Businessday 05 jul 2018 by BusinessDay

Why P&G shut $300m plant one year after launch by VP RAZAQ AYINLA, Abeokuta, OLALEKAN IPELE & OGHOGHO EDOSOMWAN, Lagos

he harsh economic environment emerging in the country is currently affecting a crop of multinational companies operating in Nigeria, especially in Agbara industrial estate as Procter and Gamble Nigeria Plc has shut its $300 million manufacturing plant in Ogun State, the single largest non – oil investment from the United States. According to the BusinessDay findings, the plant was reportedly

shut due to a combination of high cost of production accumulated from the import duties payable on 75 percent of imported raw materials, uncompromised stance and failure of the firm to bribe Customs officers and other revenue agencies in a bid to stay in the business and high cost of power generation, which prompted non-profitable operations for the company. The new line of the plant was recently inaugurated by Yemi Osinbajo, current Nigerian Vice

L-R: Jim Ovia chairman, Zenith Bank plc; Emmanuel Macron, president of France, and Aliko Dangote, president/ CE, Dangote Industries Limited, at the France – Nigeria Business Forum lunch with the visiting President of France, in Lagos on Wednesday.

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news you can trust I **THURSDAY 05 JULY 2018 I vol. 15, no 90 I N300

MTN Nigeria IPO to begin Nigeria has a subsisting Debt August after SEC’s go ahead Management Strategy – DMO See commodities on page 2

OLALEKAN IPELE & ABIMBOLA HASSAN

DIPO OLADEHINDE

he worry of investors and stakeholders awaiting an announced date for the much anticipated MTN Nigeria initial public offering (IPO) is finally over as sources privy to developments have confirmed to BusinessDay exclusively that August is the targeted beginning date for the planned sale following final go

ontrary to the publication on the front page of ThisDay Newspapers of July 4, 2018, Nigeria has a duly approved Debt Management Strategy. The Debt Management Strategy was approved by the Federal Executive Council in June 2016 and has an expiry date of December 2019. The document is available on https://www.dmo.gov.ng/publications/other-publications/

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Beer wars: Golden Guinea files N10bn suit against Pabod ...over ‘Eagle Stout’ trademark Iheanyi Nwachukwu

olden Guinea Breweries Plc has approached the Federal High Court demanding for general damages in the sum of N10 billion from Pabod Breweries Limited, a company which AB InBev has controlling equity saying Pabod infringed on its trademark for the production of Eagle Stout. Already, the case has been Continues on page 38

Continues on page 38

Inside President Macron at TEF Interactive Session. Emmanuel Macron (2nd l), President of the French Republic; Tony O. Elumelu (2nd r), founder, The Tony Elumelu Foundation and chairman, UBA Group; Remy Rioux (l), CEO, French Development Agency (AFD), and Jean-Yves Le Drian (r), French Foreign Affairs Minister, during the signing of an agreement between the Tony Elumelu Foundation and French Development Agency, held at the sideline of the interactive session hosted by the Foundation for President Macron and young African entrepreneurs in Lagos on Wednesday.

Fidelity, FCMB, Union lead mid-tier banks in recovery from recession P. 2

More trouble for Buhari, APC, as nPDP, others form rAPC Innocent Odoh & James Kwen

… blast Buhari for incompetence, divisiveness

ore trouble awaits President Muhammadu Buhari and the ruling All Progressives Congress (APC) ahead of the 2019 general election. This is as the warring nPDP faction in APC has joined forces with some aggrieved members of the Congress for Progressive Change, CPC, All Nigeria Peoples Party,

ANNP and Action Congress of Nigeria, ACN to form the “Reformed All Progressives Congress”, rAPC. The group said it is now the “authentic” faction of the party. The newly formed rAPC has President Muhammadu Buhari’s political ally, Buba Galadima as National Chairman and Tinubu political associate, Fatai Atanda as National Secretary. rAPC also

has Zonal, state, local government and ward officials across the Federation. Addressing journalists in Abuja alongside the leader of the defunct nPDP, Abubakar Baraje, rAPC National Chairman, Galadima cited cases of injustice, harassment of other members of APC, failed campaign promises as the reason for their action.

He particularly alluded to the acrimonious Congresses and convention recently conducted by the APC which is at variance with the constitution and principles of a progressive party. “You will recall that in the build up to the 2015 General elections, some political parties and groups

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2 BUSINESS DAY NEWS

… have strong earnings potential – Moody’s

years but it is likely to stabilise because most foreign-currency loans and loans to the oil and gas sector have been restructured. Sound capital buffers, which compare favourably to global peer averages, mitigate some of the banks’ high asset risks. Union, for example, raised N50 billion ($162.5 million) via a rights issue late last year and now exhibits the highest tangible common equity in the mid-tier peer group at 21 percent of risk-weighted assets. Most banks also hold sufficient liquidity to cover upcoming foreign currency obligations; only Diamond and Fidelity have Eurobonds outstanding, while all five banks have bilateral foreign-currency debt outstanding, according to Moody’s. Profitability, though, is likely to remain subdued over the next 12-18 months, with an average net income to assets ratio of just 1 percent, due to a reduction in the yields of government securities, muted loan growth and high provisioning costs. Over the longer term, however, the earnings potential for Nigerian mid-tier banks, and the country’s wider banking sector, is positive. This potential rests on banking assets still being small compared to GDP (30%), about 60 percent of adults not having bank accounts, and the retail lending sector remaining underserved.

igeria’s mid-tier banks -Fidelity Bank Plc (Fidelity), Union Bank of Nigeria Plc (Union), First City Monument Bank Limited (FCMB), Sterling Bank Plc, and Diamond Bank Plc (Diamond) -- will grow their earnings materially over the long-term, says Moody’s Investors Service (“Moody’s”) in a report published yesterday. However, operating conditions will remain challenging over the next 18 months, as the economy slowly recovers from the 2016 recession. The rating agency’s report is an update to the markets and does not constitute a rating action. “Nigerian mid-tier banks suffered more severely than the top five largest banks from the 2016 recession and are still recovering,” says Akin Majekodunmi, Vice President and Senior Credit Officer at Moody’s. “Over the longer term, though, we expect their earnings growth prospects to be positive.” Moody’s views Fidelity, FCMB and Union as best positioned to weather current operating challenges, given their sound capital and liquidity buffers, but expects Diamond to face greater headwinds due to the bank’s larger stock of soured loans and modest foreigncurrency liquidity. Loan performance for the midtier banks has deteriorated in recent Continues on wwwbusinessday online.com

VAIDS: FIRS to publish list of defaulters, mid-July ...as agency begins collating list Tony Ailemen, Abuja

Foreign Exchange Market

and amount collected. According to him “the response has been very good. We are collating all the figures both at the federal levels and the states levels and I believe that by the middle of July, we should be able to tell the nation the exact progress in terms of the numbers that have declared, amount that have been paid and amount that is going to be paid on instalments.” Fowler declared that those who refused to take advantage of the grace period given by the Voluntary Assets Income Declaration Scheme (VAIDS) policy, which expired at the end of last month, would be made to pay their taxes alongside the required penalties. On alleged multiple taxation by government agencies, Fowler said “Let me say once again that we do not really have a situation of multiple taxation. You only have multiple taxation when you pay the same tax to different tiers of government. What we have found out is that a lot of people categorize any payment to government as a tax. For example if you receive fine, a penalty they call it a tax. If you pay for the parking space, they call it a tax. Those are the things you refer to as user charges and not taxes.”

he Federal Inland Revenue Services (FIRS), Wednesday said it will publish the list of tax defaulter’s mid-July following the commencement of compilation of data on tax defaulters, as the deadline given for the Voluntary Assets Income Declaration Scheme (VAIDS) policy expired on June 30. Babatunde Fowler the Chairman of the FIRS gave this indications after a session with the Federal Executive Council (FEC), chaired by President Muhammadu Buhari, on Wednesday where he briefed the Council on the ratification of automatic exchange of information with other countries. “I came here today to attend the meeting with the Minister of Finance to ratify the automatic exchange of information. Basically what this means is that Nigeria as a country exchanges financial information with other member countries which hopefully should improve our revenues and also ensure that all Nigerians that have investments or businesses or incomes abroad will pay their taxes as at and when due,” Fowler said. The FIRS Chairman also spoke on the issue of VAIDs compliance Continues on wwwbusinessday online.com

fgn bonds

Treasury Bills

Spot $/N

I&E FX Window 361.40 CBN Official Rate 305.70

3M -0.31 11.61

5 Years

10 Years

20 Years

0.46 12.72

0.05% 13.60%

0.14% 14.28%

0.11% 14.26%

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Fidelity, FCMB, Union lead mid-tier banks in recovery from recession Oluwatosin Dokunmu & Sobechukwu Eze

FMDQ Close

Everdon Bureau De Change

Thursday 05 July 2018

Indigenous oil firms with expired leases risk bank foreclosure on FG’s inaction

… Kachikwu says review of 80 open oil acreages underway

ISAAC ANYAOGU

he Nigerian partners in arrangements through which oil mining leases (OMLs) and Oil Prospecting Leases (OPLs) were acquired have the spectra of bank foreclosure and an uncertain future hanging over their operations due to the tardiness of the Nigerian government in renewing their expired leases. According to data from the Department of Petroleum Resources, the main regulator of the Nigerian Petroleum sector, by June 2019, 53 oil leases comprising OMLs and OPLs would have expired. Ibe Kachikwu, minister of state for petroleum resources, on July 3, updated the list saying there are now 80 open acreages currently under review. “I think this is another area

where the government has failed to demonstrate its readiness to deal with issues before they become sticky,” says Chuks Nwani, an energy lawyer. For these companies, it’s get stickier because it is like running a factory in a building where the lease is in contention, or driving a rented car without a license. Operating without clarity and unsure of what kind of capital investments to make, they face an uncertain climate which adds to their business risk. Some say their bankers are threatening foreclosures due to the uncertainty surrounding renewal of their leases. Expired leases revert back to the government which can either re-award it or call for new bid rounds, but operators have a right of first refusal. Many have applied but the government has not responded. One operator said that

an approval Kachikwu granted some companies last year were later revoked. However, the minister in his speech at an oil conference in Abuja on Tuesday, said: “One of the reasons why we have done so well is the fact that quite frankly, in my three years of serving as petroleum minister of state, I haven’t received a single call from the president urging me to do an allocation to somebody or give a block to somebody, I have not received such a call.” Considering that major policy decisions and reforms have stalled on the inaction of the Federal Government in the last three years, it is not clear if this president’s non-interference stems from a lack of awareness or just a paucity of ideas. Continues on wwwbusinessday online.com

Kunle Majekodunmi, state chairman, SDP, Ogun State (l), with Opeyemi Agbaje, SDP gubernatorial candidate, Ogun State, during the declaration of Agbaje for the gubernatorial election in Ogun State.

FUNDS

Nigeria Infrastructure Debt Fund announces N4.4 distribution after 29.7% 1yr return LOLADE AKINMURELE

hapel Hill Denham, the fund manager of the Nigeria Infrastructure Debt Fund (“NIDF” or the “Fund”) has announced a quarterly distribution of 4.40 Naira per Unit for the second quarter of 2018, the fund manager said in an exclusive email note to BusinessDay, Wednesday. The minimum investment amount is N10 million. This is the fourth consecutive and largest quarterly distribution made during the Fund’s first year of operations. Along with an interim distribution in August 2017, the total cash distributions made by the Fund during its first year of operations have aggregated to 17.10 Naira per Unit- that gives a compounded

pel Hill Denham and Fund’s CIO, annualized yield of 18.2 percent. During the first full year of said: “We are extremely pleased operations, NIDF achieved a total with the NIDF’s performance durreturn of 29.7 percent. That return ing its first year of operations. “We have delivered to our unit was primarily in the form of cash distributions, along with issue of holders consistent and predictable bonus units (5.10 percent in Febru- returns, along with low volatility ary 2018) and gains in the Net Asset and principal preservation. This is exactly what we had set out to Value of the Fund’s units. During Q2 2018, the yield of the do when we launched the NIDF,” Fund’s portfolio was 18.55 percent, Balogun concluded. Commenting on the Fund’s acwhich is nearly at 500 basis points premium to the prevailing average tivities during the year, Anshul Rai, CEO of NIDF, said: “NIDF seeks to yield on 10-year FGN bonds. The average yield on 10-yr FGN channel institutional capital, parbonds was 13.2 percent at the ticularly from the pension industry, secondary market, Wednesday, into productive infrastructure for Nigeria, which is critical to overall according to FMDQ data. Commenting on the quarterly economic and social development, distribution and the Chapel Hill as well as diversification of the Infrastructure Fund’s performance economy away from oil & gas. during its first year of operations, Bolaji Balogun, Group CEO of Cha- Continues on wwwbusinessday online.com

Thursday 05 July 2018

BUSINESS DAY

Thursday 05 July 2018

BUSINESS DAY

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Thursday 05 July 2018

NEWS Otedola Bridge tanker fire victims may get N/Assembly 6,529 inserted new projects into compensation on third party cover, if… budget will derail growth plan – BudgIT MODESTUS ANAESORONYE

f the fuel tanker that exploded on Otedola Bridge at Lagos-Ibadan Expressway last week, which led to death of 12 people and burning of other 54 vehicles, had at least third party motor insurance, the owners of the tanker would have made claims from insurance to compensate affected victims. And if the tanker also had a comprehensive cover, insurance would also have bore the cost of its replacement. Besides, if any of the other affected 54 vehicles have comprehensive insurance, they can also make claims from their different insurance companies for replacement of their vehicles, if they approach them. Tope Smart, chairman, Nigerian Insurers Association (NIA), made this clarification during a telephone conversation with BusinessDay, where he said, “This is where you know the value of insurance because they will compensate you if you have ensured adequately.” Smart, who is also the

Reps to probe recovered Abacha’s loot since 1998 till date KEHINDE AKINTOLA, Abuja

embers of House of Representatives on Wednesday unveiled plans to probe Abacha loots released from 1998 till date. By the House resolution, an Ad-hoc Committee, which will be constituted, is to conclude the investigation within six weeks and report back for further legislative action. Recall that Eric Mayoraz, Switzerland ambassador to Nigeria, had during a roundtable on assets recovery organised by the Swiss Embassy in Abuja, noted that a total sum of $722 million of the Abacha family money hidden in Switzerland had been fully repatriated in 2005. Mayoraz was quoted as saying that additional sum of $322 million, which was frozen by the Swiss attorneygeneral, was repatriated in December 2017. The lawmakers, who spoke during the debate on the motion sponsored by Sunday Karimi, noted that the idea of sharing the money to the poor was uncalled for with lack of database and effective modalities for the proposed sharing. The lawmakers also argued that move by Buhari to share the recovered loot was in breach of Section 12(1) of the 1999 Constitution (as amended), which provides that the treaties and agreements reaches by Federal Government must be ratified by the National Assembly.

managing director/CEO, NEM Insurance plc, said the insurance industry had the capacity to meet claims obligation once it had taken the risk, urging the public to hand over their risks to insurance companies who were professionals in risk management. Given clarifications on policy coverage, he said “motor third party insurance has limited cover of up to N1 million for property damage, and no limit to life.” He said if the exploded tanker had third party cover, “it is guaranteed up to N1 million for third party property damage, except if the vehicle has an extended limit.” That means it has extended its third-party cover with payment of additional premiums. In that case, insurers can pay the extended limit. It could be N5 million; it could N10 million, depending on what is in the contract. “In case of life, there is no limit. So, families of the victims could sue the owners of the tanker and the owner will fall back to his insurers to get compensation for the victims. “Now, for the other ve-

hicles, their owners will be compensated for the damaged vehicles if they had comprehensive cover. But if it is just third party, they will not get compensation,” Smart said. Motor third party cover is a compulsory insurance for all vehicles plying Nigerian roads, and is sold for N5,000 for cars and N7,000 for commercial vehicles and has a liability cover of up to N1 million for third party damages, and no limit to life in the event of death of third party. This means that in the event of an accident occurring, the policy holder has a third party property damage limit up to N1 million and no limit to life in case of death or permanent disability. To ensure that you get genuine insurance policy, insurers advise that you buy from any of the NAICOM licensed insurance companies. Meanwhile, the NIA has put in place a technology platform called the Nigerian Insurance Industry Database (NIID) that captures all insured vehicles in Nigeria, and help to check fake insurance certificates.

HOPE MOSES-ASHIKE

udgIT has decried the masking and insertion of approximately 6, 529 new projects valued at N579.08 billion into the 2018 budget by the National Assembly, which it says has little or no bearing on the economy. BudgIT is a civic organisation that applies technology to intersect citizen engagement with institutional improvement, to facilitate societal change. A recent analysis by BudgIT shows that out of the 6,529 new projects entered into the budget, 90.6 percent or 5,918 items have a unit value below N200 million. Also, the projects cannot be directly linked to the written, medium-term aspirations of the government as highlighted in the Economic Recovery and Growth Plan (ERGP). A further analysis of the inserted projects shows that N63.64 billion or approximately 11 percent of the new projects added by the National Assembly will be spent on various training and capacity building

programmes in 2018. Given that the budget will be largely funded by borrowings (as highlighted in the 2018 fiscal plan), it is disheartening to discover that most of the identified line items therein show a significant disconnect from the developmental goals of government, as stated in its ERGP. “We are alarmed at the number of micro-projects added by the National Assembly that may not fall within the core scope of the Federal Government,” Abiola Afolabi, communications lead, BudgIT, says in a statement. “We also noticed that the new projects inserted into the budget are fragmented, and budget line items are accompanied with vague descriptions that will prove difficult to monitor or track in physical and auditing terms. “It is equally essential for the National assembly to explain the rationale behind the increased allocations to itself as such cannot be justified given the abysmal distribution to the education and health sector, considering that National As-

sembly increased its budgetary allocation from N125 billion to N139.5 billion. “We also observed that projects valued at N13.16bn were cancelled altogether without detailed explanation by the national assembly. Some of the critical projects removed from the 2018 budget included N200.3 million meant to settle arrears under the national telephony programme, N100 million allocated for the Establishment of an ICT university and the N1.2 billion allocated under the proposed budget for the construction of the Zauro polder irrigation project. “Equally shocking is the fact that allocation to over 4,621 projects were reduced by approximately N318.89 billion without citations,” Afolabi says. BudgIT welcomes the addition of N55.15 billion to the health sector under the National Health Act. While the amount falls short of the 1 percent consolidated revenue fund (above N70bn), we see the allocation as the critical starting point and urge Nigerians and critical stakeholders to monitor its implementation.

Obaseki mulls Security Trust Fund for Edo

do State governor, Godwin Obaseki, has revealed plans to pass into law a bill to set up a Security Trust Fund, as part of measures to revamp the state security architecture. Obaseki disclosed this when executive members of the Retired Army, Navy and Air Force Officers Association of Nigeria (RANAO), Edo State chapter, paid a courtesy visit to the governor at the Government House in Benin City, the state capital. He noted, “As part of the rethinking of the state’s security architecture, we will, very shortly, pass into law the new Security Trust Fund Bill, which is going to be the anchor on which our security architecture will be built on.” The governor commended members of RANAO for their contributions to the security of the country, noting, “Nigeria has been shaped by your activities as retired security officers and you have fought to keep the country as one.” He urged the group to provide advice and assistance to improve the security of life and property in the state, adding that security is a major challenge facing the country, and all hands must be on deck to solve the nagging problem. He said, “As a government, we realise that the challenges we face as a country is quite deep and formidable. Without law, safety and order, government will not succeed. That is why we have tried, as a government, to do our best in terms of safety, security and order to enable us build a great state.”

L-R: Funso Akere, chief executive, Stanbic IBTC Capital; Olakunle Alake, group managing director, Dangote Industries Limited; Joseph Makoju, group managing director, Dangote Cement plc, and Ayotunde Owoigbe, partner, Banwo & Ighodalo, at the Dangote Cement plc N150bn commercial paper MoU signing ceremony in Lagos.

Benin Auto Park: Edo hosts global automotive industry players, assures on incentives

do State governor, Godwin Obaseki, has assured global automotive industry players, including BMW, Bosch, Toyota, Volkswagen, Ford, Uber, among others, of the state’s readiness to provide mouth-watering incentives and other businessfriendly policies to enable them set up at the proposed Benin Auto Park, opposite the Benin Industrial Park (BIP). Obaseki gave the assurance at the Edo Automotive Investment Forum,whichhostedmembersof the Africa Association of AutomotiveManufacturers(AAAM),atthe GovernmentHouseinBeninCity, the state capital. He urged the delegation of CEOsofAfricaOperationsofglobal automotive industry players to explore investment opportunities

in the state, with focus on investments to boost the automotive sector in Benin City, one of the most vibrant auto sales and services hubs in the country. According to Obaseki, Edo State is strategically located to become one of the largest automotive hubs in West Africa and maintained that the state has a robust automotive sales and services sector, which guarantees impressive Return on Investment (RoI). Noting that the state’s thriving automotive industry services the Niger Delta market, parts of the North and even South Western Nigeria, he said, “Benin City boasts of a stock of not less than half a million cars. We want the companies to work within and even go beyond what the national

automotive council provides to explore the market.” He said the Benin Auto Park would transform Nigeria’s automotiveindustryandhelpupgrade the used car market, such that more Nigerians would start buying new cars at affordable prices and be assured of top-of-therange after-sales services. Making a case for the park, he said, “We want you to work with car dealership to create the largest single market location in Benin City, where people can buy cars.Wewanttoproperlyorganise the auto dealers in Benin City, transform the car components sector and attract investment to the state.” He said the investment strategy in the first instance will be to attractcompaniestoformalisethe

auto sales market and thereafter the emphasis will be to assemble cars. Other companies in attendance include Graffiti SA, Nissan, Toyota, Deloitte, Gauteng Infrastructure Financing Agency (GIFA), Automotive Industry Development Centre, DataDot Technology, Standard Bank of South Africa, International Finance Corporation, Afropulse Group, component sellers in Uwellu, Evgbareke, James Wyatt markets, and Service Providers. During a visit to auto dealers along Benin- Sapele Road, a dealer with Idris and Sons Motors, Salihu Abdulahi, told the delegation that the corridor hosts at least 100 dealers and the vehicles in their inventory stretch to thousands.

Thursday 05 July 2018

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NEWS

hampering Not Too Young To Run BUSINESS DAYlaw 7

P. 4

in association with

World Cup Result Neymar should drop the injury act -1Matthaeus Sweden - S/ Korea 0 Belgium 3

Diego Maradona - winner) Panama 0 was not acting, (Argentina ormer Germany captain captain) Lionel Messi is not We need players and World Cup2 winner- acting. England Tunisia 1like Lothar Matthaeus has Neymar but not the acting.”

ANTHONY NLEBEM, Reporting from St. Petersburg

L-R: Tobechi Onwuzuruike, partner, sales manager, Vertiv; Wojtek Piorko, director of sales, Middle East and Africa, Vertiv; Tope Dare, executive director, Infrastructure Business, Inlaks; Giordano Albertazzi, president, EMEA, Vertiv, and Gbenga Adebowale, country sales manager, Vertiv Nigeria, during the Vertiv team visit to Inlaks in Lagos.

NHIS council knocks Usman for N17m spent on foreign trip ANTHONIA OBOKOH

he newly inaugurated governing council of the National Health Insurance Scheme (NHIS) has accused Yusuf Usman, executive secretary of the agency, of ignoring their directive prohibiting a foreign trip request he made on which he reportedly spent N17 million. BusinessDay gathers that the trip is in connection with the 71st session of the World Health Assembly in Geneva, Switzerland, between May 21 and 26, 2018. The NHIS council had denied the request but Usman proceeded on the trip anyway. The council further directed Usman to provide a response in writing within 48 hours and to copy all council members accordingly, but that too has been ignored. “It has been reliably confirmed that, Isaac Adewole, minister of health, did not nominate you to attend the conference and four officers

who travelled in defiance of council directive, and arrived at Geneva one day before conference closed,” a signed document by Enyantu Ifenne, the head of council members NHIS, read. Legal analysts say civil service rules are being infringed upon in this instance, as “failure to comply with the council directive, they can set up a disciplinary committee for the agency, which will measure up with proper sanctions.” According to the council, the executive secretary breached due process by not presenting a nomination from the health minister, Isaac Adewole, permitting him to travel. Recall that Usman and the minister of health have had a frosty relationship culminating in his suspension, but President Mohammadu Buhari recalled the executive secretary. Barely five months into his reinstatement, there is another allegation of mismanagement of public funds and acting contrary to policy directive of government.

Stakeholders in the health insurance sector say the current situation where the executive secretary ignores the directives of the governing councils in taking fundamental decisions affecting the finances of the scheme without recourse to the Council will endanger healthcare insurance for Nigerians. The council says it denied Usman’s request for three reasons: the key programme departments, formal and nonformal, which drive NHIS thrust towards universal coverage were not included, the inclusion of Mua’zu Aliyu, Usman’s personal assistant, cannot be justified, and lack of value for the NHIS on a trip that would gulp N17 million. “However, in clear defiance of directive, you travelled with the four officers,” states the documented query. Yusuf did not respond to efforts by our correspondent to get his reaction on why he has not responded to the query within the 48 hours timeline given by the council.

Africa, Europe must build new commonality - Macron

… challenges youths to be involved in politics JOSHUA BASSEY

residentEmmanuelMacron of France says Africa and Europe must build a new commonality driven by culture for the benefit of Africa. Macron, who is on official visit to Nigeria, spoke during his time out at the New Afrika Shrine, in Ikeja, Lagos on Tuesday night, where he also challenged African youths to be involved in politics to change the society. Governor Akinwunmi Ambode of Lagos State accompanied him to the shrine. The event tagged “Celebrate African Culture” also had in attendance other personalitieslikePeterObi,former governorofAnambraState,Segun Osoba, former governor of Ogun State, Wole Soyinka, a professor of literature, senator Ben Bruce, among others. Stressing the need for Africa and Europe to reawaken their cultural affinity, Macron said: “This new commonality is not based on what is important for Europeans but what is important for Africa, abouttheirculture,howtheybuild and promote their culture and which places are important for them about their culture.”

He disclosed plans to host the African Cultural Season 2020 in France, which he said, would be about promoting African culture in Europe, adding that the event would be for Africa and by African artistes. “It will include people with fashion, African movies, new generation of artistes will be coming fromAfricaanditwillbeorganised by them to show Europe and France” the real culture of Africa. “The event will be financed by African leaders. It will not be sponsored by France or European businesses, but by African businesses, it is brand new. This season is a unique one and it will bethenewfaceofAfricainEurope organised by Africans, providing what you like and what you have here,” the President said. On why he chose to visit the Afrika Shrine again, the French President said: “I discovered Nigeria, I discovered Lagos and I discovered the shrine. This place (shrine) is an iconic place and it is a place where the best of music is given. I have to say my main memories about this place are friends, proud people, proud of their culture, proud of their art and music. I have a very different

view of Africa than a lot of other people in Europe, and that is why I am here.” Macron, who got elected as the youngest ever French President at the age of 39, in 2017, challenged the African youths to be involved in politics, as politics, according to him, is the tool to change the society. He said, “I am very happy to be here. Let me remind you that this place (shrine) is a place of music as well as politics. Politics is important, so be involved. That is my advice to the youths.” Governor Ambode, while welcoming the French President, expressed optimism that the historic visit would go a long way to breakanybarriersbetweenNigeria and France as well as foster greater collaboration for economic, social and cultural growth. Ambode said he was particularly delighted that Macron’s visit to Lagos began on a cultural and entertainment note, adding that the French Cultural Centre and Alliance Française based in the statehadalwaysbeenanassettoits culturallandscapeinthesameway that Trace Television had also become an invaluable addition to its music and entertainment sphere.

State Police: Saraki seeks collaboration of state assemblies OWEDE AGBAJILEKE, Abuja

enate president, Bukola Saraki, has called for collaboration of the 36 states’ Houses of Assembly in the amendment of the 1999 Constitution to provide for State and Community Policing in the country. Saraki spoke when the 36 States Assembly Speakers, led by its chairman and speaker of the Gombe State House of Assembly, Abdulmumin Ismaila Kamba, paid a thank you visit to leadership of the Senate for passing the bill that granted financial autonomy to state legislatures. The Senate president stated that State and Community Policing in the country had become imperative due to rising security challenges. “You are all aware of the challenges we are currently facing in this country, particularly that of insecurity. There is no doubt that the security architecture of this country presently cannot meet the demands and challenges before it. “One of the decisions we took today is to address the issue of State and Community Policing. In doing that, we gave our Constitution Amendment Committee two weeks to bring to the floor a Bill on State and Community Policing. The House of Representatives is also working along similar lines. “We will send it to the States’ Assembly to seek your support. We believe that no responsible country or society can continue to watch helplessly as our people are being killed. “We must appeal to our people that we must live in peace and harmony and we must be able to resolve our issues peacefully. As Speakers, I urge you to play your part,” Saraki said. Earlier, the chairman of the States’ Assembly Speakers Conference, Kamba, said they were at the National Assembly to thank the leadership of the Senate for passing the State Assembly Financial Autonomy bill, which had been signed into law.

hit out at Brazil star Neymar for his exaggerated reactions when clashing with an opponent on the field. He says Neymar is a worldclass footballer who does not need to exaggerate when he is fouled because it does not earn him any sympathy with the fans. Neymar has scored twice so far to help Brazil reach the quarter-finals of the 2018 FIFA World Cup in Russia where they will face Belgium on Friday. “Neymar does not need it. He is an excellent player, one of the five best players in the world,” said the 57-yearold, who won the 1990 World Cup with West Germany, told reporters. “Why does he need the acting? “It does not bring him

sympathy. (1986 World Cup

Matthaeus says it was up to referees to put a stop to it, adding that during his playing days Colombia’s Carlos Valderrama was one such culprit, but now there were just too many. “I remember Colombia (against England on Tuesday) how they were acting,” he said. England beat Colombia 4-3 on penalties in a bad-tempered game that was almost constantly interrupted with referee Mark Geiger booking six Colombians and two English players. “In the 1990s they had one Carlos Valderrama, now Colombia have six. I don’t like this provocation and acting and I cannot understand why a player likes to cheat. With video assistant referees (VAR) this should not be possible.”

World Cup: Sweden confident of upsetting England in Samara

weden are confident of relishing the prospect of a World Cup quarter-final clash against England. This is after displaying the best of their battling qualities in a 1-0 win over Switzerland in Tuesday’s Round of 16 tie. English football is hugely popular in the Scandinavian country, but the well-drilled Swedes will not be overawed

when they face a team packed with Premier League stars. The Three Lions themselves beat Colombia on penalties after a 1-1 draw on Tuesday. “Bring them on. Most of them have respect for us and we feel secure regardless of who we meet,” striker Marcus Berg told reporters as he looked ahead to the last-eight encounter in Samara on Saturday.

Spar Nigeria kicks off football challenge to engage shoppers

n the spirit of the global football festive season, SPAR, chain of hypermarket stores, has introduced SPAR Football Challenge, an innovative platform to engage with its shoppers, their families and friends. SPAR Football Challenge is a unique platform around basic skills of football and gives a nice opportunity to children and grown up as well to showcase their skills and have lots of fun at the same time. The participant plays football activities such as Penalty Shootout, Free Kick with Wall, Shoot Backward, Save the Goal, Shoot through the Mark, Dribble through Hurdles & Shoot, Juggling with Hurdles and Keep the Ball On-Air to test themselves and win prizes. The challenges games were played on a nice setup laid out on a green turf in the store car park area of the outlets of the stores. SPAR Football Challenge will be held on weekend across 6 SPAR stores located at Ilupeju, Lekki, Tejuosho, Port Harcourt Mall, Calabar Mall, Enugu Mal and Abuja Ceddi Plaza Mall and the events will

run simultaneously from June 15 to July 8th 2018. In SPAR Football Challenge, people can participate in a variety of ways. One interesting category is School Vs School Challenge, where a team of eight from a school competes with another school. In the first weekend of SPAR Football Challenge, which was held in SPAR Ilupeju, 30 different teams of boys and girls participated from over 13 schools to compete against each other. Every team gets a prize. Each member of the Winning Team was given Footballs, Water Bottle and Wristband along with a food pack. Various schools sent all girls team; all boys team and mix teams within the 8 – 15 years age bracket. Another interesting challenge in the game is the Parent & Kid vs Parent & Kid is another interesting challenge where the parent teams up with their children and challenges another pair of Parent & Kid. The first weekend witness a variety of Parent and Kid teams like Mother and Daughter, Mother and Son, Father and Daughter & Father and Son participating.

8 BUSINESS DAY NEWS CBN directs MMOs, PSPs to remit 0.005 levy on e-transactions HOPE MOSES-ASHIKE

entral Bank of Nigeria (CBN) on Wednesday directed all Mobile Money Operators (MMOs) and other affected payment service providers (PSPs) to comply with the statutory provision for the collection and remittance of the 0.005 levy on all electronic transaction by the business specified in the second schedule of the Section 44 (S 1 and 2) of the cybercrime (prohibition, prevention, etc) Act 2015. In a circular to MMOs and other PSPs on Compliance With The Cybercrime (Prohibition, Prevention, etc) ACT 2015: Collection and Remittance of Levy for the National Cyber Security Fund, signed by Dipo Fatokun, director, banking and payments system department, CBN, issued a guide on the implementation. The guide stated that the levy should be 0.005 of the service charge (exclusive of all tax effects) from all electronic financial transac-

tions occurring in a bank, a mobile money schemes or other payment platforms. Also, all e-transactions (both inter or intra) that have an accompanying service charge shall qualify as eligible transactions. The effective date for collection shall be with effect from July 1, 2018, and all levies imposed under the Act should be remitted to the nominated T24 account number 0020538861023 domiciled in the CBN. Operators are expected to remit the levy on a monthly basis using the effective date or date of commencement of business as the base month. “For this purpose, the fifth business day of every subsequent month shall be the latest date of remittance”, the circular reads. “There are many provisions in some of our statutes in Nigeria that seek to curb and punish fraudsters but Cybercrime Prohibition Act, 2015 is current and most relevant, and specific to the offences around electronic fraud,” Ibraheem Adeka Atukpa, principal policy analyst at CBN, said.

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Opeyemi Agbaje declares for Ogun guber race Deeper Life graduates skills alleviate poverty acquisition programme participants … vows to transform state, state, adding that he would ... 355 youths to receive awards, certificates

SEYI JOHN SALAU

eeper Christian Life Ministry (DCLM) is set to graduate the first batch of its multipurpose Skills Acquisition Programme for youths. The programme is being run by the professional and vocational arm of the ministry the Young Professional Forum. The Church is set to present awards and certificates to 355 young men and women, drawn from a broad spectrum of persuasions and religious affiliations. A statement released from the office of the General Superintendent of the Ministry, Pastor William F. Kumuyi, said this initial graduation is first in the series of fast-paced, multifaceted curricular, being served to pointedly address the unemployment and under-employment challenges facing the youth, especially. According to the release, “Strategic institutions in our society need to act fast and in concert with governments at various levels to confront the unemployment conundrum which is adversely affecting our

youths who constitute a vital plank of our population.” The release further stated that it requires a bold and imaginative agenda amongst vital institutions of society to stem the tide of dysfunctional, anti-social behaviours amongst the youth, traced largely to joblessness and idleness. “The curriculum of the intensive Skills Acquisition Programme include but not limited to, urban hydroponic farming, digital marketing, web design, mobile application, photography and video editing, event planning and interior design, pastry and mixology and godliness,” it said., adding that “These represent some vital sectors which the Deeper Christian Life Ministry is convinced that youths can be gainfully engaged in, in double-quick time without remaining job hunters forever.” Kehinde Bamgbetan, Lagos State commissioner for information and Strategy, is expected to be the special guest of honour at the event, which will also be attended by captains of industry and other distinguished Nigerians from all walks of life.

INIOBONG IWOK

lawyer, Opeyemi Agbaje, has declared his intention to contest for the governorship position in Ogun State under the platform of the Social Democratic Party (SDP), vowing to transform the state and initiate policies to alleviate poverty among the masses. Agbaje, who hails from Ijebu-Ode, was a former lecturer at the Lagos Business School and one time head of department at the institution, stated this in a release yesterday, saying having toured several local government areas in the state, he was aware of the challenges of the people of the state. The 53-year-old newspaper columnist stressed that he was ready for the task of governing the state, urging the people and all stakeholders in the state toward actualising his ambition, as his decision to contest the governorship position was not to acquire wealth but to serve the people. He pledged financial and logistic support for the SDP at all levels in the

also support the party’s membership drive across the state. “I have worked quietly but assiduously since January, and have visited 15 out of the 20 LGs in Ogun State to see the geography, resources, economic opportunities, developmental challenges and priorities across the state; as well as to engage with our people. I have now decided to join the SDP and pursue the governorship of Ogun State on its platform. “I am not naïve about the scale of the assignment I have imposed on myself, and I understand that it requires tremendous commitment, energy and resources as well as the favour of God. I also know it requires your support, which I humbly seek. I do not seek this position for self-aggrandisement but to fulfil an innermost passion for development, emancipation of our people and good governance. I do this out of compassion for our suffering masses and out of the conviction that what we seek to do have been done in other places.”

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The perils of an unsavoury cocktail TOCHUKWU EZUKANMA Tochukwu Ezukanma writes from Lagos, Nigeria via maciln18@yahoo.com

n one of those instances of fuel scarcity in Lagos state, I drove to a fuel station, and, like the other motorists, parked my car in the line for petrol. In a more sane society, motorists will sit in their cars, and inch their way up, as the line moves, to the fuel pump and buy petrol. But because of our general distrust of the Nigerian system, we, of course, doubted that the pump attendants will impartially dispense fuel on the basis of first come first serve. So, to ensure impartiality at the fuel pumps, most of us stepped out of our cars and crowded around the fuel pumps. Irked by the clustering of people around the pumps, the petrol station manager wanted us to return to our cars. Although there were some decent ways to do this, he, in the characteristic Nigerian show of power and disdain for others, took a maze (pepper spray) from a policeman stationed at the petrol station, and started spraying it into peoples’ eyes; and they started scrambling away from the pumps. I refused to run. As he closed in on me, I asked him: are

you a policeman? He was taken aback; he stopped, and handed the maze back to the policeman. My very limited knowledge of law tells me that under certain circumstances, a policeman is authorized to use the maze. Why then was a petrol station manager pepper-spraying his customers? It is because any Nigerian with any iota of power must exercise it in the abuse and oppression of others. Why were grown men and women intimidated by that unlawful act of a petrol station attendant? It is because due to the cultural shocks of colonialism and prolonged periods of military run, Nigerians expect that power should be cruel, ruthless and unquestionable. Therefore, no matter how lawless and inhumane an exercise of power is, Nigerians docilely submit to it. That event at the filling station was an epitome of the unsavoury cocktail of the abuse of power by those in power and the passive submission of Nigerians to power, no matter how abusive, unlawful and exploitative it is. It is a nasty blend that allows the political elite to treat the generality of Nigerians with inconceivable contempt, steal public funds and consign a disproportionate number of Nigerians to poverty, ignorance and fear. It permits the religious elite, with their convolution of the Gospel of Jesus Christ, to fleece and intimidate their congregants. They preach fallacies that enable the pastors to line their pockets in exploitation of their members. Quoting bible verses out of context, they frighten their members into total

Ordinarily, the masses cannot get anything done unless they are led. It is leadership that motivates a people, and galvanizes and channels their courage and will towards stated objectives. So, to change the Nigerian social order and make it responsive to the needs and aspirations of the people, the people need leadership submission to the personal will of the pastors. It leaves the Nigerian masses stoically bearing the unbearable, and cringing in fear of pastors, government officials, and agents of the government. But in all these, Nigerians are to be blamed. A notoriously corrupt former governor, who is now a minister in the Buhari administration attested to this fact when he said, “we steal (public funds) because you do not stone us”. His point is succinctly clear: the political and religious elite will not, on their own, stop their abuse of power and exploitation of the masses. It will take the actions of the people to stop them. The 19th Century Black American leader, Frederick Douglas, was making a similar point when he wrote, “Power concedes

nothing without a demand”. It will take demand - strident, vociferous and determined demand - from the public to force the elite to subordinate their selfish interests to the public good, rein-in their proclivity to steal public funds, stop fleecing and intimidating the people, respect the right of every Nigerian to be treated with decency, and concede the right of every Nigerian to equitably share in the enormous wealth of this country. That indefatigable maverick, Fela Anikulapo Kuti, in the one of his mournful songs, Sorrow, Tears and Blood, lucidly captured the mindset of the average Nigerian, that of unmitigated cowardice, cowardice borne out of self-absorption: a prepossession with narrow, petty, selfish interests and goals, and the consequent unwillingness to commit to anything that does not readily and directly benefit him, especially, materially. So, the average Nigerian is so terrified to take a stand in defence of the public good, freedom and other ideals of life. According to Fela, he rationalizes his cowardice: I no wan die, I no wan wound, I get one child, I wan enjoy, etc. However, the cowardice and selfishness of the average Nigerian do not make a campaign against the evil rulers of this country and their religious allies possible. Ordinarily, the masses cannot get anything done unless they are led. It is leadership that motivates a people, and galvanizes and channels their courage and will towards stated objectives. So, to change the Nigerian social order and make it responsive to the needs

and aspirations of the people, the people need leadership. Usually, the masses are not led by one of their members but by the educated and financially independent. It was a scholarly, debonair journalist, Nnamdi Azikiwe, who spearheaded the Nigeria struggle for independence from Britain. It was an erudite, urbane Doctor of Theology, Martin Luther King Jr., that led the civil right movement in America. In addition to knowledge and financial independence, the leader must be principled and governed by courage and absolute commitment to the cause. A onetime president of America, Richard Nixon, once wrote that: a true leader is so consumed with his belief in his ability to change the course of history to the point of being indifference to his own personal survival. In making a similar point, the great Indian spiritual and nationalist leader, Mohandas Gandhi stated, “only if I die for India shall I know that I was fit to live”. And the foremost American civil right leader, Martin Luther King Jr., also made a similar point, “I have conquered the fear of death”. There is a dearth of this urgently needed leadership. With everyone angling for his own piece of the pie, there is not that leader, who in the full transport of his messianic mission, has “conquered the fear of death” or believes that “only if he dies for (Nigeria) shall he know that he was fit to live”.

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How to get elected with an improved brand image participate in the 2019 elections, haven been energized by the recent passage of the Not Too Young to Run Bill. So, here are some rules of brand management that can apply to election campaign management. VICTOR IKEM Victor Ikem is a brand and marketing specialist, ikemvctr@ gmail.com

ust few months to the 2019 general elections in Nigeria, the political space is all heated up with positive and negative narratives flying all over the place. Some narratives well fit into the realities of the time thereby appealing to the general public emotions. But other kinds of narratives are absolutely lost and forgotten. What is it that makes an election thick? Is it about the negativities and the mud-slinging- things that voters won’t remember three months down the line? Well, it’s all about the candidates involved in the elections, what they say, how they are perceived and how they portray their character and how they are judged in the court of public opinion. Perception is everything! Interestingly, some young Nigerians have indicated interest to

Dipsticks and brand image research Who you say you are doesn’t matter, it is who people say you are that counts. This is the crux of the matter. The difference between self-perceived identity and actual brand image lies in a well conducted brand image research or brand health check. This check will reveal hidden weakness as well as hidden strengths. This would be diagnostic kind of check that will throw up pleasant and unpleasant surprises. This is where to start, go get yourself checked against what you anticipate or expect to or prefer to be seen as. Community needs and brand essence Every product exists to solve a problem. In this light, every political ambition should be built around an identified or identifiable need. There should be a need that exist which you eager and capable to meet. Finding a purpose and your building brand essence around it is key to victory. Adopting a cause and following through is mandatory.

This should lead to a clear statement of brand purpose cleverly crafted to appeal to the target or electorate in a way that they can connect with you. Without a clearly stated brand essence, it will be difficult to tell what cause you are pursuing or what problems you are desirous to solve. If you cannot find a good cause to pursue or identify an existing problem that you can help solve, there is no point putting yourself up for election. Culture code and voter’s identity profiling Every voter follows a certain culture code and behavioral pattern as dictated by the prevailing and dominate issue at the time. In Nigeria, most often, religious and ethnic issues trump the economy, job creation, etc. when the chips are down, majority of voters in rural Nigeria reduce their voting rights to ethnic and religious activism. It is important not to undermined this pattern but to flow with it. It is also very important not to speak above the sensibility of any religious or ethnic orientation while also being careful not to align too much to it. Behaviors that can harm the image of an aspirant from a religious or ethnic angle can be very deeply disturbing. Just as in traditional brand building, every brand should understand the existing culture codes and seek to align its values, characters and context to such prevailing orientation so that the brand’s

truth can still be evidently seen when looked at through the prism of ethnic and religious standard. Color identity and appeals Colors are powerful and convey certain appeals that can be applied to demystify a brand, its personality and predominant character. Every politician or political figure much align himself or herself and campaign to strong colors that would not only be bold and outstanding but must as a matter of expression and design depict his or her character. Color consistency is also very crucial. At every stage and situation that the political actor is encountered, there should be a constant reflection of same colors. Such colors as red, yellow and white convey positive and strong image. There are certain assumptions that colors can have psychic values if harmoniously deployed. For a brand to stand out, perfect and harmonious selection of colors which are consistently deployed is very crucial. This will help in sending the right message to electorates and general public. Use the right colors for your logo and other brand appearances. Message consistency What is your message? Every campaign must have a message and that message needs to be consistent. It would be right to have a clear and

unambiguous brand message built around a Unique Selling Proposition (USP) that can be a drawn down from a well-articulated manifesto. Without a clear and consistent message, the audience would be left in doubt as to what you actually stand for. Your message must be a factor of and draw from all element highlighted about. Without a strong, clean and clever message it will be difficult to break the parity and achieve the much-needed differentiation. Fresh identity and new image Freshness is key to convey frankness. If your identity is not fresh and new every time, it will become boring overtime. Some politicians will master a line and keep on reechoing same line all through their campaign speeches so much that the electorates can predict what they want to say next. That is not fresh. You can stay on the same clear message but bring in new perspective all the time. Same with designs and creative manifestations, these all need to be refreshed but keeping the core brand elements like color and pay offs consistent. Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/

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Mangrove restoration in oil impacted coastal areas of Nigeria CHARLES ONYEMA Dr Onyema is Associate Professor and Ag. Head of Department Department of Marine Sciences University of Lagos, Nigeria

ur oceans and coastal areas are invaluable to the continuous survival of the earth and all species. Coastal ecosystem areas are regions that extend from the continental shelf break of the ocean, inland to the limits of tidal influence. Coastal ecosystems are highly productive and play important roles in overall marine productivity. These areas especially in Nigeria include coastal wetlands, mangroves, creeks, mangrove and freshwater swamps, estuaries, lagoons and the overlying waters of the continental shelf (neritic waters). In Nigeria and longitudinally, coastal ecosystems and mangroves extend from the Bakassi Peninsula in Cross Rivers State to Badagry in Lagos State covering nine states. These areas are dominated by sandy and mud beaches, flats, creeks, deltaic swamps and salt tolerant mangrove forests. Nigeria has extensive mangrove swamp coverage and is notable worldwide. The Niger delta is largely made up of mangrove wetland areas.

FRIENDS OF NIGERIA (FON) Friends of Nigeria is a non-profit registered in France actively involved in connecting Nigerian professionals in Europe to opportunities in Nigeria and also to promoting the attractiveness of the Nigerian economy to French and European Investors. FON is the largest network of Nigerian professionals in France.

ince his ascension to power last year, Emmanuel Macron has become a symbol of a new era to Nigerian youths who were delighted to see the 39 year old at the time, occupy the highest seat in his country. With Nigeria’s political scene, especially at the national level, dominated by those considered to be elder statesmen, and the plague of godfatherism still lingering; Macron’s political journey and eventual arrival as French number one man was an impressive feat highlighting a glimpse of possibilities for young Nigerians who aspire for leadership in government.

Ecological and economic functions of mangrove include habitat to a diverse community of plants, animals they serve as carbon sink. Additionally, they provide food and shelter for a large and varied group of fishes and shellfishes, serve as spawning, breeding, nursery and feeding grounds for an array of aquatic organisms. They also help stabilize shorelines from storm surges, high coastal winds and act as protection from coastal erosion. They are also important for tourist attractions, aesthetics, educational and scientific values. More importantly they provide resources such as timber, firewood, charcoal, extractives, medicine, sand mineral, natural gas and crude oil. Oil spills maybe due to releases of crude oil from offshore platforms, drilling rigs and oil wells. Refined oils like petrol, kerosene and diesel can also spill. After the discovery of oil in the 1950’s exploration and exploitation activities in Nigeria has continually polluted the mangrove ecosystem in areas of oil mining. Some observed effects includes aesthetic nuisance, gross pollution, damage to spawning and fishing grounds, anoxic or very low oxygen conditions, elevated oil and heavy metals in water and sediment, decline and death of biodiversity including fishes, shrimps, mollusc, shell fishes, periwinkles, mangrove plant and contamination of water. Oil

It is important to note that restoring the mangrove community and forest in only a partial solution to the problem of contaminated or polluted coastal ecosystems and mangrove areas. Protection and sustaining the re-development of the mangrove ecosystem in the key goal of the rehabilitation process spills have rendered some parts of the Niger delta area of Nigeria useless for fishing, farming and other noteworthy human and productive activities. Hence the need for mangrove ecosystem restoration and Oil spill cleanup cannot be overstated in this regard. This in the situation in the Niger delta Ogoni land for instance. It becomes important to bring the environment back to its pre-impact condition. Oil cleanup, mangrove restoration and rehabilitation are definitely suited in this regard. Simply put, mangrove restoration is the process of assisting the recovery of an ecosystem that has been degraded, damaged or destroyed. A number of steps are quite important in this endeavour.

First and importantly is to curb or ameliorate the source of the oil pollution. Close or repair (damaged) well heads, broken pipelines and stop leaks from damaged vessels etc. Identifying and handling this in a necessary first step. Additionally, reduce or preferably stop the inflow of oil and oil activities into the area. Secondly, the restoration of proper and free hydrologic flow to the degraded ecosystem is paramount. The tidal inflow and outflow must be adequately reestablished and maintained. This is like restoring the heartbeat of a dying person. There may be need to open up formerly closed, dammed or blocked channels or creeks. Thirdly, it is important to physically remove or drain stagnant oil from the ecosystem to be restored. Oil cleanup activities are important to achieve this. Oil removed, must also be properly disposed according to standard regulations and global best practices. Fourthly, is to understand the natural/native plant and animal community structure of the area. Note the endemic or native species, the autecology of species, pattern of reproduction, propagule distribution, successful seedling establishment and how to enhance natural secondary succession, especially in mangrove areas. There will then be need to plant and replant, native species seeds and seedlings. It is important to note that restoring the mangrove com-

munity and forest in only a partial solution to the problem of contaminated or polluted coastal ecosystems and mangrove areas. Protection and sustaining the re-development of the mangrove ecosystem in the key goal of the rehabilitation process. This will then allow these unique coastal areas to come back to life and perform their very important ecological and ecosystem services, including restoration of a cleaner environment for farming and fishing activities including the revival and regeneration of life in the community. But this will come gradually. The involvement of the stake holders and local community members is very essential to the eventual long term survival of the mangrove restoration process. The communities must be properly enlightened organized and carried along through all the stages of the process. There may be need to disallow and allow some kinds of activities in the mangrove area. Sadly remediating the environmental devastation of the Niger delta would take a long time. For instance the Ogoni cleanup is estimated to take about 30 years, to clean up about 50 years of contamination and neglect. There is need for oil spill impacted environments to be cleaned up and restored to their pre-spill healthy conditions. Send reactions to: comment@businessdayonline.com

President Macron in Nigeria: Strengthening business ties between France and Nigeria Remarkably, Emmanuel Macron seems to have a peculiar interest in Africa and is perceived as a game changer in respect to France relations with Africa and specifically with Francophone Africa. He has currently visited six (6) African countries within the first year of his presidential mandate. The French President is visiting Nigeria this week. Nigeria would be the seventh African country and the second Anglophone African country he will be visiting. He visited Ghana in November 2017. This visit is timely as it is happening barely two months after the Nigerian president, Muhammadu Buhari signed the Not-too-young-torun bill. Although this is Emmanuel Macron’s first presidential trip to Nigeria, it would not be his first time in the country. In 2002, as part of his academic requirements, Macron did a six-month internship at the

French Embassy in Abuja. In the famous online journal Le Parisien, Mr. Jean-Marc Simon, the then French ambassador to Nigeria remembers this student for his incredible empathy towards everyone. In the article titled: Quand Macron était un stagiaire à l’ambassade au Nigéria published on 27th November 2017, the former diplomat recalls the era; commenting on Macron’s interest in politics and describing him as a pleasant, brilliant and serious young man. Almost two decades after Macron’s initial trip to Nigeria, he would return to the country, this time not as a student but as the man at the helm of affairs in his country, France. Macron’s visit is aimed at strengthening bilateral ties between both nations. Addressing the Nigerian National Assembly is one of the items on his schedule. Focus areas during the visit includes security, youth development, culture and creativity sectors, amongst others. His

advent is expected to serve as a springboard for richer and deeper Franco-Nigerian relations in all spheres. Nigeria now enjoys a flourishing relationship with France and the post-civil war dented image of France has been largely restored. This has led to mutual benefits especially regarding the education sector, security and economy. French language is taught at all levels of education – primary, secondary and tertiary. The French-FUNAI/Nigeria partnership is another commendable development in the education sector. This partnership between the French embassy in Nigeria and Federal University NdufuAlike, Ikwo (FUNAI), Ebonyi state came into existence through the signing of a tripartite agreement in January 2016 between FUNAI, Tertiary Education Trust Fund (TETFund) and the French Government. Through this scheme, the French government would be

awarding thirty-five scholarships to FUNAI students. With regards to security, France has played a significant role in fighting insurgency in Nigeria. Presently, Nigeria tops the list of France’s trading partners in sub-Saharan Africa and is the leading supplier of hydrocarbon to France in the sub-region. In 2017, trade between the two nations amounted to 3.6 billion Euros. Impressive as this may seem, the proposed visit of President Macron would yield even greater economic feats if the glaring opportunities for bilateral investments and trade is effectively harnessed. We invite private and public sector stakeholders from France and Nigeria to translate these opportunities and ongoing engagements to increased trade and collaborations between both countries. Send reactions to: comment@businessdayonline.com

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Frank Aigbogun EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, SALES AND MARKETING Kola Garuba EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

Thursday 05 July 2018

Human rights and police brutality in Nigeria

uman rights abus es by the Nig erian police, especially its special anti-robbery squad (SARS) have reached alarming levels. Last year, Nigerians on social media created a storm with a harshtag #endSARS calling for the total scrapping of the unit that is particularly noted for its brutality, sexual harassment, extortion, theft and outright robbery. Also an online petition, with tens of thousands of signatories, was submitted to the National Assembly seeking the scrapping of the unit. More than six months after that incidence and despite the cosmetic changes introduced by the Inspector General of Police into the working of the unit, the cases of police or more particularly SARS brutality has continued unabated. Young Nigerians complain on social media daily of the harassment, arbitrary arrest, kidnap, forced extortion and torture by SARS. In a 2016 report on the activities of SARS ti-

tled “Nigeria : ‘You have signed your death warrant’ : Torture and other ill treatment in the special antirobbery squad” the global human rights watchdog, Amnesty International, said it received reports from lawyers, human rights defenders and journalists, and collected testimonies stating that some police officers in SARS regularly demand bribes, steal and extort money from criminal suspects and their families. The global human rights watchdog also stated that SARS detainees are held in a variety of locations, including a grim detention centre in Abuja known as the ‘Abattoir’, where detainees are kept in overcrowded cells and in inhuman conditions. According to Damian Ugwu, Amnesty International’s Nigeria researcher, “SARS officers are getting rich through their brutality. In Nigeria, it seems that torture is a lucrative business.” The report also detailed testimonies from former SARS detainees who said they were subjected to horrific torture methods, including hanging, starvation, beatings, shootings and mock executions at the hands of

corrupt officers from the dreaded SARS. To be sure, torture is prohibited under Nigerian and international law. Also, in December 2017, President Muhammadu Buhari signed into law the Antitorture Act. Still yet, SARS and the police continue to unleash torture and other degrading treatment on Nigerians. As the campaign on social media reached a crescendo, the IG of police has again offered a tokenism – banning SARS from conducting stop and search operations on roads except when necessary. The IG also promised to restructure and reposition the unit for effective service delivery while also warning members of the group against acting as body-guards, delving into land matters and debt collection that were considered civil. But this is a well-travelled route. Anytime credible complaints are brought against the police, the police high command order investigations and actions but at the end nothing is done and business continues as usual. For instance, since 1999, there has not

been a police boss that has not hypocritically ordered the dismantling of the notorious police road-blocks in Nigeria. But till date, those road blocks still exists in all nooks and crannies of the country and serve as the medium for the extortion of, and killing of Nigerians and road users who refused to settle the policemen. What happens is that the policemen withdraw from the roadblocks for some weeks and return when national focus and attention shifts to other pressing issues. It is clear that the police has lost the trust of the people it is paid to protect. To get back that trust, a wholesale reform of the police is needed and not just the SARS. But in a situation where the president has empowered the IG of police to disrespect the National Assembly and even harass its members, including the Senate President, and charges to court anyone who dare accuse the IG of any impropriety instead of investigating the allegations, we doubt whether the government will have the courage to do it.

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Albert Alos Funke Osibodu Afolabi Oladele Dayo Lawuyi Vincent Maduka Maneesh Garg Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Sim Shagaya Mezuo Nwuneli Emeka Emuwa Charles Anudu Tunji Adegbesan Eyo Ekpo

ENQUIRIES NEWS ROOM 08022238495 08034009034 Lagos 08033160837 Abuja

}

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Thursday 05 July 2018

BUSINESS DAY

C002D5556

Investor

In association with

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

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (22 – 06–18)

37,862.53

N13.716 trillion

2,707.98

1,691.04

949.59

Week close (29 – 06–18)

38,278.55

N13.866 trillion

2,720.42

1,719.17

949.59

Percentage change (WoW) Percentage change (YTD)

1.10 0.09

0.46 6.10

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

149.45

903.41

2,553.17

1,956.40

1,481.73

927.72

323.22

2,626.59

2,008.70

1,490.07

NSE Banking Index

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

1,746.68

475.44

139.37

1,721.95 1,739.08

481.31

476.05

150.44

NSE 30 Index

1.66

0.00

0.99

0.32

-12.67

-0.44

-1.09

976.10

2.69

0.66

-4.96

7.94

0.13

-1.73

2.88

2.67

-2.26

2.59

1.68

0.56 8.00

Flour Mills: Full year scorecards reflect value creation for shareholders

… Only Excelsior Shipping Company to earn N2.2bn as final dividend income HEANYI NWACHUKWU

lour Mills of Nigeria Plc has released its audited results for the financial year ended March 31, 2018 with group revenue increasing to an all-time high of N542.7billion, compared to N524 billion in 2017, representing 3.5percent year-on-year (y-o-y) growth. The group operating profit at N48billion compared to N41 billion in 2017 represents 16.9percent yearon-year growth. Also, the group Profit Before Tax (PBT) at N16.4 billion compared to N10.4 billion in 2017, indicates 58percent yearon-year growth; while Profit After Tax (PAT) at N13.6 billion compared to N8.8 billion in 2017 indicates 54.1percent growth year-on-year. The Company, Flour Mills of Nigeria Plc recorded revenue of N389billion, compared to N375billion in 2017, which is 4percent increase year-on-year. The Group’s basic earnings per share stood higher at 483kobo against 303kobo in 2017. Principal activities Flour Mills is the market leader in food and agro-allied products in Nigeria. The Group is primarily engaged in flour milling, production of pasta, noodles, edible oil and refined sugar, production of livestock feeds, farming and other agro-allied activities, distribution and sales of fertilizer, manufacturing and marketing of laminated woven polypropylene sacks and flexible packaging materials, operation of terminals A and B at the Apapa Port, customs clearing, forwarding agents, shipping agents and logistics. Notes to activities

The Group said that food business has performed in line with its objectives on both top and bottom lines. Flour Mills said results of its agro-allied businesses reflect a combination of both profitable and growing businesses (feed, fertilizer), while “our latest entry into this category are yet to fully deliver according to our expectations including sugar, with our local backward integration program in Sunti, as well as our edible oil business.” BAGCO, its packaging material business, recorded very good results, maintaining its leadership position in its product categories. Ownership structure Out of its shares outstanding of 4,100,395,606 units, Excelsior Shipping Company Limited accounts for 2,242,727,580 units or 54.70percent. The ultimate holding company is Excelsior Shipping Company Limited, a company registered in Liberia. The beneficial owner of Excelsior Shipping Company is a trust established by the late John S. Coumantaros. Other individuals and institutional shareholders account for 1,857,668,026 units of Flour Mills of Nigeria Plc representing 45.30percent stake. Dividend Flour Mills of Nigeria Plc in a dividend notice at the Nigerian bourse said it will be rewarding investors with N1 final dividend per share. The implication is that E xcelsior Shipping Company Limited which is the majority shareholders will earn N2.2billion as final dividend income from Flour Mills which has a market capitalisation of N134.287billion at N32.75kobo per share. “Our 2017, year end result, shows a remarkable growth in the Group’s revenue of N542 billion, which represents an

An analysis of the Group's revenue and results from continuing operations by reportable segment: March 31, 2018

Food

Revenue (N ‘000)

Cost of sales (N ‘000)

Gross profit (N ‘000)

431,889,637

373,808,701

58,080,936

Agro Allied

90,683,960

74,647,737

16,036,223

Packaging

18,705,596

24,073,312

(5,367,716)

Port operations & logistics 1,201,141

1,065,988

135,153

Real Estate

190,075

299,614

(109,539)

Total

542,670,409

473,895,352

68,775,057

Gross profit (N '000)

31 March 2017 Revenue (N '000)

Cost of sales (N '000)

422,709,578

364,984,425

57,725,153

Agro Allied

80,514,710

73,720,099

6,794,611

Packaging

20,693,495

Food

Port operation & logistics 414,439

18,365,025

2,328,470

367,806

46,633

Real Estate

132,226

338,025

(205,799)

Total

524,464,448

457,775,380

66,689,068

impressive 3.5percent year on year growth. This was achieved through a combination of resilience in the face of a challenging environment, volume growth and product mix from our food and agro-allied businesses”, said Paul Gbededo, Group Managing Director (GMD), Flour Mills of Nigeria Plc. “The results are a clear indication that our efforts to continually push for improved efficiency and synergy in the Group, are yielding the expected results,” he added. According to the GMD, in the agricultural space, “we have continued to consolidate our position, with a firm commitment to lead in this space while aligning with the agricultural promotion policies in the federal and state level where we operate. We are critically looking into our investments in our backward integration initiatives and have confirmed our commitments

towards future profitable growth by recapitalizing various subsidiaries. We are also impairing at company level, part of our investment in Kaboji Farm, our first agricultural investment which has now become our center of excellence for seed and best agricultural practices in maize and soybean.” “The Group had also decided to accelerate the depreciation period of some support services assets, resulting in a onetime expense of N1.2 billion. In spite of these onetime exceptional expenses, and initial losses in some of our early stage agro-allied businesses, our Group still recorded a Profit Before Tax of N16.4 billion, confirming our commitment towards cost controls and increasing our margins”, said Jacques Vauthier, Chief Financial Officer (CFO), Flour Mills of Nigeria Plc. “In an effort to strengthen the

company’s capital base, deleverage our balance sheet, and support our working capital needs, we embarked on, and have completed a Rights Issue program during the past months. With the successful completion of the Rights Issue program, we have now positioned the Company to exploit valueaccretive opportunities, whilst giving greater operational and financial flexibility to ensure business growth and continuity,” Vauthier said. “We have also taken various actions towards reducing our financial expenses, including a commercial paper program. Our focused, but limited investments in capital expenditure as well as tight control over our working capital have helped us to manage our financing costs with a view to a material reduction in the coming year. With this result, we remain focused on our commitment to continually create value for our customers, consumers and all key stakeholders, in furtherance of our core strategic focus of ‘Feeding the Nation, every day,” the CFO said. Analysts view “In terms of outlook, Bloomberg consensus wheat forecasts indicate that wheat prices which form the bulk of Flour Mills of Nigeria’s inputs are expected to rise by only circa 5percent between 2018 and first-quarter (Q1) 2019 (end-March). Although the company is exposed to a downside risk from a potential slide in the naira relative to other major currencies, we believe the likelihood of this is remote given the prevailing price levels of crude oil and improved crude oil production levels relative to 2016/2017 levels”, Tunde Abidoye-led team of research analysts at Lagos-based FBNQuest Limited said in their July 2 note to investors.

BUSINESS DAY

C002D5556

Thursday 05 July 2018

Investor

Helping you to build wealth & make wise decisions

United Capital investment views

Investor’s Square

All Share Index reverses previous week’s loss

…rebounds 1.1%

n the trading week to June 29, Nigeria’s domestic equities survived an otherwise bearish week as huge gains recorded on the last trading day of the review period granted the bulls a win. The market opened on a slightly upbeat trend after which losses recorded on three consecutive days reversed the initial gain, however, gains recorded on the last trading day of the week culminated to a 1.1percent week-on-week (w/w) gain. The year-to-date (YtD) return exited the negative region to +0.1percent while returns for the month of June appreciated 0.5percent. Accordingly, market capitalization recovered N150.4billion to close the week at N13.9trillion. Activity levels was upbeat with average volume traded appreciated 46.1percent to 400.7million units while average value traded strengthened 11.6percent to N4.3billion. Despite the upbeat performance in the main index, sector indices return was mixed as three of the six sector indices tracked appreciated w/w. The Consumer Goods (+2.7percent) and Industrial Goods (+2.7percent) led the bulls due to gains recorded on bellwether NESTLE ( 5 . 4 p e rc e nt ) , Ni g e r i a n Breweries (+3.4percent) and DANGCEM (+1.8percent). The Insurance sector (+0.7percent) also trended northwards w/w as appreciation in LASACO (+5.9percent) and NEM (+5.3percent) buoyed the index. On the other hand, the Oil & Gas (-1.7percent), Banking (-1.1percent) and Agriculture (-0.4percent) slumped w/w due to sell offs in SEPLAT (-5.1percent), FO (-3.5percent), OANDO (-2.3percent), ZENI TH (-3.5percent), DIAMOND (-6.5percent) and OKOMUOIL (-2.3percent). Investors’ sentiment remained downbeat at 0.8x (previously 0.5x); 31 stocks advanced while 38 declined w/w. In the week ahead, we expect further mixed trading amid dearth of triggers even as we anticipate the effect of the proposed pension plan. Money Market : DMO fills only 46.8percent on underwhelming demand at shorter tenors System liquidity was sapped of liquidity in the week ending 29th June 2018, as money market rates averaged 25.2percent (Previous week: 5.6percent). The system was relatively illiquid on the

backdrop of OMO auctions by the CBN, in which a total of N207billion was mopped up from the system, compared to inflows of N183.2billion that hit the system in the form of maturities. Furthermore, the DMO conducted its monthly bond auction on Wednesday. The auction saw a modest demand of N66.7billion – skewed to the longer tenor (bid-cover: 1.1x) that was filled by only 46.8percent - due to underwhelming demand in the 5-year (0.4x) and 7-year (0.5x) tenors at an average stop rate of 13.7percent. In terms of liquidity profile, there is a sizable maturity coming in to the tune of N335.8billion (N174.8billion from OMO maturities and N161billion from NTB maturities). Yields: Amid a tussle of bulls and bears, the sellers dominate A mix of both bearish and bullish themes guided

witnessed a mixed theme in the week ending 29th June after appreciating by 14bps and 2bps in the parallel and official market to end at N360.5/$1and N305.8/$1 respectively, while inching lower by 9bps in the Investors and Exporters Foreign Exchange window to finish at N361.3/$1. The outlook of the naira is expected to remain tied to the spate of CBN’s intervention in the spot and forward market. Global equities bearish as trade uncertainties weigh In the week that ended 29th June 2018, major global equity indices diminished as trade war fears continued to worry investors. We observed a backlash between the U.S., European Union and China. Furthermore, in the US, the commerce department downgraded the reported Q118 GDP growth to 2perrcent from 2.2percent previously estimated while consumer

RSA fund price of PFAs as at June 29, 2018 S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

PFAs CrusaderSterling Pensions Premium Pensions ARM Pension Mgrs. Stanbic-IBTC Pensions Legacy PFA PAL Pensions NLPC PFA First Guarantee Pension Trustfund Pensions Leadway Pensure PFA SigmaVaughn Pensions AIICO Pension Managers APT Pensions Fidelity Pensions AXA Mansard FUG Pensions OAK Pensions Investment One Pension Mgrs. IEI Anchor Pension Managers Radix Pension NPF Pensions

sentiments all through the week to 29th of June. On the sell-side, a resumption of OMO activities by the CBN as well as FX sales helped to curtail the excess liquidity in the system, as players shorted positions. On the buy-side, players were guided by expectations of FAAC payments, as well as OMO maturities that came through on Thursday. Overall, average T-bill yield added 11bps w/w to close the week at 13.3percent (91-day (down 28bps to 12.8percent), 182day (down 10bps to 13.1%) and the 364-day (up 15bps to 13.9percent). In a similar theme, average bond yield inched higher by 14bps to end the week at 13.7percent. G e n e ra l l y , w e b e l i e v e sentiment in the Fixed Income space is tied to the stance the CBN assumes in its OMO auctions, as well as fiscal paper supply and system liquidity. Currency Market: Naira appreciates in the parallel and official market The currency market

CURRENT PRICE 3.9772 3.9642 3.8948 3.7400 3.6235 3.4402 3.4326 3.2923 3.2722 3.1362 3.1305 3.0404 2.7935 2.7339 2.7040 2.6439 2.5662 2.4726 2.3342 2.0344 1.4659

spending hiked 0.2percent. Amid of all these, the DJIA, S&P 500 and NASDAQ depreciated 1.3percent, 1.3percent and 2.4percent respectively. In Europe, beyond the rhetoric on trade tariffs and uncertainty that followed p o l i t i ca l w ra ng l i ng o n immigration policies, the hike in the region’s June inflation by 2percent to meet the ECB’s target and the improvement in private sector credit by 3.3percent in May couldn’t avert the losses recorded in the equities space. Consequently, the Pan European STOXX diminished 1.3percent w/w, France’s CAC (-1.2percent) and UK’s FTSE (-0.6percent) trended southwards. Emerging markets indices was mixed as China’s SCHOMP (-1.5percent) and India’s SENSEX (-0.7percent) diminished while Brazil’s IBOV (+3percent), Russia’s RTSI (+2.6percent) and South Africa’s JALSH (+1.3percent) appreciated w/w.

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

Global IPO activity slows in Q2 despite robust capital raises IHEANYI NWACHUKWU

he risks and uncertainties from geopolitical frictions and shifting trade policies have contributed to declines in global Initial Public Offering (IPO) activity in second-quarter (Q2) 2018, resulting in 660 IPOs in H1 2018, a 21percent decrease from H1 2017. However, despite this slowdown, global IPO markets raised $94.3billion in the first half of 2018, a 5percent year-on-year increase and the highest proceeds for the first half of a year since H1 2015. These and other findings were published today in the EY quarterly report, G l o b a l I P O t re n d s : Q 2 2018. Martin Steinbach, EY Global and EMEIA IPO Leader, says: “Global IPO figures for the first half of 2018 dipped by volume compared with the same period in 2017, despite higher valuations on some of the world’s largest markets. The good news is that economic conditions continue to be encouraging, equity valuations are high in many parts of the world and interest rates remain low. As a result, we expect a resurgence in IPO activity during the second half of 2018.” Americas IPO momentum builds The Americas defied market volatility to have a strong H1 2018, increasing proceeds by 31percent to $35.3billion and regaining the lead in proceeds amongst regions for the first time since 2014. The NYSE and NASDAQ ranked among the top three exchanges by proceeds globally in H1 2018 and contributed heavily toward an 18percent year-on-year increase in deal numbers since 2017. This strong momentum is largely a result of good performance, especially in the US where IPOs posted average first-day returns above 10percent and share price performance post-

IPO exceeded broad equity indices. US IPOs accounted for 83percent of volume and 85percent of proceeds on Americas exchanges in H1 2018. Jackie Kelley, EY Americas IPO Markets Leader, says: “The second quarter of 2018 was marked by an influx of technology IPOs entering the US market. From 2013 to 2017, we saw health care companies dominate the markets in terms of deal count, but since then we’ve seen technology companies slowly gaining. Deal count and proceeds raised are up compared with last year, and post-IPO share price performance is solid, creating momentum heading into the second half of the year.” Investor appetite remains high in AsiaPacific, despite drop in IPO activity While investor appetite for IPOs across the AsiaPacific region remained high, H1 2018 volumes declined 37percent while proceeds were down 17percent compared with H1 2017. However, Asia-Pacific still accounted for a 46percent share of global IPOs and 31percent of global IPO proceeds in H1 2018. Five of the ten most active exchanges by deal numbers were from this region. In particular, Japan’s IPO market has continued to perform well in Q2 2018 with 21 IPOs raising $1.5billion; $1.3billion of this capital was generated by 11 technology IPOs in Q2 2018. Overall, Q2 2018 saw sizeable gains in both volume and proceeds, increasing 75percent and 202percent, respectively, over Q1 2018. The large increase in Q2 2018 meant that Japan finished H1 2018 with 5percent decline in volume and an 8percent increase in proceeds compared with H1 2017. China’s Shanghai (SSE) exchange hosted Q2 2018’s largest IPO globally and was second among exchanges by proceeds. Ringo Choi, EY AsiaPacific IPO Leader, says: “Strong macroeconomic

fundamentals and investor appetite act as a counterbalance to the otherwise volatile performance of IPO activity across the region. Following the general declines in IPO performance in the first six months of 2018, largely resulting from recent interest rate increases, global political and economic uncertainties, we expect to see a rebound i n th e d ea l si ze o f th e IPOs in the second half of the year as a number of mega IPOs begin to hit the market.” EMEIA benefits from European mega deals and strong performances in In d i a In E M E I A , In d i a was the top story. India’s IPO market continued to thrive, having the second most active exchanges by number of IPOs globally in Q2 2018. More broadly, I n d i a ’s H 1 2 0 1 8 I P O a c t i v i t y wa s 3 2 p e rc e nt a n d 3 1 p e rc e n t h i g h e r, respectively than H1 2017 in terms of number of deals and proceeds. Overall in EMEIA, ongoing geopolitical uncertainty and shifting trade policies has defined H1 2018 as a period of caution. Deal volumes in H1 2018 in EMEIA declined by 4percent. However, IPO pipelines and activity remain robust behind the scenes. Deal proceeds in EMEIA rose 10percent in H1 2018 compared with H1 2017. Furthermore, H1 2018 was above the EMEIA 10-year median for deal numbers and proceeds. Steinbach says: “Rising geopolitical disruptions and trade tensions mean t h a t E M E I A’s a g e n d a is not entirely its own. A s a n e x p o r t- o r i e n t e d region, EMEIA relies on stable relationships with i t s p a r t n e r s f o r t ra d e. Despite strong economic fundamentals and strong IPO pipeline, IPO activity levels may continue to lag until investors and issuers alike feel that market conditions are more favorable.”

Thursday 05 July 2018

C002D5556

BUSINESS DAY

Investor

Helping you to build wealth & make wise decisions

FMDQ Learning

Introduction to Green Bonds (Part 1)

reen bonds are fixed income securities issued to raise capital specifically to suppor t climate-related or environmental projects. Ideally, bonds categorised as ‘green’ imply that proceeds raised from their issuance will be tagged for projects intended to benefit the environment. Green bonds could be issued by financial, non-financial and/or public entities. Green bonds are similar to regular bonds in that they are coupon-paying instruments, bearing a promise by the issuer to repay interest and principal at maturity but with a particular ‘green’ purpose given to the use of the proceeds of the bond. The specific use of the funds raised — to support the financing of specific projects— distinguishes green bonds from regular bonds. This edition of FMDQ Spotlight is the first of a two-part series on green bonds, including among others, topics on green bond principles, parties involved in a green bond issuance and benefits of green bonds. Green Bond Principles There is no single global framework which must be followed to label a bond as ‘green’. However, the k n ow n p r i ma r y g l o b a l guidance comes from the International Capital Markets Association (“ICMA”) which produced the Green Bond Principles (GBP). GBP are a set of voluntary guidelines framing the issuance of green bonds in the capital market. These Principles encourage transparency,

disclosure, and integrity in the development of the green bond market. The GBP set the foundation for the various elements that need to be incorporated within a Green Bond Policy Framework — a critical document developed prior to the issuance of a green bond depicting the sustainability-based qualities and the environmental valueadd of a given green project and which gives credibility to a green bond. The core elements typically covered in a Green Bond Policy Framework are as follows: •. Use of Proceeds •Process for Proje ct Evaluation and Selection •Management of Proceeds •Reporting •Use of Proceeds The use of proceeds is a fundamental element of green bonds issuance. Proceeds realised from the issuance of green bonds must be directed towards

issued green bonds should be clearly and publicly disclosed. Typically, the net proceeds from an issuance is moved to a sub-portfolio account or tracked and attested to in an appropriate manner by a formal internal process linked to the issuer’s lending and investment operations for green projects. Where the green bonds are outstanding, the balance of the tracked proceeds is periodically adjusted to match allocations to eligible green projects made during a given period. Full disclosures must exist with respect to the intended types of temporary placement for the balance of unallocated proceeds. • Reporting Another key element of the Green Bond Policy Framework is the reporting of the funded project(s). Detailed reporting promotes credibility and transparency of the entire process. For Press Release

projects that deliver clear environmental benefits. Some areas of eligible projects include: • Renewab •Sustainable water management (including clean and/or drinking water) •Clean transportation Routines and systems are set up to ensure the proceeds are allocated to the intended projects. •Process for Proje ct Evaluation and Selection Within the Framework, the below should typically be outlined: • a process to identify eligible green projects • a process to determine how a selected project(s) fits within the eligible green projects categories identified in (1) above •the environmental sustainability objectives of a selected project(s) •Management of Proceeds The process for managing and tracking the proceeds of

instance, it not only provides periodic information which assures the investors, but also highlights the issuers effort in the promotion of sustainability and related practices. On an annual basis, or as is required/agreed, periodic reports on the use of green bond proceeds and expected climate and/or environmental impacts of eligible projects must be reported. Benefits of Green Bonds • Benefits to the Issuers For issuers, the benefits of issuing green bonds include but are not limited to the following: •Acquisition of public acceptance by demonstrating willingness to promote green projects: When issuers, such as companies or governments, issue green bonds, the proceeds are allocated to green projects, and in promoting these projects, the issuers are in turn being promoted. •Diversification of funding base: Through the issuance of green bonds, issuers are availed the opportunity to diversify their funding base by building relationships with new investors, who value investment destinations that help to solve environmental problems such as global warming. •Possibility of raising funds on favorable terms: Emerging renewable energy companies, for example, who wish to access longterm funding may find it difficult to obtain loans with advantageous terms. In such cases, by issuing a green project bond, these companies may be able to raise funds on relatively

favorable terms from investors who are well versed in evaluating the feasibility of the renewable energy projects. •Benefits to the Investors Some of the benefits for investors investing in green bonds are as follows: •Return on investments and environmental benefits: Investors can gain both the environmental benefits that contribute to creating a sustainable society as well as returns on their bond investments. •Diversification of investment portfolio: Green bonds serve as an alternative investment asset class, allowing investors to hedge their investment risks through diversification of their portfolio. The growing need for energy efficient and clean technologies globally, especially in emerging market countries, has generally helped to drive forward the importance of and the issuance of green bonds. These securities form a sub-set of the fixed-income market and they present issuers an opportunity to widen their investor base as they appeal to environmental, social and governance (ESG) investors. To launch the Nigerian economy into the world of opportunities inherent in the green bond market, the Nigerian Green Bond Market Development Programme was launched by FMDQ, FSD Africa and CBI in June 2018 and will run over a 3-year period with a focus on, among others, the promotion of market education about green finance and sustainable investing.

companies in the sector, while the Oil & Gas Index is made up of the top seven most capitalized and liquid companies in the sector. In July 2012, the Nigerian bourse launched The NSE L otus Islamic In d e x ( N S E L I I ) w h i c h consists of companies whose business practices are in confor mity w ith S h a r i ’a h I n v e s t m e n t Principles, with the aim of increasing the breadth of the market and creating an important benchmark f o r i nve s t m e nt s a s t h e alternative ethical and noninterest investment space widened.

The companies that appear on the Islamic Index have been thoroughly screened by L otus Capital Halal Investment, in accordance with a methodology approved by an internationally recognized Shari’ah Advisory Board comprising of renowned Islamic scholars. The price indices, which were developed using the market capitalization methodology, are reviewed and rebalanced on a biannual basis - on the first business day in January and in July.

NSE Reveals Results of Biannual Review of Market Indices

Beta Glass, Oando make NSE 30 index

Lagos, June 29, 2018. The Nigerian Stock Exchange (NSE) has announced the results of the biannual review for The NSE 30, NSE Lotus Islamic, NSE Pension and the five Sectoral Indices of The Exchange -‐ NSE Banking, NSE Insurance, NSE Industrial and NSE Oil & Gas. The composition of these indices after the review will be effective on Monday July 2, 2018.

IHEANYI NWACHUKWU

he Nigerian Stock Exchange (NSE) has announced the results of the biannual review for The NSE 30, NSE Lotus Islamic, NSE Pension and the five Sectoral Indices of The Exchange - NSE Banking, NSE Insurance, NSE Industr ial and NSE Oil & Gas. The composition of these indices after the review became effective on Monday July 2, 2018. The Nigerian bourse began publishing the

NSE 30 Index in February 2009 with index values available from Januar y 1, 2007. On July 1, 2008, the NSE developed four sectoral indices with a base value of 1,000 points, designed to provide investable benchmarks to capture the performance of specific sectors. The Insurance and Consumer Goods Index comprises of the top fifteen most capitalised and liquid companies in the sector. The Banking and Industrial Goods Index is comprised of the top ten most capitalized and liquid

Below are the incoming and exiting companies in the various indices.

Indices Title

NSE Consumer Goods Index

NSE Banking Index

NSE Insurance Index

NSE Industrial Index

NSE Oil & Gas Index

Beta Glass Co. Plc Oando Plc No Change No Change

Consolidated Hallmark Insurance Plc Sovereign Trust Insurance Plc Veritas Kapital Assurance Plc

No Change

Diamond Bank Plc Julius Berger Nig. Plc No Change No Change

Oando Plc

NSE Lotus Islamic Index

Exiting

NSE 30 index

NSE Pension Index

Incoming

Cornerstone Insurance Plc Staco Insurance Plc Standard Alliance Insurance Plc

No Change MRS Oil Nig. Plc

AFRIPRUD CONTINSURE

Julius Berger Plc Beta Glass Plc Lafarge Africa Plc

Nig Aviation Handling Co. Plc

BUSINESS DAY

Thursday 05 July 2018

BUSINESS

COMPANIES & MARKETS

DAY

Property market expectation drops as Primrose dumps plan for 14-floor office devt

Pg. 18

CO 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

Dangote Ibese Cement achieves 2.4m metric tons export to West African Markets

...begins cement production in Ghana, Cameroon RAZAQ AYINLA, Abeokuta

angote cement plant, Ibese, Ogun State with production capacity of 12 million metric tons of cement per annum has achieved 2.4 million metric tons export annually to West African markets, mainly Republic of Benin, Togo and Ghana. Armando Martinez, plant director, said that the cement plant in Ibese has concluded plans to export 2 million metric tons annually, of klinker, a major cement raw material, to Dangote cement plants in both Ghana and Cameroon for a fullfledged cement production. Speaking during a facility tour conducted on Dangote cement plant, Ibese by the Standards Organisation of Nigeria (SON), Martinez noted that Dangote cement and Dangote Group was vigorously expanding and covering more African countries by locating more cement plants across Africa, explaining that the former grinding and packaging plants in Cameroon and Ghana would be converted to cement production plants. Martinez, who was represented during the facility

tour by Sunday Adondua, the general manager, Production, said that Dangote cement targets 77 million metric tons of cement annually, but produces 44 million metric tons of cement at present, and Nigeria accounts for 29.5 million metric tons of the total cement production. “Between 15 and 20 percent of total production we are doing now goes for exports to Republic of Benin, Togo and Ghana. We are even increasing our exports from here to other African countries with effect from this July. We are exporting not only cement, but also klinker. “We have a grinding plant in Cameroon, we want to export klinker, we are even developing grinding plant in Ghana and some other African countries, so we will be exporting up to 2 million metric tons of klinker from this July to the end of the year”, he said. Earlier, Anthony Aboloma, direct general, Standards Organisation of Nigeria (SON), described Dangote cement as one of the best cement manufacturers in the world, saying all Dangote cement plants passed all the parameters used to assess quality and standards as he urged the company to step and sustain the best standards of cement

manufacturing. Aboloma, represented by Joseph Ugbaja, group head, Building and Civil, Standards Organisation of Nigeria (SON), declared that the organisation had undertaken a rigorous process of quality and standard assessment of Dangote

BALA AUGIE

iger Insurance Plc has remained efficient amid a tough and unpredictable macroeconomic environment as the insurer recorded a jump in underwriting profit. For the year ended December 2017, Niger Insurance’s underwriting profit increased by 23.74 percent to N1.10 billion. It was N888.89 million as at March 2017. An increase in premium income and favourable combined ratio helped underpin Niger insurance’s underwriting capacity in sector freight with challenges. Niger insurance recorded a real underwriting performance of N1.95 billion as at December 2017. The real underwriting performance is arrived by deducting the combined ratio from 1

improving, there is room for improvement. “Dangote cement is Mandatory Conformity Assessment Programme - MANCAP certified, having gone through a rigorous process of quality checks and its products have satisfied the parameters specified by all standards.

“We want to also encourage those who are financially endowed to invest in the nation’s economy because they will be helping this country to create wealth and reduce unemployment as well as reduce poverty by providing means of livelihood for millions of Nigerians.”

L-R: Patrick Utomi, regional business manager, Abuja Region, Nigerian Breweries; Moses Ogbodo, zonal business manager, North Zone Nigerian Breweries; Celestine Nnama, winner, Star Lager United We Shine Millionaires Promo, and David Odihekandu, regional business manager, Kaduna, Nigerian Breweries at a regional prize presentation in Abuja recently.

Niger Insurance remains efficient as underwriting profit jumps and then multiplying the result by the net premium income. Niger Insurance’s diversified product portfolio has paid off as revenue spiked amid uncertainties surrounding the socio and macro-economic environment. Gross premium written (GPW) increased by 43.95 percent to N8.58 billion in December 2017 from N5.96 billion the previous year. Gross premium income (GPI) moved by 44.18 percent to N7.31 billion from N5.07 billion the previous year. Net premium income (NPI) increased by 11.16 percent to N2.14 billion in the period under review despite a 406.96 percent in reinsurance expenses to N2.14 billion in the period under review. Niger Insurance has an efficient asset allocation as evidenced in growth in investment income. Investment income in-

cement based on international best practice and could certify the product suitable for building and construction as well as uses. He said, “Dangote cement should keep up the good work, they should not relent because journey of quality is an endless one, they must keep

creased by 10.71 percent to N577.74 million in December 2017 from N521.89 million the previous year. The Nigerian insurer made N202.10 million from rental income on investment properties. The company had said during its Annual General Meeting in 2016 that it had restructured its investment by reclassifying some investment properties to non-current assets held for sale, adding that as a result, investment properties valued at N6.39 billion has been earmarked for disposal in 2017. Insurance firms invest in short term government securities, bonds, equity and real estate with a view to underpin profitability and add value to shareholders wealth. Niger Insurance total net claims expenses increased by 19.70 percent to N3.22 billion in December 2017 as against N2.69 billion as at December 2016.

StarTimes taking digital satellite TV to 10,000 villages in Africa ODINAKA ANUDU

ang XinXin, president, StarTimes Group, says the firm is in the forefront of installing digital satellite television for 10,000 villages in Africa. Speaking in Beijing for the Fourth Forum on China-Africa Media Cooperation, XinXin expressed his commitment to ensuring that Africa was digitally switched on within the shortest possible time. Although a Chinese government initiative, he told delegates that StarTimes was the executor of the project which would ensure an uninterrupted access to satellite TV access for millions of Africans when completed. About 400 delegates and senior government officials from

42 African countries have converged in Beijing for the Fourth Forum on China-Africa Media Cooperation. The forum aims to enhance the media cooperation and exchange between China and Africa and boost the development of China-Africa ties in general. The annual forum has become an important platform in promoting China-Africa media dialogue and an effective mechanism for practical cooperation since its founding in 2012. According to Nie Chenxi, deputy head of publicity, The Communist Party of China (CPC) and minister of National Radio and Television, the Chinese government, under the leadership of Xi Jiping, would continue to work for a win-win friendship with Africa, where all parties were satisfied with the developments and exchanges

to ensure the long standing relationship was sustained. Chenxi noted that the 4th Forum of China-Africa Media Cooperation would not have been a success without the participation of all stakeholders, while pledging that China would help Africa achieve media excellence and sustainable progress in digitalisation. At the forum, government ministers and the heads of media organisations from African countries and China exchanged opinions and ideas on cooperation and the development of the media sector, with most calling for more support in the areas of digital broadcasting and content improvement. According to Gregoire NDJAK, chief executive officer, Africa Union Broadcasting, “China has done a lot for Africa in digital broadcasting.

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Thursday 05 July 2018

COMPANIES & MARKETS

Property market expectation drops as Primrose dumps plan for 14-floor office devt CHUKA UROKO

rowing expectations that the property market will see more office spaces in the short and medium terms has dropped markedly, as Primrose Development Company abandons its earlier plans to develop a 14-floor office building in the Oniru sub-market in Lagos. The project, known as One Zero Five Place, was designed to offer 11,000 square metres of leasable office space. This year alone, all things being equal, the commercial office segment of the property market expects to receive over 50,000 square metres of space from projects at various stages of completion. “The land for the project is up for sale”, estate intel reveals, pointing out that the project was designed by Stauch Vorster Architects and was to sit on a 3,048.6 square metres site directly opposite the Cornerstone Office development which is adjacent to Four Points By

Sheraton Hotel. Primrose Development Company, a major player in the high end property market, was a development partner with Actis International in The Heritage Place, a 14-floor AGrade office building in Ikoyi, Lagos touted as Nigeria’s first LEED-certified green building where tenants enjoy as high as 20 percent energy saving. One Zero Five Place’s 11,000 square metres of leasable office space has an excellent efficiency ratio of 96 percent as measured by the Building Owners & Managers Association International (BOMA); it provides ample parking, a cafeteria, gym, and an intelligent building management system. The building was also designed with disabled persons-friendly features and much more. “The office market in Lagos, however, has come under pressure with large supply additions, tipping the market in favour of the tenant. In 2016, building completions came in at a disruptive 20 percent of the stock, much more than

the 5-10 percent range where market shocks typically begin”, e-intel notes. The office market is currently tenant’s market and to continue to stay in business and attract occupiers in the largely vacant buildings, landlords are offering varying degrees of concessions including yearly and, in some cases, quarterly rents as against long lease terms that ruled the market before now. e-intels reveals further that the site is being marketed along with its Governor’s Consent and approved building plan for 14-floors of office and a basement. This is a compelling value proposition for savvy investors who also have good location of the site to booth. “Primrose Development Company’s portfolio remains active with recent projects including Heritage Place in Ikoyi, completed through a joint venture with Actis and a separate development of five luxury residential villas on 1 Moor Road, also in Ikoyi”, eintel observes.

L-R: Njide Ken-Odogwu, marketing & strategy: sponsorship & promotions manager, MTN Nigeria, Ferdinand Moolman, CEO MTN Nigeria, Joseph Ogbuka, manager proposition and go to market, MTN Nigeria, Okundola Bamgboye, events and sponsorship manager, MTN Nigeria, Rahul De, chief marketing officer, MTN Nigeria, and , Peter Kajovo, analyst, sponsorship and promotions, MTN Nigeria at an MTN CEO’s Cup Match in Lagos.

Danslei debuts to help SMEs gain market relevance MODESTUS ANAESORONYE

anslei Nigeria Limited has debuted in Lagos providing services in Public Relations, Media Sales and Marketing Services, with the focus to help SMEs become well known industry brands and dramatically transform their businesses. The company believes that goodwill (reputation) is a critical asset in achieving success especially in a competitive environment. Businesses, institutions, governments, nations, states and nonprofit organizations need reputation managers to build

their brand. According to the Company, businesses that fail to use professionals to manage their reputations may not only lose reach in the digital world, but may not even be noticed amid all the noise. “At Danslei , we pack a combination of social and traditional media as primary option for managing information about our clients products, services and reputation. We understand that the little contribution we make in our communities go a long way in making our nation a better place to live and work in.” Uzo Ofurum, executive director and head of Business Development at Danslei Nig Ltd

said buying and creating media space in any media is a time-intensive process reflecting hours of transactions between buyers, sellers and creative agents, so we have come up with solutions that are user friendly and cost efficient for both the media sellers and the buyers. “Our information rich services reduce the buyer’s time, while enabling the development of a cost effective media strategy.” Danslei serves as a third sales channel for radio and television , newspapers and social media, complimenting their national and local sales efforts, Ofurum said. Uzo Ofurum has preached

the gospel of reputation management directly to the local businesses in several cities across Nigeria. He now translates his knowledge of the digital and traditional landscape into accessible information for those still stuck in the rut of inadequate dissemination of the values that they bring to the society. Uzo’s expertise in Sales, Training, Marketing, Network, Reputation Management, media planning comes from numerous executive and ownership positions he has held across multiple service related businesses. His track record of success is continued at Danslei Nigeria Limited, the company said.

Pan African Towers appoints Nigerian CEO

oard of Directors, Pan African Towers Limited has announced the appointment of Wole Abu as the Chief Executive Officer of the company. The appointment, according to a statement takes effect July 1, 2018. Prior to his appointment, Wole Abu, a 1990 Chemical Engineering graduate of University of Benin, served as the Vice President Indirect Sales, Airtel Networks Limited (Nigeria) where he held executive management positions over the years as one of the pioneer staff.

While in Airtel, he was responsible for roles that focused on growth acceleration, efficiency optimization and reclamation of market leadership. Abu, an alumnus of the Indian Institute of Management, Ahmedabad, IESE Business School Barcelona, has an MBA from the Lagos Business School and was President of the Airtel Staff Multipurpose Cooperative Society from 2011-2015. The statement further said that in his new role, Abu who has over 20 years’ experience in the telecommunications industry,

will lead Pan African Towers’ overall strategy in Nigeria with responsibility for growing revenue market share; brand & customer development, human resources as well as managing the company’s capital. Commenting on the new appointment, the Board of Pan African Towers said: “This latest appointment of Wole Abu, an industry veteran, will further consolidate the company’s achievement to date and position the company for future growth as Africa’s most preferred infrastructure sharing operator.”

Pan African Towers is a new player in the telecommunication infrastructure sharing industry that received collocation and infrastructure sharing license from the Nigerian Communication Commission (NCC) in 2017. Pan African Towers, which prides itself as an innovative player in the market currently has over 1,000 towers in Nigeria and Ghana within its 12 months of operations and has commenced build to suit collocation towers in Nigeria with plans to construct over 1,000 towers between 2018/2019.

Nasarawa Summit targets budding entrepreneurs

etermined to open windows of opportunities’ for budding entrepreneurs in Nasarawa State and beyond, SKDC Global Links Limited, an emerging markets and events company has slated the maiden edition of the Nasarawa Entrepreneurs Summit (NES). The event is scheduled to hold July 20 at Lafia, the state capital. Stella Ajige, the project coordinator, said the summit would provide the platform for entrepreneurs to attend the crucial entrepreneurship seminar that would hold as part of the summit. Additionally, participants would also have the opportunity of exhibiting their goods and services to an audience of over 2,000. She added that invited headline speakers will include distinguished experts engaged in small and medium business development. Ajige stressed that the NES will further bring the smartest ideas and entrepreneurial spirit of start-ups, innovation hubs, established SMEs together with government, policy makers, industry leaders, consultants and experts. “This unique audience has the influence and intelligence to

power faster social and economic development, create collaborative opportunity and stimulate business growth.” Armed with a mandate to identify barriers and challenges entrepreneurs’ face, the summit will proffer tangible business leeway to enable entrepreneurs seek innovative solutions like learning effective leadership communication skills, how to grow a business, the power of networking, influencing government policy and getting funding access towards expanding opportunities for all small business players. Beyond participating in the summit, the exhibitions will feature fascinating sights and sounds of Nasarawa Tourism sites/products/economic assets; cultural and heritage exhibitions. Service sectors such as: telecoms services, software, digital television, videos, music and local movie industry, Nollywood; subscriptions for cable television, payment gateways, tech support retail and wholesale trade, banking, business and accounting solutions providers; insurance, mining, manufacturing, fashion and style would be part of the package and focal point.

Thursday 05 July 2018

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BUSINESS DAY

COMPANIES & MARKETS Samsung targets Nigeria’s middle class with release of new devices

Business Event

…Includes high tech functionalities on mid-range smartphones Jumoke Akiyode-Lawanson

amsung has launched the latest additions to its Galaxy J family, Galaxy J4 and J6, its midrange smartphone series as well as the Galaxy A6+ in its high-end category, in Nigeria. According to Jingak Chung, managing director of Samsung Electronics West Africa, ‘the Galaxy J series smartphones blend materials with the most advanced Samsung technology. They have bright and vivid cameras, setting a new industry standard for design, craftsmanship and performance for smartphones in the mid-range category, and redefining the company’s signature Galaxy J series.’ Olumide Ojo, business leader, Information Technology and Mobile (IM) for Samsung Electronics West Africa, described the Galaxy J4, J6, and A6+ as a testament to Samsung’s leadership and

innovation in the smartphone market and its commitment to developing best-in-class products to meet the ever-changing needs of its consumers. ‘With the introduction of the Galaxy J4 and J6, we took the consumer feedback on our preceding Galaxy J models and made thoughtful and impactful improvements offering consumers a seamless convergence of style and performance for their everyday lifestyles. Both devices come with 32GB internal storage space; they are powered by 3000mAh battery, and run on the latest Android operating system – Android Oreo. With the Ultra Data Saving (UDS) feature, users can surf the internet longer whilst saving data, helping them stay connected for longer periods,’ Ojo said. The Samsung Galaxy J6 features an infinity display rear fingerprint sensor and both the J4 and J6 devices are imbued with Samsung’s legacy for high-performing

cameras with an advanced camera system that generates brighter and clearer images. Whilst the 13-megapixel rear-facing cameras on both Galaxy J4 and J6 enables users take amazing photos; the front-facing 5-megapixel camera on J4 and 8-megapixel on J6 let you take more stunning selfies. With dual messenger features, users can separate their work messages and personal chats with ease. Users can now connect to two different chat accounts on their favorite messenger apps. It’s easy to install and manage the second account from the settings menu. Samsung Galaxy J4, J6, and A6+ are designed to make consumer experience more enjoyable and productive. In addition, all the devices come with advanced security features, including Samsung Find My Mobile, a feature that allows users to remotely track and control their smartphones, especially in the event of theft or loss.

L-R: Sola Oyegbade, head, FCMB training academy, Sunny Onyia, CEO, Socatec Electrical Limited, Nonso Onyia, Socatec Electrical Limited at the Business Empowerment and Sustainability training organised by the Bank in Lagos for its SME customers

Access Bank partners ART X Lagos for emerging visual art talents Ifeoma Okeke

RT X Lagos, West Africa’s foremost international art fair, in conjunction with Access Bank, has announced Bolatito Aderemi-Ibitola as the winner of the 2018 edition of the ‘ART X Prize with Access’ which was instituted to recognise and support the best of emerging Nigerian visual art talent. Bolatito was chosen from a pool of several applicants by a jury of 5 renowned artists comprising pioneering artist, Bruce Onobrakpeya; Yinka Shonibare, Turner Prize nominee; Wura-Natasha Ogunji, highly regarded visual artist Honorary Fellow of the University of the Arts, London Sokari DouglasCamp; and gallerist and Oliver

Enwonwu, curator. Access Bank’s collaboration with ART X Lagos stems from a mandate to support and contribute to the development of the art sector in Nigeria by investing in Nigerian talent. The sponsorship of the ART X Prize with Access is a partnership that will celebrate, empower and provide vital professional development for a new generation of emerging Nigerian talent. Tokini Peterside, founder & director of ART X Lagos, remarked: “The extraordinarily high quality of work we received speaks volumes of the potential of the art sector in Nigeria. We are delighted to have the privilege to support the prize winner, Bolatito AderemiIbitola, at this pivotal stage in her career. “With certainty that this

will propel her forward towards a successful future within the African and global art industry, we look forward to unveiling Bolatito’s ambitious project at ART X Lagos 2018 in November. The project will introduce Bolatito to our international audience of critics, collectors and curators from renowned institutions around the world. We extend our heartfelt thanks to Access Bank for their support for this initiative and to our stellar jury for their tireless commitment and generousity to this effort.” Herbert Wigwe, CEO and Group Managing Director of Access Bank Plc opines: “At Access Bank, beyond our vast collection of established artists, we believe that we are also responsible for empowering emerging artists.

Emmanuel Patrick, marketing manager (2nd left) and Maria Oyewusi, quality control manager, all of SPAR Nigeria presenting the Overall Best School Award to students of Ajumoni Junior Secondary School during the ongoing SPAR Football Challenge at the Ilupeju store and other selected SPAR outlets in Nigeria

L-R: Aderemi Sanusi, head, consumer products, Ecobank Nigeria Limited; Kayode Odetola, head, Retail Mass Market, Old Mutual Nigeria Life Assurance Company Limited; Ayo Osolake, head, Personal Banking, Ecobank Nigeria Limited; Keith Alford, MD, Old Mutual Nigeria Life Assurance Company Limited; Unwana Esang, chief transformation officer, Ecobank Nigeria Limited during the Old Mutual-Ecobank Bancassurance partnership announcement in Lagos

54 receive funding from Microsoft, Accelerate LABS’ initiative

ifty-four winners have emerged from the Accelerate LABS programme, an initiative of The Future Project supported by Microsoft Nigeria. The winners were announced at the Grand Demo Day held at the City Mall, Lagos, recently. The Demo Day provides an opportunity for entrepreneurs to learn, network and pitch innovative ideas to investors so as to scale for impact. Speaking at the event, project lead of The Future Project, Bukonla Adebakin, said: “Our quest to identify, spotlight, and support the most innovative

entrepreneurs with impactful ideas has taken us to all the corners of the country including Abuja, Edo, Enugu, Kaduna, Bauchi and now, Lagos. “Getting the best young minds across the country to showcase their ideas have been a fascinating experience as well as an eye-opening one as we have seen them accomplish mind-blowing feats.” Divided into three streams, participants went through a 12-week incubation process covering taught sessions, mentorship, research and development. The initiative is blended in structure through Online and In-Class training,

supporting different sectors of the economy ranging from technology, fashion, education, agriculture, transportation, and others to stimulate development. “The initiative doesn’t just up-skill young people looking for an alternative to the conventional career route, but it also gives them tools and opportunities to put those skills to excellent use. Winners from Accelerate LABS Stream 1 have gone ahead to access funds from our partner organizations. They represent a new generation of businesses, scion of the pilot phase of the program launched a year ago,” she said.

L-R: Eden Vindah, sustainability/ regulatory relationships manager, Nigerian Breweries, Franco Maria Maggi, marketing director, Nigerian Breweries, Patrick Olowokere, corporate communications and brand communications manager, Nigerian Breweries and Eric Olaleye, Head HR Services, Nigerian Breweries at the Super Eagles Dome, Lagos.

BUSINESS DAY

Thursday 05 July 2018

INTERVIEW

Thursday 05 July 2018

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BUSINESS DAY

There must be holistic approach to home ownership – REDAN boss Ugochukwu Chime is the President of Real Estate Developers Association of Nigeria, REDAN and one of the speakers at the ‘BusinessDay Roundtable on Real Estate’ holding today in Abuja. He spoke to BusinessDay. He explained in details how the Federal Government could work closely with the organized private sector in making housing affordable for Nigerians while also stimulating the sector through proper incentives. John Osadolor, Onyinye Nwachukwu and Harrison Edeh were there for BusinessDay.Excerpts: Could you kindly talk take us through the developments, innovations in Nigeria’s housing sector, and how REDAN is keying in? here had been a paradigm shift in operations of many things across the country, as a result of technology and as a result of global best practice. Part of the thing it has resulted into is the fact that the way of doing things have changed drastically. Let me give you for instance the issue of housing. Prior to now in the 70s, I could recall that at that time, you have a way for civil servants to own a home. You start saving your money gradually, from moulding blocks to buying zinc, pay for timber with the timber people as the case may be. Thereafter, you commence building when you have enough money. The mortgage option now effectively in place has resulting in people being able to pick up your house, start staying in it while completing the payment. You have only paid in 10% and that qualifies you for the ownership of the house. It is so crucial that we understand that the paradigm shift in the housing sector, has created another room for investors in the society called real estate developers. This set of investors are playing a role that hitherto was being played by the government via the housing corporations and individuals who build their own homes. The second resultant aspect is that professionals in the building industry who were providing services to either Government or individuals towards housing design/ construction, are now answerable to the developers. These developers are the private sector players in the housing sector. And in the oncoming years there role as replacement of Government and individuals in the housing development value chain will become more evident. According to the Economic Recovery and Growth Plan (ERGP) of the Federal Government, 75% of the capital inflows and entreprenurial drive is coming from the private sector. This means that these professionals in the construction industry are going to be rendering services to this new set of investors who are going to fund the projects. The implication is that the necessary laws/policies that would guide, monitor the process of both this transfer of responsibility and the processes going forward are such that the roles, responsibilities are clearly spelt out and implementable safeguards put in place. For instance, we ensure that Government bureaucracy/incompetence and/ or the private sector profit motive does not override other key issues. And also bringing in the capacity and the drive of the private sector and the efficiency of the private sector, while dealing doing away with government’s bureaucracy that is associated with government’s procurement processes. That issue of ensuring that we have proper value chain, proper road map, and proper direction of where we are now. That requires every other party within the system to sit down collaboratively, define the road map that would ensure that the responsibility of each party and the return of investment or equity of each party is properly defined in such a way that there would

be proper harmony, that ensures flow in the value chain in the housing development in the country. That is in a nutshell about what is happening. The critical issue also is the fact that we also have a structured response to the housing deficit. Not an Ad-hoc response to the deficit, to be able to key in while also ensuring that all the parties in the housing value chain are fully involved. One party is the client; that is the civil servant, the workers (both in the formal and informal employment). What is the push in buying the house? It is the taste, the affordability, their acceptability of the house must be considered as a key priority. The government both at the state and the federal level are the owners of the land by the virtue of the Land Use Act. This issue has to be taken into consideration since every development is on land. The third element is on those who are in charge of the fiscal policy of the government -the Federal Government and the Central Bank must be part of what is going on. The fourth element are the investors who are going to trade in their capital, take risk of investments, while also ensuring that there is an entry and exit plan. Money is a coward, and it does not go to a place where it would be risked. So, as much as possible you de-risk the environment of the real estate, so that these investors who are coming into the sector, will now invest confidently. Otherwise, they are capable of investing in any other sector. The fifth set of people are the professional groups that we have. Those in this category include the surveyor, the architect, the estate managers, the town planners, who as a result of their professional training are supposed to moderate activities in the environment, to ensure that things are done in the proper manner that is in tandem with the global standards. These are the core issues that we face as a nation. The drawback of this in trying to manage, simulate, and improve on our system is something that is inter-administration. The current trend of four-year cycle of our elections is how it is structured for now, but developments transcend those cycle because there are many issues in a project .For instance, for a normal project of one thousand housing units, it transcends four-year cycle. In that respect, we are looking for a workable solution into the public sector, and how these stakeholders could play their role properly and have an understanding of the roles and responsibilities that is accruable to each parties. That for me is a challenge that we saw in REDAN, because by virtue of our position, we interface with each of these parties. We have seen our role as the Orchestra director who coordinates vast majority of choir with different instruments in a coordinated tunes. The role of REDAN is like the role of this Orchestra director, as we interface with all the parties, and we are coordinating it with definable, visible, benchmarks that we have set for ourselves. Could you kindly speak to these benchmarks that you have just mentioned now? The first benchmark we did was to streamline our constitution. During my first term for instance, anybody could come in and become REDAN Presi-

dent. That denied the organization the experience that the professionals offer. Now, before you become the President you must have passed through various stages, while also understanding the do’s and don’ts of the organization and the precedents and the decision making that has been taking by the Association. What I did was to amend the constitution with my colleagues, and past Presidents of various professional bodies. So, we decided that we are going to do something that will make the whole system to work better; that is first of all re-jig our own constitution and internal processes, to make it in tandem with the things that will outlive every chief executive. We are able to look at issues and brainstorm. This would enable us to have sustainability in policy and sustainability in what we are doing. We also made a lot of other changes within our organization, and we are now working with the various organizations to get data, because for instance, we keep talking about 17 million housing deficit, but the fundamental question remains, is it really 17 million? Is it 18 million and where are those figures from? So, if it is 17 or 18 million, where are the need? Does Ekiti State have the same capacity to absorb like Lagos does? Is it equal across the country, or are there areas of higher demand? So, we now have what we call National Real Estate Data Collation and Management Program, (NRE-DCMP), which has as its stakeholder: REDAN, the Central Bank of Nigeria, World Bank, FMBN, NMRC, Federal Ministry of Power, Works and Housing; National Bureau Statistics, National Population Commission, GIZ, GEMS 3. We invited these people and told them that we have a problem, and the problem is that when we go to international fora, we give figures that are contradictory. Even in some international fora, where two Ministers made presentations, their figures were contradictory. We say, can we have a more reliable data figure, and we now created this NRE-DCMP. We have four sets of data that we want to get. First, is the administrative data, which relates to land administrators, hence, how many lands do they have, what are the land administrators statistics from the states? Secondly, we need to get the business data. Who are those public and private agencies involved in housing? How many housing units have they produced, what about those who are not even producing, how many are they? If for instance we say, we want to develop one million housing in the country, do we even have enough estate developers to do it? The third data we are getting is the housing data. What is the statistics of housing data, it could be loan improvement; it could be changing from one bedroom to two bedroom. It could be changing from pit latrine to water system, hence we need to have these data. The fourth component we are also looking at is the affordability data, because you cannot ask an average civil servant to buy a house of N10 million, he cannot buy it because he does not have that kind of money to buy it, or the financial wherewithal in terms of his income to repay the mortgage loan. Also, we should further ask, people who are at the informal sector, what

Ugochukwu Chime

is their capacity to buy. As a result, we must design the solution, and not design in vacuum. So, these four sets of data are what we want to produce and that is why we are asking these institutions, what are your data needs? We have commenced works across the states, and we have been recording successes. The second thing we did was to work with other institutions, because we found out that when you talk of mortgage, there are two arms in mortgage. These include the Supply side and the demand side. The demand side is the mortgage companies, and the supply side is the developers. Hitherto, there has not been that simulation and interface management. So, what we have been able to do is to bring in Federal Mortgage Bank of Nigeria, and make them to understand the primacy of their role. This is because they are the custodian of the federal housing contributors National Housing Fund and carriers of the ambition of the Nigerian masses in respect to housing ownership. They needed to work together with developers, mortgage banks, look at the people they are serving and build a house that is acceptable, and compatible with their socio-economic needs. That understanding has been built up and we now have a meeting wherein we try to iron out issues. In the past for instance, a developer must have finished his house but may be having issues with the mortgage financing companies. And, if he did not exit the loan, the interest on which he got the loans would keep mounting. These are some of the challenges. We found out that we needed to interface more closely with what the developers and the financial institu-

tions are doing, and this is the fourth arm of our role, thus interfacing with the land administrators so that they could have a smooth transaction timing and pricing for the perfecting of title documents as a basis for mortgage, while we are also meeting with them and Building Material producers Association of Nigeria (BUMPAN) to let them know that if they could lower the price of their building materials, it would increase the turnover of everybody. So that you could have more inclusive activities and higher turnover in the building material sector. These groups I have mentioned are meeting together already, and we are looking at the supply and demand side of the interface and how it could be smoothened and meant to work better. We are also talking to the National Assembly, because currently there is no data law that governs the housing acquisition in Nigeria, and looking also at the issue of consumer protection. So that we could also have efficient foreclosure law. We want to have a more holistic bill that looks at the whole interface to find a way that restrains advert in the media space on housing without the consumers being protected. We have to have an inclusive look at the laws that govern real estate interface among the stakeholders, so that we would have a policy that guides everyone while making it possible for everyone to be more efficient. We have already gone to meet with the National Assembly and we are discussing with them, although we have discovered that the political stage is set for the election, but we will prepare all our issues so that we interface with the 9th National Assembly and ensure that this is passed. It is only last three years that India has been able to pass similar real estate bill .We are not really doing badly as a country, but we need also not be left behind. We are also going ahead in involving ourselves in training, because we discovered that many of our estate developers come from diverse backgrounds. Some are architects, surveyors, traders, some are not even educated at all. There are some minimum knowledge expected of the key

man who will drive Real Estate Development Company. So, we decided to have a Memorandum of Understanding with the University of Lagos, Centre for Housing Studies. So that we have series of training to ensure that everyone who wants to be in the real estate sector as a supplier must have appropriate knowledge to be able to play in that area. That for me is vital, that they must have accurate skills, and the competency to operate in that area, and if they don’t have it, it becomes a problem, and they cannot be efficient in the administration of land, finance, and other issues. We have done the first phase of training in Lagos, Abuja and Enugu, while we also plan to take it further across the country. That is what we are doing with training at the upper segment. We are also engaging with NBTE to have training for artisans, as most of the ones working for us are coming from far and near places. I remember in 1981 while I was involved in building a segment of Abuja International Airport, only seven of our workers are Nigerians, while others are from neighboring Mali, and others. Regrettably, the trend has not changed, because the blue collar workers such as the artisans must be efficient. No matter how well in the standard of material you buy, installation is also a key element of its effectiveness and esthetics. So, we have started that process of training these set of people. The first set graduated recently across the various parts of the country. Under the auspices of the Vice President of the Federal Republic of Nigeria, we had the N-Power Project. Those products from those N-Power projects such as the artisanal skills, have now been sent to developers. So, developers are giving them platform in the next nine months to sharpen their skills, because we are going to put them in a portal and things have changed. As we are moving to the next level of creating a platform whereby if you need a plumber, you go to that platform, query the software and get your answers. And as their names are coming up, to see the rating of those, who have used their services in the past about them, so the

person makes informed decision. What we are trying to do, is to change things and also we are trying to publish on our portals, the list of real estate projects that we are aware of. What this does for us is to build confidence with the public because such projects would be certified by REDAN. These are more things we are trying to do to ensure that the paradigm shift in home ownership approach gives us opportunity to improve the way things are done, while also improving the perception of the public on these issues. When is the portal going to be up? The Portal is going to be up by September to ensure that the portal is not hacked and there are so many other final details about the portal that we are still working on. On the Comprehensive data, you have revealed that the first leg is done, when are we expecting the second leg? We are programming ourselves and targeting the end of July for the second phase. The key problem we are having is that people are not willing to avail data, because of the fear of the Federal Inland Revenue Service, coming to ask for their own portion of tax. Secondly, we found out that many of the state governments are not keeping data in a manner that is in a comparable format. What we have tried to do is that we are going to help these institutions, first to make sure that the people who are giving us this information are releasing them in such a way that the fears they have mentioned are addressed. Thirdly, we are going to encourage the state governments to keep a more sustainable data platform, so that we could easily access data from them. So, what we did was that we are working in conjunction with the CBN. On the 9th of July, we have a land administrators’ meeting at the CBN - all the Commissioners of Land and all the Directors of Land and Directors of Town Planning are meeting here in Abuja, and we would be able to let them know what is needed. We are also looking forward to having some funding from some multi-lateral agencies, who are already interested to ensure we help them with basic data, which would help them in basic institutional framework they get from our data. In Nigeria, not up to 10 states have computerized their land administration data profiling, and that is not good enough. Let us try and keep basic data, and even if it is analogue, let there be a systematic procedure for harvesting basic information such as how many commercial, residential plots, Public used plots are available. These are basics, and it is not a rocket science. We are working on that data. Also, several components of other thing we are working on is to do enumeration of abandoned project and unoccupied houses to see house they could be used by human beings. How are you going to embark on this enumeration of abandoned projects? First of all is to know where they are located, what is their number, while also interfacing with the owners to know why they are abandoned. Some are abandoned out of litigation, some were abandoned because of the shortfall of

capital. Some because income of the targeted consumers could not reach the fixed price. In that case, we would look at the possibility of re-configuring the internal dynamics of the house, to make it easy for some consumers to occupy. What are the key prayers on the bill you are pushing for in the National Assembly? The extant laws we have in the country do not address the dynamics of the operations of the current approach to home ownership. Therefore, a new set of laws are called for. The extant was dove-tailed towards having an understanding that the major player is the government - such as the government housing corporations and others. The new law has to recognize the fact of emerging private sector dominance in the sector. Like I said, the ERGP released by the Federal Government last February has it that 75% of the investments into the economy is to be sourced from the Private sector. Consequently, you must have a new set of laws that recognizes that. The key component of that laws is that you have a National Housing Council. The National Housing Council National Council on Lands, Housing and Urban Development we have now is on the supply side, wherein the lands in the states in domiciled in the Ministry of Lands and Housing. That is not the whole picture, because it captures the supply arms, and you need to bring in the whole picture-the private sector people who bring in the money into the National Housing Council. The housing sector operators must be there. Hence, we are canvassing that there must be a new set of laws, that we take into cognizance, where we are today and where we are heading to, while also ensuring that the average consumer is protected. I remember in 1997 when the money was collected from Nigerians for houses to be built by the then Minister and that money went into the drains. It is gone. It is over. We have also have issues of developers collecting money from people and not delivering, and even Housing Corporations were also guilty of this in the past. If we have organization like the NCC NHC overseeing both the agency in public and private sector in communications, there must be code of conduct and standard of operations in any given industry, for that industry to be seen as serving its goal, and that for me is very critical element. The National Building Code, could you speak to it? The National Building code was first initiated in 2006 under Olusegun Mimiko, who was then the Minister of Housing. What it sets out to do was to define for us, what is the minimum standard of development in the sector. With respect to the Land Use Act, it is advisory that physical development policies and practices in every state is within the ambit of the control and discretion of the governor of a state. The National Building Code prescribed the minimum standard prescribed in various attributes of a house for it to be considered as a proper house. There are minimum standards that defines also the processes in what we ought to have .In so far as we know that the state governor has the power to have the physical development policies and processes for the state, we still

do know that he who pays the piper detects dictates the tune. The National Building Code is aimed at prescribing a minimum standard for each of these issues. What size of the room do you have? How many square meters could be called a room. It is very detailed, and it is something that we have been working on. I have been part of that when we worked on it in Kano under Mimiko.12 years down the line, we are happy they are looking at it, working on it and improving on it. There must be a standard code of operations so that each man must do what is right in his own eyes, and assume it is the right thing. Let us take another look at the issue of housing again specifically on land, funding and delivery. Is there anything being done to ensure affordability and availability meet at a point? What is being done is that, when we met as stakeholders as I have mentioned earlier, we started addressing the fears of each other. For instance we have about over 7 trillion lying in the pension fund. That pension fund is the money of the worker in Nigeria. But the National Pension Commission says we cannot give it to you because, the environment is not properly defined for investment in this sector, and they cannot also give the money again because the ease of doing business in that sector is not properly defined. We go to the banks, and the banks are supposed to pay in 10% of their profit and invest it in this sector. The insurance companies also have a role to play. We listened to them, and ask them, why are you not investing in this? The process is ongoing now so that we have to liberate the opportunities that are there in now. A whole lot is currently ongoing now to ensure we harvest from the Pension opportunities. On the mortgage finance side, the greatest fear for every mortgage is mortgage foreclosure, and retrieval of assets from the hand of defaulting mortgagee. The current laws that we have are tilted toward the defaulters and allowing them some measure of freedom, till the case is sorted out in Court. That is also being worked upon. As at today, the Kaduna State and the Lagos State Governments are the ones taking the lead in this initiative, in changing the ways some of these operations are done, in terms of foreclosure laws. The meeting of 9th of July is going to address that. All the state governments, land administrators and others will converge at the Central Bank to look at some of these issues holistically. What we need to do is that we need to look at the players and look at the off takers, finance suppliers to find out how can we do things together and cooperate seamlessly. We are meeting with the Trade Union Congress (TUC) and the Nigerian Labour Congress. We will raise the key concern of telling the Nigerian worker to accept what they could afford. For instance two bedroom flat with a toilet and a kitchen to yourself and not muddling up in ‘face me, I face you’ apartments, and some of them are resisting it. So, we are addressing the desire and the housing need of a Nigerian, both the civil servant, the formal and informal sector people. The oil money has spoiled the appetite for good thing, and we are no

longer contented with what we have and can afford. We are working towards all these and taking into consideration what could be afforded by the Civil servant in various parts of the country, whether in Jalingo, Awka or elsewhere. If it is N2 or N3 million the civil servant can afford, while working closely with the government asking them whether they could take out the infrastructure cost for the civil servants. We are talking to states, it is not something that is not doable, once we show them the template and if they are willing, we are good to go. Are you saying that the issue of affordability lies mainly with the governors? It lies with all of us. You recall when I said that the civil servants should also work towards what they can afford. Whatever the salary of anybody can afford, that is where the person focuses on, so that if the state is supporting they know how to come in. We really need to find solution, every stakeholder as I have mentioned must be determined to address the issue of housing for the Nigerian worker. Is there any strategy to address this issue of affordability? Let me put this in the context. 50 years ago, hundred years ago, if you could recall it is the role of the community to give house to eligible bachelors to assist them settle down. They help you to build a house, while you want to marry. So, it is the responsibility of the government to facilitate the process of housing provision. Let us not look at this issue in the eye of Father Christmas. You cannot have housing for all, without providing some form of subsidy for those at the lower wrung of the ladder. Even the United States under Obama gave some form of subsidy for those in the lower wrung of the ladder. Recall, when Adams Oshiomhole was the leader of NLC, he picketed Obasanjo, and told him that Labour would pull out of the National Housing Fund, if the Federal Government did not assist estate developers. Now, they have stopped giving that loan, and the price of those houses have gone up. Why is the Press keeping quiet on this issue? Whereas the infrastructure in Maitama, and Asokoro was provided for the people there free of charge. But in the estates where poor people are living, they pay for those estates’ infrastructure. So the inequalities are structural inequalities. Finally, if you ask someone to invest in a depressed sector, whereby there is no competition on the return of investments. You must have to give incentives. That is why abroad, when you want to put solar energy, there are some forms of incentives in form of discount to bring down the cost of the installations, because they are moving from fossil fuel to solar energy. There must be some way of putting incentives on the policy. Government must use incentive structure to improve performance in certain sector. This is part of what I mentioned that the National Housing Council should address. When we have the National Council on Lands, Housing and Urban Development National Housing Council, and the people from the finance sector are not there, then we are talking to ourselves.

22 BUSINESS DAY

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Thursday 05 July 2018

INTERVIEW ‘At GreenHouse Capital, we are committed to progress of women in technology’ GreenHouse Lab is a three-month accelerator within GreenHouse Capital focused solely on early-stage, women-led technology start-ups in sub-Saharan Africa, as well as African run start-ups domiciled in the US or UK with products that are scalable in African markets. It’s the first of its kind in Nigeria. According to TOSIN DUROTOYE, Director of GreenHouse Lab, “our mission is to provide early-stage, high-growth technology start-ups with investments and support infrastructure within the range of 250k USD and provide exceptional teams with the resources and network they need to drive growth and scale their companies both in emerging and international markets.” In an interview with BusinessDay, Durotoye shared why it’s critical to level the playing field for women in tech and how GreenHouse Lab plans to address this growing challenge. Excerpts…

hy is it important to address the lack of women in tech? As Nigeria moves full-speed ahead towards a technology driven future, a capable tech workforce will be critical to ensure continued economic growth across all sectors and industries. As it stands, more than half of global executives report a shortfall of tech workers which slows or prevents businesses from growing. With women holding only one in four tech jobs, it’s clear that a significant segment of the workforce is missing from the equation. Of the 25% of women in tech, only 21% are tech executives and of these, only 11% are African technology officers. Without women at the tech table, we’ll fail to tap into the vast brainpower and opportunity for innovation necessary to propel Nigeria and Africa as a whole, forward.

and fundraising. In addition to a structured curriculum, cohort participants are also required to engage in the hands-on application of concepts and practices learned throughout the program. Other channels of engagement include weekly lunch presentations, guest lectures, and office hours with the Entrepreneurs in Residence (EIRs). The program is residential and will be hosted at Vibranium Valley – our tech campus in Lagos. The program ends with a demo day where companies get to pitch their businesses to our wide network of local and international investors. As a VC firm with a portfolio of companies, GreenHouse Capital will also invest a minimum of 100k USD in companies that qualify and reach specific milestones. What is the criteria to apply to GreenHouse Lab?

Beyond under-representation, what other challenges are women facing in tech? In addition to being under-represented in the tech space, women are also severely under-funded. In 2017, women led start-ups received just 2.2% of available venture capital dollars although women-led start-ups produce over 30% higher return on equity. The implication of this on economic growth must be seriously considered. In addition, according to the 2017 ISACA Global Survey, 48% of women report a lack of mentors and 43% report lack of training and support. What is GreenHouse Capital doing to address these issues? At GreenHouse Capital, we’re passionately committed to the progress of women in technology. Our mission through GreenHouse Lab is to build world class, women-led technology companies by equipping entrepreneurs with the skills, resources and support needed to rapidly grow and scale their companies in emerging African markets. We do this by helping start-ups validate their ideas, bring their products to market and ultimately, attract venture capital

investment. In addition, we work to focus on program content that are specifically relevant to the challenges women face in the tech.

Why should eligible start-ups consider GreenHouse Lab?

...we believe that it takes the right team to build a successful company and as such, we select startups that are extremely passionate about their chosen vertical and demonstrate the necessary commitment to build the company of their dreams. Each start-up must have at least one woman on their leadership team which should consist of at least two members and at least one technical member

As one of Africa’s leading technology focused venture capital firms, GreenHouse Capital is uniquely positioned to offer expertise, a strong investor and mentor network and resources to grow strong companies. Over the past three years, we’ve invested in 15 companies and combined, they’ve raised $40M in capital. We also prepare our companies to take on the world stage and we’ve had a few accepted into globally recognized accelerator programs such as 500 Startups and Y Combinator. What can program participants expect from the program? GreenHouse Lab features an intensive curriculum delivered inperson and virtually. The program leverages existing entrepreneurship education frameworks and focuses on a variety of key topics including, but not limited to, product development, market segmentation, human capital, marketing,

At GreenHouse Lab, we believe that it takes the right team to build a successful company and as such, we select startups that are extremely passionate about their chosen vertical and demonstrate the necessary commitment to build the company of their dreams. Each start-up must have at least one woman on their leadership team which should consist of at least two members and at least one technical member. Selected start-ups will be required to commit full-time to the threemonth program in Lagos. Beyond this, we’re looking for early-stage, investment-ready tech startups that have identified a critical need in Africa and are building an effective, sustainable and scalable solution. We’re looking for companies that have developed, at a minimum, a beta-product and are in the process of refining their go-to-market strategy, building out sales channels and generating revenue. How can interested companies apply to GreenHouse Lab? The application for the program opened July 2 at www.greenhouse. capital/greenhouselab and closes on July 20. Interested applicants with questions may contact us at lab@greenhouse.capital.

BUSINESS DAY

Thursday 05 July 2018

CityFile

Accident claims 2 corps members in Bayelsa Samuel Ese, Yenagoa

fatal accident on Goodluck Jonathan Bridge across the Ikoli creek in Yenagoa has claimed the lives of two corps members serving in Southern Ijaw local covernment area of Bayelsa State. The corps members, it was gathered were on their way to the zonal office in Yenagoa for their final clearance when the tricycle in which they were traveling from Anyama in Southern Ijaw local government area collided with a truck laden with sand, on Monday. Two others who were injured and in critical condition are responding to treatment at the Federal Medical Centre, Yenagoa, according to the police public relations officer, Asinim Butswat. The police said the tricycle was trying to overtake another vehicle when it collided with the truck, a Mark Diesel with registration number SAG 242 XA driven by one, Damyar Uebari, male 39 years. The police said the two corps members, Omafuakpor Godwin and Adegua Victor both males were confirmed dead by a doctor when they were rushed to the Federal Medical Centre, Yenagoa. Butswat said investigations were still ongoing to unravel the cause of the accident while the corpses have been deposited at the morgue of the FMC. Meanwhile, the Federal Road Safety Corps (FRSC) sector commander, Igwe Ikechukwu Lawrence told Cityfile on telephone that the accident was caused by the recklessness of the tricycle driver.

FCT restricts trucks on Abuja-Keffi road

he FCT Vehicle Inspection Office (VIO) says the law which restricts movement of articulated vehicles along AbujaKeffi Expressway is still in force. The director of VIO, Wadata Bodinga, said this on Wednesday, stressing that Federal Capital Territory Administration (FCTA) policy, articulated vehicles should not operate within the hours of 6:30 a.m. to 9:00 a.m. and 3:30 p.m. to 9:00 p.m. He gave the examples of the articulated vehicles as trucks and trailers. He said that the policy had been in existence in the territory for over ten years. “We have always carried out public enlightenment on this policy and we have no plans to stop now,” he said. The director frowned at the claim of ignorance of the law by drivers of articulated vehicles. “When our operational personnel obstruct their movement, these drivers most of the time claim they are not aware of the restriction during unauthorised hours,” he said. He said the agency would curb the movement of these vehicles into the territory during unauthorised hours by erecting signages at designated locations. “Signages will particularly be mounted at the entry and exit points of the FCT,” he said, adding that the agency realised the importance of erecting signages after a safety survey was conducted in the territory. “We have realised that there is a need to place a signage to show that there is a restriction at least from a far distance. “With a big signage positioned, drivers should see the restrictions boldly and have no excuse to be on the road at unauthorised hours,” he said.

Residents of Aiyetoro community and its environs in Coker Aguda Local Council Development Area (LCDA) of Lagos State protesting alleged over-billing base on estimation, and demanding for pre-paid meters, this is the situation in most part of the state.

Killings: PENGASSAN wants security agencies to review strategies JOSHUA BASSEY

etroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has u rg e d s e c u r i t y ag e n c i e s to change their strategies towards ending the massive killings being witnessed in the country. The union, which expressed concern over the killings and wanton destruction of properties especially the recent case in Plateau State, in which over 100 people were massacred, decried the inability of the security agencies to arrest and prosecute the perpetrators.

“We equally frown at the alleged statement by the Meyatti Allah that the killings were in response to rustling of about 100 cattle in the area. This is not an excuse for lawlessness in a country that has government and security apparatus to handle issues. “PENGASSAN notes that the security agencies, especially the police seem helpless in the face of the mindless and unprovocative killing of innocent Nigerians. We therefore call for more recruitment into all arms of the security agencies, including the Nigerian Security and Civil Defence Corps (NSCDC) and also advise the security agencies to review their strat-

egies to put an end to the killing.” The union also advised the security agencies to improve on their relationship with the communities to enable them get necessary information before any attacks. “Besides, we implore the government to deploy a special squad of militar y and other forces permanently to troubled prone areas of Benue, Taraba and Plateau states. The Federal Government should rise above just condemning such killings and courageously do all it takes to protect the lives and properties of citizens which is the whole essence of governance,” the union said.

Enugu establishes centre for disease surveillance

nugu State government has approved the establishment of an Emergency Operation Centre for disease surveillance and control in the state. Fintan Ekochin, the state commissioner for health, who disclosed this to journalists in Enugu, Tuesday, said an isolation centre for highly contagious diseases like Ebola, Lassa f e v e r, Mo n k e y P o x , C h o l e r a a n d other emergency situations, has also been established. According to Ekochin, the facilities were established with the consent of the Nigeria Centre for Disease Control (NCDC). “We know that once in a while, there could be an outbreak of epidemic with all the emergencies that come with it. In the last six months, we have set up an isolation ward where we have clinical management

of patients with such disease conditions.” Ekochin said that the centre would ensure the protection of both patients and health workers in the facility. “To take this to the next level, we have gotten an approval to set up an Emergency Operation Centre (EOC). “This will be the information technology hub for the coordination of health emergency activities in the state equipped with communication gadgets,” he said. The commissioner noted that the EOC would become operational soon adding that whenever there was an epidemic, it would be communicated to those at the grassroots, state level, interstate, national and global. He said the government was also implementing policies that place the state above most of its peers in the

country. Ekochin said that the state, as a result of its commitment in maternal and child health, was nominated for the National Health Care Excellence Award by an international organisation. “We are just one of the three states in the country to be so nominated for the award and have received our nomination certificate. “We were recognised as one of the state governments with the best policies with particular reference to our free maternal and child health care programme,” he said. Ekochin said that it was gratifying that what the state government was doing was gaining global accolades. “This is something we are proud of. It shows that what we are doing is not just for the good of our people but a model for other states,” he said.

Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

24 BUSINESS DAY

Broadband Infrastructure C002D5556

Bank IT Security Thursday 05 July 2018

How tokenization can power small businesses FRANK ELEANYA

he word tokenization may not be as popular as bitcoin, but it is steadily becoming a trend for various industries. To be sure, every blockchain platform is powered by tokens, often known as “coins”. Bitcoin in that regard is a token – or coin, just as Ethereum, dash, Remit or Litecoin and any cryptocurrency that function over a blockchain. Bi t c o i n ’s p o pu l a r i t y comes from it being used as money, whereas tokens in general represent far more than medium of exchange. Every other digital currency does not function like bitcoin. Tokens can describe basically any assets that are tradable, from commodities to loyalty points to even other cryptocurrencies. Tokenization therefore refers to a method that converts rights to an asset into a digital token. In simple explanation, imagine you own a N500,

Blockgeeks

000 land at Mowe and you want to raise money. Tokenization can break down the price for land into 500,000 tokens, meaning that each token represents a 0.0005% share of the underlying asset. That token is issued on a blockchain platform, for instance Ethereum, to allow people to freely buy and sell on different exchanges. When a person buys one token of your 500,000 tokens,

it means they actually own 0.0005 percent of your asset. You can also add up your asset to maybe $1 million. You then break that amount into units of coins. For instance, you can create 1000 coins or tokens. Each coin will be worth $1000. Tokenization represents a world where as a business you can sell anything to raise money. One expert describes it thus, “The tokenization

Nokia 3.1 arrives in Nigeria CALEB OJEWALE

MD Global, the company which currently owns the Nokia brand has announced that the new Nokia 3.1 is available in Nigeria from accredited dealers for N50, 000 from 3rdJuly, 2018. Delivering premium experiences and a sophisticated aluminium design, the Nokia 3.1 is said to exudes the quality and craftsmanship you expect from a Nokia smartphone. By joining the Android One family, Nokia 3.1 is endorsed by Google as a best-in-class experience across hardware and software for its price point. According to Joseph Umunakwe, general manager, HMD Global West, East and Central Africa, “Nokia 3 has been an extremely successful part of the Nokia smartphone line-up in Nigeria. With so many people enjoying it every day, we’ve had a tremendous amount of positive feedback and a real motivation to refine our fans’ experience even further. We’ve made sure Nokia 3.1 delivers the perfect balance between power and design so our customers do not need to compromise.” Like the original, the new Nokia 3.1 blends a careful

selection of materials into a perfect harmony with a stunning design. Its anodised machined metal frame and sculpted glass display deliver the perfect combination for both stand-out looks and comfortable feel in the hand. Subtle but striking metal accents are matched with dual diamond cuts for a premium finish. The Nokia 3.1 runs MediaTek 6750, an octa-core chipset, giving twice the processor cores and a 50% performance boost on the previous generation so the phone can keep up with usage. Featuring an upgraded 13MP auto-focus rear camera, Nokia 3.1 captures the memories that users will want to relive over and over while the wide-angle front

of everything imagines a world where anything can be traded. Your liquidity is not restricted by cash or concrete assets. Instead, it can include anything you won, and maybe even your time.” The benefits of tokenization lies in the specifications of blockchain. First, it eliminates the need for third parties or intermediaries to execute transactions. Hence,

individuals and businesses can successfully execute their contracts and save the cost of hiring a broker or middleman. Similar to the first, is that there is also no need for intermediaries to keep the record of transactions and facilitate them because the transactions are recorded on the ledger. Blockchain by nature is a public ledger that records and validates all transactions chronologically. Hence, every transaction on the technology is recorded in the public ledger. Third, tokenization reduces the risks of double spending. Once anyone makes payment it is recorded for all to see. Fourth, it has a database that shows the complete history of ownership. In other words, aside just recording the amount of coins individuals bought, the history of every one that bought a piece of your asset, are also recorded and verified. This forecloses the likelihood of single point failures and unresponsive servers as data

stored on blockchain cannot be erased, it is transparent and allows for integrating principles of management into the assets themselves. Tokenization has implication for every industry. For instance, in the commodities market in Nigeria one company called Binkabi is already doing something along the line of commodity tokenization. Commodity tokenization is the process of putting commodities on the blockchain. At a recent Blockchain Conference organised by PricewaterhouseCoopers (PwC), Binkabi announced that it is introducing a product it referred to as Barter Block. Barter Block is a marketplace for deal identification and price discovery. The product is powered by BKB token on blockchain. “Binkabi is in active discussion with a major agribusiness group in Africa about the creation of a commodity exchange that would trade tokenized warehouse receipts,” the company’s CEO said.

The Cloud means business camera fits more into every selfie. Nokia 3.1 is entering the Android One family where it joins the comprehensive range of Nokia smartphones already delivering an experience designed by Google that is smart, secure and simply amazing. Nokia smartphones with Android One offer more storage and battery life out of the box, as well as the latest AI-powered innovations from Google to help you stay ahead of the game every day. Nokia 3.1 will receive three years of monthly security patches and two years of OS updates, as guaranteed in the Android One programme. This puts the new Nokia 3.1 among the most secure phones out there, always up to date with the latest Google services like the Google Assistant and Google Photos with free unlimited high-quality photo storage. By shipping with Android Oreo™ out of the box, user will be able to enjoy the latest features, including Google Assistant, Google Lens, Picture-in-Picture for multitasking, Android Instant Apps to discover and run apps with minimal friction, 60 fantastic new emojis and battery-maximising features like limiting background app use. The Nokia 3.1 comes ready for Android P.

FRANK ELEANYA

usinesses’ consumption of cloud technology could reach completion in 2025 with 100 percent enterprise predicted to become cloudbased, according to Huawei annual report. The world of cloud computing has gone mainstream as many more companies vie for one advantage or the other that it offers. Even larger organisations are beginning to realise that having a full grown and fully functioning IT infrastructure that responds to changes and requirements quickly and effectively can be costly. Hence, the decision to acquire more cloud space. Cloud computing refers to the practice of using a network of remote servers hosted on the internet to store, manage, an process data or information, rather than a local server or a personal computer. Cloud also

takes the responsibility of maintenance and regular updates to hardware and software out of company’s hands. There are different cloud models such as private, public and hybrid. Companies can choose any of the models according to their needs and resources. Data from the International Data Council (IDC) shows that about 85 percent of enterprise currently has hybrid-or multicloud strategy. It is the future of enterprise. In Nigeria, different industries are moving their entire processes to cloud. There is the attraction of scalability that it affords. Cloud services give businesses the ability to scale with the click of a button, or via application programming interface (API) calls. It is easier to bring in users and increase cloud usage as demand grows. A good cloud strategy provides flexibility for the work-

force. This means they can work from any location and at any time. They are not limited by borders, physical infrastructure and time. It also allows them to access their data from any device anywhere they are. Cloud computing in many ways levels the field for both big organisations and startups. In so doing, it enables innovation in any given market. Most cloud-based solutions are easy to integrate. This gives small businesses the opportunity to choose and integrate with various cloudbased providers. It is possible for them to manage their back office demands more efficiently at a reduce cost. Businesses that host on cloud are also better protected against hacking, infection and data theft. This is possible because cloud providers are mandated to comply with a range of stringent, security regulations in order to protect their customers’ data.

Spotting Refurbished PCs: Lenovo

fficially refurbished Lenovo units are to be clearly marked, and have the last part of the serial number changed, say from 4346-JP7 to 4346-RF1, the latter meaning “refurbished”. However, some views suggest getting refurbished or new

“Depends on where you buy it, if it is official Lenovo products, a refurbished machine would have a sticker at the bottom saying the product is refurbished, and would have a ‘REF’ in the model number” Checking on the warranty lookup via https://pcsupport.

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

lenovo.com/ng/en/warrantylookup for further details like manufacturing date / start date warranty and better yet to call in technical support to have it checked. As long as the warranty stands ok then you are still covered with the same warranty for every new machine.

Thursday 05 July 2018

Harvard Business Review

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BUSINESS DAY

Global Business Perspectives CONNEC TING

THE

WORLD

ONE

BUSINESS

TIME

GE to spin off health care division as part of major reshaping STEVE LOHR & MICHAEL J. DE LA MERCED

hen John L. Flannery took over as the chief executive of General Electric last August, he declared that he would not be nostalgic about the industrial giant’s storied past when reshaping the company for the future. He wasn’t kidding. General Electric said on June 26 that it planned to spin off its health care business and sell its multibillion-dollar stake in Baker Hughes, a major producer of oil field equipment, as Flannery turns the embattled industrial titan into a much smaller company. The company said it would retain just three major operations: jet engines, electric power generators and wind turbines. Those businesses accounted for 60% of the company’s $122 billion in revenue last year. GE, once the ultimate American conglomerate and a symbol of corporate power, had endured a painful decline in recent years. Executives could not sell the struggling parts fast enough. In the past year, shares in the company have fallen by half, cutting its market value by $120 billion. On June 26, in a sign of its waning influence, GE’s stock was officially dropped from the Dow Jones Industrial Average, having been one of the Dow index companies since 1896. In November, to help save some money, GE announced that it would cut its dividend, only the second time it had done so since the Great Depression. The current plan, Flannery said in a conference call with analysts, is to create “a simpler, stronger and more focused company.” Shares in the company rose on June 26, closing 7.7% higher as investors welcomed the change. For decades, GE added

businesses as varied as homemortgage lending and entertainment programming with NBCUniversal. The company shed its final stake in the television network and movie studio to Comcast in 2013. The thinking was that its corps of elite managers could make all the divisions profitable, even though they were in far different sectors. Jack Welch, who led GE for two decades until 2001, championed that model, becoming a superstar chief executive along the way. But the weakness of the GE model eventually became evident, especially when the financial crisis hit. At the time, GE was the largest nonbank financial institution in America, and its liabilities weighed on the industrial company. Under Flannery’s predecessor, Jeffrey R. Immelt, GE shed much of the finance arm, GE Capital. But Immelt also made big acquisitions, like building up its oil field machinery business. Soon after, oil prices fell sharply, dragging down profits. Although the decline of the company was obvious when he took over, Flannery’s challenge quickly looked far more daunt-

ing. The troubles at GE’s big power turbine business were deeper than expected. And earlier this year, the company took a multibillion-dollar charge and set aside $15 billion to pay for obligations held by its finance unit, mainly on long-term-care insurance policies. The travails were not Flannery’s work, but he inherited them. It was clear that costcutting and getting rid of a few smaller businesses, like the spinoff last month of its railroad business, valued at $11 billion, would not be enough. More drastic action was needed, and Flannery took it on June 26. what it had to do to move forward,” said Steven Winoker, an analyst at UBS. “The vision makes a lot of sense.” Spinning off the health care business as a separate company, GE said, is likely to take 12 to 18 months, and pulling out of Baker Hughes up to three years. The health care unit, which reported $19 billion in revenue last year, makes equipment ranging from MRI machines to products that aid cellular technology research. In an interview, Flannery, who ran GE’s health business

before he became chief executive, said his experience led him to conclude that it would do best as a separate company, free to seek investment and opportunities on its own. “In all these decisions, the issue is what is the best environment for these businesses to flourish — and for the shareholders,” Flannery said. Under the terms of the reorganization, GE will spin off a 20% stake in its health care unit into a new publicly traded company. It will then divest the rest of its holding to shareholders as a sort of tax-free dividend. GE will also sell off its 62.5% stake in Baker Hughes, gained in a merger of its oil and gas division with that publicly traded business in 2016. The proceeds from both moves will help GE reduce its net debt by $25 billion by 2020, the company said, strengthening its financial position. Jet engines, electric power generators and wind turbines, Flannery said, share similar technologies for power generation and propulsion. Their products are long-lived industrial equipment, and GE holds strong market positions. There

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are 65,000 GE jet engines in use worldwide, 7,000 power generators and 35,000 wind turbines. “These three are stronger together,” Flannery said. In the conference call and the interview, Flannery emphasized that GE’s management culture was being overhauled, as well as its portfolio of businesses. Corporate management will be leaner, with most decisions made by the businesses themselves. By 2020, corporate overhead costs will be trimmed by $500 million. Those cuts are in addition to a program to reduce companywide expenses by $2 billion this year. “Our businesses will be the center of gravity,” Flannery said. That is a conscious departure from the past, when GE was regarded to have top-heavy management. Even the company’s use of corporate jets — and in particular the use of an empty second jet to follow the one that carried Immelt — had been criticized as wasteful. The development of digital technology and advanced manufacturing, Flannery said, will remain vital to GE. But the individual businesses will decide how much and whether they want to essentially buy that expertise from GE’s research labs and digital unit. Much of the research at its labs, Flannery said, is consumed by the three businesses that will remain part of GE. But the labs, he added, will have to make changes to sustain a strong research capability, perhaps including doing contract research for outside customers. The digital technology center in San Ramon, California, had as many as 2,000 workers last summer. But the workforce has shrunk since then. GE invested billions of dollars in that unit, begun in 2011. “There will be no cost drag from digital by 2020,” Flannery said.

BUSINESS DAY

Luxury

Malls

Companies

Deals

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Thursday 05 July 2018

Spending Trends

Price Check: GB toiletries are more pocket friendly Stories by CHINWE AGBEZE

wo weeks ago, BusinessDay visited four grocery stores in Lagos to guide consumers on where to shop for food and beverages at the cheapest rates. Out of the four stores visited namely- Shoprite, SPAR, Grocery Bazaar and Prince Ebeano supermarket, Grocery Bazaar offered consumers the cheapest prices on more items surveyed than other grocery stores. This week, BusinessDay visited Shoprite, Spar and Grocery Bazaar branches in Lagos and compared prices between 12 products from each store. Again, Grocery Bazaar prices on toiletries were cheaper than prices in Shoprite and SPAR. The aim to track more

items this week was defeated as some items seen in one store were missing on the shelves of one or two others. To achieve fairness in comparison, similar product sizes were tracked. The table shows that as at July 3, 2018, Grocery Bazaar sells 75ml of Sensodyne rapid action toothpaste for less than Shoprite and SPAR. SPAR sells Omo multi A wash for N80 cheaper than Grocery Bazaar. Shoprite Ariel detergent price is lower than that of Spar and Grocery Bazaar. A 1kg pack of So Klin detergent on Tuesday at SPAR was N795, N819.99 at Shoprite and N750 at Grocery Bazaar. Within the same period, 140g of Colgate herbal toothpaste at Shoprite sold for N369.99, N370 at SPAR and N400 at Grocery Bazaar. 900g of Zip detergent was retailed for N589.99 at Shoprite, N560 at SPAR and

N530 at Grocery Bazaar. Also, 175g of Premier soap was sold for N179.99 at Shoprite, N175 at SPAR, N190 at Grocery Bazaar.

Likewise, a 75g Tetmosol sold for N199.99 at Shoprite, N200 at SPAR, and N170 at Grocery Bazaar. Out of the 12 items sur-

veyed, the prices of seven items at Grocery Bazaar prices were more pocket friendly and had price tied for one item. SPAR offered

consumers the cheapest prices in two items out of the 12 surveyed while Shoprite prices were lowest on one item.

Foods Limited has one of the highest standards of quality when it comes to food production and food safety processes, and we are glad to put a stamp on it today to mark what has always been our standard,’’ he said. ‘‘Rite Foods has the best production facility among all its competing brands on the continent. This is so we can have a heritage which we all can be proud of as Nigerians. This would put our country on the world map as an industrial force to reckon with.’’ On how they were able to maintain price and quality at a time when other Fast-

Moving Consumer Good Companies where either hiking product prices, reducing quality or quantity, Adegunwa attributed it to the firm’s symbol of quality and long-term focus. ‘‘The journey for us is a very long one. If you are focused on profitability today, you will have a problem. So, because of the fact that we are very longterm, we cannot tamper with our products,’’ he said. ‘‘We are very conscious of our symbol of quality. We just bear the losses knowing that tomorrow will be better. If anything, we are looking at how we can improve quality.’’ He also assured consumers who are worried about the visibility of Rite Foods products in some states that the company is working towards ensuring proper product circulation across the country. ‘‘Expansion plans are in place. By the end of this year, there should be additional capacity to take care of that,’’ he added. Rite Foods Limited was established in 2007 as a subsidiary of E-ssay Holdings Group. Founded in 1963, the E-ssay Holdings Group started in the photography business, by the mid-2000, the group diversified into the FMCG sector with the birth of Rite Foods Limited.

Rite Foods receives ISO 9001 certification …restates pledge to top-notch products

ite Foods Limited has received the Quality Management System certification from the Standards Organisation of Nigeria, the representative of the International Organisation for Standardization in Nigeria. The certification, known as the ISO 9001: 2015 is an international standard which is given to organizations that demonstrate the ability to consistently provide products and services that meet customer and regulatory requirements. Aboloma, director general/ chief executive, Standard Organisation of Nigeria said the ISO achievement was a demonstration of the conformity of Rite Foods management systems to internationally acceptable standard requirements with focus on continual improvement. Aboloma, who was represented by Mojisola Kehinde, director of laboratory services, said this recently during the presentation of the ISO certification to Rite Foods Limited at its factory in Ososa, Ogun State. ‘‘By the presentation of this certification today, Rite Foods Limited is adjudged to have a system that gives customers and interested parties’ assurance of your

ability to consistently provide products that meet relevant requirements,’’ he stated. ‘‘This focus on production of quality products will also strengthen your competitive strategies.’’ The director general applauded Rite Foods for putting a quality management system in place to demonstrate commitment to consumer satisfaction and adherence to statutory and regulatory requirements in the country. ‘‘By this achievement, Rite Foods have gained her place among a privileged class of Quality Management System certified organisations in Nigeria,’’ said Aboloma. He stressed the need for consistency in the production of quality products and challenged Rite Foods to ensure that the system remain effective to reap the benefits of ISO Quality management. ‘‘The production of quality products is of great interest to the nation since it promotes public health especially in the face of the prevailing health challenges in the country,’’ he said. The SON boss also called on private and public organisations that were yet to get the certification to do so to enjoy the benefits of ISO management approach.

‘‘This milestone achievement in the pursuit of production of quality product is worthy of emulation by all food and beverage industries,’’ he said. ‘‘The approach provides you robust, globally recognised and acceptable solutions to address the challenges associated with consistently meeting requirements and addressing future needs and expectations of your customers in an increasingly dynamic food and beverage production environment,’’ Aboloma added. Seleem Adegunwa, managing director, Rite Foods Limited said the journey to-

wards achieving the certification was enjoyable, educational and beneficial for the organisation. ‘‘The processes towards achieving the certification was not just for the certification alone, rather it is a culture we have chosen to imbibe in our everyday operation,’’ he said. Adegunwa reiterated the company’s commitment to remain world-class and proudly Nigeria adding that the company is making efforts daily to ensure that the world begins to recognise and associate being Nigerian with the very highest quality. ‘‘It is no secret that Rite

Seleem Adegunwa, managing director, Rite Foods Limited (second from the right) and other top executives during the presentation of ISO 9001:2015 certificate to Rite Foods Limited recently in Ogun State

Thursday 05 July 2018

C002D5556

Global retail update CHINWE AGBEZE

New openings par Zimbabwe has opened a new store in the countr y’s industrial capital Kwekwe. It is the grocery chain’s 14th store in the nation, and will create 70 new jobs in the community. Meanwhile, Russian food retailer X5 has reached a milestone with the opening of its 1500th Pyaterochka store in Moscow. Environmental flip-flop Nestlé has backtracked on its commitment to palm oil sustainability and as a result its membership to the Roundtable on Sustainable Palm Oil has been suspended. The Swiss food giant failed to submit its methods for ensuring environmentally sound practices regarding the oil. Trade war in US, Canada Canada has retaliated against the Trump administration’s new steel taxes, by imposing duties of their own on a range of American goods, including ketchup, whiskey, and maple syrup. Canadian Prime Minister Justin Trudeau is urging Canadians to carefully consider their purchases of American products. Customer appeal Amazon Go’s check-out free concept is likely to be embraced by shoppers, with 75percent of consumers’ surveyed saying they would be extremely likely to shop at such a store if one opened locally. Conversely, Walmart is going for a more

personal approach with the creation of a new executive role specifically targeted at improving customer service. Racial profiling Advisers have warned Starbucks that greater staff training measures among its 175,000 employees need to be taken to deal with racial bias. The coffee giant has been advised to conduct a “Civil Rights audit” across its 8000 stores. Strategic pairing in Europe, Africa Suppliers are worried following the news of a formal alliance between European grocery majors Carrefour and Tesco, with an analyst suggesting small suppliers and providers of own-label products have

the most to lose. Downward spiral South African retailer Steinhoff’s interim results reveal a GBP 530 million loss, following a legal scandal earlier in the year. Meanwhile, the shares of online mattress retailer Eve Sleep have plummeted 60% after it was announced that sales were significantly lower than expected. Thinking ahead in Asia Alibaba is hosting 29 African-based businesses at its Hangzhou headquarters to allow participants to experience the dramatic effect e-commerce has had on China. The online giant is also set to spend big on a new retail strategy and to combine its assets following the acquisition of Ele.me

in April. Shopkeepers protest Indian shopkeepers opposed to Walmart’s acquisition of Flipkart have been encouraged by a local lobby group to protest against the move with a host of sit-ins. According to witnesses, attendance fell far short of the one million protestors expected. Growing capital Is ra e l i -S i n g a p o re a n start-up Trax has raised USD 125 million in funding as it heads towards an initial public offering. The tech company’s imagerecognition technology is used by retailers including Coca-Cola and Nestlé to track their products on the shelves. [paywall Long-term alliances in

BUSINESS DAY

Europe After news of French retailers Auchan, Casino, and Schiever Group combining forces in purchasing with Germany’s Metro, Carrefour and Tesco also announced plans to form a global longterm purchasing alliance, as they seek to cut costs. Meanwhile, the British retailer is trialling a new app that will allow customers to pay for goods using their smart phones before leaving the store without visiting a till. Ally gathering Walmart is using its acquisition of Indian e-tailer Flipkart to unite companies together in the battle against online behemoths Amazon and Alibaba. Walmart execs have admitted that keeping minority shareholders on board at Flipkart was a deliberate move, with the company also keen to include Google as an investor. Raising the stakes Chinese e-commerce player Pinduoduo (PDD) is planning on raising USD 1 billion in an initial public offering as it takes on internet giant Alibaba and fights for market share. PDD has become one of China’s fastest growing start-ups and saw its revenue triple to USD 278 million in 2017. Up in smoke Australia has come up trumps in a dispute over the plain packaging of tobacco products, with the World Trade Organisation rejecting complaints by big tobacco exporting countries of intellectual property infringement and brand violation. Another 12 countries

are set to embrace plain packaging in an attempt to improve public health. Pro plastics Global retail majors Amazon and H&M are lobbying hard against a single-use plastic ban in an Indian state. The ban is likely to increase costs for companies but is consistent with the Indian Prime Minister’s plan to remove all singleuse plastic by 2022. Competition heats up in America Amazon’s private label brands are at an all-time high with nearly 80 original in-house products. Brands such as Mama Bear and Wag are turning up the heat on existing, established brands and are set to have a significant impact on the market. Sports talk Nike has cause for celebration with its shares jumping 12% following news of a strong fourth quarter performance. Meanwhile, fellow sportswear giant Adidas has warned its US customers of a possible data breach that could have jeopardised contact information and passwords. Rumour has it Ap p l e s e e m s s e t t o launch a platform to compete with rival Amazon Prime. According to industry sources, the tech giant plans to combine all of its media offerings into a subscription service, with predictions of a Netflixstyle streaming option to be added next year. Compiled by Chinwe Agbeze

Propertymart set to end special offers for consumers JOSEPHINE OKOJIE

ropertymart, a Lagos based real estate firm has concluded arrangements to end its special promotion offer for early subscribers of its ‘Fairmont Lekki Housing Scheme’. The offer which has encouraged many Nigerians to participate in the special offer for land sale is now set to close on July 13th. Deji Fasuwon, managing director, Propertymart, said the unprecedented turn out received for the offer and the need to get more Nigerians interested in owning properties on the Lekki corridor to the Fairmont platform made the company to shift the special offer forward as it ought to have ended a while ago. Fasuwon said the promise of providing ideal housing in order to cut the country’s housing deficit was

a factor in extending the promo by more weeks in keeping with the need to allow more people to par-

ticipate in the unique offer. It should be recalled that the property company in a surprise move according to

property market players and observers, decided to sell the Fairmont Lekki land at one of the most affordable

prices when compared to other property firms playing in the area. Aside the one-off pay-

Analysts: Chinwe Agbeze, Stephen Onyekwelu, David Ibemere, Graphics: Fifen Famous

ment of N12.8 million for those willing to purchase at a go, customers can also pay the same price under a five year or 60 months duration with an initial payment of N640,000 and a staggered arrangement which allows subsequent payments to be broken down to make it affordable for the discerning Nigerian who desires to live around the Lekki corridor and be close to Victoria Island and Ikoyi business districts. He said though the discounted offer window will be closed, the land will continue to be sold at its normal market price of 16.8 million naira. Speaking on why the company has focused on land sale in the proposed estate, Fasuwon said focusing on land sale with staggered payment option, offers easy access to credible real estate investments for the young and upwardly mobile Nigerians, while availing opportunity to scale their building projects to their taste and cost appetite.

BUSINESS DAY

C002D5556

Thursday 05 July 2018

Air Namibia deepens competition in Nigeria with flight commencement Stories by IFEOMA OKEKE

amibian national carrier, Air Namibia at the weekend marked its inaugural entry to Nigeria with flight from Windhoek, capital of the southern African nation to the Murtala Muhammed International Airport (MMIA), Lagos. The airline which starts with four times a week flights said successful opening of the Lagos route was the actualisation of long term plan to connect many countries in West Africa to southern Africa and other parts of the continent. Welcoming the airline to Lagos with the cutting of well embroidered cake that bears the airline logo, Peingeondjabi Titus Shipoh, the High Commissioner of Namibia to Nigeria, expressed his excitement to see the country’s national airline berth in Lagos. “It is an honour to welcome you to the inaugural flight of Air Namibia to Lagos from Windhoek City in Namibia,” he said. Shipoh said Nigeria and Namibia share a long history of solidarity and cooperation, dating back to the years of struggle for the decolonisation of Southern Africa, disclosing that Nigeria played a strong pivotal role in campaigning for Namibia’s decolonisation. “Today the political struggle is

L-R: Moses Shihepo, acting general manager, Ground Operations, Air Namibia; Peingeondjabi Shipoh, high commissioner of Namibia to Nigeria, Cameroon, Ambassador to Chad and permanent representative to ECOWAS; Chuma Anosike, Honourary Consul of Namibia in Nigeria.

on and we continue to enjoy peace and stability; however, the fight for economic emancipation of Africa remains to be won. Africa is now the new economic frontier. Africa needs to deepen intra-Africa trade to facilitate integration and derive tangible benefits from globalization,” he said. The High Commissioner said the role of transport and logistics sector has become extremely important for the African continent. “I am applauding Air Namibia

for taking advantage of the opening of African skies. This is an opening of new and more dynamic chapter in furthering and consolidating relationship between Nigeria and Namibia. This route will enable cooperation in all sectors; facilitate entry of Namibian investors to this strategic market. “Air Namibia’s venture into the ECOWAS market is to establish a win-win cooperation to exploit available business opportunities,

add value to the natural resources that both our countries are endowed with,” Shipoh said. Chike Ohiagu, the general manager, APG, the General Sales Agent (GSA) of Air Namibia, said there has been positive response to the flight of the airline to Nigeria with huge requests for Air Namibia’ flight tickets. “On behalf of APG Nigeria, GSA to Air Namibia we want to thank everyone that graced this occasion.

There is deluge of requests. It is a good sign that Air Namibia has come here to stay. Our duty is to sell tickets and make money for Air Namibia. In the next two weeks, there would be a forum where travel agents will be invited and we talk about Air Namibia and the product we have and the projections for the next few years,” Ohiagu said. The Nigerian High Commission in the Republic of Namibia who was represented by Uwem Johnson said that there is huge potential market for the airline in Nigeria and expressed the hope that in few months the airline would have daily flight from Windhoek to Lagos. Paul Nakawa, Spokesman of Air Namibia, who represented the management of the airline, said it was a dream come true that Air Namibia now operates to Lagos. “We are happy to come to Nigeria. We are here to stay. Namibia is open to Nigeria and we have a lot of things to offer. The first departure of Air Namibia to Accra from Lagos Nigeria on the 29 of June, 2018 is a special occasion and calls for celebration. This is a major milestone for our airline as we journey forward. “The creation of Air Namibia has gone a long way in connecting Southern Africa and West Africa. This comes as another option, given the fact that there are other players already in the market. Our objective is to create inter African trade and integration. We launched five routes in a space of three years,” Nakawa said.

Virgin Atlantic rolls out top summer travel tips for families

Air Peace, Benue seal deal on flights to Makurdi

irgin Atlantic is excited to welcome on-board families and friends jetting off for the summer holidays. Planning is key, especially when travelling with kids and large groups. From choosing travel destinations to booking flights, sorting out travel documents, pre-ordering meals and bringing your own car seat. With the help of our ground teams and Cabin Crew, we have put together some helpful tips to help make your travel experience seamless and fun. Frankie Starling, Cabin Service Supervisor at Virgin Atlantic said adults should ensure they have valid travel documents for their chosen travel destinations, to avoid last minute surprises. Starling said their choice of ticket entitles them to the airline’s fantastic range of baggage allowances. Virgin offers generous baggage allowances from 3 bags at 32kg each in Upper Class to two bags at 23kg each in Premium Cabin and two bags at 23kg as well as a hand baggage fare for those who like to travel light in Economy. She advised that parents travelling with kids should check their flight times to ensure they arrive at the airport on time and complete the check-in process at least 2 hours to flight departure time. “Ensure your little ones receive a children’s meal on-board by ordering one online 48 hours in advance. The meals offer food specifically designed

to appeal to children. Examples include: Pasta Bolognese with dinosaur pasta, yoghurt tubes, bags of fresh fruit and vegetables, mini Cheddars, raisins, jam sandwiches. “Speak to our crew once onboard as they can provide all parents travelling with children with a plastic bag – we know they generate a lot of rubbish. They can also provide you with emergency essentials in the event you run out, such as nappies, jars of baby food, plastic spoons and straws!,” she added. The airline’s cabin service supervisor also assured that the airline has a superb selection of the latest childfriendly movies, a dedicated TV channel and games suitable for all ages. There will be couple of new toys/ books on-board that can be wrapped and opened at pre-selected times. She said when it’s safe to do so, it’s fine for children to walk up and down the aircraft during the flight to stretch their little legs, adding that to make flights comfortable for babies (and peaceful for you), Virgin Atlantic have specially designed in-flight cots which passengers can prebook free of charge. Passengers can also bring their own child car seat to fit in your child’s seat as long as it meets safety standards. For children travelling alone, Virgin Atlantic offers a dedicated service for unaccompanied minors aged between five and fifteen.

EPUM SOMTOCHUKWU igeria’s leading carrier, Air Peace on Thursday closed a deal with Benue State Government to operate flights to the state capital, Makurdi in a few weeks’ time. Speaking at the agreement signing ceremony in Abuja on Thursday, Oluwatoyin Olajide, Air Peace Chief Operating Officer, assured that the airline would deliver exceptional flight experience to residents of Benue and others travelling on the Makurdi route. The route will be serviced by an

Embraer 145 jet under Air Peace Hopper, the airline’s subsidiary. The flights to Benue will terminate at the Nigerian Air Force Base, Markudi. The operations, Olajide confirmed, would cover Abuja-MakurdiAbuja and Lagos-Makurdi-Lagos. For his part Terwase Obunde, Chief of Staff to Benue State Governor, assured Air Peace of the government’s support to ensure its success on the Makurdi route. The commissioner, who represented the state Governor, Chief Samuel Ortom, said the government was grateful to Air Peace for accepting its proposal to fly to Makurdi.

The government, he added, would cooperate with the airline to ensure the launch of the route without delay. Air Peace recently acquired six Embraer 145 jets it plans to deploy to underserved and unserved routes in Nigeria and the West Coast of Africa, including Asaba, Bauchi, Kaduna, Osubi, Nigerian Air Force Base (Port Harcourt), Abidjan, Douala, Lome, Monrovia and Niamey. The carrier has also acquired two Boeing 777 aircraft for its long-haul flights to Dubai, Sharjah, London, Houston, Guangzhou-China, Mumbai and Johannesburg.

Ethiopian Airlines receives Africa’s largest 737 MAX

thiopian Airlines has announced delivery of the largest B737 MAX fleet in the Continent on July 2, 2018. The B737 MAX 8 features the new Boeing sky interior, highlighted by modern sculpted sidewalls and window reveals, LED lighting that enhance the sense of spaciousness ultimately boosting customers’ experience. The environmentally friendly aircraft has a minimal carbon emission and consumes 15% less fuel than the 737-NG. Tewolde GebreMariam, Ethio-

pian Airlines Group CEO, said, “It is an immense honor for all of us at Ethiopian to reach this milestone a few days after we colourfully marked our 100 fleet milestone and the latest acquisition is an affirmation of our continuing pioneering role in African aviation and the successful implementation of our fast, profitable and sustainable growth plan, Vision 2025. “Today, we are glad to include the B737 MAX 8, the latest in Boeing’s single-aisle series, in our young and modern fleet family with an average age of less than 5

years. As a customer-centric airline with a high adaptability to emerging technologies, we have been pioneering Africa’s aviation with latest-technology fleet throughout our 72 years history. In line with our growth targets under Vision 2025, we will keep on investing in further expansion of our fleet an in acquiring the latest aircraft the industry has to offer.” With this delivery of the new ultra-modern aircraft, Ethiopian’s fleet of Boeing airplanes grows to 73 jets, including the 787 Dreamliner, 777, 737 MAX, and the 757 and 767.

Thursday 05 July 2018

C002D5556

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

INSIDE Afam Osigwe speaks out over disqualification by NBA electoral committee

30 Babalakin urges young lawyers to acquire knowledge and build capacity

31 Photo File of the 12Th Annual Business Law Conference

Judges task Seniors Advocates on nation building

orried by the various challenges plaguing the nation, leading to a general breakdown of law and order and insecurity, members of Senior Advocates of Nigeria (SANs) have been urged to defend and strengthen the nation’s democracy by protecting its infrastructure. Speaking at the annual lecture of the Body of Senior Advocates of Nigeria (BOSAN) on the theme: “The Evolving Role of Senior Advocates in the Administration of Justice and Nation Building”, former justice of the Supreme Court, Justice Emmanuel Ayoola stated that apart from the need for the senior advocates to perform a front – rank role in ensuring quick dispensation of justice, there was also need for them to join in the protection of the National Judicial policy He said, “You must ensure that the policy by its implementation helps to promote, not only to the dignity, worth and quality of the bar and the Bench,” Ayoola said. He further urged them to ensure digging deep in enhancing quality in the growth of the Nigerian law as well as protecting Nigerian law in its application but also freeing it and its jurisprudence and literature from stagnation. In his remarks, the Chief Justice of Nigeria, (CJN), Justice Walter Onnoghen who spoke on the theme: “Practicing in a Regulated Profession: Challenges of Contemporary Law Practice,” stressed that the legal profession as a regulated profession serves as the bearer of the justice system as it is directly

L-R: Chairman, BOSAN, Continuing Legal Education Sub-Committee, Professor Fabian Ajogwu, SAN (left), former Attorney General of the Federation, Chief Bayo Ojo SAN, forner justice of supreme court, justice Emmanuel Ayoola, first woman senior advocate of Nigeria, Chief Folanke ,Solanke SAN, Chief Justice of Nigeria, (CJN), Justice Walter Onnoghen, Guest lecturer, Prof Fidelis Oditah SAN, QC, Chairman, BOSAN Lecture Organising Committee, Chief Felix Fagbohungbe SAN, and Chief Anthony Idigbe SAN, representating the NBA president, Abubakar Balarabe Mahmoud, SAN at the annual lecture of the Body of Senior Advocates of Nigeria (BOSAN) in Lagos.

engaged in the administration of justice. “As in the case of the medical practitioner, who is indispensable to the health needs of persons, the legal practitioner through ethical representation of clients plays an important roles in the social lives of persons which further transcends to the public’s confidence in the justice sector.” The CJN said the reform of the

justice sector is indispensable to the rule of law as it is through the instrumentality of reform that the yearnings of the public can be met. He stressed that measures required to strengthen the justice sector must be put in place as the success of judicial reforms depends not only on how we collectively identify and deliberate on fundamental issues affecting

the justice sector but on how we can ensure that pragmatic implementation of such reforms to the latter. Professor Fidelis Oditah SAN, QC, who also spoke at the lecture noted the challenges by the judiciary caused by the collapse of law and order in the country as well as political intolerance and greed, he Continues on page 32

Franchising in Nigeria: Models and legal considerations The franchise fees obtained and other ancillary fees obtained from the sub-franchisees may be split between the Master Franchisor and the Master Franchisee, or the Master Franchisee could have a specific franchise fee obligation irrespective of the fees received from subfranchisees.

FRANKLIN OKEKE

n our current economic clime with the growth of consumerism, markets for goods and services have become increasingly globalised with the coming of age of information technology. Franchising provides a means of expanding a business’ reach into new markets, new products and access to a wider customer base without the need for extensive capital investment. We will discuss the various models before delving into legal/regulatory/commercial considerations. FRANCHISING MODELS Master Franchising Under this model, the franchisor (Master Franchisor) grants a third party (the Master Franchisee) the right to operate the

business in a given territory, vide a Master Franchise Agreement (MFA). The Master Franchisee is referred as such because it has the right to grant “sub-franchises” to third parties within that territory while also receiv-

ing franchise fees from subsequent franchisees. The Master Franchisee effectively becomes the franchisor for that territory, operating the business and recruiting, training and managing a network of sub-franchisees.

Direct Franchising In this arrangement, the franchisor grants a third party the right to operate a single item business, rather than the right to open multiple outlets in a territory as in the multi-unit Developer Franchising or the Master Franchising model. This may be appropriate where the concept is not suited to multiple units (e.g. retail, quick service restaurants etc.), or where a franchisor prefers to have a direct relationship with each franchise operator in

a territory. Multi-unit Developer Franchising Here, the franchisor grants a third party the right to exploit a designated territory by opening multiple outlets. There is need for the third party franchisee to have considerable financial resources in order to fully utilise the territory being granted by the franchisor. This structure is commonly used in retail franchising. Management Franchising This structure is more common when the developer has sufficient capital to invest in establishing the brand in a given territory, but does not have access to the depth of operational expertise and resources required Continues on page 30

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BDLegalBusiness Franchising in Nigeria... Continued from page 29

Afam Osigwe speaks out over disqualification by NBA electoral committee A few days ago, news broke about the disqualification of one of the key contenders for the office of the President of the Nigerian Bar Association (NBA), Mazi Afa Osigwe, former General Secretary of the bar.b uttress his position: As reactions continue to pour in from various quarters, we bring you excerpts of Osigwe’s response in a piece titled, “ECNBA: How Not To Promote The Rule Of Law.” EXCERPTS...

to help ensure its success in that market. The developer obtains the right to operate an outlet(s) at the location but will engage a management company to operate the business on its behalf, which could be an affiliate of the franchisor. This structure is very common in the hotel and leisure sector. LEGAL CONSIDERATIONS Whatever model is adopted, the franchise attorney must ensure that strategies are put in place (dependent on the party he represents) for the efficient operation of the franchise.

“

or the avoidance of any doubt, let me state that this decision is not only arbitrary, it is high-handed, unfounded, unwarranted, unlawful, unconscionable, illegal, unconstitutional, capricious, null and void and of no effect whatsoever. It is a decision concocted and disingenuously honed by enemies of the Bar who are averse to progressive ideas. They are prepared to stop at nothing to ensure that the NBA remains perpetually under their manipulative control. The ECNBA purportedly hinged my disqualification on the provision of Section 3(a)(i) of the NBA Constitution, 2015. For the record, such a section only exist in the Constitution known only to and operated by the ECNBA. It is, therefore, not difficult to appreciate why in the rush to do the bidding of its masters and perpetrate injustice, the Committee carelessly but recklessly relied on a non-exiting provision in our Constitution to ground me. The other provision relied upon by the ECNBA is “Article 4” (sic)[correctly cited as Paragraph] of the Third Schedule to the NBA Constitution. By it, the Committee questions my “good standing” as a member of the Nnewi Branch of the NBA. In my earlier appeal to the ECNBA, I had impeached the decision of the body to disqualify me based on what it described as “no satisfactory proof of my relocation to Nnewi branch…” . To show either its incompetency or recklessness in doing its master’s biding the same ECNBA which included my name as an eligible voter Number 5 “under Nnewi branch” as captured in the Voters list released this morning, cites doubt about my membership of Nnewi branch as basis of my disqualification. We cannot have it worse than this. Again for the record, I had submitted along with my nomination form, the following documents in proof of my membership of the Nnewi Branch of the NBA: a letter of good standing” signed by the Chairman and Secretary of the Nnewi branch, receipt of payment of dues to Nnewi branch, teller evidencing payment of Annual Practice Fee

Thursday 05 July 2018

Mazi Afam Osigwe

as a member of Nnewi branch and voter’s list sent to the ECNBA by the Nnewi branch with my name clearly captured as No. 86 therein. Indeed, in what is clearly a palpable admission of my membership of the Nnewi branch, the ECNBA captured my name as No. 23518 in the final voters’ list published in the evening of 01.07.18. How the ECNBA still failed to see proof of my membership of Nnewi Brach is a matter that is beyond human comprehension. In any event, I have repeatedly maintained that by virtue of the provision of Section 9(2) of the NBA Constitution, the provisions of the Third Schedule have no relevance in the determination of the qualification or non-qualification of a person to contest election into a national office of the NBA. For the avoidance of doubt, I hereby state in clear and unequivocal terms that this unpopular, unlawful and reprehensible decision of the ECNBA is unacceptable to me and my teeming supporters. I reject it wholly and entirely. The decision has occasioned grave injustice on me and it clearly represents a miscarriage of justice. The image of the Association is now gradually being torn to shreds by the Electoral Committee. But as a social engineer and true democrat, I will leave no stone unturned and no turn unstoned in order to ensure that the right thing is done by the ECNBA and this horrendous decision is reversed. The ECNBA has by series of mis-steps and perverse decisions also shown it lacks the competence and integrity to be entrusted with the conduct of the election. The Committee made rules not founded on the NBA Constitution, clearly betraying the fact of its being teleguided by the General Secretary of the NBA and his cronies. All

the Committee did were in tandem with boasts made by the General Secretary, Chief of Staff to NBA President and many others. No better proof of ECNBA’s incompetence can be given than of the manner it manipulates the Voters register to remove persons whose names appeared as voters in the Preliminary Voters’ list, exclusion of persons related to me or known to be supporting me, duplication of names as well as gross failure to apply the law. Most frightening of the litany of incompetence by ECNBA is the implied reliance by it on ‘protests’ by branches to exclude names of lawyers who duly paid their BPF and Branch dues. We have never had it this bad. Less than twenty eight (28) days to the election, the electoral platform is not known neither is the procedure for voting known. We are watching. Posterity will surely remember this Committee as the worst that acted with so much impunity, scant regard for law and subject to control by a person who has no legal authority over them. Since the earlier decision of the Committee on 14.06.18 and today’s confirmation, I have been inundated with telephone calls, text messages and personal visitations by professional colleagues, associates, friends, supporters and other well-wishers who have shown unquestionable solidarity and expressed disappointment at the state of affairs in the NBA. I thank everyone for this exceptional show of love and hereby assure you all that I will not waver in my commitment to justice and fair play. My resolve remains unshaken by this unjust decision and in the next few hours, I shall be submitting my grievance of this impunity to a court of competent jurisdiction for adjudication. An injustice to one is an injustice to all!

Brand Protection Businesses should invest prudently to ensure that each target market will be underpinned by registered trademarks, patents, design rights (if appropriate) etc. Intellectual Property is usually never in perpetuity and the franchisor must ensure that a mechanism is put in place for renewals. Section 23 Trademarks Act, Cap. T13, LFN 2004, for instance provides that the registration of a trademark shall be for a period of seven years, but may be renewed from time to time. Patents, on the other hand have a limited term. Section 7, Patents and Design Act, Cap. P2, LFN 2004 provides that the term of a patent shall be twenty years from the filing date of the application. Real Estate-Franchise Lease It is important for the lease and franchise term to be synchronized. A key issue that could arise, where the terms do not align is that a franchisee may be left with no premises from which to operate or the franchise term ends but the lease term is still operational. Both of these scenarios are not only uncomfortable but can mean unnecessary financial exposure for franchisees. In sorting out the real estate factor in franchising, there are two usual outcomes: either the franchisor or the franchisee holds the lease. The franchisor holding the lease is a more straightforward arrangement because at the end of the franchise relationship, the franchisor simply recovers the premises from the franchisee (tenant). It should be noted that by holding the lease, the franchisor is primarily liable if the franchisee is in default of its (‘sub-tenant’) obligations. Where the franchisee is to hold the lease, the franchisor may assist the franchisee to locate a suitable property and negotiate with the lessor to secure: competitive rent; rent-free pe-

riod; and other incentives for the franchisee. This could be key in enhancing the profitability prospects of the franchise, especially in the start-up period. Many franchisors provide this service and even charge the franchisee an additional fee as part of their franchise package. Depending on the circumstances, it may be prescient for the franchisor to obtain an acknowledgment from the franchisee stating that the franchisee has: (1) conducted its own due diligence concerning the premises, (2) satisfied itself that the location is suitable; (3) entered into the lease as a result of its assessment of the premises; and (4) not relied on any representations or statements from the franchisor regarding the suitability of the premises. This is in order to reduce potential liability on the franchisor. With the franchisee as lease holder, the franchisor has no control of the premises, should the franchisee exit the franchise relationship. This could result - if the franchise agreement omits to preclude it – in the erstwhile franchisee deciding to remain in occupation of the premises under a different brand. In order to avoid this, the franchisor can insist on a clause in the franchise agreement stating that upon termination of the franchise relationship, the franchisor be granted the right to ‘step into the shoes’ of the franchisee in respect of the lease. This clause would be useful where the franchisor wants to retain possession of the premises due to its marketability, customer target and range etc. Restraint of Trade It may be necessary for the franchisor to include a trade restraint clause at the determination of the franchise relationship. This is to ensure that the franchisee is unable to use trade secrets garnered from the franchisor to operate as a competitor within a certain period. In Nigeria, the courts have held that trade restraint clauses are enforceable as long as same is within the scope of reasonability. In Koumolis v Leventis Motors Limited [1973] NSCC 557, the Supreme Court (SC) held that it is the role of the employer who seeks to enforce the restraint clause against the employee to show that the clause is designed for the protection of some exceptional proprietary interest of the employer and it is reasonable for such purposes. It went further to hold that an employer can lawfully prohibit the employee from setting up a competing business, or accepting a position with one of the employer’s competitors,

Continues on page 31

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Dr Wale Babalakin, SAN speaking at the event

balakin & Co to demonstrate its commitment to the NBA Lagos Branch and promote the initiatives of the Continuing Legal Education and Mentorship Committee (CLE) of the Branch. B&C has taking CLE to the next level, this is the first time the CLE was live streamed and it enabled not less than 690 lawyers to participate in the group mentorship session with Wale Babalakin. The online participants viewed from different locations from Nigeria, US, UK and three other countries. This was in addition to a 130 attendees that were physically present at the venue to learn at the eminent legal luminary’s feet. Tobenna Erojikwe, a partner with the Law Crest LLP and the Chairman of NBA Lagos CLE and Mentorship Committee, said that the Continuing Legal Education and Mentorship Committee have continued to encourage members to develop themselves and train themselves. Erojikwe explained that an evening with doyens of the profession is something that the NBA Lagos CLE

Selfie with the Learned Silk

and Mentorship Committee always do. He said: “These events have become so popular because of what is taken out of it. People are coming on life streaming and mentorship is a big thing across the world. We take feedbacks from members at meetings and monitor their progress based on this. “On the 11th of July, we will be launching a one-to-one mentorship scheme and that is going to be very big because we have a lot of young successful Nigerians, partners and associates in both foreign and local firms who are really keen to be part of the process.” He explained that the NBA Lagos CLE and Mentorship Committee is trying to expand the breadth of knowledge so that both the in-house council and people outside who have distinguished themselves give back to society, adding that the people who attend expect that this can really enhance their professional careers. He assured that the next lecture series, which is scheduled for September will be hosted in-house by MTN.

Winners emerge from 2nd edition of Paul Usoro Pro bono Challenge

ollowing submission of entries and a rigorous screening exercise, three winners have emerged from the second edition of Paul Usoro Pro bono Challenge. Paul Usoro Challenge is an initiative of the Law Firm of Paul Usoro & Co (“PUC”), which encourages young lawyers to take on pro bono cases, as a way of rendering selfless services to the community and supporting persons who are not able to afford legal fees. The lucky winners were selected after entries received were evaluated by a panel of independent judges, comprising senior lawyers including a Deputy Director of the Legal Aid Council and a senior counsel in a reputable top tier Nigerian law firm. To ensure transparency, the entire process of collation was conducted and facilitated by DKK Nigeria, an independent and leading Public Relations consultancy agency in Nigeria. According to the results, the winner of the first prize for this second edition of the Challenge is Halimat Adeniran of the Uniosun Legal Clinic. She is the team lead of Uniosun Legal Clinic, a group of young lawyers who have handled up to 35 pro bono matters within the South-Western part Nigeria. Halimat received a cash prize of N100,000 while the first runner up, Olanipekun Nelson received the sum of N70,000 and second runner up, Tonye Clinton, received the sum of N50,000. Speaking on the second edition of the Challenge, Paul Usoro, SAN said,

Paul Usoro, SAN

“the competition was born out of an overwhelming desire to reward young Nigerian lawyers who render free and selfless legal services to their communities. Lawyers should show empathy towards the less privileged persons in the society, especially women and children, most of whom are not able to pay for legal services. It requires a lot of patience and personal sacrifice to take steps to listen, recognize, understand and/or address the complaints of persons from whom one ordinarily expects no pecuniary or other rewards”. In the same vein, Munirudeen Liadi, Head of Chambers at PUC stated that, “this second edition provided a wider range of opportunities for more lawyers between 1-15 years post call experience to showcase and inspire colleagues with their touching Pro Bono cases, as against the 1-10 years post call eligibility criteria adopted for the first edition. The initiative is intended to reward the selfless and sacrificial efforts of lawyers who go the

BDLegalBusiness Franchising in Nigeria...

Babalakin urges young lawyers to acquire knowledge and build capacity enior Advocate of Nigeria (SAN), businessman and philanthropist, Dr Wale Babalakin has called on young lawyers in Nigeria to acquire knowledge and build capacity in order to be well positioned in the legal profession. The senior lawyer advised that young lawyers become dynamic and get active with regards to legal issues, especially with the affairs of the bar association through the various branches. He said “Do not sit down when you see young appointments, always make your comment and join us in the campaign to reposition the judiciary in Nigeria. Speaking during a lecture by Wale Babalakin put together by the Nigerian Bar Association, (NBA) Lagos Continuing Legal Education (CLE) and Mentorship Committee in Lagos, Babalakin said law reports require lawyers being able to distil the facts, the issues and the judgments from the case. He spoke on the need to increase the remunerations of judges, adding that lawyers must be paid well for them to deliver quality work. “There is a bright future for the legal profession in Nigeria but we have to work on it collectively by reviewing every facet of education until we get the standards back,” Babalakin said. He commended the NBA, the Lagos Branch, the chairman and the chairman of the organising committee for the great opportunity to speak to young lawyers and taking mentorship to the next level in Nigeria. “This is very resourceful, very refreshing and the best way to begin to mentor younger ones. I wish them great success,” he added. The event was sponsored by Ba-

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extra mile to defend the defenseless, ultimately restoring confidence and respect to the rule of Law in Nigeria”. Commenting on the pro bono initiative, Halimat Adeniran, the first prize winner, expressed her gratitude to the organizers of the challenge for encouraging young lawyers to render professional service at no cost. “I feel happy and excited winning the challenge. It is an amazing experience for me considering that with my few years at the Bar and engagement in pro bono services, I have been able to give back to humanity. It is also very inspiring to know that Paul Usoro, SAN and the PUC team have taken it upon themselves to reward young lawyers who are engaged in pro bono services”. She added that being the first female winner, “I feel so proud of this lofty achievement. For me, it is a firm recognition of my advocacy for the less privileged who cannot afford the services of a lawyer. More importantly, it is a collective achievement for all young female Counsel, and in particular our female Law Students in Osun State University, College of Law Ifetedo Campus’’. She encouraged young lawyers especially the females to take up more pro bono legal services most especially on issues that concern women. The second edition of the competition mostly featured humanitarian issues, particularly brutality to civilians by law enforcement agents, gender related issues and child abuse.

Continued from page 30

so as to be likely to destroy the employer’s trade connection by a misuse of his acquaintance with the employer’s customers or clients. Labour Issues A clause should be included stating that the franchisor cannot directly control the franchisee’s employees, including hiring or firing them. This is particularly important as globally, there is a debate being held as to whether the franchisor can be held jointly liable with the franchisee in the event of a breach of labour laws. Joint employer liability means the franchisor is jointly and severally liable for any labour or employment law violations committed by its franchisees (e.g. unpaid wages, unpaid benefits, minimum wage violations, antiunionization activity, etc.). In Australia, the Fair Work Amendment (Protection of Vulnerable Workers) Act 2017 (FWAA) was passed to protect employees by extending potential liability to franchisors for employment law breaches by franchisees. The liability is not automatic, but will arise where the franchisor “knew or could reasonably be expected to have known that the contravention by the franchisee entity would occur, or a contravention of the same or similar character was likely to occur”, subject to a defence that the responsible franchisor employed reasonable steps to prevent the breach (section 558B FWAA). Co-employment refers to a situation where an employee would be regarded as being employed by two employers any one of which may be bound by the terms of the contract of employment, and where each party has duties and obligations as an employer towards the employee. The principle of co-employment has been recognised by Nigerian Courts. For example, in Onumalobi v. NNPC & Anor. [2004] 1 NLLR (Pt. 2), 304, the SC held that the two Respondents were co-employers of the Appellant, relying on section 91 Labour Act Cap L1 LFN 2004 (LA). Section 91 LA defines an employer as “any person who has entered into a contract of employment to employ any other person as a worker either for himself or for the service of any other person…” The question whether two employers could be held to be co-employers in respect of an employee, will depend on the contract of employment and the surrounding circumstances. Wright v. Mountain View Lawn Care, LLC Civil Action No. 7:15-cv-00224, was a case in the United States of America where an employee of a landscaping

franchise could not show that the franchisor exercised enough control over her employment or that other factors suggested it should be held liable as a “joint employer” for the alleged unlawful acts of the franchisee. She relied on the franchisor’s control over logos, uniforms, letterhead, and vehicle colour. However, the West Virginia Federal District Court explained that control over the franchisee was not relevant and it was control over the plaintiff’s employment that mattered—which was lacking here. Conclusion Franchising is an important business tool; however it must be properly structured in order to deliver its anticipated economic benefits. In March, 2018, the United States-based doughnut and coffee franchise, Krispy Kreme, opened its doors in Nigeria; it is being promoted by Quality Foods Africa Nigeria Limited (QFA). Master Franchising might be the most suitable model of operation in Nigeria in order to ensure rapid growth and expansion whilst retaining the high standards. However, prospective parties must ensure they conduct their due diligence. Franchisors must ensure that adequacy of process to protect themselves from labour infractions committed by franchisees. Some of these include: franchisors limiting the level of trainings offered to franchisees; trainings should be limited to franchise owners and key employees with managerial authority; online training modules for lower level employees (if available) should be licensed to the franchisees, who in turn will provide the online training to their employees. Others are non-involvement in franchisee’s employment or human resource related practices such as hiring, training, firing, disciplining, setting work hours, handling payroll, providing worker’s compensation insurance, etc. If job applications may be submitted through the corporate website, it should be stated clearly that they will not be reviewed by the franchisor but will simply be passed along to the appropriate franchisee. This is to ensure that the franchisor cannot be deemed an employer according under section 91 LA. A well-structured franchise would reduce future disputes between parties as well as ensure both parties’ long term investment goals are met.

Franklin Okeke is a commercial lawyer focusing on franchise arrangements and practices with Messrs LeLaw Barristers & Solicitors, Lagos

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PHOTO FILE

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Photo File of the 12Th Annual Business Law Conference

The 12th Annual Business Law Conference of the Nigerian Bar Association Section on Busines Law (NBASBL) ended in the Federal Capital Territory, Abuja over the weekend. The three-day event which opened on Wednesday June 27th, 2018 through to the 29th was attended by captains of Industries, policy makers, regulators, members of the bar and bench, as well as several stakeholders in the justice sector. Among those who graced the occasion were the Vice President of the Federal Republic of Nigeria, Professor Yemi Osinbajo, SAN; the Chief Justice of Nigeria (CJN) ably represented by Hon. Justice Olukayode Ariwoola of the Supreme Court; Dr Okey Enelamah, Minister for Industry, Trade and Investment; Ambassador Chiedu Osakwe, Chief Negotiatot/DG Nigerian Organisation of Trade Negotiations; Ambassador Albert Muchanga, African Union Commissioner for Trade and Industry; Ambassador Ishmael Faizel, former South Afroca Representative to the World Trade Organisation; Haresh Aswani, Managing Director, Tolaram Group, Nigeria; Samallie Kiyingi, Director & General Counsel, African Export-Import Bank, and Kemi Arosanyin, Director, Africa Trade Expansion Programme, World Trade Centre, Miami, Florida.

Others are Ibrahim Dankwambo, Gombe State governor; Moses Frank Ekpo, Deputy Governor of Akwa Ibom State; Dr. Stephen Karingi, Director, Regional Integration and Trade Division, United Nations Economic Commission for Africa; Prof Bola A. Akinterinwa, former Director General, Nigerian Institute of International Affairs; Segun Awolowo, Executive Secretary, Nigeria Export Promotion Council; Clara Bot-Mang, HR Director, sub-Saharan Africa, GE; Tony Luka Elumelu, Head of Free Movement and Migration Division, ECOWAS Secretariat; Afolabi Imoukhuede, Senior Special Assistant to the President on Job Creation and Youth Employment, Office of the Vice President, among others. Over the years, the a nnual conference of the NBA-SBL has continued to be a platform for business lawyers a nd the business community within and outside Nigeria to network and engage on issues relevant to their fields as well as to establish a thriving relationship between the p rivate sector and government institutions. SEE PHOTOS BELOW

Professor Yemi Osinbajo, SAN, Vice President Federal Republic of Nigeria.

Olumide Akpata, Chairman, Nigerian Bar Association Section on Business Law (NBA-SBL)

Okey Egbuchu, Chairman, conference planning committee (CPC).

Ambassador Chiedu Osakwe, Chief Trade Negotiator & DG, Nigerian Office on Trade Negotiations.

Ambassador Ishmael Faizel, Former South Africa Representative to the World Trade Organisation

Dr Adeoye Adefulu, Vice Chair, conference planning committee

Dr Okey Enelamah, Hon Minister For Industry Trade & Investment

Former governor of Cross River State, Liyel Imoke (L) presenting a gift to Hon. Justice Olukayode Ariwoola of the Supreme Court who represented the CJN.

Hon. Justice Olukayode Ariwoola of the Supreme Court who represented the Chief Justice of Nigeria (CJN).

L-R, Chidi Ifeonye, Ezenwa Anumnu, former Chairman, NBA Abuja branch, Auta Nyada and Mazi Afam Osigwe.

L-R, Essien Udom, Mfon Usoro, former Chair, NBA-SBL and HRH Serena Dokubo-Spiff, former Secretary to Bayelsa State Govt.

L-R, Okey Egbuchu, Chairman CPC, Gbenga Oyebode, MFR and Kunle Ajagbe, Chair programmes subcommittee

Judges task Seniors Advocates... Continued from page 29

L-R, Olufemi Fadahunsi, George Etomi, & Akin Osinbajo

Olumide Akpata, Chairman, NBA-SBL (L) with Prof. Oserhieme Osunbor, former governor of Edo State.

urged members of BOSAN to assist the court to achieve the objective of criminal and civil adjudication. “As role models, members of BOSAN, he said, should ensure the prestige and survival of the rank by demonstrating integrity and exemplary conducts”, he said. Prof Oditah also stressed that senior advocates should not allow elections to become instruments for the subversion of the will of the people, for example, by using the legal process abusively to challenge free and fair electoral results as happened in 1993, nor assist despots to claim or retain power. “To my mind a senior advocate of Nigeria has five principal roles in the administration of justice. The first is to assist the court to achieve the objectives of civil and criminal litigation, which is a just disposal of the case based on the law and the evidence. This duty

transcends all other duties. “A senior advocate must assist the court to resolve disputes before it through effective presentation rather than soaring rhetoric, waspish oratory or recourse to delay tactics and dilatory manoeuvres. Effective court room presentation requires the senior advocate to show mastery of the facts of the case and sound knowledge of the substantive, procedural and evidence laws. He must naturally promote and protect fearlessly and by all proper and lawful means his client’s best interests. However, to champion the cause of his clients fearlessly is one thing; to mislead or deceive the court of opponents is quite another. Two aspects of this role deserve special mention. The first is the duty of candour “If senior advocates allow themselves to be used to thwart the will of the people and our democracy fails, we would have done ourselves and

society the greatest disservice. This is a responsibility which falls on both the senior advocates and the courts and it is a heavy one”, he Noted. In his remarks, the chairman, BOSAN, Continuing Legal Education Sub-Committee, Professor Fabian Ajogwu, SAN, said the lecture is an effort on the part of the Body to enhance the knowledge of members of the inner Bar and other legal practitioners. According to him, It is clear and evident that the affairs of the country need the input of senior lawyers who are well versed and grounded in the nuances of the law. This is imperative as the law is the backbone and fulcrum of developed societies. The lecture, which was attended by members of the bench and the inner bar from all over the country was aimed at sensitising members of BOSAN on their pivotal role in justice administration in Nigeria .

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Thursday 05 July 2018

GARDEN CITY BUSINESS DIGEST Corporate good governance principles:

SEPLAT: The pretty lawyer and FRC model IGNATIUS CHUKWU

er name is Barr/ Mrs Obianuju Othneil. This newspaper as a matter of house rule does not put titles to names of its newsmakers but in this case, the titles have a role to play in this story. She sat calmly and elegantly, illuminating the high-table at the Financial Reporting Council (FRC) public hearing & sensitization session on Nigerian Code of Corporate Governance in Port Harcourt on Friday, July 29, 2018, at Novotel Hotel on Stadium Road, close to Air Force Junction. Othneil, SEPLAT’s head of legals, represented her boss, Austin Avuru who was special guest of honour on the occasion, who actually should have sat with the Executive Secretary/Chief Executive Officer of the FRC, Daniel Asopokhai, as well as the Commissioner of Commerce in Rivers State government who was represented by Paul Damgbor (director of special duties). The chairman of the technical committee of FRC, M.K Ahmad, was seated too while the president of the Port Harcourt Chamber of Commerce, the medical doctor turned big time entrepreneur, Emi Membre-Otaji, was by Othniel’s left. Other dignitaries were also on the high-table and in the audience. The FRC seemed to need role models both corporate and individually. They seemed to find both in SEPLAT. The narrative about the company seems the most appropriate for

the essence of the day’s event while the radiating presence of the legal head represented the individual character needed at that moment. Probably because Othniel was billed to leave the venue fast, she must have deliberately been given early chance to speak for her boss, and she simply swept the floor off the feet. It turned out to be a big strategy, even unintended. She ended up telling the story of SEPLAT, this time, not about oil exploration and engineering feats but about the high standards and global corporate good governance status the company has come to represent. This alone seemed to enlighten what was already slipping into a chilly and giddy atmosphere. Financial leaders are not the best humours. By the story of SEPLAT and good governance relativity, the objective of the workshop and the work of the FRC seemed done. The message seemed clear. Obianuju as many preferred to call her, began by showing that aspiring to attain good governance status was better for companies. “Corporate governance is critical to the long-term interest and survival of any organization especially corporations. It however takes discipline. For instance, it will be difficult to give business to associate of the leader of a company”. Eyes began to pop because most persons in this part of the world rather think they were being heroes by handing businesses to their relations. In fact, it is often a thing of boast and prestige.

Obianuju Othniel

She went on to show most firms hardly survived beyond the 20 years mark whereas many abroad count to over 100 years, from generation to generation. So, why do companies die in Nigeria so young? The lawyer answered herself. “It is lack of corporate governance.” So, she went on, SEPLAT asked what it would take to also survive like foreign companies. The company was determined to do it. “It was found that corporate governance was it. One of the things SEPLAT did was to aspire to be an international

company and therefore pursue international practices to achieve international standards. In 2010, we listed in the Nigerian Stock Exchange (NSE) in order to embrace national standards of a corporation; in 2014, we listed in the London Stock Exchange. This launched us onto the international arena and we also embraced international practices or corporate good governance standards.” The lawyer held her audience spellbound, thus: “It is difficult to achieve international corporate governance

standards. The benefits are however huge. If you go for loans abroad, they will say, oh, Nigeria: bribery, corruption, nepotism, related party patriotism, etc. The solution to all that suspicion is adoption of Corporate Good Governance. It is not about saying what you do, but how you do it.” She said SEPLAT has fought hard to meet corporate good governance targets. Gain? The company does not go through some of the requirements imposed on Nigerian companies by foreign authorities. “This is

because of our sound corporate governance status. This ensures sustainability, and access to international investors who are afraid of Nigerian companies. We therefore fully support the national code. It is the only way for companies and organizations to survive.” FRC had run into storms in 2016 when its former board released bombshells of forcing out some church leaders and company CEOs. This led to new approaches by the new board and the principles-based approach instead of rules-based system. SEPLAT became more noticed in Port Harcourt mostly due to its duel with Belema Oil which swept the grassroots and communities as it hit the ground running after the acquisition of Oil Mining License OML 55 from Chevron. The matter (over debts and attempt to acquire Belema oil) was really protracted in courts until March 1, 2017, when newsmen were invited to witness rapprochement marked by signing of MoU. More than one year after, peace and progress seem to reign between the two oil companies and huge prospects seem ahead. Now, SEPLAT is being held high as a model for corporate good governance, and Obianuju did a pretty job of preaching this. The expectation is that Nigerian companies would embrace the spirit of good governance so as to hold their heads high anywhere in the world. SEPLAT’s Obianuju would be a good model for this cause.

Mikel Obi’s ‘The boys pushed, and pushed,’ as metaphor

Port Harcourt by Boat With IGNATIUS CHUKWU

ow that the defeat of the Super Eagles at the feet of the Argentines is getting cold, attention is shifting to the realities of the performance of the boys. We can look at the takeaways. One that looks ordinary but seriously significant by the day is the agony or breathlessness of the interview granted by the captain, Mikel Obi, immediately after the game. Many wonder if he must face such questioning at that point; Yes!

And so, while trying to know what hit the team from behind, a team that stood Argentina man to boy, skill to gut for 86 minutes, Mikel Obi was pushed unto the camera. In answer to a question, this young Nigerian fought and fought to push out words from his stomach and throat. His face squeezed, his lips twisted, and his mouth contorted like someone fighting epilepsy. Jesus! What a pain, what a sacrifice. Some of us have never felt such sense of patriotism and sympathy for the Nigeria before. Mikel tried with every question to push out answers. On how the team lost, he squeezed, twisted some more just to create an answer that meets the moment, and could not. He screeched out words of how ‘The boys tried and tried, fought and fought, pushed and pushed, but…but, it was not to be”. Oh my God! The pain of the loss seemed greater than any joy of victory. Mikel communicated the

full meaning and full pain of defeat; the pain of a man of valour, the anguish of a true patriot, one not ready to fall, and not willing to surrender. They were underdogs but the task must be attempted. It forced some of us to recall moments during the gruelling encounter when each Super Eagles player scratched, clawed, kicked, blocked, and did everything under the sun to stop alpharated players such as Messi, Di Maria, Aguero, etc. It was a day Messi was a wounded Lionel. Ronald and Portugal were ahead of him. It was a day his team was holding only to a point. Argentina needed all three points. Nigerians were rookies. It was a day all Argentine legends led by Maradona flew down to join the battle, whereas only corrupt government officials flew in to cheer the Super Eagles. Knowing the underworld networks that make things happen, it cannot be ruled out what those legends that enjoy the kind of global

influence that often wheels world cup hosting rights to favoured countries, that gets the right referees, etc, could do. If some of those legends could openly give Nigeria the onefinger insult for daring to delay the progress of the Argentines, would it be far-fetched to guess what they could do with their influences and connections globally in terms of referees and other things. Little wonder a referee could see ball-tohand when both the ball and the hand belonged to one and same person; whereas the world had seen such balls before and what referees ruled. Little wonder God allowed a repeat of same ball on July 1, and it was straight penalty, even when the owner of the head was different from the owner of the hand. Even some Nigerian writers who want to sound like they know more than the referee forgot that when the movement of a ball is affected by the hand, and that hand is not on the body, its a penalty, no matter what any

FIFA Article says. Hand-to-ball counts if you put your hand on your body such that it does not create additional blockade to the ball. Whatever the case, the boys pushed, pushed and pushed, but it was not to be, as Mikel gushed it put. Yes, we know that some of the boys made mistakes and some were selfish in front of goal, but the fighting spirit and the collective will to die fighting must be saluted. Some of us would give national awards to these boys, not because of results, in a tournament that saw the likes of Germany, Argentina, Portugal, Spain, all former world and European champions, go home early. Once again, the boys should stay on with their coach. This was the best preparation Nigeria ever had in recent years, the calmest, and the most scandal-free. Everything was well arranged and sorted out. The jersey won awards, the preparation received global commendation. Nigeria can

only build on this. What to build on is far beyond the calm preparations but the gutsy approach of the Super Eagles. These inexperienced boys stood Argentina head to head. It was gritty. This should be the new national creed on patriotism. This is how any one or group representing Nigeria should behave, including those who serve as delegations to other countries. They must pay all attention and all efforts to the task on hand than the jamboree mentality we see everyday. Our political leaders must push, push and push to the end on any matter of national assignment. Never again must a Nigeria go with lax in standing for Nigeria; it must be total grit or nothing. On this score, whether they failed or not should not be the issue but the total adrenalin that must be poured, the total gut that must be invested in any national endeavour. That is our new standard; that is Nigeria’s new national creed. Push, push and push.

BUSINESS DAY

Thursday 05 July 2018

FEATURE Amended company law positions businesses for global competitiveness

Starting a business in Nigeria has for years been needlessly burdened by bureaucratic red tapes which made operations difficult, but a new law may be fixing this in the near future, and even for the large organisations, stimulate global best practices and competitiveness writes CALEB OJEWALE

usiness registration in Nigeria was for many years, a ritual that could be akin to the process of launching a rocket into space. Worse still, one that appeared to follow the processes and mechanisms deployed when man first landed on the moon in 1969. Nigeria’s 1990 company law has been all that guided the business environment for 28 years, a period during which many progressive countries had reviewed their laws to be in tandem with modern realities. The 1990 CAMA act had quite a lot of ambiguity to it, appearing to require special understanding and having intricacies which could make non-lawyers feel they had perhaps, “missed their road” in whatever other professions they were pursuing. The senate now appears to have fixed this. The equivalent of company law in Nigeria has now been amended, and has but a few parliamentary bottlenecks to wriggle through before the president’s assent is sought. Bukola Saraki, the Senate President, said of the bill’s passage, that “This is a pro-business law. This bill that we have just passed will show the audacity that we have to move Nigerian businesses into a new era of success and development”. The Senate and its leader noted that the new bill would help to make the business environment of Nigeria as competitive as the best around the world. The Senate further stated, “It will allow business owners to now register their businesses in a faster and more efficient way, using technology; removes all the unnecessary regulatory provisions, such as the requirement for ‘annual general meetings’ and ‘company secretaries. It reduces the minimum share capital for all companies and start-ups in Nigeria, which will encourage more investments and create new jobs.” CAMA, as proposed by the Senate, provides some exciting developments. The existing law had roots in the Companies Law of 1948 of England, modified for Nigeria. Fundamental changes include allowing one person to incorporate a company as against two or more in the old law, thus allowing the opportunity to operate as a separate legal entity without the risk of loss of personal assets. It has reduced the minimum share capital to encourage more investments, and also removed the requirement for statutory declaration of compliance. Some highlights of things the bill seeks to achieve include: 1. Appointment of Company Secretary becomes optional The new law makes the Com-

legal backing. A group of lawyers at Olaniwun Ajayi, also in a BusinesDay article, noted that recognising the utility of technological advancement, the Bill now statutorily recognises that applicants may reserve their names through electronic means. This arguably offers little by way of change, and serves as codification of established practice.

Bukola Saraki

pany Secretary optional rather than mandatory for private companies as was the case with the existing law, Section 293(1) of the Companies and Allied Matters Act Chapter C20 LFN 2004 (“CAMA”). The Senate seemed to have taken the side of those who argue that the role of Company Secretary is not directly concerned with company management but is merely administrative and therefore needless for small firms. Moreover, the qualifications for a Company Secretary for private companies was nebulous in the old law. So, too, was the qualification for directors: the old CAMA did not spell out requirements for directors but went a distance in stating what disqualifies persons from being directors. 2. Individuals can start up and register companies all by themselves Previously, registering a company required more than one shareholder/director. It often made individuals aiming for sole proprietorships get the feeling they were being ‘compelled to form unintended partnerships.’ Ozofu Ogiemudia and Christine Sijuwade, lawyers at Udo Udoma & Belo-Osagie, wrote in a BusinessDay article, that; Single-member and director companies – MSMEs are the powerhouse of the Nigerian economy, collectively employing about 60 million Nigerians, yet only about 14% of them are registered under the CAMA. It is therefore important to encourage small businesses by making it possible for sole proprietorships to register as companies and benefit from the limited liability that incorporation confers. Under the Bill,

small companies can have a single shareholder and director. 3. Legislative backing for use of technology in business registration The Corporate Affairs Commission has for about two years, attempted to revolutionise business registration in Nigeria through its online platform. The bill may therefore not be introducing an entirely new concept but surely gives the process

The CAMA amendment is a product of the National Assembly Business Environment Roundtable (NASSBER) which was created as a platform for the legislature and the private sector to engage, deliberate and take action on a framework that will improve Nigeria’s business environment through a review of relevant legislations and provisions of the Constitution

4. Concise definition for small companies Ogiemudia and Sijuwade, explained that; the parameters by which a small company is defined have been adjusted to reflect the reality of SMEs in Nigeria. The effect of this is that more SMEs will qualify as small companies under the Bill and, accordingly, will benefit from the concessions given to small companies under the Bill such as the exemption from audits and from the requirements to hold annual general meetings and have a company secretary. Under the Bill, a small company is a private company, at least 51% of the shares of which are held by its directors, and which has a turnover of not more than N120,000,000 and net assets of not more than N65,000,000 and which does not have any foreigner, government or government corporation as a shareholder. The thresholds under CAMA for the turnover and net assets of a small company are N2 million and N1 million, respectively. 5. Companies limited by guarantee In the opinion of some legal practitioners, many charitable organisations in Nigeria are forced to set up as incorporated trustees, due to the fact that Companies limited by guarantee cannot be incorporated within the framework of CAMA without the consent of the Attorney General of the Federation. Now, the Bill dispenses with this needlessly complex hurdle, and replaced with a duty on the CAC to cause the application to be advertised in 3 (three) national newspapers. Secondly, a framework for the conversion of companies limited by guarantee to companies limited by shares has been introduced. Thirdly, the aggregate amount guaranteed by the members of this type of company has been increased from N10,000 to N100,000. 6. Introduction of Limited liability partnerships and limited partnerships The Bill has been described as revolutionary by bringing Limited Liability Partnerships (LLP) and Limited Partnerships (LP) (previously regulated only at state level, and

that, only in a few states) within the framework of the Bill. As such, the Bill provides that an LLP will be a legal entity, which would be a body corporate and exist separately from its members. This is expected to resolve concerns for private equity funds and other investment funds seeking to establish a local entity in Nigeria as a partnership. 7. Appointing Auditors, Annual General Meeting, Common seal by companies become optional The Bill now includes provisions which exempt small companies from appointing auditors in certain limited circumstances. A big win when the fact that this could be quite an operational encumbrance is considered. Also, as some lawyers at Olaniwun Ajayi described it; the Bill recognises that for many companies, the common seal is a relic, especially as the rules of evidence do not require a seal in the strict sense. Accordingly, the Bill now makes it optional for a company to have a seal, the use of which is to be regulated by the Company’s articles. In addition, small companies are no longer mandatorily required to convene annual general meetings, in accordance with the Bill. Conclusion This new law has come this far because the senate it seems, collaborated with a number of key stakeholders in getting the required inputs. The CAMA amendment is a product of the National Assembly Business Environment Roundtable (NASSBER) which was created as a platform for the legislature and the private sector to engage, deliberate and take action on a framework that will improve Nigeria’s business environment through a review of relevant legislations and provisions of the Constitution. It is a partnership between the National Assembly, Nigerian Economic Summit Group and Nigeria Bar Association’s Section on Business Law, supported by the defunct ENABLE II programme of the UK Department for International Development (UK-DfID). It is expected that this framework will support reforms designed to make Nigeria’s economy globally competitive, achieve inclusive growth and sustainability, create jobs, and cater to the wellbeing of Nigerians. This reform when operational will hopefully, reduce bureaucratic red tapes for companies, and make it easier to comply with regulatory obligations. Small businesses and start-ups will also be able to thrive, lower costs and be more profitable than before.

Thursday 05 July 2018

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Live @ The Stock Exchange Dangote Cement to list N50bn Commercial Paper on FMDQ Iheanyi Nwachukwu

he N50billion Series 1 and 2 Notes of Dangote Cement Plc Commercial Paper (CP) will be listed on FMDQ OTC Securities Exchange on July 19, 2018 with minimum investment of N5million and multiples of N1,000 thereafter. Africa’s largest cement producer recently issued N50billion Series 1 and 2 Notes under its N150 billion Commercial Paper (CP) Programme which was announced on June 27, 2018. The CP programme re-

flects the high quality of Dangote Cement Plc business and its strong cash generation, made possible by the company’s market-leading positions in Nigeria and across Sub-Saharan Africa, where demand for cement is growing rapidly. The tenor for the initial issuance is 180 to 270days, with a discount rate of 12.4percent that will yield 13.21percent for the 180 days, while that of the 270 days has a discount rate of 12.65 percent and a yield of 13.96percent. Dangote Cement was advised by Stanbic IBTC Capital Limited as sole arranger and dealer, Stanbic IBTC Bank Plc as issuing calculation

and paying agent, Banwo & Ighodalo is legal counsel, while Deloitte acted as auditors to the issuer. Funds raised in the Commercial Paper (CP) Programme will be used for capital expenditure, working capital and general corporate purposes. “This landmark transaction is the largest-ever Commercial Paper issuance by a corporate issuer in Nigeria. It allows us to broaden our sources of funding and combine established bank lines of credit with access to capital market funding, which will lower our overall cost of borrowing”, said Joe Makoju, Group Chief Executive Officer, Dangote Cement Plc.

Diamond Bank appoints Bickersteth chairman as Ogbechie retires

iamond Bank recently announced the appointment of Oluseyi Bickersteth as the new Chairman of the Board of Directors, effective June 26, 2018. This appointment comes against the backdrop of Bickerseth’s strong values and vision which both align with the bank’s current focus of delivering excellent performance by leveraging technology to provide financial solutions to retail markets.

Commenting on the appointment, Uzoma Dozie, GMD/CEO, Diamond Bank, said: “We are honoured to have Oluseyi Bickersteth join and chair our Board of Directors. We welcome his wealth of experience and look forward to his valuable contributions.” Bickersteth took over from Chris Ogbechie who retired on March 31, 2018 after completion of his tenure. Bickersteth holds a B.Sc. in Economics from the University of Ibadan

and an M.Sc. in Economics from the York University in Canada. He is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and Chartered Institute of Taxation of Nigeria (CITN). Prior to being the Chairman of KPMG Africa Practice and National Senior Partner of the Nigerian Practice, he was the Head of Tax and Regulatory practice and served as Engagement Partner on major tax advisory and compliance projects.

BUSINESS DAY

Thursday 05 July 2018

Politics & Policy Thursday 05 July 2018

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BUSINESS DAY

Restructuring Nigeria is inevitable, Turaki insists …Promises reforms if elected president INIOBONG IWOK

presidential aspirant on the platform of the People’s Demo c ra t i c Pa r t y (PDP), who is a former Minister of Special Duties, Kabiru Tanimu Turaki, has warned that only a holistic restructuring of the country could solve the numerous challenges bedevilling it, promising to implement the recommendations contained in the constitutional conference report on restructuring of the country if elected president. Tanimu stated this in Lagos, while addressing leaders and members of the People’s Democratic Party (PDP), which included a chieftain of the party Senator Adeseye Ogunlewe, the PDP state chairman, Hon. Mos-

hood Salvador, several other PDP leaders and members at the party’s secretariat, saying that he believes strongly in gains associated with restructuring the country. The presidential aspirant disclosed that he was totally in support of agitations for restructuring of the country in any form, either true Federalism, fiscal federalism, devolution of power or creating additional state for the South-East geo-political zone, adding that his position as a lawyer is that any law that stands against moving the country forward on the path of sanity should be amended. “On restructuring, I want to pointedly say that I believe in restructuring in whatever perspectives, whether it is true Federalism, whether it is resource control or fiscal federalism, devolution of power or creating addition-

al state for the South-East geo-political zone. I would implement the recommendations of the last constitutional conference report if elected president. The state

of the country has made restructuring inevitable for us now,” Turaki said. The former minister, who berated the All Progressives Congress (APC) and the Mu-

hammadu Buhari administration for failing in their promises, stressed that the country had a divisive and discriminatory government in power, which he said had encouraged doubt about the Nigeria project. He pledged to rebuild the passion of nationalism and patriotism in the citizens. “We have a divisive and discriminatory government in power that we now doubt the Nigeria project,” he said. Tanimu also promised to concede the position of managing director of the Nigerian Ports Authority (NPA) to Lagos State which he noted generates 95 percent of the nation’s non-oil revenues, adding that he was well-equipped to become president of Nigeria in terms of experience, intellectual deepness. He, however, said all the PDP aspirants, including

to intervene in the country’s security crisis. Recalling the massacres in Zamfara, Benue, Plateau, Taraba, Adamawa and Kaduna States and the murder of seven policemen in Abuja while on active duty, the former Vice President noted that decisive action is needed to address the current security challenges.

According to him, given the seeming despair and helplessness of the citizens in the face of frequent deadly attacks, the National Assembly has a responsibility to give legal teeth to the creation of state police and community policing in the country. “A peculiar crisis demands a decisive action, and I am one hundred percent behind the National Assembly in their

efforts to strengthen the hands of state governments in providing security to their citizens”, Atiku said. The Waziri Adamawa noted that leaving the citizens to their fate is not an option, adding that once a democratic government seems overwhelmed or paralysed by security challenges, the initiative by the National Assembly should be welcomed by all Nigerians.

Turaki

him had all resolved to back any candidate who would finally emerge from the party’s national convention that would hold any time in Abuja, declaring that for Nigeria to remain united, the ruling All Progressives Congress (APC) must be voted out of power. “If you are looking for credibility, we have credibility. We have integrity. We have the knowledge and experience. Nigerians are looking upon the direction of the PDP to save the nation from nepotism and despotism,” he said. The presidential aspirant was accompanied by party leaders, including former governor of Adamawa State, Boni Haruna; former Minister of National Planning, Sulaiman Abubakar; former Niger Delta Minister, Steven Oru, among other party leaders.

The former Vice explained that security strategies should be periodically reviewed because the criminals involved are also studying the weaknesses and strengths of our security system. According to him, the state should always be ahead of the criminals or should be able to develop strategies that can neutralise them before they even strike.

Atiku backs NASS on state police

…Condoles families over killing of police officers

ormer Vice President Atiku Abubakar has commended the National Assembly over its decision to amend the constitution and formally provide for state police and community policing in the country to deal with the current deteriorating state of insecurity characterised by persistent loses of lives

of innocent Nigerians at the hands of armed groups. He also condoles with families and colleagues of seven Police officers who were killed by armed bandits in Abuja in the line of duty. Atiku Abubakar said that the lawmakers have by their action, demonstrated courage in seizing the initiative

Accord Party accuses defectors of trying to dupe Fayose RAPHAEL ADEYANJU, Ado-Ekiti

biodun Aluko, governorship candidate of Accord Party in Ekiti State, has described members declaring open support for the governorship candidate of the People’s Democratic Party (PDP), Kola Olusola, for the July 14 election as people out to allegedly defraud Governor, Ayodele Fayose. Aluko insisted that he remains the candidate of the party in spite of the open support being shown by Chairman of the party, Mathew Odeoba and a leader of the party and governorship aspirant, Akogun Banji Ojo. Some Accord members, led by Ojo had on Monday dumped Aluko and backed Olusola, describing the PDP candidate as the right person to succeed his principal, Ayodele Fayose. The former deputy governor who addressed journalists in Ado Ekiti on Tuesday, said: “I have a strong belief that these people only took the action to dupe Governor Fayose”.

He alluded to a letter dated May 23, 2018 and signed by Ojo and the party’s Director of Administration, Aina Olasunkanmi, requesting him to make a refund of N65 million being the amount he had expended to mobilise for the party as an aspirant before the pendulum changed. He said he rejected the request based on the conviction that it was meant to extort him, since the party has no verifiable structure in the state to buttress Ojo’s claim. “After my initial refusal, the national body said I should give him a sum of N5million, but he rejected. Rather than paying such huge money, I would rather spend in building structures for Accord and that I have been doing,” he said. In the letter entitled: ‘Reimbursement Request’, Ojo said: We request for the reimbursement of the expenses incurred in the establishment of Accord and building of the party structure in Ekiti State. “Therefore, we are requesting for the reimbursement of a sum of N65,750,000.00 to cover the expenses for the running of

the party.” The former Deputy Governor alleged that the aggrieved party members decided to request for such a whopping amount on the strength of their belief that he had billions to spend on the election being a former number two man. Aluko said: “If Banji Ojo had spent as much as he claimed, why doesn’t the party have structure in the units, wards and local governments? If his claim was right, why did he lose the ticket to Mrs. Margaret Ilesanmi? Because it was this woman that stepped down for me. “Being a former Deputy Governor, they though I have a mint machine at home whom they thought they could suck. “So, their opposition to my candidacy has nothing to do with my capability or financial wherewithal, but some people are out to make money from the governor, that was why they have been raising all manner of false allegations to justify their pay. “We are just trying to build structures at the wards and local governments so that it can be on ground to win election.

You can begin Buhari’s impeachment process, court tells National Assembly BOLADALE BAMIGBOLA, Osogbo

he Federal High Court sitting in Osogbo, Osun State capital, has ruled that those who filed a suit seeking impeachment of President Muhammadu Buhari by the National Assembly could go ahead with their plan. Justice Maurine Adaobi Onyetenu gave the order Wednesday, following a suit filed by a lawyer, Kanmi Ajibola, and Sulaiman Adeniyi, a human right activist. The two men had approached the court to compel the National Assembly to impeach President Buhari as a result of alleged several constitutional breaches by him. The duo had initially written three months ago to both arms of the National Assembly stating reasons, why President Buhari should be impeached. They cited alleged constitutional breaches by the president and threatened that they would approach the court if they failed to act accordingly.

Following the refusal of lawmakers to act, Alimi and Ajibola, headed to court and filed a suit at the Federal High Court, Osogbo asking for an order of mandamus, compelling both the Senate and the House of Representatives to start the impeachment proceedings of President Buhari. In the suit filed on Tuesday, June 19, 2018, they hinged their arguments on four grounds on why the National Assembly should impeach the Buhari. In the motion ex-parte, the duo claimed that in flagrant violation of the 1999 Constitution, President Buhari contested election, won and was sworn in as the president on the 29th day of May 2015 without possessing the basic constitutional requirement, which would have made him qualified for the contest of the election. They further alleged that the 4th respondent, which is President Buhari in flagrant violation of section 137 (1) (j) of the 1999 Constitution presented a forged certificate to the Independent National Electoral Commission

(INEC) for the purpose of the 2015 presidential election that brought him to the office of the president “In the light of the 4th Respondent’s placement to continue in the office as the president, he has no certificate and basic requirement upon which this placement to continue in the office can be placed.” Besides, the appellants accused the president of treating the orders of the court with a great disdain and abuses the constitution of the Federal Republic of Nigeria at will, particularly from the angle of the observance of the Federal character as contained in section 14 of the constitution. “The 4th Respondent on the 29th day of May 2015, took an oath of office, among others, to the effect that, he would rule in accordance to and protect the constitution of the Federal Republic of Nigeria, particularly section 14 (2) (b) which stipulates that the security and welfare of the people shall be the primary purpose of government.

38 BUSINESS DAY NEWS

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Thursday 05 July 2018

Nigeria has a subsisting Debt Management... Continued from page 1

L-R: Bimbo Ashiru, APC governorship aspirant in Ogun State; Governor Akinwunmi Ambode of Lagos State, talking with President Emmanuel Macron of France at the inauguration of Alliance Francaise Office at Ikoyi, Lagos on Wednesday.

MTN Nigeria IPO to begin August after SEC... Continued from page 1

ahead given by the Securities and Exchange Commission (SEC). “After 6 weeks delay by SEC, the MTN IPO is set to go. MTN is targeting August to begin the share sale,” a source familiar with the matter told BusinessDay.

Minority shareholders of the telecommunication giant have frequently lamented being kept in the dark by the company as the listing of the Nigerian unit continues to generate vast interest across board. MTN plans to list its Nigerian unit which BusinessDay estimates is worth between N3.2trn ($8.56 billion) and N3.9trn ($10.88 billion) on the Nigerian Stock Exchange (NSE), and may use part of the fresh funds raised to reduce debt. The sale of the Nigerian unit of MTN will the second major listing the telecommunication giants will be undertaking in the West Africa region this year with the Ghana IPO being the most recent. MTN started the sale of its Ghanaian unit worth $754 million over a month ago (May 29) in an initial public offering. The listing was 10 times larger than Ghana’s previous biggest-ever

share sale. The company offered 4.64 billion shares in the unit at 75 pesewas each, representing 35 percent of its value. MTN Group may sell at least 10 percent of its stake in its Nigerian subsidiary to pay preference shareholders, Reuters reported earlier in the year. MTN Nigeria has around 402 million shares in issue, the same amount in preference shares, which it sold at $0.99 in 2007. As part of the IPO it would split one share into 50 units, to create 20 billion shares, which would be listed on the bourse and set the IPO price via book building, according to a Pre- IPO presentation. MTN has also been engaging extensively with the Nigerian Stock Exchange (NSE), sources tell BusinessDay. The extensive engagement is on the structure and parameters of the listing. In show of commitment to move ahead with the 2018 target, the group recently appointed Chapel Hill Denham as lead manager for the initial public offering (IPO). Other appointed advisers are South Africa’s Rand Merchant Bank, Renaissance Capital and Vetiva Capital. The telecoms firm is also working with Stanbic IBTC Capital,

More trouble for Buhari, APC as nPDP, others... Continued from page 1

came together, and formed a brand new political party, the All Progressives Congress, APC, a merger that was based on the strong belief that Nigeria had come of age, but was severely underperforming and unable to meet its potentials for good governance. The Nigerian people entrusted power to the APC based on its promises and potentials. “We are sad to report that after more than three years of governance, our hopes have been betrayed, our expectations completely dashed. The APC has run a rudderless, inept and incompetent government that has failed to deliver good governance to the people. It has rather imposed dictatorship, impunity, abuse of power, complete abdication of constitutional and statutory responsibilities, infidelity to the rule of law and constitutionalism. It has failed to ensure the security and welfare of our people and elevated nepotism to unacceptable heights.” “The last straw, was the Congresses and Convention of the APC held recently. The Congresses were intensely disputed as it was conducted with impunity, total

disregard for due process, disregard for the party Constitution and naked display of power and practices that have no place in a party we all worked the very to put in place. “There are countless cases in courts all over the country challenging the legality of congresses and even the National Convention itself. It is very likely that the judicial decisions on these cases will result in massive chaos, confusion and uncertainties. The fate of a party in this state with a few months to the elections is best left to the imagination, but it is not a fate we believe our millions of members should be abandoned to.” BusinessDay reports that there were parallel congresses in 24 States namely: Abia, Adamawa, Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Enugu, Imo, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kogi, Kwara, Lagos, Niger, Ondo, Oyo, Rivers, Sokoto and Zamfara. The congresses in Wards, Local Areas and States all over the federation produced different sets of delegates leading to the party being factionalised and divided in not just 24 States but the 36 States and Abuja FCT. “The so-called National Convention of the APC was even worse. The

Standard Bank of South Africa, Standard Advisory London and Citigroup Global Markets, as joint advisors and global coordinators, with Stanbic acting as lead issuer. MTN Group said in a note preceding its financials for the year ended December 31, 2017 that “management has already initiated its Corporate Governance Rating Scoring with the NSE with a view to listing on the NSE’s Premium Board.” The Premium Board of the NSE includes the likes of Dangote Cement Plc, Zenith Bank Plc, FBN Holdings Plc, Seplat Petroleum Development Company Plc, Access Bank Plc, Lafarge Africa Plc and United Bank for Africa Plc. For full year 2017, MTN Nigeria subscriber’s base was 52.3 million, its revenue increased by 11.4percent and data revenue increased by 86.6percent. MTN agreed to list the Nigerian unit on the Nigerian Stock Exchange as part of a June 2016 agreement to pay a $1 billion fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown. The listing of MTN Nigeria will broaden the sectors of the NSE and reduce the weightings of banking and cement on the Nigerian bourse, giving investors more options for diversification. National Convention of the party was ridiculed with constitutional infirmities that were so glaring and obvious that no fair minded person can claim that a legitimate and lawful executive from that process. “The Chairman of the organising Committee, Jigawa State Governor, His Excellency, Alhaji Mohammed Badaru Abubakar, declared 18 seats unopposed and uncontested, since only one valid candidate stood at the end of the grossly manipulated nomination exercise for each of the offices. He therefore proceeded to declare them duly elected in flagrant abuse and violation to the Constitution of the APC,” the rAPC leader stated. On his part, Baraje, leader of the defunct nPDP described the purported defection of Kwamkwaso to the PDP as a fallacy and figment of the imagination of the author of the report, and said membership of nPDP remains intact. The announcement of the formation of the “Reformed APC” is said to be the first step in what would lead to a coalition of political parties and interests, to challenge Buhari. This development is said to pose a serious threat to President Muhammadu Buhari’s bid to return to power in 2019. Continues on wwwbusinessday online.com

debt-management-strategy. The publication by ThisDay is absolutely false and the claim that they obtained a confirmation from the Director-General of the Debt Management Office to the effect that the DMO was “working on it” is also very wrong. The enquiry from Obinna Chima of ThisDay Newspapers was on the DMO’s Strategic Plan (an institutional plan) and not the Public Debt Management Strategy. This action amounts to deception and manipulation of information. In the event that the writer of the misleading report is not conversant with the difference between the Debt Management Strategy and the DMO’s Strategic Plan, he should note that the Strategic Plan is a statement of the institution’s Goals and Objectives as well as, the activities that will enable their achievements. It covers issues such as Human Resources, Technology, and Market Development amongst others. This contrasts very sharply with the Public Debt

Management Strategy which is entirely about the strategies for managing the public debt to ensure that borrowing is prudent and the public debt is sustainable. The public is advised to disregard the publication and be assured that Nigeria has a duly approved subsisting Debt Strategy which runs till December 2019. Furthermore, the public should be assured that the Strategy is being implemented in full. Preparation of a new Strategic Plan that will deliver a new, robust and all encompassing strategy is at the final stage. A robust Strategic Plan became necessary due to developments in the macro-economy, the Economic Recovery and Growth Plan and the need to come up with creative ways to fund the Government in the face of lower Revenues. Thus, a new Strategic Plan for the DMO had to be prepared in a holistic manner to incorporate these developments and expectations. The old pattern of preparing the Strategic Plan would have been grossly inadequate.

Why P&G shut $300m plant one year after... Continued from page 1

President in 2017.

BusinessDay learnt that Procter and Gamble Nigeria only attains 100 percent local sourcing of products packaging, but is still largely dependent on imported raw materials used in production and it always complained that local sourcing of raw materials was unsustainable going by low quality of local production inputs. The firm therefore, preferred importation from its sister and parent companies abroad which cost it a lot of foreign exchange which total sales could not match, hence, it was running at a huge loss which accounted for the management decision to downsize its workforce, redeploy some staff to other plants outside Nigeria and finally shut down its Agbara production lines. The fast moving consumer goods firm, according to investigation, used to import more than 75 percent of raw materials used to pro-

duce Always sanitary pads, Pampers (baby diapers), Gillette shaving sticks, Ariel detergent, Oral B toothpaste, among other products. Although, BusinessDay could not speak officially with any management staff of the firm as of press time on Wednesday, a casual worker who used to work at the haulage section of the firm declared that they were not loading and off-loading as they used to do on a daily basis and some of the main staff members he knew had already been given disengagement letters which signified that all was not well. The casual worker, who did not want to mention his name, said, “In the last few days now, nothing has been happening in P&G Agbara. What we were told was that there would be a brief reorganization of staff and departments and people should go temporarily and they would call some of us back when everything is sorted out.” Continues on wwwbusinessday online.com

Beer wars: Golden Guinea files N10bn suit... Continued from page 1 heard twice since 2016. The latest hearing would have been on Friday June 15 being the day Trade Mark Registry was invited by the Court to come for examination but the case was adjourned because of the public holidays to commemorate the 2018 Eid-el-fitr. The Court has set October 24, 2018 as the new date for the hearing on this suite. Golden Guinea Breweries Plc wants the Federal High Court to declare that as the proprietor of the trademark “Eagle Stout” registered as No. 21153 in class 32 at the Nigerian Trade Marks Registry Abuja, it is entitled to the exclusive use of the mark for the production, sale and distribution of the product in the Nigerian market. Aside the N10billion general damages being demanded by Golden Guinea Breweries (the plaintiff ) from Pabod Breweries (the defendant), the plaintiff is also asking the court to order for aggravated dam-

ages in the sum of N10 million as contained in the suit number PHC/ PH/CS/647/2016 at the Federal High Court at Port Harcourt. In the Writ issued by Omolola Aderolu of Johnson Bryant on behalf of Golden Guinea Breweries Plc, it asks the Court to restrain Pabod Breweries whether jointly or severally and all persons on whose behalf the defendant is sued whether by themselves, their director(s), officer(s), servant(s), agent(s) privies or any of them or otherwise howsoever from producing, importing, selling, or offering for sale or supplying products known as “Eagle Stout” pending the hearing and determination of the substantive suit. Among other demands, Golden Guinea Breweries also asks the Federal High Court to order the destruction of all infringing “Eagle Stout” products, in the possession/ custody or control of Pabod Breweries, the sale, distribution. Continues on wwwbusinessday online.com

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NEWS Stakeholders seek ‘fiscal certainty’ to unlock billions of investment in Nigeria’s oil/gas sector … call for sustained JV cash calls OLUSOLA BELLO & HARRISON

takeholders at the ongoing Nigeria Oil and Gas Exhibition (NOG) have called for fiscal certainty, which they say will serve as incentive to global investors seeking to unlock billions of potential investments in Nigeria’s oil and gas sector. Apart from concerns of fiscal certainty, the stakeholders also urge the Federal Government to ensure reforms being done through the Petroleum Industry Bill are holistic and attract international investors into the sector. Nigeria’s deputy minister of petroleum resources, Emmanuel Ibeh Kachikwu, has repeatedly said the Nigerian oil and gas sector requires about $100 billion to open up investment in the sector, and attract more capital inflow into the nation’s economy. Speaking on Wednesday at Industry leaders’ Panel, with the topic: Unlocking Nigeria’s Investment Potential, Paul McGrath, managing director of Mobil Producing Nigeria Unlimited, said, “To unlock investment potentials in the country, we need fiscal certainty to attract global industry players with huge capital into Nigeria’s oil rich resources. “You need to have the right framework in place to have global competitive fiscal price policies in place to help lift the opportunities

in the sector.” According to McGrath, “When we talk about investment potential in the country, there is a huge potential in that regard. The second one on investing in the country’s potential is on investing in the people. “There are works that have been done on the Petroleum Industry Bill, both by the Executive and the Legislature. It needs to have an end result, which is inadvertently to attract international investment.” He said further, “The Nigerian government must be ready to have reforms that will unlock the potentials in the sector that needs to continue attracting international investments.” In his submission at the panel, Jeff Ewing, chairman/managing director,ChevronNigeriaLimited, said, “The Federal Government has been making efforts on competitiveness and on the ease of doing business, and that is the discussion we have been having with the government to enable themhaveawiderunderstanding of the implication of the competitiveness of their Industry.” He remarked further, “The government has made some good steps on the Petroleum Industry Bill. We have also look forward to continuous engagement to ensure Nigeria continues to grow investment in the deep

water and gas.” He further pointed out, “The JV in gas and deep water deals should be made to draw more investment into the Nigerian economy.” On the need for fiscal policy to drive investment in the sector, he said, “We really need fiscal policy terms to drive deep water gas investments, while pushing those gas reserves into marketplace.” According to him, “We need to have willing buyer - willing seller where the prices are competitive globally. There are also historic issues in addressing gas payments that often occur to boost investor confidence. “We are working with the NNPC to acquire $3 billion third party funding, and we have $1.2 billion gas project, which included lots of activities for the local economy.” Osagie Okunbor, country chair, Shell Companies in Nigeria, who was also a panellist, said,”We have been discussing cash calls as a never ending issues. We have been able to sit down in a table to address the cash call issues. It has started two three years ago. ”Nigeria is competing for capital inflows with every other countries of the world. Each of these companies operate in 7080 countries globally, and each of those countries want those capital into their country too.”

BUSINESS DAY

CBN renews Skye Bank board mandate amid no financial statement … analysts demand audited financials HOPE MOSES-ASHIKE

he Central Bank of Nigeria (CBN) has renewed the mandate of the Board of Skye Bank for additional two years in spite of non-availability of financial statement for 2016 and 2017. The Board has M.K Ahmad and Tokunbo Abiru as its chairman and group managing director, respectively. This was contained in a notice sent to the Nigerian Stock Exchange (NSE) for the attention of regulators, shareholders and customers, signed by Babatunde Osibodu, company secretary/ general counsel of the bank. Reacting to the development, Ayodeji Ebo, managing director, Afrinvest Securities, said, “It is impossible to assess the performance of the current management of Skye Bank due to the unavailability of audited financial statement for 2016 and 2017. “The basis of the extension is however not clear, but we suspect may be due to other non-public information at the disposal of the CBN. The CBN should mandate the management of Skye Bank to share the audited financials of the banks as this is a publicly quoted company”,Ebo said in an emailed response. The CBN had on July 4, 2016, intervened and reconstituted the Board of Directors of Skye Bank to pave the way for a new team

to take charge of the affairs of the bank and resolve various issues that were hindering the optimal performance of the institution. Accordingly, the apex bank gave the Board a clear mandate to turnaround the fortunes of the institution positively. Acknowledging the support of the CBN so far, Osibodu noted in the notice, “We wish to inform the Nigeria Stock Exchange, the Bank’s esteemed shareholders and other stakeholders that the Central Bank of Nigeria (CBN) has renewed the mandate of the Bank’s Board of Directors for an additional two-year term till June 30 2020.” According to Osibodu, “In the two years of the Board’s mandate, the team has stabilised of the institution, entrenched sound corporate governance and risk management practices, and restored depositors’ confidence.” Continuing, the notice read: “In recognition of the stellar performance of the Board, the CBN has renewed the Board’s mandate for an additional twoyear term till June 30, 2020. “We wish to assure the bank’s shareholders and all stakeholders of the commitment of its Board and Management, working with the CBN and other regulators, to conclude various initiatives to achieve a positive and lasting turn around for the Bank and deliver value to its stakeholders.”

WAEC releases May/June examination results KELECHI EWUZIE

est Africa Examination Council (WAEC) on Wednesday released the results of the 2018 West African Senior School Certificate Examination (WASSCE) with a total of 786,016 candidates, representing 49.98 percent obtaining credits and above in minimum of five subjects including English language and mathematics. Olutise Adenipekun, head of the Nigeria national office of WAEC at a press briefing at the council’s training and testing centre office in Ogba, Lagos, said out of the total number of candidates that sat the examination in Nigeria, 1,470,338 candidates, representing 93.51% have their results fully processed and released while 102,058 candidates representing 6.49% have their subjects still being processed due to errors traceable to the candidates in the course of their registration, or writing the examination. Adenipekun while giving a detailed statistics of the result disclosed that a total of 1,576,396 candidates that sat for the exam, 1,213,244 candidates representing 76.84% obtained credit and above in a minimum of any five (5) subjects i.e. with or without English language and or mathematics.

Buhari to get PIGB Bill next week - Presidency … explains delay in Electoral Amendment Bill assent TONY AILEMEN

L-R: Dapo Martins, chief marketing officer, Sterling Bank plc; Eze Vigour, lucky winner of a brand new car, with Grama Narasimhan, executive director, retail and consumer banking, Sterling Bank, during the handover of the car to the 1dament Promo winner at the bank’s head office in Lagos, yesterday.

AMCON mulls release of debtors’ list STEPHEN ONYEKWELU & BUNMI BAILEY

sset Management CorporationofNigeria(AMCON) is running out of time and has resolved to go public with list of the names of its debtors described as maintaining “recalcitrant postures.” This is the second time in two years that the Corporation makes this move. The first was in 2016 andgeneratedaraftofcourtcases. “The list will be published as soon as it is ready. We are taking time to scrutinise it to avoid legal glitches. In line with our mandate, we have to recover the debts and time is running out. There are details I cannot unveil now,” Jude Nwauzor, head of corporate communicationsatAMCON,told BusinessDay.

In a July 1 interview with the News Agency of Nigeria (NAN), AhmedKuru,managingdirector/ CEOofAMCON,saidthecorporation sat on a N5.4 trillion debt. Part of the N5.4 trillion had been with the banks for five years before AMCON bought over the bad loans, and after seven years of the companies’ operations, the obligors are yet to pay. Resolutionsthroughstaggered plans have never worked. Let us not forget that before those loans were transferred to AMCON, they have been with the banks for over five years. “We have changed our strategy from sitting down and drinking tea, and the obligors telling us lies and we pretend that we don’t know you are telling us lies. “There is no more time for lies

because we have a sunset period. So, now our focus is on recovery. We do not want to hear anything; you cannot come and tell me you are going to pay me in the next six years, I do not have that time,” Kuru stated. AMCON is a creation of the National Assembly in response to the global financial crises of 2008/2009.Itacquiredover12,000 non-performing loans worth about N3.7 trillion from 22 banks. Out of this, AMCON injected N2.2 trillion as financial accommodationto10commercialbanks in order to prevent systemic failure. This singular action, helped stabilise the financial system, protecting about N3.66 trillion of depositors’ funds; and saved approximately 14,000 jobs. The recent move by AMCON

to publish list of debtor it says have “wilfully maintained recalcitrant postures while also adopting unscrupulous means of avoiding recovery” points to a similar move taken by the Central Bank ofNigeriain2015,whenitdirected Deposit Money Bank (DMB) to publish the list of debtors. “I think when they did it few years ago after they set up AMCON,anumberofcustomerswho owed banks money were afraid andtheyquicklywenttopay.They got a lot of money by this action. Even though a couple of them took AMCON to court to challenge their authority to do so but I think AMCON won some and lost some eventually,” Ayo Akinwunmi, head of Research FSDH MerchantBank,toldBusinessDay on phone interview.

residency has confirmed that President Muhammadu Buhari will receive the long awaited Petroleum Industry Governance Bill (PIGB), next week. This is as the Presidency explained that President Buhari was currently subjecting the new Electoral Amendment Bill to thorough review before appending his signature. Senior special assistant to the President on National Assembly Matters (Senate), Ita Enang, confirmed this to BusinessDay at the Presidential Villa, Abuja. “You know how important the Bill is and the President is doing what he is doing to ensure that we have the best for a sound democratic practice, and will not want to hurry into signing any bill into law. “But let me assure you that we are on the same page with our law makers and as soon as he is through, it will be signed into law,” he said Recall that the Petroleum Industry Governance Bill (PIGB), which was passed in March 2018, has been awaiting the President’s assent. Enang, who had insisted that the Presidency was yet to receive the bill, a position that was later confirmed by Senate leader, Ahmad Lawan, who explained that the inability of the Clerk to the National Assembly to transmit the bill to the President for assent was due to the legal advice received from the National Assembly Legal Services Directorate, which observed some contentious areas in the bill. But Enang, however, on Wednesday confirmed to Busi-

nessDay at the Presidential Villa that the President next week would receive the bill, as all the contentious issues had been resolved The confirmation has put to rest speculations on the whereabouts of the bill, which is expected to transform the oil sector when signed into law. There are indications that Nigeria May have lost well over $200 billion in the petroleum sector due to the inability of the Federal Government to conclude work on the bill after several years. The new law is expected to replace the existing archaic one that have aided and abetted huge revenue losses, impeded transparency, accountability, even as the old legislation has consistently frustrated new investment opportunities in the nation’s oil and gas industry. Some of the contentious areas were in Clauses 13, 17 (1) (e), 47(1) (d), 33 (1), 63 (1), 95 (2), 102 of the bill. For instance, the Directorate observed that while Clause 13 of the proposal establishes the Board of the Nigerian Petroleum Regulatory Commission (NPRC), there is no provision for Secretary of the board. In its recommendation, the panel said: “The Committee accepts the request to create the office of the Secretary for the Commission who shall also serve as the (non-member) Secretary of the Board, while rejecting the request for creating a Secretary for the Board of the Commission. “In line with this, the request for creation of Secretary for the Board in Section 13 is denied while the request for same in Section 20 of the Bill is granted.”

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BUSINESS DAY

FINANCIAL TIMES Why water is a growing faultline between Turkey and Iraq

Stocks slip as investors eye China’s currency policy Page A3

Page A4

World Business Newspaper

EU weighs international talks on cutting car tariffs

Brussels moves to head off trade war by involving big exporters JIM BRUNSDEN AND SHAWN DONNAN

russels is considering talks on a tariff-cutting deal between the world’s big car exporters to prevent an all-out trade war with the US, say diplomats briefed on the initiative. The idea is being studied by EU officials ahead of a meeting between Jean-Claude Juncker, president of the European Commission, and President Donald Trump in Washington this month, amid concern that time is running out to convince the US not to impose punitive duties on the motor sector. Three diplomats said the European Commission was studying whether it would be feasible to negotiate a deal with other big car exporters such as the US, South Korea and Japan. Such a move could address Mr Trump’s complaint that the US sector is unfairly treated, while reducing export costs for other participating countries’ auto sectors. Under such a deal, participants would reduce tariffs to agreed levels for a specified set of products — a concept in international trade known as a “plurilateral agreement” that lets countries strike deals on tariffs without including the entire membership of the World Trade Organization. Brussels has sought views from some capitals on the idea, the diplomats said, stressing that it was not yet clear whether a deal would be pursued or what range of autosector products would be covered. The commission would only say that Mr Juncker “has not yet decided what to discuss at the meeting with President Trump” and “will develop his thinking and

his strategy in the coming weeks”. It added: “If you want a strategy to be successful you have to keep it to yourself.” The EU has been at the centre of negotiations over reducing auto trade barriers in recent years, both as part of talks with the Obama administration that stalled and a “cars for cheese” deal with Japan that would eliminate EU import duties on Japanese cars over time. How to stop a world trade war Mr Trump has railed at the bloc’s imposition of a 10 per cent tariff on imports of passenger cars compared with US duties of 2.5 per cent. The EU says his complaint ignores the higher barriers the US imposes on other products, such as pick-up trucks. Last month Mr Trump threatened to impose 20 per cent duties on EU cars if barriers to US exports were “not soon broken down”. The Department of Commerce is also investigating whether imports of foreign cars and car parts undermine US national security. At a press conference on Monday with Mark Rutte, Dutch prime minister, Mr Trump said it would be “positive” whether or not the US could “work something out” with the EU. Mr Rutte interjected: “it’s not positive . . . we have to work something out.” EU leaders have ruled out unilateral concessions to Washington, pledging instead to defend their economic interests against US protectionist policies. Brussels warned the commerce department last week that the EU and other big economies may target up to $300bn of US goods with retaliatory tariffs if Mr Trump acts on his threats on cars.

UK companies prepare EU bases in the lead-up to Brexit Businesses keen to keep foothold in single market say regulatory compliance is key concern ALAN BEATTIE

he EU’s Toy Safety Directive is much less fun than the goods it regulates. Richard Hardstaff has read it all — and when he talks about what Brexit will mean for his company, he highlights the importance of the EU rule book as a basis for doing business. Polydron, a UK-based maker of educational toys where Mr Hardstaff is managing director, manufactures in India and China and sells to customers worldwide, including 105 in the 27 other EU countries. The bloc’s toy safety regime makes Polydron, as the importer into the bloc, responsible for checking that its products meet European standards. “It is our phone number on the goods, and if there is a problem it is us who gets called up,” said Mr Hardstaff.

But if Britain leaves the EU’s single market, each of Polydron’s EU customers would become an importer instead — and Mr Hardstaff fears that relations with customers could suffer. “There could be a hundred different interpretations, which splinters our supply chain and adds costs,” he said. As a result the Cirencester company is opening a branch and hiring staff in Germany to be the EU importer, handling 30 per cent of the company’s operations. “We would never have done this without Brexit,” said Mr Hardstaff. His concerns point to a dilemma for many UK businesses in heavily regulated sectors, which are keen to keep at least a foothold in the single market and warn of the costs of leaving the EU’s regulatory regime. As Theresa May seeks to convince Continues on page A2

Danske Bank shares fall on money laundering allegations Reported figure of $8.3bn is more than double previous estimates

RICHARD MILNE

hares in Danske Bank fell 3 per cent after reports that it may have laundered up to $8.3bn through its Estonian operations, more than double previous estimates, increasing the pressure on Denmark’s biggest bank. Danish newspaper Berlingske reported that as much as DKr53bn of suspicious money had flowed through the Estonian branch of Danske. Rasmus Jarlov, Denmark’s business minister, said the “gravely serious” case was getting worse. “It casts a shadow of mistrust over our entire banking system, and nobody gains from that,” he wrote on Twitter on Wednesday. The business minister has said that the bank’s internal investigation— due to report in the autumn

— might not be sufficient. Opposition lawmakers in Copenhagen have called on Denmark’s fraud squad to investigate. Danske was reprimanded and severely criticised by Danish regulators in May for weak anti-money laundering controls that led to suspected “criminal activities involving vast amounts of money”. The Danish Financial Supervisory Authority ordered Danske to set aside DKr5bn in capital to cover compliance matters but found insufficient evidence to make a case against any individuals. “The headlines are clearly negative for investor sentiment for Danske, with the [anti-money laundering] issue dragging on stock performance over the past year,” said Adam Barrass, analyst at Berenberg, who noted that Danske had underperformed the European banking index by 10 per cent in the past year.

He added that the key risk was a potential US fine because of Danske’s use of dollar funding and transactions. But he added that such a fine was unlikely given that Danske has no US banking licence, dollar clearing facility or access to the Federal Reserve liquidity window. The scandal raises significant questions about what senior management knew, when, and why they failed to act sooner. Danske launched its own investigation last year into the allegations that its Estonian branch was used from 2007 until 2015 for money laundering from countries including Russia, Azerbaijan and Moldova. The probe could pose questions for Thomas Borgen, Danske’s chief executive since 2013, who was in charge of international banking including the Baltics for four years before that.

Israel’s tech entrepreneurs struggle to lure overseas talent Visa problems, concerns about safety and lower salaries deter foreign engineers MEHUL SRIVASTAVA

iad Agmon has run and sold two Israeli technology start-ups and is expanding his third one, Dynamic Yield. This provides services to at least half a billion customers of global retailers including Ocado, a British online supermarket, and Under Armour, the US sports and clothing company. But as a skills shortage squeezes Israeli high-tech firms and pushes up salaries, Mr Agmon is now wondering if his next start-up might be best based outside his country. “There is no edge here any more,” he said. “If I start my company, say, in Portugal, I can get extremely talented engineers for a third of the price. From an economic perspective, there’s no advantage at all to being in Israel.” The tech sector has been one of Israel’s fastest-growing industries and an object of national pride as it has become an incubator for internationally renowned brands such as Waze, the GPS app sold to Google for about

$1bn in 2013, and Mobileye, the dashcam-based car safety system sold to Intel for $15.3bn last year. But with nearly 270,000 out of about 4m working-age Israelis already in tech, industry executives are warning that the sector risks running short of its crucial ingredient — skilled Israelis. Talent shortages plague high-tech sectors globally, but Mr Agmon and his peers are running up against a particularly Israeli twist to the problem: the struggle to secure work and residency visas for non-Jewish foreign talent. “I am not aware of any way for me as a CEO to bring in talented non-Jewish people to work here for a long period of time,” Mr Agmon said. “For 20 years, we have been begging the government for just such a programme.” Indian and Chinese engineers, who make up the bulk of high-tech immigration to the US and UK, rarely consider Israel as an option, turned off either by the difficult visa process, misplaced perceptions of safety or

by salaries that lag behind western standards, Israeli executives say. Senior Israeli engineers can earn about $11,500 a month, four times the average national wage, and some experienced, older workers take home more than double that, executives say. Average annual wages across the sector have gone up from about $61,000 in 2012 to about $72,000, according to the Central Bureau of Statistics. “For us to really graduate to the next level, we need to attract talent at the Silicon Valley level,” said Jon Medved, the chief executive of OurCrowd, a $750m crowd-funded investment vehicle. “The next wave of growth could be an inexorable thing, but we are running out of people, and we can’t produce enough people to support this thing.” To overcome the shortage, Israeli companies have hired at least 20,000 engineers in low-cost outsourcing markets such as Ukraine and India, spending about $1bn on overseas salaries, according to a survey by Ethosia, a recruiting firm.

BUSINESS DAY

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NATIONAL NEWS

Power of the image holds sway in Brazil’s election Traditional media favours established parties in a country with a wide digital divide ANDRES SCHIPANI AND JOE LEAHY

n her farm in the northeastern state of Pernambuco, Florencia dos Santos is sheltering from the sweltering heat watching television. When asked which candidate she supports in the most uncertain presi-

dential election in recent history, she says she knows only Luiz Inácio Lula da Silva, the former president now in prison on corruption charges. “I haven’t heard of any of the others yet,” she said. She is planning to vote for Lula or, in the likely case he is prevented from running because of his conviction, for the candidate

Lula anoints. How would she find out who that person is? On television and radio. Although the electoral battleground has been shifting from traditional media to social media, particularly in more urban settings, airtime and not Twitter or Facebook will still be decisive in October’s vote, many analysts say.

The problem is that, unlike social media, the airwaves are an unequal medium. A study by the Pew Research Center shows only 53 per cent of adult Brazilians use social media, lower even than in crisis-ridden Venezuela. While almost 98 per cent of Brazilian homes have a television, just 61 per

cent of the population can access the internet, says the Center of Studies on Information and Communication Technologies. “Television will still be more influential than the internet in this election,” said Mauro Paulino, director of pollster Datafolha. The forerunners, far-right nationalist Jair Bolsonaro and environmentalist Marina Silva, have a strong following on social media but belong to small parties and, for now, lack party alliances.

Protests erupt in Poland over ousting of court judges

UK companies prepare EU bases in the lead-up... Continued from page A1 both Brussels and hardline Brexiters that the UK should remain close to the single market for goods — a battle in which the prime minister is not assured of success — some companies, tired of the uncertainty, are beginning to move their business into the EU. Big groups such as Airbus and BMW have warned of the consequences for their multinational, justin-time operations of leaving the bloc’s customs union because of the risk of tariffs and customs hold-ups. But for many other businesses, the single market is far more relevant. In the case of Polydron, tariffs on toys being brought into the EU are low and the playing field between all European importers is level. “Compliance with regulation is the bigger issue,” said Mr Hardstaff. Polydron is not alone. Business associations that used to complain of the complexity of EU regulations are now asking to remain bound by them. Steve Elliott, chief executive of the UK’s Chemical Industries Association, has warned ministers that leaving Reach, the EU chemicals regime, “would seriously bring into question 10 years of investment, as registrations and authorisations that permit access to the EU single market would suddenly become non-existent on exit day”. Mike Hawes, chief executive of the car industry association SMMT, said: “Barrier-free access to the EU market and complete regulatory convergence have been the foundation of our success.” Kemdent, a dental products company based in Swindon, has a similar challenge to Polydron. Its specialist dental waxes, manufactured in the UK, need the EU’s “CE” quality mark to be sold in the single market. To comply with the bloc’s Medical Devices Regulation, which is regularly revised and toughened, they need to be registered with a certification centre called a “notified body” in an EU member state, overseen by that country’s official regulator. Jenny Perkins, Kemdent’s sales director, said that because of uncertainty over regulation after Brexit, the company was opening an office in Ireland and would come under the aegis of the Irish Health Products Regulatory Authority rather than the UK equivalent. This will add costs, and is likely to mean more of the business moving to Ireland over time. Some Brexiters argue that leaving the EU will lift the burden of regulation, particularly for small companies. But even if the UK adopts its own, less stringent, rules for medical devices, Kemdent will continue to manufacture to EU specifications. “If the UK has different rules, we might have to change the packaging, but I can’t see us changing the product,” said Ms Perkins.

Thursday 05 July 2018

Prime minister defends legislation as supreme court head insists she will carry on JAMES SHOTTER AND EVON HUBER

John Varley (left), outgoing group chief executive of Barclays Bank, pictured with his successor Bob Diamond (centre) and group chairman Marcus Agius at the company headquarters in Canary Wharf, London in 2010 © Camera Press/Bloomberg

Barclays: the bank that over-reached

The transformation of a traditional lender into a hard-charging adventurer is a salutary tale of modern finance JOHN PLENDER

ot so long ago banking was a relatively simple business whose main focus was on deposit-taking and lending. Then in the 1980s everything changed as a powerful tide of deregulation swept through the industry courtesy of Ronald Reagan and Margaret Thatcher. The utility-like prudential ethos of banking metamorphosed into a culture of gung-ho short-term profit maximisation. Trading in financial derivatives — swaps, futures and options and so on — mushroomed, while loans were packaged into securities and shuffled off bank balance sheets, permitting the banks to extend yet more loans. Bonus-hungry young men (and the odd woman) on huge trading floors operated as hired guns, feeling no loyalty to their employers. Big international banks took on increasing amounts of risk in relation to dwindling cushions of capital. This transformation culminated in the great financial crisis of 200708, which showed that the global economy had become hostage to a bloated and rickety financial sector. Today, even after the post-crisis toughening of regulation, it is arguable that the big banks are so complex and lacking in transparency as to be unmanageable. That argument derives considerable support from Philip Augar’s new book on Barclays. In The Bank That Lived a Little, this former banker provides a brilliantly readable account, based on exceptional access to most of those involved, of the transformation of the old Quaker bank into a hard-charging capitalist adventurer. At one level, it is a tale of a running battle over strategy between those at the top of Barclays who wanted it to join the club of preeminent global banks and those who wanted a more domestic fo-

cus — a tension that has afflicted other big banks across Europe. At another, it is about the growing prominence of the City of London in Britain’s social and economic life. Augar brings forensic skill to the task of chronicling the change in ethos in banking, showing how even very talented people struggled to manage the risks and strategic challenges of the new global financial marketplace. There is no question that many of the top executives at Barclays were exceptional people. Consider just three. Lord Camoys, the architect of Barclays’ response to Big Bang, the deregulation of the London Stock Exchange in 1986, was a visionary who saw that the big investment banks were challenging the traditional lending business of the old commercial banks. In this new world, instead of simply lending to clients, Barclays needed to also be able to raise money — and lots of it — for them on the capital markets by selling and trading debt and equity securities to investors. To do that it bought in the run-up to Big Bang the pre-eminent jobbing firm Wedd Durlacher, which made markets in securities, and the broker De Zoete & Bevan. Camoys was prevented by illness from playing a full part in implementing the vision, but Barclays was second only to SG Warburg in the strength of its acquisitions and the coherence of its strategy. Martin Taylor, who became chief executive in 1994, had done a superb job as chief executive of Courtaulds Textiles, a business that confronted numerous challenges in a declining sector. At the much larger Barclays, the former FT journalist brought formidable intellectual capability and was prepared to address the uncomfortable reality that investment banking contributed little to Barclays’

profits. He was sceptical about his predecessors’ ambitions to take on the big Wall Street banks and boldly decided that the equities and corporate finance businesses should be sold. Yet the sale coincided with the Asian financial crisis of the late 1990s and was botched. When Taylor later proposed to sell the residue of the investment bank after it incurred big losses in Russia, he failed to carry the board with him and felt obliged to resign. The most intriguing of Barclays chief executives was the American Bob Diamond. A former Morgan Stanley and CSFB fixed income trader, Diamond rebuilt the investment bank after Taylor’s departure and turned it into the UK’s first globally competitive investment bank. He did so without spending a cent on acquisitions and by plundering his previous employers for talent. By the time he stepped up to the top job in 2011 Barclays Capital, the investment bank, made up over half of the group’s profits and earned a remarkable 16 per cent on equity capital. The holy grail for elite London bankers had always been to break into Wall Street and take on the giants of US banking. None succeeded, although Siegmund Warburg came close to merging SG Warburg with US investment bank Kuhn Loeb in the 1960s. But the deal foundered because of personality clashes. Yet where the legendary Warburg failed, Diamond, with notable support from the then chief executive John Varley, succeeded. When Lehman Brothers collapsed in 2008, Barclays picked up the equities and corporate finance businesses — the non-toxic parts — for a song. It thus became a top-five universal bank, taking its place alongside the likes of JPMorgan, Goldman Sachs and Morgan Stanley.

housands of people took to the streets in cities across Poland on Tuesday night in protests over a bitterly contested law that came into effect at midnight that will force a swath of Poland’s supreme court judges into early retirement. The legislation, pushed through by the ruling Law and Justice party, is at the heart of a dispute over the rule of law that has badly frayed ties between Brussels and Warsaw over the past two years, and deepened the polarisation in Polish society. On Wednesday Poland’s prime minister defended the legislation, saying the country had the right to reform its legal system. Speaking to MEPs in Strasbourg, Mateusz Morawiecki said Poland was at the forefront of a “democratic enlightenment” in Europe and Brussels had to listen to the dissatisfaction of its voters who are against further integration. Among those forced out by the new legislation is Malgorzata Gersdorf, the head of the supreme court, who has accused the government of seeking to “purge” the judiciary. She has vowed to resist attempts to remove her, and said that she would go into work as normal on Wednesday. By 8.30am on Wednesday a large crowd had gathered outside the supreme court in Warsaw, where Ms Gersdorf was due to arrive, waving Polish and EU flags and chanting “free courts, free courts”. At the centre of the dispute is a law pushed through by Law and Justice last year that lowers the retirement age of supreme court judges from 70 to 65. Those above 65 — almost 40 per cent of the court’s members — must step down today unless Poland’s president Andrzej Duda agrees to extend their terms of office. Law and Justice, led by veteran ideologue Jaroslaw Kaczynski, insists the changes are necessary to reform an inefficient system inadequately reformed since communist times, and argues that elements of the reforms are mirrored in the judicial systems of other EU member states. Critics in both Warsaw and Brussels accuse Law and Justice of a politically motivated assault on the independence of the judiciary. Along with a series of other changes, the overhaul of Poland’s top court has led Brussels to take the unprecedented step of launching a probe into whether the country — once seen as the great success story of the EU’s 2004 eastern expansion — still complies with the bloc’s fundamental values.

Thursday 05 July 2018

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BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Stocks slip as investors eye China’s currency policy

Sentiment stays cautious on concern that trade dispute could cross into FX market EDWARD WHITE AND MICHAEL HUNTER

“

ossible trade wars are just another worry on top of other existing global economic problems, but the expectation of recession is usually necessary for a bear market to occur and we don’t believe that is about to happen,” says Jane Sydenham, investment director at Rathbones. Hot topic China’s stock market remains under pressure and European stocks are drifting as investors continue to watch for signs that the trade dispute between China and the US could be influencing China’s policy on its currency. The CSI 300 index of major stocks in Shanghai and Shenzhen is down 1.1 per cent in afternoon trade after a volatile run during the session. The index, which touched a oneyear low is down more than 20 per cent from its highest point this year, touched in late January. London’s FTSE 100 is down 0.2 per cent, while Frankfurt’s Xetra Dax 30 is down 0.3 per cent. The Europewide Stoxx 600 is up 0.1 per cent. The Stoxx index tracking technology stocks is down 0.9 per cent after falls for the sector in the US overnight. With Wall Street markets closed for the Independence Day holiday, trading volumes are likely to be thinner throughout the session. After China’s central bank appeared to intervene to arrest a steep decline in the renminbi the previous day, the onshore version of the currency itself is stronger again, by 0.4 per cent at Rmb6.6106 per dollar. That keeps it off its weak point of Rmb6.7168 hit on Tuesday — its lowest point since August 2017 — amid fears that China’s economy is slowing at a time when the trade dispute poses a threat. The turnround came as a result of

what traders said was Chinese state banks aggressively selling dollars to support the renminbi, and after People’s Bank of China governor Yi Gang sought to calm markets, attributing renminbi weakness to a strong dollar and “some pro-cyclical behaviour”. Hong Kong’s Hang Seng fell 1.1 per cent, while Tokyo’s Topix was flat for a second consecutive session. On Wall Street overnight, tech stocks suffered broad weakness, with Facebook falling 2.3 per cent, hurt by fresh concerns over data breaches. The S&P 500 closed down 0.5 per cent and the tech-heavy Nasdaq shed 0.9 per cent. Forex The euro is up 0.2 per cent at $1.1672, as the dollar looks tired after its sustained gains over the year to date. The index tracking the dollar against six other currencies is down 0.3 per cent on the session, taking its 2018 advance to just under 2.5 per cent. Sterling turned positive for the session — up 0.1 per cent at $1.3205 — after robust data from the UK’s dominant services sector. The purchasing managers’ index (PMI) for June hit its highest level since October 2017. Before the data came out, it was down 0.2 per cent. “The services PMI broadly confirms that the weakness in the first quarter of the year looks to have been an anomaly. “We will learn more about the health of the economy next week as hard data for the second quarter emerges — commencing with the first release of monthly GDP. Our expectation is that the data will not be strong enough to encourage the Bank to hike as soon as August.” Dean Turner, UK Economist at UBS Wealth Management Commodities Brent crude is up 0.2 per cent to $77.94 a barrel. Gold is 0.6 per cent firmer at $1,260 an ounce.

US industry starts to feel pain of trade disputes Manufacturers report rising costs and difficulties in sourcing ahead of tariff deadline ED CROOKS

anufacturing has thrived in the US over the past couple of years but industry fears are rising that the escalating series of trade disputes provoked by President Donald Trump will bring its growth to a halt. Many US manufacturers say the increased costs of steel, aluminium and components caused by US tariffs, and the accompanying threat of being shut out of other countries’ markets by retaliatory measures, have created uncertainty that is tempting them to put a brake on hiring and investment decisions. “Overall the economy in the past 18 months has been very good,” said Michael Haberman, president of Gradall Industries, an Ohio based excavator manufacturer. “We had a good year last

year, and we’re in the middle of a good year this year. But we are very concerned about the tariffs.” US manufacturing production has been growing at a healthy if not spectacular pace, rising by 1.9 per cent in the year to May, and that growth has been continuing, according to separate surveys from the Institute for Supply Management and IHS Markit on Monday. However, the Trump administration’s trade policy is starting to have a noticeable effect on American manufacturers. Both the ISM and IHS surveys found many manufacturers reporting rising costs and increasing difficulties in sourcing components. Timothy Fiore of the ISM said the comments suggested respondents were “overwhelmingly concerned” about the tariffs, and this was before the majority of the announced or threatened measures had hit.

Financial crisis warning sign is flashing red Tight liquidity and collapsing risk appetite spell trouble ahead MICHAEL HOWELL

inancial crises start under blue skies, as investors in emerging markets know too well. They lead rather than follow business recessions. Ultimately, they are caused by a sharp tightening of liquidity conditions and collapsing investors’ risk appetite. Arguably, the most important price to watch in financial markets for an early-warning sign is the price of the dominant economy’s debt. This is best measured from the US interest rate term structure, which is popularly summarised by the slope of the yield curve between the yields on 10-year US Treasuries and the Federal Reserve’s short-term policy rates. A flat or inverted yield curve is widely interpreted to signal upcoming business recession and widespread disruption across emerging markets, by damaging the rapacious appetite of US consumers and shutting off the flows of cross-border capital. Therefore, what should we make of persistently flattening national yield curve slopes over the past year and the recent media claims that the notional “G4 yield curve has

just inverted”? In practice, this single yield spread is only an accurate predictor in those rare cases of perfectly linear term structures. This is because the distribution of yields and by implication the pattern of term premia — the extra yield required to hold longer-dated bonds rather than rolling shorter tenors — across the term structure matter. This is especially true today because the quantitative easing and forward guidance policies adopted by the major central banks have arguably distorted the shape of the interest rate term structure. It is helpful to think of the yield curve as broadly consisting of two distinct parts: a front-end, say, up to around 3-year maturities that is dominated by future policy rate expectations, and a back-end, say, 5-to-20-year maturities that is largely influenced by term premia. These term premia, in turn, reflect the general risk-seeking behaviour of investors, with 10-year government bonds, whether Bunds, gilts, JGBs or US Treasury notes, being the canonical “safe” assets for many institutional

investors. The movements in term premia and in the slope of this “second” longerdated yield curve are barometers of risk appetite and reflect the net demand for these “safe” asset bonds. Hence, it is popularly argued that, by reducing the effective supply of “safe” assets, the QE policies of central banks have distorted the term structure by narrowing term premia. However, this leaves aside the more important fact that to purchase these bonds, central banks must simultaneously inject liquidity into financial markets. This, by definition, reduces systemic risks, loosens leverage constraints and, by encouraging more risk-seeking activity, reduces the need for “safe” assets. The bottom line is that far from lowering yields and term premia, these QE policies actually raise them. In other words, the stark collapse back from their decade highs in worldwide bond term premia at these longer-dated maturities is not a distortion caused by overlygenerous QE, but may instead reflect an unambiguous and growing demand for safety by the key investors.

Intel’s disruption, and the problem with every token pitch Winterbrook Capital pursues Portuguese lender over ‘defaulted’ bonds DAN MCCRUM

n the PC world, Intel had won. The chipmaker dominated production of processors which were the heart of computers, and that position was intimately tied up in Microsoft’s monopoly on the software to run them. Then phones turned into computers, Apple became the world’s most valuable company, and Intel found itself disrupted. Rumours persist that the iPhone-maker may start to produce Macbooks using processors based on ARM technology, instead of Intel’s. Rivals TSMC and AMD forge ahead at ever lower nanometer scales. How and why Intel missed the mobile market has long been debated, particularly now it is looking for a new chief executive. Ben Thompson at Statechery had a great take, and a recent riff on that by Steven Sinofsky over at Medium adds to it and prompts a conclusion with relevance to every ICO hawking a token: So first thing, if innovation is focused on first and foremost being proprietary vs solving problems people have, then I think you’ll always run into trouble.

In an “ecosystem” play this is always a risk. Ppl hate being locked in, especially when it is obviously the intent. Without going too deep into the relationship between chip architecture and Windows, Intel processors were essential to PC software, but because it also had to licence chip designs to AMD, its business logic was to move in a direction where its manufacturing advantage was preserved. From the Medium post: In Office, our twice yearly meetings I was presented with things Intel thought would make Office better, but really were just ways to have Office “support” Intel’s proprietary IA extensions In a sense the conclusion is obvious. Tech is a winner-take-all kind of game, where the aim is to preserve or extend market dominance. Companies and consumers recognise this, so they need a good reason to lock themselves into an ecosystem, and will bolt if given a chance. See, for instance, the trouble Oracle appears to have as customers shift operations to the cloud. Yet the obviousness of this conclusion appears lost in the fug of ICO hype. The essential pitch of most initial coin

offerings is a request for people to lock themselves into a new proprietary network. See Iotas, Eos, Equis, Wallos, Owns, Ton$, just to highlight a few of the moles we’ve whacked. We’ve often described such propositions as tokens in search of problems, but maybe its better to think of them as would-be monopolists hoping to sell entrapment. One coin to rule them all, etc. Yet without an immediate and tangible benefit, the self-serving existence of tokens is obvious - please buy this as it will make us rich. The power of token monopolies also introduces a version of the prisoner’s dilemma, which means trouble for wellmeaning attempts to put bits of industries onto blockchains. Whose logistics blockchain? The value (maybe) comes if everyone will log their tuna catch or shipping container on the same blockchain, but if everyone can see that value and wants a piece of it, then there will be too many competing projects to land on a universal one. As the man says, people hate to be locked in, especially when that is the obvious intent.

BUSINESS DAY

Thursday 05 July 2018

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ANALYSIS

Why water is a growing faultline between Turkey and Iraq Upstream projects will produce energy and jobs, but Iraq fears for livelihoods downstream ERIKA SOLOMON AND LAURA PITEL

hey are from different generations, different countries, and live 1,100km apart. Yet the fates of Suleyman Agalday and Nashwa Nasr are intertwined by policies transforming the Tigris River that has irrigated their societies for centuries. Today, both are threatened with displacement. In south-east Turkey, Mr Agalday, 39, will see the ancient caves and rock formations of his hometown, Hasankeyf, flooded as the waters slowly rise because of his government’s controversial Ilisu dam. Engineers are due to start filling the reservoir this month. In the months ahead, homes, gardens and thousands of years of history will be submerged. Ancient town of Hasankeyf will soon be lost to the world But the flooding of Mr Agalday’s home also threatens critical shortages for Ms Nasr’s southern Iraqi marshlands, which have long received the waters of Mesopotamia’s two great rivers, the Tigris and Euphrates, as they flowed down from the Turkish highlands. Like her ancestors, Ms Nasr raises water buffalo among the towering reeds. As a child, the waters were so high, she could lean out of her thatched house and scoop up water to drink. Now, even if the leathery 78-yearold could reach the water from her hut, it is too polluted to drink. Every day, she and her family agonise over whether to leave their home behind. “Everyone talks about migration, but where to?” she says. “All we know is raising buffalo. How would we survive? We’re looking for mercy from God. Here, water is mercy — and there is less and less of it.” The damming of the Tigris is a cultural tragedy, activists say, with potentially profound geopolitical repercussions. Compounded by climate change, it risks sparking displacement that could further destabilise both countries, their neighbours and, potentially, boost migration when Europe is desperately trying to curb the flow of new arrivals. Turkey says its decades-long project to build 22 dams — the ambitious target date for completion is the end of next year— along the Tigris and the Euphrates will produce energy and jobs. But the Southeastern Anatolia Project, known by its Turkish initials GAP, has become entwined in the bitter internal tensions between the Turkish state, the country’s Kurdish minority and a violent insurgency led by the Kurdistan Workers’ party, or PKK. Security experts increasingly argue that resource shortages disrupt communities and create militant recruiting grounds. Having militarily defeated Isis this year, Iraq says maintaining supremacy against the Islamist group depends on providing the country with a brighter future. Water is critical to that: over 80 per cent of Iraq’s water goes to agriculture, which provides a livelihood to more than a third of its 37m population. Even before the filling of Ilisu, Iraq’s water ministry reported that inflows had this year dropped 40 per cent below the median. Panic

swept the country at the start of June as water levels fell so low that people could wade across the Tigris in Baghdad. Ministers limited the planting of rice and other waterintensive crops to minimise the damage. Researchers estimate that Middle East temperatures are rising twice as fast as the world average, due to the amplifying effect of desert conditions, which could make swaths of the region uninhabitable by the end of the century. With the Euphrates extensively dammed by neighbouring Syria and Turkey, and Baghdad grappling with decades of its own water mismanagement, the Tigris’s flows are critical. “By 2035, we will have lost 11bn cubic metres of water,”says Jassim al-Asadi, an environmentalist at Nature Iraq — a decline that will make it even harder to meet the projected annual demand of 71bn cubic metres by that date. As temperatures rise, the dams’ impact will be worsened by diminishing snowfalls at the source of the Tigris and higher evaporation rates. “The future of water in Iraq is very, very dim.” In Baghdad, officials and diplomats are grappling with the aftermath of the fall of Isis and a dangerous proxy struggle between Baghdad’s rival patrons, Washington and Tehran. Dealing with Turkey and climate change, they argue, can be solved at a later date.

But in southern Iraq, locals say time is running out. If Ms Nasr’s marshlands feel strained, the neighbouring agricultural regions of Maysan province are parched. As offshoots of the Tigris dwindled, some 650 villages went dry for days this spring. Among them, the town of al-Adel, where farmers describe the hottest spring they can recall — and the driest in 30 years. They expect to harvest only half of their usual annual crop. Chart showing rising temperature in Iraq “First we had an exodus from rural areas to town centres,” says Mr Fartousi describing the impact of the shortages in recent years. “But if the towns are in this situation — then where do you go?” Other frustrations lurk beneath the surface: southerners served in vast numbers for the volunteer Popular Mobilisation Forces, or PMF, that fought and died defeating Isis. Many are now returning to a devastated countryside, or simply do not come home at all — preferring to stay in the militias many Iraqis fear could become a parallel force threatening the state. Further downstream, in the village of al-Kheir, mayor Hussein al-Yassin has been forced to call in the security forces to break up gun battles over water. Now, he holds court with local sheikhs, discussing something they hoped to never face again: displacement.

They were one of many communities forced to flee in the 1990s, when Saddam Hussein diverted rivers to dry out the marshes and root out opponents hiding there. After he was toppled in the 2003 US invasion, locals broke down the barriers, and the rivers flowed again. But dam building, low rainfall and harmful irrigation practices mean that marshes historically 15,000 sq km wide now reach only some 5,000 sq km and are likely to shrink further. Village elders are unsure how to advise people steeped in agriculture for generations who may have no option but to head to the expanding slums of Iraq’s major cities — places known to be recruiting grounds for militants. “Our people are afraid in a way others don’t understand,” Mr Yassin says. “How can they make a living in the city? They can’t raise buffalo there, they can’t farm, and they certainly cannot fish.” More than 1,000km north, in a once-sleepy corner of southeastern Turkey, birdsong is punctuated by grinding gears, as workers dismantle Hasankeyf. Last year, they moved a 15th-century monument a mile away to higher ground. Now, workers blow up rock formations

and serve eviction notices to businesses. No one knows when the valley will be flooded, but many are dreading it. “I’ve lived here all my life,” says Mr Agalday, who sells tea to tourists in a small café overlooking the town. “My grandmother lived in that cave up there.” In the distance are the grey concrete blocks of “New Hasankeyf”, a replacement settlement of 700 homes for those expelled. In theory, one of them is a house for Mr Agalday. But he insists he is not going to live there. Leaning back in a plastic chair, he closes his eyes and struggles to conjure up an image of life across the valley. “I try to imagine my children coming back from school and playing,” he says. “But I can’t stay there in my mind. I keep coming back to Old Hasankeyf.” Officials say the GAP project will not only ensure that a quarter of Turkey’s energy comes from hydropower. They add that it will narrow the wealth gap between the south-east, long Turkey’s poorest region, and the rest of the country by massively expanding the amount of irrigated land and creating thousands of jobs.

BUSINESS DAY

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NEWS YOU CAN TRUST I THURSDAY 05 JULY 2018

Opinion How Buharionomics is deepening poverty in Nigeria

CHRISTOPHER AKOR Chris Akor, a First Class graduate of Political Science, holds an MSc in African Studies from the University of Oxford and is BusinessDay’s Op-Ed Editor christopher.akor@businessdayonline.com

hat the Buhari administration came in to office and has continued to govern through propaganda is not in doubt. As I have argued on this page severally, the anti-corruption propaganda is one that is difficult to resist, even by the enlightened – and the president is still intent on using it to drive his re-election campaign. That is why the government and its spokesperson have been speaking as if they live in a different reality from ordinary Nigerians. They generally do not see what ordinary Nigerians see. What is more, they will claim credit for the ridiculous and absolve themselves of all blame for anything that goes wrong, blaming instead the previous government and cor-

rupt individuals/politicians attempting to torpedo the anti-graft reforms of the administration. You can then understand the government’s consternation with international organisations like Transparency International, especially, for pooh-poohing the administration’s fight against corruption just months before the 2019 elections. But even more embarrassing to the government is the Brookings Institution’s report of the World Poverty Clock’s estimation that Nigeria has overtaken India (a country with over 1 billion population) as the poverty capital of the world. According to the report, 87 million Nigerians are living in extreme poverty compared to India’s 73 million. What is more, the report estimates that extreme poverty in Nigeria is growing by six people every minute, while poverty in India continues to fall. Pronto, the government rolled out its propaganda machines to counter the report. First, Minister of Budget and National Planning, Udoma Udo Udoma said the study was not properly conducted. “The Ministry has reviewed this report and would like to assure Nigerians that the report is not based on any

recent surveys of the poverty levels in Nigeria and cannot be relied upon as a factual indication of recent trends in Nigeria,” a statement from the minister read. It continued: “In line with extant laws, the National Bureau of Statistics (NBS) remains the statutory agency of government with responsibility for producing Nigeria’s official statistics, including poverty estimates.” But the same National Bureau of Statistics, since 2016, estimated that no fewer than 112 million Nigerians live below the poverty line. But, of course, Udoma doesn’t care for the truth. Next was Okey Enelama, the minister in charge of industry, trade and investment. For Enelama, the report itself is “lagging in indicators which means, people are reporting history.” He then reassured: “What I can tell you, with certainty based on one’s background in business and economics, is that if we complete the things on infrastructure and you implement these reports we are doing, that is what I mean by a leading indicator, poverty will go down.” But Enelama lied miserably. According to the Institution, the World Poverty

Clock data are updated “each April and October to take into account new household surveys (an additional 97 surveys were made available this April) and new projections on country economic growth from the International Monetary Funds’s World Economic Outlook. These form the basic building blocks for poverty trajectories computed for 188 countries and territories, developed and developing, across the world. But does Enelama care for the truth? Isn’t it all about propaganda? But it is not difficult to see how the shambolic economic management and agricultural policy of the administration are combining to throw millions of Nigerians into extreme poverty. On coming into office in 2015, the president immediately sought to control both forex demand and supply at the same time. Admittedly, the naira was under intense pressure since 2014 as a result of the slump in oil prices and the huge gap between the country’s receipts and imports. But rather than allow the CBN and the monetary policy committee to perform their statutory functions, the president jumped the gun ahead of the CBN and declared that there shall be

no further devaluation of the Naira. The CBN was then forced to roll out various kinds of policies – including placing some items on import prohibition list, to protect the beleaguered Naira. That rough policy created massive winners and losers (the winners being, of course, the rich and connected while the poor and struggling businesses became the losers). The Naira took such a beating that, at a time, it traded for N500 to a dollar. It currently trades at N360 to a dollar. The effect of the policy was that many companies and businesses were forced to shut down, over 9 million Nigerians lost their jobs, and the real and disposable income of many Nigerians nosedived. Prices of goods and services, especially food skyrocketed beyond the reach of many Nigerians. Secondly, the government, in the guise of encouraging local agriculture and local food sufficiency, is driving the prices of food still beyond the reach of Nigerians. Take for instance, government’s insistence on banning the importation of rice to allow local producers to remain in business. That is good so long as local producers compete fairly and do

not sell at exorbitant prices. But that has not been the case. Locally produced rice, although of inferior quality, is priced above the reach of poor Nigerians. And that is why smuggling of rice across the borders has continued unabated. To show how wicked the government is, it is planning to shut the border with Benin Republic and also use drones to monitor smuggling. A government that is interested in fighting poverty cannot, at the same time, be stifling competition just to support and protect some inefficient but big cartels of local food producers that exploit the poor. If there is one policy a government with majority poor people should pursue, it is that of ensuring that food prices remain low. But not so in Nigeria. According to the Economist, reporting a study by the OECD, “Nigerians would save 30% of their income if they bought their food at Indian prices.” But that does not cut any ice with our policy makers. The ultimate result of government’s refusal to accept responsibility for the deepening poverty in Nigeria is that as India’s numbers of extremely poor continue to reduce, Nigeria’s will be growing by the mmillions yearly.

Wither our orphaned billions? IK MUO Ik Muo, PhD. Department of Business Administration, OOU, Ago Iwoye, Ogun State

don’t know whether Charley-Boy still runs that his TV programme, where he usually assured viewers that everything is possible. Drawing inspiration from that, I have had cause to describe Nigeria as a Charley-boy republic because it is a country where EVERYTHING was and is possible: the bizarre, the unbelievable, the inexplicable and even the foolish (see the four-part in serial in BusinessDay, December 2011). It is only in Nigeria that this herdsmen menace can happen and where the government openly defend and make excuses for such a murderous gang. And the excuses are laughable. It is either that they are foreigners, or that they were trained by Gadhafi; or that the carnage is caused by legitimately passed anti-open grazing law or that Fulani cows have been rustled. But other strange things are happening beyond the audacious herdsmen, their spon-

sors and their defenders in high places. It is only in Nigeria that almost every parliamentarian is suffering from acute integrity-deficit and yet, they are making laws for us; that cases instituted while I was in primary school are still undergoing judicial rigmarole of come-today-come-tomorrow; where a governor who cannot pay his workers salaries has the temerity to officially celebrate a multimillion Naira mansion, where animals are so powerful that a snake could swallow millions of Naira and rats could chase the most powerful president in the world out of his office, where a 75+ year old man( official age, that is) is seeking reelection while his employees are retired at the age of 65 and where an anticorruption president openly deifies his hero who has been confirmed as one of the greatest champions of kleptocracy in recent times. It is only in Nigeria that a president signs a budget which he publicly admits is mutilated, queries the authority of NASS to tamper with the budget and yet fails to seek judicial interpretation; and where fuel subsidy has been abolished and yet there is a daily shortfall of N2,4bn between landing cost and pump-price of the product. But I digress. In 2017 Nigeria faced an unusual challenge: humon-

gous amounts of money in local and foreign currencies were freely walking about the streets in broad daylight without any owners and without the usual police escorts. The monies were indeed, orphans! It all started in march 2017 when N49m was discovered at Kaduna airport. In April 2017, an assortment of foreign and local currencies ($43,449,947, £27,800 and N23, 218,000) valued at about N15bn was discovered in Flat 7B, Osborne Towers Ikoyi Lagos, which we later learnt, was bought for $1.6m Cash by Mrs Folashade Oke, wife of sacked NIA boss. In the same April, large sums, stuffed inside bags were discovered inside three vehicles(a Mercedes Benz S350, KTG 01 AA, a Lexus SUV Jeep ABC 77 AKK and an unmarked BMW 640i series) at Shendam Close, in Area 11 of Abuja. That was when I knew that in addition to raiding homes, offices and farms, the EFCC also has the power to raid unmanned cars, with or without court orders!. In the same April, N18m, $19,000 (N5.8 million) and 4,000 Saudi riyals (N326,000) were found in the Abuja residence of Danjuma Goje, while another N449, 000, 860 was recovered from an abandoned Bureau De Change office in Lagos and on 11/4/17, N4bn was recovered from a Deputy Gov-

ernorship candidate in Niger state( Just imagine how much would be arrested from the governorship or presidential candidates in rich states like Lagos, Kano and Bayelsa). Later on 10/11/17, the sum of N250m (€547,730, £21,090 and N5,648,500)was discovered at the Balogun Market in Lagos( later claimed by a tomato-seller).Before it became a commonplace, the first discovery were the sums of$9,772,800 and £74,000 from a Kaduna house of, Andrew Yakubu, the former NNPC boss. In another twist of the wandering billions, the London police stormed the house of a Nigerian student debtor and discovered $8.5m in his apartment! One “comforting’ thing about this strange disease is that it was not made in Nigeria or restricted to Nigeria, as the German customs service discovered $1.3m cash inside a luggage at Dusseldorf Airport in April 2017. The only differences were that the action contravened specific laws ( transporting more than E10000 out of Germany without declaration) , the way the matter was handled (suspects were questioned and released) and how the money was treated( it was confiscated). There were no first and second investigation panels and no assurances by the

police that it would leave no stone unturned to get to the roots of the matter( I thought by now, they would have overturned all the stones!) In 1994, my 4 year old daughter, escorted my wife to Diamond Bank in Kano and was so amazed at the bundles and bundles of money all over the place that she shouted: Mummy see money; see money; and they say there is no money! That was my first reaction to these orphaned and wandering billions, especially at a time everything was in abeyance due to recession, which as Lai told us, was caused by PDP and Jonathan. Furthermore, I was alarmed at the extent to which greed would push sons of men. If somebody spent N1m daily, it will take about 3 years to exhaust N1bn. At 100,000 daily, it will take almost 30 years! You can then imagine how long it would take to deal with N15bn! When we were growing up, that kind of money was defined in Igbo language as agukata agba awaa: a number you count until your jay breaks. And yet people are playing PingPong with billions and even trillions; amounts that are equivalent to the budgets of some neighbouring countries. I am sure that Guinness Book of Records would have taken note of these wandering and

orphaned billions As a concerned citizen and a stakeholder in the Nigerian project( even though some stakeholders hold no stakes), I have be wondering over this mater privately in the past one year but now, I want to wonder aloud. Why did all these discoveries take place only in April 2017? Why did the discoveries suddenly stop? How did EFCC achieve all these sudden recoveries and why has it not been making further recoveries? What were the sources of these monies in a country under the throes of recession? And most important: Where are all the monies, including the ones with concrete identifiable sources? In the academia, we are told not just to highlight problems but also to include policy recommendations for the betterment of the society. I hereby recommend that the Government opens an Orphanage Account at the CBN to warehouse all the orphaned monies, to be managed by a commission on orphaned monies, headed by a concerned orphan for the sustenance of orphans. Furthermore, as an orphan and a patriotic Nigerian, I humbly offer myself to perform the thankless task of midwifing and nurturing the proposed commission. I promise on my honour, not to perform a Maina-magic with the funds

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08116759801, 08082496194. Subscriptions 01-2950687, 07045792677. Newsroom: 08022238495 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

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ANALYSIS

A TIME OUT WITH MY BRAZILIAN FRIENDS IN RUSSIA Anthony Nlebem, reporting from Moscow

y 2018 FIFA World Cup experience in Russia is something that I will live to remember as the fun, excitement and the opportunity of hanging out with fans from across the continent that specifically came to cheer their country to glory. As I arrived St. Petersburg on 18th June after spending four days at Kalingrad, at my hotel were fans from Argentina, Brazil and Egypt. What shocked me the most was that the rivalry between Brazil and Argentina was far beyond what we read on the papers or online. To my surprise, the Argentina and Brazilian fans were not getting along with each other and every one for was for himself. The Brazilian fans had wished that Nigeria defeated Aregentina and were so sad that we lost to their greatest rival. Infact, they praised our boys for putting up a good fight and blamed the referee for not awarding Nigeria a deserved penalty that could have see the Super Eagles progressed to the round of sixteen. We started discussing about the Campeonato Brasileiro Série A, a Brazilian professional league for men’s football clubs contested by 20 clubs, it operates on a system of promotion and relegation with the Campeonato Brasileiro Série B. The Campeonato Brasileiro is one of the strongest leagues in the world; it contains the most club world champions titles, with 10 championships won among six clubs, and the second-most Copa Libertadores titles, with 17 titles won among 10 clubs. The company of Lucas Leung, an die-hard

fan of SC Corinthians, Lucas Rocholli, a fan of SE Palmeiras and Brono Infanger of Sao Paulo FC made me and my fellow colleagues in the hotel felt very much at home, at least we saw people we can relate effectively wand discuss football matters feely and passionately. We started discussing about the Brazilian league and when I mentioned Santos FC, a team that has produced famous players like: Pelé, Carlos Alberto, Robinho, Neymar, what I heard was amazing. “Santos is now a team for the old people today is a team of the elderly, you only few supporters. They had more supporters when Neymar was still playing,” said Lucas Leung. We went further wither our discussion and I asked can Neymar succeed Ronaldihno as Brazil legend? “Neymar has the quality is enjoying media hype, but I think he still behaves childish and falls often and will need two to three years before he can win the Ballon D’ Or award, excepts if Brazil win the 2018 FIFA World Cup. “We have some young players within the age range of 17 to 19 years in the Brazilian league who are more talented and skillful than Neymar, but we have to see a little bit more of them.” They argued that been the Worlds’ most expensive player could be the reason he still plays the way he is playing. “But Neymar has the potential to be the best player, but he needs to be cool headed and be more matured, maybe been the World’s most expensive player. “Ronaldo Delima, the phenomenal would have been five time FIFA player of the year if

Editor: Anthony Nlebem Tel: +234 803 836 9508 Email: tony@businessdayonline.com

not for his knee injury and would have won the award three or two three times more, Lucas Leung added. He got the injury in the best years of his career, A footballer career is between the age of between 26 to 30 years, Ronaldo got injured inbetween this age. We went further and discussed Robinho, “Robinho lost his agility after he left Real Madrid and that affected his career,” “Brazil has a kind of physical preparations that the players are used to, but by the time the players get to Europe, and with a new muscular physical training, the like of Pato, Robinho and Ronaldinho were not ready for that. That is also affecting Neymar’s style of play,” Lucas Leung mentioned. I mentioned Real Madrid’ Marcelo, who has played for over a decade for the Spanish giant and still very active. “Marcelo plays in different position; you have to me more physically strong as a striker to have a longer playing career in Europe,”said Lucas Leung. The Campeonato Brasileiro is the mostwatched football league in the Americas and one of the world’s most exposed, with top clubs like; Corinthians with worth over $532.7 million and over 4 million fans. Palmeiras raked in $480.1 million and Gremio valued at $320.9 million with broadcast in 155 nations. It is also one of the world’s richest championships, ranked as the sixth most valuable with a worth of over $1.43 billion, generating an annual turnover of over $1.17 billion in 2012.

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hero in the Republic of Mordovia of which Saransk is the capital. He was even awarded what amounted to a local knighthood — ‘the Chevalier of the Order of Glory of Mordovia’. But then, it was revealed that at least 20 of the race walkers under him had been banned or suspended for doping. In 2014, after an investigation by the Russian anti-doping agency, Chegin was fired. In 2016, the WADA banned him for life. The World Cup in Saransk has been a celebration of sorts — the city centre hosts food festivals on matchdays while music blares out from the party venues. But it has also been an effort to recover its reputation and disassociate it from the sins of the past. “(Chegin) doesn’t work for us,” Mordovia’s sports minister Vladimir Kireyev said. “We don’t even know where he is.” Saransk can pretend to forget its dark past. It will be a long time before the world can afford to do that.

aransk doesn’t really come across as a real-life town. It looks like something somebody made just for the World Cup. New buildings are everywhere, though it doesn’t really feel like there’s anyone living in them. One of the things that strikes you when you walk out of the railway station is just how small it is. Walk 10 minutes and ask someone where the city centre is and you will find them shaking their head and saying this is pretty much it. How then, did tiny, far-flung Saransk, with less than 300,000 people, come to be known in the international media as Russia’s doping capital? The answer lies at the Olympic Training Centre which is over an hour’s drive from the city. Ask around the city for the Centre and not many people know what you’re talking about. Deliberately or otherwise, not many today know it by the Viktor Chegin National Race Walking Training Institute. It’s not there on the guide maps printed for the World Cup.

Finally, one volunteer recognises the name. “The Olympic Training Centre!” she exclaims. “That will be over here,” she circles her fingers over a blank area of the map. The Olympic Training Centre is where Panama is based but it had a drastic makeover in preparation for the World Cup. First off, there was the name change. Then renovation, a new pitch and a fresh coat of paint to hide away the scars of the past. For years, the Viktor Chegin National Race Walking Training Institute was one of the centres of Russia’s sophisticated doping programme that resulted in most of its athletes being barred from the 2016 Olympics. When German TV network MDR screened a documentary revealing the extent of state-sponsored doping in Russia, the spotlight fell on its race walkers as well, a sport the country had dominated for years. Most of the race walkers trained at the institute in Saransk where Viktor Chegin was the head coach. Their success saw Chegin being hailed as a

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he Russia 2018 edition of FIFA Fan Fest has already received over five million spectators, according to a statement from the world football ruling body FIFA and the local organisers in Moscow. The 2014 edition of the FIFA Fan Fest reached 2.9 million visitors mark ahead of the knockout phase. The FIFA Fan Fest has been part of the Official Programme of the FIFA World Cup since the 2006 edition in Germany. It again featured at the 2010 and 2014 editions in South Africa and Brazil respectively, and has so far been one of the highlights of this year’s showpiece in Russia. Every matchday, tens of thousands of Russian and international football fans opt for the FIFA Fan Fest locations as their venues of choice to watch the matches live.

he world soccer’s governing body FIFA has fined host nation Russia, Mexico, Serbia

and Morocco football federations after racist banners were displayed by fans during recent World Cup matches. FIFA said that a neo-Nazi banner was shown during the Russian squad’s 3-0 loss to Uruguay earlier this week in Samara. The Russian federation was ordered to pay around $10,000. FIFA said the banner included the number 88, a code used by neo-Nazis for “Heil Hitler.” Serbia, meanwhile, was ordered to pay about $20,000 after fans displayed a banner celebrating a World War II nationalist

They also enjoy an exciting music and cultural entertainment programme free of charge. The fact that this record number has already been reached halfway through the tournament is very promising, with the biggest ever football party expected for the final match on July 15,’’ Colin Smith, the 2018 FIFA World Cup Chief Executive Officer and FIFA’s Chief Tournaments and Events Officer. “The FIFA Fan Fests bring the most entertaining experience to the fans in the heart of our Host Cities. It is a perfect platform to celebrate football,’’ FIFA’s Chief Commercial Officer Philippe Le Floc’h added. “Reaching the five million visitor mark with still two weeks to go until the final of the 2018 FIFA World Cup in Russia is an amazing achievement. “We want to thank all the fans for coming to our FIFA Fan Fests and all the Host Cities for helping us make this project a success,” Alexey Sorokin, CEO of the competition’s Local Organising Committee (LOC), also said.

group during a 2-0 loss to Brazil in Moscow. Mexico were fined 15,000 Swiss francs for crowd disturbance after their fans threw objects during their team’s 3-0 loss to Sweden. Morocco were slapped with a fine of 65,000 Swiss francs for a series of incidents during the 2-2 draw with Spain, including crowd disturbance and six members of the team’s technical staff forcing their way on to the pitch after the final whistle.

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EGYPT GOVERNMENT TO INVESTIGATE NATIONAL TEAM’S WORLD CUP MONIES Anthony Nlebem, reporting from St. Petersburg/Russia

lawsuit, submitted to the Prosecutor General’s Office, states that “the EFA leadership misappropriated $1.8 million, allocated for Egypt’s stay at the training base in

Grozny” Egyptian Prosecutor General Nabil Sadek on Saturday ordered to launch an investigation into possible inappropriate expenditures by the country’s football association during the 2018 FIFA World Cup in Russia, Erem News reported. “The Prosecutor General tasked the Cairo Prosecutor’s Office with launching an investigation against the Egyptian Football Association and the delegation that accompanied the national team in Russia, on charges of misuse of state funds, allocated for the national team’s stay in the Chechen capital Grozny,” the news portal quoted a spokesperson for the Prosecutor General’s Office as saying. The lawsuit, submitted to the Prosecutor General’s Office by Egyptian attorney Muhammed al-Nimr, states that “the EFA leadership misappropriated $1.8 million, allocated for Egypt’s stay at the training base in Grozny.” “At the same time, no fees were charged for Egypt’s stay, thanks to the support by Chechen leader Ramzan Kadyrov,” the document continues. The Egyptian team lost all the three World Cup group stage games - to Uruguay (0:1), Russia (1:3) and Saudi Arabia (1:2).

MOROCCO APPEAL TO FIFA ABOUT INJUSTICE

he Royal Moroccan Football Federation has sent a letter to FIFA President Gianni Infantino concerning refereeing mistakes that were made during Morocco’s matches at this summer’s World Cup in Russia, the federation said on its Twitter feed on Thursday. The federation wrote that their national team faced “injustice,” which led to Morocco being knocked out of the World Cup. The Atlas Lions lost their chance to reach the round of 16 after losing to Iran and Portugal in their first two games. The Moroccan federation listed the referees’ decisions in the matches with Portugal and Spain that “deprived the Moroccans of the opportunity to play with the rivals on equal basis” and gave their opponents extra benefits, even despite the video assistant referee (VAR) system being used. The letter also urged Infantino to maintain FIFA’s image and take measures to eliminate injustice by providing all the teams with equal conditions. Morocco’s supporters tried to draw FIFA’s attention to “terrible officiating,” chanting obscene slogans during their match against Spain. The side’s head coach Herve Renard said after the game that referees’ job was hard, but he had questions in regards to their decisions. Morocco twice took the lead but eventually drew 2-2 with Spain in Kaliningrad on Monday. Renard’s squad finished bottom of Group B with one point, while the 2010 champions topped the pool with five points, qualifying for the round of 16 where they will face hosts Russia.

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lexei Sidorov had travelled from his home inside the Arctic Circle to see Russia play — and lose — its final group game in the World Cup in far-off Samara. But neither the vast distance to the banks of the Volga nor the national team’s sobering defeat could damp his delight at being a small part of a feelgood factor sweeping the country. “I think everyone realises this is the sort of thing that happens once in your life. Everyone wants to get a part of it before it ends,” said Sidorov, a 35-year-old civil servant from Novy Urengoy, as he joined the throng on the streets. Aided by a strong start by the previously underwhelming national team, Russia has embraced the country’s largest ever international sporting event to a degree that few had expected. For citizens of a nation treated with suspicion by western rivals, encounters with unprecedented numbers of foreign visitors have helped them feel that relations with the rest of the world need not be as mistrustful and hostile as global geopolitics would sometimes suggest. To a degree that has surprised some Russians, the Kremlin under President Vladimir Putin has played its part. The heavy-handed policing that usually accompanies mass gatherings in Russia has been dropped, allowing supporters from as far away as Peru and Australia to create a party atmosphere around the clock, both in the heart of Moscow and in provincial cities. Bars have run out of beer and fast-food chains have opened around the clock. “The Australians made off with half the town, they were just grabbing stuff left and right. They drink beer out of shoes. Apparently it’s their tradition,” said Dmitry, a volunteer in Samara. “We were totally unprepared for it.”

Cheap travel has helped fans join in; Mr Sidorov had taken advantage of special five-rouble tickets for Russia fans on Aeroflot to follow the Russian team. “They’ve made it so convenient for everyone to come to the games,” he said. Mr Putin has used aggressive nationalism to help rally domestic support in recent years, but the World Cup has allowed patriotism to find broader expression. The country united in cheering the national team as it scored eight goals in its first two games; after a 3-1 win against Egypt, thousands of fans flooded central St Petersburg, waving flags and singing songs. Nationalists hailed the scenes — the biggest outpouring of popular joy since Russia annexed Crimea in 2014 — as a triumph. “Russia is coming to life as a civilisation. It is rising from its knees to free itself from colonial dependency on the west,” said theatre producer Eduard Boyakov. “That process needs signs and symbols. Here’s one. What a team.” But the team has also won over many of Mr Putin’s opponents. Opposition leader Alexei Navalny, in court over probation for a fraud conviction that he says was concocted by the Kremlin to stop him running for president, watched the Uruguay game on his laptop during a hearing. Singer Semyon Slepakov, who had a viral hit before the tournament lamenting Russia’s poor play, recorded a new one to apologise. Legions of foreign fans have joined the enthusiasm. After Russia defeated Egypt, fans from Mexico and Brazil joined chants of “Ros-si-ya!” and gave Russians high-fives on the metro escalator. “Russia’s been the ‘bad boy’ of the world in the last few years and everyone’s got used to only hearing bad news from it,” said Dmitry Navosha, publisher of sports.ru, a popular independent website. “Travelling around the

Russia during the World Cup has made me feel that Russians are becoming more open now than before — and that they’re sick of this forced ‘us against the world’ stance.” Russians’ euphoria is tinged with a niggling fear the country’s authoritarian streak will soon reappear. In normal times, much of the revelry would be illegal: Peru fans in Saransk and Sweden fans in Nizhny Novgorod paraded through the cities on the way to matches — an activity that requires receiving a hardto-get permission from the mayor’s office and is often violently dispersed. Political protests, including attempted rallies by Mr Navalny against a recent decision to raise the retirement age, are banned in World Cup host cities. Moscow State University students were detained and fined when they protested against a loud fan zone set up near their study halls during final exams. Few of Putin’s critics believe the Russian police’s friendly face will last beyond the World Cup. “Obviously, a month from now you will not be able to go up to that cop in the metro who took a photo in a sombrero, [who will say] ‘What sombrero? Get your documents out and let’s go’,” columnist Oleg Kashin said on Republic, a website. Others believe, however, that simply showing a side to Russia at odds with perceptions abroad and the Kremlin’s own behaviour is a triumph to be enjoyed while it lasts. “I’ve never seen anything like this in Russia,” said accountant Daria Strekhnina, 28, enjoying the aftermath of another match in a “fan zone” in the capital. “It’s like having a Brazilian carnival in Moscow.” Mr Navosha said: “Hopefully people will understand Russia isn’t just the people who take foreign policy decisions in the country’s name.”

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Qatar 2022: High cost of TV rights may stall live games

eports from industry stakeholders say escalating cost of securing rights will make it extremely difficult for local broadcasters to provide service for Qatar tournament in four years’ time Hong Kong football fans are in danger of missing out on watching future live games as the escalating cost to secure the rights for the month-long FIFA tournament could prove well beyond what local broadcasters are willing to pay to gain a slice of the action. Television rights for the tournament being played in Russia cost a whopping $70 million, which mainland broadcaster LeSports originally secured only to come up short after paying the first four installments. Now TV stepped in by paying the remaining costs after free-to-air local broadcasters TVB passed up the opportunity. Costs are expected rise ahead of the next World Cup in Qatar in 2022, making it extremely difficult for any local broadcaster to pay for the rights. Four years ago, TVB paid $40 million to football’s global governing body Fifa, plus another $20 million on production and other related costs. “If the broadcasting fees keep skyrocketing, I don’t think any Hong Kong broadcasting media company would be willing to dish out big money to pay for TV rights for the Qatar World Cup in four years’ time,” said a World Cup broadcasting veteran speaking under condition of anonymity.

“Even TVB reported a loss for the 2014 event despite having strong advertising pulling power and dominance in the [media] business. With LeSports also gone, the prospect doesn’t look very good.” LeSports was the original rights holder for the 2018 Russia tournament in Hong Kong after agreeing terms with Fifa in 2016. However, LeSports has been experiencing financial problems, closing their Hong Kong offices three months ago. “LeSports was asking for $17 million to sell their rights, paying Fifa the last instalment and keeping some for their own operations,” said the insider. “TVB was not interested in the rights, while Now TV was happy to take it. But certainly it won’t be that amount again for the Qatar event as Fifa are most likely to increase their price. “Even if FIFA demands the same amount $70 million, it will still be a huge figure for any broadcaster to come up with, knowing it would be extremely difficult to make a profit.” Now TV’s World Cup money grab is fleecing Hong Kong football fans Four years ago at the Brazil World Cup, FIFA was unable to reach a deal with Singapore broadcasters who ended up showing just four live matches – the opening game, plus two semi-finals and the final. “The same situation may happen in Hong Kong for the Qatar World Cup. Of course, this is not desirable and will definitely let many people down,” warned the insider, who said

the government should buy the broadcasting rights and show the World Cup free-to-air. “The World Cup captures the imagination of the public and not only football fans. Fans in China, for instance, can watch all the games free on state-run CCTV, who bought the rights and who create their own programmes and sell it to all major provincial broadcasters at an affordable rate. It works.” The FIFA World Cup coverage will never be free for out-of-pocket the Hongkongers again, says sports commissioner Hong Kong fans were last able to watch every World Cup game for free at the 1998 tournament in France. When Cable TV, a paid subscription channel, first secured the broadcasting rights for the 2002 tournament in South Korea and Japan, fans were required to pay a subscription fee. Cable TV continued to be the sole broadcasters for the next two events until TVB regained rights for the 2014 tournament. By then only 22 matches were shown live on its free channels, while fans needed to subscribe to its paid channel to watch all 64 matches. Only 19 matches in Russia are being shown live on Viu TV, a free channel, including the two semi-finals and final. Only Now TV subscribers can watch all 64 matches. Viu TV and Now TV both fall under the PCCW Media umbrella. This article appeared in the South China Morning Post print.