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Apapa gridlock set to ease as work on Ijora Bridge completed T T
INEC may conduct 2019 elections with 2010 Electoral Act
CHUKA UROKO & ENDURANCE OKAFOR
he Apapa traffic gridlock, which has locked down access to the country’s main seaport and disrupted traffic flow in Lagos is set to ease, as the contractor handling the rehabilitation work on the failed portion of the Ijora-Apapa
Bridge says he has completed his work is ready to open it for use Friday evening . BusinessDay visited the repair site yesterday and was able to confirm that work has actually been completed. Some of the workers were also seen cleaning up the bridge of construction debris. One of the site workers, who
did not want to be named, confirmed that work has been completed and that the bridge would be opened to the public the next day (today). But Adedamola Kuti, the Federal Controller of Works in Lagos, who also confirmed the completion of work on the bridge, told BusinessDay that the bridge would not be opened Thursday
(today) because “I have to go there to inspect what they have done and decide whether it should be opened or not”. “The bridge is ready, but it will not be opened Thursday; we are however trying to ensure that it is opened this Friday; not tomorrow. We know that motor-
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... as deadline for signing Electoral Bill elapses December 6 ... 40 parties adopt Atiku as consensus candidate OWEDE AGBAJILEKE, Abuja
he Independent National Electoral Commission (INEC) may use the 2010 Electoral Act to conduct the 2019 General Elections. This comes as the 30 day constitutional window for President Muhammadu Buhari to sign the Electoral Act (Amendment) Bill expires today, Thursday, December 6, with no indication that he will give his assent. Section 58 (4) of the 1999 Constitution (as amended) gives the President a 30-day period within which he is expected to either sign a bill transmitted to Continues on page 38
Inside Diamond Bank jumps 30% as recapitalisation worries fade P. 2 L-R: Dayo Obisan, managing director, Greenwich Asset Management; Shuaib Audu, executive director, Stanbic IBTC Asset Management Limited; Damilola Ajayi, -
EFInA to unveil biannual flagship financial P. 39 inclusion data
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Why ETFs are unattractive for PFAs, insurance companies
... Meristem boss recommends industry wide platform for distribution MODESTUS ANAESORONYE
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takeholders in the nation’s capital market are seeking for ways to deepen Equity Traded Funds (ETFs) by making it attractive to institutional
L-R: Funmi Ekundayo, MD/CEO, STL Trustees Limited; Kayode Fayemi, Ekiti State governor, and Akinwumi Oni, head of Trust Services and Legal, STL Trustees Limited, during an official call on the governori in Ado Ekiti, the state capital, recently.
Diamond Bank jumps 30% as recapitalisation worries fade LOLADE AKINMURELE
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hares of Diamond bank have gained as much as 30.7 percent in the last three days, as investors believe that the tier-two lender will be needing less regulatory-imposed capital than expected. The Central Bank of Nigeria’s (CBN) approval for Diamond Bank to operate solely as a national bank means the lender’s capital adequacy ratio has reduced to 10 percent, from the 15 percent required of local banks with international operations. Diamond Bank, which has a capital adequacy ratio of 16 percent, has suffered a sell-off in the past month by investors who feared the bank would be needing to raise cash to meet up with regulatory requirements. “Investors that feared the worst are now breathing easy, knowing that the bank is no
longer in desperate need to raise fresh capital,” said Wale Okunrinboye, head of research at Sigma Pensions, a local pension fund manager. Shares of the Lagos-based bank climbed 8.97 percent to N0.85 per unit, Wednesday, as it followed up on two day gains of 9 percent each on Monday and Tuesday. Some 15.1 million shares of the bank were traded Wednesday, the third highest volumes after First Bank and Access Bank. “The share price rally could be sustained if the excess capital unlocked from the reduced adequacy ratio is used to clean up the bank’s balance sheet,” said Tajudeen Ibrahim, head of research at Chapel Hill Denham. “That may come at a cost to capital adequacy ratio but could prove a game changer,” Ibrahim added. Yields on the bank’s $200 million Eurobond due 2019
also fell to 29 percent December 5, after hitting as high as 30 percent last Friday, according to FMDQ data. A torrid month of November had seen the bank slapped with two credit downgrades in the space of one week by global ratings agencies Standard & Poor’s and Moody’s. Chioma Afe, the Bank’s spokesperson, said “the recent approval of the bank’s National license by the Central bank has provoked positive reactions and feedback from both retail and corporate customers. “It has shown the bank’s stability,” Afe said in a text message to Business Day. The retail lender sold its West African operations about a year ago to focus on Nigeria, and is in the process of selling its U.K. unit, which Stanbic IBTC Stockbrokers estimates could fetch from $60 million to $70 million.
Diamond Bank’s dollar obligations next year also include a $51 million International Finance Corp. loan, according to Stanbic IBTC. “Ultimately, if we get clarity on the financial close of the sale of the U.K. entity, we get more comfort in terms of understanding the road map for Diamond Bank to meet its important Eurobond obligation due in May next year,” Stanbic IBTC Stockbrokers said. Diamond Bank said last week that it was confident it can meet its obligations, and was in talks with unnamed development finance institutions and multilateral agencies for dollar funding to help it meet the Eurobond repayment. Diamond Bank is among small Nigerian lenders trying to recover from an economic contraction in 2016 and a decline in oil prices that caused bad loans to rise above the regulatory threshold.
OPEC defies Trump, recommends oil production cuts …mum on size DIPO OLADEHINDE
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meeting of Saudi Arabia, Russia and other members of the OPEC+ group recommended an oil production cut, defying a Twitter plea from President Donald Trump to keep the taps open, but didn’t agree on how big any reduction should be. The group secured Russia’s participation in six months of output curbs starting in January, Oman’s Oil Minister Mohammed Al Rumhy told reporters in Vienna as he left the meeting on Wednesday. Although the committee didn’t discuss specific cuts, there’s still time to agree on numbers and the final deal could remove about 1 million barrels a day
from the market, he said. Ministers from the core OPEC group, which doesn’t include Russia, will now meet today to seek a consensus on exactly who will cut and by how much. While Saudi Arabia, the group’s biggest producer, will shoulder most of the burden, the kingdom wants commitments from other countries before committing to a final deal. Saudi Arabia, Russia and the other countries that make up the so-called OPEC+ coalition are desperate to shore up oil prices after a slump of more than $20 a barrel since October. But they’re contending with vociferous opposition from the U.S. president, who’s taken to using his Twitter ac-
count to berate the group’s New York based profespolicies and sees low oil prices sional consulting services Euras key to sustaining America’s asia Group stated in a report economic growth. that it expects a settlement While ministers met in by OPEC and Russia to chop OPEC’s Vienna headquar- a mixed 1.5 million barrels a ters, Trump tweeted that the day from the market although “world does not want to see, it expects discussions not to or need, higher oil prices!” be straightforward however Oil pared gains after the it expects Saudi Arabia will meeting finished to trade at to persuade OPEC and non$62.25onWednesdayafternoon OPEC group to lower output. “OPEC’s production cut is “A ramp-up of Saudi pronot always a reason for higher duction to 11.2 million barrels prices,” Ayodele Oni an energy per day might be an instrupartner at Bloomfield Law, ment utilized by Riyadh to told BusinessDay. press for a deal in Vienna,” Emmanuel Akinbobola a stated Eurasia Group. Lagos based energy analyst Iran is currently subject said OPEC meetings are now to U.S. sanctions and as such all about politics rather than the won’t participate in any curbs, interestsofthecartel’smembers. the country’s OPEC governor “The kingdom is getting Hossein Kazempour Ardebili even closer to Moscow be- said this week. cause it needs to strike new •Continues online at agreements.” www.businessdayonline.com
ments for retail and institution investors. They said that lack of investor education accounts for why Nigeria’s ETF has remained undeveloped with only 9 issues to date, and
MARKETS
investors like insurance companies, pension fund administrators and asset managers. Experts who spoke at an Exchange Traded Products Conference for 2018 organized by the Nigerian Stock Exchange (NSE) with the theme “ETF: Evolving Investment themes, accessing new markets and enhancing portfolio Alpaha” held in Lagos, said ETFs are veritable instru-
valued at $15 million, compared to their South Africa counterparts with very large portfolios. At a panel discussion chaired by Damilola Ajayi, executive director, Vetiva Capital Management, the panelists agreed that there is need for investor education, which should be simple and connect to the target audience, and
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Shareholders fear N60bn SME fund may be diverted for Trader-Moni IHEANYI NWACHUKWU & HOPE MOSES-ASHIKE
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hareholders have expressed concern over alleged move by the Central Bank of Nigeria (CBN) to transfer N16 billion out of the N60billion in Agri-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS) to TraderMoni, an initiative promoted by the Federal Government. AGSMEIS is a voluntary initiative of the banker’s committee approved at its 331 meeting in February 2017. The fund requires all banks in Nigeria to set aside five (5) percent of their profit after tax (PAT) annually to grow Nigeria’s Agri-Business/Small and Medium Enterprises. Trader moni which was launched by the Federal Gov-
ernment in June 2018, targets market women, traders, artisans and enterprising youths, and is a micro-credit scheme to cater for ultra-micro enterprises. This move which Isaac Okorafor, director, corporate communication, CBN declined knowledge of last night by phone call is already unsettling the banking sector landscape. Godwin Emefiele, governor of CBN said last week in Lagos that “Under the auspices of the Bankers Committee, the sum of over N60billion has so far been set aside under the AGSMIES fund to fund Micro Small and Medium enterprise businesses in the Agriculture and Manufacturing sectors of
Continues on page 38
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Prominent Benin residents support Obaseki’s call for withdrawal of BEDC operating licence IDRIS UMAR MOMOH, Benin
...BEDC says outage temporary
orried by the continuous power failure in the Benin City metropolis, Benin Indigenous People Assembly (BIPA) on Wednesday, thrown its weight behind the state government demand for the immediate withdrawal of operational licence granted the Benin Electricity Distribution Company (BEDC). The pressure group’s demand was contained in a statement signed by West Ehiogie West-Idahosa and Orobosa Omo-Ojo, chairman and secretary general (BOT), respectively, and made available to newsmen in Benin City. Idahosa, who urged the Federal Government and its regulatory bodies to promptly withdraw the licence or at the least refuse to renew its operational licence to be expired soon, said that was the only way to prevent the present battle with BEDC from deteriorating into anarchy. The statement, titled “Benin Electricity Distribution Company (BEDC) and the Association of Nigerian Electricity Distributors (ANED) are enemies of Edo People,” how-
ever dismissed the claimed by the two electricity bodies that the state enjoy the lion share of what the company’s get from the national grid. He also said the group frowned at the alleged attempt by ANED spokesperson, Sunday Oduntan, seeking support from sister states by “clannishly creating the mischievous impression” that the state Governor, Godwin Obaseki, has demanded for the reduction of energy allocated to Delta, Ondo and Ekiti.” Idahosa alleged that the reality on ground indicated that BEDC had no capacity to distribute the so-called 9 percent allegedly allocated to Edo State. He noted that what was happening was an “uneconomical wastage of energy” due to poor and inadequate distribution system because of obsolete networks and very old power transformers. According to Idahosa, despite the abysmal service by BEDC, the company has continued to punish her customers with arbitrary billings, even without consumption. Apart from the state governor, the civil societies under the aegis of Edo Civil Society Organisations have dragged BEDC to court seeking the withdrawal
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of the company’s licence. “In the circumstances, we support the call by Governor Godwin Obaseki for the sack of BEDC, the licensed DISCO responsible for supply of electricity to Edo State. “We the people and residents of Edo State have noticed with utter consternation, indignation and dismay the reckless and callous abandonment of BEDC statutory mandate to provide decent and sufficient energy supply for the needs of our people. “BEDC has clearly failed in its duties and responsibilities to supply energy to the people and residents of Edo State. Indeed, in the last one year, Edo State has been thrown into one hell of darkness by the electricity company. “Consequently, the state has witnessed capital flight with businesses shutting down and relocating to areas where it can find better and regular energy supply. Invariably, this economic down turn has also spiralled into the unfortunate increase in the incidence of criminality as many jobless youths now resort to crime, committed in the darkness occasioned by BEDC’S negligence and nonchalance,” he said.
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comment Positive Growth with Babs
Babs Olugbemi Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Limited and Founder, the Positive Growth Africa. He can be reach on babs@babsolugbemi.org or 08025489396.
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ne of the responses from my article titled diversity beyond diversity was a call from a C-level executive of a company. I was shocked with his confession on how he had anathematised five promising staff due to his unconscious bias and lack of knowledge of the diversity in the personality of people. In his words, I had taken wrong positions by tagging my former staff as over ambitious and expressive unnecessarily and in the process frustrated them out of the company. He was particularly impressed with how my article exposed the need for leaders to know and take diversity in the personality of their employees with the same level of importance given to the difference in race, religion and ethnicity. He thereafter requested me to write another article on the two broad personality-types in the workplacethe extroverts and the introverts. One major flaw of the introverts is the inability to communicate in a way expected in many circumstances. The introverts are accused of lacking leadership skills for this and most often perceived as weak,
Thursday 06 December 2018
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The anathema in the workplace and not social to lead a strategic team or be in a strategic position. Though communication skill is an essential ingredient of a leader’s influence, it can be horned especially where there are compensating strengths in the introverts. It takes a leader who understands the personality traits of people to discern the value of the introverts. It takes one with an understanding heart to nurture and navigate an introvert into an effective communicator and a leader with influence. As a business leader, don’t allow your bias to determine the future of your staff without effort to test the correctness of your perception. Leaders need to know their direct reports, identify strengths the introverts bring to the table and decide to improve the introverts’ capacity to communicate, respond and adapt to circumstances as part of the leadership development process. I have noted in most cases, that the introverts have the depository of ideas and creativity if well understood and maximised. They need to be mined like the oil wells since they have the power to be their best within them. The extroverts are easily anathematised in the workplace for their ‘gunslinger’ attitude to work and situations. They are often the castrated employees who are tagged as excessively ambitious, outspoken and wanting to be noticed or recognized. One thing you cannot take away from most of the extroverts is the commitment, the value they can put on the table and the ability to be a ‘go-to’ asset for the organisation. A leader must know how to extract value from his or her people irrespective of their traits, sex or race. The understanding of your employees’ traits is a panacea to the effective use of
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The understanding of your employees’ traits is a panacea to the effective use of their strengths and reduction in the emotional and mental disengagement in the workplace
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their strengths and reduction in the emotional and mental disengagement in the workplace. Bashir Muhammad is a staff of a medium-size property company that was retained after his mandatory youth service year. He is outstanding among his peers. Bashir is the first to speak, act and embraced his roles. He always acted like magnets that attract his colleagues who are willing to work and repel those who will only do what is required. He has the fire in him and within a short space of time; he could act and take a decision like the owner of the business. His boss, Olalekan Okewoye understood his sanguine and choleric temperament and sees the good in him whenever he makes mistakes in his decision or adds creativity to instructions leading to an undesired outcome. Rather than anathematised Bashir,
Olalekan is seeing the brilliant side of him and consciously mentoring him. Olalekan is with a profound understanding that leadership without mentorship is like a relationship without partnership. Employees who are extroverts are often castrated by leaders with underdeveloped people management skills. These leaders see the staff as showing visibility, lousy, independent and not vulnerable. Many excellent employees have been marked as anathema and showed the exit doors whenever the opportunity presents itself due to the leaders’ unconscious bias for toward their personality traits. The anathemas in the workplace are staff noted and marked for exit or stagnation due to wrong perceptions contrary to their loyalty, uprightness, and because they appeared not to be vulnerable. Being vulnerable is a virtue some leaders want in their followers as security in their position. The common cause of staff being anathematized could be racial or religious consideration where no matter how the staff is, he or she cannot rise above a certain grade or given some opportunity. It could be undeserving hatred for the use of latent talents in the work place where the staff is castrated for daring to express his passion outside his job role even where no conflict of interest can be traced and when the organization could benefit from such talent. Another major cause of castration is gut. A staff that is a conformist to the caprices and dictates of the leaders are loved and treated better than those with the courage to speak against or stand for what is ideal for his team or the organization at large. Leaders have responsibilities towards their followers irrespec-
tive of their personality traits in the workplace. An example of a perfect management of an extrovert is seen in the relationship between the ultimate leader, Jesus and Peter, one of his disciples. Peter wants to walk on the sea like Jesus. He is the first to speak and act. He always wants to achieve the objective of the team. Rather than perceiving Peter as a threat, Jesus sees beyond his nature, nurtured him and at a time named him as the rock. For leaders to be fair and avoid regrets of action taken against people during their stewardship, they should adopt the influence model as a gauge against unguided comments or decision on the perceived anathemas. The leadership influence as made popular by Dr John C. Maxwell wants leaders to exude integrity, nurturing and faith in people, listening with care and act with understanding heart. Other virtues of the influence model are emotional intelligence, navigate people through problems, communicate effectively and be exemplary. With influence, leaders will achieve the result through their people. The bridge between leadership influence and result is the behaivour of the leaders to the people and the situation at hand. Leaders must stop, pause and ask questions on the bias against the anathemas in the workplace. A simple pause for reflection could be the stitch in time that saves nine. *Babs Olugbemi is the author of Take the Lead (How to live, energise, activate and develop your strength), an empowerment book for employees, talent entrepreneurs and business owners
in accordance with these guidelines”. A whistle blower who has been subjected to any detriment by reason of the disclosure made shall present a complaint to the CBN, pursuant to which such whistle blower would be entitled to compensation and/ or reinstatement. Stiff sanctions also attach to contravention of the provisions of the guidelines. However, as well-intentioned as this appears to be, a lot more is required to protect the whistle blower and encourage employees to report corporate misconduct. Whistleblowers may be perceived as disloyal employees and troublemakers. Reporting misconduct has caused some employees to be victimized by their employers as well as fellow employees thus employees generally do not feel protected enough to come forward with information on misconduct. Some strategies towards achieving protection for the whistle blower include adequate training company-wide on whistle blowing and the treatment of whistleblowers. Also an
open-door policy encourages employees to speak with their superiors and express their concerns. Managers who encourage whistle-blowing set a positive example in the company and cause people to come forward when they have relevant information. Encouraging anonymous reporting to protect the whistleblower’s identity (e.g. blank emails, hotlines) is also another strategy. However, when placed side-by-side with a desire to promote a culture of transparency and accountability, anonymity may not always be desirable. The ultimate protection however lies with appropriate legislation in this regard and a vibrant judicial system. Without a doubt, defining and enthroning a corporate ethical culture is by far the surest way of ensuring the sustainability of the enterprise. Corporate strategy as crucial as it is in corporate success, crumples like a pack of card in the face of corrosive unethical corporate culture.
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Protecting the whistle blower
Bisi Adeyemi Bisi Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comments and reactions to badeyemi@dcsl.com.ng.
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histle blowing is an act of a man or a woman who, believing that the public interest overrides the interest of the organization he serves, publicly “blows the whistle” if the organization is involved in corrupt, illegal, fraudulent or harmful activity.”Ralph Nader. The prevalence of corporate scandals continue to reinforce the need to enthrone processes and policies aimed towards averting corporate governance failure. The respective industry corporate governance codes as well as the soon to be released
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Nigeria Code of Corporate Governance 2018 place significant emphasis on whistle blowing as a mechanism for reporting corporate misconduct. Significantly, the Enron and Satyam scandals were uncovered following “anonymous memos” to the Board of Directors of both companies. The corporate governance codes recognize the fact that employees have significant insider knowledge of misconduct and seek to encourage them to “blow the whistle” as appropriate. The Sarbanes-Oxley Act requires that corporations provide a standardized channel for employees to report organizational misconduct to official monitors within the corporation. The Central Bank of Nigeria (CBN) makes it mandatory for all Banks to have a whistle blowing policy, and for the policy to be made known to all employees and stakeholders. The Securities and Exchange Commission (SEC) and National Insurance Commission (NAICOM) Codes of Corporate Governance also make it man-
datory for the regulated entities to have whistle-blowing policies which should be known to employees, stakeholders such as contractors, shareholders, job applicants and the general public. However, it is pertinent to consider whether or not adequate incentives exist to encourage whistle blowing. The best incentive a whistle blower requires is adequate protection against reprisal. The absence of this protection acts as a disincentive to whistle blowing as the anxiety of potential retaliation is enough to deter a would-be whistleblower and this obviates the moral obligation he or she has to make such disclosures. The CBN Code has done well in this regard as it provides comprehensive whistle blowing guidelines with emphasis on protecting the whistle blower. Section 4.5 of the guidelines provides that “no bank or financial institution shall subject a whistle blower to any detriment whatsoever on the grounds that he/she has made a disclosure
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Let us outsource Nigeria’s governance
OKEY NWACHUKWU Nwachukwu is a Lagos-based communications consultant.
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any will interpret this subject as another treatise on re-colonization of Nigeria. And the initial reaction will likely be outright dismissal. Broaching such an issue is nonsensical, derogatory, unimaginable, unpatriotic and demeaning of a people endowed with incontrovertible abilities. How can any sane person, moreso a Nigerian, suggest that we are re-colonized? But when the dust settles and we take a survey of those baying for blood, it would likely be the parasitic elite and their followers, ethnic and racial bigots, religious zealots, egoists and the uninformed. When these segments are put into political play, it will reveal why Nigeria remains a floundering entity, 58 years after gaining independence. Every day, Nigerians, in their hundreds and maybe thousands, throng the embassies of other countries to seek for visas. What to do upon arrival at their chosen destinations is immaterial. Their most pressing desire is to leave the country. A look at some of the countries where they are headed leaves you bewildered on what could have engendered such desperation. Those
NKEMDILI NWADIKE Nwadike sent this piece from Lagos
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here has been an explosion in global and cross border trade for some decades now. With this burst also comes the menace of illicit trade, otherwise known as the underground economy. As markets open and demand grows, people try to engage in illegitimate trade by producing, importing, exporting, purchasing or selling items without complying with relevant legislations. Illicit trade is a massive problem for manufacturers, governments, regulators and multilateral agencies and indeed any legitimate operator in the industry value chain. It extremely undermines government’s objectives on taxes and revenues, places burdens on government’s regulatory and enforcement agencies and undercuts the potential benefits of international trade. It is a source of worry for government because illicit trade merchants sabotage government and the economy by evading taxes and other statutory obligations. The huge infrastructure gap and challenging business climate in the country often makes it difficult for locally manufactured goods to compete favourably against imported goods. This problem is further exacerbated by the influx of contrabands into the nation’s market. Illicit trade deprives legitimate companies and manufacturers of
without the requisite credentials to migrate lawfully now resort to the hazardous adventure of crossing the scorching Sahara Desert through Libya to Europe. Of course, many die of hunger and dehydration, while others are trafficked into slavery. Those who are able to reach the Mediterranean Sea eventually drown in the wild seas. The few that eventually get to Europe live mostly in hiding or become refugees or find themselves in underpaid menial jobs. A combination of the inability to raise enough money to return home and the indignities associated with misadventure leave them stranded abroad. Despite this grim reality, the Nigerian state feigns ignorance of the causal factors. Instead, the victims are accused of desecrating the nation’s reputation. Incumbent president, Muhammadu Buhari, had on a number of occasions dared Nigerians to migrate. Speaking at a political meeting in Abuja on Monday, October 22, 2018, he challenged Nigerians who are bent on leaving the country to do so. In April, at the Commonwealth Business Forum in London, he had castigated the youth for being indolent and seeking the easy life. He never addressed the cause of such indolent life, although largely untrue. Lamentations about the failure of leadership in Nigeria is welldocumented. But the elite and some sections of the country, who are beneficiaries of the chaos, would only admit the quandary in denial. And the country continues to dither, invoking the perception of our inability to govern ourselves. With four regions in the early 60s, Nigeria was a better man-
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The northern region, despite controlling the levers of power much longer than any other region, is under-developed and parades the worst human development indicators
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aged country. Thereafter, leadership deficiency and distrust steadily unraveled, leading to military intervention and a civil war. Consequently, the military introduced a command structure in which all powers and resources were concentrated at the centre. Progressively, the country was split into states, annoyingly called federating units, resulting in 36 unviable states reliant on federal allocations for existence. Despite several conferences to establish a more functional country, nothing has unchanged, thus sustaining a nation in disarray. The basic anchors of nationhood and greatness are nowhere associated with Nigeria. Professing nationhood is usually a slogan of the manipulative elite and the illinformed to hoodwink the populace and pursue their narrow objectives. It is not a nationhood defined by awareness and acceptance of oneness, regardless of tribe, race, history,
religion and language, among others. The only normalness shared by the country is the over-touted indivisibility. Regional and social inequalities are profoundly evident. The southern part of the country, with a richer resource base, is more developed, enjoying higher levels of literacy and health. The northern region, despite controlling the levers of power much longer than any other region, is under-developed and parades the worst human development indicators. Still, reaching a common agenda to build an all-inclusive and prosperous country is futile. The national political space is defined by elite conspiracy and hegemony, interwoven to create a nation of agonizing inequality. Although very conscious that the country requires reinvention, parochial considerations have stalled any constructive engagement. Instead, corruption is blamed for all the nation’s woes. This is a nobrainer. The northern region, going by the posturing of some of its leaders, is trenchantly against restructuring the country. They tend to act like restructuring is nothing more than a southern game plan to upend the current system to their disadvantage. But those blustering to speak for the region are just a tiny selfcentered minority unconcerned with improving the lot of the majority in the region. They have only manipulated the masses to sustain Nigeria’s most backward people and region, while also refusing to take responsibility. The two leading presidential candidates for the 2019 general elections, Buhari of the All Peoples Congress and Abubakar Atiku of
the People’s Democratic Party, have outlined their plans for governing the country. Although the election should be a referendum on Buhari’s first term performance, the incumbent government appears disinterested in an issues-based campaign. Buhari’s Next Level blueprint offers nothing particularly new; just a rehash of his famed “exceptional performance,” frequently trumpeted by Lai Mohammed, the Minister of Information. Whether these campaign promises will open the vista to a great and prosperous nation lies in the womb of time. Nonetheless, both candidates and indeed every administration since the restoration of democratic governance have made foreign investment a major policy pivot. It is argued that given the drive with which our leaders seek foreign investment, rather than develop local capacity, the country has a well-defined path to development. By extension, if after almost six decades of self-rule and the disinclination towards better governance is growing, would it not be preferable to have foreigners assist us with governance. For a people obsessed with everything foreign, outsourcing governance follows a logical trajectory. We could cloak it in some balderdash; after all we have heard it regularly echoed that Africans are incapable of governing themselves. And we have not seen any steps to disprove this notion. Instead, there is increasing dependence on foreign intercession in every facet. There is a strong case for outsourcing Nigeria’s political governance.
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Rising incidence of illicit trade in tobacco in Nigeria: A call to action the financial and moral incentive to contribute meaningfully to the formal economy, a situation that ultimately results in job losses and collapse of business. This is another reason for it to be tackled urgently. One of the most smuggled commodities in the world is tobacco. The World Health Organisation (WHO) estimates that 1 in every 10 cigarettes and tobacco products consumed globally is illicit. Revenue losses from the trade are believed to be between US$40 to $50 billion. The commodity’s small size and light weight makes it very portable to ferry as well as attractive and profitable to illicit traders. Perhaps, one of the greatest risk factors of illicit trade in tobacco is its affiliation to organized crime. Illicit trade has a strong appeal for transnational criminal networks and international terrorist organizations who use proceeds from illicit deals to fund their activities. The networks can be business webs operating across multiple channels. The operators are often engaged in more than one type of illicit trade to fund their businesses. Also, rebel groups and militias operating along international borders acquire arms with profits generated from illicit trade. Illicit cigarettes are often transported along similar routes with other products that are usually traded illegally. The identifiable categories of tobacco sales in the global market are contraband and counterfeit
cigarettes. Contrabands are authentic cigarettes purchased in a low-tax country at quantities higher than import limits but later resold illegally in markets with higher prices, while counterfeit cigarettes are fake cigarettes that are manufactured illegally and fraudulently branded to look like products from the original cigarette brand owner. Closely related to contrabands is a category known as cheap whites, in which tax and customs duties are evaded before being smuggled into another country for sale. Illicit cigarettes pose a serious threat to the health and wellbeing of consumers as a lot of smuggled fake cigarettes contain ingredients far in excess of approved levels, which make them harmful to the unsuspecting consumers. The smugglers can offer lower prices because they have evaded taxes, thereby making the harmful products affordable to consumers. In spite of huge successes recorded few decades ago, illicit trade in tobacco is still a growing concern for governments, global health agencies and even the tobacco industry all over the world. It is quite cheering to note that global, multilateral response has been unleashed on the crime in recent years. However, more needs to be done as the perpetrators keep evolving new ways to beat checks. Dealing with the global illicit trade requires a well-organised and coordinated international response in much
the same way as other transnational crimes as well as country-specific strategies as the extent of the problem varies from one country to another. There is, however, a high level of prevalence in developing countries where the scale of the activities does not often reflect in official statistics. Combating the menace of illicit trade in tobacco also requires multisectoral and international collaboration and works through the channels of cooperation in the investigation and prosecution of offenders and information gathering. This fact has also been reiterated by the World Health Organisation Framework Convention on Tobacco Control (WHOFCTC) Protocol to Eliminate Illicit Trade in Tobacco Products (The Protocol). The Protocol notes that countries differ in their relationship to the illicit tobacco trade and identifies the different forms the crime takes in various countries of the world. According to it, while “some countries are the source for illicit tobacco products, some play a role in the transit of the illicit products, while others are the destination.” It notes further that “in several cases, a country may be in more than one of these categories, or change over time from one category to another category.” Sadly, Nigeria is listed among 25 countries, including seven from Africa– Egypt, Tunisia, Algeria, Libya, Mali, Niger, Guinea – that are main transit and transit-
destination countries for illicit trade in tobacco. Nigeria’s classification among the countries that bridge these two categories is indeed telling of the magnitude of the problem. It is regrettable that Nigeria is not a member of The Protocol, whereas most of the other countries categorized with respect to the various roles played in the illegal trade have signed up in the treaty. More importantly, it is a call to action for government and the anti-tobacco coalition to scale up advocacy against trade in illicit tobacco. The realization that West Africa is a choice route for tobacco smugglers has jolted the Economic Community of West African States (ECOWAS) to action. At a recent meeting in Abuja, the community resolved to put in place machinery to eliminate illicit trade in tobacco in the region. Remarkably, the Togolese government has demonstrated strong commitment in fighting the crime by implementing a tobacco transit directive and publicly destroying products seized by the various agencies fighting the crime. This trend is remarkably being replicated by other nations like Benin, Ghana, Niger, Mali and Burkina Faso. It remains to be seen if Nigeria and other West African countries can take a cue from Togo.
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OKECHUKWU KESHI UKEGBU
The future of human labour and the automation of industrial processes
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makes for the most productive worker? “Is it the formal work space which we are used to or something less constraining more flexible as we are seeing in the new technology companies.” The vice president’s concern should not be wished away as it is characteristics of our government’s. It will be recalled that in October 1930, a year after the Wall Street Crash but before the Manchurian crisis and the Nazi seizure of power, the London Economist expressed the same worry thus: “the supreme difficulty of our generation... is that our achievements on the economic plane of life have outstripped our progress on the political plane to such an extent that our economics and our political plane to such an end extent that our economics and our politics are perpetually falling out of gear with one another. On the economic plane, the world has been organised into single, all embracing unit of activity. On the political plane, it has not only remained partitioned into sixty or seventy sovereign national states, but the national units have been growing smaller and more numerous and the national consciousness more acute. The tension between these two antithetical tendencies has been producing series of jolts and jars and smashes in the social life of humanity...” The same worries were also expressed by Paul Kennedy in his book Preparing For The TwentyFirst Century, when he opined that “human history has always
ecently, Vice President Yemi Osinbajo at the closing ceremony of the 50th anniversary celebrations and annual conference of the Chartered Institute of Personnel Management in Abuja raised a very touching concern on the growing threat posed to humans by the deployment of robots and artificial intelligence in work places. The vice president’s concern further explained that in the next few years, Nigeria would be contending with having one of the largest youth populations in the world. “We will be the third most populous nation in the world. What sort of skills will these young men and women require? Where will they work? “Already, we are contending with how technology is redefining the structure of industry and commerce and the skills required to function in them. “But more disturbing is the growing apprehension of redundancy of many who today work in the millions of jobs that may be unnecessary as robots and Artificial Intelligence perform the same functions far more efficiently and even cheaper. “What will retraining this possibly redundant workforce entail? What happens to pensions of retired humans when the majority of current workers are robots who earn nothing. “How about the growing concerns about work life balance? What sort of work environment
INWALOMHE DONALD Donald writes from Benin City inwalomhe.donald@yahoo.com
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,000 so-called Islamic State (ISIS) members that were dislodged in Syria and Iraq have all relocated to the Sahel portion in Africa. If we cannot restrict these various dreaded terrorist groups now, there may not be a country called Nigeria in the nearest future. These terrorist groups are threats to 2019 general elections. How do you conduct elections in a country that is being terrorized constantly by these various militant groups? We must act now before 6,000 ISIS fighters overrun West Africa. Up to 6,000 Africans who fought for the ISIS jihadist group in Iraq and Syria could return home, the African Union’s top security official warned late last year, calling on countries to prepare for the threat. Smail Chergui, the AU’s commissioner for peace and security, said African nations would need to work closely with each other and share intelligence to counter returning militants. “There are reports of 6,000 African fighters among the 30,000 foreign elements who joined this terrorist group in the Middle East,” Chergui told a meeting in Algiers, according to the Algeria Press Service news agency. “The return of these elements to Africa poses a serious threat to our national security and stability and requires specific
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We will be the third most populous nation in the world. What sort of skills will these young men and women require? Where will they work?
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been shaped by the growth and migration of populations, by the opportunities and the constraints provided by the environment, and by the rise of new technologies. Today, these factors are enmeshed in a state of unprecedented turbulence. World population has doubled in the past forty years ...” How will these vast numbers reshape the world’s borders, strain an already fragile ecosystem, and remake politics? New technologies are even now replacing traditional work with radically new systems of production and communication, promising enormous changes in both industrial and traditional agricultural societies. Will potential developments in biotechnology render traditional food producers obsolete? What is the role of robot-
ics in a world where millions of new jobs are needed each to absorb the fast-growing population? The question that demands urgent attention here is “how prepared is Nigeria in this situation where automated processes, such as robotics and artificial intelligence, are threatening to displace human labour?” On this, Osinbajo said that to brace up for the challenge, the Federal Government was focusing on imparting employable skills on students from primary school to tertiary education. According to him, no sensible discussion of the economy can be done without acknowledging the role of the people. He said that the third major pillar of the Economic Recovery and Growth Plan was called investing in people; on human capital development. “Our plan, especially with regards to education and health, is one that we have spent a great deal of time working on, and we are, of course, in the process of ensuring that it is fully implemented. “One of the most important features of that human capital development plan is Science, Technology, Engineering, Arts and Mathematics (STEAM) Education. “The focus is on employable skills from primary school all the way up to tertiary education. But the focus on primary and secondary education is on employable skills, especially technology. “So, our focus is on teaching young people from the primary school, even pre-primary school, using all of the new techniques
such as code writing skills, software writing skills and all that. “The new technologies that are developing and all of what we are seeing today clearly shows us that anyone in the coming generation will be left behind if they are not at the cutting edge of technology. “We believe that our educational system must incorporate that, which is why a lot of attention, in the new curriculum, is focused on science, technology, engineering and mathematics.” He said that the Federal Government was also doing same with health care as for the first time, it was spending one per cent of the entire consolidated revenue fund on health care. It is noteworthy here to commend one man for his vision. The man is Gov Okezie Ikpeazu who conceived the education for employment initiative which concept is designed to ensure that education leads to employment by imbuing the youths with the technical skills that would enable them become either self-employed or sought after by others. Also, it will not be out of fashion if a model adopted in Japan sometime ago is implemented here. Most large companies in Japan have a policy of lifetime employment, so that a worker whose job has been taken over by a robot will not be fired, but the retrained and relocated inside firm or in related companies within these industrial conglomerates.
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Metele attack in Borno: Before 6,000 ISIS fighters over-run West Africa treatment and intense co-operation between African countries,” he said. Tens of thousands of foreign fighters joined the Sunni extremist group after it seized vast swathes of Iraq and Syria and declared a caliphate in 2014. But the group has suffered a host of losses to both its territory and military capabilities in the last year. Terrorism is one of the biggest crimes against humanity. Every such crime deserves to be named appropriately, and nations experiencing such owe it to their citizens to act swiftly and decisively against terrorists. The so-called ‘foreign fighters’ – African citizens trained in Islamic State terror camps – have returned to Africa and pose a “completely new challenge. Nigeria is currently facing terror threat in the last three years. There are concrete indications that terrorists are systematically using the stream of herdsmen to come into Nigeria undetected. We can expect [ISIS] or other religious terror groups to stage an attack in Nigeria with the aim of achieving mass casualties among the civilian population and that the risk of attacks by individuals has also not diminished.” Nigeria and other West Africa countries waited for more than 6,000 ISIS that returned from Syria and Iraq to invade them despite the warning from Africa Union in September, 2017. The attack at Metele village in Guzamala Local Government area of Borno State happened because West
African countries are not prepared to fight ISIS. The Islamic State in West Africa ISIS claimed responsibility for five recent attacks which it said resulted in 118 casualties. The recent attack is a fallout of the deterioration of security on the Nigeria-Chad border that has led to the recently increased Boko Haram terrorism in the area. There is a rumour that Nigeria has problem with Chad in the Multi National Joint Task Force put together to secure Lake Chad basin area and repel Boko Haram terror attacks against all the countries around Lake Chad. Republic of Chad, Niger and Mali have internal security challenges and this was reportedly led to their pulling out of troops around Lake Chad. The lacuna is being exploited by the Boko Haram terrorists who go in and out of Nigeria, Mali, Niger, Chad and Cameroun to launch terrorist attacks. This is a clear illustration of the fact that terrorism is beyond national borders and West Africa countries never prepared for 6,000 ISIS fighters that came from Syria and Iraq. The reported death toll is among the highest since President Muhammadu Buhari came to power in 2015 and comes as the country prepares for elections in three months. The worst losses came when militants overran a military base in the village of Metele in the north-eastern state of Borno. The area is the centre of an
insurgency waged by Boko Haram, which was founded nine years ago to bring strict Islamic law to swaths of Nigeria, and a second newer group linked to Islamic State. Islamic State said it was responsible for the Metele attack and claimed to have killed at least 40 Nigerian soldiers. The increase in violence in north-east Nigeria follows a power struggle among militant leaders. In the first major rift, the Isis-linked group split from the one led by Boko Haram’s veteran leader, Abubakar Shekau, after arguments over his indiscriminate targeting of civilians in raids and suicide bombings. The Nigerian army has been hit by a series of mutinies as soldiers refuse deployments to the frontline in the north-east, saying they lack basic equipment and supplies, including adequate weapons and ammunition. I was expecting West African countries to deploy satellites and online platforms to track the returning ISIS fighters from Syria and Iraq. Recent killing of Nigerian soldiers is a manifestation that we did not prepare to tackle ISIS fighters after more than one year of warning of the returning jihadists to West Africa. I am concerned about terrorism not just within our borders, we have also seen the influence of terrorists across borders and how terrorist organisations have cooperated with each other. We are aware, for instance, that some within our
own borders are cooperating with ISIL and we think that this sort of evil collaborations must have a response from countries that share similar experiences and can present a credible force against terrorists. Terrorism is a major problem and perhaps the most significant problem that the free world will face in the coming years. Boko Haram new ties send a strong message to countries affected by the sect. It is now more imperative for countries affected by the sect to join forces in the bid to counter such strong networking among terrorists. There is a link with the unprecedented increase in the terror threat with the ongoing violence in Nigeria. These worries are substantiated and confirmed after several killings. Terrorism is one of the biggest crimes against humanity. Every such crime deserves to be named appropriately, and nations experiencing such owe it to their citizens to act swiftly and decisively against terrorists. What we have experienced so far with terrorism and it is high time government handled it with the seriousness required for such a grave situation not only to protect the lives and properties of her innocent citizens, but also to preserve the tribal identity.
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Thursday 06 December 2018
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Frank Aigbogun editor Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)
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13
Editorial
Demise on war on corruption
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here is a growing sense of deja vu in the country that the Buhari administration may not, after all, be able or morally fit to decisively fight corruption in Nigeria as the President promised time and again before and after the elections. Interestingly, even the President and his Vice President - now Acting President - have been voicing their frustration with the level of corruption in the country. The Acting President, in particular, over the last week had severally complained at the pervasive and systemic nature of corruption, almost despairingly. But this is unfortunate. The administration set the war against corruption as its core mission in government. Rightly, during the President’s inauguration, the President declared that if Nigeria does not kill corruption, corruption will kill Nigeria. He even went ahead to set up a Presidential Advisory Council on Corruption, headed by an eminent lawyer and professor to help with studies of the nature of corruption and advise the administration how best to tackle the scourge. Of course, in the first weeks of the administration, the right noises were made and the message reverberated even outside the country. There was a general feeling that there was a new Sheriff in
town and the President’s ‘body language’ as it was called then prompted the anti-corruption agencies - the Economic and Financials Crime Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) to wake up from their deep and long slumber. Subsequently, the EFCC especially went on a rampage, arresting indiscriminately, engaging in media trials and obtaining socalled confessional statements under duress and splashing them generously on the pages of the newspaper but with few and largely unsuccessful arraignments, prosecutions and convictions. It was not long before the war on corruption went the way of others before it – prosecution of only opposition politicians and people who disagree with the President, protection of corrupt associates and cronies, politicisation and cherry picking of those to prosecute and those not to, and hypocrisy in the war against corruption. Like a respected BusinessDay columnist termed it “despite the moral outrage and righteous indignation often expressed by Nigerian leaders, there is no credible commitment to tackling corruption”. If not how can the government quickly and without investigation absolve grave and weighty corruption allegations on the following close associates of the President: General Tukur Burutai, Chief of Army Staff, General Abdul-
rahman Dambazau, Minister of Interior and former Chief of Army Staff, Abba Kyari, and Chief of Staff to the President, Babachir Lawal, Secretary to the Government of the Federation (SGF). Interestingly also, the Presidential panel set up to probe arms procurement between 2007 and 2015, and whose reports were being used to prosecute past military chiefs was hurriedly disbanded the moment it began moves to investigate the tenure of the Present National Security Adviser, Babagana Monguno as Chief of Defence Intelligence between July 2009 and September 2011. The curious reason given by the government for its dissolution was that it has outlived its usefulness. If there was any doubt about the how the administration fought its war on corruption, the cases against former governor Fayose and the present Kano state governor has dispelled any doubt. While the anti-graft agency saw nothing in investigating Fayose even while in office and couldn’t wait for him to finish his term before hounding him, Governor Ganduje has been videoed purportedly receiving dollar bribes severally and neither the anti-graft agency nor the presidency has said a word. Instead, the president was videoed in France commending the governor for his many accomplishments in office. Of course, president Buhari will not want to say anything bad about the Kano state governor
where he got over 2 million votes in 2015 and where the governor has again promised him another 5 million votes in 2019. No wonder an analyst recently quipped that “Buhari’s so-called anti-corruption fight is the most invidiously selective, the least transparent, the most brazenly unjust, and the silliest joke in Nigeria’s entire history.” How can the President use the EFCC to smear his opponents in the media, but tells falsifiable lies to defend, deflect, minimise, and excuse the corruption of his close aides and political associates? Like we have always maintained, it may be easier to create agencies to fight corruption. It may be easier to launch a media campaign against perceived corrupt officials or even make scapegoat of some, but until the government gets serious and shows absolute commitment to the fight against corruption regardless who is involved, it usually declared wars on corruption are bound to fail. As it stands, it will be difficult for the government to convince Nigerians that it is seriously out to fight corruption when most of the people around the President have been accused with strong evidences of corruption, but hurriedly cleared by the President. We fear, like some analysts have volunteered, that the President is both morally and temperamentally unfit to fight corruption.
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Why SKYSAT is betting on commercial printers despite mobile growth FRANK ELEANYA
M
o b i l e printers have become very attractive giving the easy access and ability to print on the go it offers the end-users who can carry out their printing needs with few clicks of the buttons on their mobile devices such as smartphone, tablet computer, or lightweight laptop computer. However Nigerian-based S K Y S AT Te c h n o l o g i e s which has also made significant investments in that direction says the market is still with commercial printers, at least for now. Recently, at the launch of the DEVELOP brand in Nigeria, SKYSAT unveiled a new range of printers to the Nigerian market. Among the printers launched at the
DEVELOP Dealers Conference were the ‘Ineo +227’ and ‘Ineo +258’ multifunction color copier and printers which has some futuristic features and can be customized to customers’ specification. The company is a preferred partner and distributor of Konica Minolta Business Solutions Europe in Nigeria and Ghana. It has outlets and service centres in Lagos, Abuja, Port Harcourt and Kano where Germantrained engineers provide expertise, training and technical support to their customers in printing business. Izzat Debs, SKYSAT managing director explained at the press conference that although mobile printers are growing in popularity – the company has some mobile printer models - it is still new and companies are yet to fully embrace it
L-R: Ziad debs, executive director skysat technologies, Paul thin Business support manager konica Minolta, david nuttall senior executive indirect sales Develop, izzat debs managing director skysat technologies, Chiaru Yamamaru deputy trade commission Japan (jetro).
for their operational needs. In Nigeria for instance, businesses are still heavily reliant on commercial
Exploring opportunities in AI to bridge Nigeria’s healthcare gap CALEB OJEWALE
M
achines are not likely to replace doctors, at least not in any foreseeable future, but through Artificial Intelligence (AI), efficiency in diagnosing patients, and administering healthcare can be improved. This is particularly important for Nigeria, which has an acute shortage of medical workers in a country of over 190 million people who require medical attention. That it involves ‘advanced technology’ is no suggestion the country will be unable to get access to AI platforms designed for healthcare. Rather, existing, tested and proven systems can simply be deployed for use locally. Katherine Chou, head of product for Google AI healthcare, said during a presentation, “AI can help with improving the quality and efficiency of healthcare. AI can also help with access to care, and what we’ve found is that we can actually do that without increasing the cost of care.” As Chou explained, AI can help fill in the gaps that doctors are not able to reach right now in providing expert care. Also, the doctor often has limited attention
and can only examine limited conditions at any point in time. There are also devices being developed that are more sophisticated and complex, producing multidimensional datasets in for instance MRI, CT Scans, and this is getting harder to interpret. These are areas where AI can help tremendously with challenges and assist doctors. One of the areas the G o o g l e A I h e a l t h c a re started work was Diabetic Retinopathy, which Chou described as the fastest growing cause of blindness in the world, even though it is preventable. It is caused by diabetes with 450 million cases worldwide, and one out of every three patients suffers from Diabetic Retinopathy. Nigeria is said to record over 100,000 cases of Diabetic Retinopathy every year and there is a chance that deploying AI could help in managing the disease. “What we have done is to develop models that help predict Diabetic Retinopathy,” Chou said. The team took several retina images, and working with over 50 ophthalmologists, created almost a million diagnosis and those were the labels put into the model. Chou noted in her presentation that, there were multiple opinions of the same case by doctors en-
gaged. This showed a huge variability across the doctors, it was found that doctors were consistent with each other 60 percent of the time, and were consistent with themselves, 65 percent of the time. This was subsequently discussed with the doctors to understand differences in views as a way of ensuring only very high quality data is fed into the models. Uvie Ugono, co-founder of Smaart Health, an AI healthcare platform had also discussed with BusinessDay, some of the potentials for AI in making healthcare accessible to more people in Nigeria. “We don’t have anywhere near enough doctors to actually do the job, and meet the level of demand which also grows by the years as the population is growing. At the same time, we are actually losing doctors. So what we are trying to do is bridging that gap through significant efficiency gains. “By combining what we call man plus machine, that is, by having artificial intelligence do the basic diagnostic work, this saves the doctor 90 percent of the time it would normally take to get to the point of diagnosis. Which means consultation time can now be shortened,” said Ugono.
printers. Unlike mobile printers, commercial printers can work offline which suits many compa-
nies’ needs. The DEVELOP brands however come with online features like multitouch operation similar to
smartphone or tablet. SKYSAT is hoping to expand its products in Nigeria by leveraging its significant dealer channel comprising of independent distributors and specialist outlets. In Nigeria and Ghana, SKYSAT operates through a network of eight offices and service centers, 150 staff, 90 dealers and services 4,000 clients. The new products will not be sold directly to consumers, but to dealers who will then sell to the end-users. “We are trendsetters and are making a confident and creative contribution towards shaping the future,” the company noted in a statement. “Our understanding of advice far exceeds mere analysis and recommendations: We assess, design and guide. Our primary objective is increasing the productivity in our customers’ environment.”
Startups’ new headache - unpaid invoices FRANK ELEANYA
T
ony, a startup founder, received an order to procure heating, ventilation, and air conditioning (HVAC) repair equipment for a “big” company based in Nairobi, Kenya, with a parent company in the United Kingdom (UK). The parties agreed on a 30 day delivery period and an invoice was issued in the name of Tony’s company. Few days before delivery date, the parent company in the UK cancelled the order citing irregularities. “It has been two years of having $80,000 worth of unusable parts as the case drags on,” Tony wailed on a Twitter tread created by Victor Asemota, founder of tech company SwiftaCorp and a well known voice in the African tech ecosystem. Asemota’s tread on Twitter was highlighting the new headache that small businesses on the continent are facing – unpaid invoices. “There is nothing more destabilizing to a small business than unpaid invoices,” Asemota who also writes a column for the Guardian Newspaper wrote on his tread. “I have dealt with this all my entrepreneur life in Africa.” He considers unpaid invoices as the chief factor behind the high failure rate of small businesses and suggests
there should be a law that protects them from “deadbeat” big companies. “I have found that this is very common with small undercapitalized tech companies in services.” He adds. “You can’t bootstrap when the money to buy the boots are held up in accounts payable to one big bank and telco.” Funding to tech startups have grown but not as expected. The big ticket funding have only gone to a very few tech companies some of whom have deep links to Silicon Valley where most of the investors are coming from. The rest of the startup ecosystem make do with occasional training abroad, a few quid from angel investors or grants or they simply bootstrap. That is not to say that funding in tech has not had its high points. 2018 for instance, has been an outlier year for a couple of startups, but the majority are still grossly underfunded, hence they have to bootstrap. To bootstrap something means to help oneself without the aid of others. Many startups however depend on patronage from big companies to survive. In doing so, they have to put up with all manner of stories regarding compensation. To be sure, it is a problem almost every startup across the continent of Africa faces. “It’s why I “pivoted” from
Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com
the traditional web design process to building readymade websites that one can purchase and go,” @GZAKZA founder of Verbwork. “Here in Kenya a simple web design job can drag on for months and getting paid for it is a hustle.” “The big businesses in Ghana will have your net 30 days turn into 90 days, then send the invoice back claiming an error in punctuations, and have you start the 90 days all over again” @LeonIzDizzy wrote. “And while you’ve been unpaid for a year, you’ll see their CEO in a magazine taking awards for being business savvy.” @FNnebe another commentator believes it is a cultural problem rather than a legal issue. “I say this because I have sold services in the Middle East, France and USA. I only encountered one horrible customer. But Nigeria? SMEs tend to be underfinanced from the get go. Then add in the way large companies screw them over, then they end up wobbling from day one,” he said. Nvoice a startup that has built a platform to help SMEs get working capital without collateral said it is working on making it easy for startups get paid. It however says collaboration among startups could be the key to finding lasting solutions.
Thursday 06 December 2018
BUSINESS DAY
TechTalk
15
Why tech leaders are queuing behind Ezekwesili’s presidential ambition FRANK ELEANYA
T
he days that most of the leaders in the technology ecosystem in Nigeria choose to sit on the proverbial political fence or to support a popular candidate from a popular party may be gone. The presidential campaign of Obiageli Ezekwesili, presidential candidate of the Allied Congress Party of Nigeria (ACPN) is enjoying unprecedented mobilisation efforts from notable tech leaders. Ezekwesili faces a near impossible mission of clinching the presidency come 2019. For starters, Nigeria has never had a woman as a president; hence, Ezekwesili’s - highly unlikely - victory will make her the first in Africa’s most populous country. Second, elections in Nigeria are still heavily biased along ethnic and religious lines. It will be a miracle to see Ezekwesili taking any votes from the northern region for instance, where the two frontline candidates, APC’s Muhammad Buhari, the current president and PDP’s Atiku Abubakar, the closest rival, hail from. But the tech leaders manning Ezekwesili’s presidential campaign seem unperturbed by the odds ahead. It is early days in the presidential campaign which kicked off 1 December, 2018 according to INEC’s calendar. Mark Essien, the CEO of Hotels.ng who has become very vocal on issues around governance and has criticized previous and current government administrations for the manner in which they handled the country’s economy appears to be one of the figureheads commanding the efforts to sell Eze-
kwesili as the preferred candidate to the tech community and Nigerians. BusinessDay reached out to him for comments but he has not responded as at time of publishing this article. As part of his mobilisation efforts, Essie conducted a Twitter poll asking followers to choose between Oby Ezekwesili and Atiku Abubakar, the PDP presidential candidate, “If these were the only candidates in the country.” The polls result was 68 per cent in favour of Ezekwesili while Abubakar managed to get 32 per cent of the votes. Since then Essien has made efforts to recruit tech savvy volunteers including software developers, graphic designers and video producers. “If you are sick of Nigerian politics
as usual, with the same old politicians, instead of doing nothing – just vote @ obyezeks and @acpnhope,” he wrote in a post. “Your one vote is the way you can protest and say that you are tired.” His activities enjoy the support of other tech leaders such as Emeka Azuka Okoye, CEO of Cymantiks Nigeria Limited, Bosun Tijani, cofounder of Co-Creation Hub, Nigeria’s foremost innovation hub, and Samuel Aboyeji, co-founder and former CEO of Flutterwave among others. “She is a believer of human capital development which is a foundation for building a science and technology ecosystem that Nigeria can leverage to 1) Improve employability 2) Improve living standard 3) Improve economy and reduce dependence on oil 4)
Improve production of goods and service,” Okoye told BusinessDay via a tweet. Okoye is also recruiting volunteer developers for the campaign. Aboyeji who recently stepped down as the CEO of fintech company, Flutterwave, for family reasons, has taken on political activism on social media. His objective is to “free Nigeria from an irresponsible and evil political class.” Like Essien, Aboyeji has become a big admirer of Ezekwesili and to demonstrate his fandom, he is participating vigorously in the campaign to elect Ezekwesili. “I’m backing @obyezeks for President because I believe she is the best qualified for the job. Feel free to back
whoever you want but please not APC and PDP. They have raped our country enough. Let them go and sit in the countries where they have stashed our common wealth,” Aboyeji said. Aboyeji not only appeared with the candidate at a Townhall with Nigerians in Diaspora on Sunday, 2 December in Leicester, UK, he went as far as mobilizing intellectual heavyweights like Professor David Mba, proVice Chancellor and dean Faculty of Technology, De Montfort University, United Kingdom. He is also leading a donation campaign, rallying benevolent sympathizers to give to the campaign. At the base of Aboyeji’s discontent with the current administration could be this tweet, “Let’s call a spade a spade – they failed. Alongside Ogbonnaya Onu and Adebayo Shittu, this government lost major points with the future because it keeps handing out key posts as CPC party membership spoils.” Bosun Tijani who is probably the most popular and active voice on Ezekwesili’s campaign train also attended the townhall in Leicester. He is one of the early endorsers of Ezekwesili and has since dedicated his Twitter timeline to issues around the campaign. “As a citizen, give me @Obyezeks, @MBuhari, and @atiku’s profiles – I won’t think twice before opting for @ Obyezeks,” Tijani tweeted in November. “I follow my dream and hope for Nigeria, not political analysis. “I am rooting for @obyezeks because she has demonstrated consistent leadership since I came across her name. Within and outside government – leadership is a lifelong work, it is not something you do when elected.”
Seedstars Africa summit to showcase over 30 start-ups next week CALEB OJEWALE
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ubbed the largest startup competition for emerging markets and fast-growing start-up scenes, the fourth edition of the Seedstars Africa Summit holds next week from December 11th to 13th, in Dar es Salaam, Tanzania, where 36 start-ups will participate in different activities. According to organisers, startups will include 17 finalists at the Seedstars World tour, nine local finalists from Seedstars World Tanzania edition, three start-ups from Switzerland, and a delegation of three start-ups from Tanga, Tanzania. “This is the most ambitious Seedstars Africa Summit ever,” said Claudia Makadristo, regional manager for Seedstars in Africa. The line-up of events as contained in a statement sent to BusinessDay includes: The Growth Bootcamp - Seedstars Africa Summit will start
with a daylong Seedstars Growth Bootcamp, where 20 start-ups will learn more about growth strategy and how to master the art of pitching. The aim of the Bootcamp is for the participants to prepare for expansion and become more investable. Among other theoretical and practical inputs, the Seedstars investment team will mentor the participants on growth models and acquisition channels. The Parallel Delegations Bootcamp - One of the main goals of the tour is to go beyond the capital cities, promoting young local communities and ecosystems. During the afternoon of the 11th, three start-ups from Tanzanian Tanga region will have the opportunity to participate in this bootcamp, sponsored by Fondation Botnar, including one-on-one mentoring sessions on the art of pitching, growth insights and scaling strategy with relevant local mentors. The Investor Forum - The Sum-
mit week brings together the most prominent and active investors in the region. An investor-only session will be held in the morning for the investors to exchange best practices. It will be an opportunity for them to meet with high representatives from the Tanzanian Private Sector Foundation, to get more insights into the Tanzanian private sector and share their concerns as investors. Entrepre-
neurs will also pitch in front of these investors and participate in private meetings to allow them to get an in-depth feedback about their business models, as well as create potential future funding opportunities. The Conference - The Conference day kicks-off with a number of invite-only workshops addressing a wide range of concrete topics
related to African entrepreneurs reality on a daily basis, such as “Pathways to foster Innovations and Technology to bring stronger Civic Engagement” or “Leveraging innovation and academic research to create decent jobs for African youth”. Industry experts and experienced entrepreneurs will facilitate the discussions and provide inputs on the context and main blocking points to sessions attendees, for them to collectively design concrete solutions to be implemented. The Ecosystem Tour - Start-ups, mentors, Seedstars Ambassadors, and investors will also have the possibility to engage with the local ecosystem in a knowledge exchange session. The delegates will be visiting several incubation/ acceleration spaces and engage in discussions with local entrepreneurs and ecosystem shapers to get a better understanding of the successes and challenges met by the entrepreneurial scene in the country.
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Rice farming at the ‘Point of No Return’ TELIAT SULE AND ADEMOLA ASUNLOYE
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he historic point of no return, which is the beginning of the journey to unknown destination, is located in Gberefun village in Badagry, Lagos west senatorial district. That was the spot where our forefathers who were sold into slavery had the opportunity to look at the Nigerian shores for the last time. Another history is to be made in the same village, albeit, a good one. Rice farmers who are being coordinated by, Segun Atho, the national deputy president, Rice Farmers Association of Nigeria (RIFAN) have resolved to turn the 5,000-hectares landmass into the most productive centre in rice production in Lagos State. Apart from being a historic area, the choice of the location of the rice farm was informed by the availability of land and the presence of environmental conditions that support maximum rice yield. “This place possesses all the environmental factors that support maximum rice yield. Other areas in Lagos where such climatic conditions are present are in Ikorodu and Epe. The three locations, Badagry, Epe and Ikorodu have similar soil as the type found in South-South Nigeria. They support the production of upland and
Segun Atho, deputy national president, RIFAN
lowland rice”, Segun Atho said. He continued, “Rice needs water. You crossed over the lagoon to get to this farm and after this place is the ocean, which is historically the point of no return during the slave trade. We have sufficient rainfall, and you only need to dig the soil for some few meters to get enough water to irrigate your farmland”, Atho added. One of the major hindrances to farming in Nigeria is the availability of land as we are naturally attached to our lands. But two chieftains in Gberefun Village are out to make the difference as they are the ones that allowed the farmers to cultivate the 5,000 hectares of land for rice
Why rice? Rice has become a staple food that is consumed in almost every household across the world. It is second to corn as the most consumed cereal across the globe. In 2017, China produced 210 million tons to emerge as the world’s biggest paddy rice producer, accounting for 30 percent of the 700 million tons produced by all the countries in the world in that year. Other major producers are India, Thailand, Vietnam, Pakistan, United States and Brazil. In Africa, particularly Sub Saharan Africa, consumption has grown more than production in the last few years, even as the West African sub-region is estimated to account for over 40 percent of rice production in Africa. Furthermore, Nigerians consume about 6.5 million tons of rice annually. With local production not growing at the pace of consumption, half of this figure is augmented through importation and that costs the nation about $2 billion (N702bn) to import rice annually. As Nigeria’s primate city and the biggest state economy, it is said that about 60 percent of the farm produce in the nation is consumed in Lagos State. In 2010, the National Bureau of Statistics (NBS) estimated that N1.398 trillion was expended on the consumption of rice in the country, and N105 billion was spent on rice consumption in Lagos State alone. BusinessDay Research and Intelligence Unit (BRIU) estimates that the nation’s current rice consumption expenditure is N2.56 trillion, meaning that it has grown by 83 percent during the period. How did BRIU arrive at
N2.56 trillion as the national rice consumption expenditure? Our estimate is based on the assumptions that out of the 180 million Nigerians, only 40 percent or 72 million Nigerians eat rice daily. Also, an average consumer of rice expends N100 ($0.28) daily on rice. For the 365 days in a year, the total national expenditure on rice will be N2.56 trillion or $7.12 billion at an exchange rate of N360 to a United States dollar. Also, we adopted a modest 40 percent as the portion of the total rice available in the country which is consumed in Lagos State alone. That gave N1.03 trillion or $2.84 billion as the value of rice consumed in Lagos. The population of the commercial centre of the country is estimated at 20 million inhabitants and grows at about 2.8 percent per annum. “If we assume that an average consumer of rice spends N100 each daily, the rice industry in Nigeria is very huge”, Atho said. And based on our estimates, truly it is. Another source of inspiration for the project is the amount of opportunities in rice value chain that Nigerians are not aware of. It starts from rice gestation period which usually lasts for three months, implying that with good farm management, rice can be grown at least in three cycles in a year. In Lagos as it is in other southern states, the climatic conditions support the production both lowland and upland rice whereas in the northern parts of the country, most of the rice grown there is upland rice. Our findings show that with good farm management and seeds, a hectare of rice farm could produce between 4.5 to 5.5 tons. When calculated in terms of 50 kg bag, a hectare of rice farm will generate between 80 and 120 bags(50 kg) within three months. We are aware that a 50 kg bag of LAKE rice goes for N12, 000 in the market, although there is subsidy on it by the Lagos State Government. Therefore, gross revenue from a hectare of rice farm ranges from N960,000 (80 bags) to N1,440,000(120 bags) within a cycle (Three months). How much start-up capital is required? Initial investment for rice farm varies between the northern and southern parts of the country. In the north, a rice farmer would require between N180, 000 and N220, 000 to
cultivate a hectare of rice farm from land preparation to harvesting. In the south, an investor will require between N250, 000 and N350, 000 to cultivate a hectare of rice farm from land preparation to harvesting. When we assume that a farmer spends the maximum of N350,000 on a hectare of rice farm from land preparation to harvesting, and the same farmer realises the least revenue of N960,000, this leaves a net profit of N610,000 in three months, translating to about N203,000 monthly. Private-Private Partnership To enhance land preparation, RIFAN has entered into an agreement with John Deree, a leading global brand in the supply of tractors for agricultural businesses. Also, there is a standing off-taker agreement with the Rice Processors Association of Nigeria (RIPAN) whose members will buy directly from the farmers, meaning that a farmer doesn’t have to look for rice millers. “The agreement we have in place is a private-private partnership (PPP). John Deree will supply us tractors, three of which are working on this farm now. Certified seed suppliers will bring in seeds. We may employ drones to spray the rice seeds during planting”, Atho said. In a bid to reduce the unemployment situation in the country, the Central Bank of Nigeria (CBN) has invested a lot in the rice value chain through the Anchor Borrowers Program (ABP) and other related projects. It is now left for discerning Nigerians to key into the multi-billion dollars rice value chain in Nigeria. BRIU Rice Industry Monitor In recognition of the huge opportunities in the rice value chain, which, if well exploited, could reduce unemployment and poverty significantly, BusinessDay Research and Intelligence Unit (BRIU) will introduce BRIU Rice Industry Monitor in 2019. The monthly report will capture every notable progress in the nation’s rice value chain. Farmers, processors, millers, seeds suppliers, equipment sellers and distributors, research institutes, new investments, among others will be the focus of the report. We hereby seek partnership with notable players in the nation’s rice value chain to make the publication a success. 12734BDN
Ademola Asunloye and Teliat Sule on their way to the rice farm, Geberfun Village, Badagry
production. Tajudeen Fowler, the Otun Baale(next to Baale) of Gberefun Village is one of the important personalities that permitted the use of their lands for the project. He also joined our team while inspecting the large expanse of the farmland that is presently undergoing preparation. Moji Onilude, MD/CEO of Onilude Agricultural Estate, is another personality in the community that allowed his land to be used also for the project. “Our people are enthusiastic about the project and it was their enthusiasm that prompted them to release their lands to us for farming”, Atho said.
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The worrisome trend in human capital development in Nigeria ADEMOLA ASUNLOYE
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ince 2014, government expenditure on education as a proportion of total expenditure has been on the decline, while the percentage spent on health has also been falling since 2015. In addition, the proportion spent on education and health has not amounted to 10 percent each of the entire government spending from 1999 till date. This trend is worrisome despite the huge emphasis placed on human capital development around the world towards accelerating the economic growth. There exists a strong relationship between human capital and economic growth. The former affects economic growth and can help to develop an economy through the knowledge and skills of people. The consensus that emerged between theorists and practitioners was that high level of income, if not properly managed and equitably distributed, would not necessarily contribute to human development, as was the case with Nigeria (growth without development). Human capital is directly related to economic growth. The relationship can be measured by how much is invested into people’s education. For example, many governments offer higher education to people at no cost. These governments realize that the knowledge people gain through education helps develop an economy and leads to economic growth. Workers with more education tend to have higher earnings, which then increases economic growth through additional spending. Human capital is the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labour so as to produce economic value. Until we develop artificial intelligence, we need human capital to accomplish anything in the world today. In fact, it takes human capital to create some other forms of capital. While a machine may eliminate the need to have hundreds of production workers, it still took human capital to design and build the machine. And as we move progressively into a
Education vs Total Expenditure in N’Bn
government’s total expenditure. The Nigeria health sector unlike the education experienced steady growth in sectoral expenditure to its total government’s expenditure in 3 years from 3.47 percent, 4.27 percent to 5.17 percent in 2013, 2014 and 2015 respectively. There was a significant increase of 31.5 percent which amounted to N61.74 billion in expenditure in 2015 from N195.98 billion in 2014. This is the highest increase in expenditure within those consecutive years from 1999 to 2017. Although there was 21.5 percent decrease in health expenditure in 2016, because in that year, health expenditure as a percentage of total expenditure amounted to 3.92 percent, the expenditure increased to N236.1 billion in 2017 from N202.36 billion in 2016. This increase was not commensurate to health expenditure as a percentage of total expenditure which further dropped to 2.48 percent.
Source: CBN, BRIU
Health vs Total Expenditure in N’Bn
Source: CBN, BRIU
knowledge-based economy that depends on information, knowledge and high-level skills, human capital will become increasingly important. In terms of investment in human capital development (education and health), the Vision 2010 envisaged that for Nigeria to achieve a sustainable growth, then expenditure on education and health should not be less than 26 percent and 10 percent of total expenditure,respectively. Over the years, Nigerian expenditure on education and health has generally been increasing, but their proportions to the total government expenditure have been below the minimum level required. Close to two decades hitherto, the expenditure on education and health as a percentage of total expenditure has averaged 5.92 percent and 3.24 percent respectively.This means that not so much has been done within
the two sectors. In education for instance, according to the Federal Ministry of Education, the national literacy rate is about 65.1 percent from which the national female young adult literacy rate is 59.3 percent while that of the male is 70.9 percent between the ages of 15 and 24 years. The federal government of Nigeria allocates less than 10 percent of her budgetary allocation to the education sector which is far below expectation for a country with about 10.5 million outof-school children, the world’s highest number. None of the E9 (Bangladesh, Brazil, China, Egypt, India, Indonesia, Mexico, Nigeria and Pakistan) or D8 countries (Bangladesh, Egypt, Nigeria, Indonesia, Iran, Malaysia, Pakistan, and Turkey) other than Nigeria, allocates less than 20 per cent of its annual budget to education. Indeed even among sub-Saharan
African countries, we are trailing far behind smaller and less endowed nations in terms of our investment in education. Trend in education and health expenditure In 2013, the percentage of Nigeria’s education expenditure to its total expenditure stood at 7.53 percent but was down by 12 percent in 2014 to 7.49 percent. It further declined to 6.52 percent in 2015. With 5.1 percent increase in 2016, the education expenditure to the country’s total expenditure jumped to 6.62 percent. Although in 2017, the sector’s expenditure was the largest within the 5 consecutive years from 2013, but when analysed as a percentage of the total expenditure it dropped to 4.76 percent which is the least percentage in the last 5 years. This implies that although more money was spent in the sector but this was relatively low to the
Nigeria’s Human Capital Development Index It is not surprising that Nigeria ranked very low in the Human Capital Development Index (HDI) as it reflects the low level of investment in education and health over the years. Out of 189 countries of the world, Nigeria was ranked 157th (with 0.532 HDI) in terms of Human Capital Development with Norway having the highest index. The giant of Africa among its counterpart African countries like Algeria (3rd), South Africa (8th), Ghana (14th) was ranked 24th out of the 53 countries in the continent of Africa. Conclusion The Human Development Index is a summary measure of average achievement in key dimensions of human development: a long and healthy life, knowledge and a decent standard of living. It is used to distinguish whether the country which is developed or developing, and also to measure the impact of economic policies on quality of life. Hence there is need to allocate more funds to the education and health sectors in Nigeria so that the country could compete within the developing countries to ensure a sustainable economy.
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Pangolins: Vanishing in the wild Despite the unanimous agreement entered into by 183 nations—including Nigeria—under the Convention on International Trade in Endangered Species (CITES) to stop the illegal trade of pangolins globally, insatiable demand from Asia is causing the poaching of the mammals in record numbers, writes Josephine Okojie.
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t 8am on a recent Tuesday, as the temperature soared to about 25 degrees Celsius dozens of traders and buyers trooped into the Oke-Aje market in Ijebu Ode town, for the day’s activity. While traders were jostling for buyers, Bola Odumosun, a trader of traditional medicines, was already getting set for home. Bola had had a good day. Before 8am she had sold a highly priced commodity: seven live pangolins, making N42,000. The pangolins were sold between N3,500 and N9,000 each, depending on their sizes. “Each time I come to the market with aika (the Yoruba word for pangolins), I hardly stay for two hours,” Bola says. “People buy a lot of it and I even get phone calls sometimes that customers are waiting for me even before I arrive at the market. Some pay upfront to get the aika,” she says. Bola’s case gives an insight into the sheer magnitude of illegal pangolin trading and poaching in Nigeria. The pangolin, which curls up into a ball when frightened, is the world’s most trafficked wild mammal. With its appearance marked by large, hardened, overlapping platelike scales made of keratin—the
same material as human fingernails—pangolins are important to regional and global biodiversity. “Pangolins are insectivorous, such that most of their diet consists of various species of ants and termites and may be supplemented by other insects, especially larvae,”Adeshola Adepoju, executive director of the Forestry Research Institute of Nigeria, said in a paper he delivered at 2018 World Pangolin Day in Abeokuta, Ogun State. Adepoju said that because pangolins help depopulate the world of insects, removing them from the wild would cause a breakdown in the web of biodiversity. Tracking pangolin cybercrime Pangolin hunting and trade have long been prohibited in Nigeria under the Endangered Species Act Cap E9 LFN, 2004, attracting a 10year jail term for offenders. Despite the sanction, the trade and hunting are still on the rise in Nigeria and experts say they are increasingly driven not only by customer demand at markets, but by a booming illegal wildlife online trade. Pangolin traders in Nigeria are now increasingly doing the online business underground under various guises, using code languages and temporary contact numbers to avoid arrest.
require commitments from owners and founders of online forums such as nairaland to monitor ads being displayed on their platforms. “There are a lot of dimension and complexities involved in controlling ads on websites such as nairaland and the likes. It requires commitment from the owners to remove such ads on endangered animals as soon as it is being advertised,” Chris Uwaje, Africa Chair for IEEE World Internet of Things (WIoT) says.
A trader at Oke-Aje market in Ijebu Ode town, Ogun State, negotiating the price of an average-sized Pangolin with a buyer.
“Wildlife trading is becoming one of the biggest cybercrimes in the world,” says Solomon Adefolu, team lead, climate change and local engagement, Nigerian Conservation Foundation (NCF). “There are several pangolin products displayed on various digital platforms that allow traders [to] buy and sell anything online. Networks such as Facebook and Instagram are also a market place for pangolin.” To validate Adefolu’s statement, BusinessDay conducted an extensive search of various online platforms, and found at least two adverts selling pangolin scales on www.nairaland.com – a popular online community ranked among the 10 most visited websites in Nigeria by Alexa.com. The first advert, placed on March 28, 2017, was registered by a male under the account name ‘Oladipos’ with the contact’s phone number and with an inscription – ‘I have reasonable quantity of pangolin scales for sale.’ Similarly, another advert for
5kg of pangolin scales was placed on the same platform on the 27th of September 2017, and registered by the account name ‘YungJo207.’ It had no pictures of the mammals on display but a contact phone number and a statement saying that the 5kg of scales were only available
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Wildlife trading is becoming one of the biggest cybercrimes in the world
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in Lagos, the country’s commercial centre. BusinessDay attempted to call both sellers, only to find that the phone numbers were barred from receiving calls by the network providers. “In most cases, the real pictures of pangolins are not used on online advertisements and an undocumented domain addresses to hide the identity and location of users and also conceal communication between the buyer and the sellers are often used,” Adefolu says. He explains that the contacts who typically place the ads like the ones found by BusinessDay act as middlemen between buyers of pangolin parts (usually in Asia) and sellers of pangolins in Nigeria. “Immediately a contact is made online, the syndicate operational machinery is activated and the locals in Nigeria and other African countries are contacted to source for the required pangolin parts, which will be transited to the buyers, who are mostly in Asia, through the seaports,” he says. Syndicates connect to Chinese residents in Nigeria through WhatsApp messages and emails, a source told BusinessDay. They in turn contact locals that source the pangolins from Nigeria and neighbouring countries.
Thereafter, a member of the group arrives in Nigeria, transiting to Asia through the seaports after bribing some Customs officials, the source says. A 2018 report by the International Fund for Animal Welfare (IFAW) identified 106 online marketplaces and social media platforms for illegal wildlife trade globally, with 5,381 advertisements, cataloguing 11,772 endangered and threatened specimens placed on these sites worth about $3.9million. IFAW research did not focus on individual countries. “The internet has revolutionised the way the world exchanges and consumes ideas, information and merchandise,” Olajumoke Morenikeji, coordinator of the Pangolin Conservation Working Group Nigeria (PCWGN), says. “It has facilitated illegal pangolin trade and other wildlife species.” Morenikeji states that pangolins are sometimes advertised under the title ‘anteater scales’ across social media, as sellers attempt to conceal the illegal trade. Nairaland did not respond to several emails sent by BusinessDay about pangolin ads displayed on its platform. But according to experts, it would
Pangolins as delicacy, medicine In Chinese traditional medicine, pangolin scales are believed to treat many ailments and diseases. These include skin disorders, infected wounds and even heart disease. Similar beliefs also exist in some parts of Nigeria. A survey conducted by Durojaye Soewu of the Department of Plant Science and Applied Zoology at Olabisi Onabanjo University, and Temilolu Adekanola of the Department of Biological Sciences at Covenant University, found that pangolin products were used in treating a total of 47 conditions in Awori community of Ogun state, further contributing to the decline in pangolin numbers. Pangolin meat is also seen as a delicacy in Africa and Asia. This insatiable appetite has led scientists to believe that a pangolin is being poached every five minutes—an entirely unsustainable speed—according to the International Union for Conservation of Nature (IUCN). As a result, pangolin species are listed as vulnerable, endangered or critically endangered on the IUCN Red List, the biggest inventory of the world’s threatened animals. Nigerian hunters say they have noticed the drop in pangolin numbers in the wild. “Seven years ago I usually caught aika (pangolin) each time I went for hunting. But now, I hardly see them in the bush again. I have been able to catch only five aika since January till now,” says Demola Adedenro, a hunter in Ijebu Mushin, Ogun State. “My customers are always calling to know if I catch any one each time I go for hunting,” he adds. “Though it is expensive, the patronage is still very high because people eat it and herbalists use it for medicines.” Of the eight species of pangolins that exists globally, four have been hunted to the brink in Asia. Only three species have ever been found in Nigeria.
They include the giant pangolin (manis gigantean), tree pangolin (manis tricuspis), and long-tailed pangolin (manis tetradactyla) species. But according to the National Association of Zoological Gardens and Wildlife Park (NAZAP), the last sighting of the giant pangolin in Nigeria was over seven years ago, prompting concerns that the species may already be extinct here. “Since the drastic decline in the four Asia species, poachers turned to Africa to supply tons of pangolins to the Asian market,” says Moses Oyatogun, senior lecturer, Federal University of Agriculture, Abeokuta and treasurer of NAZAP. Illegal trade still on the rise In February 16, 2018, Nigerian Customs operatives seized 55 sacks of pangolin scales weighing 2,001kg, valued at N408.32 million, and 218 pieces of elephant tusks weighing 343kg and valued at 85.2 million at a warehouse in Ikeja, Lagos, South West Nigeria, arresting a Chinese suspect, Ko Sin Ying. Less than a month later, another 329 sacks of pangolin scales were found, weighing 8,492kg and valued at N732.86 million. According to a 2017 report from the international organisation TRAFFIC, Nigeria is among the top ten countries involved in the illegal wildlife trade.
Part of the 11.7 tons of pangolin scales seized by the Hong Kong customs officials that was hidden in a shipping container that originated from Nigeria. Photo by FactWire News Agency.
Low awareness, weak law enforcement persists Despite the severity of pangolin poaching in Nigeria and the effect on the ecosystem, many Nigerians have never heard of pangolins— including members of the law enforcement agencies. “I know of pangolin as a bush meat but I am not aware that it’s an endangered species. I never knew it was illegal to trade pangolin and its importance to our ecosystem,” a sergeant in the Nigeria Police Force, who asks to remain anonymous, tells BusinessDay.
This shows the widespread dearth of knowledge about the mammals. Such lack of public understanding has fuelled the killing of about a million of these solitary, nocturnal creatures over the last decade, BusinessDay’s investigation found. Way Out To halt the illegal trade of pangolins, home-range countries need to back the CITES’ mandate by enacting and enforcing stringent national laws. Currently, there are no specific national laws on wildlife cybercrime in Nigeria. But if the war against pangolin online trade will be conquered, the Nigerian government must come up with its own strategy to combat wildlife cybercrime. Similarly, measures should be implemented to drive public awareness, as well as within law enforcement agencies. Countries should also enforce laws on pangolins and other endangered species by prosecuting dealers and hunters. In addition, there must be a global strategy to combat wildlife cybercrime, otherwise; this important creature will be gone from Nigeria forever. * This story was produced by BusinessDay and written as part of the ‘Reporting the Online Trade in Illegal Wildlife’ programme. This is a joint project of the Thomson Reuters Foundation and The Global Initiative Against Organized Crime funded by the Government of Norway. More information at http://globalinitiative.net/initiatives/digital-dangers. The content is the sole responsibility of the author and the publisher.
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Apple resorts to promo deals, trade-ins to boost iPhone sales …‘Fire drill,’ trade-in deals come after signs of waning demand …Analysts look again for what’s next beyond the iPhone
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pple Inc. is experimenting with iPhone marketing strategies it rarely uses -- such as discount promotions via generous device buyback terms -- to help goose sales of its flagship product. Company executives moved some marketing staff from other projects to work on bolstering sales of the latest handsets in October, about a month after the iPhone XS went on sale and in the days around the launch of the iPhone XR, according to a person familiar with the situation. This person described it as a “fire drill,” and a possible admission that the devices may have been selling below some expectations. The person asked not to be identified discussing private strategy changes. Since then, Apple has embarked on a series of aggressive trade-in offers that have temporarily reduced the cost of some of its latest iPhones, a rare step for a company that’s been raising device prices in recent years to lift revenue and profit. Apple spokeswoman Trudy Muller declined to comment. On Sunday evening, Apple kicked these efforts into high gear, adding a new banner to the top of its website advertising the iPhone XR for $449, $300 less than its official sticker price. The deal, noted with an asterisk and described at the bottom of the page, requires customers to trade in an iPhone 7 Plus, a high-end handset from two years ago. Apple has lost about a fifth of its market value since the
start of October on signs of waning iPhone demand. On Monday, iPhone supplier Cirrus Logic Inc. cut its holiday quarter sales forecast 16 percent due to “recent weakness in the smartphone market.” Apple has also stopped reporting iPhone unit sales, sparking concern its most-important product is no longer growing. The shares slid about 2 percent Tuesday in New York to $181.15 The new marketing push may give holiday sales a bump and help the company with a broader goal of increasing the number of Apple devices in use. However, the approach may undermine a key bullish argument from analysts: That higher prices will make up for lackluster unit sales. Last week, the company started offering a limitedtime promotion that boosts the trade-in value of older iPhones by an additional $25 to $100. Apple retail employees have also been told in recent weeks to mention the program more often to consumers in stores, according to
another person familiar with the situation. Some Japanese wireless carriers also cut iPhone XR pricing last week by way of subsidies. Last year, there were similar concerns about sales of the iPhone X, and the handset ended up selling well. And Apple has used similar marketing tactics before. In 2007, it cut the price of the iPhone by $200, less than three months after the device launched. When the iPhone 3G debuted in 2008, Apple worked with carriers to subsidize the cost. It has also quietly increased trade-in values for older iPhone models in the past. Apple marketing executive Greg Joswiak tried to quell concern about sales by telling CNET last week that the iPhone XR has been the company’s best seller since it went on sale at the end of October. Regardless of such efforts, “investors are very focused on the longer term strategy and growth outside of iPhones, given what we’ve seen now coming out of this last iPhone
Saro Lifecare excites consumers with new products Josephine Okojie
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aro Lifecare Limited, makers of personal and home care products has launched a new range of insecticides and antiseptic products for Nigerian consumers. The new product Sniper Aroso Insecticides will help tackle the issue of malaria and other insects causing illnesses in the country. “Our mission is to make products that Nigerian and African are proud to buy for the protection of their homes and body,” said Gbemileke Otun, head marketing, Saro Lifecare during the launch. “Our Sniper Aroso will help Nigerians protect their
homes against insects such as mosquitoes, files and the likes. We have different products in the segment, the Purit brand that comes in three different categories; the antiseptic liquid, powder and jelly which also keep the body dry and prevent infection on the skin,” Otun said. Following the success of its Purit antiseptic products, Saro Lifecare was reported among the brands that championed hygiene in the country because of the huge impact the product had on consumers’ protection. Kolade Dada, head of sales, Saro Lifecare said “For us is actually our mission is to be able empower the Nigeria populace at large to fight pests and able to live
a healthy life styles. Nigeria actually has the highest mortality rate when it comes to malaria.” “For us we are more than 25 years we have been active in this industry and we believe that the new product will help in address our malaria challenges,” Dada said. Also speaking, Santano Sarmu, managing director, Saro Lifecare said that the company will continue to deliver valuable products to its consumers across the continent. “We are concern about the environment and we try to understand the needs of our consumers, that is, what is going in and out in terms of hygiene and understand their voice very well to service them better,” Sarmu said.
cycle,” Wedbush Securities analyst Daniel Ives said. “In a fearful technology environment, investors aren’t going to give Apple the benefit of the doubt.” Apple is working on several new products and services, including an augmented-reality headset, driverless car tech-
nology, and digital offerings like original video. Analysts also expect a new business model centered on subscriptions. Those options are riskier than the iPhone, which for a decade enticed millions of consumers to hand over hundreds of dollars for a new handset every two years. The public hasn’t flocked to AR technology in the same way yet, while Netflix Inc. has a huge head start in digital video, Alphabet Inc.’s Waymo leads in autonomous vehicles, and Amazon.com Inc.’s Prime service has nailed subscriptions online. “The question yet again is ‘what’s the next phase of innovation?’” Michael Olson, an analyst at Piper Jaffray, said. Apple spent $35 billion on research and development from 2016 to 2018. The technology that emerges from this huge
investment “needs to become a new engine of growth,” he added. Finding another hit like the iPhone will be almost impossible. Since Apple launched the device in 2007, it’s become one of the most successful products on Earth. The gadget generated $167 billion in revenue during Apple’s latest fiscal year, about the same as Alphabet Inc. and Walt Disney Co. combined. Apple aims to have technology ready for an AR headset in 2019 and could ship a product as early as 2020, people familiar with the situation told Bloomberg late last year. Chief Executive Officer Tim Cook considers AR, which overlays images and data on views of the real world, as potentially revolutionary as the smartphone. Culled from Bloomberg
Thursday 06 December 2018
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BUSINESS DAY
Itel Mobile rewards student with N500,000 in dance competition
Entrepreneurs challenged to think towards exportation
eiterating its commitment to empowering Nigerian youths to showcase their talents through various levels of passion, energy, and creativity; Africa’s mobile giant, itel Mobile has just concluded a sevencampus dance activation in Nigerian Universities geared towards creating awareness for its selfie-centric flagship –itel S13. The activity tagged #iGotTheMoves dance competition started earlier in October with a visit to Nigerian universities such as Laspotech, Yabatech, Lasu, ABU Zaria, University of Ibadan and FUNNAB. In addition to this, an online contest for fans was held which also had participants battle for amazing gifts items and a
ntrepreneurs in Lagos State have been charged to be focused, resilient and think towards exporting their products to neighbouring countries. Uzamat Akinbile-Yusuf, commissioner for wealth creation and employment, gave this advice during the product specific workshop on non-oil export held recently in Lagos. The commissioner, who spoke on the theme, ‘Breaking limitations in non-oil exports’, said the program was designed to conquer obstacles synonymous with export business. ‘‘Oil is not our Messiah, and waiting for its price to rebound in the international market is a recipe for disaster,’’ said Akinbile-Yusuf. ‘‘Entrepreneurs who view export as a slippery slope should ignore their fears.’’ Akinbile-Yusuf urged entrepreneurs to leverage on the structure created by the Lagos State government to build their capacity with a view to seeking external patronage for their products. ‘‘This ministry was established to be an enabling institution that creates sustainable wealth for Lagos
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whopping sum of N500, 000 by dancing to itel’s theme song. The campaign was concluded with Ogundare Adenike Tosin, an undergraduate of Hospitality management in Lagos State Polytechnic emerging the winner with a cash prize of N500,000. The runner-up winners included Oreoluwa Oladapo and Akinyele Temidayo from Moshood Abiola Polytechnic and Lagos State University, respectively. Speaking on the competition, Oke Umurhohwo, marketing communications manager, itel Mobile, said the essence of the competition was to promote the dance culture of Nigerian and project the amazing camera sensor mounted on the itel S13 for
clearer selfies “itel Mobile over the years has grown from just a feature phone brand to a smartphone brand, that understands the needs of young Nigerians, and while we have continued to tailor our devices towards providing the best mobile experiences at an affordable rate. Having the opportunity to start this dance competition is our way of showing that we care and we celebrate creativity amongst our target audience.” The electric atmosphere at the grand finale of the competition had in attendance amazing acts like Terry Apala, Victor AD, Junior Boy, and a host of other top-notch Nigerian artistes along with students Lovers of the itel brand, and lovers of dance.
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citizens,’’ the commissioner said. ‘‘It is our responsibility to build and develop the capacity of our entrepreneurs with potentials to become export champions,’’ she added. Tope-Banjoko Temiwumi, special senior adviser to the governor on wealth creation and employment, said the essence of the program is to make entrepreneurs to focus more on non-oil exports. ‘‘There is a lot of concentration on oil and we are asking entrepreneurs to go outside this oil,’’ said Temiwumi, ‘‘we need to start thinking outside the box. We have so many products that are exportable.’’ The specific products treated at the workshop include; Leather works, food processing, cottage industries and fashion. ‘‘We held a technical workshop on non-oil export two months ago. Thereafter, the participants came up with an array of products,’’ Temiwumi explained. ‘‘We picked the majority and decided to dig deep to know what the entrepreneurs can do to fine-tune their businesses and make
it exportable. This will also develop the economy,’’ she added. Continuing, Temiwumi said, ‘‘when their businesses begin to expand, they will employ more people thereby dealing with the problem of unemployment.’’ Some of the participants who spoke with BusinessDay applauded the state government for the program and urged them to continue the training so other artisans can benefit as well. ‘‘I’m so glad to be part of this programme. I have been looking for how I can take my business to the next level,’’ said Adepoju Abiola, a shoemaker. Tayo Ajenifuja, who has been dealing in charcoal supplies for over 15-years, hopes to learn how he can begin exporting his business. ‘‘The programme is very good and I want them to continue to enlighten people so they can know more about the exporting business rather than relying on oil alone,’’ said Ajenifuja. The participants were armed with business principles and they also learnt how they can access finance for their businesses.
my dialysis. In the end, I had to sell my three shops. For weeks, I couldn’t go for dialysis due to lack of funds. On Saturday, I became unconscious. One of my previous customers who heard of my deteriorating condition offered to fund one session of my dialysis. When I got to the hospital, I was told I was short of blood and N18,000 was needed for blood diffusion but we couldn’t afford to pay for the blood and I wasn’t given. To be strong, the doctor advise I do dialysis regularly pending the time I raise the funds for the surgery but I don’t have the money to fund a single session of dialysis. I can’t even feed my family anymore. Cost implication The total amount of money required for the surgery is N13m while dialysis per ses-
sion costs N68,000 with blood diffusion. How have you coped so far? I get hand-outs from family, friends, business associates and well-wishers. The assistance has stopped for a while and it’s understandable. The economy is hard and everyone have their individual problems to tackle. A plea for help This sickness has cost me a lot. My wife, a microbiologist lost her job because she often took permission at work to take me to the hospital. She had to start Hawking snacks to put food on our table. My children have been in and out of school but there’s little I can do. I plead with everyone to help in any way they can so I can do this surgery and get back on my feet again.
Living under poverty line How Nigerians are struggling to survive
If you want to contact the writer of this story call: +234(0) 803 889 1567, +234(0) 8155184838 chinwe.agbeze@businessdayonline.com
Kidney patient needs help to stay alive Name: Joseph Nnagbogu State of Origin: Enugu Age: 43 Dependents: wife and four children Occupation: Trader I used to retail hospital equipment at Idumota, Lagos. I had three shops and boys who worked for me until I was diagnosed of renal failure in 2016. How it started In 2004, I was diagnosed of diabetes. I was still managing the diseases and trying to control my blood sugar when I got the sad news in 2016 that my kidney had been affected. Initially, I went to Goodluck hospital, Akute road in Lagos but they couldn’t detect what was wrong and the hospital referred me to LASUTH in Ikeja, where I was diagnosed of renal failure. Then, LASUTH re-
ferred me to Dialyzer Medical Center at Oshodi for dialysis. Since 2016, I have been
on dialysis. I spend N150,000 a week on three sessions of dialysis. At a point, I could not
go out again. When I ran out of cash, I sold one of my shops and used the proceeds to fund
Analyst: Chinwe Agbeze, Graphics: Fifen Eyemisanre Famous
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Lagos records highest consumption in PMS, kerosene Stories by Bunmi Bailey
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ut of the 36 states in Nigeria, Lagos state, the commercial capital of Nigeria recorded the highest consumption and importation in Premium Motor Sprite (PMS), automatic gas oil, household kerosene and aviation turbine kerosene in the third quarter of 2018, a National of Bureau Statistics (NBS) petrol report said. Economic experts have attributed high consumption and importation to the high population and volume of economic activities in Lagos state. Ayo Akinwunmi, Head of Research, FSDH Merchant Bank said, “Lagos state by
far is the state with the largest economic activities in Nigeria and usage of energy consumptions is directly proportional to the level of economic activities.”
Akinwunmi further said that there are more cars in Lagos than any place in the country today and you would expect that a lot of these activities will drive the consump-
SandBox Games, YuuZoo Group Network launches Mr.Twister, Unstoppable Rex and other mobile app games
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andbox, a globally recognized brand known for developing next generation mobile games and AR immersive experiences in partnership with the ever innovative tech giant, YuuZoo Group have collaborated in the launch of a series of exciting, fun and engaging internationally acclaimed mobile games into the Nigerian gaming community. The games include unstoppable rex, which is centered on a dinosaur on rampage, causing maximum destruction through the streets of a city and Mr Twister, who is jumping over vertically ascending spinning hurdles in the form of stairs all to stay afloat. These series of cuttingedge games were specially
launched into the Nigeria, to bring people together and promote the development of the gaming community. Speaking at the event, “Digital Marketing Manager, Yuuzoo Group, Gbenga Ogunbiyi, said, “These are hyper casual games that can be played during leisure and can help reduce depression which is at an alarming rate. You download, play, enjoy, entertain yourself and stand a chance to get any of our weekly incentives on social media (Facebook and Instagram @sandboxglobal) ranging from smart phones, cash prices, shopping vouchers on smearena.com.ng, recharge cards” Sandbox had officially launched both Unstoppable Rex and Mr Twister in the same week, first by collabo-
rating with the renowned Yaba college of Technology Heroes Award on the 22nd of November, as one of the major proud sponsors of the honorary event and beauty pageant. The event which was attended by both the school alumni and students, saw the s e cond successful launch on the 24th of November 2018 in collaboration with the Digital Marketing Meetup community at the Lagos Chamber of Commerce International Conference Center (LCCI), Ikeja, Lagos state. The illustrious event mixed with the thrill of sandbox games witnessed ensured a contest for who could amass the highest scores in unstoppable rex. These games can be made available on the IO and Google play store
L-R: ibola Jegede,the project lead of Yuuzoo Sandbox and Damilola Popoola, Game Content,Yuuzoo Sandbox
tion of PMS, automatic gas oil, household kerosene and aviation turbine. From the NBS report, Lagos consumed and imported 737.3 million litres
of PMS, 313.5 million litres of gas oil, 31.4 million litres worth of kerosene and, 127.9 million litres. According to the NBS population statistics, Lagos state recorded a population of 12.6 million as at 2016, making it the most populous city in Nigeria. “Lagos state is the commercial city of Nigeria, hence the usage of the petroleum products are humongous. Due to the erratic power supply, the companies are forced to provide their power through the use of generators,” Ayodeji Ebo, MD, Afrinvest Securities Limited told BusinessDay yesterday in a telephone interview. “This can further be explained by the significant contribution of Lagos state ($136.0billion) to Nigeria’s
GDP. In addition, Lagos state is the most populated state in Nigeria, explaining the huge consumption by households for cars and generators,” Ebo added Additionally, the NBS reflected that 4.4 billion litres of PMS, 873.7 million litres of automotive gas oil, 312.7 million litres of household kerosene, 212.8million litres of aviation turbine kerosene, and 162.4 million litres of Liquefied Petroleum Gas (LPG) were imported into the country in the third quarter of this year. The month of September recorded the highest volumes of PMS imported into the country at 1.6 billion litres while the highest volume of automotive gas oil and household kerosene were imported in July and August 2018 respectively.
Trophy Lager honours Alaafin with carnival, rewards more consumers
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rophy Lager, a leading quality beer brand and one of the national treasures from the stable of International Breweries Plc, last week, organized a three-day beer carnival to celebrate the Alaafin of Oyo, Lamidi Adeyemi III’s 80th birthday in Oyo state with pomp, music, fun and mouth-watering prizes. The event, which provided an unforgettable, exciting and culturally appealing experience for consumers, also saw the brand reward winners in its ongoing National Consumer Promo, tagged Honourable Millionaires promo, which was instituted to celebrate Trophy Lager’s 40 years of facilitating goodwill and celebration for Nigerians. Consumers had a great time as they were thrilled to comedy, drama and musical performances from top artistes Speaking on the rationale for the initiative, Consumer Connections Manager, IB Plc, Jumoke Okikiolu, noted that the celebrations are two-fold. “On one hand, our decision to celebrate with Kabiyesi is very much aligned with our brand values as he is a personage who stands tall in the promotion of Yoruba socio-cultural values of honour, integrity and quality service. Also, this fiesta has afforded us the opportunity to celebrate and reward our highly esteemed honourable men
and women, who have stood with the Trophy brand for 40 years, for their support and loyalty, in a unique and fun way,” Okikiolu said. Funso Elubeku, Marketing Manager, Trophy Lager, IB Plc said, “At the heart of our National promotion is the need to provide a memorable experience for our loyal fans. We are empowering 40 Honourables to win N1 million for the duration of the promotion with other consolation prizes such as free instant airtime worth N80 million and N40, 000 cash prize weekly for 40 consumers as well.” Currently, 16 people have emerged as honorable millionaires and about 250 people have won N40, 000 each till date. “All our consumers need to do is to buy a bottle of Trophy Lager
and look under the crown cork, text “TROPHY” space “UNIQUE CODE” under the crown cork to 30810 to win instant prizes and a chance to win either N40, 000 or one million naira in the weekly draw. The more entries put in, the better chance of winning the cash reward,” Elubeku added. Remarkably, Trophy Lager, popularly referred to as the pride of the SouthWest and widely accepted as the Honourable beer that is deeply rooted in the region’s socio-cultural values, and loved by consumers because of its distinctive taste and quality, has remained a market leader in its category. It is worthy to note that the promotion is not limited to South West alone as winners have emerged from other regions of the country.
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COMPANIES & MARKETS
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Facebook heads to TechCrunch Startup Battlefield to celebrate African innovation
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BANKING
Diamond bank in rare comeback as stock rallies two days straight LOLADE AKINMURELE
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iamond b a n k s t o c k s e n d e d a o n e m o nt h - l o n g d e c l i n e with back to back gains of nearly 20 percent in the space of two days. Shares of the tiertwo lender, which rose 9.8 percent Tuesday, followed a 9.23 percent increase Monday. That made it the best performing bank stock for two days straight. Each Diamond bank share clos e d at N78 kobo Tuesday, as the struggling lender shows early signs of recovery from a torrid November
during which it shed 54 percent. Investors will be hoping the bank sustains the rally and pares losses made after credit downgrades by ratings ag en c y , S & P ’s an d Moody’s soured sentiments. T h e b a n k ’s C h i e f Financial Officer (CFO) was not imm e d i a t e l y av a i l a b l e to comment. Analysts say the stock rally is being driven by speculators who are betting the bank will recover some lost ground and rise to N1 per share in the short term. Chioma Afe, the Bank’s spokesperson, however said “the recent approval of the bank’s National license
by the Central bank has provoked positive reactions and feedback from
both retail and corporate customers. “It has show n the
b a n k ’s st ab i l i t y a n d ability to carry out both local and international
transactions,” Afe said in a text message to Business Day.
INDUSTRIALS
Lafarge gets shareholders’ nod for N89bn rights issue David Ibidapo
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afarge Africa has received shareholders’ approval to raise N89.21 billion by way of a Rights Issue at N12.00 per share, the cement maker said in a statement to the Nigerian Stock Exchange (NSE) Tuesday. Six new shares will be issued for every seven shares held by shareholders at a qualification date yet to be announced. The N12 offer price represents a discount of 6 percent to Tuesday’s closing price of N12.80, after declining 4.48 percent from N13.40 close of previous day. Shares of Lafarge have plunged to a five-year low this year as rising finance costs and a struggling South African business dampens investor sentiment. According to the statement, about N60bn of the issue proceeds will be
used to deleverage the balance sheet essentially the repayment of short term naira denominated debt, while the balance will be used to fund its working capital requirements. According to data from Bloomberg, shares outstanding of Lafarge Africa Plc amounts to 8.67 billion with a market capitalization of N110.153 billion as at
market close on Tuesday. Assuming the shares are fully subscribed, it will increase Lafarge’s share count by 86% to 16.1 billion shares. BusinessDay analysis of Lafarge loans and borrowings showed that as at Q3 2018, total loans and borrowings surged by 158 percent to N177.4 billion from N68.7 billion in 2017. Meanwhile total
non- current liabilities amounted to N187.8 billion compared to N80.08 billion. “The rights issue is a major plank of Lafarge’s turnaround strategy which includes; growing its market share via a its new route-to-market strategy, improvem e nt o f i t s l o g i s t i c s, enhancing production efficiencies, cost optimisation and reduc-
tion of its fixed cost, deleveraging of its balance sheet,” the cement maker said. Lafarge’s results in recent times have been impacted negatively by a high interest burden arising from its elevated debt levels. BusinessDay analysis of Lafarge debt levels revealed that total liabilities of N413.33 billion for the period 9 months ended 2018 accounted for 75.7 percent of total capital of N546.2 billion, higher than 72.8 percent which was accounted for in 2017. Following the rights issue, the company however expects its net debt-to-capital ratio to improve to 0.42x from its current position of 0.68x and a potential interest savings of 22% from current levels. “Based on our estimates and assuming all the rights are taken, we estimate a potential earnings dilution of around 46% to 2019E
earnings,” Lafarge said. Year-to- date (YTD), Lafarge shares have underperformed the NSE All share index (ASI). The shares have shed -71.5 percent compared with -19.3% return on the index. BusinessDay analys i s o f 5 y e a r p e r f o rmance of Lafarge Africa P l c , s h o w s t h a t p e rfor mance is dow n by -87 percent grossly underperforming the All s ha re In d e x w h i c h i s down -20 percent in the last 5 years. “Lafarge is currently faced with their struggling south Africa business and high interest expense due to high debt levels,” said Wale Okunriboye, an investment analyst at Sigma Pension Ltd. “ This right issue is g e a re d t o o n l y s o l v e the second issue. Since Lafarge owns about 76 percent of its issues, buying its ow n share may convince others to subscribe,” Okunriboye added.
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COMPANIES & MARKETS CONGLOMERATES
Unhappy market zaps N2 trillion from Dangote Conglomerate IFEANYI JOHN
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he year 2018 is quickly turning into a year to forget for Africa’s richest man Aliko Dangote. His sprawling conglomerate which is the biggest in Nigeria by market capitalization has come under attack as bearish sentiments have driven share prices drastically lower this year. Each of the publicly listed Dangote companies is down more than 27 percent from its year high price in 2018. Collectively, the companies have lost around N2 trillion in market capitalization since February 2nd. A stock is said to have entered bearish territory when its share price falls by at least 20 percent from its 52-week high. Many companies on the Nigerian Stock Exchange this year entered bearish territory in the middle of the year precipitated by a selloff in emerging market stocks around the world, a slowdown in Nigeria’s economic growth and heightened political uncertainty in the country. Dangote Cement, which is the biggest company among the Dangote con-
glomerate in early February rose to a year high price of N290, pushing its market capitalization to a record N4.94 trillion in January. Since price peaked, the stock price has now dropped 36.2 percent as share prices closed at N185 yesterday. Dangote Sugar, the second largest company by market capitalization among the Dangote Conglomerate hasn’t fared any better. The market capitalization as at yesterday was down 45.3 percent from its year high as the stock price continued to march downwards, dropping to N13.1 yesterday after hitting a year high of N23.95 in Q1 this year. Dangote Flour is the worst performing company among the Dangote group of companies in terms of market performance. The company has lost more than two-third of its value since it hit its 52-week high earlier in the year. As at yesterday, the stock price had declined by 65.2 percent from its year high, closing at N6.20. Nascon, which is the salt producing franchise of Dangote Industries saw its share price decline by only 27.2 percent from its year high as at yesterday. It is currently
L-R: Olabisi Olaiya Adefisan, retired chief matron and genetic counselor at Onikan Health Centre; Gbemisola Oyegoke, mother of the chairperson of Omotoke Gambari Foundation; Omotoke Gambari, chairperson, Omotoke Gambari Foundation, and Omar Gambari, member board of trustee, at the end of year party of the foundation in Lagos recently.
the best performing stock among the Dangote group of companies. “I don’t think the market has bottomed out just yet, I suspect there may be another round of selloffs just before the elections,”
said Maju Eldad, Lecturer in Economics department at Federal University of Kashere, Gombe. “The selloffs this year has been due to non-fundamental reasons like political uncertainty, insecu-
rity and recently crude oil price volatility. Dangote is only a victim of a very unhappy market. I think the Dangote companies are still very sound fundamentally despite the slow growth economy. Investors
may be thinking that weaker consumer spending may hurt its 2018 financial performance, but I think those fears will ease next year with the minimum wage hike set to be passed,” Eldad added.
PROFESSIONAL SERVICES
Mark Weinberger to step down as EY global chairman Iheanyi Nwachukwu
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Y has disclosed that Mark Weinberger will step down from his role as EY Global Chairman and CEO effective from July 1, 2019 – the start of its financial year 2020. During Weinberger’s tenure as EY Global Chairman and CEO, the global organisation has undergone tremendous change. EY is now helping more clients in more places tackle their toughest challenges than ever before. There are more than 270,000 EY people in over 150 countries, and last year 65,000 people joined EY. Weinberger embraced the transformation needed
for EY to be a leading professional services organization and during his tenure its annual compound revenue growth rate was 8.5 percent. Over the past six years, over 120 acquisitions have brought in new skills and capabilities, such as cybersecurity, artificial intelligence and data. Today EY has 2,000 software robots (bots) at work, with 1,300 of these for clients and 700 in use internally. There are now over 20,000 data and analytics practitioners and more than 2,000 data scientists in EY. Best-inclass blockchain, cyber and digital solutions have been developed in EY. Within the organization, Weinberger championed
increasing diversity at all levels and creating a more inclusive culture. On the Global Executive, the highest governing body in EY, the percentage of women increased to more than 26percent and it included more representation from the emerging market and early stage partners to bring in younger voices. Additionally, nearly 30percent of the EY FY18 partner class consisted of women. He also focused on developing EY people, creating a best-in-class experience through innovative programs such as EY Badges (a skills accreditation program) and LEAD (its non-numerical based performance management system). Weinberger
established the global organization’s purpose of Building a Better Working World during his tenure, as he guided the evolution of EY into a purpose-led organisation. Weinberger has served on the EY Global Executive for the past 10 years and on the Americas Executive Board for the five years prior. He was elected EY Global Chairman and CEO in 2012 and successfully led EY through its Vision 2020 strategy and believes the time is right for him to step down at the beginning of its fiscal year 2020. Weinberger says, “When I reflected on the massive changes we have navigated over the last seven years and the strong
position we command to enable EY to excel in the years ahead, I realized that the time is right for me to step aside. I know there is an even brighter future for EY and I’m excited to see what will be shepherded in by the next generation of exceptional EY leaders. I have great confidence in the extraordinary talent that extends across our organization. I’m thankful for the opportunity to have served EY clients and people around the world. “I am sincerely grateful to each and every one of the 270,000 EY people and countless alumni around the world; the success of EY has always come down to EY people. Individually and collectively we have driven
EY’s accomplishments. The best part of being EY Global Chairman and CEO, and what I will miss the most, is traveling around the world to meet with EY people and clients. I have always been amazed and humbled by the everyday acts EY people do to build a better working world and have been privileged to see this first hand.” EY has a well-defined succession process and will vet a diverse slate of candidates. It expects to appoint a new EY Global Chairman and CEO sometime in January, allowing a six-month transition and smooth hand over of responsibilities which will become effective July 1, 2019.
BUSINESS
Thursday 06 December 2018
COMPANIES & MARKETS
Business Event
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TECHNOLOGY
Facebook heads to TechCrunch Startup Battlefield to celebrate African innovation Jumoke Akiyode-Lawanson
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n line with its c o m m i t m e nt to growing Africa’s te chnolog y start-up ecosystem and its passion for developing diverse, y o u n g t a l e n t , Fa c e book is returning as the headline sponsor o f Te c h C r u n c h S t a r tup Battlefield Africa 2018. The event, taking place in Lagos, Nigeria — w ill search for SubS a h a r a n A f r i c a’s b e s t innovators, makers and technical entrepreneurs. Te c h C r u n c h S t a r t up Battlefield Africa sees start-ups compete across three categories: social good; productivity and utility; and gaming and enter tainment. It profiles the founders and entrepreneurs leading A f r i c a’s n e x t w a v e o f technology innovation and highlights new ideas, businesses and applications w ith disr uptive potential. On December 11, Te c h C r u n c h S t a r t u p Battlefield will bring together the strongest s t a r t- u p s f ro m a c ro s s Sub-Saharan Africa, w h e re t h e y w i l l p i t c h to a live audience of 500 people ranging from VCs, investors, government officials and developers. Fa c e b o o k s ay s i t s
representatives from Africa and beyond will be on the ground to celebrate, where they will be connecting, listening and learning from var ious commun i t i e s a s w e l l a s t a king par t in an exciting series of workshops, networking sessions and talks between 6th and 11th December. “Following the great success of the inaug u r a l Te c h n C r u n c h Startup Battlefield event in 2017, w e are delighted to return as the headline sponsor for this year ’s event,” says Emeka Afigbo, F a c e b o o k ’s h e a d o f developer programs. “Given our passion for connecting people and helping de velopers and entrepreneurs to thrive, we can’t wait to see how this year ’s entrants are using t e c h n o l o g y t o e ngag e and empower people across the continent,” he added. On the 6th and 7th of D e c e m b e r, Fa c e b b o k w i l l h o l d i t s ‘d e v e l oper circle leads summit’, a two-day summit f o r m o re t h a n 6 5 d e veloper circles leads across Sub-Saharan Africa, representing a grow ing community of over 42,800 members across 31 cities in 15 countr ies across Sub-Saharan Africa. The ‘Instagram ins p i re a c t i o n L a g o s’, a workshop to inspire,
educate and train 7080 entrepreneurs and women working in tech, will also hold on the 6th. The Facebook startups and developers summit 2018 by developer circle Niger ia will bring together 600 attendees and w ill r un trainings and workshop sessions on specialist deep-tech subjects, such as Messenger Bot on the 8th of December and a digital pitch competition for a chance to win support and pr izes from Facebook a n d Fa t e Fo u n d a t i o n w ill hold on the 10th of December. NG_Hub Start-up Mixer ; A social gathering br inging together Star t-ups from across the ecosystem, including NG_Hub star t-ups (Start-ups using Faceb o o k ’s C o m m u n i t y H u b ) a n d t h o s e t a ki n g p a r t i n t h e Te c h Cr unch Star tup Battlefield event will also hold on the 10th and Student Hack ; In partnership with Re: Learn by CC_Hub, Facebook w ill take place on the 1 1 t h o f D e c e m b e r. It will bring together 50 local high school students from Lagos to take part in Hack-aDay and other activities that highlight the difference developers can make in the world using computer science skills.
APPOINTMENTS
UAC strengthens board, appoints new director CHUKA UROKO
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s part of on-going efforts at repositioning the company, UAC of Nigeria PLC (UAC) has appointed Bolaji Odunsi as a non-executive director of the company. Odunsi replaces Olufunke Ighodaro who recently resigned from the board to take up an executive role in South Africa. Odunsi, a financier, has over 25 years of interna-
tional investment experience in a variety of industry sectors, including manufacturing, security, oil and gas and distribution. He has significant board level experience in Europe and the US, with focus on implementing transformational change encompassing systems and controls, team enhancement, financial and regulatory reporting and business analysis to drive value creation. He was a co-founder of Stirling Square Capital Partners, a leading midmarket European private
equity firm and a partner in Compass Partners and BC Partners. Before joining BC Partners, he worked as a member of the M&A team at Enskilda Securities in London. His prior experiences include stints at Touche Ross & Co and the engineering consultancy firm of Mott, Hay & Anderson. Odunsi is a chartered accountant and holds a Bachelor of Science degree in Civil Engineering and a diploma in Philosophy from the University of London.
L-R: Isiaka Abdulrazaq, chief financial officer, NNPC; Onyinye Ikenna-Emeka, general manager, enterprise marketing, MTN Nigeria; Bello Rabiu, chief operating officer, Upstream; Isa Inuwa, chief operating officer corporate services, and Abdullahi Auwal, senior manager enterprise business, northern region, MTN Nigeria, during the NNPC Corporate Services Connect in Abuja.
L-R: Obumneke Okoli, marketing manager, Hero Larger; Tolu Adedeji, marketing director, International Breweries Plc; Godwin Oche, national sales director, International Breweries, and Neave Kannemeyer, Chief Security Officer, International Breweries, at the fourth edition of Hero Fiesta, which featured a number of popular Nigerian artists, in Onitsha.
L-R: Uche Nnaji, OUCH Couture CEO; Steve Onu (aka Yaw), OAP-actor/producer; Iyabo Ojo, star actress, and Enyinna Nwigwe, Nollywood star, at the premiere of ‘SMASH’, a romantic-comedy directed by John Njamah and produced by Yaw; at Film House IMAX Cinema, Lekki, Lagos.
L-R: Tomiwa Akande, external communications manager; Abiodun Peters, corporate and compliance counsel; Sade Morgan, legal, public affairs and communications director; Ekuma Eze, country CSR manager, and Ifeoma Okoye, public affairs manager, all of Nigerian Bottling Company (NBC) Limited at the 2018 SERAS Awards in Lagos, where NBC was recognized as the ‘Best Company in Gender Equality and Women Empowerment’ in Lagos.
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COMPANIES & MARKETS ANNOUNCEMENTS
Afromedia CEO retires David Ibidapo
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fromedia notified the Nigerian stock exchange market (NSE) on the retirement of former Chief executive off i c e r, O t u n b a A k i n lola Irewunmi Olopade, who retired on the 29th of November 2018. According to the notice shared Wednesday, Olopade is however expected to maintain the role of a nonexecutive director in the organisation. According to information obtained from Bloomberg, O lapade has been the CEO and group managing director at Afromedia plc since October 1999.
Also, Olufemi Olaiya was promoted to takeover over the position of managing director, Afromedia ltd which took effect also on the 29th of November. BusinessDay analysis of five year performance of Afromedia ltd revealed that the company has consistently re corde d loss after tax between 2012 and 2016. The biggest loss during the period was seen in 2012 after the company made a loss of N4.49 billion. Meanwhile in 2016, Afromedia was able to reduce its loss significantly by 60 percent to a loss of N1.78 billion. A l s o, t h e p r i c e o f Afromedia plc remains static at N0.50 for the last five years as there is no trading activity.
L – R Nerina Visser, CFA, Chairperson of the ASISA ETF Standing Committee; Oscar N. Onyema, Chief Executive Officer, The Nigerian Stock Exchange (NSE) and Deborah A. Fuhr, Managing Partner & Founder, ETFGI during the 2018 NSE Annual ETPs Conference tagged “Exchange Traded Products: Evolving investment themes, Accessing New Markets and Enhancing Portfolio Alpha”, in Lagos , yesterday. Pic by Pius Okeosisi
This is due to delays in meeting filing regulations of the stock exchange.
Afromedia plc was formed with a partnership of UAC International, Mills and Al-
len International and British Franco Electric Company. Afromedia plc has
a market value of N2.2 billion and outstanding shares of 4.44 billion.
GLOBAL
OIL & GAS
Schlumberger warns weak fracking demand to hurt its North America Q4 revenue
NNPC seeks investors to unlock Deep-water resources
BALA AUGIE
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chlumberger, the world’s largest oilfield services provider, warned investors on Tuesday that its North America revenues would likely decline 15 percent in the fourth quarter sequentially on steeper-than-expected price declines in hydraulic fracturing. The drop in hydraulic fracturing activity this year had been “significantly larger than we expected,” Patrick Schorn, executive vice president, said at a conference in New York, leading to a bigger decline in pricing than it had originally forecast. Schlumberger, the world’s largest oilfield services provider, warned on Tuesday that its fourth-quarter North America revenues will likely decline 15 percent sequentially on steeperthan-expected price declines in hydraulic fracturing. The drop in hydraulic fracturing activity this year has been “significantly larger” than expected, Patrick Schorn,
executive vice president of wells at Schlumberger, said at a conference in New York, leading to a bigger decline in pricing than the company had forecast originally. Oilfield service companies this year have been hit by a slowdown in demand as regional oil prices have fallen with transportation bottlenecks faced by producer customers. A recent drop in the U.S. benchmark crude to around $53 a barrel also has stoked concern of an oil glut next year. Schlumberger is “guiding consensus lower” through the first quarter of 2019, analysts for investment firm Raymond James wrote in a note following Schorn’s presentation. Shares of Schlumberger were down about 2.6 percent in afternoon trading on Tuesday, at $44.62, amid a broad market decline. The stock is down roughly 44 percent since January. Hydraulic fracturing pumps water and sand at high pressure into a well to release oil and gas trapped in shale rock. Oil producers have been pull-
ing back on fracking and completing wells because of the pipeline bottlenecks and price weakness. Schorn said recent price declines would likely prompt its customers to take “a more conservative” approach during the start of 2019 and that any ramp-up in international investment also could be tepid. “Looking forward to next year, the recent volatility in oil prices has introduced more uncertainty to the outlook” for exploration and production spending in 2019, Schorn said. Schlumberger’s North America revenue, including its Cameron International business, was $3.12 billion in the third quarter, accounting for roughly 38 percent of total revenue. A year ago Schlumberger acquired Weatherford International’s U.S. pressure pumping business for $430 million, positioning it to better compete with rival Halliburton. Both companies have seen shares fall sharply this year amid the slowdown in hydraulic fracturing demand.
HARRISON EDEH, Abuja
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he Nigerian National Pet r o l e u m C o rp o r a t i o n (NNPC) is seeking investors to increas e Nigeria’s crude oil reserve, according to group managing director, Maikanti Baru, who unveiled investment opportunities in the nation’s deep-offshore f ro n t i e r s a t t h e 1 0 t h World Energy Capital Assembly in L ondon, United Kingdom. Delivering an address at the panel session entitled: Spotlight on Afr ica,” Bar u said t h a t “g l o b a l l y , Ni g e ria has the highest untapped deep water re s ou rc e o f ab ou t 1 0 b i l l i o n b a r re l s o f o i l equivalent, in addition to other vast opportunities in the oil and gas value chain”. The NNPC GMD who was represented at the event by the Group
General Manager Corporate Planning & Strategy of the NNPC, Bala Wunti, explained t h a t Ni g e r i a h a s t h e largest and one of the most vibrant economies in Africa with lots of potentials, especially in the gas, refining and infrastructure space. “I invite you all to a country that has massive opportunities, very good business climate and good returns on investment. Our resilience has been tested, we have been through the booms and bursts and we came out stronger. With our experience, geographical location and capacity, Nigeria is the country of now and the future”, the GMD stated. He further explained that NNPC has a clear strate g y for harnessing these potentials through collaboration and building robust partnerships as ent re n c h e d i n t h e C o rporation’s 12 Business
Focus Areas being aggressively driven by the Leadership of the Corporation. T h e Wo r l d E n e r g y Capital Assembly is a leading gathering of energy executives, finance and investment professionals to discuss emerging and re-emerging energy investment opportunities, review deals done and chart an outlook of energy related activities across the globe. O t h e r p a r t i c i p a nt s at the 10-year Anniversary of the event include Lord John Browne, the Baron Browne of Madingley and CEO of British Petroleum from 1995 to 2007; the Global Chief Economist of British Petroleum, Spencer Dale; the Senior Vice President of Abu Dhabi National Oil Company, Ab dul Nass er Al Mughairbi; as well as the Senior Vice President and Chief Economist of Equinor, Eirik Wærness, among others.
Thursday 06 December 2018
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BUSINESSTRAVEL Aviation sector gets global training centre to boost capacity Stories by IFEOMA OKEKE
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igeria’s aviation sector is set to receive a major boost in capacity as the International Civil Aviation Organisation (ICAO) is set to commission the Federal Airports Authority of Nigeria’s (FAAN) Training Centre, which has been designated as Global Training Centre of Airports Council International (ACI). Henrietta Yakubu, the general manager, corporate communications in an interview with journalists at the Murtala Muhammed Airport (MMA), Lagos said that the facility, which is situated at Lagos Airport would be commissioned this Friday. According to Yakubu, the commissioning and designation of the facility as ICAO/ACI Global Training Centre would further enhance training of technical personnel for the industry.
She explained that before the facility was approved, inspectors from ICAO had visited the facility regularly and discovered some open items, which she said were closed by FAAN’s management before the final approval was given by ICAO. She recalled that the facility was designated as an ICAO/ACI training facility in Mauritius in 2017 during the ACI meeting in that country. She expressed that with the approval of the facility, it would be easier and cheaper for technical personnel
Air Peace takes delivery of 6th ERJ 145, assures on seamless operations … Scales safety test for B777 operations
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est Africa’s leading airline, Air Peace has received the last of the six 50-seater Embraer 145 jets it recently acquired, assuring that its vision of providing seamless flight services on the domestic, regional and international routes was running according to plan. The aircraft marked 5N-BUW and named Virginia Omeogo Adegoke (Nee Onyema) touched down at the Murtala Muhammed International Airport, Lagos at about 4 a.m. (LT) on last Tuesday. Air Peace took delivery of its 5th ERJ 145 weeks ago on Sunday,October 14. A statement issued by Chris Iwarah, the carrier’s corporate communications manager, said the airline’s goal of guaranteeing seamless flight operations as well as connecting unserved and underserved routes was fast being fulfilled. “We are delighted to announce the arrival of our sixth 50-seater Embraer 145 jet at the Murtala Muhammed International Airport, Lagos at about 4 a.m. on Tuesday, November 27, 2018. The arrival of the aircraft has further strengthened our resolve to provide seamless flight services on the domestic, regional and international routes as well as extend the reach of our exceptional operations to many more unserved and underserved destinations under our no-city-leftbehind project. “Upon the arrival of our first Embraer 145 aircraft in February this year, we set another record in Nigeria’s aviation industry with the establishment of a subsidiary, Air Peace Hopper to organise our plan to democratise air transport and deliver exceptional flight services to unserved and underserved cities in Nigeria and the West Coast of Africa. “Since we started this project, the pieces of feedback have been quite encouraging. Although there have been challenges, including delays
mostly on account of circumstances bordering on safety and other factors beyond our control, we have kept reviewing our schedules and restrategising to ensure the best of flight services for our teeming loyal customers. This has greatly paid off and the delays reduced to the barest minimum. “We are in aviation to create massive job opportunities, connect people and business and leisure destinations, help in growing the economies of Nigeria and other nations we operate in and make our dear nation proud overall in the global aviation community. “We are quite proud that this vision is unravelling on a great positive note, especially with the support, loyalty and patronage of our esteemed customers. With our deepened capacity, we have no doubt it is early yuletide for the flying public this year,” Air Peace said. This is as the airline recently scaled a major regulatory hurdle in its path to international flight services, successfully performing the partial emergency evacuation and ditching demonstrations as part of the safety tests for the operation of its Boeing 777 aircraft. Emergency aircraft evacuation refers to an exercise aimed at evacuating those on an aircraft when an emergency occurs on the ground, in water or mid-flight. The ditching demonstration, however, simulates a planned water landing and evaluates the airline’s ability to handle such emergency. An emergency evacuation demonstration is mostly required when an airline proposes operating a specific aircraft type and model entering into its service for the first time. Once the signal for is given, the aircraft’s emergency evacuation equipment and 50 percent of the required emergency exits and slides must be ready for use in a maximum of 15 seconds.
on the continent to be trained on aviation matters, adding that ICAO’s approved instructors would be engaged for training of personnel. Yakubu further lauded Saleh Dunoma, managing director of FAAN who also doubles as the President of ACI-Africa for upgrading the facilities to its present status. She said: “Sometime last year, during the ACI meeting in Mauritius, FAAN training school was designated as an ICAO training centre. By this Friday, ICAO will be coming to Nigeria
for the commissioning of the facility. “One of the advantages of the training centre is that it will make it easier for member countries to train their personnel in Nigeria and it is also cheaper for them to come to Nigeria to be trained, rather than going to United Kingdom, United States and other countries around the world. “Another advantage is that there will be more opportunity for those in the region to get trained. You know when cost is not really a factor; more people will be factored in for training. There is also accessibility for trainees and the weather conditions are favourable in Nigeria, while the learning facilities are fantastic and new. “For ICAO to designate us as a training centre, you will know that everything that we needed to put in place have been put in place. The training facilities are up to date. The instructors will be coming from all over the world and they are ICAO trained instructors.” On the on-going certification of
some international airports by the Nigerian Civil Aviation Authority (NCAA), Yakubu assured that some of the airports would be certified by 2019. She recalled that the international wings of Lagos and Abuja were certified in 2017 by the regulatory authority, stressing that officials from ICAO were also assisting FAAN in the certification exercise. “You know there are certain conditions that must be met before an airport is certified and before MMA and Abuja Airports were certified last year, we had to fulfil all these conditions and before any other airport would be certified, same conditions, too have to be met. “Recently, a team from ICAO came around during the Airport Excellence (APEX) training, which was held in Nigeria, the team went to Kano, Port Harcourt and Enugu Airports. I can assure you that next year, one or more airports would also be certified after we have fulfilled all the conditions,” she assured.
South African Airways airlifts 3m passengers on J’burg-Nigeria routes in 20years
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he leading carrier in the Sub-Saharan Africa region, South African Airways (SAA), has airlifted nothing less than three million passengers during its 20 years of non-stop operations between Johannesburg and Africa’s most populous city, Lagos, Nigeria. Operations commenced on 4th December 1998 as SAA launched its first flight into Nigeria soon after the Bilateral Air Service Agreement between the two countries had been signed. SAA has since brought several aircraft onto this route, from the initial Airbus 300 series, which had to make a technical stop en-route in Luanda to the Boeing 767 and the B747-400 and to the Airbus A340–600, which was then replaced by the current state of the art Airbus A330-300 aircraft. SAA operates a daily service to Murtala Muhammad International Airport, Lagos, consistently delivering exceptional turnaround times and excellent facilities including state of the art on-demand inflight entertainment system, increased economy and business
class space and legroom for extra comfort. “The Nigeria operations rank amongst SAA’s most profitable and we want to continue to support this important destination by continuously improving the overall customer experience and exploring new opportunities. This will enable us to retain our market position as the carrier of choice amongst the Nigerian travelling community. Our understanding of our customer profiles who travel in both business and economy class cabins, is one of the reasons we decided to deploy the A330-300 aircraft which responds well to the needs of this market,” Pumla Luhabe, SAA general manager commercial said. “With its thriving economy, Nigeria is Africa’s economic powerhouse; Lagos is a high-energy city famous for its vibrant lifestyle, set against the backdrop of the Nigerian film industry, Nollywood, and their world renowned music industry bolstered by heavyweights such as the late legendary Fela Anikulapo Kuti to the modern day Davido, DBanj, and Psquare
to mention a few. Nigeria offers numerous commercial opportunities and a cultural experience like no other. “Nigeria is among the top destinations to which we fly, and over the past 20 years SAA has transported over three million passengers into the region and we will continue to listen to our customers to ensure we are providing them with the best possible service for continued loyalty. Reinforcing our legacy of exceptional service, SAA was recently voted Best Airline Staff in Africa at the World Aviation Awards,” Luhabe added. In honour of this milestone, SAA rolled out a campaign that saw brand activation on social media, radio and print publications from September 2018 in the Nigeria region. Some of the activities include Voyager / Corporate dinner, a Travel trade award function, SAA movie night for the Travel trade and to the children of the Arrow of God Orphanage (an Orphanage supported by SAA over the past 8 years), all leading to a celebration to be hosted in Lagos this December.
L-R: Ohis Ehimiaghe, regional manager, West and Central Africa; Vuyani Jarana, group chief executive officer and Aaron Munetsi, regional general manager, Africa, Middle-East & Indian Ocean Islands all of South African Airways at the press conference commemorating the 20 years anniversary of the airline’s service to Nigeria.
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Thursday 06 December 2018
BUSINESS DAY
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In association with
Helping you to build wealth & make wise decisions NSE All Share Index
Market capitalisation
NSE Premium Index
The NSE-Main Board
NSE ASeM Index
2,564.13
1,713.69
1,087.32
Year Open
38,243.19
N13.609 trillion
Week open (23 – 11–18)
31,678.70
N11.565 trillion
2,258.21
1,425.65
787.55
N11.271 trillion
2,162.10
1,410.41
788.24
Week close (30 – 11–18) Percentage change (WoW) Percentage change (YTD)
30,874.17
-2.54 -19.27
-4.26 -15.68
NSE Lotus II
NSE Ind. Goods Index
NSE Pension Index
330.69
2,560.39
1,975.59
1,379.74
734.44
290.94
2,222.56
1,287.83
1,180.25
735.02
276.03
2,205.70
1,244.53
1,162.82
NSE Banking Index
NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index
1,746.68
475.44
139.37
1,430.07 1,394.99
410.74
120.69
398.47
126.37
NSE 30 Index
-1.07
0.09
-2.45
-17.70
-27.51
-20.13
-2.99 -16.19
976.10
4.71
0.08
-9.33
-24.70
-5.12
-0.76
-3.36
-1.48
-16.53
-13.85
-37.00
-15.72
FCMB Group grows Q3 profit by Stanbic, Rencap, CSL, 7 119.9% to N12.026bn others account for N1.6trn …stock price rallies by 5.4% year-to-date equities deals in 11 months I n the third-quarter (Q3) ended September 30, 2018, FCMB Group Plc grew profit after tax (PAT) by 119.9percent t o N 1 2 . 0 2 6 b i l l i o n , f ro m PAT of N5.469billion the Holding Company financial institution recorded in corresponding Q3 period of 2017. The group’s unaudited interim financial statements for the period under review released last week to investors at the Nigerian Stock E xchange (NSE) shows gross earnings of N132.875billion against N118.816billion in Q3’17, re p re s e n t i n g a n i n c re a s e o f 11.8percent. The company’s share price at N1.56 represents positive returns of 5.4percent year-to-date (Ytd) outperforming the NSE All Share Index (ASI) which has negative return of circa 19percent. FCMB Group Plc grew Q3’18 Net Interest Income by 6.7p erc ent to N53.235billio n from N49.902billion in Q3’17; while its Non-Interest Income ro s e t o N 3 7 . 4 5 8 b i l l i o n f ro m N22.540billion in Q3’17, up
stories by heanyi Nwachukwu
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tanbic Stockbrokers Limited led other nine stockbroking firms that were responsible for a record N1.558trillion worth of listed equities deals in eleven months ended November 30, 2018. This record value represents 68.32percent of the total value of stocks traded on the Nigerian Stock Exchange (NSE) in the review period, according to recently releas ed broker performance report from January 2, 2018 to November 30, 2018. Stanbic IBTC Stockbrokers Limited sits on top of other following equities trade valued at N451.292billion it accounted for in just eleven months. This represents 19.79percent of the total value of stocks traded on the Lagos Bourse in the review period. Rencap Securities (Nigeria) Limited occupied the second position after accounting for N279.352billion worth of exchanged equities which represents 12.25percent of the total value traded on the NSE. Also, CSL Stockbrokers Limited a c c o u n t e d f o r 9 . 9 1 p e rc e n t of the total value of traded stocks on the NSE in eleven month which represents N226.035billion.
According to the NSE ranking, other stockbroking firm and the value of equities they traded are: EFCP Limited (N211.607billion or 9.28percent); FBN Quest Securities Limited (N118.272billion or 5.19percent); Chapel Hill Denham Securities Limited (N73.035billion or 3.20percent); Cordros Securities Limited
(N54.663billion or 2.40percent); United Capital Securities Limited (N51.426billion o r 2 . 2 5 p e r c e n t ) ; Cardinalstone Securities Limited (N49.006billion or 2.15percent); and Primera Africa Securities Limited (N43.530billion or 1.91percent of the total value of traded stocks on the NSE in eleven months to November 30.
66.2percent. The principal activity of F C M B G ro u p P l c i s t o c a r r y on business as a financial holding company, investing in and holding controlling shares in, as well as managing equity i nve s t m e nt s i n C e nt ra l Ba n k of Nigeria approved financial entities. The Holding Company has s i x d i re c t s u b s i d i a r i e s ; Fi r s t City Monument Bank Limited ( 1 0 0 p e rc e n t ) , F C M B C a p i t a l Markets Limited (100percent), CSL Stockbrokers Limited (100percent), CSL Trustees L i m i t e d ( 1 0 0 p e rc e nt ) , F C M B Microfinance Bank Limited (100percent) and Legacy Pension Managers Limited (91.64percent). FCMB Group Plc was i n c o r p o rat e d i n Nig e r i a a s a financial holding company on November 20, 2012, under the Companies and Allied Matters Act, in response to the CBN’s Regulation on the Scope of Banking Activities and Ancillary Matters (Regulation 3).
Matured Naira-settled OTC FX Futures contracts on FMDQ reach $13.11bn
T
he 29th OTC FX Futures contract NGUS NOV 28 2018, with contract amount of $886.79 million, matured and settled on FMDQ OTC Securities Exchange on Wednesday, November 28, 2018. This maturity brings the total value of matured Naira-settled OTC FX Futures contracts on FMDQ, since the inception of the market in June 2016, to circa $13.11 billion; with a total of circa $17.31 billion worth of OTC FX Futures contracts traded so far.
The matured contract was valued for settlement against the NAFEX – the Nigerian Autonomous Foreign Exchange Fixing – the FMDQ reference Spot FX rate published same day. The associated clearing/settlement activities were effected accordingly. A new contract NGUS NOV 27 2019 for $1.00 billion at $/₦366.60 was introduced by the CBN to replace the matured contract and refreshed its quotes on the existing 1- to 11-month contracts.
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Local bourse continues freefall, down 4.9% in Nov. 18
T
he Nigerian equity market recorded four consecutive daily declinesduringtheweek to November 30, 2018 but found relief on the last trading day. Resultantly, the NSE All Share Index (ASI) logged a 2.5percent week-on-week (w/w) decline - its sharpest in November as the index closed the month on a bearish note (-4.9percent), bringing month-onmonth (m/m) declines to the fifth consecutive month. Also, market capitalisation shed N293.7billion to settle at N11.3trillion while year-to-date (YtD)returnlandedat-19.3percent. Similarly, activity level was downbeat as average volume and value traded plunged 25.2percent and 50.6percent to 239.7million units and N2.9billion respectively. A sectoral glance at the performance on the exchange showed that three major sector indices of the five that we track, closed in red territory. The Oil & Gas (-5.1percent), Industrial Goods (-3.4percent) and Banking (-3percent) sector indices bore the brunt of the sell-offs owing to declines in SEPLAT (-9.7percent), FO (-6.3percent), OANDO (-2.1percent), WAPCO (-7.1percent), DANGCEM (-4.2percent), DIAMOND (-31.6percent), UNIT Y (-18.8percent),FBNH(-6.6percent) and GUARANTY (-5.6percent). On the flip side, the Insurance (+4.7percent) and Consumer Goods (+0.1percent) sector indices escaped the bear’s wrath as buying interests in CONTINSURE (+33.3percent), MANSARD (+6.3percent), PZ (+7percent) and UNILEVER (+1percent) provided support. Investors’ sentiment remained underwhelming as market breadth closed at 0.6x; 24 stocks advanced and 40 declined. In line with our expectation of a year-end “relief” rally, the depth of sell-off that we have seen in recent times underscores this fact. Yet, any potential upside may be capped by sentiments around politicaluncertaintiesaheadof2019 elections. Money Market: One-year T-bill crosses 17percent as pressures on crude prices forces CBN to hike OMO rates The week to November 30 was a tight week in terms of system liquidity as the CBN issued fresh OMO bills worth N88.9billion (via two OMO auctions worth N532.6billion, against maturities of N443.8billion). Evidently, this resulted in a rise in average money market rates (Open Buy Back and Overnight rates) for the week to 16.2percent from 8.1percent in the preceding week. Interestingly, the CBN also hiked OMO rates; 91-day from 11.50percent to 11.65percent, 182-day from 13percent to 13.20percent, and 365-day from 14.50percent to 14.75percent - most likely predicated on the recent slide in crude oil prices, as the bank seeks to raise the returns on holding Nigerian assets in a bid toreducedollardemandpressures. On another note, the bank conducted its bi-monthly NTB auction, wherein it successfully re-financed N150.6bn. Demand was modest as bids of 1.8x the offer turned up, though markedly lower than the 3.1x recorded in the preceding auction. The CBN was able to roll over the auction at
WEEKLY REPORT
relatively lower stop rates (91-day November on a high, up 1percent (10.90percent versus 10.95percent w/w and 0.2percent m/m to at the last auction), 182-day $42billion asat Friday. Meanwhile, (13.10percent vs. 13.16percent benchmark Brent price dipped further during the week, trading at the lastSTOCK auction) andREPORT 364-day MARKET FOR NOVEMBER 30TH 2018 (14.45percent vs. 14.45percent at below $60/b at the end of the week as Saudi Arabia and other OPEC+ the last auction). In the secondary market, member signalled an output cut in ANigeria total turnover of 1.199Bills billionyields sharestracked worth N14.277their billionupcoming in 15,841 deals were traded week meeting, inthis abid to Treasury by investorsbyonan the average floor of the of Exchange in contrast to a totalprices. of 1.282 billion shares valued at support higher 68basis N23.142 hands last week in 11,467 deals. Looking ahead, we expect the pointsbillion (bps)thattoexchanged closeat14.7percent, as yields repriced, following the sustained weekly FX intervention The Financial Servicesrates: Industry91-day (measured(up by volume) led the activity chart with 963.315 million by the CBN to continue to support hike in OMO shares at N7.536 billion182-day traded in 8,871 thuslocal contributing and 52.79% to the unit80.38% at N360-N365/1$, 23bpsvalued to 13.5percent), (up deals;the atthe I&E window. Inwith the total equity volume and value respectively. especially The Consumer Goods Industry followed 41bps toturnover 14.9percent) and 364-day believe theresulting 83.001 million to shares worth N4.213 billion in 2,802meantime, deals.The thirdwe place was Industrial Goods (up 56bps 17.3percent). volatility in global crude Entering December, we expect Industry with a turnover of 60.782 million shares worthupside N1.976 billion in 1,639 deals. to see more of OMO auctions, oil prices as a result of the OPEC+ outputBank cutPlc, is positive for following bythe DMO Trading in thethe Topdirective Three Equities namely Diamondpotential Bank Plc, Access and Universal that NTB’s of N78.05bn 13th for reserves. 512.535 million shares worth N1.367 billion in Insurance Plc, (measured by volume)for accounted Global rebound as and deals, 20th contributing Dec-18 would be fully 1,437 42.76% and 9.57% to the total equity equities turnover volume and value redeemed. This week, system the Fed adorns a dovish cue respectively. Major global equity indices maturities to the tune of N684.8bn –madeentirelyofOMOmaturities. were catalysed by events in the Equity Turnoverthe - Last 5 daysof this event monetary policy and trade front. We expect tempo US Fed chair - Powell - signalled to guide trading sentiments. Bond Market: Bond bears a less aggressive stance on that rates wereUnchanged “just rule the roost amid OMO statements TurnoverCBN Turnover Traded Advanced Declined below neutral level” . hike Date Deals Volume Value (N) Stocks Stocks Stocks Stocks Although17 nospecific indication theme 1,941,637,608.77 guided 26-‐NA ov-‐1sell-side 8 2,911 104,868,530 93 18 58 sentiment in the bonds market was given as to the erasure of the 27-‐Nov-‐18 3,121 182,228,953 2,754,300,158.78 much 92 anticipated 14 Dec-18 23 ratehike. 55 followingtheCBN’sOMOratehike. 2,726,745,882.46 23 USMCA 59 28-‐Nov-‐18 3,252 220,396,007 Consequently, FGN bond yields On94 the trade12 front, the 29-‐Nov-‐18 higher 3,648 by 441,605,724 63 inched 8bps on4,460,315,600.79 average was98 officially12 signed by23 respective this buoyed to 15.6percent. 30-‐Nclose ov-‐18 at2,909 249,422,893 Similarly, 2,393,580,325.83 presidents; 104 22 15 hopes 67 average yield for FGN Eurobond of a détente between the United also edged higher from 8percent States and China in the wake of the
to 8.2percent while average yield meeting between Xi and Trump at in corporate Eurobonds increased the G-20 over the weekend. Additionally, in a second to 11.2percent from 10.1percent. Generally speaking, there is a estimate that matched the first, US better of risk forOperations the market For Furtherbalance Inquiries Contact: Market Department Q3-18 GDP grew at an annualized Page 1 assomeofthefactorsthatwerepain- rate of 3.5percent while consumer points for Emerging and Frontier spendingrose0.6percentinOct-18. Market investors during the year Overall,theS&P500(+4.8percent), seem to be abating. What’s more, DJIA (+5.2percent) and NASDAQ TheDMOiswell-armedtomeeting (+5.6percent) trended northwards its domestic financing target within w/w with the S&P lodging its best the 2018 budget, underscored weekly gain since December 2011. Bullish sentiments also filtered by its passive stance in the last bond auction and its willingness to into European markets amid redeemNTB’sforDecember.These geopolitical worries. The week factors, coupled with expectations started off with cheery reports that of an output cut by OPEC (which the EU approved Theresa May’s maypredicateariseincrudeprices), proposedBREXITdraftagreement. clearly portends a bullish outlook Yet, the future of BREXIT is hinged for the fixed income market in the on the UK’s parliament decision coming up next week. nearest term. Also, the Italian government Foreign Exchange: Naira depreciates at the Parallel signalledthepossibilityoflowering market; FX reserves inch higher its budget deficit target, even as the In the Foreign exchange European Commission received market, the local currency support from member states for a weakened against the dollar at the potentialsanction.Overall,thePanparallelmarket,downby1.4percent European STOXX (+1.0percent), w/w to average N367.5/$1 at the UK’s FTSE (+0.4percent) and close of the week. The naira also Germany’s DAX (+0.6percent) all depreciated mildly by 2bps at the registered w/w accretions. BRICS-classified emerging official market to N306.8/$1 while rates at the Investors & Exporters markets also benefited from the (I & E) market appreciated to globalequityeuphoriaasallindices N364.1/$1, up 16bps w/w as the tracked a w/w gain except South CBN maintained its weekly FX Africa’sJALSH(-0.1percent).Brazil’s intervention in the wholesale and IBOV (+3.8percent), Russia’s RTSI retail FX market in a bid to support (+1.1percent), China’s SCHOMP (+0.3percent) and India’s SENSEX the naira. Also, FX reserves closed (+3.5percent) all rose w/w.
Investor’s Square •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
SEC takes e-dividend campaign to South-East Iheanyi Nwachukwu
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he Securities and Exchange Commission (SEC), Nigeria through its Port Harcourt Zonal Office will today hold a Town Hall meeting with stakeholders and the general public in Enugu. This is in a move to further enlighten investors and the general public on the process and benefits of e-dividend, multiple subscription, e-processes and other contemporary issues in the Nigerian Capital Market. The event which has as its theme: “Current Initiatives by the Securities and Exchange Commission, SEC Nigeria to Enhance Investor Value”, is expectedtodrawparticipantsfrom various segments of the society. The event is expected to create an avenue for the Apex capital market regulator to educate and enlighten the public on the above subject and also for operators, stakeholders and various investors to interact and discuss other issues surrounding the activities of the capital market. The SEC had in January 2015 commenced the e-dividend registration campaign in Abuja with a Road Show culminating in a Town Hall Meeting. The Enugu event will also provide an opportunity to throw more highlights on investment opportunities available in Nigerian Capital market and how retail investors can benefit therein. The Commission had announced that the e-dividend
registration would continue seamlessly in spite of the expiration of free registration deadline and also enjoined investors yet to enroll, to continue with the registration at a cost of N150 only. “Investors should continue to approach their banks or registrars, as usual, to seamlessly mandate their bank accounts for the collection of their dividends electronically, including unclaimed dividends, not exceeding 12 years of issue; as the N150 would not be demanded from them at the point of registration. The SEC recently extended the forbearance period for
regularisation of multiple share subscription to another one year after the expiration on 31st December 2018. Mary Uduk, Acting Director General of the SEC disclosed this in her address at the 3rd and final Capital Market Committee (CMC) meeting held for the year 2018 in Lagos. “I am delighted to report that on the lingering issue of multiple subscriptions and forbearance for shareholders with multiple accounts, the CMC agreed that the forbearance window should be extended by another year from the December 31,2018 deadline previously communicated”, she said.
Listing costs, other factors deter SMEs from approaching capital raising platforms
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he African Securities Exchanges Association (ASEA) working group conducted a survey in 28 ASEA member exchanges to determine the fundamental issues experienced by African small and medium enterprises (SMEs) in accessing finance, as well as opportunities available for these SMEstoraisecapitalonexchanges. The key challenging factors identifiedinthesurveywereaccess to finance (37percent), followed by corporate governance and marketing (18percent). Some of theotherissuesidentifiedincluded costs of listing; which relates to continuing obligations for SMEs; and corporatising of business. While 19 exchanges have SME platforms, the survey revealed that most of these SMEs are not aware of exchanges as an alternative to
raising finance. In 2017, the African Securities Exchanges Association (ASEA) formed a working group called the ASEA SME Facilitation Working Group to establish the efficacy of financing of SMEs across African capital markets. The working group comprises of various stock exchanges and is chaired by the Johannesburg Stock Exchange (JSE). Following the survey results, the working group developed a report on the Capital Raising Opportunities for Small and Medium (SMEs) on Stock Exchanges in Africa, which is a consolidation of survey responses ofthe15ASEAmemberexchanges who responded. The report is set to provide ASEA member countries with valuable insights that may be
beneficial in the development of solutions to assist in meeting the capital raising needs of SMEs in Africa. It explores the challenges and opportunities that exist for SMEswantingtolistonexchanges. Featuring prominently on the motivating factors for listing, is the prospect of raising funds, elevating company profiles and to enhance corporate governance. “Lack of adequate access to finance is considered as one of the major obstacles and constraints to the growth of SMEs. The results reveal the gap that exists for exchanges, and other role players, to play a role in readying SMEs to list. These include; providing mentorship, roadshows to create awareness, and to provide informationandtrainingatvarious touch points in the ecosystem,” says chairperson, Zeona Jacobs.
Thursday 06 December 2018
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BUSINESS DAY
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Investor As Lafarge Africa moves to raise N90bn through Rights Issue
Helping you to build wealth & make wise decisions
Iheanyi Nwachukwu
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n Tues day December 4, Lafarge Africa Plc notified the Nigerian Stock Exchange (NSE) of the decision of its Board of Directors at the meeting held on Monday December 3 in respect of the company’s proposed Rights Issue. The Board of Directors have approved the terms of the Rights Issue. Lafarge Africa Plc will raise N89.21billion by way of a Rights Issue at N12 per share, by issuing 6 new shares for every 7 shares held by shareholders at the Qualification Date, which will be announced. Lafarge Africa Plc is a subsidiary of LafargeHolcim, a world leader in building materials. The company has operations in Nigeria Ewekoro and Sagamu plants in Ogun State, Ashakacem in Gombe State, Mfamosing in Cross Rivers State, Atlas cement in Rivers State and Ready-Mix Nigeria and varied operations in South Africa and Ghana with total group capacity of around 14 million Metric Tonnes. The Rights Issue follows the resolution of Lafarge Africa Plc shareholders passed at the Extra-Ordinary General Meeting (EGM) held on September 25, 2018. Lafarge Africa Plc has outstanding shares of 8,673,428,240 units while its market capitalisation is in excess of N116.223billion. The Rights Price represents about 10.45percent discount on Lafarge Africa’s traded closing price of N13.4kobo as at Monday December 3, 2018. Lafarge Africa Plc stock was one of the actively traded equities on December 3. Its share price gained 40kobo or 3.08percent which helped push it higher above a 52week low of N13. The stock had reached a 52-week high of N47. “The regulatory approval process is ongoing,” said the notice signed by Adewunmi Alode, Company Secretary, Lafarge Africa Plc. In September, the Board of Lafarge Africa Plc approved the refinancing of the shareholder loan to $293million with longer maturity and a Right Issue of up to N90billion. “The restructuring is aimed at reducing the Company’s leverage position as well as
strengthening its profitability,” according to Bruno Bayet, Chief Financial Officer of Lafarge Africa. Bayet noted this when the company released its third-quarter (Q3) to September 30, 2018 financials. Lafarge Africa Plc is in the business of manufacturing and marketing of cement and other cementitious products such as Ready-Mix Concrete, Aggregates, Fly-Ash, among others. In the third-quarter (Q3) to September 30, 2018, the cement maker berthed at the Nigerian Stock Exchange (NSE) with group revenue increasing to N234.3billion, from N223.6billion in Q3’ 2017, representing 4.8percent increase. The company said its positive performance in Q3’18 was mainly driven by strong volume growth in Nigeria and favourable pricing trends in South Africa. The group pre-tax loss of N14.36billion implies a decline of 1,413.2percent when compared to N1.094billion pre-tax profit reported in third-quarter (Q3) of 2017. Loss After Tax (LAT) stood at N10.3billion against N938million profit after tax in Q3’17, representing a decline of 1206percent. Earnings before t a x , d e p re c i a t i o n a n d amortization (EBITDA) for the third quarter increased significantly as a result of improved performance in South Africa while it was down for the nine-month
period due to South Africa’s performance in the first two quarters of 2018. “We continued to deliver strong margins in our Nigerian business as a result of our successful commercial strategies with improved product visibility and the fast tracking of the new route to market. Our energy efficiency plan translated in increased use of Alternative Fuel and Coal. “O u r S o u t h A f r i c a n operations delivered first positive recurring EBITDA and are focused on executing its turnaround plan,” said Michel Puchercos, CEO, Lafarge Africa Plc. He further stated that the company successfully commissioned a new grinding station in Ghana with a capacity of 600KT. Looking at Lafarge Africa’s recent financials, Vetiva research analysts classified the major drags to earnings under two headings: operational challenges, driven largely by weakness in South Africa operations; and financial challenges, driven by the banks high leverage and bloated finance charges. “Whilst the former is b e i ng t a ck l e d t h rou g h the turnaround plan and restructuring efforts, Lafarge plans to reduce its finance expenses by conducting a N90 billion Rights Issue, the proceeds of which would be used to pay off high-interest local currency debt, fund working capital needs and pay down $22 million of its related
party loans. “Meanwhile, the company also restructured the balance of the existing $315 million related party loans in order to reduce pressure on cash flow. Prior to this restructuring, the company was scheduled to pay off the full amount of the loan by November 28 (N113.4billion at N360/$)”, Vetiva said in its October 22 equity research to investors. The analysts further stated: “For context, Lafarge Africa cash balance was N17.5 billion as at September 2018, with the company having other short-term obligations (circa N10 billion Commercial Paper and N30 billion in bank
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Given Lafarge’s maturing short-term obligations, Vetiva analysts believe the Rights Issue is necessary for the going concern of the company and expect the paying down of local currency debt to support earnings, as they account for a large part of interest expense. That said, they do not see the Rights Issue as a silver bullet. While it lessens Lafarge Africa’s debt burden
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overdrafts) also maturing before the end of the year. Post-restructuring, the tenor of the $315 million loans have been lengthened to 2026, with a repayment moratorium in the first two years. Meanwhile, the repayment of the Commercial Paper and Overdraft will be funded from the Rights Issue proceeds. On the other hand, the cement producer has also set up a standby short-term financing facility worth $20million from their parent company, to support future working capital needs.” Given Lafarge’s maturing short-term obligations, Vetiva analysts believe the Rights Issue is necessary for the going concern of the company and expect the paying down of local currency debt to support earnings, as they account for a large part of interest expense. That said, they do not see the Rights Issue as a silver bullet. While it lessens Lafarge Africa’s debt burden, the analysts said “it would still leave a balance of circa N195 billion which the company would ultimately have to deal with, amidst a stillworrying level of US Dollar exposure. We await further details on the programme from management before including the issue in our model”. Lafarge Africa Plc has recorded net sales of N234 billion for the nine-month period and N72 billion for the third quarter of 2018. This is an increase of 5percent over 2017 both versus the quarter and the nine-month period. Going for ward, the company’s outlook for the cement market in Nigeria re ma i n s f avou rab l e i n Q4. In South Africa, it expects the execution of its turnaround plan will continue to yield positive results. All product lines are expected to contribute to the performance. “We believe the group will deliver its first profit in two years in 2019E, wherein we expect finance charges will be some way lower compared to 2018E. But that aside, the short-term outlook for both Nigeria and the South Africa cement markets is conservative from the view point of economic activities. “And while the ongoing restructuring/turnaround activities across the group appear to be yielding little results, the associated costs remain elevated, with continued negative pass-
through to margins and profitability”, said research analysts at Lagos-based Cordros Securities in their October 19 note to investors. Looking at the timeline provided by Lafarge Africa management on the Rights Issue (RI), debt restructuring, and FX risk, Cordros analysts said they expect to see the impact of the approved Rights Issue on both earnings and balance sheet from 2019E; adding “Both the substitution of expensive short-term debts with equity and the restructuring of US Dollar loans (from $308 million to $293 million, maturity extended to 7.5 years, and with 2-year moratorium on both interest and principal effective September 2018) should moderate finance cost. That said, we believe the outstanding US Dollar debt is underlined by FX risk in a possibly volatile 2019 environment”. Cordros sees strong stock price upside, for Lafarge Africa “but with a caution”. The analysts target price is N27.05, noting that the stock offers 29percent potential upside “and expected total return of 36percent after incorporating 2018E dividend yield of 7percent. However, we maintain HOLD rating. The group has consistently disappointed with its ability to grow revenue and maintain stable margin, amidst a highly leveraged balance sheet (with high FX risk).” “ Vo l u m e g r o w t h i n 2019; eyes on turnaround programme and Ghana : Economic activities do not appear likely to improve significantly in Nigeria and South Africa (SA) in 2019, from 2018. And we believe it was for this reason that LAFARGE’s management was cautionary about its cement demand growth expectation in both markets during the recent conference call. “Management however noted that the ongoing turnaround programmes will provide the group some room to improve on volume and close the gaps – which has existed in recent years – with the markets. Volume is also expected to gain support from Ghana – where management said the result from test exports from Nigeria was positive – with a target 80percent utilisation rate from the 670kmts grinding station billed to commence production next month,” Cordros Securities analysts further noted.
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BUSINESS DAY
Thursday 06 December 2018
Investor
Helping you to build wealth & make wise decisions
Stock Market Review
Stock investors lost over N290bn last week …will year-end ‘relief’ rally help? Iheanyi Nwachukwu
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nvestor in equities listed o n t h e Nig e r i a n Stock Exchange (NSE) who held their stocks till trading week to November 30 booked additional loss of about N294billion in the review period as sentiment remained weak on Custom Street. The Nig er ian Sto ck Exchange (NSE) AllShare Index (ASI) and Market Capitalisation depreciated last trading week by 2.54percent and closed at 30,874.17 points and N11.271 trillion respectively. The NSE ASI closed the preceding week to November 23 at 31,678.70points while the market capitalisation stood at N11.565trillion in the preceding week. All other indices finished lower last week with the exception of the NSE ASeM, NSE Insurance and NSE Consumer G oods Indices that finished higher by 0.09percent, 4.71percent and 0.08percent respectively. Share price movement (top advancers) The summary of price changes showed 25 equities appreciated in price during the review week ; lower than 30 in the preceding week. Forty-one (41) equities d e p re c i a t e d i n p r i c e, higher than 24 in the preceding week ; while 103 equities remained unchanged lower than 115 equities recorded in the preceding trading week. C o n t i n e n t a l Reinsurance Plc recorded the highest price gain from N1.50 to N2, up by 50kobo or 33.33percent; Beta Glass Plc followed from N62.10 to N68.30, up by N6.20 or 9.98percent; while Cutix Plc stock price increas e d from N1.66 to N1.82, up 16kobo or 9.64percent. Other gainers include:
GlaxoSmithKline Consumer Nigeria Plc which recorded an increase from N13.25 to N14.50, adding N1.25 or 9.43percent ; Mutual Benefits Assurance Plc rallied from 23kobo to 2 5 k o b o, u p 2 k o b o o r 8 . 7 0 p e rc e nt ; C A P P l c increased from N29.20 to N31.50, gaining N2.30 or 7.88percent; and P Z Cussons Nigeria Plc also advanced from N10.65 to N11.40, up 75kobo or 7.04kobo. A x a m a n s a r d Insurance Plc recorded 12kobo or 6.32percent gain last week from N1.90 to N2.02; followed by 1 1 P l c s t o ck p r i c e which increased from N165 to N175, gaining N10 or 6.06percent ; and Nigerian Aviation Handling Company Plc w h i c h s aw a ra l l y o f 17kobo or 4.96percent from N3.43 to N3.60. Top laggards The share price of Diamond Bank Plc declined most by 30kobo or 31.58percent last week from week open level o f 9 5 ko b o t o 6 5 ko b o. Prestige Assurance Plc followed after recording 24kobo or 30.38percent decline, from 79kobo to 55kobo. Unity Bank Plc stock price decreased
from 85kobo to 69kobo, down by 16kobo or 18.82percent. Associated Bus Company Plc was down by 4kobo or 12.90percent, from 31kobo to 27kobo. A.G. Leventis Nigeria Plc declined from 33kobo to 29kobo, down by 4kobo or 12.12percent; Veritas Kapital Assurance Plc stock price declined from week open level of 25kobo to 22kobo at the close of the review week, down
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This week, we expect to see some increased buying activities in the early part of the week following four days of losses in the previous week. However, we do not expect this to be sustained all through the week as the overall bearish sentiment, stoked by political uncertainty, is expected to weigh on market performance. Thus, we maintain our bearish outlook over the near-term
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by 3kobo or 12percent ; NEM Insurance Plc also dipped from N2.65 to N2.35, down by 30kobo or 11.32percent ; Seplat Petroleum Development Company Plc stock price lost N63.20 or 9.68percent of its week open price of N652.70 to close at N589.50. Law Union and Rock Insurance Plc stock price was down from 52kobo to 47kobo, losing 5kobo or 9.62p ercent ; while John Holt Plc stock price declined from 44kobo to 40kobo, after losing 4 ko b o o r 9 . 0 9 p e rc e nt of its week-open share price. Turnover (equities, ETPs, and bonds) In the review trading week ended November 30, 2018, the stock market recorded total turnover of 1.199 billion shares worth N14.277 billion in 15,841 deals as against 1.282 b i l l i o n s ha re s v a l u e d at N23.142 billion that e x c ha n g e d ha n d s t h e preceding trading week in 11,467 deals. The Financial Services Industry (measured by volume) led the activity chart with 963.315 million shares valued at N7.536 billion traded in 8,871 deals; thus contributing 80.38percent and
52.79percent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 83.001 million shares worth N4.213 billion in 2,802 deals. The third place was Industrial Goods Industry with a turnover of 60.782 million shares worth N1.976 billion in 1,639 deals. T ra d i ng i n t h e To p Three Equities namely Diamond Bank Plc, Access Bank Plc, and Universal Insurance Plc, (measured by volume) accounted for 512.535 m i l l i o n s h a re s w o r t h N1.367 billion in 1,437 deals, contributing 42.76percent and 9.57percent to the total equity turnover volume and value respectively. There was no trade recorded for Exchange Traded Products (ETPs) during the review week. However, 5,637units valued at N1.301 million were traded the preceding week in 5 deals. Also, total of 16,686 units of Federal Government Bonds valued at N16.442 million were traded last week in 10 deals compared with 3,032 units valued at N3.046 million traded preceding week in 16 deals.
Analysts’ views Most market analysts’ outlook for stock trading this week tilted toward mixed pattern which results from interplay of underlying weak market sentiment and cautious cher r y picking across beaten down value stocks. For instance, research analysts at Lagos-based United Capital Plc who said in line with their expectation of a yearend ‘relief ’ rally, “the d e p t h o f s e l l - o f f t hat we have seen in recent times underscores this fact. Yet, any potential upside may be capped by sentiments around political uncertainties ahead of 2019 elections.” F o r t h e analysts, investors’ sentiment remained underwhelming last week, saying. “NSEASI logged a 2.5percent weekon-week (w/w) decline its sharpest in November as the index closed the month on a bearish note (-4.9percent), bringing month-on-month (m/m) declines to the fifth consecutive month. Also, ma rke t c a p i t a l i s at i o n shed N293.7billion to settle at N11.3tr illion while year-to-date (YtD) return landed at minus 19.3percent.” Afrinvest research analysts in their December 3 note said their weekly sentiment indicator weakened to 0.6 points from 1.2 points recorded the preceding week. “This week, we expect to see some increased buying activities in the early part of the week following four days of losses in the previous week. However, we do not expect this to be sustaine d all through the week as the overall bearish sentiment, stoked by political uncertainty, is expected to weigh on m a r k e t p e r f o r m a n c e. Thus, we maintain our bearish outlook over the near-term”, Afrinvest research further noted.
Thursday 06 December 2018
C002D5556
Corporate Social Impact
BUSINESS DAY
35
Onuwa Lucky Joseph (08023314782) Editor.
Sheryl Sandberg ups her giving amidst pressure on Facebook
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heryl Sandberg, Chief Operating Officer of Facebook, is a very busy woman trying to balance the growth of the social media giant alongside the challenges arising therefrom. Recently, her company has been in the news for all the wrong reasons, with CEO Mark Zuckerberg appearing before the US House Energy and Commerce Committee for breach of trust between the company and its users. He’s also appeared before the European Parliament over the Cambridge Anaytica scandal and the spread of disinformation, alias fake news. Sheryl Sandberg is in lockstep with her boss trying to weather this particular storm but she’s also trying to be in the news for the right reasons, her giving predating the issues her company is contending with. After signing up to the Giving Pledge (started by Warren Buffet) in 2014, her first big giving was in 2015 when she gave $31million and till date she has given more than $281million so far. Her latest big give is $334,000 Facebook shares that is valued at more than $50.7million. She plans, according to Philanthropy.com, to donate another $50millon in cash to start a new foundation called toe Goldberg Sandberg Charitable Support Fund Sandberg is a known champion of female causes whose Lean In book published in 2013 was to almost equal parts wide acclaim and trenchant criticism. All she set out to do however was empower women to think more highly of themselves and not stay passive in the office space. While many agreed with her, others said she could stake out her position because of her white privilege and a solid background that includes Harvard. The important thing is that
under the aegis of the Empress Njamah Foundation. Recently, on her birthday, she did the heartwarming job of gifting 20 wheelchairs to disabled people who couldn’t afford one for themselves while also distributing foodstuff, clothes and books to disadvantaged children. This is commendable, and the hope is that Nollywood will share some of its glamour with the needy.
she is putting her money where her passion is and helping free many from their financial and emotional shackles. After Thanksgiving Comes Giving Tuesday The controversy surrounding the origins of Black Friday is still swirling, with some saying it was from the slavery era, even though Snopes.com (the self-styled debunker of urban myths online) has, yes, debunked the theory, insisting that the “day’s origins have nothing to do with slavery”. The portal claims that the term was coined by the Philadelphia Police which hated the heavy traffic its men and women had to contend with the Friday after Thanksgiving. In naming it Black Friday, the hope was that it would discourage shoppers from shopping. Didn’t work! What’s more important for our purpose here is the Tuesday after Thanksgiving. Okay, this is all American, we know, but as they say, as America
goes, so goes the world. In this particular instance at least for Giving Tuesday. The date is being domesticated in different countries of the world to ensure an effusive outflow of giving to the less privileged worldwide. Hasn’t quite caught on in Nigeria, at least not like Black Friday has. But we expect that from next year a lot more people would be aware and ready with their gifts, not a few of which would have been sourced from the massive discounted sales of Black Friday. So the Tuesday after America does its Thanksgiving, the rest of us join them
to some giving to those who need some getting. Trust us to notify you on these pages. Empress Njamah Rolls Out The Wheelchairs Empress Njamah used to be the epitome of controversy, the height of which was back when she was in a relationship with Timaya, another controversy supremo. It would seem though that she now has turned a new leaf, preferring instead to give of her resources and time to those not as fortunate as her. To this end, she frequents orphanages, hospitals,
War on Terror: Our Gallant Dead Soldiers Shouldn’t Go Nameless Nov 23, 2018, Boko Haram unleashed terror on Nigerian troops killing dozens of them. At least that was what soldiers who survived the attack said. It is a shame that after all these years, Boko Haram is still taking pot shots at Nigerian soldiers, killing and injuring hundreds of them in the process. The ostensible reason Col Sambo Dasuki is still in detention is government’s claim that under the immediate past government of Goodluck Jonathan, he masterminded the diversion of money meant for arms to other sources thereby leaving our soldiers with antiquated weapons against the 21st century armament of the terrorist group. Today, the soldiers are still complaining about antiquated weapons. This, after 1billion dollars purportedly drawn down for the purchase of weapons! Where are the weapons? But even worse, how come when our soldiers die in battle, their identities, like their corpses remain shrouded? What is so wrong with publishing the names of our gallant dead soldiers? Enough of this Unknown Soldier business. The dead men have families, have colleagues and friends. It’s only fitting that they be properly identified and given heroes burials. They deserve no less.
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BUSINESS DAY
Thursday 06 December 2018
Corporate Social Impact
Old Students Associations Intervention UNN Mass Comm Alumni plan befitting new building
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t takes a humongous lot to get people pulling together. It takes nothing short of superhuman effort to pull it off. There’s a sense in which despite a mental acknowledgment of ‘common destiny’, people are still apt to pull in different directions. Social scientists are as yet unsuccessful in their attempt to unravel the reason for this. Of course, there are motivation theories posited in an attempt to provide some illumination. But, to use a big word, the phenomenon still remains a conundrum. Anyone who’s worked with a group appreciates how this push/pull dynamic can obviate the loftiest of aspirations. So here we have these Old Students (some of them literally creaking old, almost) of the Mass Communication Department of the University of Nigeria, Nsukka, coming together for the purpose of building their alma mater a befitting new departmental building. What they currently have has been standing since the 60s when UNN was founded as the first indigenous Nigerian university. (This is a fact of history, by the way, that UI students would do well not to dispute.…) The one-storey Jackson Building, named after John Payne Jackson, trail blazing founder of the Lagos Weekly Record in 1891, has the distinction of being the first department of Mass Communication in Nigeria. At the time it started in 1961, the department was primarily a school of journalism which prepared courageous men and women for the business of reporting the truth and nothing but the truth vis-à-vis an inchoate nation that had just shrugged off the shackles of colonialism and needed a vigilant 4th estate to keep its government guided. But times have changed, and Mass Communication while still about Journalism, is increasingly more about Advertising, Public Relations, Government Relations, Online Publications, and an ever evolving plethora of communication channels that interact with the mass of humanity. The alumni agree that there’s need for a befitting new building to be known as the Jackson Institute of Communication and Media. But getting individuals to move to the beat is where the problem is. This writer just so happens to be privy to the effort in view of his status as an Old Boy. The WhatsApp Platform created to forge bonding and drive the idea is more popular amongst members as a channel for alternately waxing nostalgic about the good old days and waxing indignant about their nation’s fortunes or misfortunes. By and large, there’s an overwhelming refusal to confront the pressing issue of the day. Is that in view of the suspicion that the effort might require, quoting Winston Churchill, “blood, toil, tears and sweat”? Every once in a while, someone in the group makes the herculean effort of trying to steer folks back to the straight and narrow, away from the other preoccupations of the day. A few ayes are heard, but just as quickly, the nays voice their nay with a burst of clutter that comes off as spiritual, motivational, international, intellectual, political; anything that’s not the prime subject that should engage the Platform’s imagination and task its ingenuity. The plan is to do something appropriate for this acknowledged primus inter pares that will guarantee that its bragging rights are not mere high fidelity empty barrels output. With the new structure in place, scholars would be compelled to come from everywhere to drink and refresh from this free flowing fountain of mass communication knowledge. A certain indefatigable Rod Simeon (Simeon Idaewor) is the acknowledged moving spirit for the project while Mashud (Mash) Abubakar can rightly be regarded as the Deputy Moving
Spirit. The coincidence is that they are both from Northern Edo State, but they are the ones pushing their Ibo, Yoruba, Hausa, and other minorities siblings towards achieving on the desired aspiration of the collective. The current plan is to raise N1billion. This is up from an initial N600m estimate. As we know, however, the figures will change because the building will change, the requirements will change and a whole lot more will change. Whatever changes, know that there is a growing determination to pull off the multi-level building which is proposed to house, amongst others: • Centre for Digital and Mobile Communication • Centre for Conflict and Policy Communication Management • Centre for Technology and Media Convergence • Centre for Policy and Development Communication • Centre for Broadcasting • Centre for Branding and IMC I cannot now recall – yours sincerely being one of the ‘floaters’ on the Platform – if there’s a definite timeline for breaking ground. But the moving spirits are doing all they can to ensure that everyone gets on the wagon in quick time. So far, N6million is in the kitty, courtesy of a leadership-by-example input by Prof Pat Utomi and others. Hopefully, some of the big guns will soon start shooting as everyone wakes up to the necessity of quickly resolving this need. The Issues with Old Students Associations Trying To Give Back The whole point of this write up is that a lot of alumni association in Nigeria are in the same situation, their school not being where it was when they were there as students. They are acutely aware of that, and they know that unless they step up to the plate nothing will change. With a measly 7% budget allocation to education in the 2018 budget, it is clear that the rot can only get worse. All the future strikes of ASUU will not move a needle unless other interested stakeholders step in to do the needful. However, even as they move these noble ideas, they are hamstrung by a number of factors. Today’s Pervasive Poverty: It is the experience of many old students that though the spirit is willing, the wallet is weak. A lot of middle age guys as well as those entering the senior citizen zone have far too much on their plate to take care of. School fees, House rent, Office rent, Support for extended family members, etc. This situation makes for lots of ‘grammar’ and an insubstantial little by way of actual contribution. Self-Centredness: This, unlike the first point, is a condition exhibited by those whose wallets may be bulging but whose spirits are shriveled. They are the me, me, me people. Some of them have no plans for anyone other than themselves and their immediate families. In any case, their kids are unlikely to attend the school. So why bother?
Lack of Leadership: Endeavours such as highlighted here are essentially voluntary. Moral sanctions, yes, but nothing stronger. It behoves then the leadership of such associations, which, by the way, cuts across classes, calendar years and ages, to have persuasive abilities to draw folks out of themselves and away from the sidelines into the mainstream. It won’t work for everybody. But effective leadership will draw in more and more people until a critical mass can be achieved that moves ahead with potent determination. Managing Frail Egos: Again, this is a job of leadership but also one of collective understanding. Some old students feel like they’ve over-achieved while some are acutely aware of their seeming lack of achievement. The ability to carry both types along, as well as the vast majority who still see themselves as boys and girls who just happen to have more responsibility now is an important determinant of success. Inability to Ensure Sustainability: Donations are not the hardest things to do. There’s always some well-heeled guy with a good heart who has no problem with say, writing a cheque for, say a borehole to their old school in view of the school’s challenge with water. A few months later the borehole goes bad and the students are back to square one. The same can be said for equipping a science laboratory, the school library, sports department, etc. The solution is to ensure that there’s a sustainability mechanism built into the project. And for this to happen, the Old Students must stay involved and have staff give account of the investment. This is easier said than done, of course, but it is doable with the right amount of commitment. Proven Strategies for Achieving On Alumni Objectives For the Jackson Building, as it is for many other Old Students Projects, levies are the first base approach. It’s akin to sweat equity in a business setup. It may not come to much but it signifies commitment of the ideator. Individuals need show that commitment by contributing the amounts allotted them by the executive. Coordinators of the Jackson Building initiative have assigned different amounts to different class combines, with my own class combine (86-90 set) assigned 100k per old student. Old Students Influence: Lots of schools have their students well placed in different organisations. These old students can seek ways of legitimate support from their corporations for their alma mater. It might be big or not so big, but it would help ensure project progress. Politicians can be approached to support. As expected, they are more than happy for platforms that provide them opportunities for burnishing their pro people and pro development credentials. But their promises usually don’t amount to much in real terms. So Old Students must be careful to not spend too much organizing such events only to end up losing every kobo invested. International Funding can come from es-
tablished Foundations like the Bill and Melinda Gates Foundation, Rockefeller, Ford, W.K. Kellogg Foundation Trust, etc. Some of these Foundations have never really invested in Africa and can be persuaded to do so. Another appealing strategy is to cascade the need to local family or corporate foundations which have moneys set aside for projects like this. Of course, the project must align with the core objectives and catchment area requirements of the Foundation for them to be interested. So, some research will help in determining who to approach for support. Our local corporate foundations need to do more in this regard. Let it be said that a lot of the good being done in our country is from within rather than the cap in hand approach handouts that sometimes leave us poorer, all things considered. Free lunch from Western Foundations at times comes with adverse ideological preachments that must be ingested alongside the main course. The more good we can do for ourselves, therefore, the more we can retain the values that are important to us as a people. The Big Guns must carry others along. Old schoolmates who, by all available indices, are seen to be successful must do their fair share. Which means they must out-give others. Now, don’t forget that there are also some oldsters in the shadows whose success is just not common knowledge. They may not make the news, but like we’d say here, they are super comfortable. Their mates who are privy to their good fortune must endeavour to draw them out and ensure they are part of project. Patience with the process is also very important. We won’t all catch the fire at the same time. Some colleagues are still, for all kinds of reasons, wet wood that require a bit more coaxing to get blazing. Don’t tell them to go to blazes! They still will catch fire anyhow and might end up burning brighter than others. We must commit money: Whether we think of ourselves as doing well or not is sometimes relative. The important thing is for people with the same aspiration to pull together, to show commitment. And with commitment, money is where the rubber meets the road. No one is committed who does not commit his/her money to an enterprise they consider important. We walk our talk by committing money. The Big Boys and Big Girls Must Lead the Way The Jackson Building initiative is fortunate to have blazing big guns who are well and solidly behind the idea though not everyone has come round to it yet. The names everyone is counting on is e-v-e-r-y-o-n-e, but especially the likes of Prince Tony Momoh, Dr. Josef Bel Molokwu, Prof. Pat Utomi, Osaro Isokpan, Malam Garba Shehu, Yemi Emiko, Kingsley Osadolor, Paul Arinze, Prof Nnanyelugo Okoro, Emeka Oparah, Prof. Chinedu Afigbo, Paul Nwabuikwu, Amb. Kunle Bamgbose, Andy Amenechi, Nick Idoko, Nick Dazang, Michael Asuquo, Kingsley Kubeyinje, Charles Monwuba, Samuel Ajibola, Chido Nwakanma, Emeka Odo, Paul Ugoagwu, Udeme Nana, Vivian Ikem, Ikem Okuhu, Gbenga Adefaye, Felix Ofulue, Marcel Mbamalu, Ozemoya Okordion, Emma Esinnah, Susan Eshiett, Mike Asuquo, Francis Ewherido, Mideno Bayagbon and a whole lot of others big guns in the shadows ‘doing well’ but not necessarily in the arenas that keep them visible to all. For those old Jacksonites who are hearing about this initiative for the first time, they would do well to get on board. And if you are an old student of any school reading this, now you understand why you are a critical factor in ensuring that the glory days of your old school do not end with your time there. There are better days ahead. (If you are involved with any initiative for your old school, feel free to reach us on 08023314782 to talk about it.)
BUSINESS DAY
Thursday 06 December 2018
Leadership
37
SHAPING PEOPLE INTO A TEAM
Making cryptocurrency more environmentally MARC BLINDER
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lockchain has the power to change our world for the better in so many ways. It can provide unbanked people with digital wallets, prevent fraud and replace outdated systems with more efficient ones. But we still need this new and improved world to be one that we want to live in. The largest cryptocurrencies — Bitcoin, Bitcoin Cash and Ethereum — require vast amounts of energy consumption to function. Last year, blockchain used more power than 159 individual nations, including Uruguay, Nigeria and Ireland. Unsurprisingly, this is creating a huge environmental problem that poses a threat to the Paris climate-change accord. It’s a brutal, if unintended, consequence for such a promising technology, and “mining” is at the heart of the problem. When Bitcoin was first conceived nearly a decade ago, it was a niche fascination for a few hundred hobbyists, or “miners.” Because bitcoin has no bank to regulate it, miners used their computers to verify transactions by solving cryptographic problems, similar to complex math problems. Then they combined the verified transactions into “blocks” and added them to the blockchain (a public record of all the transactions) to document them — all this in return for a small sum of bitcoin. But where a single Bitcoin once sold for less than a penny on the open market, it now sells for few thousand dollars, and around 200,000 Bitcoin transactions occur every day. With these numbers increasing, so has the incentive to create cryptocurrency “mines” — server farms now spread across the world, often massive. Imagine the amount of energy consumed by 25,000 machines calculating math problems 24 hours a day. Beyond the environmental concerns, this inefficiency threatens blockchain as a meaningful platform for enterprise. The high energy costs are baked into the system, and, because the cost of running the network is passed on in transaction fees, users of these networks end up
paying for them. Initially, companies that use bitcoin may not see the financial consequences, but as they scale, the costs could become fatal. The good news: there are a variety of alternatives available that can help organizations cut massive energy costs. Right now, they aren’t being adopted quickly enough. Companies who want to keep their head above water — along with everyone else’s — need to educate themselves. Here are two areas that are a good place to start. GREEN ENERGY BLOCKCHAIN MINING: An immediate fix is mining with solar power and other green energy sources. Each day, Texas alone receives more solar power than we need to replace every nonsolar power plant in the world. There are numerous commercial services for powering crypto mining on server farms that only use clean, renewable energy. Genesis Mining, for instance, enables mining for Bitcoin and Ethereum in the cloud. The Iceland-based company uses 100% renewable energy and is now among the largest miners in the world. We need to make green energy
appealing for future blockchains, too. Every company that uses blockchain also defines its own system for miner compensation. New blockchains could easily offer miners better incentives, like more cryptocurrency, for using green energy — eventually forcing out polluting miners. They could also require all miners to prove that they use green energy and deny payment to those who don’t. ENERGY EFFICIENT BLOCKCHAIN SYSTEMS: While Bitcoin, Bitcoin Cash and Ethereum all depend on energy-inefficient cryptographic problem-solving known as “proof of work” to operate, many newer blockchains use “proof of stake,” or PoS, systems that rely on market incentives. Server owners on PoS systems are called “validators,” not “miners.” They put down a deposit, or “stake” a large amount of cryptocurrency, in exchange for the right to add blocks to the blockchain. In proof-of-work systems, miners compete with one another to see who can problem-solve the fastest in exchange for a reward, taking up a large amount of energy. But in PoS systems, validators are cho-
sen by an algorithm that takes their “stake” into account. Removing the element of competition saves energy and allows each machine in a PoS system to work on one problem at a time, as opposed to a proof-ofwork system, in which a plethora of machines are rushing to solve the same problem. Additionally, if a validator fails to behave honestly, they may be removed from the network — which helps keep PoS systems accurate. Particularly promising is the “delegated proof of stake,” or DPoS, system, which operates somewhat like a representative democracy. In DPoS systems, everyone who has cryptocurrency tokens can vote on which servers become block producers and manage the blockchain as a whole. However, there is one downside. DPoS is somewhat less censorship resistant than proof-ofwork systems. Because it has only 21 block producers, in theory the network could be brought to a stop by simultaneous subpoenas or ceaseand-desist orders, making it more vulnerable to the thousands upon thousands of nodes on Ethereum. But DPoS has proved to be much faster at processing transactions
c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate
while using less energy, and that’s a trade-off we in the industry should be willing to make. Among the largest cryptocurrencies, Ethereum is already working on a transition to proof of stake, and we should take more collective action to hasten this movement. Developers need to think hard before creating new proof-of-work blockchains because the more successful they become, the worse ecological impact they may have. Imagine if car companies had been wise enough, several decades ago, to come together and set emission standards for themselves. It would have helped cultivate a healthier planet — and pre-empted billions of dollars in costs when those standards were finally imposed on them. The blockchain industry is now at a similar inflection point. The question is whether we’ll be wiser than the world-changing industries that came before us.
Marc Blinder is the chief product officer of AIKON.
38 BUSINESS DAY NEWS
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Apapa gridlock set to ease as work on Ijora Bridge... Continued from page 1
ists have been passing through pains
in that axis, but all we are doing is for them to have smooth driving experience”, he noted. The Apapa bridge has been under repairs for the last three months causing significant pain and stress for motorists going to Apapa, Nigeria’s premier port city where the country’s two busiest ports with about 75 percent of the country’s import and export activities take place. The site worker explained that it took so long to complete the rehabilitation work on the bridge because “the main work that was done included the expansion 10 joints and also the work done on bridge bearing to stop it from shaking” He told BusinessDay that “if all the bridge needed was just asphalt paving, it would have taken about
three days to complete. But because of the expansion joints and a lot of bearing that were worked on, the work had to take that long.” This position seem to contradict what the Federal Controller had earlier told BusinessDay that the delay in the rehabilitation of the bridge was as a result of the difficulty in the procurement of the materials which were to be imported. Kuti had assured that “as soon as the materials are shipped into the country, work would commence in earnest”. The Ijora Bridge is one of the only two major routes to Apapa ports. The other is Apapa-Oshodi Expressway. This explains why Apapa as a port city is not only congested but also suffocating businesses and residents many of whom are now seeking alternative locations.
The closure of the bridge escalated the traffic gridlock into Apapa and led to a significant increase in the time it takes to take goods into and out of Apapa and also rise in the cost. BusinessDay findings show that transporting a 40-footer container from either the Apapa or Tin Can Island Ports to Onitsha increased to about N1.3 million, up from between N320,000 and N340,000 before the congestion in Apapa. Moving the same container from Lagos to Shagamu which before cost N120,000 to N150,000, has risen to between N750,000 to N800,000. For an importer to move his goods from Lagos to Ilorin now costs him between N860,000 and N900,000, up from N220,000 to N260,000, just as transportation of same size container to Abuja costs N1.3 million to N1.4 million, up from N420,000. All these increases are putting
Atiku Abubakar, presidential candidate of the People’s Democratic Party (PDP) and former Vice President of Nigeria, at the venue of North Central zonal rally for the 2019 presidential campaign, with Senate president, Bukola Saraki (immediate left); chairman of the PDP, Uche Secondus, and Governor Abdulfatah Ahmed of Kwara State, yesterday in Ilorin.
him by the National Assembly or communicate the withholding
of his assent. Analysts have expressed concern over the country’s inability to have an amended Electoral Act signed into law, less than three months to the polls. It would be recalled that the National Assembly had transmitted the fourth version of the Electoral Act (Amendment) Bill to the President on November 7, 2018. The amendment which seeks to improve the quality of elections in Nigeria, has been going back and forth between the Legislature and the Executive arm of government, with the President rejecting the alterations done by the National Assembly on three previous occasions. Some of the highlights of the bill include legalization of smart card reader for accreditation of voters, electronic transmission of results, stiffer sanctions for erring INEC officials, media houses among others. Already, 75 political parties have threatened to boycott the 2019 election if President Buhari fails to sign the bill into law. The political parties under the aegis of Inter Party Advisory Council (IPAC), are of the opinion that the Bill will ensure credible elections if signed into law by the President. The parties that attended the IPAC meeting last week where the resolution was reached include the Action Peoples Party (APP), Action Alliance (AA), Alliance for Democracy (AD), Progressive Peoples Party (PPP), Mass Action Joint Alliance (MAJA), Better Nigeria Political
Users of the alternative ApapaOshodi Expressway have described it as a major “highway to hell” due to the number of trucks that have turned the main road to their parking lots. A Trailer Park being built to take away some of the trucks has become a perpetual construction site where the contractor and his sleeping workers have been stranded for close to eight years now. A source told BusinessDay that trailer park has been handed over to the Nigerian Ports Authority (NPA) to manage but this could not be confirmed as efforts to get a reaction from the ports authority did not yield any fruit. “I am not aware of any such move”,a source close to the authority’s corporate communications unit, who did not want to be named, told BusinessDay on phone, assuring he would revert, but did not as at press time. However, Hadiza Bala-Usman, managing director NPA had said the authority was perfecting arrangement to invite interested private sector operators to bid for the management of selected truck parks in partnership with the ports authority.
Why ETFs are unattractive for PFAs... Continued from page 2
INEC may conduct 2019 elections with 2010... Continued from page 1
pressure on businesses. The bad state of the expressway is also increasing the cost of doing business and almost crippling businesses. “We now have to give our drivers extra 100 litres of diesel to move from Amuwo Odofin to Apapa to pick a container. A journey that used to take one hour before now can take a minimum of three days and then you have to wait for days to get your container,” a tanker driver who identified himself as Hakeem explained to BusinessDay. The alternative Apapa-Oshodi Expressway is a 27.5Km road that originates from Apapa Port and terminates at Oworonsoki junction and was constructed between 1975-1978 but has not received any major rehabilitation work in 40 years whereas experts say roads are usually designed for about 20-year life span. A former president of Association of Consulting Engineers of Nigeria (ACEN) who pleaded anonymity described the expressway as “shame of a nation”, lamenting that the federal government has allowed the road to degenerate to a level where it wearsout its users with long hours in traffic.
Thursday 06 December 2018
Party (BNPP), All Grand Alliance Party (AGAP), Coalition for Change (C4C) Alliance for a United Nigeria (AUN), New Generation Party of Nigeria (NGP), People for Democratic Change (PDC), Restoration Party of Nigeria (RP), Young Democratic Party (YDP) among others. But a ranking senator told BusinessDay on Wednesday that the President is not at ease with the legalization of smart card readers and electronic transmission of results to checkmate rigging. The PDP lawmaker submitted that having benefitted from a ‘faulty process’ that brought in President Buhari in 2015 where INEC ‘disenfranchised’ people in the South by using card reader while adopting incident forms in the North which recorded massive votes for him, the President would prefer the status quo to be maintained in the 2019 election. “The President is not comfortable with the provisions of the bill that legalised the use of card reader for accreditation as well as electronic transmission of results from Ward to Collation Centre. He prefers the analogue accreditation and results transmission which are subject to manipulation,” the lawmaker who spoke on condition of anonymity, said. He argued that refusal of the President to assent to the bill would adversely affect the capacity of the electoral body to conduct transparent and credible polls. However, it appears the apex legislative chamber is already divided along Pro-Saraki and Pro-Buhari supporters on the matter. Investigations revealed that while
PDP senators belong to the ProSaraki camp, Pro-Buhari lawmakers are majorly from the APC. Also, most Pro-Saraki senators are in the forefront of those urging the President to sign the bill into law, while their APC counterparts think otherwise. Just recently, the Senate Majority Leader, Ahmad Lawan had said President Buhari would not be stampeded in signing the bill. The APC lawmaker submitted that even without the assent of the President to the 2018 Electoral Act (Amendment) Bill, the amended 2010 Electoral Act was in perfect order to guide the nation have a more transparent election in 2019. Dismissing calls on the president to sign the bill, he urged him to take his time and scrutinise what was transmitted to him before taking a decision on whether to sign or withhold assent to the proposed legislation. “The President is studying this bill, it is not like you will send it to him and he will immediately sign. This is a sign that he is really interested in what we sent back to him. It is for him and his advisers to read through line by line and see how best the electoral process can be enhanced. “So, I don’t think we have run out of time. In fact I think we should encourage the president and those helping him to complete going through the bill before he signs. What is the problem? We still have the 2006 Electoral Act as amended (in 2010) that we used in 2015 for an election that was adjudged to be free, fair and an improved process. We don’t necessarily put so much pressure and unneeded criticism of the president when he is yet to complete his analysis of what has been sent to him. He needs to take his time.”
innovation driven by value creation. Sulaiman Adedokun, managing director, Meristem Wealth Management Limited said there should be an industry wide platform for distribution, stating that this will help achieve economies of scale and reduced cost. Besides, he said the driver of ETFs should be returns on investment, which will require that there is a rebalance in index for proper spread. “To develop ETF, means developing an index that mirrors strategy and philosophy, beyond returns on investment to enable it attract required interest,” Adedokun said. Shuaib Audu, executive director, Stanbic IBTC asset management said there is need to create market framework to help drive ETF, calling for regulatory framework to make EFF open to insurance companies and PFAs. He also suggested that securitized lending should be extended to ETFs,
to ignite activities in that space. Dayo Obisan, managing director, Greenwich Asset Management who agreed with others on the need for investor education, emphasized on the need to create products that meet the needs of investors. Obisan who is also the president of Fund Managers Association of Nigeria identified the need for low cost products. Ndako Minjidad, head investment & research at Lotus Capital in his remark said investor education should take a different perspective, if possible the message should be passed in local languages. He also said that investor education should be independent, calling on the regulator to take up the role and drive the awareness about ETFs. “There should be sponsored researches, more conferences and strategic engagement with institutional investors, all of these he said were critical to deepening penetration,” Minjidad stated.
Shareholders fear N60bn SME fund may... Continued from page 2
our economy.” “The CBN recognises that the greatest challenge confronting the MSMES and local farmers is access to credit, and that to unlock the growth potentials in our country; these group must access funding seamlessly”, Emefiele said. Sources in the banking sector now allege that the CBN plans to transfer N16 billion from the AGSMIES fund to the federal government’s TraderMoni scheme. But shareholders are not comfortable with the move. The Trader-Moni scheme has been described as sophisticated vote buying by the opposition Peoples Democratic Party (PDP). “We are appealing to CBN not to divert the money banks contributed for the SMEs. Such thing can’t happen abroad. That money must remain there for the SMEs. We need SMEs to create jobs. Government doesn’t create jobs and we need to grow the SMEs to fill that gap”, Boniface Okezie, national coordinator, Progressive Shareholders Association of Nigeria (PSAN) told BusinessDay on phone. Okezie noted that by accepting to
contribute five percent of their Profit After Tax which shareholders would have gotten in form of dividend, “banks have madesacrificesalready,andtheyshould be allowed to grow the SMEs. Whether politically motivated or not, the money must not be touched,” he said. “Banks have made such savings to grow the SMEs. The money must not be diverted for any reason by CBN. CBN must account for every bank shareholder’s money collected for this purpose. We cannot ignore possible pressure from the politicians to access the money and spend this season for votes but CBN must resist such pressure,” another shareholder said on phone last night. Trader Moni was launched in partnership with the Bank of Industry (BoI) in order to enlarge government’s “financial inclusion agenda down to the grassroots.” As political campaigns garner momentum, Vice President Yemi Osinbajo has been active lately in distributing Trader Moni which is designed to help petty traders expand their trade through the provision of collateral free loans of N10,000. Under ‘Trader Moni’, traders don’t need any documents or property to collect N10,000 loan from the federal government.
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APC names campaign EFInA to unveil bi-annual council today flagship financial inclusion data ... as axe dangles over Amaechi JAMES KWEN, Abuja
T L-R: Lead Auditor, DQS Management Nigeria Limited, Lawrence Ogudu, presenting to the executive director, Business Development Directorate, Nike Bajomo, and chief executive, Eric Fajemisin, both of Stanbic IBTC Pension Managers Limited, with the ISO 9001:2015 Certification at Stanbic IBTC Wealth House in Lagos.
Investors on NSE lost N581bn in November ENDURANCE OKAFOR with agency report
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arket capitalisation of Nigerian Stock Exchange (NSE) was down monthon-month in November by 4.9 percent, meaning the net worth of investors on the nation’s bourse dropped in the period. Sell-off pressure resulting from the uncertainties around the forth coming 2019 election coupled with the Yuletide celebrations is said to have slowed NSE market cap to N11.271 trillion in November 2018 from N11.852 trillion in October. The NSE All-Share Index shed 1,592.1 points from its month opening of 32,466.27 to a close at 30,874.17, resulting from losses posted during the review month. Analysis on the price
activity revealed that Diamond Bank, Eterna Oil, Ikeja Hotel, Lafarge Africa, Niger Insurance, C & I Leasing, Union Diagnostic, NEM Insurance, and AG Leventis were the top losers in the period. Diamond Bank dropped by 53.24 percent to close at 65k compared to N1.39 opening price, this made the stock the worst performing stock in percentage terms. Eterna Oil dropped 30.58 percent, Cement Company of Northern Nigeria shed 27.86 percent, while Ikeja Hotel, Lafarge Africa, Niger Insurance, C & I Leasing, Union Diagnostic, NEM Insurance and AG Leventis, all reported a drop in their various stocks. On the other hand, Continental Reinsurance, GSK, MC Nicholas, May & Baker, CAP, Beta Glass, NAHCO, Nestle, Presco and AXA Mansard Insur-
ance were the top gainers in the review month. Continental Reinsurance was the best performing stock in percentage terms; it grew by 35.14 percent to close at N2 per share on the strength of its expansion drive and improvement in earnings. GSK followed in line with 17.89 percent to close at N14.50, while MC Nicholas was up 14.68 percent to close at 47k per share. May & Baker, CAP, Beta Glass, NAHCO, Nestle, Presco and AXA Mansard Insurance, made the list of top gainers, as their various stock were up in the review month. Meanwhile, the Nigerian Stock Exchange All Share Index closed yesterday up by 0.47 percent. Major gainers are Veritas Kapital Assurance and Diamond Bank, while losers are CCNN and Trans-
he All Progressives Congress, APC, would today name a Presidential Campaign Council to anchor the re-election of President Muhammadu Buhari. The campaign council, BusinessDay learnt, is the main agenda of the Wednesday prolonged meeting of the National Working Committee, NWC of APC. Though the National Chairman of APC, Adams Oshiomhole who presided over the meeting and APC National Publicity Secretary, Lanrie Issa-Onilu did not address the press at the end of the meeting, a reliable source privy to the meeting said, the NWC discussed extensively on the issue of constituting a Campaign Council. According to the source, “tomorrow they will announce the campaign council. That was the main thing that made the meeting so long. After then campaign will now start fully. The council has to be formed before Buhari returns so that when he returned campaign will immediately kick off”. The source who refused to name those likely to be members of the Campaign Council, however, affirmed that the present Director General of the Buhari Campaign Organisation, Rotimi Amaechi, is not going to lead the campaign because of reservations raised by some top APC leaders. Recall that Amaechi anchored the 2015 victorious election of Buhari and was recently reappointed by the President as the Director General of his Campaign Organisation for the 2019 general election.
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nhancing Financial Innovation & Access (EFInA) has announced that the Access To Finance (A2F) 2018 Survey data is ready and will be disseminated on December 11, 2018, in Lagos. EFInA’s biannual flagship A2F Survey provides credible information on the state of financial inclusion in Nigeria by mapping the access to and demand for financial services in Nigeria. The A2F is a nationwide survey, which has been conducted by EFInA for 10 years. Previous surveys were held in 2008, 2010, 2012, 2014 and 2016. EFInA’s board chair, Segun Akerele, in providing some background to the event, says the survey is a nationally representative sample of all Nigerian adults aged 18 years and above conducted across all 36 states and the FCT through administered questionnaires in English, Hausa, Yoruba, Igbo and Pidgin English. He continues that the findings from the survey highlight the state of access to financial services in Nigeria and also sets out the opportunities to extend financial services to the under banked and low income segments in the country. The main objective of the Survey is to measure, benchmark, and profile levels of access to financial services by all Nigerian adults. The A2F Survey also does the following: Establish credible benchmarks and indicators of financial services penetration in Nigeria; Document usage of financial products across both formal and informal sectors from an urban and rural perspective; Provide insights into regulatory and market obstacles to growth and innovation in the financial sector.
Others are, Identify the financial needs of the adult population and thereby give service providers the opportunity to develop innovative products to serve them; Improve understanding of the use of and demand for financial services in Nigeria; Provide credible data that highlight opportunities for policy reform and support evidence-based financial inclusion policies and Monitor the potential impact of new financial sector policies on enhancing access to finance. Financial inclusion means providing individuals and businesses access to useful and affordable financial products and services that meet their needs and are delivered in a responsible and sustainable way. Financial inclusion aids inclusive growth, economic development, and financial deepening. More practically, it can increase poor people’s access to financial services, reducing poverty and lowering income inequality. EFInA’s A2F Survey provides a strong established framework to measure levels of access to and usage of financial services in Nigeria. It tracks progress, assesses impact, identifies challenges, and suggests policy direction that provides an enabling environment for financial inclusion. The EFInA A2F Survey was leveraged heavily for the National Financial Inclusion Strategy in 2012 and to develop targets for financial inclusion by 2020 – which is to reduce financial exclusion to 20% in 2020. The purpose of defining a Financial Inclusion (FI) strategy for Nigeria is to ensure that a clear agenda is set for increasing both access to and use of financial services within the defined timeline, i.e. by 2020.
Anambra proposes N157.1bn for 2019 budget Airfreight marks modest growth in October, up 3.1% EMMANUEL NDUKUBA
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overnor Willie Obiano of Anambra State has presented a budget of N157.1 billion for the 2019 fiscal year, titled ‘Budget for sustained economic growth and youth empowerment’ to the Anambra State House of Assembly. The budget is against N166.9 billion presented in the 2018 fiscal year, which represented a 44 percent increase on the 2017 budget The year under review was a milestone for the state in the education sector with five school girls from Regina Pacis Model Secondary, Onitsha, taking the world by storm when they swept aside advanced countries like US, China, Spain, Turkey and Uzbekistan to win
the gold medal at the World Technovation Challenge in San Francisco, USA. Amala Ezenwa, a primary 4 head teacher from Awada, won the overall best school administrator in Nigeria in 2018, while the state government demonstrated a great capacity to manage crisis this year when torrential flooding submerged a large portion of Anambra North. Governor Obiano said the government had maintained a firm handling of the security situation of the state with a donation of 40 patrol trucks to security agencies and 50 motorcycles to the special motorbike squad to mop up petty criminals. He said the state had continued to implement the economic stimulus package, as agriculture had remained a major pillar of his admin-
istration, adding that major performance indicators point to a positive growth in the 2018 planting season. He said the proposed 2019 budget was earmarked with 41.3 percent as recurrent expenditure and 58.7 percent for capital expenditure. The governor said the draft estimates for 2019 clearly demonstrated his administration’s determination to continue delivering good governance and purposeful leadership to the people. He said the highlights of the sectoral capital plans of continued intervention on road works and infrastructure estimated N22.4 billion of which construction of new roads would gulp N20.9 billion and N1.5 billion for Anambra State Road Maintenance Agency.
IFEOMA OKEKE
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nternational Air Transport Association (IATA) released data for global airfreight markets showing that demand, measured in freight ton kilometres (FTKs), rose 3.1 percent in October 2018, compared to the same period the year before. This pace of growth was up from a 29-month low of 2.5 percent in September. Freight capacity, measured in available freight ton kilometres (AFTKs), rose by 5.4 percent year-on-year in October 2018. This was the eighth month in a row that capacity growth outstripped demand. Growing international ecommerce and an upturn in the global investment cycle are supporting the growth. However, demand continues to be
negatively impacted by: A contraction in export order books in all major exporting nations in October; longer supplier delivery times in Asia and Europe and weakened consumer confidence compared to very high levels at the beginning of 2018. “Cargo is a tough business, but we can be cautiously optimistic as we approach the end of 2018. Slow but steady growth continues despite trade tensions. The growth of e-commerce is more than making up for sluggishness in more traditional markets. And yields are strengthening in the traditionally busy fourth quarter. “We must be conscious of the economic headwinds, but the industry looks set to bring the year to a close on a positive note,” Alexandre de Juniac, IATA’s director-general/CEO,
said. African carriers saw freight demand decrease by 4.2 percent in October 2018, compared to the same month last year. This was the seventh time in eight months that demand shrank. Capacity increased by 5.4 percent year-on-year. Demand conditions on all key markets to and from Africa remain weak. Nonetheless, seasonally-adjusted international freight volumes have stopped declining and recovered sharply in recent months.
CHANGE OF NAME
I, formerly known and addressed as Mrs. Cooner Justina Lawretta Ngozi now wish to be known and addressed as Mrs. Uzoh Justina Lawretta Ngozi. All former documents remain valid. General Public please take note.
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BUSINESS DAY
CITYFile
Amosun disburses N72m for community projects in Ogun RAZAQ AYINLA, Abeokuta
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overnor of Ogun State, Ibikunle Amosun has disbursed cheques of N72 million to some communities as grants to cover expenses incurred on self-help projects embarked upon by the communities. The projects include community roads, boreholes, construction of mini bridges, electrification, and security, among others. Speaking during the presentation of the cheques to about 349 communities across the state, at the World Community Development Day celebration organised by the ministry of community development and cooperatives, Amosun said that the fund was to support their self-help efforts. The governor, who acknowledged the role of Community Development Associations (CDAs) in the development of the state, said: “The capacity building initiative of the CDAs towards having good leadership in our communities has also helped in maintaining the peaceful atmosphere that is prevalent in our dear State.” The commissioner for community for community development and cooperatives, Gbenga Adenmosun, said while 349 CDAs benefitted from the grants, subventions would go to 220 Area Community Development Committees (ACDCs) in the state. Adenmosun, who pledged continued support to the growth and development of communities in the state, requested CDAs to do more, saying that the celebration was to appreciate their voluntary and selfless contributions to the growth and development of the state.
L-R: Akin Oyebode, executive secretary, Lagos State Employment Trust Fund (LSETF); Sanai Oyewole Bolanle Agunbiade, majority leader, Lagos State House of Assembly; Monzor Olowosago, publisher, Oriwu Sun Newspaper, and Aina Olukoya, governor of the Lagos State Council of Tradesmen and Artisans (LASCOTA), Ikorodu Division, during the LSETF’s stakeholders community engagement in Ikorodu recently.
Four injured, houses burnt in C’River communal clash MIKE ABANG, Calabar he police have confirmed four persons injured and some houses burnt in a communal clash between Urugbam and Abanwa communities in Biase local government area of Cross River State. Spokesperson of the state police command, Irene Ugbo, who confirmed the incident on Tuesday, however, described as false, reports that five persons were killed in the clash. He said that the police
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had deployed another team of personnel to the communities to maintain law and order. “The command wishes to state that four persons were injured and some houses burnt during a communal clash that ensued between Urugbam and Abanwa communities in Biase local government. The online report that five persons were killed is false. “The information is not just fake and misleading but a compendium of lies and calculated attempt to perpetually put
the people of this extraction in total fear, confusion and restlessness. “The command, therefore, urges the public to go about their lawful businesses as efforts are ongoing by the state government, police and stakeholders to put lasting peace to the prolonged crises between the two communities,’’ she said. Ugbo advised members of the public to always cross-check or authenticate facts and figures before publicising same, to avoid spreading fake and unconfirmed news.
Police move to halt kidnapping, cultism in Abia Pastor charged with defrauding members of N1.5m
GODFREY OFURUM, Aba
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he police in Abia State have established an ‘Anti-Kidnapping Squad’ with the aim to rid the state of kidnapping and other violent crimes. The Commissioner of Police (CP) in charge of the state, who briefed journalists in Umuahia, said the command was out to stop the activities of hoodlums and create an atmosphere conducive for the residents and businesses. Ezike observed that the rate at which cultism has penetrated secondary schools, markets and streets, calls for the establishment of an anti-cultism outfit that will combine carrot and stick approach. He promised that the outfit would be established before the yuletide season and appealed to citizens of the State, to help in making the dream of a crime free Abia, a reality. “To stem the challenges of kidnapping and abductions in Aba area of Abia State and coordinate and consolidate our efforts, as well as promote the use of technology in tackling the menace, I have with immediate effect established the Abia State Command Anti Kidnapping Squad with jurisdiction to cover all parts of the state. “A Superintendent of Police has also been appointed as the squad leader and in the coming days their impact will be felt in
mitigating the challenges of kidnapping. “Cultism in Abia State may assume a worrisome dimension, if drastic measures are not put in place to check the activities of these sons and daughters of evil. “The trend is indicative of the fact that it has penetrated our secondary schools, streets, markets and social clusters. The command has commissioned an operational-psycho-social study that will inform our response in the immediacy. “But most likely-an anti-cultism outfit that will combine carrot and stick approach may be rolled out by the command before Christmas. The task ahead of us is daunting, but not impossible. I therefore appeal to all the good citizens of Abia State to partner with us and make the dream a reality.” Speaking on the behavior and attitude of his men in ensuring that they do the right things, the Abia new CP said: “In furtherance of our resolve to ensure accountability policing, I have established the command monitoring unit and appointed a Chief Superintendent of Police, as the officer in charge. “They are to ensure that police activities are done in conformity with rules, regulations, the law and best practices. This unit shall also speedily resolve all cases of excessive use of force, abuse of human rights and corruption/corrupt practice, reported against police officers”.
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ichael Udom, a 52-year-old pastor at Pinnacle of Praise Church, Lagos, has been charged before an Ikeja Magistrate Court for allegedly defrauding his church members of N1.5 million on the pretext of coordinating a monthly contribution. Udom is facing a three-count charge of conspiracy, fraud and stealing. The prosecution alleged the accused obtained a sum of N1.5 million from one Sylvia Nnamdi and Alfred Olugbenga, under the pretences of being a pastor and coordinator of an Ajor Thrift Association, a representation he knew to be false. Michael Unah, the police prosecutor told the court on Tuesday that the accused committed the offences with other two still at large sometimes in May at Fadeyi in Lagos. He said the accused, who portrayed himself as a pastor and the coordinator of the Ajor Thrift Association to the complainants, convinced them to join the contribution but converted the sum
of N1.5 million to his own personal use. Unah said that the accused refused to give the complainants the money when it was their turn to collect. The accused, however, pleaded not guilty to the charge. The chief magistrate, A. A. Fashola, admitted the accused to bail in the sum of N200,000 with two sureties in like sum. Fashola ordered that the sureties must be gainfully employed with an evidence of three years tax payment to the Lagos State government and have their addresses verified by the court. He also ordered that the sureties must be blood relations of the accused and also reside within the court’s jurisdiction. The offences contravened Sections 287, 314 and 411 of the Criminal Law of Lagos State 2015, (Revised). Section 314 prescribes a 15-year jail term for false pretenses while section 287 provides seven years for stealing. The magistrate adjourned the case until January 22 for mention. NAN
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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships
Arbitration in Nigeria: the dawn of a new era of readiness and willingness to arbitrate
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rbitration in Nigeria is regulated by the Arbitration and Conciliation Act (ACA), which was enacted in 1988 and has its roots in the UNCITRAL Model Law. It is undeniable that the promulgation of the ACA has contributed immensely to the development of arbitration as a sustainable alternative mechanism for disputes (particularly commercial disputes) resolution in Nigeria, instead of litigation. However, there has always been the lingering question as to whether the development of arbitration in Nigeria has been hampered by the fact that, in many cases, disputes in respect of which the parties have agreed to arbitrate still end up being litigated in the courts. There have also been questions as to whether the courts have been providing adequate support to the process of arbitration, in terms of the manner in which arbitration agreements are enforced in Nigeria. READY AND WILLING TO ARBITRATE The very first point at which the court has the opportunity to demonstrate judicial support for arbitration is the enforcement of an arbitration agreement by way of an Order for stay of proceedings pending arbitration. Under Nigerian law, if any party to an arbitration agreement commences any action in any court with respect to any matter which is the subject of the agreement, the other party to the agreement has two alternative options, which are to (a) to take steps in the litigation proceeds, in abandon-
Mofesomo Tayo-Oyetibo
ment of the arbitration agreement, or (b) apply to the court for an Order of stay of proceedings pending arbitration. The focus here is option (b). In Nigeria, the provisions of section 5 of the ACA, regulate applications for Orders of stay of proceedings pending arbitration and provide that: 5. (1) If any party to an arbitration agreement commences any action in any court with respect to any matter which is the subject of an arbitration
agreement any party to the arbitration agreement may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the court to stay the proceedings. (2) A court to which an application is made under subsection (1) of this section may, if it is satisfied(a) that there is no sufficient reason why the matter should not be referred to arbitration in accordance
with the arbitration agreement; and (b) that the applicant was at the time when the action was commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, make an order staying the proceedings. In the determination of an application of stay of proceedings pending arbitration, section 5(2) of the ACA uses the word ‘may’, thereby leaving the question of whether or not stay
ought to be granted to the discretion of the court which, in any event, must be exercised judicially and judiciously. In exercising this discretion, the court must be satisfied as to the fulfilment of three conjunctive conditions, which are that firstly, the Applicant must have taken no step in the proceedings, secondly, there must be no sufficient reason why the matter should not be referred to arbitration and thirdly, the Applicant must be, at the time when the action was commenced, and still remains ready and willing to do all things necessary to the proper conduct of the arbitration. With respect to the third condition in particular, the position of Nigerian law as to what amounts to satisfactory proof of readiness and willingness to do all things necessary to the proper conduct of the arbitration has been as decided by the Court of Appeal in the cases of MV PANORMOS BAY V OLAM (2004) 5 NWLR (PART 865) 1 and UNITED BANK FOR AFRICA PLC V TRIDENT CONSULTING LIMITED (2013) 4 CLRN 119. Essentially, the Court of Appeal held in those cases that an Applicant for stay of proceedings pending arbitration must demonstrate unequivocally by documentary and/or other visible means that he is willing to arbitrate. Such demonstration is satisfactorily Continues on page 42
Mofesomo Tayo-O yetibo is the Managing Counsel of Twelve Legal and an expert in commercial disputes resolution. mofe@twelvelegal.com
The African continental free trade agreement (‘Afcfta’): Strengthening Africa’s trade capacity OLASUPO SHASORE AND AISHA RIMI
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istorically, Africa has always been known for its ancient trade routes that criss-crossed the continent promoting commerce, ensuring political interaction and of course sometimes resulting in war. The emergence of sea travel and cross ocean movement and trade played a significant part in diminishing traditional internal trade amongst African nations. With present-day focus on the digital and knowledge economy, including the drive to bridge Africa’s so called infrastructure and technological gap, free trade movement still unfortunately occupies the back seat.
Intermediately, in 1980 the then Organisation of African Unity (‘OAU’) the precursor of the African Union (AU) concluded the ‘Lagos Plan of Action’ for Economic Development of Africa 19802000 in which it proposed a regional development plan that conceived and included an ‘African Common Market’. The next stepping stone was the 1991 Abuja Treaty establishing an African Economic Community in pursuit of Art. 3 of the AU statute objective in ‘accelerating the political, socio-economic integration of the continent’. And so, when the 18th Ordinary Session of the Assembly of Heads of State and Government (HOSG) of the African Union met in Addis Ababa in 2012, they
came to the decision that a Continental Free Trade Area would be formed in Africa and endorsed the Action Plan on Boosting Intra-Africa Trade (BIAT). It was the most significant moment in securing the future of African adherence to the Treaty obligations – almost a promise to re-enact in modern terms, the ancient trade routes. Legal framework AfCFTA is a super-regional multilateral treaty with all the features of both an investment treaty as well as tariff pact, designed at promoting foreign investment and at the same time protecting against the potential harm from over trading. Continues on page 42
L-R: Frank Aigbogun, BusinessDay Publisher; Jubril Enakele, managing director, Zenith Capital Limited, receiving best deal advisor of the year award from Priscilla Ogwemoh, NBA-SBL council member / representative of the Chairman, Nigerian Bar Assoication Section on Business Law (NBA-SBL) to the awards, and Lucy Newman, during the BusinessDay BAFI Awards.
42 BUSINESS DAY YOUNG BUSINESSLAWYER
It is not magic, it is hard work
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f we did a poll on the most popular idiom, one of the most referenced would be “if wishes were horses, beggars would ride”. Ignore the mobbed use, this statement is the truth. If life was easy-peasy and things were wished to existence, we all would wish away! However, many of us unconsciously handle our career like it would be built on a wish, we ease in and out of our wishes and we leave no footprints to our thoughts. You can trust that we all are guilty, at different times, we enter that zone and have little will to do anything, but we hope that without fail, we escape the consequence of the failure to show commitment or act. All successful lawyers list consistent, persistent hard work as a core stimulant of their success and the describe the best time to begin to put in the work consistently as day one. Is this easy to adhere to? I would say no, as it requires total mindfulness and intentionality to achieve this and the best of us struggle to meet this standard. Nonetheless, as another work year wraps up, it is a good time to evaluate your approach to work in the course of the year. I have learnt that stock taking is critical and the best time to do this is now. It is important to evaluate personally the progress (if at all) made and strategize for the next cycle. Please note that this evaluation is not only with respect to performance appraisals done in the context of work as these are typically limited to the period of review and may distract you from a more holistic view of your input and output. I must clarify that hard work is not synonymous with gruelling lengthy time doing tasks that give you no traction when you have better options or could have worked smarter. Hard work is smart work, deploying resources optimally. Whether the resource is time, research, access and opportunity, when you are taking stock, the question is not only
what you did but how you did it and the level of productivity that resulted from the act. Whatever the result is, it is important that you outline it honestly, without excuses and internal justifications. If it was not done right, it may be that you missed several hoops, so I would say, be brutal to yourself and hold yourself to higher expectations than others will. Where reviewed against this paradigm, you will easily identify what you need to change. After this review is undertaken, you should outline the corrective action. This should not be done alone, you should find someone more senior, a mentor, guide, work buddie or trusted friend who understands the challenges at your level to discuss your proposed action and get their input. You will be surprised at the leverage that this gives to your actions. In outlining your goals, you must
again beware of wishes and ensure that with every desire, there is clear, smart and predictable action outlined. Vision boarding is a very common and efficient way for dealing with this plan. It involves the creation of pictorial images of your goals and the actions that you would take to achieve them, and it should not be downplayed. OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association. Feedback – Oyeyemi.aderibigbe@ templars-law.com; yemiimmanuel@yahoo.com.
Arbitration In Nigeria: The dawn of a new era... Continued from page 41
done by notifying the other party in writing of his intention of referring the matter to arbitration and by proposing in writing an arbitrator or arbitrators for the arbitration. The position taken by the Court of Appeal in the two aforementioned cases has often faced criticism on the ground that it places a burden, on an applicant for stay of proceedings pending arbitration, which is more onerous than is contemplated by section 5(2) of the ACA. A NEW ERA Following a recent decision of the Court of Appeal, it appears that the court is relaxing its stance on what is required of an applicant in demonstration of readiness and willingness to arbitrate for the purposes of fulfilling the condition set out in section 5(2)(b) of the ACA. In the case of DR. CHARLES D. MEKWUNYE v. LOTUS CAPITAL LIMITED & ORS (2018) LPELR-45546 (CA) the Court of Appeal had cause to consider the provisions of section 5(2)(b) of the ACA as well as its previous decisions in MV PANORMOS BAY V OLAM and UNITED BANK FOR AFRICA PLC V TRIDENT CONSULTING LIMITED. In the LOTUS CAPITAL case, the court observed that the position taken in its
previous decisions, to the effect that it is not enough for an Applicant for stay to merely depose that he is ready and willing to ensure the proper conduct of the arbitration “constitutes a departure from the plain provisions of Section 5(2) of the Act”. It was also held that unless the adverse party controverts the mere affidavit deposition of an applicant as to his willingness and readiness to arbitrate, the Court is at liberty to treat such deposition as having satisfied the condition of section 5(2)(b) and make the Order for stay. Importantly, the court limited the applicability of UNITED BANK FOR AFRICA PLC V TRIDENT CONSULTING LIMITED by holding that the decision is only potent and tenable in instances where the Applicant’s deposition in the affidavit in support of the Application for stay is challenged and/or contradicted by the Respondent. In such cases, it will be necessary for the Applicant to provide further evidence in support of his deposition in that regard. Consequently, where the Respondent does not challenge the Applicant’s mere affidavit deposition as to readiness and willingness to arbitrate and there is no sufficient reason to why the matter should not be referred to arbitration, the court is
entitled to make an Order of stay of proceedings. MOVING FORWARD… Going by the decision of the Court of Appeal in the LOTUS CAPITAL case, it is apparent that the court has restricted the applicability of its earlier decisions in the MV PANORMOS BAY V OLAM and UNITED BANK FOR AFRICA PLC V TRIDENT CONSULTING LIMITED by relaxing the burden on an Applicant seeking an Order of stay of proceedings pending arbitration. Going by this decision, it is apparent that the courts are now more willing to give judicial support to arbitration through the exercise of judicial discretion in favour of the enforcement of valid arbitration agreements through a clearly liberal but welcome interpretation of section 5(2) of the ACA. Ultimately, in the grand scheme, this no doubt provides a positive answer to the question of whether the courts are doing enough to support arbitration in Nigeria. Mofesomo Tayo-O yetibo is the Managing Counsel of Twelve Legal and an expert in commercial disputes resolution. mofe@twelvelegal.com
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LEGALINSIGHT The African continental free trade agreement (‘Afcfta’)... Continued from page 41
The approval of the African Union Ministers of Trade at the Extraordinary Summit in Rwanda on 9 March 2018, gave life to AfCTFA, kick starting crucial instruments of its phased implementation; the Protocol on Trade in Goods and associated annexes; Protocol Trade in Services and its annexes as well as the Protocol on Rules and Procedures on the Settlement of Disputes. To show the intent of African countries, fifteen nations have ratified the protocol on free movement of persons, right of residence and right of establishment. Whereas forty four countries first signed the agreement in March this year, the number increased to forty nine with the signing by South Africa, Sierra Leone, Namibia, Lesotho and Burundi at the recent Summit in Nouakchott, Mauritania. Six countries namely, Rwanda, Ghana, Kenya, Ethiopia, Chad and Swaziland have now ratified the agreement. The process of ratification of international treaties is completed by filing instruments of ratification as provided for in the Treaty by respective countries through their legislature passing appropriate bills. With the stipulation that only twenty two ratifications are needed for the AfCFTA to come into force, the prospects are high. The modalities of barrier elimination, cooperation and tariffs removal is contained in the three protocols mentioned above and their annexes. The protocols provide a better understanding of the scope, potential, reach and ramifications of this transformational agreement. Broadly the Protocol on Trade in Goods will remove import duties, and create import parity with customs cooperation between nations while ensuring standards of the cooperation amongst parties, technical assistance required and capacity building obligations. The Protocol on Trade in Services will oblige equal treatment of services between foreign service providers within and across host countries, mutual recognition of service providers and the liberalisation of service sectors to accommodate free participation in service sectors. The Protocol on Dispute Settlement which is yet to be finalised (it is a phase II activity) is expected to cover Intellectual Property, Investment and anti-competition measures and promises to give the much needed boost to the dispute resolution industry by creating an international investment dispute resolution framework and infrastructure on the continent. Institutionally the African Union’s HOSG will have general oversight over the operation and policy objectives of AfCFTA while the Council of African Ministers responsible for Trade will ensure implementation and enforcement of AfCFTA.
growth. The North American Free Trade Agreement (NAFTA), which is arguably the world’s largest free trade area of 450 million people and links Canada, Mexico and the USA, saw trade between the 3 countries quadruple over a 15-year period. There has clearly been an obvious boost in the respective economies, increased profits and job creation for all three countries, with vibrant competition, competitive prices and wider choices for consumers. Certainly, if Free Trade Agreements were negative in their impact, the UK would not be actively pursuing a post Brexit Free Trade arrangement with the EU, and now the US. The ASEAN Free trade agreement and Asia Pacific Free Trade agreements have also both recorded significant success. Currently, only 18% of Africa’s exports are traded in Africa, which is an abysmal return for the continent. From all observable evidence AfCFTA will open market access to goods and services; create more trade and therefore wealth for the continent; increase economic growth and ensure greater employment opportunities for the continents 60% youth population. There will inevitably be a greater exchange of raw materials across the continent making for cheaper cost of manufacturing, goods and services. With increased Foreign Direct Investments (FDI), small businesses and local manufacturers have an opportunity to improve on their processes, upscale their production and acquire new technology. These businesses inevitably become exposed to international markets that would ordinarily have been out of their reach and become able to compete on a regional if not global level. There is also the added benefit of Technology transfer and the knock-on effect of increasing GDP of member States, better economic development and increased standard of living - raising Africa’s prospects for the future. All indicators point to the overwhelming change in the economic landscape of the continent from the free movement and intra-African trade; wealth and economic development will positively disrupt the services industries of a very talented continent. Already Pan African businesses are well situated to benefit. With an ‘African Common Market’, the future is encouraging. In fact it is an exciting time for Africa and African businesses, ultimately the signing and ratifying AfCFTA will usher in the largest Free Trade Area since 1995 multiplying intra Africa trade and Africa’s GDP ‘when Africans trade in Africa’. We note that Nigeria has recently inaugurated a Presidential Committee on Impact and Readiness for AfCFTA perhaps a sign that she will join other countries in pursuing this laudable AU Treaty objective.
The Future Globally, Free Trade Agreements have exhibited numerous benefits in the promotion and increase of international trade which by extension increases economic
Olasupo Shasore (SAN) and Aisha Rimi are Partners at the commercial law firm ALP Nigeria
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LegalBusiness
INDUSTRY MATTER
NBA President decries spate of killings involving lawyers …As legal community records three murders in 10 days
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he President of the Nigerian Bar Association (“NBA”) has decried the spate of killings involving legal practitioners in Nigeria. The president who released an official statement on currently in deep mourning. Within the last fortnight, we have lost 3 (three) of our members in very tragic circumstances that speak to and underscore the palpable and pervasive state of insecurity in our country. On Friday, 31 November 2018, the decomposed body of our Ikole-Ekiti Branch Secretary, Adeola Adebayo, was recovered from a forest having been brutally murdered by his abductors. Recall that Adeola was kidnapped on Saturday, 17 November 2018 and a N3, 000, 000.00 ransom paid on Thursday, 22 November 2018 for his release – see the NBA Statement of 24 November 2018. Possibly, he was killed by the criminals even before the ransom was paid. How cruel! In the evening of Thursday, 29 November 2018,while we were still on bended knees for the release of Adeola, Adeshina Okeya, a new wig, was fatally attacked by a vigilante group in the outskirts of Abuja leading to his death the following day, Friday, 30 November 2019. Adeshina’s death is particularly tragic given the fact that the brutal attack that led to his death occurred on the same day he was called to Bar, that is, Thursday, 30 November, 2018. He didn’t even have the opportunity of registering with any NBA Branch post-Call, let alone of showcasing his wig and gown before Their Lordships and/or Their Honours. Earlier, on Friday, 23 November 2018, the lifeless body of Remigus Ogu (Jnr), a serving Magistrate in Imo State, was found in the centre of a road in Amucha Community in Njaba Local Government Area of Imo State where it was dumped by his killers. Remmy (Jnr) was kidnapped the previous day, Thursday, 22 November 2018 and his killers, after dumping his body on the highway, made away with his official car, mobile phones and other personal effects. As we write, no arrest has been made in regard to the kidnaps and murders of Adeola Remmy (Jnr)and Adeshina Adeola and Remmy (Jnr) were young fathers whose children have now been made fatherless and their young wives turned into widows. The fathers of our three fallen colleagues are all lawyers. Dr. Williams Adebayo, Adeola’s father, is a law lecturer at Ekiti State University while Ademola Okeya served as a past Chairman of Ikole-Ekiti Branch – the same Branch that Adeola served as Secretary up to his untimely and cruel death. Chief Remigus Ugo (Snr), the father of Remmy (Jnr) is the doyen of the Orlu Bar having been called to the Nigerian Bar in 1976. I have been in constant communication with all three fathers and I truly feel for and empathize with them. Our hearts go out to the parents and indeed the families of our three fallen colleagues, both extended and nuclear. May the Almighty comfort them and wipe their tears and may our fallen colleagues find rest. Meanwhile, these incidents bring to the fore the terrifying state of insecurity in our land. Adeshina would, perhaps, still have been with us if the
Paul Usoro
state of insecurity in the country was not so grave such that communities have resorted to self-help in the form of vigilante groups. Community policing in other climes refers to the collaborative efforts of communities with the police to secure lives and property. In Nigeria, our vigilante groups effectively stand in for the police and assign to themselves the role of intercepting and confronting violent criminals. And to carry out these functions, they are armed by the communities that they protect with dangerous weapons including arms and ammunition thereby turning them into a parallel police system. The price we pay is exemplified by the very unfortunate death of Adeshola. The murder of Remmy (Jnr) is even more distressing and alarming. In civilized climes – and we number Nigeria as one – criminals are loath to attack or kill judicial officers and law enforcement officers because of
NOTABLE WORDS “ Governments at all levels in the country need to and must wake up to their primary responsibility of protecting lives and property. ” -PAUL USORO, SAN PRESIDENT, NIGERIAN BAR ASSOCIATION
the instant repercussions that follow. The long arms of the law speedily isolate, identifies, catches and brings to justice those criminals who dare or engage in such taboos and this is to accentuate the cornerstone roles of these officials in maintaining law and order in the society. Their safety and lives must therefore remain nogo areas and off-limits for criminals; the institutions to which they belong must also not be threatened howsoever by criminals. Criminals indeed feel emboldened when they can get away with attacking and diminishing the institutions of justice and law enforcement, illustratively, by killing the officers of the institutions and/ or directly attacking the institutions. Sadly, this taboo is broken, and this affront has been achieved specifically in Imo State in the last six months. We say this because the murder of Remmy (Jnr) is not an isolation in the demystification and degradation of the justice institution by criminals. In June 2018, criminals invaded the Orlu High Court complex, carted away the Bar Centre generator and
battery, broke into the exhibit room of Magistrate Court 1 located in the complex and made away with some exhibits. About two months thereafter, precisely in August, the criminals again visited the same court complex, gathered and made away with the remaining exhibits and then set fire to the complex destroying the Exhibit room, the Archive and chambers of the Chief Magistrate and indeed, a section of the complex. If we argue that these happened at night, in the pitch of darkness – which would be an extremely lame excuse– what does one say about the daylight armed robbery attack on litigants and court officials at about 12.30pm in November 2018 right inside the same Orlu High Court complex? And, in the same month, November 2018, our colleague, Remmy (Jnr), a serving judicial officer, was brutally murdered and his body indecorously displayed on the highway by criminals. What more gruesomeness do we need to see to know that we are all under siege by criminals and that our law enforcement agencies appear to be overwhelmed by the superior firepower, skills and methods of these criminals? It is instructive that the three incidents that we write about in this Statement occurred in the three geographical regions of Nigeria – the East, West and North – clearly making the point that no part of the country is immune from the current nemesis of insecurity. These murders of our colleagues also epitomize the all-round insecurity of lives and property and incessant killings of innocent citizens by criminals in the country.We have said it time and again: governments at all levels in the country need to and must wake up to their primary responsibility of protecting lives and property. It is scary that criminals can so freely terrorize and murder innocent citizens, including judicial officers, and ransack our court premises, without let or hindrance, at night, under cover of darkness and even in broad daylight, during daytime. Are our judicial institutions not meant to be heavily and fully fortified and made safe for all stakeholders?What happened to the security infrastructure that should envelop and protect our judicial officers, including magistrates? These issues should be of serious concern to our law enforcement agencies. We urge our governments and the law enforcement agencies to immediately institute required remediation steps that would protect the lives and property of our citizenry and in the process regain public trust and confidence in our governments. Perhaps, we need to overhaul the law enforcement agencies in totality, retool them and retrain the personnel in a manner that would make them overawe the criminals and strike fear into their hearts. The fear and dread of law enforcement agents, as a deterrent for criminal conduct, particularly violent crimes, appears to be non-existent. That unfortunate perception must be quickly reversed by governments. Right now, it would appear that the criminals are not at all afraid of law enforcement agents. Beyond these remediation steps, we call on the law enforcement agencies to fish out urgently the murderers of our colleagues, Adeola, Adeshina and Remmy (Jnr) as a first and immediate step towards restoring the confidence of the Nigerian people.
What Changes does the Revised FX Manual 2018 bring to the FX Regime in Nigeria? Continued from last week
Unlike the old FX manual, two Schedules (“A” and “B”) containing respectively a list of “Export Goods Exempt from Inspection” and a list of “Prohibited Exports”, are annexed to the revised FX manual. The new Schedule A exempts the following items from inspection: 1) Personal effects; 2) Used motor vehicles; 3) Perishables i.e. day old chicks, human eyes and human remains; 4) Vaccines, Yeast; 5) Objects of art; 6) Explosives; 7) Pyrotechnic products and Arms; 8) Ammunition; 9) Weapons; 10) Implements of war; 11) Live animals; 12) Household and other non-commercial products; 13) Gift and personal effects, trade samples/printed business matter; 14) Machineries and equipment for repairs abroad; 15) Machineries for the execution of specific contracts, re-exports; 16) Return of empty containers; 17) Trans-shipments; and 18) Supplies to Diplomatic/ Consular Missions and supplies to the United Nations for their own needs. The new Schedule B of the revised FX manual prohibits the following goods from exports: 1) Raw hides and skin; 2) Timber (rough and sawn); 3) Scrap metals; and 4) Unprocessed rubber latex and rubber lumps. SPECIFIC CHANGES Specified Currencies: In relation to allowable currencies for FX transactions in Nigeria, the Chinese Yuan/Renminbi is now an allowed instrument contrary to what obtained under the old FX manual. On the other hand, the Swedish Kroner and Danish Kroner which were instruments of FX transactions in the old FX manual have been dispensed with in the revised FX manual. Also, the Australian Dollar is now the specified currency unlike the Australian Shilling which used to be the allowed instrument of FX transactions under the old FX Manual. Foreign Exchange Forms: Requirement for Declaration of Import and Export of FX: Under the old FX manual, “Form TM” was used for declaration of import into Nigeria and “Form TE” for declaration of export from Nigeria, of foreign currency and financial instruments above US$5,000 or its equivalent, precious stones, jewelry and works of art (including antiquities). The new limit for which declaration is required on both “Form TE” and “Form TM” is US$10,000 pursuant to the revised FX manual. Importation/Exportation of Foreign Currency and Nigerian Currency Notes/Coins: Foreign currency, either in cash or any other instruments, was, under the old FX manual, allowed to be imported into Nigeria without declaration; provided the amount did not exceed US$5,000 or its equivalent in other foreign currencies. Any amount above this limit was to be declared at the point of entry. This limit has been increased to US$10,000 in the revised FX manual. Similarly, export of foreign currency from Nigeria was allowed without declaration subject to a
limit of US$5,000. Export of any amount in excess of this was subject to declaration at the point of exit together with evidence of transaction/procurement through an Authorized Dealer. The limit above which declaration is now required at the point of exit has been increased to US$10,000 but not more than US$50,000 or its equivalent in other foreign currencies. For Nigerian currency notes/ coins, a traveler exiting Nigeria or arriving in Nigeria was allowed to carry currency notes and coins not exceeding Ten Thousand Naira (N10,000) without declaration under the old FX manual. Any amount in excess of this limit was subject to declaration and prior approval of the CBN. The revised FX manual has modified this requirement by raising the applicable limit to One Hundred Thousand Naira (N100,000). Travels: The limits for Personal Travel Allowance (“PTA”) and Business Travel Allowance (“BTA”) were respectively US$4,000 and US$5,000 per quarter, under the old FX manual. The revised FX manual retains the limits for both PTA and BTA but specifically defines a “quarter” to mean: January to March; April to June; July to September; and October to December. Whilst age limit for purchase of PTA was not provided in the old FX manual, only persons 18 years and above are now qualified to purchase PTA under the revised FX manual. In the same vein, the old FX manual contained no provisions as to whether a person entitled to BTA was also eligible for PTA or vice versa while on the same trip. Under the revised FX manual, travelers who are entitled to BTA are disqualified from eligibility for PTA or vice versa in respect of the same trip. The old FX manual provided no specific limit as to purchase of foreign currency by Hotels licensed as Authorized Buyers. Under the revised FX manual however, the amount of foreign currency which licensed Hotels can purchase per approved transaction has been limited to US$5,000. Notably, the timeline for licensed Hotels to submit monthly returns to the CBN on total purchases and sales of foreign currency (including “nil” returns where applicable), was “not later than ten days after the end of each month” under the old FX manual. This timeline has now changed. Henceforth, licensed Hotels are to render returns to CBN not later than five days after the end of each month. (This publication is an abridged version of the author’s article on the subject). The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm or serve as legal advice. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.
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BDLegalBusiness
Lawyers should position themselves as trusted advisors on blockchain technology – Rotimi Ogunyemi THEODORA KIO-LAWSON
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he Vice Chair of the Information Communication and Technology (ICT) committee of the Nigerian Bar Association Section on Business Law (NBA-SBL), Rotimi Ogunyemi has disclosed that the ‘lawyer of tomorrow’ would be one who has come to terms with the reality that technology is revolutionising today’s legal landscape. Speaking at the young lawyers summit recently organised by the Young Lawyers Forum of the Nigerian Bar Association (NBA), Lagos branch, which held in Lagos, Ogunyemi stated that specialisation was the answer to the impact of technology on the legal profession. He said this while speaking on the theme, ‘Charting a Path in the Legal Industry, Specialisation as a tool.’ According to him, the competing forces changing the face of industries, are all underpinned by the brute force of computing power. “Technology is at the
core of what lawyers do and it is becoming more prevalent within law firms and legal departments as the practice of law is being disrupted through the use and advances in technology,” he said The ICT Law expert went on to describe how these computing forces disrupting forces disrupting industries have impacted every aspect of legal practice, from law firms and corporate practice to courtroom operation. He noted that one of such disruptions is the use of block chain in the delivery of legal services, such as, smart contracts, deeds management and e-voting. “Smart contracts are programmable contracts encoded on a blockchain. This way, contractual terms become self-executing based on underlying code. In the same vein, governments and organisations are implementing blockchains to revolutionise the way information is stored and transactions occur, such as in land registries.” Ogunyemi also described how blockchain
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based e-voting platforms are transparently secure and auditable voting systems also revolutionizing the way elections are conducted. “There are several opportunities for lawyers to position themselves as trusted advisors on blockchain-based phenomenon,” he said. Other disruptions discussed include, Online Dispute Resolution: which allows the use of technological tools and platforms for dispute resolution with the incorporation of ADR techniques. In his presentation, Hamid Abdulkareem of Aluko & Oyebode, described Arbitration as the way to go in today’s legal practice. He noted that Arbitration was significantly different from litigation, due to its flexibility. He however urged participating young lawyers to patiently learn the ropes if they were to succeed at it. His words, “In arbitration, it takes time to build a solid reputation. Give it time; and while at it, build your knowledge and contact
base. This is very important.” The summit, which was themed, ‘The Young Lawyer and the Future of Legal Practice’ was declared open by the Chairman, NBA Lagos Branch, Chukwuma Ikwuazom, while, Derin Fagbure, Chairman, Young Lawyers Forum, who had earlier welcomed all participants had enjoined them to make best use of the opportunity the summit presented Among the speakers at the event were, Busola Ogunsola, Lolade Ososami, Reginald Udom, Nnamdi Nwizu, and Oyinkansola Fawehimi. Others were, Ahmed Akanbi, Kayode Adegbola and Jimi Disu, who all spoke on various issues ranging from entertainment law and specialisation; arbitration; managing finance; mentoring and training; etiquette and branding; importance of networking; to the role of the young lawyer in politics and nation building. Stakeholders in the industry have commended the organisers for timeliness of the summit and the issues raised for the development of the young lawyer.
PHOTOFILE
Former NBA president, Augustine Alegeh, SAN celebrates daughter on her Call-to-Bar
Former NBA President, Augustine Alegeh (SAN) flanked by his family at a dinner to mark his daughter’s call to the Nigerian Bar. From Left to Right is one of his daughters, Anita Alegeh; his wife, Ferishat Alegeh; his son, Oshioke Alegeh; the Celebrant and latest lawyer in the family, Kamilah Jasmine Alegeh and former President, Augustine Alegeh (SAN). The event held on Thursday November 29th, 2018 at the Jakes Club in Abuja.
R–L, Lady Ussieh Osunbor; Ferishat Alegeh, Margaret Malu and Lauretta Omomia
Ahmed Akanbi and members of the YLF excecutive committee after the session on the role of young lawyers in politics and nation building
Bola Animashaun presenting Mrs Busola Ogunlola, one of the panelists in the first session with her present.
L-R, Wife of former NBA president, Ferishat Alegeh; his daughter and celebrant, Kamilah Jasmine Alegeh and Honourable Justice Amina Augie of the Supreme Court.
The Chairman of the branch, Chukwuka Ikwazom with some members of NBA Lagos branch.
Lolade Ososami, partner at Udo Udoma & Belo Osagie during her presentation on considerations for specialising.
Nnamdi Nwizu, former Vice President and head of fixed income trading for Citibank Nigeria giving his presentation on managing your finances. L –R, Joseph Silas Onu, Garba Tetengi (SAN) and Ade Okeaya – Inneh.
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GARDEN CITY BUSINESS DIGEST The ‘Zibima Model’ for industrial harmony around oil/ gas investment clusters in Niger Delta communities Template undergoing final validation to be used by govts, investors and civil societies on how to engage host communities for effective outcome IGNATIUS CHUKWU
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ubodenyefa Zibima, PhD, is a lecturer and researcher with the Niger Delta University (NDU) in Wilberforce Island in Bayelsa State. He is also the Team Lead, Environment and Resource Control desk for Stakeholder Developments Network (SDN). He has just come out with a model (still undergoing validation) to tackle the fears over whether the legislations in new oil and gas laws and policies would actually stem the spate of violence in the oil region. Fears had been rife that though the Petroleum Industry Bill (or the later offshoot, Host Community Bill), there is no clear provision to effectively engage the host communities that host the investment clusters in oil and gas. Any failure to get this fundamental step right could tip the entire exercise by provoking crisis and explosions in the investment clusters that could torpedo the entire investment and further drive away investors. This worry attracted the attention of top civil society funders for a viable search for a scientific solution that could become legislated template to be used as entry and engagement model for any oil and gas investor coming into the oil region. Facility for oil Sector Reforms (FOSTER) has been in the forefront for this search.
Few weeks back, Zibima unveiled his discovery, a template for sustainable peace and harmony within oil/gas investments in the Niger Delta known as the MCRIA (The Micro Conflict Risk Impact Assessment) model that details how to avoid conflicts when entering the communities and how to even help solve existing one. He also designed mitigation strategies. In all this, corruption was discovered to be at the back of all these conflicts. Formula for nipping this in the bud was advanced. The ‘Zibim Model’ was created from researches around focal communities such as Ogidighen in Delta State, Gelegele in Edo, and Odukpani in Cross River State. After another stage of the research, a validation exercise in Port Harcourt, Zibima fielded questions from BusinessDay’s Garden City Business Digest; What does this research represent? In this research, we are taking in oil and gas. We have understood that somehow, conflicts tend to arise around clusters of these investments. The idea of this research is to first, understand why these conflicts emerge; secondly, to understand the methodologies that feed these conflicts. We also want to understand the capacities of stakeholders involved and understand their roles that feed these conflicts. Once you understand these
factors, you now use this understanding to frame a mitigation strategy; in itself the host community engagement strategy, one that would enable exiting clusters, the government and potential investors to engage in a transparent and viable way. It will help bypass the conflict issues that emerge in terms of who needs to speak for which community; what the communities want, and what the government is willing to do. If these factors are mapped out, it will feed into exiting or proposed legislations, such as the Host Community Bill of the PIB. As it stands today, while the Host Community Bill intends to provide avenues for development of the communi-
ties, it has no framework for engaging with them. These are some of the problems we think we can solve by developing a functional host community engagement strategy. Did you find any investment model that is working in the Niger Delta because of a good model of engagement during your research? It is not like there are no investments ongoing or functional in the Niger Delta, but you will realize that even across communities, there seems to be problems in engagements between functional investments and their host communities. So, you have investments that are working already, but they lack issues of engagement be-
tween the investors and the government on one hand and the communities on the other hand. You also have investments that are yet to take off because of the problems with the community as another segment. These are the two categories of investments that you can find. We are hoping that we can surmount all of these problems. What we need do is to be proactive, open communication processes so that with this kind of engagement that is transparent, you can easily understand the issues at the onset, understand the communities, and the expectations of the investors. Then we can merge all these expectations and come up with a working solution for all of the stakeholders. What does the event today represent; is it part of the research? This is part of the research, more or less a validation exercise. We bring together stakeholders, community leaders, investors, civil society and academia. We present the findings to them. We have come back with feedback. We realize from the outcome of this meeting that people will realize that this is a problem and they now understand how it happens in the communities. It is a step in the engagement process. This will be escalated going forward to higher levels of policy making. Our target is, in the final analysis, the recommendations
made to the board from this engagement will form the basis for a legislation that will become formalized. So, any person that comes to invest in any community will understand that if you actually want to engage with them, you will see a model on ground that is a product of research. Is there anything you discovered today that was not captured in your earlier stages of the research; has this been helpful? Yes, this has helped to validate what we have been talking about. It tells an investor that yes, these are validated points. Yes, we are on the right track; not only because what we intend to achieve at the end will benefit the communities, but because people will now understand that the problems are real and there is need to find solutions to them. Who is the likely user of this kind of research; the community or who? It is beneficial to anybody; communities, investors and govt. These are the key stakeholders in any project. The communities will now understand how to engage with investors and government will realize how to deal with the communities. Investors will now know the underlining factors in the area they come to invest in. In so doing, you find sync across interests and expectations from all of these stakeholders.
International accounting education body admits Nigeria’s fast-rising professor as vice president
Port Harcourt by Boat With
IGNATIUS CHUKWU
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t was huge applause at the womb of the Golden Tulip Hotel in the Government Reserved Area (GRA 2) of the Garden City when it was announced that Nigeria’s fastrising professor of Accounting, Clifford Ofurum, has emerged the next Vice President of the prestigious International Association for Accounting Education and Research (IAAER). Ofurum is a lecturer in the University of Port Harcourt (UNIPORT) and he became famous when he headed the Port Harcourt Business School (PHBS) that worked hard to compete with the Lagos Busi-
ness School and Enugu Business School (EBS). The PHBS made name few years ago when it brought the famous Chris Imafidon, father of the brainiest children in the UK, to download his great brains to Nigerians back home. It was at that point that Imafidon told this writer (BusinessDay) how he could turn any child into a genius, and that his children, though the brainiest in the UK, were no geniuses. What a wonder! He promised to replicate the experience in Nigeria to prove his point, but do Nigerians want brains? Loads of aw cash, maybe! He had also shown how he could help Nigeria play at par with the latest revolution, AI (artificial intelligence), saying all countries at this onset stand equal at in the search of the new intelligence. The idea seemed to have stopped at the fore-walls of the PHBS where it was unveiled. Ofurum’s experiment with
the PHBS seemed to be so successful that the Ignatius Ajuru University of Education (which now has a kind of romance with him) has floated the second Port Harcourt Business
Clifford Ofurum
School. The Garden City now controls 50 per cent of Nigeria’s business schools. Some say people should watch out for the outcome of this development some 10 years from now.
Ofurum also served as the Local Organizing Committee (LOC) chairman of the ongoing Nigerian Accounting Association (NAA), a body that is affiliated with the IAAER, and in fact, is a dominant force in the international body, such that Nigeria takes front seat in any of their activities. The news was broken by no less a personality than an Accounting professor, giant in the Narasawa State University, Suleiman A.S. Aruwa, who actually is stepping down as both IAAER vice president and NAA president. Many already look at Ofurum as stepping into big shoes left by Aruwa, and many say it is fitting. The nomination of Ofurum met the easy endorsement of the big guns in NAA, the professors of Accounting, according to Aruwa. Most of the Profs were seated in the Golden Tulip (Abuja Hall) where the opening ceremony of the NAA AGM took place
because of the strike action by ASUU. The ASUU was said to have insisted that the AGM must not hold in the university because of the strike. Many said, hmmmm. The Vice Chancellor of the host university, the professor, Ozo-Mekuri Ndimele, could not agree more with the personality of Ofurum, saying the Accounting education guru had already won hearts in the sister university (IAUE). He said; “I have stolen him. The moment I came in contact with him, I knew this is a genius.” There were talks about sabbatical, but that is for another episode. Ofurum would now carry the responsibilities of Nigeria’s Accounting education world to the international arena where grants would be important to boost research and learning for the Nigerians who have been producing the professionals in Accounting that dominate ICAN and ANAN.
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Investing in Rivers State Taxes: From January 2019, defaulters can no longer hide in Rivers – RIRS boss • No hiding place for tax dodgers anymore in the oil state • Time has come to go to prison for tax • The tax master knows everything except he looks away • Tax practice in Rivers State will soon be a model Ignatius Chukwu
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ivers State Internal Revenue Service (RIRS) says it plans to make the state a tax model in Nigeria through seamless payment and tax clearance processes, but it may be impossible to hide any more from paying taxes in the oil-rich state. The executive chairman, Adoage Norteh, told newsmen at a briefing last week Thursday, November 30, 2018, that time may have come when the Service would have to send people to prison on account of tax default. Norteh has a clear message to those who operate off the radar for years thinking the RIRS would not discover them; “The tax master knows everything, except he looks away. He warned that this tax master will not look away. Excerpts; Adequate information is key It is important to brief the public often on the all-important programme we are to embark upon in January 2019. This is because information is key to constantly engage the tax community. People have tax problems due largely to inadequate knowledge. It is also important to reiterate the importance of taxation because it is for public good due to the many projects and programmes that governments handle with tax, and the right it confers on taxpayers to demand for good governance and accountability, but you don’t have to have a road tarred to your doorstep before you decide to pay tax. But, now people can see a lot of evidence of tax at work in Rivers State now. Life to be easy for tax payers The key thing that will happen in the Rivers State tax community is that life is going to be very easy for taxpayers. We want to continually improve on how tax is paid in the state. For instance, we want to show that people mustn’t have to
Adoage Norteh, executive chairman, RIRS
go to the tax office before obtaining tax receipts. The RIVTAMIS system has the facility to let you print your own receipt if you have paid. By the way, receipt is not an end but means to an end. We have foolproof mechanism to confirm what you paid and you cannot use that receipt if it is not correct. RIVTAMIS is the key, henceforth The Rivers State Tax Management Information System (RIVTAMIS) is the platform for tax interaction between the RIRS and the tax paying community in Rivers State. Verification can be done from any point. We want to inform the general public that from January 2019, it will be impossible to file annual returns except you paid taxes and you have registered on the platform. It is this way that we will know you are a tax paying entity. Annual Return process is a self-assessing process. We must check that you paid taxes first. You must tell us how much your staff earned, then verification can come later through tax audit. We are giving you the opportunity to voluntarily tell us details, and we can
verify later, because as tax administrators, we know how to go about finding out. We want to encourage self-compliance. Besides, we have other ways to find out the truth if you make false declarations. The tax master knows everything For instance, if you declare that you earned N2m in a year, and we have evidence that you have three children in a school where they pay about N1.5m each per year, and maybe big cars; a house, etc., we would want to know how come you earn only N2m per year and you were able to foot these other bills. The tax master knows everything except he looks away, but our policy is not to look away. So, my message this morning is that people should go and register on the platform, and those who have done so should please go and check again. In January, 2019, we will begin to accept annual returns. We are no longer going to accept manual returns. If you are just coming into Rivers State, please indicate so. We started implementation about six months ago, but we
give people ample time. We do not want people to start complaining that they are not allowed to register next year but the system is open right now. It is free. Anybody asking you for money to register is a fraud, even if the person has RIRS identity card. Warning: We will block every avenue of filing or getting tax clearance if you are not registered in the system. You have one month to register. Let it be made clear that audit has closed; and anybody helping you with it now is a fraud. Go to the platform and register. Time has come to go to prison for tax If we do all of this and people still do not take us seriously, then, we think time has come to send some people to prison. There is tax avoidance which is not criminal, but there is tax evasion or default. They are not the same. Whatever you want to do, make sure you stay within the law because the law allows you some leverage, but it is an intricate process. You must be versed in tax law and practice to engage in tax avoidance processes. Note, also, that most of those who shout loudest against government performance do not even pay taxes. The burden seems heavy on the organized private sector because their taxes are deducted at source. Another person may have big assets and escapes tax. The new process is going to fish out everyone and you must pay backlog. The law provides that government can now take over your property, or even say, you cannot operate your property. You can no longer hide in Rivers State Look, the time to escape from paying taxes in Rivers State will end in 2018. We will soon confiscate and hand over some property in the state due to tax default. We advise persons to better go and remedy their taxes now. Ask questions if you do not know. Get back to me, if anybody tries anything funny with you. It is free to ask
questions. Touts are now everywhere due to festive season coming fast, but be wary of them; whether they are even from the RIRS. Do not just yield. We observe that 90 per cent those on the streets harassing people for taxes are touts because we (RIRS) go in an organized manner. We do not collect cash either because you must pay in the bank. Any body who asks for cash is a tout. We present clear identification if we go on tax drive. For now, information is the tool. We are going to embark on aggressive awareness, daily, for the entire month of December. During question and answer session, the chairman explained further; We want to take tax collection beyond crude levels; chasing people about. We however notice that there is apathy to tax payment in this place. It is just getting better now with constant awareness and adoption of friendly methods. Despite that, our situation is peculiar. Tax practice in Rivers State will soon be a model We are going to make it simpler. We want to improve the collection method. There is modest increase in the IGR of the state. If we are looking for a true model in tax payment, Gov Nyesom Wike is one. He always pays his tax and always displays his TIN. So, we are not going to hurriedly pick a tax model in case such a person turns out to have tax issues. Tax enforcement, however, is the last resort, but we won’t manhandle anybody. We try always to be civil but firm. Let it be known that there are other tax authorities in the state that are also on the road. For touts who want to do our work, we arrest them everyday. We collect tax with a human face. We can remind you if you are found wanting. In 2019, be sure that people will pay their taxes, including market people, because of the measures we have put in place.
Abia wins Niger Delta Development Forum contest on ‘delivering results’
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bia State, which recently marched to Port Harcourt and carted away Shell’s secondary school quiz contest for two years running, has won another contest in Port Harcourt, this time with an impact plan on ‘delivering results’ through state-led plan. The contest was organized under the Partnership Initiative for Niger Delta (PIND) with support
from other international development and donor agencies including Foster and DFID. Akwa Ibom and Imo states came second and third respectively. The video-based presentation was on long-term state-led development road maps, and the presentations were watched by all states and participants. Each state had 30 minutes for presentations and 15minutes for questions from judges. Each contesting state
was asked to identify and present proposals for long-term planning within a set of pre-determined criteria. One of the judges, Abel Akeni, urged states to learn from past failure (failed plans) and avoid such missteps in the future. Another judge, Ojo Seun, said it is necessary to create enabling environment to sustain the economic value of a contesting state, saying it would give ad-
vantage. “State should ask relevant questions like; what human capital is developed to explore natural and economic values/ resources? How effective is the institutions on ground? What technical know-how and technological tools are on ground to leverage opportunities?” Another, Aniagolu Okoye, urged states to think in terms of comparative advantage priorities, while Seun Akinsanya said
states shouldn’t be too keen about legislation, because new government can change the plans, rather they should operationalize the plans and involve the Civil Service. Joe Abbah said people with disabilities should be considered in plans. In a vote of thanks, PIND’s deputy executive director, Tunji Idowu, said; “Wherever you can change the narratives in the Niger Delta, please do.”
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Beijing says it is ‘confident’ of trade deal with US
Trump touts ‘very strong signals’ from China amid market jitters over substance of G20 ceasefire TOM MITCHELL
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he Chinese government said it was working towards an agreement that could end its trade war with the US by March 1, in Beijing’s first comment on the issue since Donald Trump said he had set a 90-day truce before raising tariffs on Chinese imports. In a brief statement on Wednesday attributed to an unidentified spokesperson and posted on its website, China’s commerce ministry said it was “confident” a trade agreement with the US could be reached “within 90 days”. The comments, however, did nothing to halt a sell-off on Asian and European stock exchanges. Mr Trump applauded China’s response in a tweet on Wednesday: “Very strong signals being sent by China once they returned home from their very long trip, including stops, from Argentina,” where the G20 meeting was held. “Not to sound naive or anything, but I believe President Xi meant every word of what he said at our long and hopefully historic meeting,” the president added. “ALL subjects discussed!” US stocks had tumbled on Tuesday because of confusion about the outcome of Mr Trump’s weekend meeting with
Xi Jinping, his Chinese counterpart, on the sidelines of the G20 leaders meeting in Buenos Aires. In addition to delaying a planned rise in tariffs on roughly half of all Chinese exports to the US for at least three months, Mr Trump had said that Beijing had agreed to lower and possibly revoke all tariffs on US-made cars. He also suggested large-scale Chinese purchases of US crops would resume immediately. But statements by senior cabinet officials, including White House economic adviser Larry Kudlow and Treasury secretary Steven Mnuchin, suggested that the apparent concessions by Beijing might not kick in until after an agreement was reached. After their dinner, Mr Trump and Mr Xi did not issue a joint statement. Instead both governments issued accounts of the meeting that did not tally, highlighting how difficult it would be for them to reach a comprehensive trade deal. “The [G20] meeting looks to have paused the negative trajectory of the [US-China] bilateral relationship,” said Andrew Polk at Trivium, a Beijing consultancy. “But it did not reverse that trajectory.” Chinese officials have not commented on Mr Trump’s claims that they would reduce
Markets have been confused about the outcome of Donald Trump’s weekend meeting with Xi Jinping © AP
tariffs on US-made cars or begin “immediate” purchases of US crops. China imposes a punitive tariff of 40 per cent on US auto imports — compared with a standard rate of 15 per cent — and has also slapped tariffs on imports of US soyabeans and other agricultural products. It is not clear if the Chinese government would suspend the tariffs ahead of a final trade deal — or help importers absorb the cost
of the extra duties. In a separate statement on Wednesday, the National Development and Reform Commission outlined a series of tougher penalties for companies caught infringing intellectual property rights. China’s IPR protection regime has steadily improved over recent years but it does not address US accusations of alleged “forced technology transfers” through mandatory joint ven-
ture structures in certain industries. Chinese officials have consistently denied that they force foreign investors to surrender proprietary technologies. “China has only listed a long table of all the existing laws relating to violations on patents,” Iris Pang, Greater China economist for ING Asia, wrote in a research note. “It seems China is signalling that it already has the necessary laws to guard against such violations.”
Unravelling US-China trade truce threatens deal wave
Global stock sell-off reaches Europe as trade truce doubts deepen
Advisers say political uncertainty and growing regulatory pressure stand in way of M&A
NICOLE BULLOCK, EDWARD WHITE AND MICHAEL HUNTER
JAMES FONTANELLA-KHAN AND ERIC PLATT
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he market sell-off triggered by fears that the US-China trade truce could unravel has created fresh uncertainty for companies on the hunt for acquisitions, threatening a five-year global takeover wave, dealmakers say. Jumping volatility creates several problems for advisers who have helped broker more than $18tn of deals since the start of 2014. Swinging share prices can spoil a deal, as buyers and sellers struggle to agree on a value to clinch a transaction, and can also weigh on board and chief executive confidence. If an economic slowdown materialises, as some market barometers suggest, M&A activity would suffer. “There is no direct impact on transactions, however, the uncertainty that the trade war and the potential for escalation of the trade war has on the economy has created uncertainty,” said Frank Aquila, a corporate lawyer at Sullivan & Cromwell. “And uncertainty ultimately is what kills all deals.” Some global dealmakers ini-
tially welcomed efforts by US president Donald Trump and his Chinese counterpart Xi Jinping to temporarily halt a trade war that already has scuppered several multibillion-dollar transactions. But the lack of detail about the truce reached at a G20 meeting in Buenos Aires last weekend has left advisers sceptical about what comes next. “I think we are a long way from a truce; it’s more like everyone took a step back from the cliff,” said the head of one of Wall Street’s most active investment banks, who asked not to be named to avoid a confrontation with the Trump administration. “Both leaders needed to press the pause button,” the adviser added. “Trump needed it after the bad performance of the markets and Xi needed it to show some progress with his own members of the politburo. But long-term, this situation is going to continue to weigh negatively on deal activity as there continues to be a lot of Continues on page 48
Metals and tech stocks lead losses after falls in Asia
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uropean stocks joined a global selloff on Wednesday on worries that markets had overplayed signs of improved trade relations between the US and China while concerns over a slowing American economy deepened. The losses spread from New York, where the S&P 500 fell more than 3 per cent — a fall only matched or exceeded in eight sessions over the past five years. The Europe-wide Stoxx 600 was down 0.7 per cent, as was Frankfurt’s Xetra Dax 30. London’s FTSE 100 fell just over 1 per cent. Stocks exposed to the trade dispute were among the biggest fallers, including chipmakers and car manufacturers. The Stoxx index tracking European technology was down 1.2 per cent, with that following industrial metals makers down 1 per cent. This followed falls in Asia where mainland China’s CSI 300 closed off its low point for the day, but down 0.5 per cent overall. Hong Kong’s Hang Seng fell 1.6 per cent. Initial hopes that presidents Donald Trump and Xi Jinping had made what amounted to a breakthrough on the trade war between the US and China continued to fade. Jim Tierney, a fund manager at AllianceBernstein, said: “All of the positive feeling we had over the weekend and yesterday is just unravelling with tweet after tweet. “If you tariff everything around the world it is just a great big tax on consum-
ers and it ultimately slows economic activity globally.” On Tuesday night in the US, Mr Trump wrote in series of tweets: “We are either going to have a REAL DEAL with China, or no deal at all — at which point we will be charging major Tariffs against Chinese product being shipped into the United States.” The president added: “Ultimately, I believe, we will be making a deal — either now or into the future . . . China does not want Tariffs!” On Wednesday morning China’s commerce ministry said it was “confident” that a trade agreement with the US could be reached “within 90 days”, in Beijing’s first acknowledgment of the three-month deadline set by Mr Trump. Chinese officials have still not commented on Mr Trump’s earlier claims that they would move to reduce tariffs on US-made cars or begin “immediate” purchases of American crops. “The ‘trade truce rally’ was shortlived, as investors doubt whether the reality will match the weekend’s rhetoric,” said Ian Williams, economics and strategy research analyst at Peel Hunt. “Meanwhile, the building headwinds to global growth are intact. Eurozone investors should focus on political turmoil closer to home, now afflicting the ‘core’ economies, which reflects the strains within the region, even without the complication of Brexit.” US markets will remain closed on Wednesday for a day of mourning after the death of former president George
HW Bush. Overnight in New York, the Nasdaq Composite dropped 3.8 per cent, returning to correction territory — defined as a 10 per cent fall from the most recent peak. Any intensification in the trade war is thought likely to involve tariffs that could affect the technology sector, which dominates the index. Industrials, technology and financial stocks were the worst performers overall. Such concerns helped draw investors into the relative safety of US debt, pushing yields down. That led to investors demanding narrower premiums for holding debt of longer maturities — a so-called flattening of the yield curve, and a closely-followed indicator that points towards weaker economic growth. The difference between two- and 10-year Treasury yields dropped to less than 12 basis points on Tuesday, a gap not seen in 11 years. The trading pattern added to the growing doubts that the Federal Reserve will be able to tighten US interest rates as quickly as expected, leaving the dollar index around the seven-day lows it touched on Tuesday. It slipped 0.1 per cent to just under 97 points. China’s onshore renminbi exchange rate, which moves within a trading band of 2 per cent either side of a daily midpoint set by the People’s Bank of China, was 0.5 per cent weaker at Rmb6.8663. The currency had reached its highest level in more than two months on Tuesday.
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Boost for Cyril Ramaphosa as South Africa emerges from recession
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uncertainty in the market.” Acquisition activity is running at a white-hot pace, with some $3.8tn of deals agreed this year, according to data provider Refinitiv. While Chinese dealmaking is down 10 per cent from year-ago levels, 2018 transaction volumes in the country rank among the top five years on record. But bankers and lawyers have warned since Mr Trump launched his protectionist America First effort that a deepening politicisation of dealmaking and regulatory scrutiny could threaten activity. Earlier this year, Mr Trump blocked Broadcom’s $142bn hostile bid for rival chip company Qualcomm. China retaliated by suffocating Qualcomm’s $44bn acquisition of Dutch-owned NXP. Tensions between the two countries thawed ahead of the G20 truce, with China signing off on a number of deals, including Walt Disney’s $85bn takeover of 21st Century Fox and United Technologies’ $30bn Rockwell Collins deal. Dealmakers say they are trying to prepare companies for a more arduous path to regulatory approval. US policymakers have recently strengthened the government’s powers to scrutinise and block even small investments in sensitive technologies based on national security concerns. The UK is also considering expanding the government’s ability to intervene in transactions, while the EU is finalising a scheme to better protect domestic companies from Chinese buyers. “Companies are accustomed to weighing regulatory risks in the traditional areas of antitrust and national security,” said Gary Posternack, global head of M&A at Barclays. “What is harder for companies to assess, and therefore more concerning, is the increasing politicisation of regulatory processes around the world.” Most of the deals that have come under pressure from regulators, however, are large ones, as the overall number of deals blocked by antitrust authorities remains near historic lows. “In our experience, the level of political scrutiny applies mainly to large transformative cross-border M&A. We don’t see that level of scrutiny on $5bn transactions but we do see it on $40bn deals. It will be interesting how this impacts big deals next year,” said Hernan Cristerna, cohead global M&A at JPMorgan Chase. “We might see a drop in mega deals but the rest of the market will remain healthy as we aren’t seeing that level of intense scrutiny in the regular flow business.”
Thursday 06 December 2018
Recovery may be shortlived as Eskom prepares for spate of power blackouts JOSEPH COTTERILL
S Theresa May speaks in parliament after the publication of the legal advice on Wednesday © PA
Legal advice on Brexit plan warns of ‘enduring’ backstop risk Attorney-general says UK could face ‘repeating rounds of negotiations’ on EU divorce LAURA HUGHES AND JAMES BLITZ The UK could become bogged down in “protracted and repeated rounds of negotiations” if it tries to exit a “backstop” customs union with the EU, according to the legal advice given to UK prime minister Theresa May on her planned Brexit treaty. The full text of the advice, drawn up by attorney-general Geoffrey Cox, was published on Wednesday, a day after MPs voted to find the government in contempt of parliament for ignoring their request for release of the document. In the six-page document, Mr Cox stated that the so-called “backstop” to avoid a hard border on the island of Ireland would “endure indefinitely” until it was superseded by a long-term EU-UK agreement on trade. Warning of “stalemate”, he added that without such a trade deal the UK would not be able to “lawfully exit” the arrangement. The backstop would keep the entire UK in a customs union with the EU and Northern Ireland within parts of the bloc’s single market
unless and until an alternative solution was put in place to avoid a hard border. Brexiters strongly oppose the backstop, since they believe it would lock the UK into complying with EU rules and trading arrangements. Mr Cox argued that the risk of being permanently trapped in the backstop “must be weighed against the political and economic imperative of both sides to reach an agreement that constitutes a politically stable and permanent basis for their future relationship”. But his legal advice acknowledged that the backstop would carry on “even when negotiations have clearly broken down” on a future trading relationship. He said: “Despite statements in the [withdrawal agreement] protocol that it [the backstop] is not intended to be permanent, and the clear intention of the parties that it should be replaced by alternative, permanent arrangements, in international law the protocol would endure indefinitely until a superseding agreement took its place.”
The note also warned that “in the absence of a right of termination [on the backstop], there is a legal risk that the United Kingdom might become subject to protracted and repeating rounds of negotiations”. Nigel Dodds, deputy leader of Northern Ireland’s Democratic Unionist party, which keeps Mrs May’s minority government in power, said Mr Cox’s paper was “devastating”. Mr Dodds added on Twitter: “For all the prime minister’s promises and pledges the legal advice is crystal clear. In her words, no British prime minister could ever accept such a situation.” The DUP is propping up Mrs May’s minority government, but it has pledged to vote against her Brexit deal in a crunch House of Commons vote on December 11 because the backstop would treat Northern Ireland differently to the rest of the UK. Mr Cox was careful to note that the backstop was “by no means a comfortable resting place in law for the EU”.
ISIS returns to insurgent roots after battlefield defeats Group re-emerges as ‘clandestine’ organisation sowing instability in Iraq and Syria CHLOE CORNISH AND ASSER KHATTAB
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sis is carrying out a rising number of kidnappings, killings and bombings in Iraq and fighting fiercely in Syria as the extremist group returns to its insurgent roots having been driven out of almost all the territory it once controlled. A recent US Department of Defense report said an “effective clandestine Isis organisation appears to be taking hold” four years after the group controlled swaths of Syria, as much as a third of Iraq, and declared a caliphate. A suspected Isis roadside bomb in Mosul killed at least three schoolchildren late last month and a car bomb killed at least five people in the city of Tikrit in mid-November. Attacks in oil-rich Kirkuk province so far this year have more than doubled from 2017, according to the Center for Strategic and International Studies. Between 2014 and 2017 Isis was driven out of areas it controlled in Iraq by the western-backed Iraqi army alongside Kurdish forces and Shi’i militias, many
supported by Iran. Western jets also pounded Isis-held territory, reducing swaths of cities to rubble. But its re-emergence as a guerrilla force signals the continued threat posed by a group that inspired deadly terrorist attacks in Europe and shocked the world with massacres and beheadings in Iraq and Syria and the systematic sexual enslavement of women. Kino Gabriel, spokesperson for the Syrian Democratic Forces, a key US ally fighting Isis, said the group was taking advantage of persistent political instability in Syria and Iraq. “Our estimation of Isis’s power was wrong. We realised that there are more Isis fighters than we thought,” he said. Isis’s revival is prolonging the deployment of US troops in Syria, where some 2,000 personnel are stationed. Trump administration officials have recently pledged that American soldiers will remain in the nation until the “enduring defeat” of Isis and the removal of Iranian forces and Tehran’s proxies. It also suggests that the organisational structure that helped Isis
grow has not been eliminated and that weakened states remain hardpressed to check it. Although Isis has lost the oilfields in Iraq and Syria that helped it become the world’s richest terrorist group, analysts say they are still well-funded, earning revenue from extortion and front companies including car dealerships to currency exchanges. In Iraq Isis has the potential to undermine the new government’s efforts to consolidate improvements in security and deliver badly needed economic development — particularly in mostly Sunni areas devastated by the battle with Isis. Hashem al-Hashemi, an Iraqi government adviser, compares Isis’ situation to Osama bin Laden’s al-Qaeda forces besieged in Afghanistan’s Tora Bora, holed up in mountain and desert areas but capable of guerrilla attacks. Yahya Rasool, spokesperson for Iraqi army’s Joint Operations Command, said: “Our war on Isis today is an intelligence war, not a military war. We are searching and raiding their hide-outs.”
outh Africa emerged from recession in the third quarter of the year, easing pressure on President Cyril Ramaphosa over his handling of the economy. But the recovery may be shortlived as Eskom, the struggling state electricity monopoly, imposes a spate of phased power blackouts on industry. Africa’s most industrialised economy grew 2.2 per cent quarter on quarter in the three months to the end of September, ending a recession that marred Mr Ramaphosa’s first months in power after he replaced Jacob Zuma earlier this year. Rebounds in manufacturing, finance and trade drove the recovery despite an 8.8 per cent drop in mining output, South Africa’s statistics agency said on Tuesday. But on Tuesday the country entered its sixth consecutive day of the so-called “load-shedding” — outages aimed at forestalling total blackouts — as Eskom’s power plants continued to struggle. The crisis has exposed the difficulties facing Mr Ramaphosa as he attempts to revive the South African economy, which stagnated under his predecessor. The country’s output has not grown for more than three consecutive quarters since 2014-2015 and has not surpassed annual growth of 2 per cent since 2013. Central bank forecasts for annual growth in 2018 remain weak at less than 1 per cent. “While we welcome this positive news, we remain concerned that our economy is not growing fast enough,” a spokesperson for the ruling African National Congress said on Tuesday. The economy is facing deep structural problems such as high jobless rates among the black majority and lack of investment. Mr Ramaphosa is also seeking to reassure investors that the ANC will not compromise property rights as it moves ahead with a constitutional change to allow the expropriation of land without payment. The ANC says the policy is necessary to ease massive inequality in land ownership that has persisted since the end of apartheid. South Africa’s parliament debated the measure on Tuesday. An index of agribusiness confidence has fallen to its lowest level since 2009, in part because of uncertainty over land reform. “Any reckless move in policy which might undermine property rights could dent investment and longrun growth prospects in the sector,” Wandile Sihlobo, head of research at the Agricultural Business Chamber, said. Mr Ramaphosa has said he is making progress on a target to raise $100bn of international investment, but he faces difficult decisions on how to fix broken state companies such as Eskom. Business confidence fell under Mr Zuma as corruption and waste became rife in government and in state-owned companies.
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@ FINANCIAL TIMES LIMITED
Global stocks hit by deepening doubts on trade war truce Oil slips and flattening of US Treasury yield curve spooks traders EDWARD WHITE AND MICHAEL HUNTER
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lobal stocks fell on Wednesday after concern over US-China trade relations and worrying signals of economic health from the US bond market fuelled a sell-off on Wall Street overnight. European bourses tracked falls across Asia that followed one of the biggest sell-offs in US stocks in recent years. The Europe-wide Stoxx 600 was down 0.8 per cent, as was Frankfurt’s Xetra Dax, while London’s FTSE 100 was 1 per cent weaker. Stocks exposed to the trade dispute were among the biggest fallers, including chipmakers and car manufacturers. The Stoxx index tracking European technology was down 1.2 per cent, with that following industrial metals makers down 1.5 per cent. The Australian dollar — which can track the outlook for growth in China, the main market for the metals produced by the Sydney-listed miners — fell 0.9 per cent to $0.7270, a fivesession low. Australia’s third-quarter GDP missed forecasts, adding to concern about the outlook for 2019. The trading pattern followed a 3.2 per cent tumble for the S&P 500 index on Tuesday, one of only eight declines of more than 3 per cent in the past five years. The Nasdaq Composite dropped 3.8 per cent, returning to correction territory — defined as a 10 per cent fall from the most recent peak. In the US, industrials, technology and financial stocks were the worst performers. And the Treasury yield curve — which reflects the difference between shorter and longer term US borrowing rates and is a closely followed bond market barometer of economic sentiment — is flattening, often a harbinger of slower economic growth. The difference between two and 10-year Treasury yields dropped to
less than 12 basis points on Tuesday, a gap not seen in 11 years. US markets were closed on Wednesday, to mark the funeral of President George HW Bush. “The market decline in the US overnight and the flattening of the yield curve reflect that economic growth momentum is taking over as the primary concern for investors,” said Tai Hui, a JPMorgan Asset Management strategist. Investors were also worried about the durability of the US-China trade war truce with Donald Trump casting doubt on whether a long-term deal between Washington and Beijing could be struck. China’s commerce ministry said on Wednesday it was “confident” that a trade agreement with the US could be reached “within 90 days”, in Beijing’s first acknowledgment of the three-month deadline set by Mr Trump. But on Tuesday night in the US, Mr Trump wrote on Twitter: “We are either going to have a REAL DEAL with China, or no deal at all — at which point we will be charging major Tariffs against Chinese product being shipped into the United States.” The president added: “Ultimately, I believe, we will be making a deal — either now or into the future . . . China does not want Tariffs!” Forex China’s onshore renminbi exchange rate, which moves within a trading band of 2 per cent either side of a daily midpoint set by the People’s Bank of China, was 0.5 per cent weaker at Rmb6.8663. The currency had reached its highest level in more than two months on Tuesday. The offshore rate was 0.3 per cent weaker at Rmb6.8692. The pound continued to track Westminster’s Brexit drama. After the publication of the UK government’s legal advice on Theresa May’s deal on the terms of departure from the EU, sterling was flat for the session at $1.2721.
Glencore, Vitol and Trafigura face bribery probe Commodity traders investigated in Brazil on suspicions of payments to Petrobras employees
ANDRES SCHIPANI AND HENRY SANDERSON
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razilian prosecutors said on Wednesday commodity traders Vitol, Trafigura, and Glencore are under investigation on suspicion of paying bribes to employees of state-controlled oil company Petrobras in exchange for contracts, in the latest twist to the sweeping corruption investigation that has rattled Latin America’s largest economy. Prosecutors said “there are suspicions” that between 2011 and 2014 the three companies paid over $15.3m related to over 160 operations “of purchase and sale of oil products and rental of storage tanks”. Other unnamed companies are also being investigated for paying a similar amount in bribes to Petrobras’ employees. Federal police have arrested 11 people and is rounding up another 26 for questioning. The investigation dubbed “No Limits” is part of “Lava Jato”, or “Car Wash”, probe into corruption at Petrobras, which has ensnarled
a number of Brazil’s political and business elites since 2014. “Evidence shows that there was a scheme in which the investigated companies paid bribes to Petrobras’ employees in exchange for favours, more advantageous prices, and gaining contracts more frequently,” prosecutors said in a statement. A spokeswoman for Trafigura said they don’t comment on legal matters. A spokesman for Glencore declined to comment. Vitol said in a statement that it has “a zero tolerance policy in respect of bribery and corruption.” “Vitol will always co-operate fully with the relevant authorities in any jurisdiction in which it operates,” it added. Prosecutors added the alleged corruption activities took place between Petrobras’ offices in Houston and the company’s headquarters in Rio de Janeiro. They also point that between 2004 and 2015 Trafigura alone, “carried out around 966 commercial operations with Petrobras, which totalled approximately $8.7bn”.
Mexico’s López Obrador suspends oil auctions for 3 years Andrés Manuel López Obrador has promised to change the constitution to allow more plebiscites JUDE WEBBER
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exico’s new president Andrés Manuel López Obrador closed the door to oil auctions for three years and said companies that had been awarded contracts under the country’s energy reform needed to stop speculating and start producing. In his daily early morning news conference, Mr López Obrador said contracts awarded under the 2013 energy reform, which ended the eight-decades monopoly of state oil company Pemex, were safe — as long as they were productive. “We are not going to cancel contracts. What we want is for those who received them to demonstrate that they will invest and produce,” said the president,
who took office last Saturday. “We’re going to have a threeyear truce so that there is investment. We don’t want investment titles that are only used for speculation. We want them to produce and we need them to — production is falling,” he said. Some of the fields awarded in a series of oil tenders held since 2015 contained discoveries, but others were exploration blocks that require drilling and which oil experts say cannot be brought on stream immediately. Mexico had been due to hold a new round of oil auctions in February but they now appear to have been formally shelved. In any case, some of the assets included in that auction were unconventional, and Mr López Obrador has categorically ruled out fracking — the technology
required to exploit them. “We’ll intervene and Pemex will have more investment now. In a few days, we’ll start drilling more wells,” he said. “We are going to reactivate” some wells with declining production, he said. “In 10 days we are going to Campeche and we’ll start drilling a good battery of wells to stop the fall in production and start producing more crude,” he added. Mr López Obrador has put Pemex under new management. The outgoing chief executive, Carlos Treviño, told a news conference last week that this year’s production was expected to be 1.83m to 1.84m barrels per day, with a 2019 goal of 1.831m bpd. The new management has yet to announce its targets.
Decision to drop RBS probe faces legal challenge Ex-head of business taken over by bank’s GRG unit seeks judicial review NAOMI ROVNICK
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he UK financial regulator’s decision to drop an investigation into certain managers at Royal Bank of Scotland’s disgraced restructuring unit is being legally challenged by the former head of a company sold off by the unit. Neil Mitchell, who ran Torex Retail before he blew the whistle on an earlier fraud at the software company and RBS’s Global Restructuring Group took control of the business, has applied for a judicial review of a UK Financial Conduct Authority decision in July that its options for taking action were “limited”. Mr Mitchell, who claims to represent 530 complainants affected by alleged wrongdoing at GRG, alleges in his judicial review application that the FCA has been “unlawfully refusing or failing” to fulfil its legal obligations and that its July decision should be “quashed”. The FCA, despite commissioning an independent review of the RBS unit that found it had
systematically mistreated its customers, justified its position in July by saying that commercial lending, such as that carried out by the now-defunct GRG, was largely unregulated. The ruling led to calls by MPs for reforms to how lending to small and medium-sized enterprises is overseen. In his application for judicial review, seen by the Financial Times, Mr Mitchell alleges that the FCA wrongly declined to rule that former GRG managers were not fit and proper persons, while the regulator should also have taken action over inadequate systems and controls within the unit. GRG was an RBS unit that restructured corporate clients of the bank that ran into financial difficulties. RBS had been accused of pushing businesses into GRG’s restructuring processes to pick up assets at fire-sale prices. Mr Mitchell also alleged that RBS colluded with Cerberus, a private equity and hedge fund, to sell Torex at a knockdown price. That claim was dismissed by a judge
who ruled that it did not have a real prospect of success at trial. The independent review that led to the FCA’s July decision not to take action against GRG’s management found no evidence that viable small companies were put under the unit’s control. But the review did say that “many aspects of GRG’s culture, governance and practices were deficient and that in some areas the inappropriate treatment of customers was widespread and systematic”. The FCA said GRG “was largely unregulated and the FCA’s powers to take action in such circumstances, even where the mistreatment of customers has been identified and accepted, are very limited.” “After carefully considering all the evidence we have concluded that our powers to discipline for misconduct do not apply and that an action in relation to senior management for lack of fitness and propriety would not have reasonable prospects of success. We will not comment on the application seeking to review this decision while it is pending.”
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ANALYSIS The ex-McKinsey consultant tipped to be next Greek PM
Poll favourite Kyriakos Mitsotakis seeks to boost economy with reforms KERIN HOPE
M Does cloud computing mean game over for Xbox and PlayStation? Hardware makers must adapt to a world where superfast broadband can stream blockbuster games without the need for a box LEO LEWIS
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ome entertainment has always been a ruthless business, but games consoles’ 50-year territorial war for the living room has been endlessly brutal. On screen, it is fought with chainsaws, battleaxes, plasma rifles or the Poltergust 3000 spectral vacuum cleaner. Behind the scenes, though, is an even bloodier conflict fought with long-term bets on technology, balance sheets, exclusivity agreements and games so intricate that they require 1,000-strong armies of staff to produce. The casualties are frequent. Who remembers the Casio PV-1000, the Timlex Mega Duck and the Bandai Playdia? Each may have briefly imagined themselves as rivals to the Nintendo Entertainment System or Sony PlayStation, but some barely made it out of the stores. Fizzled offerings from Apple, Panasonic and Sharp prove that even titans of consumer electronics have stumbled when it comes to games. But whereas the fight used to be between competing machines, analysts say the looming battle is about whether the pace of technological change and the nature of the games themselves could make consoles redundant. The gaming world is “poised to undergo a transformation not seen since the advent of mobile phone games” 20 years ago, wrote Candice Mudrick, an analyst at industry research group Newzoo, in a report on what has been dubbed “cloud gaming”. The threat to traditional console hardware sales, she told the FT, “is very real”. Using cloud technology, gamers — anywhere in the world with a strong enough internet connection — could theoretically stream, rather than download, high-end games and play them in real time over the web on any device, as they might a Netflix drama series. In October, Microsoft unveiled a “vision for the evolution of gaming” similar to the way that music and films are now available on demand and accessible from any screen. Keen to reverse the disappointment of its Xbox One console, a machine whose sales figures Microsoft stopped releasing a year after its launch in 2013, its Project xCloud will trial next year, but the ambition sets the scene for a world either without traditional consoles, or where their dominance is mortally wounded. The disruptive implications of cloud gaming are huge. The console model, at its heart, is about control of the medium through which the principal revenue stream — the games — are channelled. If the medium is rendered irrelevant by cloud gaming, games studios such
as Electronic Arts and Activision may decide to offer their wares without the middleman. Sony and Nintendo are both games makers in their own right and may yet find a profitable cloud model; Microsoft has been buying up games studios to give itself a stronger in-house portfolio. The advent of 5G broadband could accelerate the process. The ability to stream, and the diminished need for an independently highpowered, high-memory box sitting under the TV, poses a major threat to a global consoles market worth $34bn in hardware and software sales. After eight cycles of consoles the industry may currently be building the last generation of devices that can credibly use that name. To some, that prediction seems wildly premature. Broadband may take more than a decade to be both fast enough and sufficiently available to make cloud gaming a viable offering for the narrative-heavy games that draw fans to consoles. And despite what might be around the corner, this remains something of a heyday for console makers. Newzoo predicts revenues for the console game market will grow 15.2 per cent this year compared with 2017. And while mobile gaming, both in terms of its global user base of about 2.1bn and annual revenues of about $60bn, may have expanded spectacularly in recent years, that has not come at the expense of consoles. On the contrary, says Serkan Toto, a Tokyo-based consultant to several games companies, it has probably helped to broaden the audience. The three main console makers are the ultimate survivors, say analysts, and are determined to maintain their market position. Kenichiro Yoshida, Sony’s president, in an interview with the FT in October scotched speculation that the day of the console was numbered by confirming that the company was working on a successor to the PS4 that analysts believe could be ready by 2020. Nintendo’s console business also looks robust. The Switch, which works as both a home console and a portable device and is the exclusive home of Mario, Zelda and other hardware-shifting franchises, has sold nearly 23m units since its launch in 2017. Its own sales forecasts suggests it could sell a further 10m over Christmas and analysts say it could have an active life of about seven more years. Both companies are also getting better at monetising the content, developing new revenue streams beyond the mere sale of the game itself. The current pipeline has supplied a thick flow of apocalyptic wastelands, top-level football, Pokémon and mythological Norse slaughter — the precise formula on which the industry thrives. When Sony released its exclusive Spider-Man title in September, it broke records
by selling 3.3m copies in three days. “Cloud gaming will come. There is no way around it. There is a broad consensus that this is the future of gaming,” says Mr Toto. “Everything will be streamed and devices will be agnostic. It is just further away than a lot of the commentary makes out.” But is it? One way to frame the debate, say games industry veterans, is to consider a showdown between Arthur and Kassandra — a Wild West gunfighter in the Red Dead series of games whose stubble grows in real time and an ancient Spartan warrior who combines naval manoeuvres, one-night stands and a sword fight with Pythagoras. Kassandra is the hero of Ubisoft’s Assassin’s Creed Odyssey — a richly cinematic fantasy set in the Peloponnesian war. It is a perfect example of a premium title that has been developed in the era where Sony’s PS4 is dominant, with 81m consoles sold around the world. It is visually stunning, narrative-heavy and optimised to work best with the kind of large TV you find in a living room. So called “triple-A” games like these, runs one argument, are too complex and demanding to work acceptably through a streaming system. But in a piece of stunning disruption, says Pelham Smithers, a games and technology analyst, Assassin’s Creed Odyssey is already available on Nintendo’s Switch console via a streaming service — although only in Japan for now. The processing and memory power required to run the game are devolved to cloud servers and it plays acceptably well on Nintendo’s relatively underpowered machine, according to reviews. This is, for now, a rarity and far from perfect. Japan has the fastest and most stable broadband among G7 economies. Speeds elsewhere are judged to be too slow to make streaming of tripleA titles viable and some estimates suggest that “peak 5G” is unlikely to be standard in the US and EU much before 2029. But the streamed version of Assassin’s Creed Odyssey suggests the future has already arrived. “As well as ending the idea that Switch cannot play PS4-level games as it is not powerful enough, it shows the threat streaming can be to the console gaming industry,” says Mr Smithers. “The company that has to be most worried by this is Sony.” If true, he argues that the promised next-generation PlayStation takes on an importance that Sony had hoped to avoid. Having beaten Microsoft, it had hoped to enter the next cycle as the console of choice for serious gamers. As it now stands, he says Sony must prove itself in an era when, among other challenges, “gaming power may well lie with cloud servers, not console processors”.
onths before Greece’s next elections, Kyriakos Mitsotakis — the favourite to become prime minister — is already in campaign mode. He and his shadow cabinet are out on the stump each weekend, fired up by a recent opinion poll giving Mr Mitsotakis’s centre-right New Democracy party a record 16-point lead over the ruling leftwing Syriza party of prime minister Alexis Tsipras. Speaking to teachers and university professors at an interactive museum in a rundown district of Athens last month, his subject was Greece’s ailing education system. “We cannot achieve strong growth rates unless we invest in our human capital,” said Mr Mitsotakis — educated at Harvard and Stanford universities — as he and Niki Kerameos, the shadow education minister, out-
attract fresh investment while maintaining the high budget surpluses agreed with the EU. Mr Mitsotakis has long dreamt that such a moment could be at hand. The 50-yearold is a scion of one of Greece’s most political families: son of a prime minister, his older sister Dora served as foreign minister while his nephew Costas, a regional governor, will be running for mayor of Athens. Such a background opens the former McKinsey consultant to the charge that he is privileged and remote — something he is keen to try to deflect by sharing the campaign platform with aspiring cabinet ministers like Ms Kerameos, along with candidates for a clutch of local and EU elections next year. “He wants to avoid the elitist tag,” one aide said. Mr Mitsotakis played a minor role during the country’s crisis, serving as civil service minister in a ND-led coalition
Kyriakos Mitsotakis says his New Democracy party could use its pro-market image to attract fresh investment
lined plans for better IT teaching, university courses taught in English and a strict timetable for completing degrees. If all goes well, Mr Mitsotakis might soon be in a position to try to make good on those plans. A win by the margin predicted by the latest polls would ensure an outright parliamentary majority for his conservatives in the election due to be held by October 2019. Greece has posed the EU one of its thorniest recent problems, emerging from a third, €86bn bailout only in August. Mr Mitsotakis argues the country needs growth-oriented reforms following three years of fiscal tightening under Mr Tsipras and Syriza. In an interview, he bluntly criticised Greece’s economic performance and said the trio of EU and IMF bailouts failed in their “main objective” of ensuring the country could once again borrow on international capital markets. “If you look at where we are compared with 10 years ago [when the crisis erupted] we have made progress on many fronts but a lot of the fundamental problems associated with the structure of the economy are still there,” said Mr Mitsotakis. He said his party could restore confidence in the economy and use its pro-market image to
government implementing the second bailout. His brief from international creditors was to eliminate 15,000 public sector jobs — a task cut short by the government’s fall in January 2015, triggering a snap election won by Syriza. Today Greece’s crisis is officially over, but its fragile banks carry exceptionally high levels of non-performing debt. Unemployment is almost 20 per cent. Mr Mitsotakis insisted the government must do much more to restore market confidence . “It’s not just a question of consolidating fiscal policy because, if anything, fiscal policy has been too tight. It is also a question of really believing in implementing structural reforms, making Greece more competitive, changing the overall business climate, bringing in significant amounts of foreign investment but also mobilising domestic investment,” he said. Reviving stalled privatisation projects would help, starting with a €6bn scheme to redevelop Hellenikon, the coastal site of the former Athens international airport, as a leisure, business and residential centre. Greek and Gulf investors are committed to the project but the start of infrastructure work has been delayed for almost two years.
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Live @ The Exchanges Top Gainers/Losers as at Wednesday 05 December 2018 GAINERS Company
Market Statistics as at Wednesday 05 December 2018
LOSERS Opening
Closing
Change
Company
Opening
Closing
Change
DANGCEM
N185
N190
5
SEPLAT
N614
N598.9
-15.1
STANBIC
N46.55
N47.5
0.95
CCNN
N18
N16.25
-1.75
FLOURMILL
N20.15
N21
0.85
INTBREW
N30.75
N29.45
-1.3
N10.3
N10.9
0.6
GUARANTY
N35.95
N35.3
-0.65
N4.7
N4.95
0.25
N10
N9.5
-0.5
PZ OANDO
UACN
ASI (Points)
31,151.68
DEALS (Numbers)
2,845.00
VOLUME (Numbers)
198,637,464.00
VALUE (N billion)
2.309
MARKET CAP (N Trn
11.372
Dangote Cement, 18 others lift stock market by N52bn Stories by Iheanyi Nwachukwu
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igerian listed equities gained approxim a t e l y N52billion on Wednesday December 5, 2018 as investors rushed to buy the shares of Dangote Cement Plc and other value counters. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.47 percent from 31,007.25 points to 31,151.68 points. The value of listed equities –the market capitalisation increased to N11.372trillion from preceding day level of N11.320trillion. Nineteen (19) stocks gained against 18 losers. The stock market’s yearto-date (YTD) returns currently stands at -18.54per-
cent. In 2,845 deals stock dealers exchanged 198,637,464 units valued at N2.309billion.
FBN Holdings Plc, Access Bank Plc, Diamond Bank Plc, FCMB Group Plc, and GTBank Plc were
actively traded stocks. Dangote Cement Plc recorded the highest price gain from N185 to N190,
up by N5 or 2.70percent. Stanbic IBTC Holdings Plc followed from N46.55 to N47.5, adding 95kobo or
L – R: Nerina Visser, CFA, chairperson of the ASISA ETF Standing Committee; Oscar N. Onyema, OON, chief executive officer, The Nigerian Stock Exchange (NSE) and Deborah A. Fuhr, managing partner & founder, ETFGI during the 2018 NSE Annual ETPs Conference tagged “Exchange Traded Products: Evolving investment themes, Accessing New Markets and Enhancing Portfolio Alpha”, held in Lagos.
2.04percent. Flourmills Nigeria Plc stock price advanced from N20.15 to N21, up 85kobo or 4.22percent; PZ Cussons Nigeria Plc from N10.3 to N10.9, up 60kobo or 5.83percent; while Oando Plc share price gained 25kobo from N4.7 to N4.95, up by 5.32percent. Seplat stock recorded the highest value decline from N614 to N598.9, down by 15.1 or 2.46percent. Cement Company of Northern Nigeria Plc followed after its share price dropped from N18 to N16.25, down N1.75 or 9.72percent. International Breweries Plc recorded decline of N1.3 from N30.75 to N29.45, down by 4.23percent. GTBank Plc lost 65kobo or 1.81percent, from N35.95 to N35.3; while UAC of Nigeria Plc dipped from N10 to N9.5, losing 50kobo or 5percent.
Lafarge Africa to raise N89.21bn by way of Rights Issue
Nigeria’s Exchange Traded Products space records growth
…at N12 per share, 6 new shares for every 7 held
… Nine ETPs listed on NSE
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afarge Africa Plc has notified the Nigerian Stock Exchange (NSE) of the decision of the Board of Directors at the meeting held on December 3 2018 in respect of the proposed Rights Issue. Following the resolution of the company’s shareholders passed at the Extra-Ordinary General Meeting (EGM) held on September 25, 2018, the Board of Directors have approved the terms of the Rights Issue. Lafarge Africa Plc will raise N89.21billion by way of a Rights Issue at N12.00 per share, by issuing 6 new shares for every 7 shares held by shareholders at the Qualification Date, which will be announced. The Rights Price represents a circa 10.45percent
discount on Lafarge Africa’s traded closing price of N13.4kobo as at Monday December 3, 2018. The regulatory approval process for the Rights Issue is ongoing, according to the notice signed by Adewunmi Alode, Company Secretary, Lafarge Africa Plc. Lafarge Africa Plc is a subsidiary of LafargeHolcim, a world leader
in building materials. The company has operations in Nigeria - Ewekoro and Sagamu plants in Ogun State, Ashakacem in Gombe State, Mfamosing in Cross Rivers State, Atlas cement in Rivers State and Ready-Mix Nigeria and varied operations in South Africa and Ghana with total group capacity of around 14 million Metric Tonnes.
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igeria’s Exchange Traded Products (ETPs) space has grown steadily by a cumulative average growth rate of 8 percent over the last 4 years, said Oscar Onyema, Chief Executive Officer, Nigerian Stock Exchange (NSE). Onyema said the crosslisting of ABSA’s Newgold Exchange Traded Fund (ETF) on the Nigerian Stock Exchange in December 2011 opened up the ETPs market. Currently, there are nine (9) ETPs listed on the Exchange – 2 thematic ETFs providing access to Pensioncompliant and Shariahcompliant stocks, 2 broad equity market ETFs tracking the NSE 30 Index, 3 sector based ETFs, 1 commodity ETF, and 1 bond ETF tracking exposure to benchmark FGN Sovereign Bonds. The NSE CEO disclosed all these on Wednesday December 5 in Lagos at the 2018 Exchange Traded
Products conference where he said that the introduction of ETPs is one of the Exchange’s strategy to enhance diversification “as well as broaden the options available in the capital market to support the efficient implementation of investment strategies across diverse asset classes and instruments”. The theme of the ETPs conference is “Exchange Traded Products: Evolving investment themes, Accessing New Markets and Enhancing Portfolio Alpha”. In the last 15 years, investors’ demand for ETPs (both retail and institutional) has grown remarkably, which in turn has led to a greater variety of products offered by ETP sponsors, he noted. Globally, ETPs have grown remarkably this year recording net flows of approximately $358billion as at October 2018. According to ETFGI, the Global ETP industry had close to 15,000 ETPs listings on 71 exchang-
es with assets of about $5trillion cutting across 392 providers at the end of October 2018. “It is interesting to note that equity-based ETPs make up 76.7percent of global ETP listings whilst Fixed Income based ETPs represent 16.7percent of listings, similar to the asset split in Nigeria”, Onyema added. The NSE CEO used the medium to encourage ETP product issuers and intermediaries to expand their footprint by broadening distribution channels, introducing other asset classes/ strategies, entering new markets, leveraging technology and data analytics to understand the market and demand. “This year, in collaboration with issuers, we have focused on diversifying the ETPs space by supporting new product development and thus expect the launch of new ETPs in the short term”, he added.
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Agbaje attacks Sanwo-Olu, describes him as a failed commissioner
…Agbaje inexperienced to rule Lagos - APC Iniobong Iwok
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imi Agbaje, governorship candidate of Nigeria’s main opposition party, the People’s Democratic Party (PDP) in Lagos State, has described the promise by the ruling All Progressives Congress (APC) governorship Candidate in the state, Babajide Sanwo-Olu, to restore the glory of Lagos as not only laughable but an admission of failure by the ruling clique that had allegedly enslaved the state since 1999. In a statement signed by the Director of Media and Publicity Agbaje governorship campaign organisation, Wednesday, Felix Oboagwina, the PDP candidate said it was noteworthy that Sanwo-Olu who had been three-time commissioner consecutively in the state and lately the managing director of the state’s housing corporation had no
Agbaje
achievements to show. Agbaje, who spoke in reaction to an earlier statement by the APC gubernatorial candidate to make the people the cornerstone of his administration and restore the glory of Lagos State, said it was an admission of the ineptitude with which his opponent, his sponsors
Abia: Ohanaeze youth group endorses Ikpeazu, Anyaso for 2019
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n what seems a show of approval for what it considers as great achievements and improved governance in Abia State, the youth wing of Ohanaeze Ndi-Igbo has endorsed Okezie Ikpeazu for a second term, even as the group also called for support for the People’s Democratic Party (PDP) candidate for Bende Federal Constituency House of representatives’ seat, Chima Anyaso, who the group describes as a true face of youth leadership in Nigeria. Speaking during a courtesy visit to the home of the PDP House of Representatives candidate in Igbere, the Ohanaeze youth leader from Abia State, Okey Nwankwo, who led other members, reiterated the need to have youths who have contributed immensely to economic and infrastructural growth of the state occupy
various leadership positions. He further affirmed that the endorsement on both Ikpeazu and Anyaso is coming in view of the need for Governor Ikpeazu to complete his second term in office to ensure security, stability and sustain the infrastructural and economic growth of Abia State and for Anyaso to continue to be the voice of young Nigerians. Also, the National President of the Youth Council, Kingsley Dozie, said: “Governor Ikpeazu and Chima Desmond Anyaso are the candidates of Ohanaeze Ndi-Igbo Youths; we have seen their great achievements, we know and trust them, we believe in their capacity to contribute not just to the growth of Bende, but Abia State. We are supporting them and this is a non-partisan support, we will mobilise and ensure they win the elections”.
Atiku appoints 3 youths, woman as aides
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s campaigns of the People’s Democratic Party candidate, Atiku Abubakar kicks off in Sokoto State yesterday, 3 December, 2018, the former Vice President of Nigeria has appointed, three youths and a woman as aides. The new appointments are contained a press statement issued by his Media Adviser, Mazi Paul Ibe in Abuja on Sunday. The new appointees include Ahmed Adamu, Special Assistant (Youth and Strategy); Aliyu Bin Abbas; Special Assistant (Youth Support Groups); Phrank Shuaibu, Special Assistant (Public Communications) and Barr. Funmi Lamuye, Special Assistant (South-West). Adamu, 33, academician, petroleum economist and leadership and development expert, who hails
from Katsina State is the pioneer Global President of Commonwealth Youth Council. He was an international expert at the United Nation’s Global Forum on Youth. He was also ranked among the top 100 most influential young Nigerians by Advance Media Africa. Abbas, 34, an indigene of Borno State, is Director General of the Atiku Cares Foundation. ACF, a philanthropic platform of the former Vice President for humanitarian interventions to vulnerable persons and communities has under the leadership of Abbas, made great impact in bringing succor to the most vulnerable around the country especially in the Northeast zone. Shuaibu, 43, a publicist and public communications consultant hails from Kogi State.
and his godfathers had ruled the state for the last 19 years. “That is Sanwo-Olu admitting to what everyone knows already, that he and his paymasters are guilty of misgovernment; and for most of two decades, they have enslaved the state for purely selfish benefits,” “But Lagosians cannot be fooled
and they know that these leopards cannot change their spots, Lagos State was just in the 2018 Global Livability Index as the second worst city for humans to live in the world. And this is no thanks to its waste disposal mismanagement, traffic logjams, incessant flooding, insecurity, double taxation, impunity, lawlessness, godfatherism, corruption and abandoned projects”. Agbaje urged Lagosians to reject Sanwo-Olu at the polls for representing the continuity of these negative indices, promising to grant the councils in the state free rein to administer their budgets and allocations and manage their funds to enable them build drainage, markets, primary healthcare, so the citizens could feel the impact of government at the grassroots. “We also intend to fully liberate the local governments to mind their own business.
But reacting in a statement to this medium, Publicity Secretary of Lagos APC, Joe Igbokwe, said that the PDP had nothing new to offer Lagosian, stressing that Sanwo-Olu had a deep knowledge of the state and the private and public sectors to successful rule the state. Igbokwe further stated that Agbaje had no management or public service experience, adding that the achievement of APC in the state was well noted. “Lagos PDP can come up with anything in order to pretend if as they have any value to add in Lagos but Lagosians do not like them. “Our Candidate, Sanwo-Olu, is a great scholar in the finest tradition with deep knowledge of the public and the private sectors and he has a lot to bring to the table, unlike the candidate of PDP, Jimi Agbaje, who has no knowledge of the public.
Benue APC receives decampees from PDP, as Jime pledges real change Benjamin Agesan, Makurdi
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he All Progressives Congress (APC) has received a boost in membership as thousands of People’s Democratic Party (PDP) members defected to its fold in Naka, Gwer West Local Government Area of Benue State. Receiving the defectors, Benue State Secretary of the APC, Peter Akulega, assured them that APC remains the party with equal opportunities for all and the new entrants would be treated fairly hence, they should give their best in ensuring victory for the party. Speaking on behalf of the decampees, Utoor Gbinde, Hon. Edwin Shungu and Yankyaa said though Governor Samuel Ortom’s wife was from Gwer West, the area could not boast of any development under her husband’s administration
and since the governor who has achieved nothing in close to four years has rejoined the PDP, it was needless for Gwer West people to continue in the umbrella party that holds no promise for them. Also speaking, Gboko Barnabas and Hills Hilary Gber confirmed that even the Udam area where the Benue First Lady comes from is bereft of government presence as they called on the people to vote for the APC. In their remarks, APC Leader in Gwer West, Titus Zam and Eugene Aliegba advised the Tyoshin people that the coast was clear for the APC to reclaim its mandate in the state so as to install credible leadership citing today’s defection ceremony as the end of PDP in Gwer West. Responding, Benue APC governorship candidate, Emmanuel Jime thanked the decampees and the good people of Gwer West for their
unanimous decision to back him and the APC to gain victory in 2019. The APC gubernatorial candidate analysed that Benue was pregnant with change but while expecting the emancipatory change in 2015, it ended up in stillbirth to the utmost disappointment of all citizens of the state who have been gnashing their teeth for close to four years. He said during the three years of Ortom’s misrule, he (Jime) was busy studying all the rudiments of good governance and he could assure that Benue will have credible and evidential leadership next year which will provide the real change the state has been yearning for. He decried the absence of good roads, schools and portable water in Gwer West and other parts of the state but assured that he would make life better for them when he takes over next year.
2019: We would only back candidate who support restructuring – Afenifere Iniobong Iwok
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s the 2019 general election approaches, leader of pan- Yoruba social political group, Afenifere, Ruben Fasoranti, has said the South-western part of Nigeria would only back a presidential candidate who was in support of the group’s clamour for an urgent restructuring of the country. There have been increased agitations for the restructuring of the Nigerian federal system. Most of the calls have come from groups in the South East, South-South, South West and North Central geopolitical zones of the country. The pro-restructuring groups have called for a return to the for-
mer regional structure and for the regions to control their resources. However, this calls have been ignored by the incumbent Muhammadu Buhari administration who has insisted that the problem with the country was about the system of doing things and not structure, stressing those clamouring for restructuring are looking for an opportunity to destabilise the country. But speaking in an interview with BusinessDay Monday, Fasoranti, noted that the group would collectively vote against any presidential candidate who was against the current clamour for restructuring of the country, stressing that Nigerians have learned their lesson and can no longer be taken
for a ride. The Afenifere leader said the group would soon publicly declare the name of the presidential candidate its will support in next year’s election, while expressing dissatisfaction with the performance of incumbent Muhammadu Buhari’s administration. “Our position on restructuring has always been clear and we have said it is a must that Nigeria is restructured among region because as you can see the president structure is not working. “Restructuring is one of our cardinal demands which would determine who we are going to support and we are serious about it, we will; vote against anybody who do not support this,” Fasoranti said.
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Land reform: Veritable growth catalyst presidential candidates should not ignore CHUKA UROKO
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s the race for 2019 gathers momentum, especially among presidential candidates, one important area that should be a major concern for them is what to do with the country’s land to catalyse economic growth. Nigeria’s total land area is estimated at 91 million hectares and available record shows that only 3 percent of this land is documented. Again, it has been discovered that of this number, 82 million hectares are arable but only 42 percent of the cultivable area is farmed. This means that there is something wrong with the land system in Nigeria that needs to be corrected and given its centrality as a factor of production, it should be given a pride of place in the economic agenda of any intending president of this troubled country. Back in 2009, late President Musa Yar’Adua initiated a move for land reform in the country with the setting up of the Presidential Technical Committee on Land Reform (PTCLP) as a forerunner of the proposed National Land Commission. Almost 10 years after, nothing has been said or done about this proposed reform; not until a couple of months ago when PTCLP organised a four-day National Stakeholders Dialogue on Land Reform in Abuja with the aim of addressing challenges in the land tenure system. Land is so important in any economy that its reform should be the fulcrum around which other economic agenda of any serious
Buhari
leader should revolve and, as Peter Adeniyi, chairman of the PTCLR, once said, “we owe it as a sacred duty to ourselves and the future generations to define and design our own land governance system”. Land is the bedrock upon which the satisfaction of all human needs is built. Food, clothing and shelter are all human needs met from resources derived from land. Though land size is fixed, its price and value rise exponentially, more so when it is improved upon by way of development or value addition. As a factor of production, Alfred Marshall in his ‘Principles of Economics’ written in 1890, says land is so important that the other factors would be redundant without it. The other factors are labour, capital and entrepreneurship. Land reportedly accounts for 20 percent of the earth’s surface, and consequently, every economy requires comprehensive land regu-
Atiku
lations and policies to guarantee the effective usage of its land and the maximisation of resources attached to it. This underscores the need for its reform in Nigeria. From traditional, economic and industrial perspectives, experts see land as being unique and strategic and its availability plays a pivotal role in the development of any economy as it increases investment inflow. Industrialisation, housing development, agriculture, mining, oil exploration and other economic and productive activities that lead to improved standard of living, job creation, economic growth, among others, are possible only when land is available and harnessed for such purposes. A World Bank report on ‘How Africa Can Transform Land Tenure, Revolutionise Agriculture and End Poverty’ says Sub-Saharan Africa is home to nearly half of the world’s usable, uncultivated
land but, so far, Africa as a whole has not been able to develop these unused tracts to dramatically reduce poverty and boost growth, jobs, and shared prosperity. Another World Bank report on ‘Securing Africa’s Land for Shared Prosperity’ argues that if African countries and their communities could effectively end ‘land grabs’ and modernise the complex governance procedures that govern land ownership and management over the next decade, it would bring about improved well being and standard of living of their people. These typically tell the Nigerian story, thus making the need for reform not only necessary, but also urgent. They also underpin the need for the country to reform property ownership by citizens. Experts posit that the current land tenure system in Nigeria is reason for the dismal home ownership level and large stock
of dead assets in the country. It is estimated that only five percent of the country’s housing stock, which is less than 20 million units in total, are in formal mortgage, meaning that 95 percent of these houses are dead assets because they are neither tradable nor bankable. Andrew Nevin, partner and chief e0conomist for PwC, said in Lagos recently that it was only land and property ownership reforms that could unlock this huge stock of dead assets whose value he estimated at $307 billion or 81 percent of the country’s GDP. Nigeria has a rigid traditional land tenure system coupled with the current land titling system which is onerous and excludes many people from formal land ownership, hampering full-scale economic activities, especially real estate. Nevin emphasised that land and property ownership reforms were needed, especially for real estate which is one of the most critical sectors that, if reformed, would propel growth and alleviate poverty in Nigeria. “Real estate makes up 60 percent of the world’s global assets and in developed countries, real estate buttresses the financial sector, enabling for the creation of asset-backed loans and securities”, he added. Instead of the huge emphasis and over-dependence on oil revenue which is neither stable nor reliable because of the price volatility and fluctuations in the international market, whoever is coming in as president to manage the economy of the country in the next four years should be worrying more with what could and should be done on land to make it better and more viable than it is at the moment.
Why political billboards, posters were removed, says LASAA JOSHUA BASSEY
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agos State Signage and Advertisement Agency (LASAA) said on Wednesday it had to remove some billboards and posters from some roads in the state because political parties concerned failed to apply and secure appropriate permissions from the agency. Mobolaji Sanusi, the general manager of LASAA, gave the explanation at a security/stakeholders meeting with the Independent National Electoral Commission, political parties and their candidates with
Imohimi Edgal, Commissioner of Police (CP) in charge of Lagos. The meeting was at the instance of the CP to foster peace among the political interest groups ahead of the 2019 general elections. Recall that Jimi Agbaje, governorship candidate of the People’s Democratic Party (PDP), on November 27 reported the vandalism of his billboards and posters to the state police command, with the allegation the ruling All Progressives Party (APC) was responsible. Sanusi explained that the APC obtained permission from the agency before mounting its billboards
and pasting its posters, especially in the Lagos Island while others did not. According to him, there are rules and regulations guiding the pasting of billboards and posters in Lagos State, which must be strictly adhered to. He explained that the agency usually cleaned up the state on a weekly basis, to remove any posters or billboards mounted illegally. Edgal advised that all participants and political candidates should always engage the agency before pasting and mounting their billboards and posters, to take advantage of
the agency’s discounts. “Lagos State is politically matured. The removal of the billboards and posters could not have been an intentional act and that is why I have invited the LASAA MD to be here today, in order to clear the air on the issue,” he said. Edgal noted that a major thrust of the meeting was sequel to complaints about the destruction of political party posters and billboards. The CP warned parties against information that some groups were already arming some members of the NURTW to cause chaos in the state, in case election results did not
favour them. Sam Olumekun, the Resident Electoral Commissioner (REC) in Lagos, said there were 64 registered political parties in the state and advised politicians to focus their campaigns on issues, instead of campaigns that could result into violence. Olumekun noted that INEC would ensure free, fair and credible elections, which he said can only be achieved in a peaceful atmosphere. However, some other parties accused LASAA of bias, and favouring the APC more than other parties in the state.
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2019: Oshiomhole launches verbal war against OBJ, Atiku, PDP … resumes attacks on Okorocha, Amosun James Kwen, Abuja
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head of the 2019 general election, National Chairman of the ruling All Progressives Congress (APC), Adams Oshiomhole, has launched verbal war on former President Olusegun Obasanjo for his support for Atiku Abubakar, People’s Democratic Party (PDP) presidential candidate. Oshiomhole declared that Obasanjo and Atiku would be divinely punished during the February 2019 poll by losing election while President Muhammadu Buhari and APC would emerge victorious. He said Atiku’s political infidelity would be his main albatross at the polls, while Obasanjo would be punished having earlier asked God to punish him should he ever support Atiku. Oshiomhole made the vituperations Wednesday when he received women leaders of the APC from across the local governments of his home state, Edo, who were at his private office on a solidarity visit. He berated Atiku and Uche Secondus, PDP National Chairman, over their calls for the resignation of the Inspector-General of Police, (IGP), Ibrahim Idris and Chairman, Independent National Electoral Commission (INEC) Mahmood Yakubu, noting that,while Atiku wants to replace the IGP, Secondus is bent on becoming the INEC Chairman
Oshiomhole
with the sole aim of subverting the electoral process. The APC National Chairman also boasted that “Buhari will win by getting more votes than he garnered before. Some of those people who misuse religion, which was one of the most potent weapons used very recklessly by people that have no issues in 2015. This time around, they would have to speak to issues because the two main candidates are Moslems. “Secondly, the issue of north and south responsible for Buhari retaining the key support in the north while the south auspiciously voted based on son-of-the-soil tag. This
time, ethnicity will be a non-issue because they are from the same region. They are therefore, going to look at character. “Nobody has ever said Buhari is a thief. But who said the other person is a thief? It was his boss (Obasanjo). When you are working with me and I say you are a thief, God will punish me if I support you. And when you are confused because your supply line has been chopped off and then you enter into a new deal, you now turned around to support the same person. “That God that you called with your name to punish you if you sup-
YOMI AYELESO, Akure
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head of the 2019 presidential election, no fewer than 16,000 members of the Federal Government’s N-power Volunteer Corps have declared their total support for the re-election of President Muhammadu Buhari The beneficiaries, decked in white shirts and black skirts and trousers, marched from the popular Oba-Adesida road to Gani Fawahenmi Arcade Ground along Igbatoro-road in Akure, the Ondo State capital campaigning for Buhari. The youths, who are between age 18-35 years, said they would remain grateful to the Buhari’s administration for initiating the N-Power programme, which ac-
State. We cannot focus on one person and not on the other. Ogun is one of the most enlightened states in the country and that is where Chief Awolowo came from. They have a huge history and it is not a political kingdom headed by one person. “I believe that if they (governors) were looking for reconciliation or truth, they would not have done what they did (allowing their aides to defect). They already have the mindset that once they don’t get their governor in, nothing is right, it is how democracy works. “Overall, APC is a stronger party now but we should not focus only on APC. Talking of Ogun state, the PDP has two governorship candidates and two deputy governors running yet as we speak, the APC has only one in the person of Dapo Abiodun. “When a child ran out of his father’s house to bear a new name according to history and the Bible, he returned when the weather thoroughly beats him as a prodigal son. That is why APC has prodigal sons. Those who think that their political future is tied to that are poor students of history. “We are not thinking of sanctioning them because the real sanction will come from the electorate but as for if any rules of the party has been breached, they are the things we will have to look at. It is not my function. What should be the real headline is that we will deliver Dapo Abiodun in Ogun State and Hope Uzodinma in Imo State,” he said.
Oyo PDP guber candidate promises to create jobs with low interest credit
2019: Over 16,000 N-Power beneficiaries declare supports for Buhari in Ondo cording to them has helped in reducing unemployment through the creation of job opportunities. Addressing the youth, the State Governor, Oluwarotimi Akeredolu, said he was delighted that the beneficiaries of N-Power in Ondo State are the first in Nigeria to openly declare and campaign for Buhari’s second term. The governor urged the youths to take their campaign for Buhari’s re-election to the nooks and crannies of the state. According to him, “that is the only way to say Thank You to the administration of President Buhari, who initiated the programme for the teeming youths in Nigeria. “President Buhari and his Vice, Prof. Yemi Osinbajo have fulfilled their promise. People who can keep promises are not many.
port the person is about to go to work. And He will go to work in February and He will punish him thoroughly and the person he is supporting, in favour of Nigerians”. Oshiomhole also attacked Governors Rochas Okorocha of Imo State and Ibikunle Amosun of Ogun State when he described as prodigal sons, some aggrieved governors of the party who have been threatening to work against its governorship candidates in their states. He however, noted that the party would not immediately sanction such governors for anti-party activities as their main punishment would come from the electorate. “Our popularity in Imo and Ogun states is higher. What you don’t know and Nigerians always make me surprise by thinking that once you are a governor, you have electoral value. Yes, we have overwhelming majority of the APC governors with electoral value but we also have others without electoral values, who are pectoral liabilities. “I can concretely tell you today that in Imo state, APC will win more votes. As I said, it is about numbers and my focus is on the ordinary Imo electorate because the governor, his Commissioner for Happiness and the son-in-law have only one vote on that day. But those mechanics, market women, school teachers and workers whose salaries are unpaid for years that have the same weight of votes. “Also, in Ogun State, don’t forget that the vice president is from Ogun
“We must be grateful to Mr. President for this great gesture and the only way to say Thank You to Buhari is to ensure we talk to our parents, friends and siblings to cast their votes for Buhari by February 16, 2019 so that the President will take us to the ‘Next Level.’” According to him, “When you invest in the youths, you have invested in the nation. We won’t be tired. We did it in 2014, so we are prepared for the race ahead of us. “The current beneficiaries of N-Power should not think about themselves alone. Others must come next year, others will come 2020. How will they come if there is no continuity? “We are thanking the President and the Vice-president because one good turn, deserves another.”
Akinremi Feyisipo, Ibadan
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he governorship candidate of People’s Democratic Party (PDP) in Oyo State, Seyi Makinde has said that his administration would drive job creation by providing low interest credit facilities and support for small businesses so as to make Oyo State an attractive place to do business, work and live. While saying that he is willing and ready to bring solutions to the challenges facing the people of the state and the state itself, he stated that “Our government will invest in infrastructure, education and affordable healthcare”. According to him, “I am running to be the people’s governor who represents our entire state and my plans for our economy reflect this. We will invest in our educational system from primary to secondary
and tertiary levels across Oyo State and relieve the burden of high school fees placed upon our students, parents and guardians. “Plans are in place to make our state’s educational institutions a place where all youths and students in Nigeria will aspire to study”. Emphasising that “employment is one of the best way to fight rising crime rates, keep families together and build a stable society, Makinde said, “one of my main priorities as your governor will be to provide an enabling environment for business so that more jobs can be created, ensure that workers salaries are paid when due and their rights are adequately protected”. Makinde, who stated these in a letter to the people of Oyo State personally signed by him, noted that “any unconstitutional policies of the out-going administration, which are not in the best interest of the people of Oyo State, will be duly reviewed.
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58 BUSINESS DAY NEWS Lack of transparency dents Nigeria’s war against corruption CHRIS AKOR & CYNTHIA EGBOBOH
Vote buying, bribery may mar 2019 polls
he President Muhammadu Buhari administration’s much talked-about anti-corruption war is flailing and largely turning into a farce like others before it analysts say, principally due to a lack of transparency in its prosecution. The lack of transparency manifests in the form of secrecy surrounding recovered funds, selective prosecution or prosecution of only opposition politicians and people who disagree with the President, protection of corrupt associates and cronies, secrecy around the defence budget, the lack of transparency in both military and government procurements, and the secrecy and unaccountability associated with security votes. Meanwhile, corruption continues to cost Nigeria dearly. Consulting firm PwC calculates that corruption in Nigeria could cost up to 37 percent of GDP by 2030 if it’s
not dealt with immediately. This cost is equated to around $1,000 per person in 2014 and nearly $2,000 per person that lives in Nigeria by 2030. PwC reached this conclusion by estimating the ‘foregone output’ in Nigeria since the onset of democracy in 1999 and the ‘output opportunity’ to be gained by 2030, from reducing corruption to comparison countries that are also rich in natural resources, including Ghana, Colombia and Malaysia. “Despite the moral outrage and righteous indignation often expressed by Nigerian leaders, there is no credible commitment to tackling corruption,” said Olu Fasan, a fellow at the London School of Economics. Nigeria’s fading war on corruption can be seen in its low rankings on transparency International’s Corruption Perceptions Index (CPI). Since 2015, Nigeria’s ranking has continued to slide. In 2017, Nigeria was ranked 148th
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position out of 180, scoring just 28 out of 100, a figure far lower than the African average. In 2016, the country was ranked 136th/180 scoring 27/100. In 2015, the year Buhari came to power, Nigeria was ranked 136th scoring 26/100. Okeke Anya, Project Manager, Civil Society Legislative Advocacy Centre (CISLAC) on Tuesday decried the secretive nature of defence budgets and insufficient oversight of law enforcement agencies, adding that it has further hindered the effective fight against corruption in Nigeria. “There is a complete lack of transparency in the procurement of military equipment, overpricing, purchase of obsolete and dysfunctional weapons, also the Nigeria Police and military have a reputation of heavy-handedness and poor respect for the rule of law,” Anya said at a press conference to commemorate the international anti-corruption day in Abuja.
He further said that some defence budgetary allocations contribute directly to insecurity and lawlessness, stressing that the security votes are one of the most durable forms of corruption that exists in Nigeria. “The total Security Vote spent by all tiers of Government in 2017 is N241.4 billion, which is more than the annual budget of the Nigerian Army, more than the annual budget of the Nigerian Air Force and Navy combined and more than 70% of the annual budget of the Nigerian Police Force,” he concluded. Ezenwa Anyuwu, Director General , Lawyers Network Against corruption stressed that most fundamental governance problems in Nigeria arises from extreme corruption in the political party system adding that the electoral processes at the federal and sub-national level need to be free of political profiteering and manipulation.
L-R: Nonso Okpala, GMD/CEO; Olatunde Busari chairman, and Gbeminiyi Shoda, company secretary, all of VFD Group Limited during its 2nd annual general meeting in Lagos, where the shareholders approved the conversion of VFD Group to a public liability company (VFD Group plc) and the raising of N7 billion via equity and debt.
MMA2 terminal commences payment for redundant workers IFEOMA OKEKE
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arely three months after Bi-Courtney Aviation Services Limited (BASL), operator of Murtala Muhammed Airport Two (MMA2), Lagos, declared over 30 workers redundant following their decision to join any industry unions, the terminal operator has commenced payment to the affected workers. Also, it seems the picketing of the terminal for almost a week by the unions may have consumed Jari Williams, the CEO, as BusinessDay learnt that the management had removed him and some top management staff. However, out of the over 30 workers declared redundant by the company in Sep-
tember, only 29 of them were on Thursday issued cheques with different amount of money, depending on the years of service with the company and their positions as of the time of the crisis. Illitrus Ahmadu, president of Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), also confirmed the development in an interview with our correspondent. According to Ahmadu, the unions were able to negotiate the redundancy package for their members affected by the exercise with the company, but some of the affected staff equally picked up letters for unionism after their disengagement from the company. For those set of people, he said the unions could
not protect them because as of the time they joined, they were already disengaged from the company. He said: “I can confirm to you that our affected members in BASL are presently receiving their packages from the company. We were able to negotiate disengagement package for them after they were declared redundant by the company.” It would be recalled that the industry unions had grounded activities at MMA2 for almost a week after issuing several picketing notice to the management, which were ignored. The unions also jointly signed a petition, which was sent to the management of the Nigerian Civil Aviation Authority (NCAA) against the management.
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Energia, Oando JV deliver multi-billion naira infrastructural projects to host communities in Delta
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ando Energy Resources, a subsidiary of Oando plc, and Energia Limited, the operator of their Joint Venture - Ebendo/Obodeti Marginal Field (OML 56), on Monday commissioned and handed over multi-billion naira infrastructural projects to six host communities in Kwale, Ndokwa West Local Government Area, Delta State. The projects include a newly built health centre; housing estate; fully furnished community town hall; two new and fully furnished palaces; an integrated drainage system and roads and rural electrification for the benefit of the communities of Ebendo, Obodougwa, Umusam, Isumpe, Umusadege and Ogbeani. The projects are an actualisation of the promises made by the JV in an agreed memorandum of understanding (MoU) with the host communities for the exploration and operations of the Ebendo/ Obodeti oil field. These newly commissioned projects are in addition to the 35 other social and infrastructural projects worth over N2 billion delivered over a 10-year period in line with the MoU. Projects have included the Ebendo Community Ultra-Modern Market; the Isumpe Community fully furnished Ultra-Modern Town Hall, and the provision of community buses and a robust Welfare Programme through a Trust Board for elderly community members. Speaking at the commissioning, the Governor of Delta State, Ifeanyi Okowa, represented by the commissioner for oil and gas, Freeman Fregene, expressed delight over the commitment of the JV to genuinely want to positively impact the lives of the residents of their host communities. “The existence of Oando
and Energia has brought rapid developments to these host communities. The performance of these companies reflects on the developmental strides of the communities and it is worth emulating at all levels,” he said. “Without Oando and Energia, I don’t think these rapid developments would have been possible in these communities. As a state, we give commendation to these two companies on their continuous drive to better the lives of residents in their host communities by providing easier access to improved healthcare, good roads, employment opportunities, and housing projects among several others. I urge the community leaders to continue to show support and ensure the commissioned projects are put to good use,” Fregene said. From inception the mission of the JV partnership has been to effectively drive the rapid and sustained development of its host communities. To do this they put aside a percentage of their gross production revenue for diverse community development projects. In 2009, they established the Community Trust Fund (CTF) Board, consisting of representatives from Oando, Energia and the host communities. So far, the CTF has spent N2 billion on over 35 infrastructural projects across the Emu Ebendo, Oboduguwa, Umusam, Isumpe, Ogbeani and Umusadege communities. These have included 9 road and drainage projects, 7 town halls and palaces, 6 educational facilities, 5 electrification projects, 4 elders’ welfare projects, 3 youth and women empowerment projects, healthcare facilities, markets, housing estates, transportation systems, security and landscaping projects.
SHIN, Total settle dispute over Egina Deepwater project KELECHI EWUZIE
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amsung Heavy Industries (SHIN) and Total Upstream Nigeria Limited (TUPNI) have settled out of court the dispute over the 200,000 barrels of crude oil per daycapacity Egina Deepwater oilfield project. The two multi-national companies had been in a legal battle over the contract for the building of the $3.3 billion Floating Production Storage Offloading (FPSO) unit constructed for the $16 billion Egina Deepwater oilfield being developed by Total, an international oil company. The information about the dispute resolution was contained in a letter signed by Jean-Michel Guy, Total’s executive general manager, Egina Project, and addressed to the group general manager,
National Petroleum Investment Services (NAPIMS), a division of the Nigerian National Petroleum Corporation (NNPC), informing the agency of the settlement. According to the letter, “Given that parties have resolved the dispute after reaching a final settlement agreement as in our letter ref. EGN-00-AEMG-BNPCLET-000827, dated August 28, 2018; the order becomes ineffectual since there is no longer a dispute for which arbitration is required.” Guy said: “We refer to our letter ref. EGN-00-AEMG-BNPC-LET-000826, dated August 20, 2018 wherein we informed you that the Federal High Court (the Court) adjourned the legal action instituted by Samsung Heavy Industries Nigeria Limited (SHIN) with regards to the Egina FPSO contract to 29 August, 2018 for
ruling. “On the said date, the matter came up at the Court for judgement. Although, SHIN filed an application to discontinue the matter, the Court declined considering the application and proceeded to deliver its judgement. The Court gave judgement in favour of TUPNI and dismissed all but one of SHIN’s reliefs (the relief requesting for an order directing the parties from undermining the powers of the Arbitration Tribunal).” He further said the court amended the said order to the effect that SHIN must issue its Request for Arbitration (RFA) within five working days, and that if the RFA had not been submitted to the International Chamber of Commerce after the stated period, in accordance with the contract, that order shall be automatically vacated.
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Ease of doing business yielding positive results - Enelamah STELLA ENECHE, Abuja
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inister of industry, trade and investment, Okechukwu Enelamah, has reiterated the commitment of the Buhari Administration on the promotion of the Ease of Doing Business in Nigeria. He maintained that the Presidential Enabling Environment Council (PEBEC) launched in 2016 by this government had been working assiduously to remove constrain and bottlenecks in doing business in Nigeria, which was beginning to yield positive results. The report of the World Bank’s Ease of Doing Business Report 2018 indicated that Nigeria moved up 24 places from 169th to 145th in the ranking of 190 countries. He declared this in his opening address at the 10th
National Council On Industry, Trade and Investment recently held at Umuahia, Abia State, with the theme: “Ease of Doing Business in Nigeria: The Role of States and Local Governments.” Enelamah stated, “The theme was consciously adopted as the focus of our deliberations at this meeting because of the need to consolidate gains already recorded in the sector. This is also in line with the overall vision of our Ministry to promote economic growth, create jobs and generate wealth, a vision we are pursuing vigorously through the mandate given to us by the President, to create the right enabling environment to stimulate domestic investment and attract foreign direct investment in all sectors of the economy. ‘Our dream is to make Nigeria the most preferred investment destination in the Continent.”
The minister further stressed the aptness of the theme within the context (and content) of the goals of the Economic Recovery and Growth Plan (ERGP) of the present Administration of President Muhammadu Buhari. The ERGP focuses on three strategic objectives: restoring growth, investing in the people and building a competitive economy. Creating an enabling environment for business transactions and investment would undoubtedly lead to economic diversification, which is another key objective of ERGP and this administration. “That is why we are focused on creating the right environment and making it progressively easier to do business in Nigeria,” said minister. The Minister assured the council members that PEBEC chaired by Vice President Yemi Osibajo, meet regularly to ensure co-
ordination across Ministries and to resolve challenges. He further highlighted some of the remarkable achievements so far made by the council in promoting Ease of Doing Business in Nigeria; the Council has completed 360day National Action plans on these reforms, some of which relate to visa on arrival, airport infrastructure, consolidated arrival and departure forms amongst others. Technologies were deployed to improve service delivery in the Ministries in the areas of Small and Medium Enterprises (SME) platform, digitizing and simplifying the provision of Government services examples includes Commercial Law Department in the Ministry, digitizing one stop investment Centre and pioneer status incentives processes at the Nigeria Investment Promotion Council (NIPC).
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Baru seeks investors to unlock 10bn barrels deep-water resources HARRISON EDEH, Abuja
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ngoing drive by the Nigerian National Petroleum Corporation (NNPC) to increase Nigeria’s crude oil reserve was taken a notch higher on Wednesday with the unveiling of multi-billion dollar investment opportunities in the nation’s deep-offshore frontiers at the 10th World Energy Capital Assembly in London, UK. Delivering an address at the panel session entitled: ‘Spotlight on Africa,’ Maikanti Baru, group managing director of the NNPC, said, “Globally, Nigeria has the highest untapped deep water resource of about 10 billion barrels of oil equivalent, in addition to other vast opportunities in the oil and gas value chain.” Baru, who was represented at the event by the group general manager, corporate planning and strategy of the NNPC, Bala Wunti, explained that Nigeria had the largest and one of the most vibrant economies in Africa with lots of potentials, especially in the gas, refining and infrastructure space. “I invite you all to a country that has massive opportunities, very good business climate and good returns on investment. Our resilience
has been tested, we have been through the booms and bursts and we came out stronger. With our experience, geographical location and capacity, Nigeria is the country of now and the future,” he stated. He further explained that NNPC had a clear strategy for harnessing these potentials through collaboration and building robust partnerships as entrenched in the Corporation’s 12 Business Focus Areas being aggressively driven by the leadership of the Corporation. The World Energy Capital Assembly is a leading gathering of energy executives, finance and investment professionals to discuss emerging and re-emerging energy investment opportunities, review deals done and chart an outlook of energy related activities across the globe. Other participants at the 10-year Anniversary of the event include Lord John Browne, the Baron Browne of Madingley and CEO of British Petroleum from 1995 to 2007; the Global Chief Economist of British Petroleum, Spencer Dale; the Senior Vice President of Abu Dhabi National Oil Company, Abdul Nasser Al Mughairbi; as well as the Senior Vice President and chief economist of Equinor, Eirik Wærness, among others.
Kidnappers abduct health workers, lecturers in Ondo, demand N50m ransom YOMI AYELESO, Akure
G L-R: Motola Oyebanjo, head, corporate communications, Lafarge Africa plc; Temitope Oguntokun, head, sustainability and corporate brand, Lafarge Africa plc; Toni Kan, CEO, Radi8 Limited; Bruno Bayet, chief financial officer; Lafarge Africa plc, and Folashade Ambrose-Medebem, director, communications, public affairs and sustainable development, Lafarge Africa plc, during the presentation of Lafarge Africa’s Best company in Education at the 2018 SERAs Awards in Lagos.
Stakeholders seeks speedy presidential assent on competition bill HARRISON EDEH, Abuja
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ome stakeholders in the Finance and Trade sector have called for the speedy assent of the competition bill, which was passed on Wednesday by the Senate to ensure conducive business environment and increased investment in the country. They made the call at the 2018 World Competition Day organised by the Centre for Trade and Business Environment Advocacy (CTBA) and the Abuja Chamber of Commerce and Industry (ACCI) on Wednesday in Abuja. The theme of the event is “ Digital Economy, Innovation and Competition and Consumer Protection Bill.’’
According Leonard Ugbajah, executive director, CTBA the bill has made the most progress following concerted efforts of the various stakeholders. “The bill was passed by the two chambers and transmitted to the President for assent but was returned due to some observations. We appreciate the Legislature for the passage today, which is a great gift to the investment community today. “We hope that a dialogue of this nature will go a long way in renewing the political commitment to eventual conclusion of the legislative process of enacting a competition law for Nigeria. “The Federal Competition bill and the Consumer
Protection bill makes provisions for addressing abuse of dominant market power. “It addresses anti-competitive agreements involving two or more firms as well as regulation of mergers to ensure that competition is not stifled.’’ The director-general, Consumer Protection Council, Babatunde Irukera in his remarks said: “having competition legislation is good and right now we have the opportunity of doing so.” The President, ACCI, Adetokunbo Kayode, said the country needed a vibrant regulatory framework with a clear role to encourage investors to do business with us. Kayode, represented by Adesoji Adesugba, the Vice
President ICT, ACCI also urged stakeholders to support the government by helping it to design some relevant policies. “We must advocate this, we must encourage legislation, we must encourage the government to do the right thing.’’ According to the president, the theme of the event is apt, relevant to this age, for the new world and especially for Nigeria where we have competitive age in the sector. He further urged the government to ensure digital education, and take advantage of what was happening in the globe as without this, the country would be retarded in terms of economic development.
unmen suspected to be kidnappers have abducted workers of the Federal Medical Centre and the Rufus Giwa Polytechnic both in Owo along the Akure-Owo expressway. The health workers and the polytechnic staff were kidnapped at the failed portion of the Emure - Ile/Owo road, a few drive away from the state capital, Akure. The health workers were identified as a medical doctor, nurse and a record officer with the Federal Medical Centre in Owo. Colleagues of the kidnapped health workers confirmed the sad incident to journalists in Akure, Ondo state capital on Wednesday. One of their colleagues who spoke under the condition of anonymity said that the victims were stopped on the road by the abductors before they were kidnapped and taken away. She added that the kidnappers had already contacted the family of the abducted medical workers and are demanding the sum of N50 million as ransom. “Three of our staff here in the FMC were kidnapped on Wednesday by some gunmen while on their way to work although we have also reported the incident to the
police in the state. “Those that were kidnapped are - a medical doctor with the hospital, a nurse and a record officer whose identity I can only remember and she is Josephine Fanikasi. “They were abducted at Emure-Ile and l learnt that the abductors who are heavily armed with guns are all Fulani due to their poor grammar. “They have contacted the family of the three victims and they are even demanding N50 million as ransom before they can be released,” he said. The Police Public Relations Officer (PPRO) in Ondo State Command of the Nigeria Police Force, Femi Joseph also confirmed the incident, noting that the victims were travelling when they were kidnapped. Joseph added that the victims were waylaid by the armed hoodlums on the Akure/Emure-Ile/Owo road and were whisked into the heavy bush. His words: “I can confirm that the story is true but I only know about just one FMC staff who was kidnapped while the others are a staff of the polytechnic in Owo who were travelling. “But our boys are on their trail and they have started combing the bush with a view to rescuing these kidnap victims alive.
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Opinion What do we understand by institutions? 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
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hen President Obama, on his first trip to Africa, made the point that what Africa needed most were strong institutions and not strong men, many Nigerians quickly agreed with him. Since then, the need for strong institutions have become a singsong in Nigeria as columnists, analysts and academics expend valuable time and space showing why Nigeria cannot develop without strong institutions. I can remember only one individual – Professor Ibrahim Gambari – a former Head of the United Nations’ African Union Mission in Darfur, disagreed with Obama. For Gambari, to sustain democracy in Africa, not only strong institutions were needed, but also strong leaders. As he puts it : “ Yes, strong institutions are ver y
important and in case of democracy, strong democratic institutions are vital to the sustainability of democracy but also important are strong leaders. So, there must be a distinction between strong leaders and strong institutions but it is important to have a combination of both”. I will return to Gambari’s argument later. However, what leaves me baffled is that these same people who argue for strong institutions are the same people who also support actions that destroy institutions. They are the first to support actions that promote strong man rule even while vehemently arguing for the establishment of strong institutions. This leaves me confused and unable to understand e x a c t l y w hat t h e s e f e l l ow s mean by institution. If I am to hazard a guess, and seeing the way most Nigerians use it in arguments, I will say that many Nigerians mean by institutions structures or agencies of government that works. In time, we even begin to call those agencies national institutions – and so when institutionalists argue for the building of strong a n d e n d u r i ng i n s t i t u t i o n s, many Nigerians naturally assume that to mean government agencies that are functional. Yes, institutions could mean organizations or agencies, but they are far more. They are principally “rules of the game”;
procedures that structure social interaction by constraining and enabling actor’s behaviour.
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They forget that sooner than later, a “king that does not know Joseph” will ascend the throne and, in the absence of institutions, reverse whatever reforms they think they have enacted. Ultimately, they would only have succeeded in dragging the country back by decades.
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They are the planks on which successful and prosp erous societies are built. In their brilliant and engaging study on Why Nations Fail, Daren Acemoglu and James
Robinson provide answers to questions that have stumped experts for centuries: why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine? They considered lots of factors ranging from location/geography, weather, culture or even education and knowledge of best policies but discounted them all. For them – and many other academics – the distinguishing factor is the presence of strong and enduring economic and political institutions. These are the guarantors of success. Societies therefore that devoted time to building such institutions (read a capable state that, in the words of Ricardo Hausmann, “can protect the country and its people, keep the peace, enforce rules and contracts, provide infrastructure and social services, regulate economic activity, credibly enter into inter-temporal obligations, and tax society to pay for it all”) are ultimately successful while those that depend on rule by philosopher kings, moralists and strongmen do are not and ultimately become poor and fail. Even without this engaging study, we know from “history that strong institutions are the best guarantee of progress and sustainable growth and development in any society. Institutions are impersonal and not subject to the whims, caprices, flimsy and erratic
nature of human behaviour. Reforms based on personalities, personal rule or individuals fizzle out eventually. What is more, human nature is erratic and does not guarantee consistency. History has shown that it is not always possible to get excellent people to run institutions over time. Weak and sometimes, morally bankrupt individuals get into positions of authority. The key difference however is that in societies where institutions are strong and well e n t re n c h e d , t h e s e i n s t i t u tions withstand or survive such p ers ons w ithout considerable damage. However, where institutions are weak or non-existent, all previous progress is destroyed and the society or organisation had to start afresh after such weak or bankrupt individuals depart.” That is why I get worried when one of the leading light of this administration – a first class material with a MSc in public administration from Jo h n F. Ke n n e d y S c h o o l o f Government at Harvard University Mallam Nasir el’Rufai– p o i n t e d l y t o l d t h e C e n t ra l Bank of Nigeria to either cut the interest rate or have it cut for it by fiat. Really? That is why I am prepared to cut Ibrahim Gambari some slack because he was open with his preference for strong man rule. But these pseudo intelle ctuals w ill argue for
institutions with one side of the mouth and act in ways that clearly show their preference for strong man rule. They will argue for institutions – rules that constrains all actors – but they w ill openly encourage the President to circumvent the law; to detain indefinitely people they consider security threats even against the judgements of competent courts; to refuse bail to suspects even when they have been granted bail by competent courts ; t o a r re s t i n d i s c r i m i n a t e l y , violate people’s rights (while disingenuously arguing that those people first violated Nigerians’ rights), interfere with the independence of the C e nt ra l Ba n k , t e m p e r w i t h rules to achieve quick but fleeting results. But they forget that they are actually destroying the country; that any little progress they think they are making w ill fizzle out w ith time and the country will be worse for it. They forget that sooner than later, a “king that does not know Joseph” will ascend the throne and, in the absence of institutions, reverse whatever reforms they think they have enacted. Ultimately, t h e y w o u l d o n l y hav e s u cceeded in dragging the country back by decades. We must be resolute in reminding these pseudo intellectuals that institutions are the only means of building a virile, rich and successful society.
Certificatemania, Universitymania & Quantity Illusion
Ik Muo Ik Muo, PhD. Department of Business administration, OOU, Ago_Iwoye 08033026625, muoigbo@yahoo. com, muo.ik@oouagoiweye. edu.ng
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hen the last ASUU strike was suspended (these strikes are never called off!), I remember concluding in an article that : the ASUU strike is over; lets prepare for another strike! That is because the foundation for further strikes is usually laid by the terms of settlement ( M O U, M O A- m e m o ra n d u m of understanding or action) of the previous aluta. Now, here we are!. I am not surprised that ASUU is back in the trenches. I am not surprised that this has lasted more than four weeks (you see, this is not an NLC strike that is called off at 12 midnight!). I will also not be surprised if the government makes the type of offer that men make to women while they are already in bed, thus making it a prelude to another akshion. And to complicate the matter, the g overnment
has adopted a no work no pay policy, which can only lead to no pay no work response! This is not about ASUU strike but you may check out the document on why ASUU is on strike or my article on Governance , integrity deficit and srikes. (Ik Muo, BusinessDay 4/6/18) It has been said that the most commonsensical definition of madness is doing the same thing all over again and expecting different results. I don’t have any issue with this definition, the source of which I do not know. But I wish to ask a question to ever ybody and nobody in particular: how do we define doing something worse that the first one, in all material particulars, and still expect a better outcome? That is surely worse than madness or it is madness to the ‘nth’ order. That is what is happening in our educational sector where we take one step forward, two steps backwards and three steps inside the bush! Just recently, there was a report that the NASS has in i t s p i p e l i n e ( w hy a re t h e s e pipelines always congested?), plans to establish 80 higher institutions (27 universities, 22 colleges of education, 19 polytechnics, six institutes, one police academy, one fede ra l c o l l e g e o f a g r i c u l t u re, a federal college of forestry, o n e p a ra - m i l i t a r y a c a d e my and one federal college of veterinar y assistants as well as a school of mines and geo-
logical studies). Just as the son of man was trying to dig deep so as not be accused of spreading fake news, (which is more deadly than BH and herdsmen combined), we heard that they have already approved 10 of them, probably the first tranche of the tertiary education armada. And this is happening at a time when all our public universities are grounde d to a halt be caus e the various visiting governments cannot provide mere survival-level funding for existing universities. I note in passing that one of the universities is located in PMBs v i l l a g e. T h i s i s n o t e w o r t h y because, while OBJ and Atiku settled themselves with private universities, GEJ and PMB settled themselves with public universities. I don’t know what I will settle myself with when I get there (don’t write me off yet!). But that is by the way. As at now, we have 43 federal universities, 47 state universities, 75 private universities and more than a hundred fake universities. There are also hundreds of polytechnics, Colleges of Education, Agriculture and so on; thousands of diploma awarding kiosks and further thousands of online degree mills. I have thought about this and come to the inescapable conclusion that the government in power and its various organs are suffering from quantity illusion, the mistaken
belief that quantity is all that matters. I heard that term for the first time in 1977 from Prof Dotun Philips, our lecturer in the Department of Economics at UI. However, the term was coined by Irvin Fisher (1928) The Mone y Illusion, a 2011 edition of which is available at Amazom). It refers to the tendency for people to think of currency in nominal, rather than real terms, such that as income increases nominally, there is the mistaken belief that purchasing power has increased, while in fact, there h a s b e e n a n e ro s i o n o f t h e p u r c h a s i n g p o w e r. W i t h i n
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I have thought about this and come to the inescapable conclusion that the government in power and its various organs are suffering from quantity illusion, the mistaken belief that quantity is all that matters
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this context, the people in government believe that more university enhances our ranking in the imaginar y global education performance index. But the whole thing did not just start with the quest for more universities ; it started with the fanatic craze for certificates. We suddenly found ourselves in a society where the only thing that mattered and still matters is a certificate. That is a debilitating ailment called certificatemania. That is why people cheat in exams, go to magic centers, h i re p e o p l e t o w r i t e e x a m s for them, patronise the oluwole mills and all that. But s i n c e s o m e c e r t i f i c a t e s a re more powerful than others, it became obvious that a higherorder certificate is preferred. That was how we moved from c e r t i f i c a t e m a n i a t o u n i v e rsitymania. Unfortunately we fell into the quantity illusion, an ailment that is psychological in nature and scope. Some states that cannot fund a university now have three and even moving on to four. All polytechnics and colleges of education are either awarding degrees or are in the process of being converted to universities. I sympathise with the c o m m o n e nt ra n c e s t u d e nt s of today. In our own days, we knew the number of Universities in Niger ia. Today, even those in NUC might not have that knowledge. I think we should explore
this fur ther but before this, there are two quick ones. One coach Leslie, who teaches an Orange Theory Class tells his coachees that doing one perfect-form exercise can yield more results than 12 sloppy ones. Even though our people mock the person who needs a proverb to be interpreted for him, this simply means that a healthy optimally funded, staffed and equiped university is more fruitful than 12 everything-goes universities. When we were in UI, Kuti Hall was know for quantity. I just wander if the current Minister of Education has anything to do with Kuti Hall( Kuti for Quantity!) Other Matters I heard that PMB has reassured the whole world infaraway Poland( a country of just 40m people) thatthis is the real me! I have already argued that there are three Buharis: Buhari the soldier, Buhari the saint a n d Bu ha r i t h e a c c u s e d ( I k Muo: Eureka: There are three Buharis, not Two BusinesDay,22/11/18). I assume thathis reaction as in response to a question from a journalist. Can our journalist have the opportunity to ask such a question and what will be his fate? Why was such a rebuttal done in Poland and not in Abuja? Why not talk us rather than to the international community? Afterall, this is a political era and all politics is local!( To be continued)
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