBankofNigeria

he fear of failing at something — of doing it wrong, looking foolish or not meeting expectations — can be paralyzing. But avoiding challenges that make you anxious isn’t going to help you grow. To overcome your fear of failure, redefine what the concept means to you. For example, instead of thinking about failure (or success) in terms of what you achieve, reframe it in terms of what you learn. No one gets everything right, and a “failure” can still provide invaluable experience for the fu-

ture. It’s also important to focus on what you want to do rather than what you want to avoid. When you’re dreading a tough task, you may unconsciously set goals around what you don’t want to happen. Creating a “fear list” can help: Write down the challenge’s worst-case scenario, how you can prevent it and how you’ll respond if it comes true. Creating a plan for a bad outcome can give you the courage to move forward.

hen a talented employee of yours announces their resignation, it’s a dreadful moment. The first thing you should do is take some time to process any negative emotions you feel, such as frustration or disappointment. These kinds of feelings are normal, but they won’t help you address the situation productively. Once you’ve reflected, focus on celebrating the employee’s accomplishments and gathering their honest feedback about the team. Set an example by expressing genuine support for their decision to leave; you may want to throw a goodbye party or

In an ever changing economy, with 125 years of serving YOU, we remain strong, trustworthy, dependable, safe and consistent. You can be conﬁdent that we will continue to deliver innovative banking products and services which seamlessly and conveniently suit your lifestyle needs.

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he only thing worse than having a long to-do list is not knowing how you’re going to get everything done. Timeboxing can help: It’s a way of converting your to-do list into blocks of time on your calendar, so you have a plan for what to do and when. Start by looking at your to-do list and figuring out each task’s deadlines. For example, if a promotional video has to go live on a Tuesday, and the production team needs 72 hours to incorporate your edits, then put a hold on your calendar at least 72 hours before Tuesday. Repeat for each item on your to-do list. If you work on a team where people can see one another’s calendars, timeboxing has the added benefit of showing people that the work will get done on time. But the biggest advantage of timeboxing might be that it gives you a feeling of control over your calendar — which can help you feel happier at work.

(Adapted from “How Timeboxing Works and Why It Will Make You More Productive,” by Marc ZaoSanders.)

Overcome your fear of failure by redefining it How to respond when a great employee says they’re leaving

(Adapted from “How to Be (Adapted from “How to OverCreative When You’re Feelcome Your Fear of Failure,” by ing Stressed,” by Elizabeth Susan Peppercorn.) Grace Saunders.) c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

Expertise www.ﬁrstbanknigeria.com

Tuesday 05 February 2019

Stress doesn’t have to short-circuit your creativity

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Harvard Business Review

hen you’re stressed out, it’s hard to decide what to eat for dinner, let alone get work done. How can you produce ideas when you’re feeling this way? First, take a breath and relax. Trying to force yourself to be creative will only lead to more frustration. Instead of thinking, “I must be creative right now,” tell yourself, “I’m going to play around with some ideas.” Then do an activity that will let your mind wander. Going for a walk or napping, for example, naturally loosens up your

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a similar event to wish them well. And then make sure you conduct an exit interview, even if human resources will do one too. Ask for the person’s advice on retaining other employees and improving the experience of working for you. By being willing to hear uncomfortable truths, you’ll show the person that you respect the experience and knowledge they gained during their time there.

(Adapted from “How to Manage Morale When a Well-Liked Employee Leaves,” by Liane Davey.)

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Market

Nigeria’s growing crude oil production meets plummeting exports STEPHEN ONYEKWELU

hile Nigeria’s crude oil production capacity is growing oil exports have dipped for twostraight months, BusinessDay analysis show. The Egina’s floating, production, storage and offloading (FPSO) vessel will add 200, 000 thousand barrels a day to Nigeria’s production at full capacity and Nigeria could ramp production up to 2 million barrels per day this year but the 1.7m bpd supply cap imposed on Nigeria by OPEC will test the country’s resolve. Crude oil exports fell for a second straight month led by dip in shipments of grades including Bonny Light, Brass and Bonga, vessel-tracking data compiled by Bloomberg show. “This is traceable to slower economic activities in the global oil market in those months. Besides, these might be older cargoes accumulated over time” Jubril Kareem, an independent energy expert said. Nigeria’s crude exports fell to 1.69 million barrels per day in January as against 1.77 million b/d in December. Akpo condensate flows fell to 92k b/d against 97k b/d in December. Combined crude and

condensate shipments dropped to 1.78m b/d against 1.87m b/d. In December, the Organisation of Petroleum Exporting Countries (OPEC) decided to cut 800,000 barrels, or 2.5 percent of members daily output, this meant Nigeria’s daily oil production is to drop by a minimum of 43,775 barrels, to 1.7 million barrels, effective January 2019. The

drop is expected to remain in place for an initial six months period until June 2019. Destination analysis for January crude/condensate flows shows: 41% to Europe, 21% to Asia, 8% to Africa, 5% to North America, 4% to Latin America and 19% to unidentified destinations. It is probably the time to imagine

a scenario where crude oil prices stays bearish in 2019 and Egina pumps 200k bpd, then Dangote refinery kicks off next year needing 650k bpd. If also by some twist of events deep water oil production projects such as Owowo West with some 180k b/d capacity and Bonga Southwest with 150k b/d production capacity take FID, Nigeria will

need to re-calibrate its OPEC commitments. With rising production capacity and soon bigger refining capacity, it is time for Africa’s largest crude oil producer to go big on petrochemicals. Saudi Arabia is doing so. BusinessDay had reported how Saudi Arabia the world’s second biggest crude producer is shifting between 2m and three million barrels per day hydrocarbon production into chemicals as one way to take a leading position in the sector. Perhaps, Nigeria can pay more attention to becoming a petrochemicals hub in West Africa. Nigeria’s petrochemical industry has been hampered by the poor state of the refineries leading to loss of billions of naira in revenue. Shipping off 445,000 barrels of crude oil a day to refineries in Europe and Asia outsources jobs and investments to these countries. In a 2018 report, the Paris-based energy think tank said that 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.

Insight

Lundin Petroleum result shows what to expect from Seplat, others DIPO OLADEHINDE

undin Petroleum, a European independent oil and gas exploration and production company, has declared annual revenue of $2.6 billion in 2018 giving a clue to what investors, shareholder’s and industry experts should expect from the company’s Nigerian counterparts. With oil prices averaging at $71, Lundin Petroleum, one of the operator of OML 113 at the Benin Basin, offshore Nigeria and also technical advisor to Nigeria’s Yinka Folawiyo Petroleum Company (YFP) recorded a 30.5 per cent increase in revenue. “2018 proved to be a standout year across all areas of our business, with excellent performance from our producing assets, strong financial results and success with the drill bit,” Alex Schneiter CEO of Lundin Petroleum said.

Due to strong facilities and reservoir performance at both its Edvard Grieg field and the Alvheim area, Lundin Petroleum recorded production of 81.1 thousand barrels of oil equivalent per day (Mboepd) in full year 2018 compared to 86.1 Mboepd for 2017 while operating

cost, including netting off tariff income, was $3.66 per barrel which was below the revised full year guidance of less than $3.80 per barrel and 12 percent below the original guidance of $4.15 per barrel. The company said the performance is due to a combination of

reduced costs, increased production volumes and the termination of production from the Brynhild field during the year. Operating profit from continuing operations was $1.4 billion compared to $812.4 million recorded in 2017 primarily driven by higher oil prices in combination with lower production cost. Buoyed by stronger commodity prices, operating cost below guidance and very strong production efficiency, CEO of Lundin Petroleum noted the firm has delivered EBITDA in excess of $1.9 billion and also record high free cash flow of $663 million for the year 2018. BusinessDay analysis showed the firms Earnings before interest, tax, depletion and amortization (EBITDA) from continuing operations in 2018 increased to $1.9 billion compared to $1.5 billion in 2017 representing EBITDA per share of $5.65 which was higher than $4.41

in 2017. With operations focused in Norway which have an average daily production of 1.6 million bpd relatively similar to Nigeria; Lundin Petroleum achieved average price for a barrel of oil equivalent from own production amounted to $67.89 in 2018 compared to $51.63 in 2017. Lundin Petroleum’s total cost of operations amounted to $102.5 million in 2018 compared to $117.3 million in 2017 while the total cost of operations excluding operational projects amounted to $93 million compared to $105.9 million. The financial performance of Lundin Petroleum will be an insight for investors and shareholders on what to expect from financials of major oil exploration companies like Oando, Waltersmith, Shoreline Energy, Seplat, Sahara Petroleum who are all expected to declare improve profits margins as a result of 2018 higher crude oil prices.

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Tuesday 05 February 2019

ENERGY INTELLIGENCE Interview

Tanzania shouldn’t be shopping for foreign oil sector consultants when Nigeria has 60 years experience – Ayoola In this interview, Oladapo Ayoola, CEO, Sub Saharan Africa Upstream Oil and Gas Summit speaks on opportunities the forthcoming conference in Tanzania from April 9-11, will provide for collaborations between operators in the continent’s oil and gas sector.

hat should investors look forward to

at this year’s sub Saharan Africa Upstream Oil and Gas summit holding in Tanzania? This year’s summit will provide opportunities for practitioners and investors to showcase what we already have, exchange ideas on what we are doing rightly and what we can learn from each other-West Africa learning from east Africa, east Africa copying best practices from West Africa and South Africa. From April 10, we will discuss the unique investment opportunities in east Africa with a focus on Tanzania. We are asking PURA (Petroleum Upstream Regulatory Authority) of Tanzania to come and tell us what we need to do for a successful investment. We have asked the CEO of Petroleum Commission of Ghana to come and talk to us. This is because if investors know what the fiscal policies are and what the procedures are, it would be easier for them. Nigeria is a success story of so many indigenous entrepreneurs who have gone not just into downstream but Exploration and Production. We have many success stories to take to the rest of Africa such as Eroton, Aiteo, Amni, Seplat among others. At the summit, we will also discuss funding opportunities. Can we pull

world. What we have not been able to put together is our own funding mechanism. If you have the right personnel and fiscal policies, then you buy the technology and then we have the capacity to deliver.

together as a continent and fund genuine investment opportunities on our soil? How will the conference tackle the sector challenges? We are focusing on opportunities and talking to regulators. If regulators are upfront with investors by telling them what they need to do and then we get a checklist, that’s all an inves-

tor wants to know. The investor wants to know what the challenges are and that’s why on the April 10, we will be bringing key regulators to come and talk to investors and say, “this is what we’d be asking of you” The other challenge is funding. On the other hand is technology. In terms of manpower, Nigerians are as brilliant as any other part of the

Kindly share some success stories from previous summits? Despite it being an up and coming platform, we are beginning to see the impact. Specifically, during the first edition in 2015, Nigeria Petroleum Exchange (NIPEX) was there and they had a stand. We had a gentleman there from Uganda. Today, NIPEX is consulting for Uganda regulators, supporting them on how to start a Petroleum Exchange which will be the first in East Africa. That is a nation to nation benefit. There are also individuals who are consultants who have met and relationships formed for mutual commercial benefits. Last year, we broke new grounds. We brought about 25 oil and gas host community members who came to the platform to say what they would like to see and how best they can make the relationship between them and oil companies a beneficial one. We also introduced Women in Petroleum forum. The leadership in the petroleum sector is male dominated. So, we are calling on women who have achieved success in the oil and gas industry to mentor young women

right from the university. Why are renewables an important part of this summit? When we were younger, we all knew electricity comes from Kainji Dam which is hydro. And now we know that our sun is now being tapped for solar energy. Technology is going towards that sector. We are aiming to service the same market. So, both sectors must meet at some point. What is your message for participants? Whether you are a geoscientist focused in exploration, or in Health Safety and Environment, engineering, community engagement, an investor, this is the place to be. This is where we prepare for the future of the continent where somebody who sits in Kampala, Uganda should be able to look through his table, bring out the card of an African specialist that he has met somewhere and then collaborate. There is no reason why Tanzania should be going in search of consultants in Europe when Nigeria has 60 years’ experience. You can imagine the number of people who have retired with the wealth of experience. So, why are we not sharing best practice? Why are we importing from where they don’t understand our peculiar community challenges? This is the platform for the future.

Analysis

Can Nigeria-led African oil producers club dent continent’s challenges? STEPHEN ONYEKWELU

be Kachikwu, Nigeria’s minister of state for petroleum resources is leading an Africa-wide drive seeking to raise $9 billion to finance projects in Africa including oil exploration, refineries and pipelines but this faces regulatory framework challenges in Nigeria. In the recent continent-wide campaign to raise funds for big ticket capital intensive projects, Nigeria is working with over a dozen other nations grouped under the African Petroleum Producers Organisation, or APPO, to raise $1 billion in start-up funding for the African Energy Investment Corp.,Kachikwu said in an interview. At least half of this will come from private investors including venture capital companies, he said. “The target is to be able to drive work-funding distribution in excess of $9 billion” over the coming year, Kachikwu said on the sidelines of an oil conference in Abuja. However, for decades Nigeria’s oil industry failed to change or reform itself and now it is being starved of

as much as forty billion dollars of investment waiting for the country to change its ways and enact badly needed reforms. The global professional services firm, PwC estimates that regulatory uncertainty is keeping $40bn of potential foreign investment out of Nigeria. Nigeria lost an opportunity to reverse this flight of foreign direct investment into the country when President Muhammadu Buhari declined assent to the Petroleum Industry Governance Bill (PIGB), a prelude to the passage of three subsequent bills meant to bring clarity and transparency into the opacity of Nigeria’s petroleum industry. The implication has been unclear fiscal and regulatory framework to drive investment, management and inefficient operations in the sector, as well as the contentious aspect of the bill (the Host Communities Stakeholding). Furthermore, Nigerian oil companies have been counting on alternative funding schemes including contractor financing, insurance funds, private equity, pension funds among

others to get financing for new projects in an industry where lenders have become weary and wary of. In exchange for some of the funds, operators say they have been offering equity participation, profit sharing and various crude for payment schemes supported by the Nigerian National Petroleum Corporation (NNPC) which provides guarantees that gives the lenders confidence. This is probably why Nigeria, which currently pumps about 1.75 million barrels of crude a day, is

trying to revive APPO after decades of inactivity and poor collaboration within the African oil group. Producers on the continent have become “silos” and need to start collaborating more on transnational projects to boost development and protect the regional market, Kachikwu said. Also a member of the OPEC, Nigeria is working to establish the 18-nation African group as a “minisegment” of OPEC. African members would take a unified position on issues including oil prices, output cuts,

project costs and funding, according to Kachikwu. “I have done this informally through the last two years of OPEC such that whenever we go to Vienna, those who are OPEC members will meet with me first so we toe a common position,” he said, referring to meetings at the producer group’s headquarters. “What we have found out is that it has been very effective because suddenly the likes of Saudi Arabia and the rest find that they could no longer just roll off African support just like that.” Nigeria is scheduled to hold a general election from Feb. 16, with President Buhari seeking a second term. His main challenger, Atiku Abubakar, has said that he would privatise the state-run oil firm, which he called a ‘mafia organization,’ if he is re-elected. The Nigerian National Petroleum Corp. has a long-standing reputation for inefficiency and opaque management. Investment inflows into the Nigerian petroleum sector will wait awhile until there is clarity in the regulatory environment for investors to be able to make long-term capital expenditure investment decisions.

Tuesday 05 February 2019

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Investment

Solar energy rise fails to impress Nigerian lenders ISAAC ANYAOGU

igerian commercial banks are not impressed enough to commit resources into the bourgeoning commercial and industrial solar market in Nigeria offering costly facilities for developers in the offgrid space, a new report by Bloomberg New Energy Finance has found. In its January report, the analysts found that there are no project financing product available in Nigeria that lets vendors borrow against a cash flow stream, adding instead, all local financing in Nigeria requires the developer to provide a physical asset as collateral. Commercial banks do not accept solar equipment as collateral and require borrowers to own real estate, as a result, developers are mostly financing projects through their own balance sheet, either in U.S dollars, if they are a multinational corporation, or in naira in the case of local developers. Projects developers have had to rely on external funding from development organisations such as United States African Development Foundation, German group GIZ and early start-up funders like Shell-seeded All On to unlock access to finance to fund projects. In some cases, government policy have hampered rather than helped. The report said operators want duties on solar panel abolished followed by cost reflective electricity tariff; and then review of the 1 megawatts captive generation license of the Nigerian Electricity Regulatory Commission (NERC).

The report however pointed out that Nigeria’s power outages are the primary and dominant enabler of the C&I solar business in the country with developers interviewed by BNEF agreeing unanimously that they can only be in business today because of the poor state of the nation’s electricity grid. It added that this was most pronounced in rural areas, but also in cities such as Lagos or Abuja, adding that power outages in Nigeria were usually unpredictable and ranged from four to 15 hours on average per day, across the country.

“Therefore, C&I customers expect developers and EPC companies to provide them with a guarantee on total system reliability. Since almost all developers use a combination of solar, batteries, grid and diesel generators, most of them guarantee their systems will provide power for 98% or more of the time over the year. “The government had some success in boosting generation capacity, but transmission and distribution remain a bottleneck. No developer interviewed by BNEF believes that the grid will improve in the next three years. Most developers believe it will

get worse and potentially collapse, and conclude that the future of power in Nigeria consists of decentralized power systems,” said an aspect of the report. It listed most of the major barriers to more C&I solar in Nigeria to include financial, from debt availability to credit risk and foreign exchange hedges, adding, “many developers in Nigeria told BNEF they wish that import tariffs would be reduced.” According to it: “Revenue for C&I solar projects is always in naira. International developers need to convert this to foreign currency. The CBN

allocates U.S. dollars to local banks but applies restrictions on converting Nigerian naira into U.S. dollars. This is a huge risk, particularly if a company holds U.S. dollar debt. “Batteries must typically be replaced after 3-10 years of operation. These costs occur in U.S. dollars, whereas project revenue is in naira. If left unhedged, the battery replacement can significantly reduce project returns if the naira depreciates. Developers reduce credit risk by installing advanced management systems to enable them to remotely cut off systems for non-paying customers.”

Market

Africa ramps up solar home systems, Nigeria should too DIPO OLADEHINDE

ccording to the Global OffGrid Lighting Association (GOGLA) five Africa countries including Kenya, Mozambique, Rwanda, Tanzania and Uganda represent around 45 percent of the global offgrid Solar Home System (SHS) market as data revealed there are over 2,300 new off-grid solar users in these countries. SHS are solar technologies that are made up of a solar PV panel, battery and LED lights which provide light and power to a household or business and are sold in countries that have large populations living off-grid. While Nigeria has many SHS installations, it is yet to gain the same traction as these African countries. GOGLA revealed that nearly 60percent of off-grid solar customers in Kenya, Mozambique, Rwanda, Tanzania and Uganda undertook more economic activity within just three

months of purchasing a SHS; whether gaining a new job, using their system directly within a business, or being able to be more productive by working for longer hours. “For more than a third of customers, this access to electricity has already enabled them to increase their monthly income by $35 a month, more than half the average monthly GDP per capital,” GOGLA said.

In t h e f i v e A f r i ca c ou nt r i e s GOGLA said SHS allows 44 percent of users to be more flexible with their daily activities and spend more time at work. “Almost half of these customers have already found these extra work hours enable them to make more income: on average, an additional $25 per month.” GOGLA said 13 percent of customers use SHS to support a business they operated prior to purchasing their

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

system: primarily shops, stalls, bars or restaurants while 11percent of customers started a new enterprise after purchasing the SHS. The most common being a phone charging business. Although phone charging for a fee is the most common activity overall, GOGLA noted that the biggest returns are seen in retail shops, which increase their revenue by an average of $36 per month. Overall, 24 percent of customers use their system to support their business, with 89 percent seeing this reflected in increased revenues. On average business owners generate an additional $29 per month. In addition, GOGLA report said over 90 percent of households that replaced toxic kerosene lamps with solar alternatives reported that they have experienced improvements in both health and feelings of safety. Globally, Off-grid solar is recognized as a fast and affordable alternative for scaling up energy access across the globe, delivering a wide range of

improvements to quality of life. According to GOGLA , Nigeria has the second largest potential offgrid market in the world after India with 8 percent of the global off-grid household population of 434 million households. The country’s Rural Electrification Agency (REA) plans to deploy 10,000 mini-grids across the country and yet estimates that installing 100kWh each per mini-grid will only meet 30 percent of anticipated demand in the country. They hinged their conviction on the fact that Bangladesh with a population of over 158 million and has shown from implementing offgrid power solutions which made its government to initiate the Solar Home System (SHS)-based rural electrification programme in 2003 through Infrastructure Development Company Limited under a micro-credit scheme. In 2002, only 7,000 Bangladeshi households used solar panels but as of today, the programme has installed about two million SHS in the country.

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BUSINESS DAY

Tuesday 05 February 2019

BUSINESS DAY

Tuesday 05 February 2019

PHOTOSPLASH

BusinessDay Excellence in Public Service Awards 2018 in Abuja

Frank Aigbogun,CEO, BusinessDay Media Limited.

Umaru Kwairanga, Sarkin Fullanin, Gombe, speaking at the event.

Pally Iriase, representing Yakubu Dogara, speaker House of Reps

Ogho Okiti, President/CEO, Time Economics

L-R: Pally Iriase representing Yakubu Dogara, speaker House of Reps with Chidi Izuwah, DG/CEO ICRC,

L-R: Pally Iriase, deputy chief whip, House of Reps with Yusuf Kazaure, MD/CEO Galaxy Backbone.

L-R, Frank Aigbogun, with Yemi Kale, statistician general of the federation ,represented by Isiaka Olarewaju.

Frank Aigbogun with Mohammed Sani Haruna, CEO, NASENI

L-R, Frank Aigbogun with Usman Gur Mohammed, MD/CEO, TCN

L-R, Frank Aigbogun with Mohammed Sani Haruna, CEO, NASENI

L-R, Umaru Abdul Mutallab, former chairman, First Bank Plc with Umaru Ibrahim, Sunday Oluyemi, director research, policy and international relations, NDIC

L-R: Umaru Kwairanga, special guest of honour with Ahmed Bobboi, CEO, PEF

L-R: Umaru Abdul Mutallab, former chairman, First Bank Plc with Jude Nwauzor, head corporate communications, AMCON, representing Ahmed Lawan Kuru, MD/CEO, AMCON

L-R, Umaru Kwairanga, special guest of honour with Pally Iriase, deputy chief whip, House of Reps

L-R: Umaru Kwairanga, special guest of honour, Pally Iriase, deputy chief whip, House of Reps and Frank Aigbogun, CEO, BusinessDay Media Limited.

L-R: Pally Iriase, deputy chief whip, House of Reps with representative of Babatunde Fowler, chairman, FIRS

L-R, Umaru Abdul Mutallab, former chairman, First Bank Plc, Umaru Kwairanga, special guest of honour and Mary Uduk, DG, SEC

Umaru Abdul Mutallab, former chairman, First Bank Plc, John Osadolor, director, BusinessDay Media Limited, and Umaru Kwairanga, special guest of honour.

L-R: Pally Iriase, deputy chief whip, House of Reps with Mohammed Sani Omolori, clerk to the National Assembly representing Umar Mohammed, permanent secretary, Human Resources, House of Reps.

Cross section of dignitaries .

FTC Gbagy Troupe entertaining guests during the award ceremony.

Cross section of dignitaries .

Cross section of dignitaries.

Cultural dancers at the event,

L-R: Frank Aigbogun with Isa Ibrahim, DG, NITDA represented by Usman Abdullahi, director IT Infrastructure Solution, NITDA

L-R: Umaru Kwairanga, special guest of honour with Mary Uduk, DG, SEC

L-R, Frank Aigbogun, Umaru Abdul Mutallab, former chairman, First Bank Plc and the representative of Babatunde Fowler, chairman, FIRS.

Cross section of award recipients with Frank Aigbogun (3rd right), CEO, BusinessDay Media Limited.

Cross section of award recipients with Frank Aigbogun (centre), CEO, BusinessDay Media Limited.

L-R: Umar Mohammed representing Mohammed Sani Omolori, clerk to the National Assembly; permanent secretary, Human Resources House of Reps, Pally Iriase, deputy chief whip House of Reps, Frank Aigbogun, Umaru Abdul Mutallab, former chairman First Bank Plc and Umaru Kwairanga, special guest of honour. Pictures by Tunde Adeniyi

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Coca-Cola furthers lead in Nigeria’s non-alcoholic beverage market with Chi acquisition provides consumer products in the dairy, beverages and snacks sectors. Few years after operation, Chi gained leadership of the fruit juice and dairy market with its Chivita and Hollandia products, building strong competitive advantage over other players such as Fumman, Dansa and Five Alive. The completed acquisition of Chi last week has enabled Coca Cola to reclaim leadership of the Nigerian fruit juice market which it lost to Chi Limited a couple of years ago and also build a strong capability to expand its W/African portfolio of still beverages. Formally announcing the full acquisition of Chi in Lagos, Peter Njonjo, President of Coca-Cola

Stories by Daniel Obi Media Business Editor

he recent acquisition of Nigeria’s Chi at undisclosed amount by Coca Cola has comfortably put Coca Cola at lead position in both the fruit juice and Carbonated Soft Drink, CSD markets. Coca Cola has been leading the CSD market with its variants since its entry in to Nigeria about 67 years ago. It has positioned itself to continue on this lead trajectory. Chi Limited, former subsidiary of Tropical General Investments, TGI, incorporated in 1980 is a fast-moving consumer goods company that

Company’s West Africa business unit agreed that Chi brand has been built well in the Nigerian market. Stating that Coca Cola’s objective is to grow Chi and Hollandia as billion dollar brands said the acquisition is a further testament of Coca Cola’s commitment in Nigeria. Coca Cola latest acquisition is perhaps part of the $17 billion investment plans it promised in 2014 to invest in Africa between 2010 and 2020. The multinational company which has about 145 bottling and manufacturing plants in Africa with about 13 in Nigeria is eyeing expanding consumer class. Analysts say the acquisition is to the advantage of shareholders and the global brand value of the company.

Women are still portrayed inappropriately in Ads – study

ender stereotypes in various professions are increasingly gaining attention. In entertainment, especially music, many women and men dress differently and they are portrayed as they appear either appropriately or otherwise. In advertising, a significant percentage (45%) of audiences thinks women are still being portrayed inappropriately according to Kantar’s newest analysis of advertising creativity and media effectiveness. Kantar is a division of WPP, and one of the world’s largest insight, information and consultancy groups. But in the study, AdReaction’ vast majority (91%) of marketers think they are doing a good job of portraying women as positive role models in adverts. Men dominate the advertising industry globally and their creative works are largely the reflection of the society. The report however said advertising industry’s failure to portray and target women well impacts the effectiveness of individual adverts and campaigns, and at a high level means male-skewed brands are missing out on an average of $9 billion in brand valuation. The latest AdReaction study from Kantar, includes analysis of 30,000 ad tests in the 2018 Link global ad database, survey responses of 450 global marketers, consumer advertising attitudes among almost 40,000 consumers around the world, and brand equity analysis of over 9,000 global

brands to create an in-depth understanding of the role of gender in advertising. Other key creative findings from the survey include reveal that when both genders appear in ads, men are 38% more likely to be featured prominently than women. Gender portrayals in advertising remain stereotyped, with most ads showing women to be “likeable” or “caring”, and only 6% including an “authoritative” female character. The report also revealed that adverts led by authoritative female characters outperform other ads. “They generate more expressiveness (measured via facial coding), in part because these roles are a positive surprise. Authoritative female characters also make ads much more believable and persuasive – attributes which are known to lead to short-term sales boosts”. It was also discovered that the advertising industry struggles to

make great ads starring women. “ Ads featuring only women are less impactful overall and less likely to make people feel proud or to generate excitement than ads featuring only men” “Creating gender-based creatives is less necessary than has been traditionally imagined. There is no identifiable overall difference in response to ads across gender lines. Good adverts are usually good for everyone and bad adverts are bad for everyone - irrespective of intended gender targeting”, the report said. The report also said that women do show a slight preference for ads with a ‘slice of life’, children, and well-known music. “There are very few other specific creative elements which guarantee success among one gender. Everyone has a funny bone – humour works well across both genders – but ads featuring only women use comedy less than half the time as ads featuring

only men (22% vs 51%)” Additionally the report said Average brand value is highest among gender-balanced brands ($20.6bn vs $16.1bn among female-skewed brands and $11.5bn among male-skewed brands); yet just 33% of global brands achieve this balance. Ad format has a strong role in effectiveness. In particular, online ads are failing to deliver for women; in 2018 they generated 28% less brand impact than among men, and fewer women find online ads to be reliably relevant. Women much prefer shorter online video, and strongly dislike non-skippable ad formats which create a sense of ‘loss of agency’. Commenting on the study’s findings, Rosie Hawkins, Chief Offer and Innovation Officer, Kantar Insights Division said “It is clear from our findings that some introspection is required on the part of creative and media agencies and their clients. The failure to meaningfully connect with female audiences is selling brands short and limiting their brand value. It is disappointing that female portrayals are generally less powerful, but encouraging that ads featuring more authoritative women are seeing greater success.” Hawkins continued “It is not a simple journey though. Brands need to tread with care, and have good self-awareness of how they are perceived. Some more progressive brands have greater permission to challenge gender stereotypes, and brands also need to account for local socio-cultural attitudes.”

Tuesday 05 February 2019

Top 100 brands shortlisted for Africa Finance Award 2019

oremost brands across different sectors in Africa have been shortlisted for the 2019 edition of Africa Finance Award. The program now in its sixth year, top brands in different sectors namely finance, marketing communications, oil and gas, security, packaging, real estate, power, manufacturing and others will feature in this year program Some of the top brands that are shortlisted for this year program includes: KCB Bank Kenya Limited, Origin 8, Consolidated Bank Ghana, Nationwide Medical Insurance Nampak Plc, Marina Trust, Ghana Union Assurance, Sigma Pension, Inland Containers, Phoenix Insurance Company Ltd, American Tower Corpora-

tion, Allianz Insurance Company Ghana Limited, Itex Intergrated Services Limited, IGS Financial Services Limited, Diamond Capital, Elvan Group, Unity Bank, Wetherhead Advertising Group, VFD Group, African Banking Corporation Limited, NIPOST, Suntrust Bank, Federal Housing Authority, Providus Bank among others. Some past winners of the 2018 edition includes: Keystone Bank, Vitafoam Nigeria Plc., First Registrars, Powergas, Orange Insurance Brokers, Propertymart, Pension Transitional Arrangement Directorate, ARM Pensions, Dunn Loren Merrifield, among several leading brands. Six countries will feature in the 2019 awards, namely: South Africa, Ghana, Nigeria, Cameroun, Kenya and Morocco. Submission of entries for the 2019 awards opened December 10, 2018 and it will close in February.

Tuesday 05 February 2019

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BRANDING NBC underscores commitment to Nigeria, invests N41.1bn in 3 years, says CEO Daniel Obi

igeria still leads Africa as the largest economy in the continent, according to International Monetary Fund, IMF 2018 report. The country has a GDP of $376.3 billion far ahead of S/ Africa with $349.3 billion and Egypt with $237.1 billion. With a population of about 200 million, Nigeria, the most populous country in Africa also sits comfortably as the biggest market in Africa and cynosure for investors. However, the country’s economy, considering its potentials, is not growing according to projections. This is due to many factors, including bad policies and external shocks. GDP growth hit 6.31 percent in 2014, slowed to 2.70 percent in 2015. In 2016 it declined to -1.6 percent but started an upward spiral to 0.8 percent in 2017. The GDP growth is far below population growth of 3 percent annually. In addition to the challenges of upcoming elections which experts say is instigating caution on the part of investors leading to postponement of business decisions, there is the challenge of access to capital for entrepreneurs in Nigeria. Epileptic electricity supply is another major challenge for investors and homes in Nigeria. Up until today, average entrepreneur can only have access to a few hours of electricity per day. Government regulations leading to unease of doing business and multiple taxations have combined to frustrate many businesses in Nigeria, hindering the expected economic growth. Nigeria ranks abysmally poor at 146 position out of 190 countries in the World Bank’s Ease of Doing business report. “In Nigeria, it can take between 2 weeks and 1 month to set-up a business which always involves jumping through a number of regulatory hoops. The government is becoming more supportive of local start-up ecosystems, but generally, the Nigerian government needs to do more to make doing business easier and more interesting”, a report in Invoice. ng says.

Some firms and multinationals are discouraged and dispirited about the environment; hence some of them who don’t have patience to stay on and reap from the Nigeria’s potentials are seeking operating spots in lesser economies. But one of the firms that is determined to move with Nigeria is Nigerian Bottling Company(NBC), the beverage giant and franchise bottler of CocaCola in Nigeria. NBC, a member of Coca-Cola Hellenic Group, one of the largest Coca-Cola bottlers in the world, also has the Nigerian franchise to market Coca-Cola brands. The company which started operations in Nigeria in 1951 and operates 8 bottling plants across the country said it will continue to invest in Nigeria because of its belief in the Nigerian economy. “We will never stop investing in Nigeria. In effect, in the last three years, 2016 to 2018, which were really difficult years for the economy, we have invested in excess of 100 million Euros. These are numbers that can be verified from the authorities. In our factories, we have made significant investments to ensure we offer superior quality to consumers. We will keep on investing with over 50 million euros annually in order to make sure that we maintain quality and infrastructure”, the Managing Director of NBC, George Polymenakos told BusinessDay in a chat. George whose firm has over 3000 people in direct employment and indirectly supports the jobs of up to a million people in its value chain looks into 2019 and says he is optimistic about the year. “We believe that the economy will stay on about 2 percent GDP growth which is another boost compared to what the growth level was in the previous year. Nevertheless we know how to navigate and we do believe that we will have another successful year” According to George, a Greek who has led NBC for three years, Nigeria’s economy is in a growth trajectory, but in a fragile level. However, he said the management of NBC is optimistic about the growth movement. “Nigeria is a country that is destined for growth. It is though a fragile environment as elections are coming up but as the company has navigated for

George Polymenakos

67 years in Nigeria, we know how to navigate good and bad and average times. Nigeria has a great future and we as a company are very happy that last year was a year for revenue growth and it was a year of positive bottomline and year of profitable operations for our company. I have to reinforce the role Nigeria plays in the entire Coca-Cola Hellenic Group. We are happy and we have continued to be profitable, and we are growing our topline. We are seeing growth in the economy, though not at a pace that is appreciable, but we remain optimistic about the future of Nigeria”. George who is really confident of NBC leadership role in the nonalcoholic beverage market, said over the last five years, NBC has invested over 500 million Euros in order to completely transform its technology, capacity and quality. “This is the base in which we are building for the future. The transformation project we started some years ago is gradually coming to a successful completion. We now have a state of the art organization and sound fundamentals complemented with best in class technology as well as good people that engage passionately to secure our growth”

He said the company is well positioned for 2019 as NBC has done all the good things in the past. “We don’t have any more transformation to do and we have full portfolio of products to satisfy consumer needs and challenge at price points” Giving insight on his company’s production and retail model, he said NBC tries to capture and to serve every need of the consumer in Nigeria. “We want to offer an array of products starting from high income to very low incomes. We want everybody to be able to find our product and that is why we have strategic infrastructure throughout the country. We have intense route to the market to secure presence of our products. In fact we are going places and we have a plant in Maiduguri which is operating. In Maiduguri, we have doubled our production capacity, securing that everybody in Nigeria, no matter where they reside, no matter the circumstance, would be able to find our products in competitive prices. Because we are celebrating 67 years that is why we are rewarding our consumers. We are introducing very affordable prices for our glass bottle as low as N50 per bottle”

On the shutting down of Enugu plant, the NBC managing director gave more insight into the business decision. He said the plant was repurposed. “It will be a major distribution hub for the area and its surrounding. But at the same time, as technology moves, and we have been here for 67 years, we have to evolve according to time. Enugu Plant is somehow constrained in terms of our ability to expand. Its location was not allowing expansion. Enugu plant is being repurposed and it will continue to be a major distribution hub for us and at the same time. Enugu is not alone in this. We started the optimization program with our mother plant in Apapa, then Ilorin, Kaduna and Jos. In Enugu, we have treated this matter with utmost respect to every stakeholder especially to the employees. Yes, we have to let some people off, but at the same time we did it with extreme respect, offering remuneration far above the statutory requirement” ‘’The repurposing of some NBC facilities across Nigeria, Enugu inclusive, is in line with our sustainable business strategy with the overarching goal of improving efficiency and boosting production capacity to meet the ever growing demand of our discerning consumers. While production activities have stopped at the Enugu facility, the company would continue to carry out logistics and commercial operations from the location’’ Speaking on the environmental challenge posed by PET bottles, George said his company and 7-Up have friendly environmental operations with glass bottles but added that NBC, Coca-Cola Nigeria Ltd, 7-Up, Nestle and Nigerian Breweries have formed an alliance, the Food and Beverage Recycling Alliance (FBRA) with the objective of collecting and recycling plastic wastes. He said more Companies are joining the alliance to leverage economy of scale in addressing a social challenge. He however said that NBC is committed to investing more on returnable glass in Nigeria, same as all over the world. “We are blessed in Nigeria that almost 50 percent of our business is in returnable containers, the glass bottles”.

9 teenagers win innovation challenge with health solution

group of nine teenage students have emerged winners of the InterswitchSPAK 1.0 Innovation Challenge, for collaborating to develop a technological solution posed to provide Nigerians with easier access to National Health Insurance. The InterswitchSPAK 1.0 Innovation Challenge is a segment of the InterswitchSPAK National Science competition organized by Interswitch Foundation. Grouped into nine teams, the

InterswitchSPAK finalists were tasked with developing solutions to three salient socio-economic issues. These issues were in the areas of health care, public transport system and education, with focus on the out-of-school concerns. The students proffered brilliant solutions to their given tasks by leveraging technology. Each team was headed by Interswitch staff who volunteered as mentors. Winner of the challenge, Team Neptune, made up of nine SS2

kids, were mentored by the trio of Princess Edo-Osagie, Inalegwu Alogwu and Abiodun Adebisi. They were tasked to: “propose a solution that promotes an allinclusive health insurance scheme in Nigeria, leveraging technology”. The nine-man team’s health solution which incorporated the current National Health Insurance Scheme (NHIS), makes provision for web doctors for policy holders with access to the internet and telemedicine option for those

without access to the internet. Noting that many Nigerians prefer going to pharmacies for treatment, Team Neptune also proposed that neighborhood pharmacies be empowered by the health insurance scheme so that patients who consult the Web Doctors, can purchase prescribed drugs from partner pharmacists in their locality. Mitchell Elegbe, Group CEO / Founder, Interswitch; Tarebi Alebiosu, MD, Yoke Solutions and Chika Nwobi, CEO, Level 5 Lab,

constituted the jury saddled with the daunting task of selecting a winning team from the brilliant lot. The two major criteria used in deciding the winners were ideas and presentation. For ideas, the jury considered the integration of technology, attempt at defining the opportunities, feasibility of the idea, how impactful it was and how disruptive it was. For the presentation, the jury considered the delivery, creativity brought to bear and demonstration of team work.

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Tuesday 05 February 2019

In association with

Pushing the boundaries of Fintech in Nigeria

ing and customer transactions options. Fintech also helps businesses to have improved payment systems and, customer relationship management. Consumers can now carry out transactions through their mobile devices, thus improving response/feedback time. When it comes to the unbanked and underbanked, some Fintech companies have made efforts to develop and provide solutions that gives them access to financial services, thus contributing to efforts for financial inclusion. One of such Companies making efforts to develop new and innovative ways to deliver Fintech solutions that are convenient and easy to use is itex Integrated Services Limited. Itex is an innovative Fintech Company that designs and deploys secure solutions to diverse Pan-African customers.

Itex has for several years focused on the development and deployment of convenient, reliable and secure payment solutions to its customers in Nigeria and across Africa. In fact, the Company played a critical role in the implementation of the ‘Cashless Nigeria’ initiative. Itex is one of the first organizations to successfully deploy and manage Point of Sales (POS) terminals in Nigeria. Until date, the Company continues to make custom payment applications to ease electronic payments, revenue collection, payment of utility bill and value added services payments such as airtime, electricity, cable TV, tariffs, toll payments, etc. Most commendable about Itex’s efforts is the Company’s extension of financial services into rural areas such that the unbanked become the banked and, areas without access to banks can still enjoy financial services without entering the banking hall. Efforts like this need to be encouraged. Fintechs should get the needed support from both government and private corporations. The education on the need to be financially included and on the need to embrace financial technology need to be taught to people across levels and especially in the rural areas. The impact of financial technology on the economy cannot be over emphasized. Several research and evidences point to the fact that Fintech is the future of the business economy. This is the time therefore, to grow our technological strength and support Fintech Companies to drive us to that growth that Fintech will bring about.

spread across the cities that it operates. Applauding the offer, industry analysts opined that through these efforts, Smile Nigeria has championed the goal to extend Internet access to the majority of Nigerians who prior to now did not have access. Smile’s effort to get Nigerians on to the Internet is demonstrated by its aggressive investment in a large 4G LTE network, introduction of a wide and affordable bundle portfolio, affordable data enabled devices and now these exciting offers.

For Smile Nigeria, these feat are aligned with the company’s commitment to create a differentiated value proposition and provide customer centric services, which are aimed at adding unrivalled benefits to its teeming customers spread across major cities and towns in the country. “More than anything else, the new offers meet with Smile’s position as the broadband provider of choice in Nigeria that enables its customers to do and achieve more,” the company said in a statement.

Stories by Jumoke Akiyode Lawanson

or centuries, technology has changed the way we live, communicate, work, play, interact and do business. Although there are still many ways that we are trying to catch up with technological advancements, many sectors have evolved with technology resulting in ease of operations and better customer service. The financial industry is one of such sectors that has grown at an exceptional rate. In the last few years, traditional banks have joined forces with Fintech companies to utilize more financial technology offerings. For one thing, there was a need to eradicate the long queues in banking halls, make cash transactions easier and faster without a visit to the banking hall and resolve other issues associated with payments and financial transactions. In 2015, an article in the Huffington Post stated, “Fintech is beginning to disrupt the financial world as we know it. The financial industry is now more focused than ever on technological innovation than at any other time”. The same article goes on to define Fintech as “financial technology; a digital revolution. It is about major changes to asset management, business and personal loans, fund raising, money transfers, and the way to invest. Fintech involves disputing the way all business operate, as well as our personal finances”. Indeed, the financial industry

is growing so fast with technology. Banks are now able to deal with changing customer expectations and are able to recruit new customers based on varied offerings that meet the diverse customer needs. Beyond banks, other corporations and service companies are able to provide simpler payment solutions because of financial technology. Initially, customers were apprehensive about using Fintech services. There were issues about trust of the system, fraud, system hacks and failed transactions. However, with technological advancement, many of these issues have been minimized. In Nigeria, financial technology has greatly influenced e-commerce and payment solutions. According to a PWC 2017 Fintech Survey Report, over 62% of customers will make use of mobile applications for

financial transactions within the next five years. This implies that Fintech companies are going to do more for customers especially on mobile. Another implication of this is the rise of a shared economy. For example, Cable TV Companies collaborate with banks and Fintech Companies to provide a platform where customers can pay for their cable TV on the Bank’s Mobile App platforms. This shared economy is being witnessed across sectors - power, education, environment, health, transportation and even entertainment. Financial technology has huge benefits for all businesses, especially new startups or small-scale businesses. With Fintech, these small businesses are exposed to a world of benefits in terms of access to funding, e-commerce, online order/supply channels, crowd sourc-

Smile rewards customers with new bonus offers

mile, 4G LTE telecommunications service provider, has announced new device and bonus offers that will afford customers who purchase a new SMiFi or Router Starter Pack, get 100 percent bonus data on recharge for three consecutive months, as well as free unlimited on net calls and 10 minutes off net calls. With the recently introduced offers, customers are at liberty to get 7GB plus SMiFi or UnlimitedPremiumplan plus Router and 100 percent bonus.

According to Smile, these new offers give customers the ability to create their own hotspot, stream, download and connect with family and friends as prices start from as low as N9,800 and the SMiFi offer is available in all cities of operation. “We recognise that the Internet is becoming more and more important for nearly everybody in their everyday lives, and as such, it is our goal to enable as many new connections as possible. These offers are yet another step towards realizing this goal,” Lotanna

Anajemba, head of marketing, Smile Nigeria, said. Emphasizing further, Anajemba highlighted that the need for instant continued access to the internet, has resulted in a higher demand for data to be readily accessible at affordable rates. It is therefore believed that the new device and bonus offers will not only give customers great value for money but also rewards them for their usage. Smile says that the offer can be accessed via its online shop, its physical retail shops and authorized distributors

Tuesday 05 February 2019

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Globacom sets pace for the future of technology ... Plans to play in cloud storage market, deploy AI in telecoms, others Stories by JUMOKE AKIYODE-LAWANSON

lobacom, Nigeria’s second largest telecommunications operator is planning to revolutionize the sector with major investments in technology of the future which includes the use of cloud technology, deployment of Artificial Intelligence (AI), mobile money and others. The company during a media parley in Lagos on Friday, February 1, 2019, revealed its plans to launch a series of digital products including, Glo Health; a digital health assistant, designed to help Nigerians access the best global healthcare, by connecting them with specialized doctors worldwide and allowing them to schedule appointments, track key health parameters and access information on common medical conditions directly through their phones. This new feature will be available in audio translation in all

three major Nigerian languages (Igbo, Yoruba and Hausa). Globacom is confident that the launch of its GLO TITI, the highly interactive and engaging artificial intelligence service, in a few weeks, will completely change customer experience. The company which will

be the first telecoms company to deploy this platform, says the AI platform will engage customers directly in English and Pidgin through voice and text and will assist them to get information on pressing issues. It will also support customers to choose the most convenient data and talk plan

in both the prepaid and postpaid categories, resolve general and specific issues such as ballance enquiry/Value Added Service (VAS) and respond to customer enquiries 24/7 without any human interface. Globacom will also be competing with the likes of

L-R: Olubunmi Bamijoko; head strategy, corporate performance and monitoring, Strategy, USPF, Oluebube Nwosu; CEO, placesandservice, Ijaola David; COO, placesandservices, and Chioma Agwuebo; founder, TechHer, at the recently concluded USPF Changemaker Challenge 2018, held in Abuja.

Google cloud, iCloud and One cloud for market share, with the launch of its Glo drive. The Glo drive is meant to address the problem subscribers face with storing data, as it would offer limitless storage in the cloud. Another product announced at the event is the Glo Entertainment Portal, a single point of access for all digital content through Glo Café which supplies premium content of top international labels. It has over 2million local and foreign songs. Bisi Koleoso, deputy chief operating officer, Globacom said; “We have invested massively in new technologies to introduce these products which we believe will redefine business, social and personal pursuits”. Another of its new offerings is the Glo call connect service that allows subscribers with zero balance notify called subscribers through SMS and helps them stay connected even without credit or

with low mobile phone battery charge. Similarly, the Glo world connect ensures that business executives stay connected to their offices regardless of wherever they may be around the world by offering affordable roaming data in 60 countries with over 6.4million WiFi hotspots worldwide. The company also unveiled its new communication direction and its endorsement by world heavyweight boxing champion, Anthony Joshua. The endorsement contract with the world heavyweight boxing champion covers Nigeria and Ghana. Koleoso said Globacom is committed to ensuring that Nigerians are not left behind in the march towards a digital world. “Having ended 2018 on a very high note, retaining our position as the second largest operator with a remarkable 45.3 million subscriber base, we have resolved to further enrich customer experience on our network with these new offerings,” he said.

Cyberspace achieves international certification for Quality Management system

AerinX: Augmented reality solution promises reduced rate of aircraft disasters

yberspace Limited, an indigenous systems integration company has achieved the ISO 9001:2015, an internationally recognized Quality Management System certification. ISO 9001: 2015 is a standard that sets out the requirements for a quality management system. It helps businesses and organizations to be more efficient and improve customer satisfaction. The certification which will be officially presented to the company today, Tuesday February 5,2019, at a ceremony in Civic Centre Lagos, stands Cyberspace out as a company committed to continual improvement of operational processes in line with global best practice. Boma Beddie-Memberr, sector lead trade advisor for ICT, United Kingdom International Trade and Investment will officially hand over the certificate to Cyberspace Limited on behalf of British Standard Institute (BSI). According to BSI, ISO 9001 is designed to be a powerful business improvement tool which helps organizations to manage social, environmental and financial risks, improve operational effectiveness and reduce costs. Its benefit to businesses

he near-death experience of Yemi Osinbajo, Vice President of Nigeria, after the helicopter conveying him and some members of his team crash landed in the Kabba area of Kogi State Nigeria on Saturday has sent shivers down the spine of many Nigerians, even as it has been emphasized that aircraft safety should be of utmost importance in every country and technology could well be the go-to solution to the incessant problem of plane crashes in the world today. International aviation industry statistics show that some 70 to 80 percent of aircraft accidents occur due to human lapses or mistakes. While a significant portion of such cases involve mistakes committed by either pilots or flight crew, a marked amount of lapses happen during checking and maintenance of aircraft. Recently, AerinX, a Hungarian firm announced its plans to develop an augmented reality (AR) solution for the external inspection and maintenance of aircraft and other aerial vehicles. In fact, it is reported that the company has already started a partnership with one of the largest maintenance, repair and overhaul companies of

also include helping to increase customer and stakeholder satisfaction, protect brand and reputation, remove barriers to trade and bring clarity to the marketplace. With this achievement, Cyberspace Limited, has further demonstrated its commitment to building a resilient and sustainable business with strong corporate governance. Since establishment in 1995, Cyberspace Limited has worked its way to becoming a one-stop systems integration company with wide and varied experience in solving complex business challenges. “Cyberspace is an indigenous company that has its business processes aligned with global best practice. We started many years ago with ISO 9001:2008 until last year when we decided to work with BSI for the ISO 9001:2015. It was a much more rigorous certification process but at the end, we are better for it,” Fred Young, coordinator, Cyberspace audit team said. According to Young, the benefits of ISO 9001 include but are not limited to the following: “It helps us to demonstrate to stakeholders that our business is run effective-

ly, the process of achieving and maintaining the certification helps ensure that we are continually improving and the regular assessment process improves staff responsibility, commitment, and motivation,” he said. Before now, Cyberspace has attained the Capability Maturity Model Integration (CMMI) level 3 certification. The CMMI is a software development process improvement approach, which has become the standard for measuring an organization’s capability to apply a processbased methodology to software development. Olusola Bankole, chief marketing officer, Cyberspace Limited said the CMMI helps to integrate traditionally separate organizational functions, set process improvement goals and priorities, provide guidance for quality processes, and provide a point of reference for appraising current processes. According to him, CMMI has aided Cyberspace Limited’s growth in diverse ways. “Our software development work and processes have received the highest form of third-party validation. It helps us to take a proactive approach to managing projects and processes,” Bankole said.

Central and Eastern Europe to test and refine the system. In a statement sent to BusinessDay, AerinX says it aims to solve the problem of aircraft disasters with an ARbased system which assists with external surface checks and the conduct of related maintenance of aircraft. The system is expected to make the process simpler, faster and more precise. Most damage detection, registration and documentation still occur manually, with maintenance engineers measuring damage with a ruler, marking the spot with a marker pen, before having to sift through long, PDF or paper-based documentation when determining the seriousness of the damage. “The aircraft industry, commercial and military aviation are highly technology-intensive branches of the industry, so it can be shocking, even for laymen, how backward in some aspects the segment’s digitalization is,” says Antal Bence Kiss, AerinX’s CEO. “This is also true for the surface inspection and maintenance of aircraft. Our smart inspection system combines AR technology with modern picture processing, giving a decision-supporting tool in the hands of professionals.” According to the com-

pany, the technology system allows engineers conducting maintenance to determine the size and exact location of damage. AerinX is able to project all relevant technical information about a given aircraft type in 3D on the surface of the plane, including plate thickness at the given point and damage history, which will allow inspections to be considerably faster and more accurate, decreasing the chance of human mistakes, and resulting in fewer accidents. Reducing flight delays The system might also come in handy during socalled “aircraft on ground” (AOG) situations, when planes have to be immediately inspected due to damage or other incident. Currently, an average external inspection may take up to 90 minutes, or even two hours with the current methods. AerinX claims to be able to reduce this time to 20 minutes, which may result in several tens of thousands of dollars in saved costs, while also resulting in reduced delays. The AerinX system is currently in its prototype phase, with the firm getting venture capital investment support for further development and market introduction in both civil and defence aviation segments.

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Tuesday 05 February 2019

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E-mail: jumoke.akiyode@businessday.com

Facebook partners Dubawa for fact-checking in Nigeria

ollowing the recent launch of its Third-Party FactChecking program in partnership with Africa Check and AFP, Facebook today announced its third partner, Nigerian fact-checking organisation Dubawa, part of a global network of fact-checking organisations, certified by the non-partisan International Fact-Checking Network – Poynter. Helping to assess the accuracy of news and reduce the spread of misinformation, Facebook’s fact-checking program aims to improve the quality of news people find on its platform. Facebook’s fact-checking program relies on feedback from the Facebook community, along with many other signals Facebook uses to raise potentially false stories to fact checkers for review. Local articles will be factchecked alongside the verification of photos and videos, and if a fact checking agency identifies a story as fake, Facebook will show it lower in News Feed, significantly

L R- Lamido Umar Yola; principal manager, zonal operation, Nigerian Communications Commission (NCC), Adedigba Ismail; deputy director, consumer affairs bureau, NCC, Idris Bashir; deputy director, public affairs, NCC, Mohammed Ahmed; representing Ndalile of Mokwa during the 46th edition of Consumer Town Hall Meeting in Mokwa Niger State on January 31, 2019.

reducing its distribution. Adaora Ikenze, head of public policy for West and Central Africa, Facebook said; “This new partnership with Dubawa further highlights our commitment

in tackling misinformation and false news across Nigeria, and builds on the already important work that AFP and Africa Check have begun. We know that ThirdParty Fact-Checking alone

is not the solution, it is one of many initiatives and programmes we continue to invest in across the country to help to improve the quality of information people see on Facebook.”

When third-party factcheckers write articles about a news story, Facebook will show these in ‘Related Articles’ immediately below the story in News Feed. Page Admins and people on

Facebook will also receive notifications if they try to share a story or have shared one in the past that’s been determined to be false, empowering people to decide for themselves what to read, trust, and share. Commenting on the partnership, Ebele Oputa, project officer and editor, Dubawa said: “The danger of fake news, mis-information, dis-information, in whatever form, is ever more real and vivid in today’s world. In recent years, we’ve seen democracies all over the world, being threatened by the spread of false news which plays to the fears and prejudices of people. As a fact-checking organization in Nigeria, we try as much as we can to fight this via our articles, tweets and trainings, but we also understand the role that technology plays in getting the right information to the public. As such, our partnership with Facebook is very pivotal in ensuring that factual information gets to the people who earnestly need it to make right decisions.”

E-commerce: How chatbots add value to USPF Changemaker Challenge 2018 rewards hackathon winners customers buying experience

hatbots are now widely used because getting quick feedback is essential to today’s customers. Many businesses have recognised this fact and are deploying chatbots to assist the customer service team to drive customer engagement and interaction. This, in turn, will impact the Net Promoter Score (NPS), thus making customers more loyal. This said, here are five ways chatbots add value to the buying experience of customers. 24-hour customer service Your customer service representative can sometimes be overwhelmed and cannot respond to all requests. This is where chatbot comes in. Because they use artificial intelligence to process information, they can respond and reply accurately to enquiries and

Jumoke Akiyode-Lawanson

queries at any time of the day. Seamless live chat The clarity of the response of a chatbot has made so many people think that they are actually chatting with a customer rep. Unknown to them, they are talking to a chatbot. For example, you can use Jumia Bot to make enquiries about your shopping preference and resolve complaints. Allows you to personify your brand With chatbot, you can easily personify your brand depending on your brand vision. Chatbot can feature with various conversational styles that range from being friendly to helpful and playful. These different personalities will ensure that customers keep coming back.

Can handle endless queries Chatbots have been set up to use human intelligence to sort out customer queries. As a result, chatbots can handle endless queries with little or no mistake. Despite the fact that chatbots can do the job, it doesn’t mean you should remove the human touch. Smoother purchase journey Chatbot can do so many things that will ensure that the consumer’s purchase journey is smooth. The bot can offer relevant information, video content and even voucher code. In addition, chatbots can also assist customers with aggregating information like the item they desire to purchase, the method they want to pay for the order, and how they want the order shipped.

t is often said that the future of any economy depends on how many new businesses it can generate particularly within the small business and startup segments. This is the idea behind the establishment of the USPF changemaker challenge, a unique hackathon designed to solve a number of issues confronting us as a Nation. The 2018 USPF changemaker challenge with the theme ‘The future is here: Disrupting Legacy Ecosystem with Technology’ ended on a very high note with three teams emerging as winners. Team ‘Real Media’ with members; Nwosu Oluebube and Ijaola David who founded placesandservices.com.ng where awarded the 1st prize of N1million. Ogunranti Adebayo and Samson Okubanjo of team Xavier won N750,000 as their product Beza X came second. While Nwosu Isochukwu,

Mfonbong umondia David, Jideofor Ochiabutor Chuka and Peter Cynthia of team iNeeds were awarded N500,000 for iNeeds.ng as third prize winners. The decision was reached by a panel of judges comprising of Kolapo Solesi; managing partner, Abridge Consulting, Chukwuemeka Fred Agbata; co-founder, GoDo.ng; Chioma Agwuegbo; founder, TechHer, Adetunji Obakeye; IT Professional, Deji Olarinre; co-founder, Hullnet, Aisha Amoka; founder, Makifa Network and Moses Malan Faya; technology lawyer. All judges have diverse experiences that helped guide the various teams until the winners emerged. The selection was made based on a number of criteria such as marketing viability, ease of implementation, go-to-market strategy, needs analysis as well as communication skills. According to Ayuba Shuaibu, secretary of the Universal Service Provision Fund, (USPF), the Innovative ICT

Solutions and Entrepreneurship Development (IISED) project is one of the initiatives of the Universal Service Provision Fund which provides platform for ICT start-ups to create fully working prototypes of ICT solutions capable of deepening ICT penetration in Nigeria while creating employment for the young ICT entrepreneurs. Over 48 hours, teams developed impactful technology driven applications by building fully working prototypes of their solutions through specific technical guidelines. The Hackathon held from the 25th to 27th of January 2019 at Kanem Suites, Utako Abuja and it afforded the teams who participated from all over Nigeria the opportunity to network and connect with brilliant, software developers, UX Designers, Data Scientists, ICT Experts, Budding Entrepreneurs, Strategists, Angel Investors, Idea Funders, Public Policy Experts, Incubation Experts and Technology Enthusiasts.

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Why The Pacific Tower is next destination for home buyers, investors

Lessons for investors on collaboration for successful real estate investment

CHUKA UROKO

n the upscale, highly sought-after Ozumba Mbadiwe Street in Victoria Island, Lagos, The Pacific Tower is located strategically with its magnificent, modern and classic architecture that echoes the spirit of a vibrant urban neighborhood with breathtaking views of the Lagos Lagoon. The facility is a prestigious tower with a unique blend of commercial, boutique residential and play space development planned on a 14-floor vertical mixed-use high-rise structure. In modern market parlance, The Pacific offers opportunities for live, work and play experience. For reasons of its good location, pricing, uncommon architecture and upsides potential, The Pacific, which is developed and promoted by Global Property Partners (GPP), is the next destination for home buyers and investors, especially those with long term view of the property market. In real estate, location is said to be everything and the location of The pacific is simply everything including its potential for value appreciation, ease and flexibility of movement to various parts of Lagos—Ikoyi through the link bridge which is just metres away; to Victoria Island through Ademola Adetokunbo Street, to Lekki through the Lekki Epe Expressway or to the Airport through Eko Bridge via Ahmedu Bello Way. Its location also offers a panoramic views of the Lagos Lagoon. At the moment, the developer is offering buyers discounted prices through promotional sales that give back to the buyers upwards of N10 million to N15 million. He is also offering flexible payment options in which the buyer has the choice of paying outright or by installment. For an apartment on the 8th floor of the building, the installment promo price is N115 million; outright promo price is N105 million while after-promo price is N120 million. This means that a buyer who chooses to buy while the promo lasts has N10 million or N15 million as bonus depending on his choice. Similarly, for an apartment on the 9th floor of the building, the installment promo price is N120 million; outright promo price is N110 million while the after-promo price is N125 million, mean-

ing that it pays to buy now than later, that is, after the promotional sales. The Pacific offers 1&2 bedroom apartments with penthouse suites and comes with unique features. It has seven floors of the 1 & 2 bedroom apartments with two premium designed penthouse suites. There is also a recreational floor with gymnasium, spa/massage, games room, shopping mart, restaurant and bar, terrace sit-out for outdoor viewings. There are five floors of ultra-modern open office spaces and three floors, including ground, first and second floors exclusively designed as car-park zone. The facility is designed for premium taste with guaranteed value at a unique location; its generous parking spaces, fine landscaping and ultra modern elevator as well as acoustical space planning for noise control places it well ahead of competition. The developers assure that buyers can own an apartment unit with 20 percent initial deposit and spread the balance over 30 months.

For investors looking for office space, The Pacific has something to offer them because the office segment of the building has four floors of premium and functional office spaces with unique architectural designs. There are luxurious amenities and flexible layout with best-in-class interior designs alongside an ultra modern facilities designed for optimal efficiency, functionality and comfort. It has an open-plan office design combined with structural capability, quality craftsmanship and superior workmanship and functional layout. This means that buyers enjoy the flexibility and opportunity for multiple space use. At the residential segment of the building, the developer has the boutique 1 & 2 bedroom apartments. en-suite. Added to these are exquisitely designed penthouse suites, classic living room and dining area; fitted designer kitchen with appliances , cabinetry and accessories; beautiful floor designs finished with a

combination of marble and high-quality tiles, and top grade quality bathrooms. As a real estate advisory and direct investment firm, GPP identifies or creates real estate investment opportunities and strategies for institutions and family offices. Olaolu Oluwarinde, the firm’s Senior Manager, Business Intelligence, says they operate on the principles of commitment to client satisfaction and quality workmanship and services. “We always ensure that our buildings meet or exceed clients’ expectations. We understand that satisfied clients are the key to our success. Thus, the amount of attention placed on details separates us from the competition. At GPP, it’s strictly undiluted luxury like never before. “This project is in line with the company’s mission to provide affordable luxury homes and maintain its pacesetter position in real estate services. We have constantly exceeded our teeming customers’ expectations through innovation, uniqueness and creativity,” he told BusinessDay in Lagos.

Design Union targets middle-class home seekers in new products offering AMAKA ANAGOR-EWUZIE

iddle class home buyers are the target of two state-of-the-art, luxury apartments known as Eden Heights and Ilupeju Gardens which Design Union, a leading real estate development and lifestyle group, has launched into the property market. Eden Heights, a high-rise luxury apartments and penthouses located in the heart of Victoria Island Lagos, is also designed to cater for the expatriate population in Nigeria. It is a 17-storey tower that was locally designed, built and finished using Nigerian professionals and artisans. The facility also houses the exclusive capital club, Ehima cave spa, royal residencies with premium hotel rooms and world-class private meeting rooms for top level executives and business owners.

Ilupeju Gardens, On the other hand, is a small and intimate estate of mid-rise apartments being developed in partnership with the Lagos State Development Property Corporation (LSDPC). Located in Lagos mainland, this facility is positioned to cater for residents in the bustling Oshodi/ Ilupeju axis – particularly the Indian and Lebanese expatriate community. The Gardens offers a unique technology feature that intersects between real estate and climate safety, deploying planted Neem trees in the environs with a filtering capacity of up to 1,000 residents annually. With these two additions to its portfolio of property development projects, Design Union continues to demonstrate its market leadership and commitment to bridging the gap in the supply and demand value chain in the real estate sector. These projects are coming at a time Nigeria, Africa’s most populous city,

is confronted with issues of accommodation and population density, which has become a recurring issue in the country. Speaking on the two projects in Lagos last week, Anthony Aihie, CEO of Design Union, said that the company leveraged on its creative and project execution expertise in creating Eden Heights, aimed at solving living conditions problems in Africa. According to Aihie, Eden Heights is a development whose attention to detail provides a world-class platform for business leaders to live and relax at the same standards found in the leading business destination cities of the world. “With investments like this, our mission is to provide an international environment, which over time will indeed become the centre of attraction for international business leaders on the bustling Victoria Island, securing enormous value while creating a

much-needed positive image for the country and local talent,” Aihie said. On Ilupeju Gardens, Aihie said that the ingenuity of the environmentally sustainable design of the Gardens development will redefine the standards in the middle-income housing market when completed in 2021.“We are building on an investment track record and portfolio size of over $600 million, the organisation champions a new wave of excellence and innovation in property development designed to scale up user experience and attract foreign global capital in Africa,” he added. Design Union Limited is a leading real estate development and lifestyle group operating in Nigeria since 2000. The company carries out design, construction and operation of its properties. It also carries out design and construction for third party developers, making it a one-stop shop for the clients it serves.

very step of the way in his journey through life, man has some lessons to learn. Part of these lessons border on how best to live with neighbours and achieve peace of mind; how to do business with others and make more profit, and how to collaborate and get more results. In most businesses today, due to a combination of reasons, including paucity of funds, shared vision and high business risks, collaboration is, increasingly, being put in the front burner for consideration. Investors in real estate sector have been advised to seek and embrace collaboration in their investment decisions for successful results. Collaboration is valuable and, according to Udo Okonjo, Vice Chair/CEO, Fine & Country West Africa, the true value of collaboration is shown when stakeholders take stock of their individual objectives and each discovers a far improved outcome that would have been impossible to achieve if he or she had done it alone. Okonjo canvasses the collaborative spirit of the ants as espoused by Bernd Meyer, a professor at the faculty of Information Technology, University of Monash who notes that until 2000, the largest known ant super-colony was on the Ishikari coast of Hokkaidō, Japan. The professor says the ants colony was estimated to contain 306 million worker-ants and one million queen-ants living in 45,000 nests interconnected by underground passages over an area of 2.7 square kilometers (about 670 acres). “Meyer spends his working life considering ants and their collective decision-making skills and says these unique creatures have so much to teach us about collaboration to achieve a collective goal—keeping the colony”, Okonjo said, quoting the professor as saying that the most intriguing lesson to be learnt from ants is the collective spirit in individual pursuit and efforts. “The ants each make individual little decisions based on what they perceive directly around them, with the colony as the big picture; everyone doing their bit makes the colony into a kind of superorganism. They allocate their workforce as a colony adequately for what they need on the colony level”, the professor noted. Okonjo says that the ants collaborative spirit is exemplified in a typical real estate project as no one type of real estate professional, no matter how intricate their plan, is able to, by themselves, actualize meeting the rising demand for buildings that are modern, smart, efficient, flexible and sustainable with a ‘wow’ factor.

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Tuesday 05 February 2019

Homes, jobs, GDP growth coming as Rendeavour launches Alaro City devt …Ambode says devt demonstrates investor-confidence in economy CHUKA UROKO

ffordable homes, jobs and Lagos GDP growth are underway as the development of the Alaro Satellite City in the North West Quadrant of the Lekki Free Trade Zone (LFTZ), Lagos, will not only open up that corridor, but also transform its economic landscape by providing homes and creating jobs. The city, which was conceived to provide housing schemes to a broad spectrum of income earners, industrial workspaces, warehouses, hospitality and commercial office facilities, would also be contributing significantly to socio-economic development of the state, leading to the growth of its GDP. Akinwunmi Ambode, the Lagos governor, noted at the launch of the satellite city, which is being developed by the Rendeavour Group, that the development was a demonstration of the confidence the organised private sector and foreign investors have in Lagos economy, the government and the viability of doing business in the state. He stressed that “the Alaro Satellite City is a strong statement that Lagos is still attracting more direct foreign investment”. The governor’s optimism on this development was shared and amplified by Frank Mosier, chairman, Rendeavur, who said they were introducing a new order in Lagos, explaining that, over the next decade, there would be thousands upon thousands of new jobs

L-R: Teni Zacchaeus, chairman , North West Quardrant Development Company FZC; Akinwunmi Ambode, governor, Lagos State; Audu Ogbe , minister of agriculture and rural development , and Stephen Jennings, CEO, Rendevour, during the unveiling of Alaro City in the Lekki Free Zone, Lagos Picture by Pius Okeosisi

for the people. “There will be thousands of new, first home owners, whose children will be educated in leading schools built on this site. Hard working people will have the opportunity to own homes, to get better jobs and to start businesses; their children will have access to a great education right down the street so that the next generation can achieve even more. All on this 2000 hectare site with world-class infrastructure”, he assured.. Mosier is of the view that the success of this project and the resulting prosperity of this neighborhood will demonstrate to the people of this city the opportunities for them to live better lives, adding that the success of the project would also send a message

to investors across the world that Lagos State is a good home for direct investment; that the state supports global investors and that they can have a great impact. “I believe this project represents a turning point for foreign direct investment and that the time is right for investment in Lagos State”, he emphasised. Rendeavour, which is doing this project in partnership with the Lagos State government, is Africa’s largest urban developer. Alaro City is its 7th ongoing city development in five African countries including Nigeria, Ghana, Kenya, Zambia and the Democratic Republic of Congo (DCR). Backed by American, British, Norwegian and New Zealand investors with a long-term commit-

ment to Africa, and to Nigeria in particular, Rendeavour opened its first businesses in Nigeria in 2006 when it launched Renaissance Capital, one of Nigeria’s and the continent’s leading investment banks. The company says it has, over the last decade, provided affordable houses for 3,000 families and created 10,000 direct and indirect jobs through its cities development and infrastructure provision across the five African countries. This means that at an average of four persons per family, the company has created homes for 12,000 persons. Given the multiplier effect of job creation, it means that about 50,000 people may have benefited from the development activities of the company given

five dependants per worker. These new cities sit on combined land area of 12,000 hectares where they are providing homes, offices, schools, hospitals and industrial parks within wellplanned urban environments, delivering new roads and utilities such as power, water and ICT, to thousands of people today, and to hundreds of thousands in the future. The CEO revealed that they had invested approximately $300 million of their own capital to develop sustainable and inclusive new cities which, in turn, has catalysed well over $1 billion in additional investment in construction, plant and equipment in these countries by indigenous and multinational companies looking to build their own future in Africa. Jennings hopes that with Rendeavour’s unique city-building credentials and the development of vital infrastructure such as the Lekki-Epe Expressway, Alaro City is destined to beat transformational world-class mixed-use city. “At 2,000 hectares, the city will provide tens of thousands of jobs with thousands of these commencing in the next 12 months alone, all of which will be backed by programmes that prioritise up-skilling our surrounding communities”, he assured. “Our partnership with Lagos State will ensure that Alaro City is an economically sustainable city open to all Nigerians. We already look forward to the development of the City and to its 2,000 hectares, to accommodate the rapid growth of the Lekki Free Zone,” he added.

Rising young population, low income drive demand for single room apartments Endurance Okafor

he relationship between Nigeria’s growing young population and the demand for single room apartments is directly proportional, driven also by declining income level. A survey by BusinessDay revealed that the average rate per month at which single room self-contained apartments are rented increased by 24.16 percentage points from 42 percent in 2017 to 66.16 percent in 2018. This is as a result of the increas-

ing young adult population who are just starting their career in most of the urban cities coupled with those whose income level was affected by the 5-quarter recession and as such settle for a room self-contained instead of their conventional two bedroom apartments. Meanwhile, credit sales reports that the average rent of Nigerians between 20-35 years of age is around $230 monthly and the average price of one bedroom in mega cities like; Lagos, Abuja and Port Harcourt is around $300 per month.

Ibraheem Babalola, MD/Cofounder of Muster, an AI powered peerto-peer shared housing market place, said “this means that a lot of people cannot afford to rent by themselves.” He cited also the problem of the upfront annual rent requirement, “which means there is need for a product that would break those payments into monthly payment, because a lot of the people earn their salary on a monthly basis.” BusinessDay estimates revealed that Nigerian tertiary institution produces about 500,000 graduates every year coupled with those who study abroad and return after obtaining a foreign degree to search for job opportunities. Survey also shows that most of the graduates usually migrate from their state of residence to the most presumed viable cities like; Lagos, Abuja and Port Harcourt with the mind-set to get a white collar job. The need to get an affordable accommodation for this set of young graduates is almost as important as life itself considering that majority of them usually don’t have relatives or friends in the destination city and as such some spend days in hotels while they look for the nearest agent that can help them secure an affordable accommodation.

The rather unfortunate ones sometimes get into wrong hands hiding under the umbrella of being estate agents and are most of the time scammed of the money that was intended for their accommodation. According to Larry Adeyeni, an agent who renders the service of assisting people around Akoka and Yaba environ to secure accommodation, out of about 30 clients he got per month in 2017, 21 of them ended up securing the apartments. This is compared to the 40 clients that rented in the same period of 2018. Nigeria with about 60 percent youth population is projected to become the world’s third most populated country by the year 2050. Africa’s largest economy which has about 74 per cent of low income earners, can only afford N4, 000 to N11, 000 monthly as rent. The unemployment figures by the National Bureau of Statistics as at Q3 2018 puts Nigeria as the country in the world with the 10th highest unemployment rate behind Mozambique (25 percent), Swaziland (26.4percent), Lesotho (27.percent), S/Africa (27.5percent), Kosovo (29.4percent), Palestine (31.7percent), Namibia (34percent), Bosnia & Herzegovina (35.33percent) and Congo (46.1percent). Meanwhile, Larry’s figures were

affirmed by Baba Jide’s, also an agent but provides services to those seeking accommodation around Admiralty way in Lekki phase I. Baba as he is popularly called said “the rate at which people come to rent single room is very high now.” In his words, single room in this part of Lagos is a ‘hot cake’. According to the figures compiled from him, there was an increase to 50 percent in 2018 in the rate at which people rented single rooms in his own part of the Island. When asked why there was high demand for that kind of accommodation in the luxury area of Lagos he said “it is because that is the cheapest kind of apartment here and most people from the mainland want to relocate and live close to their work place.” This was confirmed by Oluwatosin Dokunmu, a young graduate, who is doing his compulsory National Youth Service at an investment bank on the Island and he has to travel rom Ikorodu every day to his office. “I want to get an apartment because my place is very far from my office and I spend nothing less than 3-4 hours on the road, but I haven’t got a single room I can afford on the Island as they are all very expensive for the little income I earn,” Dokunmu told BusinessDay.

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What improved mortgage banking policy, PIB mean to housing sector Stories by CHUKA UROKO

art of the reasons for slow growth in Nigeria’s housing sector is lack of a functional mortgage system which is also not growing due to ineffective government policy that guides its operations. This is why there is need for improved policies on this sector. Experts are of the view that improving policies on mortgage banking and urban planning will see more foreign investment in the housing sector, leading to the closing of persisting 17 million housing deficit. Agele Alufohai, chairman, Quantity Surveyors Academy Board (QSAB), agrees, adding that there will also be a boom in infrastructure development for delivering gas and oil to power plants and industries. This, he said, will happen when Nigeria finally delivers new oil industry legislation popularly known as the Petroleum Industry Bill (PIBS), leading to the resolution of pricing issues around gas and electricity. The thinking that gave rise to the PIB sees the bill as a sure way to open up the country’s oil and gas sector to private sector investment. Foreign or local investment in this sector means more offices and residential real estate will be required by the investors and their companies, leading to increased demand. That also means suppliers of real estate products who have been licking their woods

in the last 12-24 months would return to sites. “Given Nigeria’s vast social needs and the huge debt service burden, at 50 percent of current revenue, Nigeria has little choice but to fund critically needed infrastructure through Private-Public Partnerships (PPP)”, Alufohai said, noting that Global Infrastructure Partners (GIP), one of the biggest private investors in infrastructure, is headed by Adebayo Ogunlesi, a Nigerian. The GIP currently has $450 billion under management. Recently, it made an unprecedented move to poach the World Bank President, Jim Yong Kim, to enhance its capacity to finance infrastructure in emerging markets such as Nigeria. Alufohai urged the Nigerian government to boost capacity to attract PPP financing of infrastructure, explaining that this is a quick way of retooling the country’s productive base and attracting the much needed foreign exchange. Nigerian professionals equally have a key role to play in attracting private sector investment for infrastructure development in the country. The QSAB chairman who spoke at the QSA’s Construction Arbitration, Skill Acquisition and Certification Training (CCArb) in Abuja, noted that construction was a very expensive business, pointing out that any where there is money, there is always a risk and that any country that wants to attract a lot of money,

in terms of investment, must take risk mitigation very seriously. “That is certainly what quantity surveyors are doing by extending and sharing arbitration skills. Construction is fraught with all sorts of risks, from delayed delivery to cost overrun. For a country like Nigeria, with a huge infrastructure gap and limited means of financing, we have no choice but to procure infrastructure increasingly using PPP”, he advised. He argued that if big-ticket construction projects are fraught

with risks because they have a considerable possibility for dispute, PPPs multiply the risk. Arbitration is thus a means of considerably de-risking investment in construction generally and in projects procured through PPPs particularly. “The QSA, working in conjunction with the Nigerian Institute of Quantity Surveyors (NIQS) and the Quantity Surveyors Registration Board of Nigeria (QSRBN), has started this hard work. “The QSA will be conducting

high-quality training in many other areas such as oil and gas and heavy engineering, focusing on new trends in construction in these areas, including economics and technology, as well as private and public sector financing,” he said. He expressed hope that construction professionals in the public sector would also try as much as possible to take advantage of these courses and training to achieve the needed growth through a seamless public-private partnership.

How estate agents dupe prospective tenants, home buyers in Abuja Stella Enenche, Abuja

hile security and other law enforcement agencies continue to battle cases of armed robbery, kidnapping, thuggery, cultism and the like, there is an emerging crime in the Federal Capital Territory (FCT) which requires urgent attention. There are several reports of agents defrauding residents seeking accommodation. These unscrupulous agents, while taking advantage of the desperation of some of their “clients”, end up collecting rents from two or more persons for the same house. BusinessDay’s investigation revealed that many FCT residents have been duped, in the course of this transaction. “When my rent expired in my Maitama apartment and I needed to move to a new place because I couldn’t afford the N1.2 million rent any longer, I contacted this fellow who I met a few months earlier at a friend’s child’s dedication. “He told me he was an estate agent and said he could secure accommodation in any part of Abuja of my choice and he even took me to his supposed office; we concluded talks and I told him how much I could raise. I finally credited his account with the sum

of N600,000 after he alerted me of a two-bedroom apartment in Ludge ( A suburb along Abuja international airport road) which he said the whole arrangement was on first come, first served basis. After payment, he issued receipts and told me that I could move into my new apartment in two weeks because the landlord needed to fix something in the house. “Two weeks later when I went to the house, I discovered that another tenant had already moved into the apartment. I later gathered that the agent had collected different sums of money from four tenant for the same apartment.

“I reported the matter to the police but there was no head way. I had to go and stayed with my younger sister because my maitama apartment had already been given out to the new tenant since I had already told the landlord that I would be moving out. “I think the government should look for a way to check these fraudsters who parade themselves as house agents. They are really causing serious problem in the housing market” Another victim, Godsent Etim, recalled how an agent took him to a new property which was still under construction, saying there

were some rooms available for rent and how he paid for the apartment and the agent told him that it would be ready in a month. “He handed my receipt over to me and even my supposed house key. By the time I was ready to move into the apartment, I discovered all the rooms in the compound had been occupied and that the supposed agent was fake. I tried his numbers they were no longer reachable. I had no choice but to let it pass. I have learnt my lesson; now I deal directly with the owner of the property.” Another victim, Yakubu Grace, told BusinessDay it was all like a dream when she was duped by a fake estate agent, recalling how her friend introduced her to an agent in Karu Site where she gave the agent specifications of what she wanted. “He called few days later to say he had got a place for me to rent but the landlord was insisting on two years rent payment which was N500,000. Initially, I refused to pay because I felt two years advance payment for a self-contained apartment was not too tidy for me but he latter convinced me and I reluctantly paid the money into his account. That was the last time I ever heard from him,” she said. However, some agents interviewed over the development expressed divergent views. For instance, Victor Ezeh, president of

Property Limited, said there were categories of agents in the FCT, ranging from roadside, freelance, and others. “Some of us have our offices in small shops and all. We advertise online .Some of our clients see our adverts online and call us. One of the major challenges we have is that, there are fake agents in the system. I know someone that have collected house rent of a prospective tenant, instead of remitting to the landlord , he made away with the money and by the time the prospective tenant got to know about it, it was too late. The police went after him for some time, but he was apprehended . “The fake ones are affecting our business because they are not giving us a good image by the way they operate. They don’t only defraud clients, some of them defraud land lords..There are ases where landlords will entrust a property into the hands of an agent with the agreement that the agent will deliver but they(fake agents) will deviate from such agreements .They will put the money in their pockets rather than remitting to the owner of the house . “This act has now made most of the landlords not to give their properties to agents; .they would rather advertise vacancy of their property by themselves with their phone numbers”, he said.

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Tuesday 05 February 2019

Analysis

Nigeria’s power, infrastructure sectors struggled A 100-page report on Power and Infrastructure Round Up which includes a review of 2018 and outlook for 2019 written by Olaniwun Ajayi, a leading law firm in Nigeria shows that Nigeria’s power and infrastructure sectors struggled to meet the aspirations of many Nigerians in 2018 but there were also significant developments that if sustained will improve the lot of millions of Nigerians. ISAAC ANYAOGU, presents the salient points from the report in this analysis. Power sector

ccording to the World Bank, Nigeria still ranks second worst in the global electricity access deficit charts. This picture did not change in 2018. While there was a flurry of regulatory and market activity leading to modest improvement in power delivery, the sector largely underperformed according to the report by Olaniwun Ajayi. Nigeria has an electricity demand of 98,000MW but the sector struggled to sustain an average daily power production of 3,761 MW within the first nine months of 2018, despite having an installed capacity of about 12,522 MW. According to the Power Sector Performance Report of the Presidential Task Force on Power, in September 2018, the power sector witnessed a power loss of 107,340MW, (about N51.519 billion in monetary terms) due to insufficient gas supply, distribution and transmission infrastructure. As at 29 October 2018, the number of idle power plants had increased from seven to 15, as a result of gas limitations, resulting in a revenue shortfall of N52.45bn in October. But despite a turbulent year, Olaniwun Ajayi analysts found that the power sector recorded some positives.

Highs

In May 2018, the Azura-Edo IPP, commenced commercial operations and has since been supplying power to the national grid, with a 74% availability factor. Azura secured a $900m debt financing from a consortium of 15 banks from 9 different countries, including most of the European development finance institutions to build a 450MW Open Cycle Gas Turbine in Benin City, Edo State. The National Gas Policy created in mid-2017 was followed up on that with the introduction of the Flare Gas (Prevention of Waste and Pollution) Regulations, in May 2018. In essence, the Flare Gas Regulations seeks to prevent waste of natural resources and facilitate the creation of social and economic benefits from gas production by discentivizing gas flaring. 2018 also saw the initiation of a bill to amend the Electric Power Sector Reform Act, 2005 (EPSRA) at the House of Representatives, with the objective of prohibiting estimated billing by Discos, and providing for the compulsory installation of pre-paid meters to all power consumers in Nigeria. The bill was passed this month. NERC also introduced the Meter Asset Provider Regulations (the MAP Regulations), which replaced the Credit Advance Payment for Meter Installation (CAPMI) scheme, which had created a framework under which electricity consumers could self finance the acquisition and installation of meters, subject to refunds through deductions from monthly electricity bills. With a view to improving grid reliability and wheeling capacity, 2018 saw the Federal Government paid greater attention to transmission. This increased attention helped ramp transmission capacity to 7000MW in 2018, a 28 .57% increase from the around 5000MW recorded in 2017. In December 2018, the TCN entered into a $170 million arrangement with Agence Française de Développement (AFD) to construct a number of sub-stations in the Abuja area. On 8 March 2018, NERC issued the Uniform System of Accounts Regulations, 2018 which harmonised accounting systems of all electricity generation, transmission, distribution and trading licensees, and mandate integration of accounting standards and financial reporting across the value chain in the industry.

Offgrid sector

In the off-grid space, 2018 saw a continuation of the trends in 2017, with the growth in off-grid renewables (particularly captive solar systems) being sustained in the course of the year. Initiatives such as the “Energizing Economies” and “Energizing Education” scheme was established by the Rural Electrification Agency (REA), which also undertook a spate of rural electrification projects in 2018. The EE project has provided a platform for the development of power projects in key trade centers within the country such as the Ariaria Market in Aba, Abia State and Sura Market in Lagos State, while a number of small scale projects to provide steady supply to federal universities and teaching hospitals have been embarked upon. Other noteworthy developments include the work being done by Viathan Engineering, through a network of five (5) IPPs supplying power to critical public infrastructure in Lagos and Ogun States, following the financing boost received through its successful N10 billion bond issuance programme, backed by Infrastructure Credit Guarantee Company Limited (Infracredit).

Lows

Last year, the report found that key pipeline projects expected to

reach financial close didn’t see much progress, as major international financiers still appear reluctant to back medium-to-large scale IPPs in Nigeria. The concern is about the creditworthiness of Nigerian Bulk Electricity Trading Plc (NBET), and the limited sovereign support to backstop its obligations under its power purchase agreements. Other broader macroeconomic issues such as foreign currency volatility and convertibility concerns, inflation and a continued trend of poor growth in an economy just recovering from its second recession in the last decade presented challenges. Projects expected to be delivered in the year, did not meet their targets. This include the 240MW Afam III IPP in Rivers State, the 215MW Kudenda IPP in Kaduna, the 40MW Kashimbilla IPP and the 30MW Gurara IPP could not meet their completion deadline of 2018. The analysts said the passage of the 2018 budget, the complexity of the underlying commercial arrangements and protracted negotiations with counterparties and financiers, and in other cases the project sponsors were more focused on higher priority projects could have affected the deadlines for the projects. Nigeria continued to suffer constraints associated with gas in 2018. Gas supply and infrastructure continue to remain major issues of concern for the power sector, and according to NERC’s analysis, account for about 64% of the gap between Nigeria’s actual generation of 7,000MW and her 12,522MW installed capacity. Gas pipeline incidents were responsible for a number of outages in 2018 leading to idle capacity from many power plants. Transmission was identified as a challenge for the power sector value chain in 2018. Even with some of the recent improvements, the gap between installed generation and her reliable wheeling capacity of 7000MW still stands at about 5000MW, demonstrating how limited Nigeria continues to be in her ability to harness existing generation capacity. Tariffs remain non-reflective of market realities, while the interlinked issues of the metering infrastructure deficit and collection shortfalls remain major concerns for customers, the regulators and the Discos, the report said. According to NERC, as at June 2018, of the 8,292,840 registered electricity customers, only 3,591,168 had been metered, representing about 42% of the registered electricity customers in the country. This wide metering gap has accentuated the collection losses incurred

by the Discos, and as a result, liquidity constraints across the value chain continued to manifest well into the second quarter of 2018 where it was reported that the aggregate Disco debt to NBET had risen to N859 billion The report dwelt extensively on what developments in the power sector recording all the significant investments that came into the sector as well as the initiatives that could yield much result in 2019. For example, All On, partnered with Lumos and ColdHubs in an agreement that would see to the setting up of mini electric off-grids across the Niger Delta in February 2018. Seeded by Shell, All On is helping companies deepen access to funds for setting up and expanding off-grid renewable energy solution to end the perennial shortage of electricity supply in the region. In 2018, Mainstream Energy Solutions Limited, the operator of the Kainji and Jebba hydro power plants announced plans to partner with the French company and global energy player, Engie SA to build a 500MW solar plant to complement its electricity production from the hydro power plants presently being operated by the company. Energy for productive got a boost as Xerogrid, a renewable energy business based in Leeds, was awarded a contract to supply solar systems that will power mobile clinics in Nigeria for the charity eHealth Africa. Shenzhen KangMingSheng Technology Industry, a Chinese firm, said it was planning to site a manufacturing plant for solar-powered equipment in Nigeria. Through its subsidiary, Kamisafe Nigeria, it was announced that the manufacturing plant would be used for the production of renewable energy gadgets that would help improve access to power supply in Nigeria. The plant would be used for the production of solar-powered street lights, indoor renewable lamps, rechargeable energy-saving lamps, multifunctional mobile power supply, fans and other appliances Mainstream Energy Solutions Limited, the operator of the Kainji and Jebba Hydro power plants has announced its plans to supply electricity to Burkina Faso. Earlier in the year, the Rural Electrification Agency (REA) said it has initiated and is working on 422 new electrification projects under the 2017 capital appropriation, alongside aiming to complete another 197 projects that were approved under the 2017 capital appropriation but were still in progress. A review of a breakdown of the new projects provided by the REA indicates that of the six geopolitical zones, the largest share of the electrification intervention was intended for the North Central, with 93 projects planned for this zone. 81 of these projects are intended to be executed in

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in 2018, this year doesn’t look rosy

the South South 76 in the South East, 52 in the North East, 77 in the North West, and 43 in the South West. The World Bank said the sum of $350 million from the $2.1 billion concessionary loan approved for Nigeria, will be given to further some of these electrification projects initiated by REA, including the Energising Education and the Energising Economies Programmes. Operators in the sector were miffed over the Federal Government’s decision to increase the import duties on solar panels to 10% INFRASTRUCTURE The report opens with the passage of the National Roads Fund (Establishment) Bill by the Senate in February 2018. The Bill establishes a National Roads Fund which will serve as a repository of revenues from the charges received from road users and other sources and will be channeled towards the financing, administration and periodic maintenance of road infrastructures in Nigeria. In the railway sector, the report highlighted concession of the Nigerian narrow gauge railway lines. In April 2018, the Federal Government and the GE-led consortium entered into an Interim Phase Framework Agreement (IPFA) which was designed to set forth the terms for the supply of locomotives, wagons and certain remedial civil works in respect of the Western Line. But there were significant complications with some of the commercial arrangements, necessitating re-negotiation of the IPFA. In particular, GE, which had been experiencing significant financial troubles and was undergoing a reorganization process at the time, withdrew its position as the lead concessionaire whilst relinquishing its position to the Transnet. In 2019, the project could see significant boost as it is back on track and parties are making earnest efforts to ensure that the deal is completed on time, with deal documentation for the full concession already at an advanced stage, the report said. Much will depend on the outcome of the February elections. Another key development in 2018 according to Olaniwun Ajayi analysts was the inauguration of the Abuja Light Rail project by the Federal Government. The FEC had, in 2017, approved the project for construction by CCECC at a cost of $1.3 billion. The project is proposed to be an integral part of the FCT Transportation Master Plan, which is designed primarily

to transport large numbers of people and goods from satellite towns into the metropolitan public transport system of the FCT, Abuja. The project comprises bridges, flyovers, a training school, office, lounge, parking bay, Operation Control Centre, four 460 KVA generators, food court, meeting rooms, surveillance, among others. It is divided into lots and only two has been completed so far. Whilst work is about to commence in lot 1B, the remaining lots would be run and operated on a private partnership for efficiency. As at the time of this report, the routes that are fully operational and running include the Abuja metro- Kukwaba 1, National Park-Kukwaba (Ring Road II), Wupa- Bassanjiwa (Airport east), Idu- Airport, while Gbazango-Kagini (Jibi)- Dei Dei-Gwagwa-Idu routes are yet to commence operation. Following several delays and protracted negotiations in connection with the financing of the project, construction of the $1.5 billion Lekki Deep sea port was officially flagged off by the Federal Government in March 2018. During the official inauguration, the Federal Government pledged its total and unalloyed support and commitment to the management of the Lekki Port LFTZ Enterprise, which is located in the Lekki Free Trade Zone in Lagos. The sea port is expected to be one of the deepest ports in West Africa and the hub of port operations in Nigeria, with a wide-access port channel to handle vessels and generate about 170,000 jobs directly or indirectly. In December 2018, while presenting the 2019 budget proposal before the National Assembly, the President restated his administration’s commitment to rebuilding and expanding the country’s road network. According to the President, an additional 1,531 kilometers of roads were constructed and 1,008 kilometers rehabilitated across the country in 2018, with priority projects such as the Abuja–Kaduna–Kano highway as well as the Second Niger Bridge having been progressed significantly through the PIDF, while each of the geo-political zones has a major road project. In the North-Central, a contract was awarded for the dualisation of the 93km Ilorin – Jebba Road, which provides a critical link between the Northern and Southern parts of the country, as well as for the Abuja – Keffi-Lafia – Makurdi roads. In the North-West, we have completed the Sokoto to Tambuwal – Jega Road compris-

ing 135km out of the entire Sokoto to Yauri stretch and sections of Kaduna Eastern bypass and Kano Western bypass are also progressing. In the North-East, the Mayo – Belwa – Jada Road, and the Gombe – Numan – Jalingo Road as well as the reconstruction of some bridges were the highlights. In the South-South, 132km was completed on the Ugep Road, while work also commenced on the Calabar – Itu – Odukpani Road and the Bodo – Bonny Bridge. In the South East, construction commenced on a critical section of Umunya linking Awka to Onitsha, a stretch of 18km. In the South–West, the Badagry Expressway was awarded for construction along with the Apapa – Tin Can Island, Mile 2 – Oworonshoki, road and interstate roads linking Ogun through Ikorodu to Sagamu, and Ipaja to Otta.. The President noted that the N100 billion Sukuk Bond raised by the government is being used to fund an additional 25 road projects across the country, distributed across the various states. On telecommunications, the analysts noted that as part of its drive to deepen broadband penetration in the country, the Nigerian Communications Commission (NCC), under its open access model for broadband access, approved a number of telecommunications infrastructure company (InfraCo) licensees in the course of 2018. InfraCos are licensed to provide dark fibre services on a commercial basis and focus on the deployment of metropolitan fibre and provide transmission services, available at access points (fibre to the node or neighborhood) to access seekers. In January 2018, Zinox Technology Limited was approved as the designated InfraCo licensee for the South East, while Brinks Integrated Solutions Limited was approved for the North East. The NCC had previously, in 2017, awarded InfraCo licenses to IHS and MainOne Cable for North Central and Lagos respectively. By the terms of the licenses, the InfraCos are required to deploy fibre infrastructure within their licensed areas within one (1) year, failing which they could lose their licenses. The NCC also subsequently entered into discussions with the licensed InfraCos for subsidy arrangements to enhance the bankability and sustainability of their fibre deployment projects. Last year the NNPC has signed the contracts for the engineering, procurement, and construction with a consortium of indigenous and Chinese companies in respect of two lots of the Ajaokuta–Kaduna–Kano (AKK) gas pipeline. The construction will be carried out on a 100% contractor financing basis. The pipeline will originate from Ajaokuta through Abuja, Kaduna and end at a terminal gas station in Kano and is expected to cost the sum of US$2.8billion. The Minister of State for Petroleum Resources, Ibe Kachikwu explained that the project has lingered to 13 years due to setbacks as a result of scarce resources for government to fully finance the project, hence, the need for a contractor financing. In December 2018, the Federal Government and Abia State Government signed a N500 billion deal for the development of the Enyimba Economic City. The project is a PPP of Crown Realities Plc, the Abia State Government, the host communities and the Federal Government of Nigeria under the Project “Made in Nigeria” initiative of the FGN. The project is located on 9,803 hectares of land spanning three (3) local government areas in Abia State, Ukwa East, Ukwa Wes and Ugwunagbo, at the centre of the five (5) South-East and four (4) South-South states and has the right characteristics and ingredients to drive massive economic expansion of the region and, by extension, Nigeria. It has major arterial, intercity road connections and is very contiguous to the existing sea ports (Onne and Port-Harcourt) and the proposed Ibom Deep Sea Port. The Federal Government has also approved the concession of 20 out of the 33 grain Silos in the country which will, as presently envisaged, would likely earn it an estimated revenue of N6 Billion at the end of the 10 year period. As part of the concession arrangement, the Federal Government will remain the owner of the silos and at the end of 10 year, it can either renew, revoke or takeover the silos and operate them. Pipeline projects The detailed report also included projects that are still in development such as the Lagos Ibadan Rail Project, the 375km Abuja-Kaduna-Zaria-Kano dual carriageway, proposed Concession of Ibom Sea Port and the proposed award of Contract for the construction of Fourth Mainland Bridge in Lagos State, the construction of IbadanKaduna standard railway gauge project and proposed concession of the National Trade and International Business Centre in Lagos. The report presents a sombre picture on account of the elections. “With general elections scheduled for mid-February 2019, most projections for 2019 will likely be impacted by the outcome of the elections. “As such, a lot is riding in the elections and players in the power and infrastructure ecosystem are keenly observing with a view to predicting how the pendulum might swing and how to plan appropriately. Especially with an election which is likely to be contested, we can also generally expect investors to keep their gunpowder dry and hold off on making any major moves until the outcome of the elections and the strategic direction of the administration are definitively determined. “As such, we expect things to move at a relatively slow pace in both the public and private sector until the second or third quarter

of the year,” the report said.

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Tuesday 05 February 2019

Human Capital

‘Nigeria must harness Technical education for economic, technological advancement’ KELECHI EWUZIE

he potential in technical education in Nigeria has remained underutilised due to years of neglect and this has been described as a major drawback to economic and technological development in the country. Some education stakeholders who spoke to BusinessDay decried the poor state of most of the technical institutions built in the past to provide the skilled manpower needed to drive industries in the country as well as the poor performance of the Engineering discipline in various institutions of higher learning where incompetent graduates were being raised for the starving industries. They maintained that the country can only advance technologically and economi-

Tech-U Vice Chancellor, Ayobami Salami presenting the letter of award to the University’s best student for the 2017/2018 session, James Olayemi Ogunro, during the second matriculation ceremony of the University.

cally if this aspect of education receives the attention it requires.

Chinedu Duru, a human resource professional observed that Nigeria has a lopsided

educational structure whereby only about 300 technical schools exist whereas it is

Conrad Foundation awards $60,000 scholarship to Greensprings students KELECHI EWUZIE

n recognition of their outstanding performances, Conrad Foundation has awarded students from Greensprings Secondary School, Ibeju-Lekki, Awoyaya campus a scholarship worth $60,000 (approximately ₦21 million), for 4 years per finalist at Clarkson University, New York, United States of America. The scholarship was awarded by the Conrad Foun-

dation through the Conrad Challenge, a competition that was formed in 2008 in honour of the legacy of Charles “Pete” Conrad Jr. As an annual competition, the Conrad Challenge brings together a dynamic community of innovators and entrepreneurs driving a collaborative movement to develop extraordinary and viable solutions that benefit our world in the areas of Aerospace, Aviation, CyberTechnology , Security, Energy, Environment, Health,

Nutrition and Smoke-Free World. The aim of the Conrad Foundation partnership with schools is to help develop talents and drive entrepreneurship in Africa. Several top-league secondary schools partake in this annual competition. Greensprings School, Lekki campus presented three teams for the Conrad Challenge and two of the three teams qualified for the final stage. At the grand finale of the challenge at the

Students of Greensprings Secondary School Lekki, Lagos, winners of the Conrad Foundation$60,000 scholarship.

prestigious Lekki Peninsula Hotel recently, a team from Greensprings School (the Five Ions) emerged the First Runner Up out of 13 teams from schools all over Nigeria. All the students in the team (i.e. the Five Ions) received scholarships worth over $60,000 for 4 years at Clarkson University, New York. Feyisara Ojugo, Principal, Greensprings Secondary School, Lekki campus while commenting on the feat of said the participation of her students in the Conrad Challenge has helped to strengthen their minds, and also, the experience has assisted to further motivate and inspire the spirit of innovation in our students. . According to her, “Being able to see prototyping machines, firsthand, in operation and meeting innovation experts was a rare experience beyond the theories in classroom.” Ojugo further stated that winning the scholarship is exciting news for Greensprings School, as the school continues to redefine education in Africa, by consistently molding students to become global citizens and leaders in various fields.

the aspect of education that directly addresses the issue of unemployment, by creating a great pool of skilled manpower for industries. “The challenge we have in Nigeria is that we have a lopsided educational structure. We have just about 300 technical schools in the country as a whole. Technical education is learning by doing and it is the aspect of education that creates the greatest impact in the society. It directly addresses the issues of youth unemployment and youth restiveness and supplies the real labour need for industries. It provides the skilled manpower that is used to drive the industries,” Duru said. Also speaking on the importance of technical education to national development, Olumide Ajayi, a development economics expert who is the project coordinator at the Entrepreneurship Development Centre (EDC), noted

that it would go a long way to improve the informal sector of the economy while providing skilled manpower for the formal sector. Ajayi however, promoting training in technical education must go hand in hand with training in entrepreneurship as the latter ensures the conversion of the technical skills into wealth. “Government should pay attention to technical skills and entrepreneurship training to improve the economy. This will address the issue of poverty because more people will be empowered. They will contribute to the growth of the GDP and also become employers of labour thereby reducing unemployment rate,” he noted. He further said that there is need to support the Engineering discipline in polytechnics and the universities because we need technical and technology education to develop the country.

Tech-U matriculates new students, to appoint professors of practice Akinremi Feyisipo, Ibadan.

he Vice Chancellor of Nigeria’s premier technical University, First Technical University (Tech-U), Ibadan, Ayobami Salami, has announced plans by the University to appoint professors of practice to join its growing faculty. This was made known during the University’s second matriculation ceremony and investiture of University Scholars. Addressing the audience, Salami said as a way of enriching the experience of our students, Tech-U is putting finishing touches to a policy of attracting highly experienced industry players for appointment as Professors of Practice. He explained that Professors of Practice are professionals, either practicing or retired with or without traditional academic backgrounds, who have exceptionally distinguished themselves in their fields of practice. Salami further said the policy is strategic to the University which prides itself for its disruptive model of tertiary technical education, as it would further deepen the integration of academic scholarship with practical industry

experience. He noted that when fully implemented, the University would set the pace as the first institution in Nigeria to introduce this innovation. “Knowing that delivering on our mandate of a unique educational model requires capable, experienced and passionate manpower, we have consistently ensured that we recruit the brightest hands in the various fields of study to teach our students. I am proud to say our growing faculty consists of some of the best from the available pool of experts. Additionally, we have also engaged scholars in the diaspora as visiting lecturers to strengthen the pool, Salami said. The vice chancellor noted, “On our part, we will not leave any stone unturned in ensuring that we motivate our staffs, who already are about the best paid in the public tertiary education system in Nigeria, to be able to nurture our students to become intellectual giants who dictate trends in their fields. The matriculation ceremony had in attendance Oyo State Commissioner for Local Government and Chieftaincy Affairs, Bimbo Kolade and other dignitaries including Chairmen of Local Governments Areas in Oyo.

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EDUCATION

Foundation holds Science, tech fair to support, mentor female students Stories by KELECHI EWUZIE

hristopher Kolade Foundation as part of its drive to address gender inequality in the field of science and technology has organised the second edition of Stemma Hands-on Empowerment (SHE) fair in Lagos. The initiative was put together to offer girls in Lagos secondary schools the opportunity to experience science and technology in relatable, interactive and fun ways. The fair also provided an opportunity for the girls to listen to successful women in science and technology, gain from their wealth of experience and how they developed and sustained their interest and pursued a career in science and technology. Christopher Kolade, the founder, while speaking at the event said it is wrong to address youths as leaders of tomorrow, but that they are leader today waiting for tomorrow’s opportunities.

An external exhibitor from Aunty Ayo International School explains her project (a light bulb powered with salt and water) to some SHE participants.

“If you are leaders today, it means you are entitled to take some decisions today, and the benefits of the decisions you take today will come tomorrow. So in order to take

competent decisions today, you must have a vision of what tomorrow will look like.” He said that is why the foundation has focused the students’ attention on those

things that seem to be the criteria for making tomorrow beautiful – science, technology, mathematics, adding, “We must start doing things today in the areas of science and

technology to qualify us to be leaders of tomorrow.” He urged the students to seek to make an impact in the society, to do something to change the current situation in the country positively, as well as to imbibe the values of honesty, integrity, punctuality, among others. The SHE initiative also seeks to engage them in enquiry; stir their intellectual curiosity, build their confidence, apprise them of female role models in the field, and equip them with demonstrable skills in targeted areas of science and technology. Omobola Lana, managing consultant of the foundation, said the programme has had a positive impact on the girls as they now believe in themselves and what they can do and what can aspire to, and the things they can achieve have grown exponentially. “The programme is technology based but there is a compulsory leadership and ethics component. The combination of these and the girls achieving things with their own hands

make them feel there is nothing they cannot achieve.” Oluranti Adebule, deputy governor of Lagos, commended the foundation for sustaining the initiative to encourage more girls to showcase their technological skills thereby helping to build their confidence that they too can achieve their dreams in the fields of science and technology. She called for an enlightenment seminar for parents and guardians to change the mind-set that STEM is not girls, but for boys alone. She also appealed to all stakeholders to encourage more girls to take interest in STEM and demystify the falsehood of science and technology being the exclusive preserve of boys. Onyeche Tifase, managing director, Siemens Nigeria in her keynote address called on the students to know the importance of self-development and always believing in oneself and being curious, always asking questions because sometimes people are waiting for someone to ask for clarifications.

‘For over Three decades, we remain committed Students get varsity education boost to Redefining education in Africa’ …As SuccessBox splashes N2M to winners

ai Koiki, the executive director of the school said the management of the school is proud of the achievements over the years, adding that they are building a legacy in the education sector that will redefine Africa’s education system. Koiki observed that by being the first Thinking School in Nigeria, the school is committed to preparing children who will lead change in the world through analytical thinking. A c c o r d i n g t o h e r, “Greensprings celebrated many achievements last year, and one of the achievements includes the opening of the third campus in Ikoyi in September. The new campus, which is located at 12a Reeve Road, Ikoyi, caters for preschoolers and elementary children between the ages of 2 and 10. The opening of the campus was a strategic move to cater for the demand for quality education by residents of Ikoyi and its environs”. To her, “The establishment of the Ikoyi Campus will bring us one step closer towards achieving our vision of leading holistic, inclusive, innovative, world-class education in Africa.” Another major achieve-

ment of the school last year was the opening of Anthos House, a unique school for children with special needs. The school was staffed with experienced teachers and adequately equipped with all the facilities needed to provide the learning support for children with special needs. We are quite grateful for the tremendous progress made within a few months of operation. Besides opening a new campus and a special school, another major achievement for Greensprings School last year is the fact that the school’s students won special recognition awards in the IGCSE examination. Six students from the school emerged Top in Nigeria for various subjects. Beyond achievements, Greensprings School also gave back to the community last year. The Greensprings Kanu Football Camp 2018 ended with an award of scholarship given to Abbey Fawaz of Jubilee Model School, Surulere, having emerged the most promising football talent in the competition. Abbey Fawaz is now on a full scholarship in Greensprings School, and it is definitely a dream come true for the upcoming football star.

On the day of celebrating the 34-year anniversary of the school, which was on January 21, 2019, the executive director of Greensprings School, Lai Koiki, was asked about the plan for the school in the next 10 years. She replied that “There is talk about setting up a university; it is a dream, and our dreams do come true.” Greensprings School was established in 1985, and ever since it has been delivering world-class and life-transforming educational services to children right from preschool to secondary school and unto IB Diploma.

s part of its contribution targeted at aiding students pursue their tertiary education, the management of Chroniclesoft, promoters of SuccessBox, an online platform has rewarded no fewer than five successful 2018 JAMB candidates with 2 million naira. The SuccessBox is an online platform where thousands of students practice past questions extensively before the Unified Tertiary Matriculation Examination, (UTME). Oluwakoyejo Oluwatosin, chief executive officer, Chron-

icle Software Development Company while presenting the cash awards to the five candidates who scored between 280 and 343 practising with SuccessBox said the goal of the company is to empower over one million JAMB candidates with a robust testing platform to enable them better prepare and achieve excellence in JAMB 2019. According to him, “SuccessBox is an online test platform where students from all over Nigeria and beyond can prepare with over 50,000 Questions and Answers and go on to excel in their exami-

Joshua Adigun, Ibrahim Ajibade winners SuccessBox platform competition and Oluwakoyejo Oluwatosin, chief executive officer, Chronicle Software Development Company at presentation of cash prize of N500,000 to winners in Lagos.

nations” He observed that so far the company seems to be heading in the right direction, as the number of subscribers continues to grow in the recently upgraded robust online test platform. “SuccessBox offers students a platform to practice seamlessly for JAMB and WAEC. Its features include instant scoring mechanism, random question generation, 15 years or more past question bank and post-test performance review among others”, he said. Oluwatosin further stated that the platform is purpose built and will operate as a web-enabled, mobile-friendly portal while increasing the server bandwidth based on demands and will provide additional supports to over one million users. To him, “The solution will enable more examination candidates have access to high quality preparatory materials in the most cost-effective way.” He reiterated the company’s commitment to improving the quality of education using smart technology solutions in Nigeria, adding that this is the 10th year since establishment, this is our little way of giving back to the society that has been there for us since the inception of the business in 2007.

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Nahco to invest N3.6bn for procurement of equipment in 2019 Stories by IFEOMA OKEKE

latokunbo Fagbemi, the group managing director/ chief executive officer of the Nigerian Aviation Handling Company PLC (nahco aviation) has said the company will spend N3.6billion on the procurement of equipment this year. This is as she disclosed that about N1.9billion has already been invested for the procurement of some equipment in the past few months. Speaking during a press conference at Nahco headquarters in Lagos last week, Fagbemi said that the equipment will be put to use by the end of the first quarter of 2019. “By the end of the year, we will have spent about 3.6billion naira in equipment. By

September, we will have the next set of equipment coming in. This is what we are doing in terms of equipment. We are going to have a master plan for our facilities. What we are doing immediately is to ensure that we refurbish what we have in terms of our facilities. “We want to make our facilities look better; these include our buildings, the warehouses amongst others and improve on all the processes within the system. We are also drawing up a people’s plan for our people. These things are strategic for us,” she said. She stressed that going forward, the company will be focusing on setting new standards and leveraging professionalism to set its operations apart from other ground handling service providers so as to retain its current customers and attract new ones.

Olatokunbo Fagbemi

Speaking on the price war that exists between the company and its competitor, Fagbemi said, “We are in a

Ethiopian Airlines to start free transit tour for international passengers

thiopian Airlines, the Largest Aviation Group in Africa and SKYTRAX Certified Four Star Global Airline, has announced its customers worldwide that it has extended free transit tour to global passengers as of February 1, 2019. The new complimentary city tour package organized by ET Holidays, the tour operator wing of Ethiopian Airlines, takes transiting passengers with six to eight hours’ time in the running capital, Addis Ababa, on a journey through one of the landmarks of the city, the National Museum, accompanied with a taste of Ethiopian Coffee and souvenir shopping at affordable prices and make them experience the unique flavours of the political capital of Africa during their

brief stay. Regarding the initiative, Tewolde GebreMariam, Group CEO of Ethiopian Airlines, remarked, “As travel has gone digital with our innovative technology solutions including Ethiopia Mobile App and online platforms, the huge influx of transit passengers in Addis Ababa, the world’s gateway to Africa, can enjoy personalized and end-to- end travel experience. “Ethiopian Mobile App enables passengers secure their visa electronically within 4 hours from any part of the world, as well as book their flights, pay online using credit or debit cards, mobile money, e- Wallet and bank transfer, check-in and issue boarding pass seamlessly. “As we continue to discover

and deliver the best for our customers, we are pleased to come up with complimentary offerings to our global transiting passengers and make them savour every moment and feel the real taste of Addis Ababa during their brief stay. While promoting Ethiopia, Land of Origins, and its beautiful capital Addis Ababa alike, as tourist destinations, we will keep promoting initiatives tailored to provide our ever growing customer with a unique and unforgettable travel experience.” Ethiopian Airlines (Ethiopian) is the fastest growing Airline in Africa. In its seventy plus years of operation, Ethiopian has become one of the continent’s leading carriers, unrivalled in efficiency and operational success.

business where our customers are stronger than us. Most of them are the airlines and that is the challenge in this

ground handling business. Most of these strong customers are in the cost-cutting mode. “Essentially, there is no secret that this brings a lot of pressure on pricing. But one thing that I have begun to discuss is that we should ensure that pressure on price does not drive any company in terms of safety and security in the provision of services. I will champion everything to ensure that the pressure on price does not compromise safety and security.” She explained that the regulators will also need to play a part in the issue of pricing so that companies do not compete in such a manner that affect safety and security because that is the most important thing when it comes to air transport. The group managing director of the company noted that the mission of Nahco will be to consistently pro-

vide exceptional services using professional teams, cutting edge technologies and leading practices to deliver value to all stakeholders, adding that its differentiating competent is service excellence. “We have added empathy to our core value. Our core values are safety, integrity, reliability, respect and empathy. Empathy for us is very important because we want to operate in the place of excellence so that we are not just saying we are delivering customer service but we are delivering customer service from the perspective of how customers feel. “Hopefully we believe that whether it is for the internal or external customers that come, it will be a great place for people to work. We want our turnover to grow by over five times and we want to grow across the Africa continent,” Fagbemi added.

FRSC inaugurates special marshals at MMA2

s part of efforts geared towards the creation and sustainability of a safe and secure society in Nigeria, the Federal Road Safety Corps (FRSC), Lagos State Command, has inaugurated a new body of Special Marshals at the Murtala Muhammed Airport Terminal Two (MMA2), in Lagos. This development is hinged on the long-standing relationship that has existed between FRSC and the management of Bi-Courtney Aviation Services Limited (BASL), operators of the MMA2. The Special Marshals unit accordingly, is saddled with the responsibility of administering road safety standards and other relevant measures aimed at ensuring orderliness

not only around the airport but also in different parts of the country. The partnership forms part of Corporate Social Responsibility (CSR) initiatives of BASL towards ensuring safety of lives and property consequently engendering national growth and development. In his welcome address, Rodger Whittle, BASL’s Group Executive Director (GED), said, coping with the task of establishing and maintaining a safe and secure environment is a continuous duty that demands collective responsibility. The challenges on the Nigerian road networks, according to him, are enormous and without doubt, adding that it requires a lot of support beyond the confines of op-

erations of regular marshals of the FRSC, stating that this is why this initiative of establishing the Special Marshal unit is indeed a laudable one and should be encouraged. Whittle stated further that as a responsible organization and a leading brand within the aviation sector, this presents yet another opportunity; amongst many, for BASL to contribute its quota to national development within the ambits of the mandate of Federal Road Safety Corps (FRSC). “We have professionals of diverse fields and capacities across the BASL company present here today, who have volunteered and are committed to be part of this commission; in order to contribute meaningfully to societal safety of lives and property.

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Live @ The Exchanges Top Gainers/Losers as at Monday 04 February 2019 GAINERS Company

LOSERS Opening

Closing

Change

N74

N77.9

3.9

N45.3

N46

0.7

TOTAL

REDSTAREX

N5.5

0.5

NASCON

CUSTODIAN

N6.5

N6.8

0.3

DANGFLOUR

N5.8

0.2

NB STANBIC

Market Statistics as at Monday 04 February 2019

Company

Opening

Closing

Change

N29.5

N27

-2.5

N223.3

N220.9

-2.4

N17.9

N17.65

-0.25

UACN

N9.2

-0.2

CHAMPION

N1.8

N1.62

-0.18

ASI (Points)

30,745.052

DEALS (Numbers)

2,909.00

VALUE (N billion)

1.040

MARKET CAP (N Trn

Investors gain N40bn as stock market opens week on positive note …Nigerian Breweries, Stanbic IBTC, 14 others rally Stories by Iheanyi Nwachukwu

igerian stock market opened this week on a positive note as more investors moved into Custom Street, Lagos buying the shares of Nigerian Breweries Plc, Stanbic IBTC Holdings Plc and fourteen (14) others. The Nigerian Stock Exchange (NSE) AllShare Index (ASI) closed on Monday February 4, 2019 at 30,745.05 points, representing an increase of 0.35percent as against 30,636.36 points recorded the preceding trading day. The market’s Year-to-Date (YtD) returns currently stands at -2.18percent. Likewise, the value of listed equities increased to N11.464 trillion, from N11.424 trillion at the

L-R: Sanjeev Kumar, finance director, The Coca-Cola Company, West Africa Business Unit, Peter Njonjo, president, Coca-Cola, West Africa Business Unit, Cornelis Vink (MFR) , chairman, Tropical General Investment Group (TGI) , Rahul Savara, group managing director, TGI Group, Jerome Shogbon, group executive director, TGI Group at the formal signing ceremony of Coca Cola acquisition of Chi Limited in Lagos recently.

beginning of the day’s trading representing an increase of about N40billion. While the stock market recorded 16 gainers, no fewer than 20 lost their values. Nigerian Breweries Plc stock price increased most by N3.9 or 5.27percent from N74 to N77.9; fol-

lowed by that of Stanbic IBTC Holdings Plc which gained 70kobo or 1.55percent, from N45.3 to N46. “As we move into a new month, we maintain our bearish outlook on the market, although the earnings season could see market rally in the period”, said analysts at

Lagos-based Afrinvest in their February 4 note to investors. The share price of RedStar Express Plc was also up by 50kobo or 10percent, from N5 to N5.5; while Custodian Investment Plc stock price gained 30kobo or 4.62percent, from N6.5 to N6.8.

Dangote Flour Mills Plc moved up from N5.8 to N6, adding 20kobo or 3.45percent. On the losers table, Forte Oil Plc declined most, from N29.5 to N27, losing N2.5 or 8.47percent. Total Nigeria Plc also declined from N223.3 to N220.9, losing N2.4 or 1.07percent. Nascon Plc lost 25kobo or 1.40percent, from N17.9 to N17.65; UAC of Nigeria Plc dipped from N9.2 to N9, losing 2kobo or 2.17percent; while that of Champion Breweries Plc declined from N1.8 to N1.62, after losing 18kobo or 10percent. Fidelity Bank Plc, Transcorp Plc, Diamond Bank Plc, Zenith Bank Plc and United Bank for Africa Plc were actively traded stocks on the Bourse. In all, investors exchanged 183,670,788 units valued at N1.040billion in 2,909 deals.

We need to attract, retain investments - Uduk

takeholders in the Capital Market have been urged to continue to take positive steps to attract and retain both local and foreign investments to stimulate economic growth and developed critical infrastructure necessary for the country’s development. Mary Uduk, Acting Director General of the Securities and Exchange Commission (SEC) stated this at the formal launch of the book ‘Riding the Eagle’ written by Toyin Sanni in Lagos on Monday February 4, 2019. Uduk stated that during the decision-making process, investors want to be sure of the rational basis of their investment decisions before transferring resources, and this is why quality information is needed.

She said “Providing information to investors will enhance transparency in the Nigerian markets and

improve our global reputation in the investment community. “Riding the Eagle

183,670,788.00

VOLUME (Numbers)

meets this imperative by providing comprehensive and up-to-date information on investing in the

L-R: Abiola Adekoya, CEO, RMB Nigeria StockBrokers; Doyin Salami, Economist & senior lecturer, Lagos Business School; Akinola Olawore, president and chairman of Council, Nigerian British Chambers of Commerce; Olufemi Awoyemi, CEO, Proshare limited; Bimbo Olashore, treasurer, NBCC, and Bode Aregbesola, head, Aviation, United Bank for Africa, at the Nigerian British Chambers of Commerce Breakfast Session in Lagos .

Nigerian markets via a roadmap and guide for foreign, domestic, institutional and individual investors alike. It also examines the challenges faced by the Nigerian economy across sectors, past and recent success stories and solutions to some of the nation’s economic and development challenges. She said the Book goes into details on the key sectors that drive the performance of the Nigerian economy and what investment opportunities are available for interested investors and motivated entrepreneurs. The SEC DG therefore commended the author, Toyin F. Sanni, for putting at the disposal of the industry, the value of over one decade in the money market and another two decades in the capital market.

11.464

NSE boosts listing, trading businesses teams with two new executives

he Nigerian Stock Exchange (NSE) on Monday appointed Jude Chiemeka and Olumide Bolumole to its Executive Management Team. Olumide Bolumole joins NSE as Divisional Head, Listing Business while Jude Chiemeka joins as Divisional Head, Trading Business. Jude Chiemeka comes with over 24 years’ experience in Securities Trading and Asset Management across markets in Africa. He joined NSE from United Capital Securities Limited a subsidiary of United Capital Plc, where he was the MD/CEO. He had previously helmed affairs at leading investment banking firms in Nigeria such as Chapel Hill Denham Securities and Rencap Securities (Nigeria). He is a Fellow of the Chartered Institute of Stockbrokers and an alumnus of University of Lagos, Lagos Business School as well as University of Oxford, UK. Olumide Bolumole is a financial market professional with close to two decades of experience in capital markets across; asset management, investment banking, and merchant banking. His most recent role was as Acting Managing Director of FBNQuest Capital from 2018 to 2019. He joined the FBN Holdings Group in 2012 where he headed securities’ sales spanning FBNQuest Capital as well as FBNQuest Merchant Bank. Olumide started his career on the equities trade execution desk at De Putron Fund Management, a Hedge Fund based in the UK. He also worked at BGL Securities Ltd where he was head of institutional sales. His area of expertise is across asset classes with competencies in trading, business development and distribution. Olumide holds a Bachelors of Engineering degree in Aeronautical Engineering from the City University (London, UK) and a Masters of Information Systems from the University of Sheffield (Sheffield, UK).

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INSIGHT CCB: In the headlines for good reasons

he high profile case of the suspended Chief Justice of Nigeria (CJN) Walter Samuel Onnoghen has brought the duo federal agencies, Code of Conduct Bureau (CCB) and Code of Conduct Tribunal (CCT), into the media limelight -- for good reasons, though, this time around. The long arm of the law they superintended upon has caught up with an unlikely defendant. Owing to the circumstances of its action, particular the speed with which the man’s prosecution is being conducted and considering that a number of other high profile cases are yet to be dispensed with, the Federal Government is accused, in some quarters of being bias; but is it? Also, because the suspended CJN was an unlikely defendant, tongues have been wagging—for and against the trial of the suspended CJN. Emotions, sentiments and political affiliation aside a dispassionate analyst is supposed to examine the charges against the Onnoghen and provisions of the law being applied. If we find any incongruity then we can make a case for prejudice. What are the cases against Mr. Onnoghen? President Buhari went into detail to state them, relying mostly on the petition against him by a Civil Society Organization first became public about a fortnight ago. The president said: “Although the allegations in the petition are grievous enough in themselves, the security agencies have since then traced other suspicious transactions running into millions of dollars to the CJN’s personal accounts, all undeclared or improperly declared as required by law. “Perhaps more worrisome is the Chief Justice of Nigeria’s own written admission to the charges that he indeed failed to follow the spirit and letter of the law in declaring his assets, citing ’’mistake’’ and ’’forgetfulness’’ which are totally unknown to our laws as defences in the circumstances of his case. “One expected that with his moral authority so wounded, by these serious charges of corruption, more so by his own written admission, Mr. Justice Walter Onnoghen would have acted swiftly to spare our Judicial Arm further disrepute by removing himself from superintending over it while his trial lasted. “Unfortunately, he has not done so. Instead, the nation has been treated to the sordid spectacle of a judicial game of wits in which the Chief Justice of Nigeria and his legal team have made nonsense of the efforts of the Code of Conduct Tribunal to hear the allegation on merit and conclude the trial as quickly as possible considering the nature of the times in which we live. “Whether deliberately or inadvertently, we have all seen the full weight of the Chief Justice of Nigeria

descend on the tender head of one of the organs of justice under his control. There is simply no way the officers of that court, from the Chairman to the bailiffs, can pretend to be unaffected by the influence of the leader of the Judiciary. “ Political interests from the geopolitical region of Mr Onnoghen have risen in stout defense of their son. The main opposition party has raised objection to the manner in which the government of the ruling party has handled the issue. Commentators have raised issues with the political implications of the action of government. Representatives of several countries and regional bodies have expressed concern about the timing of the action, vis-à-vis the impending general elections. Sections of the civil society have threatened to take mass actions to protest government’s action. In addition to the backing of the Nigerian Bar Association (NBA) and other vociferous entities, the man himself has been fighting back, and it is clear that legal fireworks are in the offing before elections. There are also a large number of people who feel that the man should have honourably resigned if, indeed, he admitted his failure to declare some of his foreign accounts due to forgetfulness, even as they concede government’s untidy handling of the matter. They feel that a government that has committed to fighting corruption cannot pass up the opportunity to deal decisively a high profile case. However, unperturbed by the uproar, the duo agencies continue to carry on with their work as defined by the provisions of the constitution—the substratum of their mandate and powers. And that could be one of the reasons why all the efforts so far made in the courts, including, lately the Court of Appeal, to stop the CCT from going ahead with the trial of the suspended CJN have failed. The charges preferred against the suspended CJN include the allegation that he has maintained a domiciliary accounts in foreign currency which he has failed to declare, in violation of the code of conduct for public officers as highlighted above. If we stop at this and examine the law establishing the CCB and CCT, the former CNJ is in clear violation of the extant laws. First, he made an incomplete declaration; secondly, he maintained domiciliary accounts in violation of the provisions of the law governing conduct of the public servants in Nigeria. The Code of Conduct Bureau and Tribunal Act, Chapter 58 LFN 1990 outlines the mandate given to the Bureau, namely: “to establish and maintain a high standard of public morality in the conduct of government business and to ensure that the actions and behaviour of public officers conform to the highest standards of public morality and accountability.” To implement the above man-

Mohammed Isah, executive chairman/CEO, Code of Conduct Bureau

date, section 3, part of the Third Schedule to the 1999 Constitution of the Federal Republic of Nigeria as amended has provided an enabling legal environment for the bureau to do the following: • Receive declarations by public officers under paragraph 12 of part 1 of the fifth schedule to the constitution. • Examine the declaration in accordance with the requirements of the code of conduct or any law. Retain custody of such declaration and make them available for inspection by any citizen of Nigeria on such terms and conditions as the National Assembly may prescribe • Ensure compliance with and where appropriate, enforce the provisions of the code of conduct or any law relating thereto. • Receive complaints about noncompliance with or breach of the provision of the code of conduct or any law in relation there to, investigate complaints and, where appropriate, refer such matters to the code of conduct tribunal.” • Receiving documentations of declaration of public servants and following up on what has been declared to ascertain its veracity or not is a routine work at the CCT and public servants that were found to have made false declaration have been investigated, apprehended and arraigned before the court of competent jurisdiction the CCT to answer for their contraventions. The Implications of non-compliance with the codes is clear and the penalties are severe. They include: • Removal from office, vacation of official seat in any legislative house; imposition of fine; • Disqualification from member-

ship of house and from holding any public office for a period not exceeding ten 910) years and seizure; and • Forfeiture to the state of any property (ies) acquired in abuse or corruption of office. It is remarkable to note that the powers of the CCT were once contested up to Supreme Court and the verdict was “in matters pertaining to code of conduct the CCT is the highest court that matters”. Among the judges of the Supreme Court

‘

The lesson I see in the unfolding saga of the trial of the suspended CJN is the manifestation of the efforts of the present administration to build institutions that are strong enough to implement the provisions of the laws no matter the official or social status of the person involved

‘

Bashir Ibrahim Hassan

then was Onnoghen. Interestingly, schedule V part (ii) of Nigerian constitution was explicit and lists public servants to include: Chief Justice of Nigeria, Justices of the Supreme Court, President and Justices of the Court of Appeal all other judicial officers and all staff of courts of law. Thus, on the breach of the provisions of the code, the suspended CJN has questions to answer. On the argument put forward by some commentators that the CCT cannot try the CJN because the National Judicial Council is responsible for disciplining judicial officers, the constitution has settled that by defining a public servant and the judgment of the Supreme court at some point has affirmed the CCT as the court of competent jurisdiction . The lesson I see in the unfolding saga of the trial of the suspended CJN is the manifestation of the efforts of the present administration to build institutions that are strong enough to implement the provisions of the laws no matter the official or social status of the person involved. This shift, this non-interference in operations of our institutions right across the broad spectrum of officialdom, should continue. And putting round peg in round holes will help realize this dream. Leading the CCB today, at this watershed moment in the history of bureau, is Mohammad Isa, a legal luminary, a product of both Ahmadu Bello and Obafemi Awolowo universities. His knowledge of the Nigerian legal system is buttressed by his many years of teaching law at Usmanu Danfodiyo University Sokoto, his alma mater, and Bayero University Kano in recent years. The CCB has a long and checkered history. Established in 1979, it did not get its legal mandate until a decade later. However, since then, the Code of Conduct provision has maintained a permanency of some sort, in the 5th schedule of all constitutions following thereafter -- the 1989, 1993, 1995,1999 and the current 1999 constitution (as amended), confirming the importance of the bureau in the efforts to establish and maintain a high standard of public morality in the conduct of government business. The government should not lose sight of the need to adequately fund these institutions if they are to deliver on their mandates. The fight against corruption is not an easy one, especially in our country where sentiments easily becloud our sense of reasoning, justice and fairness as the case of Onnoghen shows. We clamour for the entrenchment of rule of law so long as it does not go against our vested interests. But Nigeria must entrench the rule of law to ensure justice, equity and fairness to all. This is the only road to peaceful, egalitarian and prosperous society we all desire. Hassan, a public commentator writes from Abuja

38 BUSINESS DAY NEWS

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NNPC privatisation, stable power top... Continued from page 1 the subcontinent one way or the other.

While Kingsley Moghalu, presidential candidate of Young Progressives Party (YPP), believes partially privatising the NNPC will make it a more profitable organisation, Atiku Abubakar of the main opposition People’s Democratic Party (PDP) pledges to fully privatise NNPC. Muhammadu Buhari of the All Progressives Congress (NNPC) has not said much about his plans for the state-owned oil company, while Fela Durotoye, presidential candidate of the Alliance for New Nigerian (ANN), and Omoyele Sowore, candidate of the African Action Congress (AAC), are looking to provide stable electricity power in Africa’s largest economy. Atiku, a former vice president, has vowed to break up the NNPC, which he called a “mafia organisation”. According to excerpts from Atiku’s policy documents ‘Let’s Get Nigeria Working Again’ and ‘Atiku’s Plan’, the PDP candidate plans to increase the contribution of the downstream sec-

tor to GDP from 0.5 percent to at least 2 percent by 2025 by increasing the quantity of petroleum being refined, consumed and exported. Atiku further plans to expand domestic gas production to meet power generation and manufacturing demand, as well as more efficient management of revenue flows from the oil and gas sector by ensuring transparency and accountability in the operation of all private and public institutions operating in the sector. Atiku also plans to strengthen the regulatory framework to create a functional, fair and transparent upstream and downstream oil and gas market and stir competition that will eventually improve efficiency and breed higher quality of service. The framework, according to the policy documents, will be such as to ensure confidence in the system and will include implementing the Petroleum Industry Bill (PIB), the National Oil Policy, National Gas Policy and Downstream Gas Act, which will enable the commercial regulation of the sector as well as improve transparent licensing and non-

discriminate access to pipelines. If elected president on February 16, Atiku plans to create policies and a transparent incentive regime that will allow for purposeful growth of the national reserve base for both oil and gas. To boost ‘producibility’ and increase reserves, Atiku says his government will reconsider the introduction of the marginal fields bid round and also reconsider the blocks bid round to encourage more exploration. In order to improve domestic supply of refined petroleum products, the former president says his government will incentivise investors willing to site modular refineries in Nigeria’s northern region to source crude from neighbouring Niger and Chad via pipeline to be constructed under Public Private Partnership (PPP). Luqman Agboola, head of research at Sofidam Capital, said it’s impossible, uneconomical and not feasible to privatise NNPC 100 percent within four years, adding that doing so would entail losing money. Agboola explained that it would be difficult to privatise some agencies under NNPC, like National Petroleum Investment Management Services (NAPIMS) which is in charge of JV and PSC with over 100

L-R: Bashir Ibrahim Hassan, general manager, business development, north, BusinessDay; Frank Aigbogun, publisher/CEO; Jude Nwauzor, head, corporate communications, Asset Management Corporation of Nigeria (AMCON), and Patrick Atuanya, editor, BusinessDay, at the BusinessDay Award of Excellence in Public Service 2018 held at Yar’Adua Centre in Abuja.

More businesses cry out after BusinessDay... Continued from page 1

dollar.

When the money came, approximately $50,000, their local bank denied a request to release the naira equivalent of the money at the prevailing market rate of N360 per dollar and balked at releasing the funds in dollars, citing an instruction that emanated from the central bank. They could only get regulatory approval for a disbursement at N305.9/$. The transaction dealt a blow on the project as it meant Azubike and his team had to give up N3 million in FX conversion loss. They had just got N15 million (using the N305.9/$ rate) despite making plans for N18 million (N360/$). “It created a setback for us given our estimations were done at N360/$,” Azubike told BusinessDay in an interview. “It was difficult to accept but there was nothing we could do, no one was willing to tell our story, they seemed scared, until the BusinessDay article yesterday,” Azubike added. He didn’t provide any more details on the deal. Azubike was one of several people, from senior executives of oil

firms to private equity investors, who said they had been shortchanged by the N306 rate. In an article published Monday, BusinessDay took the veil off a forex arbitrage that has been fanned by the N54 per dollar spread between the official N306/$ rate and the marketreflective N360/$ rate. It was about how Nigeria’s oil firms are made to sell their dollars without competitive bid. The scheme ensures that oil firms and other organisations that sell their dollars on the instructions of the NNPC lose over N32 billion ($89 million) annually. The money is enough to provide over 6,000 housing units for homeless Nigerians and build eight ultramodern hospitals that could reverse the $1 billion annual health tourism spend by Nigerians denied of quality healthcare on their home soil. The story was a follow-up to a previous article which examined the CBN’s long-standing N306/ USD exchange rate which has now remained for the third year running despite being inaccessible to the bulk of businesses and households. However, the central bank denied the allegations, arguing that there was “no room for arbitrage”.

“The FX rates across various markets governed and regulated by the CBN have been converging, leaving no room for arbitrage opportunities in Nigeria’s FX market,” the apex bank said in a statement Monday. Nigeria’s multiple FX rates have converged to some extent, but still range between the N306 rate, quoted on the CBN’s website and adopted by the Federal Government for its annual budget, and the N360/$ rate in the parallel market. This creates a N54/$ spread which is being exploited to devastating effects by faceless people able to lay their hands on the N306 rate. The CBN’s denial of the arbitrage opportunities in the market came as a surprise to many who asked questions of the apex bank’s FX market transparency. “Denials ring hollow when the CBN/Bankers Committee no longer publishes detailed data on forex sales (how much, when, to whom, for what purpose),” said Matthew Page, a former US intelligence community’s top Nigeria expert. “Such information ranks among the most secret/tightly guarded in Nigeria. Why hide what was once openly published?” Page said via his twitter handle Monday. Every market player, from com-

Tuesday 05 February 2019

assets that cannot be fully evaluated within two or three years. “What we can do is partial or gradual privatisation because what we have seen is not all privatisation is successful, like we have seen with the power sector, although there are a couple we can do away with very quickly in the downstream sector, like NNPC retail,” Agboola said. Muhammadu Buhari, incumbent president and candidate of the All Progressives Congress (APC), while declaring open the first-ever Nigeria International Petroleum Summit (NIPS) in Abuja in February, said Nigeria was ready to provide leadership for Africa in oil and gas. The country, he said, was open to private investment in the downstream sector and was vigorously pursuing “a programme for the rehabilitation of existing refineries so as to enhance capacity to supply locally-refined petroleum products in Nigeria and West Africa”. He said this was a key component of the National Petroleum Industry Roadmap and the 2017-2020 Economic Recovery and Growth Plan (ERGP) of his administration. “This summit will afford Nigeria a unique opportunity to showcase to the international community policy direction and efforts of government in the petroleum sector. This is especially in the new oil and gas exploration and markets, new measures to sanitise the sector, the expansion of investment opportunities to boost investors’ confidence,technologicaladvancementand Nigeria’scontentdevelopment,”hesaid. “Our effort in stakeholder engagement and stabilising the Niger Delta will continue to receive due attention to ensure sustainable level of production,” Buhari said. In December, at the 40th anniversary of the National Union of Petroleum and Natural Gas Workers (NUPENG) in Abuja, Buhari said to demonstrate his commitment to Nigeria’s reforms, he would give assent to the Petroleum Industry Governance Bill (PIGB) as soon as the National Assembly presents it to him. Buhari had last year declined assent to the PIGB, saying the provision of the Bill permitting the Petroleum Regulatory Commission to retain as much as 10 percent of the revenue generated unduly increases the funds accruing to the commission to the detriment of the revenue avail-

able to the federal, states, Federal Capital Territory, and local governments in the country. He also cited some legislative drafting concerns which would create ambiguity and conflict in interpretation if the Bill was assented to in the form it was presented. Last week, Buhari directed NNPC to extend its exploration to six basins in the country. “Exploration in our frontier basins is imperative to the economy of the country. I, therefore, have directed NNPC to intensify its campaign in the Chad Basin, to discover new hydrogen to extend the economy of the people within the region and the nation at large,” he said. “Our next level is to ensure that exploration is extended to Chad Basin, GongolaBasin,AnambraBasin,Sokoto Basin, Dahomey Basin, Bida Basin and Benue Trough, for more prosperous Nigeria. Gas and oil remain critical to the present economic development of our country and the future,” he said. While Buhari has not said much on his plans for NNPC, Femi Adesina, presidential spokesperson, on July 25, 2015, barely two months after Buhari was sworn in as Nigeria’s president, said the president would split the NNPC into two entities. “Mr President will soon split the NNPC into two entities. One will be an independent regulator and the other one an investor vehicle,” Adesina said. Nearly four years on, that promise is yet to come to fruition. Kingsley Moghalu, a former deputy governor of the Central Bank of Nigeria (CBN) and presidential candidate of Young Progressives Party (YPP), believes partially privatising the NNPC will make it a more profitable organisation. The political economist wonders why a presidential candidate will propose 90 percent sale of the NNPC and adds that public organisations should not be a tool for political agenda. “The NNPC needs to be partially privatised41percentor51percenttoeither private sector or government. This will turn the NNPC into a much more transparent organisation that is run consistently profitably,” Moghalu told Channels TV in a recent live interview. Moghalu also believes petrol subsidy is one of the biggest scams in Nigeria.

mercial banks to investors, uses the more market-reflective N360-N363 per dollar exchange rate. Even the CBN makes dollar interventions at around N354 per dollar. The CBN’s spokesperson, Isaac Okorafor, did not respond to earlier emails seeking answers to why the CBN continues to keep the rate. Until state-owned oil firm, Nigerian National Petroleum Corporation (NNPC), became the sole importer of petroleum products into Nigeria, the CBN justified the N306/$ rate by saying it was necessary to keep petrol prices low, meaning dollars were sold at a cheaper rate to independent importers. Now that the independent petrol importers have downed tools and left the responsibility to the NNPC, the rationale for keeping the rate is fast fading, yet it remains. The states are also adversely affected by the maintenance of the N306/$ rate. The dollar portion of federal allocations to the states is converted at the N306 rate instead of the prevailing N360 market rate. That implies that for every dollar of federal allocations due to the state, N54 is lost. State governors had complained about the practice but have since grown quiet. BusinessDay calculations show

that the states could have earned 17 percent more if the N360 exchange rate were applied. The Federation Account Allocation Committee (FAAC) disbursed the sum of N2.57 trillion to the states in 2018, according to the National Bureau of Statistics (NBS). Federal allocations are largely made up of crude oil export sales and Petroleum Profits Tax (PPT) as well as revenues from Value Added Tax (VAT), Import and Excise Duties, Royalties and Companies Income Tax (CIT). Crude export sales and PPTs account for nearly 70 percent of total allocations, which would equate to N1.79 trillion of allocations to states in 2018 ($5.8 billion at N306). If converted at N360 per dollar, state allocations would be N2.1 trillion, 17 percent more than the 2018 value. There is a long list of expenditure items that the states could address with the extra cash from FX revaluation gains, from investments in infrastructure to payment of workers’ salaries. That case has been strengthened by a likely minimum wage hike to N30,000, which is sure to put a strain on the finances of the states, most of which are barely able to generate enough income to meet their costs.

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Nigeria recorded 41,000 cancer-related deaths, 116,000 new cases in 2018 - WHO OYIN AMINU, Abuja

igeria recorded a total of 41,000 cancer-related deaths, 116,000 new cases in year 2018, the World Health Organisation (WHO, has said. Regional director of WHO, Matshidiso Moeti, disclosed this at an event to mark the World Cancer Day 2019 in Abuja. He called on stakeholders to address the current inadequate access to cancer diagnostics and therapies, the lack of knowledge on cancer and low health literacy levels, culturally inappropriate cancer prevention materials, mistrust of the health care system, and fatalism regarding cancer cure. The director said the theme of this year’s commemoration “I am and I Will,” was chosen as a reminder of the important actions that are needed to take

as individuals, groups, communities and political leaders, to reduce the impact of cancer on lives. “Cancer continues to be one of the leading causes of mortality Worldwide,” Moeti said. He noted that new cases and deaths from cancer continue to rise, from 14 million new cases and 8.2 million deaths in 2012, to 18.1 million new cases and 9.6 million deaths in 2018. He warned: “If current trends are maintained, the cancer burden in Africa is projected to double from 1,055,172 new cancer cases in 2018 to 2,123,245 cancer cases by 2040,” Moeti. Moet noted that among the most important serious challenges facing cancer patients in most African countries were poverty, late and poor cancer diagnosis and lack of medical cover. He further said the key drivers of the increasing cancer burden in Africa in-

cluded increasing exposure to known cancer risk factors such as tobacco use, sedentary lifestyle, unhealthy diets, alcohol use and environmental pollution. “Additional contributing factors in the rise of the cancer burden in Africa are the epidemiologic and demographic changes that are currently taking place. In short, the cancer burden is increasing as Africans are now living longer, in large part because of improvements in the control of the infectious causes of mortality and morbidity,” he noted. Moeti added that factors responsible for the high cancer burden in Africa include the absence of widely available information on the early signs and symptoms of cancer, late diagnosis, and misdiagnosis. Others are the absence of or weak referral systems, difficult access to care and treatment, high costs

of treatment and medicines, and weak health care systems. He explained that only 26 percent of low-income countries around the world reported to have public sector pathology services, while only 30 percent of these countries had cancer treatment services; however, 90 percent of high-income countries can offer such services. He added that significant progress had been achieved in diagnostics and treatment of cancers in high-income countries, which had resulted in better prognosis and enhanced survival rates for cancer patients in high-income countries with 5-year survival as high as 80-90 percent for cancers that can be treated when detected early. “Most cancer patients in Africa are diagnosed at a late stage and the prognosis for a positive outcome is lessened, even in cases where treatment is available and affordable,” Moeti noted.

Akinwunmi Ambode, Lagos State governor, flanked by Tunde Balogun, chairman, All Progressives Congress (APC) Lagos, (3rd r); Kemi Nelson, Southwest Zonal APC Women Leader (2nd l); Demola Seriki (l), and others during the inauguration of Local Organising Committee for the APC Presidential Campaign in the state at the Lagos House, Ikeja, yesterday.

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Mining, manufacturing, ECOWAS, AfDB sign construction top list of $22.7m Abidjan-Lagos over $90bn proposed highway agreement investments in 2018 - NIPC COWAS and the AfHARRISON EDEH, Abuja

ining, quarrying, manufacturing, construction, transportation and storage top list of over $90.9 billion worth of proposed investments in 2018, the Nigeria Investment Promotion Council (NIPC) said on Monday The report, obtained by BusinessDay, shows that $90 billion worth of proposed investments were announced for 92 projects in 23 states and the Federal Capital Territory (FCT). The report states further that mining and quarrying accounted for 35 percent of the total value, manufacturing 24 percent, construction 20 percent, transportation and storage 15 percent, while other sectors accounted for 6 percent. Comparatively, the proposed investments for 2018 show a 27 percent growth in value year-on-year, from the $66.36 billion figure recorded in 2017. It would be noted that the 2018 announcements were from investors in 20 countries, with domestic investors accounting for 33 percent of the value, followed by investors from United Arab Emirates at 20 percent. France stood at 18 percent, United Kingdom 10 percent, and the remaining 19 percent were from other countries. The FCT, according to the report, is the biggest beneficiary of the announcements with 21 percent (by value). Rivers State accounted for 18 percent, Lagos and Bayelsa 14 percent and 13 percent, respectively, while other states accounted for the balance of 34 percent.

rican Development Bank (AfDB), on Monday signed a $22 million agreement for the technical design to develop the Abidjan-Lagos highway. The signing of the Grant Retrocession Agreement between ECOWAS and AfDB and the contracts for the feasibility, environmental, socio-economic and detailed engineering designs was done in the ECOWAS Commission in Abuja. ECOWAS Commission president, Jean-Claude Brou, said the signing was in recognition of the decision of the Presidents of Nigeria, Ghana, Cote d’Ivoire, Togo and Benin in 2014 on the construction of the highway. “With the approval of the member states, the ECOWAS Commission forwarded financing requests of approximately 89 million dollars to several development partners, including AfDB and European Union, to fund the technical and project preparation studies. “We thank the AfDB for their swift response and subsequent identification mission undertaken in Dec. 2018 for possible financing. “The EU contribution of €9.13 million was mobilised through the African Development Bank who also contributed approximately $11.06 million making it a total of $22.72 million for the project.” The commission’s president added that contracts were also signed with three major consulting firms to undertake feasibility, environmental, socio-economic and detailed engineering designs for the six-lane highway. He said the 1,080 km Abidjan-Lagos corridor would connect some of the largest and economically dynamic cities in Africa and also link vibrant seaports, which served landlocked countries of the region.

CCT orders Onnoghen to appear in court February 13 Onnoghen: Senate discontinues Supreme Court case, lauds NJC intervention FELIX OMOHOMHION, Abuja

ode of Conduct Tribunal (CCT), Monday, ruled that the suspended Chief Justice of Nigeria, Walter Onnoghen, appear before it on February 13, the next adjourned date. The chairman of the tribunal, Danladi Umar, ruled that Onnoghen must appear in court on the adjourned date to take his plea before any application from him could be entertained. Earlier, the tribunal refused attempt by both the prosecution and defence teams to adjourned the case, pending the determination of the matter before National Judicial Counsel (NJC).

When the case was mentioned for hearing, Monday, a defence counsel, Adegboyegba Awomolo, told the court that the same petition over which Onnoghen was standing trial at the CCT, was before the NJC and should be stepped down until when the NJC would have finished with the matter. The prosecution counsel, Aliyu Umar, also agreed with the submission of the defence team. However, chairman of the tribunal, Danladi Umar, disagreed, insisting that the matter must go on. This resulted in a lacuna. Umar later stood down the matter for 30 minutes to give a ruling. At resumption, a member of panel, Atedze Agwaza,

apologised on behalf of the tribunal for the earlier refusal to grant adjournment. “I apologised over what has happened and behalf of the chairman, I promised it will never repeat itself again. You know the pressure this matter is generating, you know we are still in the learning process,” Agwaza said. Umar in his part also apologised for the misunderstanding, and adjourned the matter at instance of both parties to February 13. He said: “The presence of the defendant is needed at the tribunal. Plea must be taken before raising any objection to challenge the tribunal’s jurisdiction to entertain the matter. I will like to see the defendant on the next adjourned date.”

OWEDE AGBAJILEKE, Abuja

igerian Senate has ordered the discontinuation of the case it filed at the Supreme Court on the suspension of the Chief Justice of Nigeria (CJN), Walter Onnoghen. This follows the intervention of the National Judicial Council (NJC) on the issue. In a statement signed on Monday, Yusuph Olaniyonu, special adviser to the Senate president, the Senate announced that it had decided to give the NJC intervention a chance. “The Senate has therefore decided to discontinue the case it filed in the Supreme Court. It should

be noted that the case has been slated for hearing tomorrow (Tuesday). “This decision also affirm the confidence of the Senate in the ability of the NJC to successfully and creditably resolve the issues,” the statement read. President Buhari had on January 25 suspended Onnoghen based on allegation that he violated the code of conduct for public officers by not declaring his assets as required by law. The President said his action was informed by the exparte order of the Code of Conduct Tribunal (CCT), which also asked him to step aside and that the second most senior Supreme Court Judge, Tanko

Mohammad, be sworn in. On January 29, the NJC issued letters of query to the suspended CJN and the acting head of the Judiciary. While Onnoghen was asked to respond to allegations levelled against him, especially why he failed to declare all his assets as stipulated by law, Mohammed was also asked to explain why he allowed himself to be sworn-in by President Buhari without the recommendation of the Council, as stipulated by the Constitution. The two judges were given seven days to respond to the queries, while the body adjourned till February 11, to decide the fate of the two judges.

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Flour Mills maintains volume growth as leverage ratio improves BALA AUGIE

lour Mills of Nigeria (FMN) Plc,Nigerian food and agro allied Group, just released its nine month ended December 2018 financial statement that showed the consumer goods giant recorded volume growth amid a tough and unpredictable macroeconomic environment. The company said that continued strong sales and brand building focus has ensured a further growth in market share and strengthened the Group’s market leader position within the flour market. Flour Mills has reduced the amount of debt in its capital structure as finance cost reduced by 34 percent to N16.12 billion in the third quarter to December (Q3) 2018 from N25.13 billion the previous year; the reduction in debt was largely driven by settlement of overdraft facilities and replacement of high yielding low with more favorable loans. Also, total debt- long and short term- stood at N127.41 billion in the period under review, representing a 39.58 percent reduction from N132.92 billion recorded the previous year. Debt to equity ratio, which means the level of debt in the capital structure, fell to 83.55 percent in Q3 (Dec) 2018 from 88.13 percent the previous year. The consumer goods firm has a coverage ratio of 1.64 times operating profit- though lower than the 1.76 times recorded in 2017-, which mean the company’s earnings can cover its interest expenses. The lower a company’s interest coverage ratio is, the more its debt expenses burden the company. When a company’s interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable. 1.5 is generally considered to be a bare minimum acceptable ratio for a company and the tipping point below which lenders will likely refuse to lend the company more money, as the company’s risk for default may be perceived as too high. The results are largely a reflection of our focus on driving volume while improving on operational efficiency and ramping up strategic marketing and promotional activities to win over market segment in our food business,” according to Paul Gbededo, Group managing director of Four Mills. “Despite devastating effect of traffic congestion in Apapa on our operation, we are positive that we will see improvements across our major business segments before the close of the financial year, as we continue to focus on delivering on our promise of quality to our customers,” said Gbededo. Amid a myriad of challenges beleaguering consumer goods firms in

Africa’s largest economy, Four Mills recorded a profit after tax of N7.89 billion while it posted revenue of N401.12 billion. 2018 was tough for operators in the food and beverage industry as macroeconomic headwinds left them grasping for breath while they weren’t able to breakeven. When Nigeria existed its first recession in 25 years in the fourth quarter of 2017, one would have expected companies to thrive and magnify shareholders earnings. However, dwindling purchasing power among consumers, insecurity in the northern part of the country, decrepit infrastructure, high incidence of smuggling, counterfeiting locally manufactured products, and the menacing grid lock at the Apapa Ports have made it practically difficult for manufacturers to make profit or bolster margins as amid sky high cost of production. Other challenges bedeviling the industry are: high excise duties on products, exorbitant cost of haulage, and congestion at the Lagos seaports arising from the non-functionality of other seaports in the country. Firms like Flour Mills Nigeria Plc, Honeywell Four Mills Nigeria Plc, Northern Nigeria Flour Mills Plc, and Dangote Flour Mills that belong to the food sub sector of the manufacturing sector have had to weather the storm. But, many others especially the small and medium scale businesses in the sector had to close shops due to the unfavorable operating climatic conditions as macroeconomic shocks disrupted planning. The insurgency in some parts of the country- which has claimed millions of lives and displaced farmers- have hindered companies especially operators in the food and beverage from shipping their products to these crisis region hence resulting in loss of significant market share. Honeywell, a major player in the industry, attributed the key impediment to growth during its first quarter result to the Apapa traffic gridlock, which has virtually crippled business activities in Lagos State. Its management said the dilapidated road infrastructure and chaotic traffic situation in and around the nation’s premier port made it inordinately difficult, and enormously expensive to transport goods out of the factory in Tincan Island, adding that the challenge resulted in an effective freight cost increase of about 25 per cent. Of course the above bottle neck to growth will balloon distribution and administrative expenses and holding costs, as inventories will be lying fallow at the factory. The Management of Dangote Group says its sugar and salt companies lose about N 2 billion monthly

Paul Gbededo, group managing director/CEO, Flour Mills of Nigeria Plc

to the perennial traffic gridlocks on Apapa Port roads every month. If we multiply the amount N2 billion by 12 months, it then means that the company will lose N24 billion annually, an amount that could be plunge back into the business for future expansion or distributed as dividend to shareholders. Nigeria will need about $3 trillion in the next 26 years to bridge the infrastructure gap in the country, according to Nigeria Labour Congress (NLC). Marcus Adiele, Executive Director in one of the Flour Mills Company, says problem of logistics occasioned by the bad roads and the dwindling economy is taking a toll on the industry. “Flour Companies are just struggling. Apart from Dangote Flour Mills that relies on the parent company transport unit, for its transportation needs, the transport sector also lacks capacity in terms of ability to invest in quality trucks for movement of goods and services,” said Adiele. Experts bemoan that the influx of cheap and substandard products through the porous Seme borders is undermining the growth of operators in the food and beverage sub sector because it is creating undue competition, while the relative stability in the foreign exchange market has made it easy for importers to bring in goods, further stoking the supply glut. “Within the last nine months, one could notice a drop in demand for flour products, largely due to the availability of cheaper agricultural produce and the slowdown in economic activities as a result of the upcoming election. Also, we have influx of foreign Pasta

products. These are available at a lower price, which comes back to issue of appropriate tariff,” said Adiele. The President of the National Union of Food Beverage and Tobacco Employees (NUFBTE) Lateef Oyelekan equally decried smuggling as one of the problems of the food sector. “Smuggling in the Northern part of Nigeria and the Seme axis of the Nigerian border with Benin Republic is alarmingly worrisome,” said Oyelekan. Despite the ban on importation of flour based products like noodles and spaghetti, smuggled products dot the shelf of many markets and stores in Nigeria. To further exacerbate the already anaemic position of manufacturers, consumers have refused to open their wallets, as Nigerians are getting poorer by the minutes, while unemployment rates are rising amid growing population. According to a recent World Bank data, 92.10 percent of Nigerians live at below $5.50 a day. The reality is that most people cannot afford to buy a packet of Spaghetti or proteins. Nigeria with a population of 180 million people, has 87 million people, nearly half its population, in extreme poverty; as high inflation environment continues to erode discretionary income. More worrisome is that the country’s population is expected to hit 400 million by 2050, making it the third most populous nation in the world. This means there will be more mouth to feed in a country where policy makers are insensitive to the plight of the people.

BD MARKETS + FINANCE Analysts: BALA AUGIE

The Nigerian Industrial and Revolution Plan, published in 2014, identifies weak purchasing power as an obstacle to industrialization in Nigeria. Christian Orajekwe, equity research analyst at Cordros Capital said that Nigerians suffered significant erosion from Naira devaluation and increase in price of fuel while wages are yet to be at per with inflationary consequences of those events. “After the recession, a lot of middle income class left the country in search of greener pastures thus dampening sales volumes as patronage reduced,” said Orajekwe. Nigeria’s economy remains fragile as GDP grew by 1.50 percent in the second quarter of 2018, a downturn from 1.95 percent in the first quarter. President of the Manufacturers Association of Nigeria (MAN), Frank Jacobs said that these challenges are still manifesting in the form of high inventory of unsold finished products, inadequate electricity supply, frequent increases in electricity tariff in the face of poor services from distribution companies and abnormally high interest rates. Patronage by people for consumer goods products has slowed due and as expected firms’ inventory days has gone up hence resulting in huge holding costs. The cumulative average stock (inventory) turnover ratio of the largest consumer goods firms fell to 2.83 times or 234.05 days between 2018 and 2017 from 3.70 times or 144.52 days recorded in the period of between 2017 and 2016. Experts blame the country predicaments on the inability of policy makers to think out of the box and formulate policies that will make businesses thrive while contemporaneously creating jobs and lifting people out of poverty. China, world’s second largest economy- through copious investment infrastructure, aggressive industrial revelation, and investment in Agriculture business that began in the late 1970s- has lifted more than 800 million people out of poverty, slashing the rate from nearly 90% in 1981 to under 2%, as measured by the World Bank’s latest spending benchmark. Indonesia, South East’s largest economy, through diversification way from oil and accelerated economic reforms, recorded tremendous reduction in poverty rate as it was able to reduce unemployment rate below 7 percent from a high of 40 percent in 1960. However, stakeholders are upbeat that things will turn around with the completion of the Apapa road project, expected before the end of 2019; Stability in the international price of wheat and Seasonal improvement in flour products demand and the conclusion of the 2019 elections.

Tuesday 05 February 2019

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Nigeria’s oil sector recovery threatened by political tension OLUSOLA BELLO

… as investors remain cautious

he oil and gas companies are not in a hurry to put their money into the beleaguered Nigerian oil and gas industry, as they remain cautious in their approach to investment because of political uncertainty. Industry analysts say the political uncertainty that pervade the country is a big threat to oil recovery as no sensible investor would want to risk their hard earned money by investing in the sector now. Nigerian National Petroleum Corporation (NNPC) is in talks to raise up to $ 4.1 billion to develop blocs operated by its upstream arm. It is currently looking to raise $3.15 billion from Sterling Oil Exploration and Energy Production and $ 991.1 million from CMES-OMS Joint Venture.

The financing would be used to raise production from blocs operated by NNPC subsidiary, Nigerian Petroleum Development Company. Biodun Adesanya, managing director of Degeconek, and former president of the Nigerian Association of Petroleum Exploration (NAPE), says holding on to investment during election by oil and gas companies is standard thing that happens in third world countries. Also, Andy Olotu, former managing director of Schlumberger Nigeria, says it is normal for investors to exercise caution in a time like this, because they don’t know whether the incumbent or the new person that may win the election will change the policy direction of the industry when elected. He says the removal

of the Chief Justice of the Federation Walter Onoghen is another proof of political uncertainty, which will not make investors comfortable. Other industry operators say the fact that the militants in the Niger Delta are calm is not a guarantee that there is peace in the region. If the election does not favour some of the groups in the Niger Delta, they may stir up crisis in the region. They also say the political uncertainty of the country does not give anybody confidence to invest in the country. They are of the opinion that there are too many disenchanted groups in Nigeria, especially those who have perceived the elections as being rigged already because of certain actions of the government. The NNPC financed

its projects through some Alternative Arrangement, which allows its Joint Venture partners source for fund to carry out the projects. One of such arrangements is the Modified Carry Arrangement. Companies that provide such alternative funding are the ones now adopting wait and see approach. They want to see what happens after elections before they decide to put their money down to finance NNPC projects. Meanwhile, government claims to be making headway in putting the oil industry’s finances in order and stimulating investment. But the international oil companies (IOCs) will want to see the outcome of February’s presidential election, and whether licensing reforms are implemented before sinking billions into further offshore developments.

L-R: Paul Harriman, chief operating officer, Egbin Power Plant; Charles Ndonah, graduand; Kola Adesina, group managing director, Sahara Power Group plc; Bolaji Ahmed Nagode, director-general, National Power Training Institute of Nigeria (NAPTIN), and Omojola Olanike, graduand, during the NAPTIN/Sahara Power Graduating Engineering Induction Programme in Lagos. Pic by Pius Okeosisi

PDP dismisses endorsement of Buhari by retired generals OWEDE AGBAJILEKE, Abuja

eople’s Democratic Party (PDP) has dismissed the endorsement of President Muhammadu Buhari by 71 retired generals. The main opposition party argued that given the level of insecurity in the country since the President took over in 2015, no general worthy his rank would endorse his re-election bid. Addressing a press conference in Abuja on Monday, PDP national publicity secretary, Kola Ologbondiyan, questioned the rationale for the endorsement. He wondered why the retired Generals did not use their experiences to offer solutions to end the lingering

insecurity in some parts of the country. He said: “We consider this endorsement as names dropping, just to create an aura that does not exist around President Buhari. Young officers are being killed and no General has spoken on how to curb the insurgency and banditry. “Is it now that Nigerians are tired of the governance style of President Buhari that Generals will be endorsing him? When bandits are taking over Zamfara and even Katsina the home state of Buhari? The PDP does not believe any General worth his salt will do that.” On allegations by Information Minister, Lai Mohammed, that the PDP was conniving with hostile in-

ternational security forces to undermine the current administration, the PDP publicity scribe enjoined Nigerians not to take the Minister serious, adding that each time he speaks, he exposes the plot of his own party invariably. “Each time Lai Mohammed speaks, he comes out to make allegations that in a way reveals the plan they are making. “Not long ago, he accused the opposition of plot to bring people from Niger Republic to disrupt elections but at the end, who brought people from Niger Republic? It was President Buhari. If he claimed that the opposition is planning to scuttle the polls; like President Buhari, we are not aware,” he said.

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Tuesday 05 February 2019

Sims introduces ‘Burj Khalifa’ air-conditioners into Nigerian market

ims Nigeria Limited, an electronics and home appliances company, has launched the ‘Burj Khalifa’ air-conditioners into the Nigerian market. It is the Royal Tower smart-inverter airconditioner that comes with an unmatched 10-year warranty on its inverter compressor. According to Fab Uzor, executive director (corporate services) of the company, the Royal Tower inverter airconditioner is a best-in-class

and the very first of its kind in Nigeria, with several cuttingedge features and capabilities. For instance, it cools in less than 30 seconds and could cut energy consumption by up to 70 percent. Very interestingly, to cater for the interest of other customer segments, the company is also offering the benefits associated with the Royal ‘Burj Khalifa’ AC in its split-unit version, which comes in a very attractive design with beautiful golden trimmings.

AXA Mansard announces AXA’s partnership with Liverpool FC

XA Mansard, a member of the AXA Group, a worldwide leader in insurance and asset management, is proud to announce that AXA, the #1 Global Insurance Brand for the 10th consecutive year, is partnering Liverpool FC. AXA reignites its sponsorship strategy and is proud to join forces with one of the most famous names in sports. The multi-year partnership with English Premier League legends Liverpool Football Club (Liverpool FC) sees AXA become the club’s Official Global Insurance Partner. Commenting on the partnership, the CEO of AXA, Thomas Burbel said “I am delighted to announce this long-term partnership with Liverpool FC, which comes at a particularly exciting moment for AXA as the Best Global Brand Ranking, announced by Interbrand today, recognized AXA as the number one insurance brand for the 10th year in a row.” Building on shared values, AXA and Liverpool FC will create innovative experiences for clients, partners

and fans around the world, as well as making meaningful contributions to the local communities in which they both operate. Working closely with Liverpool FC’s players, manager, coaches and health professionals, AXA will also create unique and relevant content that will help support the shared goal of promoting a healthy lifestyle, delivering on the AXA brand purpose of empowering people to live a better life. Also commenting on the partnership, the head, brand and communications at AXA Mansard Insurance plc, Nkiru Umeh, noted, “We are excited about this partnership with Liverpool FC. It’s our way of identifying with the passion and energy of football fans both in Nigeria and all over the world, which reflects our passion to consistently provide quality products and services to our esteemed customers.” AXA Mansard Insurance plc is a member of the AXA Group, the worldwide leader in insurance and asset management with 166,000 employees serving 105 million clients in 62 countries.

Apapa, Tin Can, Onne ports handled 90% market share of cargo in 2017 – report AMAKA ANAGOR-EWUZIE

papa, Tin-Can Island and Onne ports accounted for about 90 percent of market share of all the cargoes handled in Nigeria’s seaports in 2017, the Nigeria’s Maritime Industry Forecast, a report released recently by the Nigerian Maritime Administration and Safety Agency (NIMASA), revealed. According to the NIMASA report, which quoted the National Bureau of Statistics (NBS) port statistics, 2012-2017, most of Nigeria’s 43,019,889 metric tons of merchandise trade including bulk, commodities or containers occur via the sea and the vast majority

of the containers arrive at Apapa Port, Tin-Can Island Port or Onne Port. The NIMASA report says port usage nevertheless has seen a decline in recent years as reported by the Nigerian Ports Authority (NPA), which owns the six ports complexes across the country including Lagos, Tin-Can Island, Calabar, Onne, Delta and Rivers ports. According to data from the website of the NPA, while non-oil cargo throughput rose to its highest point in 2014 with 84.9 million metric tons, there has been a decline in the volume of cargo throughput in the preceding years with provisional data for 2018 standing at 35.9 mil-

lion tons from January to September. “External factors remain the key reason for the decline experienced in Nigeria’s port usage. The volatile nature of international crude oil prices, led to a fall in the value of naira against other international currieries especially the dollar and, has also reduced domestic demand for imports,” the NIMASA report further explains. It further states that imports ban on certain consumer goods, which was part of the government’s effort to encourage domestic production and reduce the country’s trade deficit, also had impact on volume of import in the period under review.

Tuesday 05 February 2019

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NEWS Nigeria’s earnings from crude oil more precarious ... as investment bank downgrade price forecast OLUSOLA BELLO

oing by the forecast of Goldman Sachs, Nigeria’s extra earning from oil this year may be extremely meagre, thereby putting the projected earnings from oil by the government in a precarious position. The benchmark for her budget is put at $60 per barrel of crude oil for the year 2019 and a production level of 2.3 million barrels per day. But going by OPEC quota, Nigeria now produces about 1.6 million barrels of crude oil even though it has the capacity to produce more. The international investment bank has downgraded it forecast for oil price in 2019 from $70 to $62.50, the reason being that the cut in crude oil production by OPEC is not likely to deter a country like United Sates from flooding the market with crude oil, especially as it has recorded more aggressive production from Shale oil

“We expect that the oil market will balance at a lower marginal cost in 2019, given: higher inventory levels to start the year,” analysts, including Damien Courvalin and Jeffrey Currie, said. The persistent beat in 2018 Shale production growth amid little observed cost inflation, weaker than previously expected demand growth expectations, were other reasons for the crude price projections, adding that “even at our above consensus forecasts and increased low-cost production capacity.” Meanwhile, the US government is considering a release of oil from the strategic petroleum reserve (SPR), timed with potential outages from Venezuela. Venezuela has exported roughly 500,000bpd to the US, and because of American sanctions, those volumes are now in jeopardy. The only problem is that the SPR does not contain heavy crude. Already, the market for heavy oil is tight while that for lighter oil is much looser.

Global oil demand growth for 2019 is forecast to be 1.5 million b/d in the current STEO compared with 1.8 million b/d in the April STEO. OPEC in December 2018 agreed to take 800,000 barrels per day (bpd) off the market from the start of 2019. Pledges from 10 other producers aligned with the influential oil cartel, including Russia, brought total output cuts to 1.2 million bpd. Analysts have said OPEC may be less influential than it used to be, but still accounts for more than 40pc of global oil supplies against 53pc in the 1970s. Clearly, it has more clout when acting as OPEC, the wider cartel that includes Russia and Kazakhstan, which struck a supply cuts accord in Vienna in December. Despite OPEC’s heft, with mega-producer Saudi Arabia at the helm, undercurrents in the global energy marketplace are viewed as unsettling, said Petroleum Economist.

World Cancer Day: Obaseki lauds Buhari’s effort at providing care for patients

do State governor, Godwin Obaseki, has commended the efforts of the President Muhammadu Buhari-led Federal Government at prioritising care for cancer patients. Obaseki gave the commendation on Monday in Benin City, in commemoration of the World Cancer Day, a day set aside by the World Health Organisation (WHO) to draw global attention to the disease, review progress on treatment and management options with global stakeholders. Emphasising the need for people to go for regular checks to detect the cells early, the governor said: “Under president Buhari, we now have the National Institute for Cancer Research and Treatment (Establishment) Act, 2017. “The Act provides the

much-needed national direction in cancer research, control and treatment and guides scientific improvements to cancer prevention, treatment and care, coordinates and liaises between the wide range of groups and health care providers with an interest in cancer.” He added that few weeks ago, the minister of health, Isaac Adewole, inspected the ongoing installation of three new cancer machines at the Lagos University Teaching Hospital, Idi-Araba, Lagos, as part of efforts to bring cancer treatment closer to sufferers across the country. The governor further said, “He is aware of plans by the federal government to establish similar centres in other geo-political zones in the country to bring the treatment facilities closer to the people

and check capital flight occasioned by medical tourism.” He explained that the Federal Government inaugurated a radiotherapy centre with new multilevel linear accelerator equipment for cancer treatment in 2017 at the National Hospital Abuja, and urged Nigerians to re-elect president Buhari so that all parts of the country can benefit from his initiatives in health and other sectors of the country. According to the WHO in its 2018 publication, “cancer is now responsible for almost one in six deaths globally. On World Cancer Day (4 February) WHO highlights that cancer no longer needs to be a death sentence, as the capacity exists to reduce its burden and improve the survival and quality of life of people living with the disease.”

Total releases 15 finalists of Startupper of the Year Challenge

he process of short listing the entries submitted to the 20182019 Startupper of the Year by Total Challenge in Nigeria has been completed. The 15 candidates shortlisted by Total for the final include Amoo Rebecca with Eliminating Post-Harvest Waste project; Ayegba Victor, Unique Multiaxial Enterprise project; Ezenwere Emmanuel Arone, Aerial logistics project; Hanson Anietie, Saint Hanson HealthCare project; Ijir Aondosoo, My Waste, My Energy project, among others. Their projects were selected out of more than 5,212 entries through a questionnaire and a “Share for Likes” voting

phase, before being reviewed by social business professionals. The 15 finalists will receive coaching over two days before pitching their projects to the local jury, made up of Ayodeji Megbope, CEO, No Left overs; Bayo Rotimi, CEO, Quest Advisory Services Limited; Bosun Tijani, CEO of Co-creation Hub; Ikpe, CEO, Cars45; Funke Opeke, founder/CEO, MainOne Cable Company Limited; Iyinoluwa Aboyeji, partner, Future Collectives; Mosunmola Abudu, CEO/ founder, EbonyLife TV; Nasir Yammama, CEO/founder, Verdant AgriTech Limited; Obinna Ralph Ekezie, CEO/ founder, Wakanow.com, and

Yewande Zaccheaus, CEO/ founder, Eventful Limited. When the final selection process closes on February 12, 2019, the jury will announce the names of the three winners of the 2018-2019 Startupper of the Year by Total Challenge in Nigeria. These young entrepreneurs will receive financial support of up to N6 million personalised support and coaching from Total Nigeria and a communications campaign to publicise their project. There will also be a Top Female Entrepreneur award for one of the finalists to support her project. The prizes will be awarded at an official ceremony on February 13, 2019.

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Respite as Rivers APC back on ballot after gruelling court process … issues of ‘representation, jurisdiction’ now to be determined by Supreme Court … Tonye Cole describes judge as brave IGNATIUS CHUKWU

big reprieve seems to have come the way of the All Progressives Congress (APC) in Rivers State following its first ever victory in any court in Rivers State since may 2018. The Federal Appeal Court in Port Harcourt has granted the party’s stay of execution to a Federal High Court order barring the party from presenting any candidate in the upcoming elections at both state and federal levels. This leaves the key issues pending at the Supreme Court (representation and jurisdiction) to remain the

planks of judgment at the apex court. The APC is contending that the person that represented the party at the Rivers High Court as lawyer was not mandated to do so, and that the high court had no jurisdiction to hear it, being a pre-election matter. The matter seemed lost in the past few weeks as court after court including the Supreme Court granted one verdict or the other against the APC in the matter concerning its congresses in the state and the primaries. Magnus Abe of the same APC had secured an order at the state’s high court nullifying the congresses conducted after an order stop-

ping it. They went up to the Supreme Court for stay of execution but the APC lost all the way. Leveraging this, the state governor, Nyesom Wike and the People’s Democratic Party (PDP) went to the Federal High Court in the state to argue that since the delegates for the primaries were conducted by a nullified executive body, that the candidates that emerged were illegitimate. The court agreed and ordered the Independent National Electoral Commission (INEC) to remove all APC candidates out of the ballot. The action seriously dampened the mood of the party as none of their candidates

was allowed to campaign. The wind blew in favour of the PDP that appeared like a sole party. Even the BBC deleted the APC from their debates. Efforts to bring the party back to the ballot have been arduous, starting from the happenings at the Supreme Court. When the appeal court tried to hear the matter last week Tuesday, a section of lawyers disrupted the proceedings under the NBA boycott of courts. The judge was furious. The matter was moved to Friday, February 1, 2019 and ruling was moved to Monday, February 4, 2019. By 1pm, the Justice, Ali Gumel, began reading the verdict under tight security.

L-R: Damilola Ogunbiyi, MD, Rural Electrification Agency; Babatunde Raji Fashola, minister of power, works and housing; Okezie Ikpeazu, governor, Abia State; Muhammadu Buhari, president, and Rochas Okorocha, governor, Imo State, during the commissioning of Ariaria Market Independent Power Project in Aba, Abia State.

Nigeria lags behind peers in budget preparation, passage JOSHUA BASSEY

ike in the past years, Nigeria is again continuing its unsuccessful struggle to meet its annual budgetary cycle, lagging behind other African nations that are making progress in timely preparation and passage of their budgets, with positive impact on their economies and quality of lives of their citizens. Whereas, Nigeria’s fiscal year begins in January and ends in December, the budgetary trend from 2014 shows that the earliest time Africa’s biggest economy’s budget had been passed was in March 2016. The culture of delayed budget passage is continuing this year, as the National Assembly is yet to begin any serious deliberations on the N8.83 trillion 2019 budget presented to the joint sitting

of the legislators by President Muhammadu Buhari on December 19, 2018. And with the general elections just around the corner, analysts are concerned that the 2019 budget may be further delayed. Nigeria Employers’ Consultative Association (NECA) says the trend contrasts what obtains in other African countries, citing example with Ghana, Ethiopia and Egypt, which are running within their budgets’ cycles. According to Timothy Olawale, director-general of NECA, “In Ghana for instance, the budget for the 2019 fiscal year was approved in November 2018. In Ethiopia, the budget for the 2018/2019 fiscal year was approved few days before the commencement of the fiscal year in July 2018. Similarly in Egypt, the budget for their 2018/2019 fiscal

year was approved about a month to the commencement of the fiscal year.” The stability and predictability of the budgetary process of these countries could be one of the reasons why they are becoming the new desired destination for foreign investments,” the NECA DG said. Olawale, who expressed the concern of the Organised Private Sector (OPS) over the situation in Nigeria, described it as ‘worrisome,’ saying the importance of quick passage of the budget in any nation could not be overemphasised as it played a very critical role in economic development. “Nigeria’s fiscal year begins in January and ends in December; hence, we cannot begin to imagine the dire consequences of the late passage of the budget on national development and business growth,” he noted.

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Anudu wins 2018 MAN Reporter of the Year third straight time

usinessDay journalist, Odinaka Anudu, has won the 2018 Manufacturers Association of Nigeria (MAN) Reporter of the Year award. With this, Anudu retained the award he previously won in 2016 and 2017. He was announced the winner at the 2019 MAN annual media luncheon held in Ikeja, Lagos, last Wednesday. According to MAN, Anudu’s stories, submitted through a competitive process, were considered most incisive and in-depth, meeting all the criteria set by judges. His in-depth reporting and analysis of relevant issues in the manufacturing sector stood out among his colleagues,’ MAN said. Mansur Ahmed, president, MAN, said Anudu also won the award for going extra mile to do in-depth reporting and analyses of issues and policies affecting the manufacturing sector, adding that he placed key manufacturing challenges on the front burner of public discourse. “We congratulate Odinaka Anudu for being a serial winner of this award,” Ahmed said, adding that it is a demonstration of his doggedness. Anudu, BusinessDay’s senior editorial analyst, edits the Industry and SMEs sections, supervising a widelyread section produced every Monday called ‘Start-Up Digest’. He has won a number of local and international journalism awards, fellowships and grants. Internally, he won the 2018 BusinessDay Top Performer for the Editorial Department, making him the best journalist for the newspaper last year. He has won some nomi-

nations outside Nigeria, notable among which was his 2017 selection by the University of the Witwatersrand, Johannesburg, South Africa, for a fully funded investigation in Guateng. Anudu is a trained economist and philosopher. He is also an entrepreneur, public speaker and former schoolteacher. He was educated at Nnamdi Azikiwe University, Awka, and the United Nations Institute for Training and Research (UNITAR). He was formerly the secretary-general of the National Drug Abuse Control Association, receiving several training programmes in journalism, locally and internally. He has two books to his credit, ‘Top-Class English for Schools and Colleges’ (2009) and ‘Drug Abuse and Our Future: Who Will Bell the Cat?’ (2010). In its tradition, BusinessDay has produced other award-winning journalists, including Patrick Atuanya (editor), Chuka Uroko, Obinna Emelike, Iheanyi Nwachukwu, Daniel Obi, Teliat Sule, Josephine Okojie, Isaac Anyaogu, and Caleb Ojewale, among many others. BusinessDay is Nigeria’s leading business and financial newspaper, covering business, finance, economy, banking, politics, health and arts, among others.

Oil prices touch 2019 high on OPEC cuts, sanctions against Venezuela STEPHEN ONYEKWELU, with agency report

il prices climbed a two-month high near $64 a barrel on Monday as OPEC-led supply cuts and US sanctions against Venezuela’s petroleum industry discount forecasts of weaker demand due to an economic slowdown. International Brent crude oil futures were at $62.70 per barrel at 1455 GMT on Monday, 1 cent above their last closing figures. Brent rose by more than 3 percent in the previous session to their highest since Nov. 21, Reuters reported. US West Texas Intermediate (WTI) futures were at 55.20 per dollars barrel, down 6 cents from their last settlement. WTI settled 2.73 percent higher in the last session at its highest since Nov. 19. Output declines from

OPEC as they make good on their pact to curb a supply overhang were compounded by falling US oil rig counts and sanctions on Venezuelan oil sales. “While Venezuela’s output reportedly rose last month, fresh U.S. sanctions on the country could see 0.5 to 1 per cent of global supply curtailed,” said Vivek Dhar, commodities analyst for Commonwealth Bank of Australia in a note on Monday. The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran last year, experts said after examining details posted by the Treasury Department. OPEC oil supply fell in January by the largest amount in two years despite sluggish production declines from Russia, according to a Reuters’ survey.

Nigeria’s crude exports fell to 1.69 million barrels per day in January as against 1.77 million b/d in December. Akpo condensate flows fell to 92k b/d against 97k b/d in December. Combined crude and condensate shipments dropped to 1.78m b/d against 1.87m b/d. Russian oil output in January missed the target for the output cuts, Energy Ministry data showed on Saturday. Production last month declined to 11.38 million barrels per day (bpd), but that was only down by 35,000bpd from its October 2018 level that is the baseline for the pact. Russian Energy Minister Alexander Novak has said the country’s overall cuts from the October baseline would total 50,000 bpd in January. Russia has pledged to reduce oil output by 230,000 bpd from October.

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Bill Gross bows out at Janus Henderson

Investor dubbed ‘the bond king’ to focus on personal assets and charitable foundation Chris Flood

ill Gross, the investor once known as “the bond king”, has decided to retire from Janus Henderson to concentrate on managing his personal assets and private charitable foundation. The 74-year-old Mr Gross was once of the world’s most feted fixed income investors. He co-founded Pimco in 1971 and helped to build the Newport Beach-based fund house into one of the world’s most successful fixed income investment managers. But after a run of disappointing performances and acrimonious disagreements with other senior Pimco executives, Mr Gross moved to rival Janus Henderson in 2014. Assets in Mr Gross’s Janus Henderson investment fund dropped below $1bn earlier this year after a sustained period of client withdrawals and poor performance. It marked a spectacular reversal in fortunes. As recently as 2014, Mr Gross oversaw close to $300bn in assets as manager of the world’s biggest bond fund at Pimco. He has since

struggled to retain clients at Janus Henderson, which itself has suffered heavy outflows across the group. “At some point in all managers’ careers, they must realise they are not great any more. Alternatively, someone must tell them so. This has not been the case with Bill Gross or Janus Henderson,” Randy Waesche, chief executive of Resource Management, a US financial adviser, said in January. Dick Weil, chief executive of Janus Henderson, said on Monday: “I have known Bill for the past 23 years. Bill is one of the greatest investors of all time and it has been my honour to work alongside him. I want to personally thank him for his contributions to the firm.” In an interview with CNBC in August last year, Mr Weil conceded Mr Gross had “made some bad bets”. He added: “He believes still in his basic presumption that inflation is not going to get out of control. And so he hasn’t lost faith in his fundamental view. But he’s been wrong and wrong badly in the short term. And he’s accountable and we’re accountable for that.” Mr Gross, who has described himself as a “70-year old Justin

European powers recognise Guaidó as interim president of Venezuela

Spain, France, Germany and UK back opposition leader after Maduro fails to call elections

Michael Peel and Ian Mount

uropean powers have backed Juan Guaidó as Venezuela’s interim president in an effort to raise the pressure on Nicolás Maduro’s regime, even as divisions in the EU threaten efforts to forge a common stance. Spain, France, Germany and the UK followed through on Monday on a January 26 pledge to recognise Mr Guaidó as interim leader if the government in Caracas failed to call fresh elections within eight days. Other European states including Denmark, Austria and Latvia followed suit, in a co-ordinated show of support for the opposition leader and head of Venezuela’s national assembly to organise fresh polls. The EU had also given eight days for the Maduro government to announce elections, but has stopped short of saying it will recognise Mr Guaidó as interim president and has warned only of possible “further action” instead. The bloc’s position has been complicated by divisions within Italy’s governing coalition of the antiestablishment Five Star Movement and the far-right League over the crisis in Venezuela. Pedro Sánchez, Spain’s prime minister, said Madrid officially recognised Mr Guaidó as Venezuela’s president with the “clear horizon” of holding elections that “were free, democratic, with guarantees and without exclusions”. “In the coming hours and days, I will contact the EU and European

and Ibero-American governments that want to join forces with the cause of democracy in Venezuela to elaborate our position,” he said. The deep ties between Venezuela and Spain — its former occupying colonial power — have frayed badly during Mr Maduro’s presidency. The number of Venezuelans living in Spain more than doubled to 110,000 in the two years to July as conditions in their homeland deteriorated, according to official figures. In an interview with Spanish television on Sunday, Mr Maduro attacked Mr Sánchez and his plan to recognise Mr Guaidó. “This will go worse for you than when [former prime minister José María] Aznar got involved in Iraq,” he said. “I hope you do not stain your hands with blood alongside Trump in the Venezuelan crisis.” France’s President Emmanuel Macron said Paris recognised Mr Guaidó so he could “put in place an electoral process”. Jeremy Hunt, UK foreign secretary, said London would now recognise Mr Guaidó as “interim constitutional president until credible elections can be held”. He tweeted: “Let’s hope this takes us closer to ending [the] humanitarian crisis.” Mr Guaidó proclaimed himself Venezuela’s leader on January 23 and received the immediate backing of the US and several Latin American countries. Since then, the opposition has been seeking international support and urging the country’s military to abandon Mr Maduro.

Bieber”, became well known for his colourful investment letters which included discussions of such wideranging topics as the pleasures of sneezing, the passing of his cat and the problems of being a man in the modern world. His views on fixed income markets were widely followed. In 2016, he warned that the unprecedented

bond-buying programmes pursued by central banks after the global financial crisis had created a $10tn “supernova that will explode one day”. Aggressive reduction in benchmark interest rates below zero combined with quantitative easing programmes and investors’ ravenous appetite for bonds resulted in yields on more than $10tn of sov-

ereign debt sinking into negative territory. “Global yields lowest in 500 years of recorded history . . . is a supernova that will explode one day,” wrote Mr Gross in a tweet. Before the UK election in 2010, Mr Gross dubbed Britain’s bonds “nitroglycerine” and declared that the country’s high level of debt should warn investors off.

US Q1 earnings tipped for first decline in 3 years

Analysts slash their year-on-year forecasts as companies succumb to pressure on margins Nicole Bullock and Ed Crooks

all Street analysts have slashed their estimates for US corporate earnings in the first quarter and now expect the first year-on-year decline in almost three years. Consensus estimates point to a 0.8 per cent drop in earnings per share this quarter, according to FactSet, a dramatic markdown from a forecast of 3.3 per cent growth at the end of December. If expectations prove true, it would be the first such contraction since the second quarter of 2016. Concerns about earnings growth in 2019 surfaced last year and the outlook has continued to darken as the reporting season for the fourth quarter progressed. With about half of the companies in the S&P 500 having reported their results, earnings for the fourth quarter rose 12.4 per cent overall. But corporate tax cuts boosted profitability last year, setting up less flattering comparisons for 2019. What is more, the US has endured brutal cold snaps of late and companies have had to contend with the uncertainty of the longest government shutdown in US history. Still, the pressure was seen more on margins than top-line growth, forecasts showed. The drop in earnings forecasts came alongside a more modest decline in expected revenues for S&P 500 companies. Analysts were expecting top-line growth of 5.7 per cent this quarter versus 6.5 per cent

as of December 31. “Margin deterioration is going to be a big theme this year,” said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors. “What is driving that deterioration is higher labour costs and the friction created by the trade war, which disrupts supply chains.” Various sectors of the S&P 500 were facing risks including commodity prices and the slowdown in China. DowDupont, the chemicals group, was one of the companies warning about a margin squeeze. Howard Ungerleider, chief financial officer, said the company expected its petrochemicals and plastic division, set to be spun off by April 1 as a new Dow, would report operating earnings down more than 20 per cent in the first quarter, hit by a decline in margins that started last year and has continued into 2019. Meantime, energy companies led the decline in earnings estimates for the first quarter as a slide in oil prices late last year cast the 2019 outlook in doubt. Analysts were predicting a nearly 6 per cent drop in first quarter EPS for energy companies versus expectations of an increase of 16.5 per cent at the end of 2018. John Rielly, chief financial officer of the exploration and production company Hess, told analysts on a call last week that “all we’re doing now is trying to manage uncertainty” following the fall in oil prices in the past four months.* Brent crude has dropped from more than $86 a barrel in early Oc-

tober to just under $63 at the end of last week. Forecasts for the tech sector, home to Apple and chipmakers, went from a 2.2 per cent decline in profitability to an 8.9 per cent drop. Some high-profile tech companies have also raised the red flag on sales. Apple shocked investors in January by warning that a downturn in Chinese consumer spending and slower pace of iPhone upgrades globally meant the company would miss its own sales estimate last quarter for the first time in more than 15 years. Guidance for the current quarter was below the Wall Street consensus. Amazon raised worries with a cautious first-quarter sales forecast that came in below Wall Street estimates because of regulatory changes in India that forced the retailer to pull products from its site there. The company said it also expected to ramp up spending in 2019, which could eat into margins. Even as analysts dialled back their profit forecasts last month, investors bid up stocks by 7.9 per cent in January, the best start to the year since 1987. Investors have pointed to a dovish outlook from the Federal Reserve and rebound from oversold conditions in December as reasons for the rise. “The market is trading on the hope that this is a temporary issue and that we start to see some growth in the second quarter and that the back half of the year should be a whole lot better,” said Nicholas Colas, co-founder of DataTrek.

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NATIONAL NEWS

FT Bankers happy to see the back of dry January

Can Europe’s new financial channel save the Iran nuclear deal?

Fundraisings fade due to Brexit, the US shutdown and wobbles in global markets

What is the E3’s new trade mechanism and what will it achieve?

Katie Martin

or many parts of the financial markets it was a dry January. Brexit worries, the US government shutdown and some alarming wobbles in global markets all wiped out the usual new-year rush of fresh equity and bond deals. In the UK, the month drew the smallest number of new bond deals since 1995. Bankers tasked with drumming up new business insist, or hope, that this is a blip. Still, the slow spell is likely to leave a mark on revenues for the quarter. After producing 18 new listings on the stock markets in January 2018, the US generated just one in the same month this year. Europe also produced one, while there were none from the UK, according to data from Refinitiv. In large part, the lag was down to the longest US government shutdown in history, which ended late in the month after 35 days. While government workers were furloughed, it was impossible for companies to have their listing documents reviewed and approved. Loopholes were available, but few companies wanted to run the risk of inadvertently falling foul of rules and facing legal action after listing. “Everyone is sitting on a good pipeline of deals,” said Adrian Lewis, head of equity capital markets for Europe at HSBC in London. “But this is probably the biggest lag we have ever had at this time of year.” The scene was set for a slowdown back in October last year, when stock markets around the world took fright at the pace of US interestrate rises, cracks in the valuation of technology stocks and simmering tensions over international trade. In Europe, a run of high-profile but poorly performing initial public offerings in the autumn, including those from Aston Martin and Funding Circle, also forced companies and bankers to tap the brakes for fear of meeting drab investor demand. Several other companies yanked their plans to list. Unusually, given the smooth ascent in global stocks since the 2008 financial crisis, October’s market wobble proved to be more than temporary. Bankers say companies with a need to tap investors responded differently; some rushed into the market to get ahead of a likely tricky new year, while others decided to wait it out. Violent sell-offs over the typically sleepy final days of December and opening days of January gave those that demurred further pause for thought and delayed the long process of preparing documents for potential new investors. The flow of cash around the system for equity investors was also unhelpful. In total, equity funds suffered an unprecedented $100bn in outflows in December, according to EPFR, giving fund managers less new money to put to work. Globally, the amount raised in IPOs in January was down by more than 80 per cent from the same month last year, at $2.6bn, and the number of deals was down by nearly 60 per cent, at 45, the Refinitiv data show. Aside from those initial launches, the flow of deals from companies putting extra equity on stock markets was more robust, but it still fell sharply from the previous year to reach a decade low.

Tuesday 05 February 2019

Michael Peel

Mining equipment at work at an Australian mine jointly owned by Barrick Gold and Newmont Mining.

Barrick chief declines to set deadline to settle Tanzania row Neil Hume

ark Bristow, the head of Canadian miner Barrick Gold, refused to set a deadline for settling a longstanding dispute with the Tanzanian government that has hampered the operations of Acacia Mining. Barrick owns almost 65 per cent of London-listed Acacia, which has been unable to export gold-bearing ore from the country since March 2017 because of a row over unpaid taxes. Mr Bristow, who has a wealth of experience in Africa, said the two sides were moving closer to deal, using a framework agreed by Barrick’s executive chairman John Thornton and Tanzanian President John Magufuli. This involves the payment of $300m by Acacia to settle the dispute over taxes plus a 50:50 split (after capital expenditure) of the economic benefits of its mines. Mr Magufuli has refused to deal

with Acacia, so Barrick has been leading the discussions. “This is disaster for everyone. There is not one stakeholder that’s hasn’t suffered from this impasse. Not the long-suffering shareholders of Acacia, ultimately Barrick, the government, the Treasury and ultimately the people of Tanzania,” Mr Bristow said at the Mining Indaba conference in Cape Town on Monday. “The industry in Tanzania is hurting.” While Mr Bristow said he had “no doubts” there would be an agreement he refused to set a timeline. “You can’t negotiate anywhere, particularly in Africa with a deadline,” he said, adding that Mr Thornton had laid a “very good foundation.” “The principle for sharing 50:50 should be acceptable to the mining industry,” he said. He pointed that Barrick would not be able to deliver anything with Acacia board approval. Mr Bristow took the helm of Barrick in January following a merger with Randgold Resources,

the Africa-focused company he built into one of the world’s largest gold producers. On disposals arising from the combination of Barrick and Randgold, Mr Bristow said he would not “throw the baby out with the bathwater” and sell assets before fully understanding their geology. “Understanding out assets is important but there are some we have clearly signalled are noncore”, he said, referring to its 50 per cent stake in the Kalgoorlie mine in Australia. Analysts also reckon he will look to sell company’s Lumwana copper mine in Zambia. In the wake of the deadly dam disaster in Brazil that is likely to have claimed the lives of at least 300 people, Mr Bristow said his management team had taken another “quick look” at the Barrick waste storage sites to make sure there was no gaps in its due diligence. “We are paranoid about our tailings facilities,” he said. “We worry . . . about the . . . pressures on the walls,” he said.

The Trump era could last 30 years

But the populist movement is going to need more than electoral success Gideon Rachman

ow long is this going to last? Ever since the twin political upheavals of 2016 — Britain’s vote for Brexit and America’s election of Donald Trump — analysts have argued about whether this a temporary aberration, or the beginning of a new era. It is still early days. But it already seems likely that future historians will look upon the events of 2016 as marking the beginning of a new cycle in international history. The bad news for anguished liberals is that these cycles can last quite a long time — 30 years seems to be about average. In the years since “Brexit-andTrump”, a global populist movement has gathered momentum. The fact that Mr Trump is despised by much of the western establishment and media can obscure this point. But the US president has many admirers, some of them running governments around the world. Jair Bolsonaro, the new president of Brazil, Latin America’s largest country, is an avowed Trump fan. In the Middle East, the Saudi and Israeli governments much prefer Mr Trump to Barack Obama, his predecessor. His

fan club also extends into Europe. The governments of Poland and Hungary are closer ideologically to the Trump White House than to the European Commission in Brussels. Matteo Salvini, the deputy prime minister of Italy (and the country’s most powerful man), also sees Mr Trump as a role model. The horror show of Brexit means that there are few other European populist parties currently campaigning to leave the EU. But the anti-establishment impulse that gave rise to the Brexit vote is still gathering strength in Europe. It has found expression in diverse forms, from the gilets jaunes movement in France to the rise of the Alternative for Germany party, which is now the official opposition in the German parliament. Past precedent suggests that if a “populist era” takes hold, it might last as long as three decades. All efforts at historical periodisation are slightly artificial. But it is possible to identify two distinct eras in postwar western politics, both of which lasted roughly 30 years. The period from 1945-1975, known as les trente glorieuses in France, was identified with a period of strong economic growth across the west,

alongside the construction of welfare states and Keynesian demand-management — all played out against the international backdrop of the cold war. By the mid-1970s, this model had run into trouble in the Anglo-American world, with Britain suffering from “stagflation” and President Jimmy Carter diagnosing a national “malaise” in the US. A new era (often termed “neoliberal” by its critics) began in 1979 with the election of Margaret Thatcher in Britain, followed by Ronald Reagan in the US in 1980. In retrospect, this was also part of a global shift. In 1978, Deng Xiaoping came to power in China and initiated a policy of market-based “reform and opening-up”. The communist bloc in Europe also began to crack with the formation of the Solidarity trade union in Poland in September 1980. The foundations of a globalised capitalist economy were emerging. This “neoliberal era” also lasted roughly 30 years until it was discredited by the global financial crisis of 2008. As with the end of the trente glorieuses, it took a few years of uncertainty before a new ideological movement emerged. But that happened in 2016, with Mr Trump’s election and Brexit.

ermany, France and the UK have created a special financial channel to enable trade with Iran to continue despite the reimposition of US sanctions on Tehran. The new mechanism, unveiled by the so-called E3 last week, is an attempt to save a landmark international nuclear deal after Donald Trump pulled the US out of it last May. The Financial Times looks at the measures announced by the Europeans, what’s at stake — and whether they are likely to succeed. What exactly have the three European powers done? The group has created a “special purpose vehicle” or SPV to insulate international trade with Iran from the impact of US sanctions. The targets of Washington’s extensive measures range from the oil industry to the central bank in Tehran. The SPV is a France-registered limited liability company called Instex, headed by Per Fischer, a German banker. Germany, France and the UK, which were signatories to the 2015 nuclear deal, will all be shareholders. European diplomats say the idea is to cut the number of potentially sanctionable cross-border payments between Iran and the states with which it trades. This would be done via mirrorimage financial clearing mechanisms in Europe and Iran: essentially, a barter system, in which transactions for, say, Iranian oil exports, are matched against imports of industrial machinery. The Europeans plan to start cautiously, focusing first on supplies of essential goods such as pharmaceuticals and food that are likely to fall under humanitarian exemptions from US sanctions. But the details of how Instex will work are still far from clear. The E3 acknowledges it needs to work out the technical and legal means to make the SPV operational — a process likely to take months. If the mechanism is proved to work, it could eventually also be used by non-EU countries. Why have they created Instex? The new channel is a linchpin of European efforts to persuade Iran to stay in the nuclear deal, despite the US withdrawal. The EU wants to preserve the economic benefits that came from the lifting of sanctions and were crucial to Tehran agreeing to curb its nuclear programme. The creation of the SPV comes after the EU last year set up a “blocking statute” to forbid European companies from complying with the reimposed US sanctions — and threatening legal action against them if they did. Even European diplomats say the financial benefits of the much-delayed SPV are likely to be modest, as most big companies with US business interests will not want to risk antagonising Washington. Only smaller European companies with no significant ties to the US are likely to risk using Instex. However, many point to the immediate political dividend. Instex shows Tehran — and the US — that the Europeans are serious about the nuclear deal.

Tuesday 05 February 2019

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COMPANIES & MARKETS

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Wall Street slips at open while dollar edges higher Weaker pound helps UK stocks outperform continental European bourses Michael Hunter and Hudson Lockett

S and European stock markets slipped while the dollar continued to pull away from its January lows, with US earnings season expected to once again test sentiment as Google’s parent Alphabet reports quarterly figures. Wall Street’s S&P 500 inched 0.1 per cent lower at the start of trading, with the Google earnings due after the closing bell. The index finished Friday’s session just 0.1 per cent higher as a reassuring batch of domestic economic data were countered by unease over Amazon’s latest trading update, which revealed slower revenue growth at the closely watched company. Across the Atlantic, Frankfurt’s Xetra Dax slipped 0.3 per cent, with stocks in carmakers and industrial metal makers falling. The Europe-wide Stoxx 600 fell 0.1 per cent but London’s FTSE 100 bucked the trend, rising 0.3 per cent — helped by sterling’s sifter tone. There was some brisker action in Asia. Tokyo’s Topix rose 1.1 per cent, boosted by energy stocks. However, Sony fell as much as 8.9 per cent after the technology

and entertainment conglomerate lowered its sales guidance. In Sydney the S&P/ASX 200 rose 0.5 per cent with the financials segment up 0.9 per cent. Hong Kong’s Hang Seng finished a shortened trading day up just 0.2 per cent. Mainland Chinese markets were closed for the week-long lunar new year holiday. Forex and fixed income The dollar index rose 0.3 per cent to 95.87, taking it 0.7 per cent above its session low last week, when the Federal Reserve indicated it could soon be finished lifting interest rates. The yield on 10-year US Treasuries ticked up 2 basis points to 2.71 per cent. Sterling continued to head back down toward $1.30, as hopes that the prospect of a no-deal Brexit would be taken off the table by Westminster politicians remained unfulfilled. The pound lost 0.3 per cent to $1.3043. Commodities Brent crude, the international oil benchmark, slipped 1.2 per cent to $61.99 a barrel, having risen 4.7 per cent over the previous week. US oil marker West Texas Intermediate lost 2 per cent to $54.18. Gold fell 0. per cent to $1,311.31 per ounce.

Tesla to buy electric battery maker Maxwell in $218m deal Purchase comes as electric car maker endures volatile start to the year Eric Platt and Arash Massoudi

lon Musk-led Tesla agreed on Monday to buy a maker of battery technologies in an all stock deal, as the maker of the Model 3 seeks to bolster its electric capabilities after a bruising start to the year. The company clinched a $218m deal to take over Maxwell Technologies, a California-based developer of electric batteries that has counted Volvo-owner Geely, Lamborghini and General Motors among its customers. Maxwell is a maker of ultracapacitors, which can be integrated into regenerative braking systems and used to help lengthen the life of a vehicle’s existing battery for start-stop engine technology. The company also makes power storage systems for electric utilities. The takeover comes at a testing time for Tesla, as the company accelerates the production of its lower cost Model 3 and tries to move past a scandal last year that saw the Securities and Exchange Commission force Mr Musk to give up his role as chairman of the automaker. Tesla shares have been volatile to start the year, as investors balance an improving balance sheet with news the company’s chief financial officer Deepak Ahuja would step down. The deal comes less than a year since US securities regulators charged Maxwell and one of its former sales executives with

fraudulently inflating the company’s revenues. Maxwell and the executive settled the charges by paying $2.8m and $500,000 in fines respectively, without admitting or denying guilt. The fine was the second time the company had settled charges with US regulators, having been charged in 2011 with repeatedly paying bribes to government officials in China. It also settled those charges with a fine and did not admit or deny the charges. The sale of Maxwell was approved unanimously by the company’s board of directors, who expect the deal to be completed in the second quarter of 2019. Maxwell Technologies stockholders will receive fractional shares in Tesla worth $4.75 for each share of Maxwell they currently hold, a 55 per cent premium to Friday’s closing price. “We believe this transaction is in the best interests of Maxwell stockholders and offers investors the opportunity to participate in Tesla’s mission of accelerating the advent of sustainable transport and energy,” said Franz Fink, the chief executive of Maxwell. The sale of Maxwell was approved unanimously by the company’s board of directors, who expect the deal to be completed in the second quarter of 2019. Tesla shares slid 2 per cent in early morning trading on Monday to $306.78, while Maxwell stock climbed nearly 50 per cent to $4.59.

Gannett rejects MNG’s $1.4bn bid James Fontanella-Khan, Eric Platt and Anna Nicolaou

annett, the publisher of USA Today, has firmly rejected a $1.4bn takeover offer from rival MNG Enterprises, claiming it was not a credible buyer and had undervalued the media group. In a strongly worded statement, Gannett said that MNG, a hedge fundbacked US newspaper group known for hollowing out American newsrooms, had failed to address a number of concerns raised by the board, including showing how it would finance the deal. “Given MNG’s refusal to provide even the most basic answers to Gannett’s questions, it appears that MNG does not have a realistic plan to acquire Gannett,” the owner of USA Today said on Monday. “As a public company, Gannett’s board would engage with any party that makes a bona fide, credible proposal that appropriately values the company and is capable of being closed. MNG’s proposal fails that test.” MNG said it would consider nominating a slate of individuals to the Gannett board and that it had retained

boutique investment bank Moelis & Company to act as its financial adviser. “Gannett’s long-suffering shareholders cannot afford to wait any longer,” MNG said in a statement. “The only responsible course is for Gannett to engage in a genuine pursuit to maximize value, either from MNG or others with reported interest.” MNG, which owns more than 200 newspapers under its Digital First Media brand, including the Denver Post, the Orange County Register and the Boston Herald, offered Gannett shareholders $12 a share to purchase the company outright. Gannett’s shares rose about 20 per cent on the day MNG disclosed the offer, mirroring the premium baked into MNG’s proposal. Following Gannett’s bid rejection, its share price fell 4.1 per cent to $10.76 on Monday. MNG is controlled by Alden, which was founded by reclusive investor Randall Smith, known for investments in distressed assets. In recent years under the stewardship of Mr Smith’s protégée Heath Freeman, Alden has focused on buying up troubled newspapers.

The secretive hedge fund owners fashion themselves as saviours of bankrupt newspapers but the journalists working for their publications accuse them of slashing costs and interfering with editorial coverage. The Denver Post published an editorial last year accusing the hedge fund of being a vulture capitalist. In a 2018 editorial, the Post wrote that “since Alden took control, the decline of local news has been as obvious as it’s been precipitous.” Gannett said on Monday that it tried to engage with MNG, including sending two letters seeking more details about the offer. But the hedge fund-backed group said it would only talk to Gannett if it agreed to sign a non-disclosure agreement, which Gannett declined to sign. “An NDA is not a prerequisite for MNG to explain how it intends to finance and close the transaction MNG itself proposed,” Gannett said. Gannett’s board reiterated on Monday its plan to continue supporting the company’s digital strategy, which has been criticised by MNG, which owns a minority stake in Gannett.

Barrick forms JV to hunt for big gold mines in the Guiana Shield Alliance with Reunion Gold will see miner ramp up exploration activity in the region Henry Sanderson

arrick Gold has formed a joint venture with Reunion Gold Corp to explore for gold in the Guiana Shield in South America, as the world’s largest gold producer looks to discover the next big gold mine. The 50-50 alliance will seek to identify and acquire properties “that have the potential to yield discoveries” that could be large “Tier 1” gold mines, Mark Bristow, the chief executive of Barrick, said.

The agreement “expands Barrick’s exploration footprint in the Guiana Shield, a significantly underexplored region and one of the most prospective in the world for large scale gold discoveries,” Mr Bristow said. Since merging with Randgold Resources this year Barrick has pledged to focus on its largest lowest-cost gold mines that produce over 500,000 ounces of gold as well as develop its exploration pipeline. The venture will “explore for, develop and mine” projects in the Guiana Shield, which covers Guyana,

Suriname, French Guiana and the northern parts of Brazil, Barrick said. Barrick will pay $4.2m for Reunion’s existing projects, with subsequent funding to be split 50:50 between the two companies. Barrick will also pay C$5.5m to buy 36m shares in Reunion at a price of C$0.15 per share, giving it a stake of 19.9 per cent in the company. It will have the right to participate in future equity raisings by Reunion and assign one or more geologists to work full time on any of the company’s projects.

US stock futures lower ahead of another big earnings week Peter Wells

S futures are pointing lower on Monday morning, with investors preparing for another week of corporate earnings and potential headlines about US-China trade talks as guides for direction. On the lighter side of matters, the Super Bowl victory for the New England Patriots on Sunday could be a factor in the market looking

to head lower today, as per the socalled Super Bowl indicator. Futures for the S&P 500, Dow Jones Industrial Average and Nasdaq 100 were all down by about 0.1 per cent. That comes after the benchmark S&P 500 chalked up a third straight day of gains on Friday, following a strong US jobs report. Despite expected weakness in equities, government bonds

remained out of favour. That follows a sell-off on Friday that saw yields spike higher following a strong report on the US manufacturing sector. This morning, the yield on the benchmark 10-year US Treasury was up 2.2 basis points to 2.7128 per cent, while that on the policy-sensitive two-year was up 1.4 bps to 2.5242 per cent. The dollar was slightly firmer, with the DXY index up 0.2 per cent to 95.762.

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Tuesday 05 February 2019

ANALYSIS Wirecard discloses investigation into accounting allegations Olaf Storbeck and Stefania Palma

Fake news: How Lithuania’s ‘elves’ take on Russian trolls

EU parliamentary elections are seen as vulnerable to disinformation, but some countries are policing false stories

Michael Peel

he six continually updated screens in front of Sergeant Tomas Ceponis’ desk in Lithuania’s defence ministry do not transmit conventional military data. On one, he can monitor the most popular stories in the Russian language. Another display shows how content is being shared via social media, while a third tracks trending online news about several countries including neighbouring Belarus. “I believe in the 21st century we have to be ready not only to fight in kinetic wars, but in information wars, too,” says Sgt Ceponis, whose work at the Lithuanian army’s strategic communications department makes him part of an unusual military-civilian network in Lithuania to police alleged “fake news”. “We think if you can connect intelligence guys with psychological operations guys, it’s probably the best.” Lithuania sees itself as being on the frontline of a Russian offensive to sow misinformation in the western world. European politicians have become increasingly spooked by the spread of conspiracy theories, such as recent stories that President Emmanuel Macron planned to hand the French regions of Alsace and Lorraine to neighbouring Germany. That follows claims of Kremlin-backed meddling in the 2016 US presidential poll and the UK’s Brexit referendum the same year, as well as the row over the poisoning in the UK of Sergei Skripal, the former spy — in which the two men accused by London claimed on Russian television that they were tourists. “People realised, ‘Holy shit, this is like something out of a cold war thriller,” says an EU official from another formerly Soviet-occupied state about the Skripal incident. “The Russians have weaponised disinformation. It’s another side of the same coin as bringing the Ukraine electricity grid to a halt.” For the EU, one of the biggest sources of dread is the potential for such manipulation to play a role in the European parliamentary elections due in May. These elections have taken on greater importance this year because of the rise of far-right and anti-establishment parties — many with a pro-Russian bent — challenging the status quo across the continent. They are also uniquely vulnerable to outside interference. A combination of low turnout and protest voting means successful propaganda campaigns could reap high returns as small groups of motivated voters can have a major influence on the results.

Lithuania, like other neighbours shaped by Soviet-era Communist domination, has long pushed for a tough approach to disinformation both at home and at an EU level. Vilnius’ strategy is notable for the way it relies on close co-operation between groups in society — such as the media and the military — which in other respects have a more adversarial relationship. “Ten years ago there was no way to discuss these issues at all, because [EU] colleagues thought ‘it is not our business, it’s freedom of speech and that’s it’,” says Linas Linkevicius, Lithuania’s foreign minister. “It took time to convince them that lies are not freedom of speech.” The question is how much the experiences of this country of fewer than 3m people, formed by a very particular history with Russia, could — or should — be scaled up to a multilingual bloc of hundreds of millions, especially given the risk that opponents could brand government anti-disinformation work as censorship. So far, European efforts to guard against misinformation have been modest. They have also been dogged by legitimate concerns over how much state authorities should be involved in defining, still less tackling, the wide range of outright factual falsehoods and contested narratives often grouped under the unhelpful shorthand of fake news. The idea of involving institutions such as the military in combating disinformation — as Sgt Ceponis is doing in Lithuania — causes deep anxiety in parts of the EU. “There is a cultural issue here,” says one diplomat from a western EU state. “Do you come in really heavily and slam down the full weight of the state to expose this? Or do you expect that this is part of having a free media space?” The EU’s desire to fight back against disinformation has increased as more and more member states have experienced problems. In one case in 2016, Germany saw a barrage of claims by Russian media and politicians that foreign immigrants had abducted and raped a 13-year-old ethnic Russian girl named “Lisa” in Berlin. The authorities were criticised for being slow to discredit the story, though defenders of the German handling of the case say the need to check facts and preserve “Lisa’s” privacy made it hard to move quickly and decisively. In Spain, the government has accused Russia of spreading disinformation in an effort to deepen the crisis that erupted in 2017 over Catalan secession (Moscow has denied the claim). In December, EU leaders branded the spread of “deliberate, large-

scale, and systematic disinformation”, including as part of hybrid warfare, an “acute and strategic challenge for our democratic systems”. They called for an “urgent response that needs to be sustained over time” including to safeguard the integrity of the European elections. The EU response ranges from investing more in debunking false information to pressing social media companies to do more to curb their circulation. In late January, the European Commission said Facebook and other businesses needed to hire more independent fact-checkers and take down more fake accounts. Facebook said that before the European elections it would create a public database to show who was paying for politically driven advertisements and how often they were viewed. Julian King, the EU’s security commissioner, stresses that Brussels wants to see more action on disinformation but has no plans to be a “fake news” referee. “We are not saying whether particular pieces of information are true or false, or good or bad,” he says. “What we are trying to do is find a way of increasing transparency and provenance so an audience has a way of contextualising the information they are given.” Some officials in Vilnius and other central and eastern European capitals view the problem in starker terms. They see a landscape of evergrowing propaganda, including in Lithuania’s case via television stations that broadcast heavily in Russian. One government official says she can watch Russian language programmes on as many as 10 TV stations, which often buy Russian content because it is cheaper than EU programming and can be shown without translation. She says the output mixes “really nice to watch” shows on fashion and science with programmes that extol the supposed benefits of Russian imperialism and chip away at the growing weaknesses in the west. “They are using issues like Brexit and the tensions in the US as examples of really bad things happening in the west — like the west can’t manage itself,” the official says. Lithuania has a rising number of legal means to tackle alleged sources of disinformation — although officials insist these are aimed at stopping blatant factual fabrications and standardising broadcast rules, rather than stifling debate. Authorities can order electronic communications providers such as servers to shut down for 48 hours without a court order if they are used to mount a “cyberincident”, such as a disinformation attack.

erman payments provider Wirecard on Monday morning told investors that an external law firm has been investigating alleged accounting manipulations by “a member of Wirecard’s finance team” in its Singapore operations since May 2018, with the probe still ongoing. The company’s share price fell 35 per cent last week after the Financial Times reported that a senior Wirecard executive in 2018 was suspected, in an internal presentation, of using forged and backdated contracts in a string of suspicious transactions that raise questions about the integrity of the accounting at the fintech group.

software intellectual property valued at €2.6m”. Wirecard told investors that Rajah & Tann was mandated on May 18 to conduct a full independent investigation on the matter. “The audit is about to be completed,” Wirecard told its investors, adding that neither Rajah & Tann nor its own compliance department “have made any conclusive findings of criminal misconduct on the part of any officer or employee of the company.” Wirecard said on Monday that before commissioning Rajah & Tann, an internal investigation by its own compliance team “found no evidence to support the allegations and concluded that they were unfounded”, add-

Law firm Rajah & Tann, commissioned by Wirecard to investigate its Singapore office, found evidence indicating ‘serious offences of forgery and/or of falsification of accounts’, according to a preliminary report on the inquiry seen by the FT © Reuters

An external law firm, Rajah & Tann, commissioned by Wirecard to investigate the payment company’s Singapore office, found evidence indicating “serious offences of forgery and/or of falsification of accounts”, according to a preliminary report on the inquiry seen by the FT. Singapore police said in a statement on Monday that they were looking into “the matter” after the reports. Shares in Wirecard rose 18.8 per cent to €128.8 following the statement by Aschheim-based Wirecard which came after it last week called the FT reports “inaccurate, misleading and defamatory”. It told investors on Monday that one of its employees in Singapore in April 2018 raised concerns internally “about alleged actions of a member of Wirecard’s finance team in Singapore”. According to the statement, “the allegations related to potential compliance breaches in the area of accounting for the period 2015-2018 totalling revenues of €6.9m and costs of €4.1m as well as an internal transfer of

ing that it found “indications that the allegations could be related to personal animosity between the employees involved”. It said it “fundamentally contradict[s]” the FT reports. In Monday’s statement, the German payments company pointed out that it “has strong governance procedures and controls” and that its corporate governance and compliance unit “conducts its investigations confidentially and independently of the executive and supervisory board and provides reports to both boards on relevant findings”. The criminal prosecution office in Munich told the FT on Monday morning that it does not see a reason to start a criminal investigation into Wirecard as the potential misconduct did not happen inside Germany’s jurisdiction. “With regard to the potential criminal behaviour at question, German prosecutors can only become active if it was conducted domestically or by German nationals,” a spokesperson said, adding that neither seem to be case.

Tuesday 05 February 2019

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BUSINESS DAY

NATIONAL DISCOURSE

MICHEAL ANI

ven though about 91 political parties have been registered by the Independent National Electoral Commission (INEC) to contest in the forthcoming elections, Nigerian’s have staked their bet that the 2019 presidential elections will be a horse race between the ruling All Progressive Party (APC), and the opposition People’s Democratic party (PDP). The candidate of the ruling party, who happens to be Nigeria’s incumbent, is seeking re-election in Africa’s biggest economy, to seal up another four-year term after defeating former president Goodluck Jonathan in the 2015 poll. Buhari’ main challenger,

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Tuesday 05 February 2019

2019 elections: Ways and means versus hopes and dreams Atiku Abubakar, a 72-year-old businessman and former vice president, who after painstaking primaries, emerged as the party’s flag bearer, has promised to revive the economy of Africa’s biggest oil producer. Both candidates will be on the hot plate come February 16 as Nigerians will be marching to the poll to decide their next president. However, while both candidates are scrambling to secure majority votes to clinch the post of president, both seem to be deploying different strategies to woo the populace to their side. President Buhari is showing his hand via social media platforms and political rally’s and has focused greatly on grassroots campaigns. Several times, his Vice President, Yemi Osinbajo, has been spotted interacting with the youthful population in order to catch the young. He has also been seen having a haircuts in salons patronised by the common man, enhancing the humble accessible hu-

man face which has been his trademark since assuming the position of vice president. It is obviously calculated that accessibility and lack of airs will sufficiently connect with young would be voters, who are by far in the majority, and impress them sufficiently to cast their vote for his principal. His one on one campaign strategy is gaining him much popularity as he has embarked on a street to street campaign, preaching to Nigerians on the need to vote in the current administration to take the country to the “Next Level”. The opposition party, the PDP, is not letting up and is contesting the social media and other spaces with the incumbent, making noises on state to state political rally’s promising to deliver the sun, moon and skies. While these rallies might be important, it should be noted that numbers from these large crowds might be deceiving, as many of them constitute crowds for rent and will answer the call of any political piper, so long as

the price is right. They will and do attend, sing and dance at the rallies of any political party without obligation or commitment. Furthermore, it is difficult to know whether a larger portion of these people, are really equipped with the ingredient required to vote, that is Permanent Voters Cards (PVC). Another noticeable grassroots development by the ruling party, was the flag-off of the Trader Money Initiative, were it was said N10, 000 was being shared from the $322 million Abacha loot to the poor. Subsequently, the opposition parties have taken to social media and other media platforms ranting that the Trader Money initiative by the Buhari administration was being deployed as political incentives. Even though it is crystal clear that the development was for political interest, it should however ring a bell that the ruling party is flaunting carrots which are hard to resist but ‘D-Day’ will tell if the conscience of the masses is up for sale, or if they can grab the bread and

still be conscienscious enough to deploy their voters cards with sound judgement. Recently, president Buhari named Femi Otedola, the chairman of Lagos-based energy company Forte Oil Plc alongside five others as advisers for his re-election campaign, ahead of the presidential vote. Some punters say this may be a plus to his chances in the election bid because of the clout and colour of these business and charity juggernauts, while others say its all ineffectual gymanastics. At the end of the day though, we the people need security, decent and affordable health facilities, quality and affordable schools that do not go on strike every now and again. We need mortgage systems that can transform the kind of rents we pay now into installment payments for homes that will belong to us in 10 or 15 years. We need an investment friendly environment with leaders who will cushion our lives and not scorch our earth.

How to save Nigeria’s ailing industries ODINAKA ANUDU

n July 2018, Procter &Gamble shut down its once celebrated $300 million consumer goods plant in Agbara. The diaper line had been United States non-oil investment in Nigeria. The company said it was restructuring its Nigeria manufacturing operations to deliver a more effective business operation for now and sustainably for the future. The closure, however, reflected the challenges facing local manufacturers in the country. The company was operating in Ogun State, where multiple taxation was rife. Just last week, many Nigerians panicked when a national newspaper reported that PZ Cussons was considering leaving Nigeria as a result of its tough financial situation in the country. Social media picked the story and ran to town with it, generating a plethora of reactions from Nigerians at home and in the Diaspora. Though the report turned out to be false, it depicted challenges facing local manufacturers. PZ’s financial statement for the full year ended May 2018 showed that the consumer goods company’s revenue increased from N78.2

billion in 2017 to N80.5 billion in 2018, representing a 2.94 percent increase year on year. But profit before tax fell from N4.8 billion to N2.3 billion in 2018. Profit after tax also dropped from N3.6 billion to N1.9 billion. In the third quarter of 2018, PZ Cussons, like other firms, struggled from weak consumer discretionary spending in Nigeria and macroeconomic issues. Last year, Unilever sold its Blue Band. These further highlight key challenges facing manufacturers. According to the Manufacturers Association of Nigeria, key producers were unable to sell goods worth N149.23 billion in the first half of 2018 after producing goods worth N4.6 trillion. This is because the purchasing power of Nigerians is shrinking, with almost 44 percent of the population in extreme poverty and more than one out of five Nigerians without jobs. To boost the purchasing power of Nigerians, analysts say the government must provide incentives to enable local investors to thrive. Single-digit credit is key, and good infrastructure is inevitable to enable investors to create jobs and reduce poverty. Interest rate charged manufacturers by banks in the first half of 2018 stood at 22.9 percent, 0.25 percentage point

MANUFACTURING higher than 22.65 percent recorded in the same half of 2017, MAN says. “High cost of borrowing also persisted as a major challenge to the manufacturing sector,” MAN says, urging the government to recapitalise the Bank of Industry and Bank of Agriculture to make single-digit lending better. Foreign capital is also important, experts add, as investors eye deregulation of key sectors such as petroleum and foreign exchange market in the next dispensation. Forty percent of manufacturing expenditure goes to alternative energy provision, according to industry sources. Manufacturers spent N212.85 billion on alternative energy sources between the second half of 2016 and the first half of 2018, according to data from the Manufacturers Association of Nigeria (MAN). This is more than double what was incurred in the previous four halves. Manufacturers told BusinessDay that logistics costs have risen by 50 percent to 100 percent in the last two years, owing to the poor state of roads and lack of a good transport system. Firms bringing in raw materials into Apapa ports and those exporting commodities abroad have seen their costs swell on rising dwell

time, which results in high demurrage charges. Only 10 percent of cargoes are cleared within the set timeline of 48 hours now while the majority of cargoes take between five and 14 days to clear, according to a maritime report conducted by the Lagos Chamber of Commerce and Industry (LCCI).The report notes that some cargoes take as many as 20 days to be cleared at the ports. To reduce logistics hiccups along Apapa and Tin Can ports, Babatunde Ruwase, president of LCCI, recommended the finalisation of concessioning of Onitsha seaport. He further urged the government to improve the security situation along and within the Warri port in order to ward off militants and touts. These ports need to be regularly used to reduce burden on Lagos ports. Major sub-sectors from steel to automotive are suffering. The 2013 National Automotive Policy imposes 35 percent levy and 35 percent duty on imported vehicles, amounting to a total of 70 percent. Even with 70 percent fees paid on imported vehicles, importers of damaged or ‘accidented’ vehicles officially enjoy a rebate of 30 percent. What this has done is to encourage the importation of rickety vehicles, which make up

70 percent of imported cars today. Today, the age of most imported used cars in Nigeria is 15 years, whereas that of Algeria, Angola, Chad, Mauritius and Seychelles is three, according to a research done by PwC. The prohibitive levy and duty paid on imported cars have encouraged smuggling of vehicles into Nigeria. Officially, market for cars in the country is just 6,999 as against 555,716 in South Africa; 181,001 in Egypt; 168,913 in Morocco, and 94,408 in Algeria. “If we want to develop a market for 54 companies that have got licenses with 410,000 capacity plants and we import a huge number of used vehicles, how are we going to support vehicles being assembled, since the ones assembled locally will be more expensive?” Bambo Adebowale, chairman, Auto and Allied Sector group of the Lagos Chamber of Commerce (LCCI), asked in a recent interview with BusinessDay. Steel makers are experiencing low sales owing to smuggling and importation of cheap Chinese products and low patronage by locals. Analysts believe that Ajaokuta Steel needs to be privatised to provide inputs to manufacturers who always seek foreign exchange to import raw materials.

Tuesday 05 February 2019

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SDP, PDP, 65 parties threaten to boycott 2019 election over Onnoghen’s suspension KELECHI EWUZIE

ocial Democratic Party, Peoples Democratic Party and Sixty-five political parties have threaten to boycott the 2019 general election in protest against the suspension of Justice Walter Onnoghen, Chief Justice of Nigeria by the Federal Government describing it as “illegal and unconstitutional. The parties in a joint document endorsed by all of them called on President Muhammadu Buhari to do the right thing and reverse the suspension of the CJN immediately. According to the parties, “The CJN, as a judicial officer, can only be removed from office by the President acting on an address supported by two-thirds majority of the Senate for his inability to discharge the functions of his office or appointment or for misconduct or contravention of the Code of Conduct. “Anything contrary to this procedure is unconstitutional and serves only to harm our democracy.

Walter Onnoghen

Furthermore, the National Judicial Council, (NJC), has not recommended the suspension or removal of the CJN, neither has it exercised any disciplinary action against the CJN. Thus the purported suspen-

sion of the CJN by President Buhari must fail”, Part of the statement by the parties reads: “We emphatically state here that the purported suspension of the CJN is unequivocally illegal, inde-

2019 polls: Group admonishes INEC to be impartial SIKIRAT SHEHU, Ilorin

he Independent National Electoral Comm i s s i o n ( I N E C ) ha s been admonished to be transparent and ensure that 2019 election is fair, credible and reflect the will of Nigerians. Salam Maruf Olanrewaju, the national president of the Progressive Care-Initiative (PCI), who made the call in Ilorin, said the group has resolved to partner and support any party or presidential candidate that is committed to move Nigeria forward. Olanrewaju said:”We believe in good governance and rules of law, we have been calling

for a full blown federal system in which states would truly be states. As an organization, we will support any presidential candidate committed to the lofty idea. “As a progressive minded organization which is known for peaceful coexistence in Nigeria, we remain resolute to ensure that all our people live in peace and harmony, during and after the upcoming elections.” He therefore, enjoined youths not to allow themselves to be used as political thugs or trade their future for pot of porridge from any politician. Similarly, he encouraged everyone to come out in their multitude to perform their civic

responsibility and vote for their candidates saying, “we are calling on INEC to do their official part as an impartial umpire by ensuring that the elections are not only free and fair but seen and accepted by all and sundry”. Olanrewaju, assured that no member of PCI will get involved in political hooliganism, nor be used as instruments of violence or instability by anybody in the forthcoming elections. “We are fully ready and willing to cooperate with appropriate law enforcement agencies to monitor events and proceedings of the elections and ensure the much desired peace is given to a pride of place before, during and after the elections,” he stated.

fensible and thus unconstitutional. The improper process adopted by President Mohammadu Buhari, in suspending the CJN and in appointing Justice Tanko Mohammed as the Acting Chief Justice of Nigeria, is seen by a majority of Nigerians as based on an improperly obtained Order of the Code of Conduct Tribunal, thus making it illegal. “Furthermore, it is unconstitutional because it violates and goes against the Constitution of the Federal Republic of Nigeria. Painfully, the actions of President Buhari is intended and contrived to precipitate a constitutional crisis in our dear country and further polarize Nigeria unnecessarily. “It should be noted that the office of the CJN is not a ministerial position, rather it is a creation of Sections 230(1)(a) and 231(1) & (2) of the Constitution of the Federal Republic of Nigeria. That office, the CJN, is the head of an independent arm of our tripartite government. “It should also be noted that the removal of the CJN is addressed

in our Constitution in Section 292, wherein a strict process is outlined and must be followed. Generally, the three independent arms of the government must be involved in both instances of appointment and removal of the CJN. Thus, the president, in acting alone and unilaterally, lacks the power and authority to suspend the Chief Justice of the Federation. “President Buhari’s purported suspension of the CJN in reliance on the improperly obtained and improperly issued Order of the Code of Conduct Tribunal, which is actually under the Executive Branch, is to put it mildly, wrong, misplaced, ill-conceived and deserving of immediate reversal. “It is very distressing that the timing of this illegal act by President Buhari, being so close to the upcoming general elections, has brought suspicion to the intent of the President regarding the fairness of the forthcoming general elections and possibly tainted the elections dispute resolution process, such as the creation of election dispute tribunals.

Onnoghen: Senate discontinues Supreme Court case, lauds NJC intervention OWEDE AGBAJILEKE, Abuja

he Senate has ordered the discontinuation of the case it filed at the Supreme Court on the suspension of the Chief Justice of Nigeria (CJN), Walter Onnoghen. This follows the intervention of the National Judicial Council (NJC) on the issue. In a statement signed on Monday, Yusuph Olaniyonu, Special Adviser to the Senate President, the Senate announced that it has decided to give the NJC intervention a chance. “The Senate has therefore decided to discontinue the case it filed in the Supreme Court. It should be noted that the case has been slated for hearing tomorrow (Tuesday).

“This decision also affirm the confidence of the Senate in the ability of the NJC to successfully and creditably resolve the issues”, the statement read. President Buhari had on January 25 suspended Onnoghen based on allegation that he violated the code of conduct for public officers by not declaring his assets as required by law. The President said his action was informed by the exparte order of the Code of Conduct Tribunal (CCT), which also asked him to step aside and that the second most senior Supreme Court Judge, Tanko Mohammad be sworn in. On January 29, the NJC issued letters of query to the suspended CJN and the acting head of the Judiciary.

2019: Lagos PDP rejects INEC, NURTW collaboration on election materials …Say collaboration aimed at rigging Iniobong Iwok

head of the forth coming general election, the Lagos State People’s Democratic Party (PDP) has rejected the recent pact signed between Independent National Electoral Commission (INEC) and National Union of Road transport Workers (NURTW) on the movement of election materials before, during and after the polls. In a press conference in Lagos, the Lagos State chairman of the party, Adegbola Dominic, said that the party would not accept the pact

because it had been confirmed that NURTW was an arm of Lagos State All Progressives Congress (APC), stressing that the admission and confession by the party’s spokesperson in Lagos, Joe Igbokwe, that NURTW members were card carrying members of APC had suggested that the general elections in the state would not be credible if NURTW members are allowed to handle sensitive documents like election materials. Dominic noted that the viral pictures showing NURTW members and APC supporters at elections in Ekiti and Osun States in an open relationship with the national leader

of APC, Asiwaju Tinubu was an attestation to the suspicion, while, appealing to INEC to terminate the agreement and seek collaboration elsewhere. The politician also requested that INEC ban Lagos State APC from participating in the forthcoming election in view of how APC had militarization the polity, recruited thugs and notorious criminals into their folds as members, who brazenly assault, kill and maim peace loving Lagosians at will. He Charged law enforcement officers to ensure that adequate security is provided to secure members of PDP and all Lagosians, insisting

that APC leadership in Lagos State should be arrested and prosecuted for the fracas in the party’s recent mega rally where APC members, freely used dangerous weapons like machetes, guns, knives, in which a leader of the NURTW, MC Olumo, was shot. According to him, “The unacceptable agreement was signed between INEC and the NURTW, particularly relating to elections in Lagos State. The Lagos state PDP chairman condemn and reject in totality the announced agreement between the INEC and NURTW with respect to transportation and delivery of election materials

before, during and after the polls. We hinge our condemnation on the admission, confession by, Joe Igbokwe, that officers and members of NURTW are card carrying members of APC”. We demand that INEC should terminate it and seek collaboration elsewhere. “The recent undeniable assault hardship foisted on lagiosian following the so called mega rally is still freely where the APC members freely used weapons. We expect law enforcement to provide adequate security for our member and all lagosian. The APC leadership should be arrested for the said fracas at the so called mega rally”.

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INSIGHT/INNOVATION

Mr. President, please stop! OGHO OKITI

t emerged in the last two weeks that the Nigeria National Petroleum Corporation (NNPC) is expanding its search for oil in the North and in the middle belt. Ordinary, it is wonderful to search for oil, but early this week, media reports suggested that the Managing Director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, was quoted to have called for patience in finding that oil, coming at the back of continuous and intense search for oil in the region in the last four years. In relation to this search, the Punch newspaper had written a very damning editorial on November 20, 2017. They made three important points in the editorial that is worth reporting here. First, they argued that the search was a “wrong step (by the President) ordering the NNPC to double up its search for oil in the North”, for which it thought the government has spent US $340 million and N27 billion in seismic expedition. Second, the editors argued that the search for oil in the Lake Chad area started almost forty years ago, “initiated when President Buhari was Federal Commissioner for petroleum. Third, the editors argued,“politics, rather than sound economics, underlies the compul-

sive oil search”. It is not surprising that this is back in the news, two weeks to election. But that is not the focus of my piece. Rather, it is that there is a thin thread that runs through the actions and policies of the President, and if he wins the election, and does not change, nor embark on economic reforms, will be dangerous for the economy. This symptom of the actions and policies of the President is best illustrated from the angles of the three cardinal campaign issues. And I now take them one after the other. First, let us look at the economy. In 2014, in the period leading to the election, the economy had just become the largest economy in the Africa, surpassing South Africa, after rebasing. Nonetheless, it suffered from three important weaknesses. While the economy was growing, it was not providing sufficient and adequate jobs for the youths emerging from our poor and weak education system. It was also dependent majorly on a single export, and thus required that we diversify our exports. Third, and tied to the second point is that government revenue was not as diversified as the economy. So, the purpose of voting for Mr. President was to correct what was wrong, and not to “kill” the economic growth of those years. There are similarities with the fight against corruption. Nigerians acknowledge there was serious problem with corruption. Everyone knew it had become a systemic issue, widespread and has severe implications for Nigeria’s growth, prosperity and inequality. They also recognise that the fight against corruption in the past had been one sided, and that the indiscipline of those in leadership had allowed corruption

to continue to fester and also grow. Finally, they recognise that our politics is largely motivated, tainted and sustained by corruption. In the context, without necessarily saying so, they had imagined that Mr. President, with a perception and record of prudence, would deal specifically with these aspects of corruption. In the case of security, the President campaigned and responded to the fears by Nigerians that insecurity was becoming a grave and potent danger, capable for dividing and destroying the country. Indeed, the motivation also was very simple. From 2013 onwards, it had become really scary that Boko Haram had become an unbearable menace and a full-blown terrorist organisation, especially given the consistent suggestion at the time that it was linked to Al Qaeda and the El Shabab in Somali. There is no doubt that the President and his handlers will make references to the successes it has recorded on the security front and in the area of corruption. On the security front, there have been successes, but they will also admit that those successes have been below expectation. Nigerians voted for a President they believe will decisively deal with Boko Haram because they believed his knowledge of the military would be helpful. But it is in the area of corruption that this thin thread becomes clearer. The successes in the area of corruption are largely personal, meaning that whatever successes recorded are not in response to some systemic change but on personal conviction by those in certain level of leadership. Also, and this is very important, while the President has pursued vigorously fighting the corruption of the past, he has not made the same progress in fighting the corruption

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On power, we are missing out on investments because we believe the poor should not pay more for power. They already do!

of the present. We thus have a President that has vigorously used the policies established by previous administration in fighting the corruption by opposition, ironically using the policies established by them in fighting them, especially the Biometric Verification Number (BVN) of our accounts. In conclusion, the thin thread that runs through the search for oil, and the actions and policies of the President is the extent and scope of the imposition of the personal belief of the President. What we see is that the progress is associated with the personal belief of the President and not a display of how we think it should really work. In the search for oil, it would have been better to rely on sound economics, and by extension, rely on the major oil companies to search for the oil. Yes, if there is oil there, they will find it. In fighting corruption, it will be better to rely on systemic approach, and make reforms that build on the progress made and not on the personal conviction of the President. On the economy, it should not be about the expansion of the State, but on critical economic reforms that will pull in investments. For instance, while we are searching for oil in the North, the country is missing out on investments in the sector because we have not passed the PIB. On power, we are missing out on investments because we believe the poor should not pay more for power. They already do. So, please, Mr. President, stop this personal approach to Presidency, especially because any progress made will not be sustained. I thank you. Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

How is INEC doing? PROPHYLAXIS

AYULI JEMIDE

s the elections get closer Nigerians have all eyes on the Independent National Electoral Commission (INEC). Not many Nigerians would want to be in Professor Mahmood Yakubu’s shoes at this moment. The toughest job in Nigeria today is the INEC Chairman’s job. INEC must be coming under a lot of pressure from the All Progressive Congress for ruling that the party has no candidates on the ballot in Rivers and Zamfara States. INEC has stood its ground on this matter and that should be applauded. INEC has come under pressure from opposition parties on the appointment of Amina Zakari as collation officer and stood its ground on this matter.INEC has also responded positively to pressure from international observers to change some of the provisions in the 2019 Elections Guidelines to give all the stakeholders a bit more comfort. It is also worthy of note that INEC has announced that it will throw open the processes that would take place at the Situation Room during the 2019 elections to enhance the integrity of the election. It is therefore assumed that the Situation Room will have international observers, accredited

representatives of the various political parties and election monitors. As regards the status of uncollected PVC’s, people believe, and I share the view that INEC has not done very well in the way and manner PVC’s are collected in certain parts of the country. In some parts of Nigeria traditional rulers are used to aid collection of PVC’s and in other parts the local government offices were PVC’s are collected are not properly manned. It should be noted that there are 774 local government areas but the population of each local government area differs. It is therefore unfair not to have several collection centers for the populous local governments. At the Eti-Osa Local Government in Lagos State where I was supposed to collect my PVC the process was quite shoddy and disorganized. With each person who comes to collect PVC’s the officials have to shuffle large packs ofPVC’s to manually search for your PVC. Many people were told their cards could not be found but the cards were later found when the citizens persisted. Still on uncollected PVC’s I find it difficult to believe that in this day and age INEC cannot update the number of uncollected PVC’s on a daily basis from 774 local governments. Why do we have to wait until 8th February when PVC’s collection ends to know which states or local governments has the least or most collected PVC’s. This information is very important from a voter mobilization stand-point. INEC has also been taken to court in relation to voting guidelines for Internally Displaced Persons (IDP’s). INEC has come up with guidelines for IDP voting under an amendment to the

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… your doubt on INEC’s independence is the more reason why you should vote – the more voters out there, the more difficult to discount or miscount in favour of one party or the other

2010 Electoral Act which provides that: “in the event of an emergency affecting an election, the Commission shall, as far as possible, ensure that persons displaced as a result of the emergency are not disenfranchised”. The question being asked is whether the IDP’s in the IDP camps are subject to any ‘’emergency’’ to warrant a separate guideline on how votes are collated for IDP’s. This becomes a significant issue when we consider that there are approximately 2 to 3 Million IDP’s from available statistic. As regards collation the IDP guidelines provide for E-Collation which has raised eyebrows because INEC has insisted that collation of results for the rest of the country shall be manual. So why are IDP’s different? The plaintiffs in this case have sought a declaration that it would be unconstitutional and illegal for INEC to conduct elections in IDP camps, without first complying with the 1999 Constitution and the Electoral Act (2010) by compiling and maintaining as part of the national register of voters, the names of all persons entitled to vote in each IDP camp. In my view, there is no such thing as a totally independent umpire. Umpires are human or manned by human beings who have their innate preferences and prejudices no matter how subliminal. The INEC Chairman and staff of INEC may not be outwardly partisan, but they surely know who they would vote for if they were allowed to vote. I frankly do not expect INEC officials not to have their own favoured candidates. They are also Nigerians and have their personal views on who deserves to be elected. That said, Nigerians simply expect them to ensure that their personal views

do not influence the way they do their jobs. Therefore, their sacred duty is simply to create a level playing field to enable all parties compete favourably. Unfortunately a fair number of Nigerians do not think INEC intends to create a level playing field. Why? Ebuka Obi-Uchendu the host of the TV programme Rubbing Minds could not have put this any better when he said in relation to INEC that a team is only as good as its last match or last few matches. He then went further to say that a fair number of Nigerians generally believe that INEC’s last two outings in Ekiti and Osun state gubernatorial elections indeed showed INEC’s propensity to use some‘’remote control’’ in collation of election results. I recall that even International Observers attested to this.On the back of this perception, some voters I have spoken to have said elections are not about who votes but about who is counting and since they have no faith in INEC they do not intend to vote. My simple response to people who are of this view is that your doubt on INEC’s independence is the more reason why you should vote – the more voters out there, the more difficult to dis-count or mis-count in favour of one party or the other. Go out there and vote! Don’t be discouraged! Go get you PVC before the 8th of February when the collection centers at the various local government offices close. Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

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