Businessday 06 jun 2018 by BusinessDay

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news you can trust I ** WEDNESDAY 06 JUNE 2018 I vol. 15, no 69 I N300

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Nigeria oil reserves remain stagnant for 12 years

as Brazil, IOCs, Mexico oil reserves replacement ratio inches up

STEPHEN ONYEKWELU & DIPO OLADEHINDE

igeria, Africa largest oil producing country is far from attaining its full potentials in its oil and gas industry as its proven oil reserves are not rising to replace as much oil as it pump on a daily bases due to lack of exploration of and decreased investment in the sector over the past years. The reserves replacement ratio, measures how many new barrels come in to replace the ones pumped out. “In the last two years Nigeria’s reserve replacement ratio has declined significantly. Low oil price means most IOCs cut back on exploration activities and thereby further reducing replacement ratio,” Jubril Kareem, energy analyst at Ecobank Plc, told BusinessDay. “We expect some recovery in the short to medium term as higher crude oil

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fgn bonds

Treasury Bills

Budget delay disrupts NBS’ data release calender Endurance Okafor

he Nigerian Bureau of Statistics (NBS), recently rated as one of the best in Africa is at risk of not being able to do its job of gathering and providing data, which usually

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NSIA’s assets rise by 27% to N534bn but profit drops Onyinye Nwachukwuw, Abuja

T L-R: Babatunde Fashola, minister of power, works and housing; Abubakar Malami, minister for justice, and Walter Onnoghen, attorney-general of the federation/chief justice of Nigeria, shortly after the opening ceremony of the 4th IIPEP/NJI Annual Judges Workshop on Petroleum, Gas and Power Sectors with the theme, “The Judiciary and Power Sector Recovery Programme: Legal, Commercial and Regulatory Issues,” at the Aloysisus Katsina –Alu Seminar Hall, National Judicial Institute, yesterday.

he total assets held by Nigeria’s sovereign wealth fund (SWF) has risen by 27 percent in 2017 to N533.9 billion. But the fund, in the same year saw a sharp and steep decline in profit after tax to N23 billion compared to N130 billion made in 2016. Sources close to the NSIA blame the profit decline on the

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National Assembly makes 11 demands on Buhari KEHINDE AKINTOLA, Abuja

he supremac y battle between the National Assembly and the Presidency deepened further yesterday as the National Assem-

… threatens to invoke impeachment clause ...passes vote of no confidence on IGP bly in a joint session presented 11 resolutions that President Muhammadu Buhari must attend to or risk getting impeached. This marks an escalation of

the ongoing conflict between the National Assembly and the Presidency and risks increasing economic uncertainty as the 2019 election approaches.

Budget 2018 is yet to be signed into law and there are key bills like the petroleum industry bills

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June sees N60bn worth of deals as month sets off on early start P. 34

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NEWS

Tax reform: Senate mulls Tax Research Fund OWEDE AGBAJILEKE, Abuja

s part of efforts to reform the Nigerian tax system and make it more efficient, the Senate is working on a legislation that seeks to establish a Tax Research Fund. The Fund is to provide for the financing of a Tax Study Group with a view to improving the link between policy objectives and tax structure. This is contained in the preliminary report of the Tax Reform Technical Committee set up by the Senate in March this year to work out modalities for achieving a comprehensive tax reform for the country. Membership of the committee was drawn from the National Institute for Legislative and Democratic Studies (NILDS) and tax experts from revenue generating agencies. At the presentation of the report at the National Assembly in Abuja, NILDS director-general, Ladi Hamalai, lamented that the dearth of evidence-based studies for transforming policy objectives and guiding principles of tax structure had been a critical issue hampering successful tax reform in Nigeria. Other recommendations of the committee include the processing of a bill to amend tax laws to provide for concur-

Wednesday 06 June 2018

rent use of tax, handle legislation to limit tax deductions exemptions; amendment of the 1999 Constitution to provide for taxing powers of each level of government as well as processing a bill to provide for a Unified Tax Code. The committee also called for a legislation to provide for a single tax authority for the Federal Government, each state and local governments; provide limitations to the powers of ministries, departments and agencies (MDAs) to impose fees and charges, excluding fees and charges for goods and services as well as enactment to establish a tax court. On the non-refund of excess tax due to weak mechanism for refunds, the report urged tax authorities to ensure timely payment of refunds, even as it called for the provision of tax refund in the budget. The report highlighted strategies the Nigerian government could adopt to boost tax revenue to include: broadening of the tax base, institutional capacity building and improving the integrity of tax administration. The Federal Ministry of Finance is expected to work with tax agencies alongside the Ministry of Justice to come with various legislations and forward them to the National Assembly for legislative action.

In his address, chairman, Senate Committee on Finance, John Enoh, listed the challenges bedevilling tax administration in the country to include: dearth of evidencebased studies or analytical framework for transforming policy objectives and guiding principles to the tax structure; segmentation of the tax system; relatively static tax structure; multiplicity of taxes and multiplicity of deductions and exemptions. According to Enoh, “Nigeria is in dire need of a strong tax system that will serve as a catalyst for the mobilization of tax revenue, investment, the provision of public goods and services and the overall development of the country. At present, the tax system is apparently weak and unable to serve this purpose effectively and efficiently. “For instance, the tax yield, measured by the ratio of tax revenue to the Gross Domestic Product (GDP), is about 10 percent, which is low compared to the rest of the world, including developing countries. “The tax system is also not investment-friendly, as the country ranks 171St out of 190 countries in the Doing Business Index (DBI).” The final report is expected to be submitted to the Senate president, Bukola Saraki, before the end of the year, for further legislative action.

Relocation order: Luxury bus owners drag Ambode to Osinbajo TONY AILEMEN, Abuja

hefaceoffbetweentheAssociation of Luxury Bus Owners of Nigeria (ALBON) and Lagos State government over the state government directive ordering them to relocate to Ojota area from Jibowu has taken a new dimension. This is as the bus owners have dragged Governor Akinwunmi Ambode before Vice President Yemi Osinbajo. The bus owners, who had a marathon meeting with Osinbajo at the Presidential Villa, Monday night, pleaded with the Vice President to intervene in the relocation order,whichtheysaywasthreatening to cripple their businesses. President/chairmanofIfesinachi Group of Companies, Emeka Mamah, who led the delegation to the Vice President, alleged that Ambode’s policies in Lagos State was creating tension and making thestatehostiletotheirbusinesses. Mamah, while speaking with State House correspondents after the meeting, however said, “Osinbajo has assured that he was going to step in so as to resolve the issue as soon as possible.” The group was at the Presidency to seek Osinbajo’s intervention in the 2017 executive order by the Lagos State government directing all transporters on the Ikorodu corridor to relocate to Ojota, an order they vowed to resist since it will cripple their businesses as the new location cannot accommodate 10 percent of the fleet of buses controlled by them.

Ekiti: INEC identifies 300 flash points OWEDE AGBAJILEKE, Abuja

head of next month’s governorship election in Ekiti State, the Independent National Electoral Commission (INEC) had identified 299 flash points in the state. The development comes as the Commission discloses that it will use Enhanced Card Readers in the July 4 exercise. INEC resident electoral commissioner (REC) in Ekiti State, Abdulganiyu Raji, stated these in Abuja on Tuesday, at a dialogue session with Situation Room - a coalition of over 70 civil society organisations. Although the REC did not disclose the names of the flash points due to what he attributed to security reasons, he, however, said the electoral body was working with security agencies to ensure that the crisis areas were reduced to the barest minimum before the election.

In his remarks, INEC national commissioner supervising Ekiti State, Solomon Soyebi, said the commission had put measures in place to checkmate vote buying that characterised off cycle elections in Edo, Ondo and Anambra states. Soyebi said in the forthcoming governorship election in Ekiti, vehicles would not be allowed to park near voting units, even as he stressed the need for politicians to focus on issue-based campaigns. “We are very much aware of pay-as-you-vote syndrome. It is something the Commission frowns at and work seriously against. We saw it in Anambra, and we are saying it to the whole world now. As much as possible, we don’t want vehicles in our voting areas. That is where they keep the money. “We have aligned our voting stations in such a way that it is difficult for you to expose the choice you have made on the ballot paper.

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Nigeria oil reserves remain stagnant... Continued from page 1

price will trigger more exploration activities.” Reserve-replacement ratio is a metric used by investors to judge the operating performance of an oil and gas exploration and production company. In the last twelve years, Nigeria’s oil reserves and daily production had remained almost stagnant hovering in the region of 37 billion barrels and two million barrel production day (bpd) respectively, data from Organisation of Petroleum Exporting Countries (OPEC) showed. A 10-year target set by the Federal Government to boost crude oil reserves to 40 billion barrels and daily production to four million by 2020 is becoming unrealistic as analysts says corruption and government shenanigans have decreased growth in the sector. According to statistics from OPEC, Nigeria oil reserve decreased to 36.247 billion in 2011 from 37.200 billion recorded in 2010, while in 2012 there was relative improvement to 37.139 billion but went down again to 37.071 billion in 2013. In 2014, it stood at 37.448 billion before sliding down to 37.062 in 2015 while in 2016 it stood at 37.453 billion. According to the BP annual statistical bulletin released June 2017, OPEC member Iran has increased its oil reserves from 138 billion barrels in 2006 to 158 billion barrels in 2016. Iraq has moved from 115 billion barrels in 2006 to 153 billion barrels in 2016. Saudi Arabia has moved from 264.3 billion barrels in 2006 to 266.5 billion barrels in 2016. In this time period (2006 – 2016) total African reserves increased to 128 billion barrels from 116.9 billion barrels largely led by Angola and Libya. “Just like savings and earnings, the oil reserves and daily production are vital to creating energy security, increasing the income from crude oil, boosting economic development and showcasing an index that is capable of wooing investors into the country,” a Lagos based oil and gas analyst told BusinessDay. Also, Nigeria average daily oil production dropped to 1.975 million barrels per day in 2011 from 2.048 million bpd in 2010, it dropped further in 2012 and 2013 to 1.954 million bpd and 1.754 million bpd respectively. In 2014, there was a slight improvement to 1.807 million bpd although it declined again to 1.748 million bpd in 2015. In 2017, oil production moved up to 1.6 million bpd from the 1.4 million bpd recorded in 2016. Similarly, the level of active rigs which indicates the level of exploration, development and production activities occurring in a nation’s oil

and gas sector as at 2010 stood at 35, it moved to 38, 44 and 59 in 2011, 2012 and 2013. The figure dropped to 46 in 2014, 29 in 2015 and eventually crashed to only nine in 2016. The analysis above showed Nigeria’s oil and gas reserves replacement ratio which is essential in driving its exploration and development activities has been flat in the last 10 years despite its other state owned peers like Mexican oil company Pemex and Brazil’s Petrobras both recording improvement in 2017. Norway’s state owned Equinor produced an average of 2.134 million barrels of oil equivalent (mboe) per day. This represents an increase of 1.90 percent over the 2.095 mboe per day average in the fourth quarter of 2016. The company achieved a respectable reserve replacement ratio of 150 percent in 2017. Pemex, the Mexican oil giant was able to replace 17.5 percent of the amount of oil and gas it produced in 2017, by adding 174.2 million barrels of oil equivalent (boe) in proven reserves during the same year. Pemex’s 2017 replacement rate means that the company has enough proven reserves to keep pumping at its current pace for another 7.7 years, according to the filing to its Securities and Exchange Commission (SEC). Even with a historical production record in 2017, Petrobras was able to replace 89 percent of the produced volume, mainly due to the drilling of new wells and better than forecasted behaviour from reservoirs in the pre-salt of Santos and Campos basins. Rather than make progress, Africa’s top oil producer may be taking steps backward going by statistics from the Department of Petroleum Resources (DPR), which indicate that the country’s reserves declined by whopping 961.47 million barrels between 2012 and 2016 alone. The Egina oil field located offshore Nigeria in oil mining lease (OML) 130 (expected to produce some 200,000 barrels per day), was discovered some 14 years ago showing lack of exploration in recent time. People with deep knowledge of the sector say some of the constraints militating against exploration and development activities in Nigeria include delays in passing the Petroleum Industry Bill (PIB). This has slowed down inflow of investments in the upstream by companies concerned about the effects of the PIB. Since IOCs divest from onshore assets, most acquiring indigenous companies have not spent significantly on exploration and development activities. “It is getting difficult and the terrains are expensive. The bulk of the oil that remains freely accessible to

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L-R: Mary Uduk, acting director-general, Securities and Exchange Commission (SEC); Bola Onadele. Koko, MD/CEO, FMDQ OTC Securities Exchange; Justine Leigh-Bell, director, Climate Bonds Initiative; Evans Osano, director, financial markets, FSD Africa, and Tumi Sekoni, associate executive director, capital markets, FMDQ OTC Securities Exchange, at the Nigerian green bond market development programme launch, with the theme “The Rise of Green Bonds: Global Trends and the Opportunity for Nigeria” in Lagos, yesterday. Pic by Olawale Amoo

Nigeria stock sell-off is second worst in emerging markets MICHEAL ANI

ince peaking in early 2018, Nigeria’s stock market index has recorded the second biggest sell off in emerging markets stocks, and the strength of the dollar gets much of the blame. BusinessDay analysed stock exchanges of 37 countries following the interest rate hike in U.S, which has continued to put pressure on emerging and frontier markets. The analysis cuts across the stock market index of Nigeria, South Korea, Moscow, Pakistan, Taiwan, Poland, Indonesia, India, Mexico, Egypt, South Africa, Turkey, Brazil, Argentina, China, Bangladesh, Bulgaria, Chile, Colombia, Czech Republic, Greece, Hungary, Iran, Israel, Malaysia, Mauritius, Oman, Peru, Philippine, Qatar, Romania, Slovenia, Thailand, Ukraine, United Arab Emirate(UAE), Venezuela and Vietnam. While few were able to weather the storm, many have been badly hit. Turkey’s stock index recorded the highest sell off at 17.9 percent to 99,000 points from as high as 120,000 point in January when the market was at its peak. The Nigerian stock market index followed behind Turkey recording a 17.7 percent sell off from as high as 45, 000 points in January 19 to about 39,000 on June 5th. The Argentine, Bangladesh, and Vietnam indexes completed the league of 5 worst sell offs at

17.4 percent, 15.34 percent and 15 percent respectively. “Foreign investors are liquidating and repatriating their positions from Nigeria which is causing pressure on the Naira, the Investors and exporters window and sell offs of stocks” said Wale Okunrinboye, Head of research at Lagos based Sigma pensions. “Also, some are positioning themselves ahead of the 2019 election,” he added. Some foreign investors in the fixed income market whose investments matured are not rolling over their investment because of low yields in the domestic market. BusinessDay gathered that they are repatriating their funds as yields in the fixed income securities in the advanced economy are going up. This however, last week put pressure on the foreign exchange as naira depreciated to N367 per dollar. While emerging markets with the least sell offs are the Slovenian, Taiwan, Qatar, Peru, Israeli exchanges at negative 0.6 percent, 1.6 percent, 1.6 percent, 1.8 percent and 2.3 percent respectively. From our analysis, we also noticed that of all the 37 exchanges in emerging market that was surveyed only Venezuela stock market index has been rallying since the beginning of the year heading north by 44.7 percent from 25,458 points in April to 36,840 points as at June. Emerging-markets stocks have been pummelled lately, as a result of positive economic

data emanating from developed economies and markets, the tension being generated by trade wars, Italian political drama that is threatening the Eurozone and global push-back on US tariffs. “The dollar remains the single most important consideration for EM (emerging-markets) finances,” says a report from debtratings agency Fitch. In general, a stronger dollar tends to mean lower stock prices in emerging markets. The U.S. currency headed north in late January, around the time U.S. Treasury Secretary Steven Mnuchin said the U.S. didn’t want a weak dollar. From Jan. 24, the day Mnuchin spoke, through May 31, the dollar has risen 5.3 percent, as measured by the trade-weighted dollar index of major currencies. According to the global agency, many emerging-markets countries borrow in U.S. dollars despite having their own currency for domestic use. Thus, when the dollar rises, everything that gets priced in other currencies becomes cheaper, including foreign stocks such as those in emerging markets. “Borrowing in foreign currency on a meaningful scale is almost entirely an EM phenomenon, spurred by the underdevelopment of local capital markets,” Fitch said. While borrowing that way can be a satisfactory arrangement when exchange rates don’t move, it can present problems at other times.

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Nigeria invests $9bn on infrastructure in two years

... woos investments in tourism with waivers OBINNA EMELIKE

way from the lip service paid to tourism development in the past, the Federal Government has assured on its commitment to develop tourism as a sustainable revenue base and alternative to oil with over $9 billion investment on enabling infrastructure in the last two years. Disclosing the present administration’s action plans for tourism development in his speech at the opening ceremony of the 61st United Nations World Tourism Organisation (UNWTO) Commission for Africa (CAF) meeting in Abuja Monday, President Mohammadu Buhari, who

was represented by Boss Mustapha, the secretary to the Federal Government, noted that Nigeria was safe and open for investments in tourism. Besides the sustained investments in tourism enabling infrastructure, the President said the country was further wooing local and global investors to her tourism sector with incentives, which include: pioneer status to all major tourism projects, minimum tariff on imported tourism equipment, minimum duty on casino equipment, work permit for foreign workers with specialised skills within the industry, and land at concessionary rate by state governments to tourism investors. President Buhari specified

that the minimum tariffs were only on amusement park equipment, materials for hotel construction, furnishing, dedicated transportation for tour operators and equipment for restaurants not manufactured in Nigeria. He also assured that government was deepening the legislative and institutional capacities for the protection of intellectual property rights in Nigeria. The move, according the President, will give all investors the assurance of security of their rights, especially in the creative industry, which need foreign collaborations. Earlier in his welcome address, Lai Mohammed, minister of information and culture, noted that Nigeria bided for the hosting

right of the meeting in an effort to showcase all Africans and the world through UNWTO, the numerous tourism potential of the country with the hope of getting collaborations for more investments, exchanges, and facilitate mutual trade integration among African countries. According to Mohammed, the UNWTO/CAF meeting on the theme, “Tourism Statistics: A Catalyst for Development,” has further offered Nigeria opportunity to test-run her visa-on-arrival policy with commendation from 51 participating countries, 26 tourism minister and other delegates. “This meeting has also provided us with the opportunity to test our Visa On Arrival policy,

which is part of the efforts of this administration to boost tourism in particular. Many of our delegates received their visas on arrival here in Nigeria. In this regard, we will like to thank, in particular, the Nigerian Immigration Service and all agencies at the airport that have facilitated the inward journey of our guests,” Mohammed said. In his remark, Zurab Pololikashvili, secretary-general, UNWTO, who was in Nigeria and Africa for the first time, appreciated the efforts being made by the government to boost tourism but taskedthegovernmenttodomore going by the key position of Nigeria in Africa and to emulate other oil producing countries who are investing heavily in tourism due

to the unsustainable oil revenue. The Georgian national, who assured that Nigeria could lead Africa in tourism with the right investments, products and campaigns, noted that the meeting in Abuja with African tourism ministers, provided an excellent opportunity to discuss ways to promote intra-Africa travels and tourism, leveraging on the continent’s vast resources and population for mutual benefit to all member states. As well, Amani Abou-Zeid, African Union Commissioner for Infrastructure, Energy and Tourism, noted at the meeting that the essence of CAF was in line with AU’s economic development agenda, which hopes to lift the continent to prosperity.

Oxford/Cambridge Club of Nigeria to help Nigerians study in UK ODINAKA ANUDU

xford and Cambridge Club of Nigeria says it will soon launch the 2018 endowment initiative that will enable qualified Nigerians to attend Oxford or Cambridge universities. Speaking on the Oxford and Cambridge Club of Nigeria, Timi Austen-Peters, president, said, “It is a non-profit association consisting of alumni from the University of Oxford and the University of Cambridge who are either of Nigerian descent or currently living in Nigeria.” The Club was established over 30 years ago by a group of prominent Nigerians who attended either of the two universities and wished to create a forum to encourage social, economic and intellectual debates in Nigeria. Throughout the year, the club hosts events, which anyone can attend, ranging from the May

Ball (traditionally held in June) and the Spring Lecture. “More recently, we have added the Oxbridge Debate to our annual schedule,” AustenPeters mentioned. “This year in particular, we intend to use the May Ball, which will be held Saturday, June 23rd, 2018, to launch an endowment initiative that will enable qualified Nigerians to attend Oxford or Cambridge as we believe limited resources need not be a barrier to academic development. Money from the fund will also be used to upgrade the infrastructure of two chosen public primary schools every year.” “This year, 2018, promises to be an exciting year for the Club with a mixture of intellectual, business and social events to look forward to,” he said, adding that the Club continued to build a reputation for intellectual thought leadership, attracting leaders from the business community.

Alleged N104m fraud: Suspended SEC DG arraigned, granted bail FELIX OMOHOMHION, Abuja

ederal Government Tuesday slammed a three-count charge on the suspended director-general of the Securities and Exchange Commission (SEC), Mounir Gwarzo, at the Federal Capital Territory High Court, Maitama, Abuja. The minister of finance, Kemi Adeosun, suspended Gwarzo in November 2017, for alleged financial impropriety. Arraigned alongside Gwarzo is the SEC executive commissioner, Corporate Services, Zakwanu Garuba, for allegedly conniving with Gwarzo to commit the fraud. Garuba is facing a separate two-count charge. Th e y w e re, h ow e ve r, granted bail in the sum of N25 million each with one surety in like sum after they pleaded not guilty to the charges. The sureties are to hold position of not less than deputy director in federal ministry and to have landed properties within the jurisdic-

tion of the court. In the charge with suit no CR/185/18, the Independent Corrupt Practices and other Related Offences Commission (ICPC) accused Gwarzo of receiving over N104 million as severance benefit between May and June 2015, when he has not retired, resigned or disengaged from service. He wa s a l s o a c c u s e d of collecting the sum of N10,983,488.88 in excess of car grant in the same period contrary to Section 19 of the Corrupt Practices and Other Related Offences Act 2000. One of the charges read: “That you, Mounir Gwarzo, on or about June 2015, while being the Director-General of the Securities and Exchange Commission, received the sum of N104,851,154.94 as severance benefits when you had yet to retire, resign or disengage from the service of SEC; conferred a corrupt advantage upon yourself and committed an offence under Section 19 of the Corrupt Practices and Other Related Offences Act 2000.

L-R: Keith Alford, MD, Old Mutual Nigeria Life Assurance Company; Foluso Phillips, chairman, Nigeria South Africa Chamber of Commerce; Chris Kapanga, GCEO, Old Mutual West Africa; Bola Adegbonmire, CEO, Lemuel Technologies Limited, and Japhet Duru, acting MD, Old Mutual General Insurance Company Nigeria, during the Nigeria South Africa Chamber of Commerce breakfast forum sponsored by Old Mutual in Lagos.

FG donates relief materials to IDPs in Edo, ‘Maintenance of public infrastructure as state makes case for Libya returnees will spur economic growth’

ational Logistic Committee on Distribution of Relief Materials has donated relief items to Internally Displaced Persons (IDPs) accommodated in Edo State. Assistant controller general of Customs, Azarema Abdulkadiri, disclosed this when he led members of the committee on a courtesy visit to Edo State governor, Godwin Obaseki, at Government House, Benin City. Noting that the donation marks the fifth round of distribution of relief materials to the IDPs in the state, he said the relief materials include, “10,653 bags of 50kg of rice; 33 cartoons of 400mg tin of tomato paste; 1,232 cartoons of 70mg of tomato paste; 210 pieces of five litre galloons of vegetable oil and 40 pieces of two litre bottles of vegetable oil.” Other items are: “5,822 small cartoons of Lucozade boost drinks; 993 cartoons of Eva soap; 4 cartoons of liquid soap; 11 cartoons of tablet soap; 329 bales of second

hand clothes and 2,159 pieces of shoes.” Abdulkadiri expressed appreciation to state government and people for accommodating persons displaced by the ongoing insurgency in the North East, as the Federal Government continues to make efforts to restore peace in the region. “The judicious distribution of the materials by officials in the camp would have tremendous impact on the lives of the IDPs,” he added. Governor Obaseki, who lauded efforts of the President Muhammedu Buhari-led Federal Government in providing succour to the IDPs, urged the committee to include returnees who were victims of human trafficking in their programme of distribution. He said, “One of the challenges the state government is dealing with is the resettling and reintegration programme for 3,000 returnees who are victims of human trafficking. We are expecting about 6,000 others.”

ENDURANCE OKAFOR

liezer Facility Management, an integrated facility management services provider, has urged Nigerians to imbibe maintenance culture towards public infrastructure. The Lagos-based company says if this is not done, Nigeria as a nation will continue to lose funds invested in infrastructural development, which in the long run will slow economic growth. David Korede, chief operating officer at Eliezer Workplace Management, says to participate actively and effectively in management and maintenance of public infrastructure, there is need to take ownership of those in our communities. “A recent survey showed that adoption of ownership concept towards public infrastructures will have a positive effect of growth, economic stability and the reduction of infrastructure

maintenance,” Korede told BusinessDay. The United Nations projects Nigeria to become the third most populous nation in the world by the year 2050. With this, Africa’s most populous nation will have its infrastructure come under huge pressure. There is therefore need for the government and the citizens especially, considering they are the most affected, to develop ownership culture towards the maintenance of public infrastructure to enable them last for the period expected and for it not to cause hazards to the environment, as compiled from the company. This then led to the ‘my Lagos, our Lagos’ initiative, a movement by the facility company to help create awareness for the need to have ownership culture towards taking care of the environment and the public infrastructure especially.

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NEWS Kachikwu sees stability in Niger Delta West African Gas project … confirms discovery of gas resources in Lagos off shore

HARRISON EDEH, Abuja

mmanuel Ibeh Kachikwu said Federal Government’s strategy in stabilising the Nigeria’s oil rich Niger Delta region would improve gas supply for the West Africa subregion for their energy needs. Kachikwu made the disclosure at the ongoing meeting of the Committee of Ministers of the West Africa Gas Pipeline (WAGP) Project in Abuja, while also confirming that more gas resources were being discovered offshore Lagos. “I am pleased to be able to welcome you all at a point when the Niger Delta is stable and gas supply from Nigeria is becoming more assured and also when more gas resources are being discovered offshore Lagos, which could present more option of gas supply to the West African Gas Pipeline Project,” Kachkwu said at the event.

Kachikwu said the meeting of energy ministers in the sub-region was to consider the feedback on the issues discussed at the last meeting of the Committee of Ministers of the West African Gas Pipeline held December 2017 in Lome. The feedback, he said focused on WAGP operational issues, status of the Western inter-connection, tariff and other regulatory issues would be discussed. He also pointed out that the WAGP project was being celebrated all over Africa today, as the flagship project for the New Partnership for African Development (NEPAD). Therefore, this project should be sustained with our cooperation from all parties. “We all have nurtured the WAGP project and today’s meeting will further strengthen our resolve to see that we move forward on pending issues to achieve the set targets,” he said. Also in his remarks, Walter

Perez, managing director of West African Pipeline Company while giving updates on the project, said, “At our last meeting in Lome – Togo, I gave a brief on the Western interconnection project, explaining how the WAPG will be used to enable gas to flow from Western offshore Ghana to the primary load centre for power generation at Tema. Since then, we have progressed engineering work and related procurement activities.” Perez explained further that the company had also executed the construction management agreement with Eni, adding, “We are now eager on the construction to commence at Tema and Takoradi imminently.” The project is expected to improve energy supply in the sub-region while also ensuring direct impact on power supply and improved economic inter-dependence of the region in trade and other economic related activities.

RMB shows support to growth of arts, culture HOPE MOSES-ASHIKE

and Merchant Bank Nigeria has reiterated support for arts, culture and creative industry, given the potential of the sector to generate economic growth. Consequently, as part of the fifth anniversary to the bank, artists Uche Joel Chima

and Kelani Abass have been invited to exhibit pieces from their most recent bodies of work. Uche and Kelani are well-established artists and have exhibited internationally. Using storytelling, their collections reflect on society, work, memory and identity. The exhibition will also feature works by emerging artists currently in or recent-

ly graduating from Higher Education. The pieces from Olarinde Ayanfeoluwa, Akin Aluko, Washington Masdioluwa and Chioma Ekpetorson provide a thoughtful lens, which capture the everyday and shared emotions of their subjects. At RMB, we believe art, culture and creativity have been the glue that binds together, not only hearts and souls, but entire societies and nations. And which also lifts the heaviness and lightens the darkness. That is one of the reasons we do not only invest in and support businesses and the economy; we also invest in and support the arts stated Michael Larbie, CEO, Rand Merchant Bank Nigeria. We support the arts because we have always believed that the creative economy has the potential to generate economic growth, employment and trade. And we believe that the growth of this sector will enable many more Africans to engage effectively and profitably in the broader economy. In South Africa, RMB is recognised as driving growth in the creative economy through supporting initiatives for both audience development and artist exposure in many forms of the creative arts, including music, dance, drama and visual arts. In Nigeria, we aim to support artists and organizations to develop and support a creative mindset for a creative economy. We sponsored a night at the theatre for our clients a few years back and recently supported the Lessor Art Exhibition. We will continue to support the Nigerian creative industry through different initiatives.

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Making Nigeria’s electricity market competitive STEPHEN ONYEKWELU

ive years ago, Nigeria set off a comprehensive reform of the power sector, in a privatisation move that was acclaimed by players in the space as one of the boldest reforms but faced by insufficient cash flows due to losses along the power value chain. This reform was designed to achieve two things: fix chronic efficiency gap in old public utilities and attract private capital needed to drive the sector to meet Nigeria’s fast growing electricity demand. Half a decade later, the power sector has not recovered from one of its biggest challenges, ‘shortage’. From gas availability to electricity units delivered to the end-user, there are severe constraints that not only threaten the viability of the sector, but practically repel fresh funding and investment across the value chain. This has led to sub-optimal utilisation of generating capacity, inadequate transmission infrastructure and distribution losses and low rates of collection. To illustrate this, over 3, 000 MW of generating capacity is stranded due to gas constraints. Transmission capacity can transport 50 – 60 percent of installed capacity, while collection losses range between 40 – 60 percent at the electricity distribution companies (DISCOs) level. People with deep knowledge of the sector say insufficient cash flows have significantly impaired the ability of electricity generating companies (GENCOs) and DISCOs to recover all costs and generate appropriate return on investment. BusinessDay investigations show that to make Nigeria’s electricity market competitive some urgent steps must be taken to push reforms in the sector further along market oriented lines. To find sustainable solution to the power sector woes, experts have suggested some steps. Debts are accumulating at the Nigerian

Electricity Supply Industry as only four of the country’s 11 DISCOs, paid for supplies of power they received for transmission to their customers from the generation companies, GENCOs in January 2018. BusinessDay’s check shows that that the highest percentage of revenue paid by the distribution companies for electricity received from the generation companies is 29 percent. Total debt stock in the power sector is close to N800 billion, a source with knowledge of the matter told BusinessDay. Creative financial deals, backed by sovereign guarantees would be needed to free the power sector of this debt. The government needs to give up its 40 percent equity holding in the DISCOs. This could take place in stages. The 40 percent could be managed by a consortium and some commercial banks. However, the government will have to ultimately give up its

equity entirely. This is not completely novel because, on September 25, 2017, Babatunde Fashola, minister of power, works and housing, stated that the federal government would be open to welcome new and tangible offers that would lead to it divesting its 40 percent shares in Nigeria’s 11 DISCOs. The other point is to ensure that government, going forward, would not owe DISCOs. It must budget for power in the way that it budgets for diesel and travels. “We have done that in the 2017 budget; we will do it again in the 2018 budget, and enforce compliance by agencies to pay their debt” Fashola said. This will help in bringing stability to liquidity problems in the power sector, ultimately for the benefit not only of the DISCOs but the entire value chain. Transmission Company Nigeria (TCN)

needs to be broken-up and privatised. Experts say this is necessary if the market is to be optimally deregulated. In other countries where the electricity industry was formerly a government owned, vertically integrated, monopoly; the reforms have generally involved splitting the industry into separate generating, transmission and distribution sectors. The transmission system often remains a government-owned common carrier, or is kept under extensive regulatory control as a natural monopoly. Stakeholders in Nigeria’s power industry say Nigeria’s TCN needs to be broken up into mini-privatised operations to make the system work. Finally, those who get a concession must present two pieces of evidence: proof of experience doing something similar in a similar economy and proof of liquidity or money to pull off the deal.

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COMMENT SMALL BUSINESS HANDBOOK

EMEKA OSUJI Dr Emeka Osuji School of Management and Social Sciences Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

igerians have been savouring the good news of the end of the recession that recently ravaged the economy. They have seen the good, bad and ugly. Indeed, Nigerians have seen decades of economic growth, especially of the variety described by Prof Jagdish Bhagwti as Immiserizing Growth – growth that made the people poorer. The question now is whether the end of recession would bring respite from the present hardshipor fizzle out like the massive growth of the last decade that put no bread on their tables. Many are already screaming “God forbid” that the end of recession be another paper work of no material significance. There is even an added “God forbid” that the rebound of the economy couldbring back inflation and reverse the gains made by CBN in inflation targeting. The latest inflation figure shows a decline towards the single digit target of the CBN. This fear of inflation returning is not unfounded. There is a theoretically sound expectation that economic rebound is more likely to promote inflationary pressure than otherwise.This is why I voted, in absentia, with the Monetary Policy Committee to leaveinterest rate where it was, against the counsel of some “experts”.

MAYOWA AMOO Mayowa Amoo is an investment banker based in Lagos

he AfCFTA Agreement states clearly the objective of AfCFTA: to create a single market for goods, services, facilitated by movement of persons in order to deepen the economic integration of Africa. This piece discusses the origins of AfCFTA, its inherent benefits and challenges, Nigeria’s stance and in conclusion, further work needed to secure economic self determination for our people. One of the key principles of the AfCFTA is that the existing Regional Economic Communities (RECs) will serve as building blocks for AfCFTA. Tariffs will be eliminated on 90% of goods traded between and amongst African countries. This should translate to lower prices, higher volumes and higher GDP for the continent. The balance 10% of goods represents sensitive products that are expected to be liberalised over a longer time period or be permanently on the exclusion list. At the 10th Extraordinary Session of the Assembly of the AU on the launch of the AfCFTA held in March 2018, there were three (3) legal instruments requiring signature of

Wednesday 06 June 2018

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Poverty alleviation and poverty generation: Spot the difference Given what we have seenlately: the statistics from those who should know, especially the National Bureau of Statistics, the analyses by those who understand the economyand those who do not, but wear the toga of experts, and the current perceived positive trajectory of some economic indicators, the economy is not likely to relapse into another recession so soon. Moreover, the things that happen around election time in Third World countries (You may humour yourself by preferring “developing” to Third World countries)like Nigeria, do not support the possibility of a decline in consumer spending in an election year. We are close to 2019, when all manner of cash, legal or illegal, printed or earned, stolen or relooted, will match forward,in Ghana-must-go bags, in the wee hours of the night, into the public financial space.Campaign finance laws are still largely non-existent here. Politicians are already spending their way into public office. The likelihood of a drop in consumer spending is therefore low. However, that is only theoretically speaking. We can still plunge ourselves into economic crisis notwithstanding. We did it before. The end of recession and the resumption of growth is just but a small part of the story of poverty and deprivation in Nigeria.Less than a year ago, there was wide-spread gloom among Nigerians regarding the direction of the economy. This gloom was not a Nigerian phenomenon. It featured elsewhere, with many countries recording declining indices. No thanks to the Euro crises and the slow-down of China. We now have signs of a rebound not just in Nigeria, but across continents. Our rebound, which many agree is

In our fight against poverty, it is important to avoid or at least minimize povertygenerating activities, especially on the part of governments. For instance, taxes are important to government but when taxation stifles the economic activity of the poor, it counter produces and works against any programme of poverty alleviation anchored largely onrising oil prices, is predicted to continue as oil prices head to record level of over a hundred dollars in 2019. The upward trend in oil prices also brought some stability in the foreign exchange market, which has doused inflation. The question now is: how is life in the average Nigerian family? Has anything changed? Perhaps, it is too early to ask if the improving economy has impacted the poorest and most vulnerable. The right answer is not likely to be a solid yes because we curb poverty with one hand and court it with another. The problem of poverty and destitution in Nigeria, which have become so serious that a declaration of national emergency is not an extreme option, is rooted in our attitude to distribution – the distribution of the common patrimony of all Nigerians, including income, opportunities and wealth. Many poor countries are facing the same challenge whereby a few people corner the resources of all to the exclusion of the majority. Noth-

ing good can come out of economic growth that is underlined by the massive greed of a few that control the national wealth. That is poverty generation. As long as every leader has imperial tendencies funded by public funds, there is bound to be mass poverty among the rest. Unfortunately, the legislature, which should have made laws to reduce the current unjust reward system that generates poverty has become the main engine or poverty generator. Bad public policy is also a poverty generator. When a state governor boasts of his private properties acquired while still in office and a publicly names the litany of properties belonging to his familywhile still in office, with public utilities in shambles, that is poverty generation. The Vatican recently released a communication on the need for distributional equity in world resources to ensure that her resources are used for the benefit of all and not just a few. Distributional equity or justice in the sharing of the wealth of the world, is the only basis of a successful fight against world poverty.It is hypocrisy to fight poverty in one direction and promote it on another. Discrimination in job opportunities has become public policy in Nigeria. Only those connected to powerful people get jobs and this seems to promote the problem of out of school children. There is no immediate incentive for education. Nepotism has overrun our public institutions – a violation of the constitution. In our fight against poverty, it is important to avoid or at least minimize poverty-generating activities, especially on the part of governments. For instance, taxes are important to government but when taxation stifles the economic activity of the poor, it counter produces

and works against any programme of poverty alleviation. The current strategy of internal revenue expansion whereby revenue consultants, motivated only by their share of the revenue, are set upon the already beleaguered citizens, will defeat the objective of taxation. Ultimately revenue drops. Some of the fines imposed by states are too high that they benefit only tax officials who collect brides that are much lower and more realistic than the fines. Even angels may be tempted to negotiate a bribe with revenue collectors when the fine is unreasonably high. Similarly, when tax and environmental control officials intimidate the citizens so badly that they no longer ply their trade, we accelerate rather than decelerate poverty. Policy application must recognize the need to sustain the economic activity of the poor. In some states,urban renewal has been turned to a political weapon against everybody and not just the opposition. Demolish their shops; make wide ditches on both sides of high streets and walk away so that the shops get no patronage. Claim you are beautifying the place but be slow at work, after all you don’t even have the funds. Soon they become desperately hungry. By 2019 they will be too busy begging for food to have political opinion. Immiserize the people to get them to support unpopular programmes. In Imo, even the best friends of government have cried out at the rate people are being thrown into hardship under their urban renewal programme. That is poverty generation. Of course you may launch a microfinance programme that finances nobody. That is not poverty alleviation.

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Nigeria and Africa Continental Free Trade Area (AfCFTA): A big deal? members so as to birth the AfCFTA – the AfCFTA Consolidated Text, the Kigali Declaration and Free Movement Protocol. Nigeria was absent and did not execute any of these instruments. We should have been there and signed at least one of the instruments especially because signature does not equal ratification. A cursory view of the Heads-of-State (or their representatives) present indicates that every regional African power was there and signed at least one of the instruments: South Africa signed the Kigali Declaration, Egypt, Cote d’Ivoire and Mauritius signed the Consolidated Text. Kenya signed all three and has ratified alongside Ghana. It is likely that our action would be relationally damaging (and make subsequent demands and negotiations difficult), despite our size as the largest market on the continent. Nigeria, like other member states, will only finally ratify the Agreement in accordance with our constitutional procedures. It is important to note that, as with all such agreements, member states post ratification can withdraw after five (5) years if they so choose – effectively a 5-year trial period. There are compelling reasons for Nigeria to sign up. The AfCFTA

once it becomes effective after at least twenty two (22) member states would have ratified the Agreement, will cover a market of 1.2 billion people and a GDP of US$2.5 trillion assuming all 55 member countries signed up – whereby it would be the world’s largest free trade area by number of participating countries, since the formation of the World Trade Organisation (WTO). Agriculture and manufacturing, two areas of relative strength in Nigeria, should benefit the most from AfCFTA, hence shifting the country and the continent away from capital intensive, job-limited, extractive sectors towards more labour intensive and price-stable industrialisation. MSMEs will have the opportunity to scale their businesses regionally and then eventually globally especially through supply chain of different industrial value chains. For instance within South Africa Development Community (SADC), Botswana feeds the SA car industry leather while Lesotho provides fabric for seats of cars. Private businesses, traders and consumers must lead the initiative across the continent. The challenge of infrastructure required to create the gateways like air, sea, roads and rail networks must be overcome through private sector co-leadership with government. For instance, it is

not impossible for an aggregation of the wealthiest 55 individuals on the continent to commit to funding and building road and rail networks from say Cape Town to Casablanca and from Nairobi to Dakar in exchange for bragging rights and other monetary concessions from relevant governments through the instrumentality of the AU. The Nigeria Labour Congress is reported to perceive AfCFTA as a “renewed, extremely dangerous and radioactive neo-liberal policy initiative.” This hard line position forms part of why Nigeria pulled away from signing the Agreement. NLC’s position may be misguided as it may not have the benefit of receiving orientation on AfCFTA’s costs and benefits for Nigeria. In terms of cost to member states, UNCTAD projects that US$4.1 billion may be lost tax income. However, UNCTAD also makes clear that in the long run there will be gains amounting to US$16.1 billion. The Nigeria Office for Trade Negotiations (NOTN), the government agency for trade matters in Nigeria, is clear about the benefits of AfCFTA when it says that “This (AfCFTA) will boost job creation through increased intra African trade and expand market access for Nigeria’s exporters of goods and services, covering a

market of over a billion Africans with a combined GDP of US$2.5 trillion.” It is thus difficult to accept the possibility of Nigeria not giving assent to the AfCFTA Agreement post the on-going national sensitisation. The fear of loss of tax income by governments is real. However, tariff elimination is going to be gradual over a period of between five (5) and fifteen (15) years. Notwithstanding, it is irrefutable that the more advanced African economies are in a position of strength to tap into the impending benefits of AfCFTA. To assuage the genuine fears of smaller economies, subject to them fulfilling certain verifiable economic parameters, it would be useful for the AfCFTA Secretariat to lead the charge for establishment of a Continental Stabilisation Fund to be seeded by the top 10 economies of the continent with a view to leveraging the fund to support the growth and development of smaller economies and hence avoid protectionism by these latter countries.

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In the belly of the plastic whale

NNIMMO BASSEY Bassey is Director of Health of Mother Earth Foundation (HOMEF)

t was a surreal feeling for me to literally step into the belly of a whale in December 2017. It was an unforgettable experience, to say the least. One could not but imagine what would have been the fate of biblical Jonah if he had found himself in the belly of a whale like the one I encountered. My encounter was with a Cuvier’s beaked whale. An adult male Cuvier’s beaked whale can weigh up to 3000 kilogrammes and measure 5-7 metres in length. These whales usually have just two visible teeth at the tip of their short beak. Lacking much in terms of teeth, they feed by suction. They hunt by echolocation and can be injured or confused by noises generated by humans, including noise from seismic exploration

for fossil fuel resources. Encountering them is not easy, so Jonah would probably not have been given a hike by this specie. Why? They live where there is no light, at about 2000 metres way down in the ocean. Plus, they feed on fish, crustaceans and mostly deep-sea squid. This appetite for squid may be one of the key problems that modern man now poses to these deep-sea creatures. Scientists suspect that the Cuvier’sbeaked whales get attracted to floating plastics, mistaking them for squids or ingest them while hunting for other species that may seek hiding places in floating plastics materials. Plastics in the seas are a huge threat to the Cuvier whales and other sea creatures. Ending a plastic civilisation The World Environment Day 2018 presents a challenge and an instigation. The theme, Beat Plastic Pollution, challenges us to take action and the notion that plastics pollution can be beaten should inspire actions. The World Oceans Day equally urges action against plastic pollution. Beating plastics pollution is a huge challenge when we consider the perverse culture of current disposable economy. Fifty percent of plastics in use are disposable or

Reports by Ocean Conservancy, suggest that there will be more plastics than fish in the oceans by 2050. Already, plastics have been found in over 60 percent of all seabirds and in all sea turtles species that mistake plastic for food

single-use type. Globally, we buy one million plastic bottles every minute and use up to 5 trillion plastic bags every year.The least anyone can do is to pause and think before grabbing that plastic bottle of so-called soft drinks. We should learn to refuse plastics and not just aim to reduce, reuse or recycle them. It is time to tackle this menace at source. Packaging is said to account for 40 percent of all plastics in use. It is time to terminate this plastic civilisation. Sadly, many folks think that the story of their plastic bags or wraps end once they toss them into the trash bin. In a bid to appear hygienic, we cover or wrap foods with plastics – in both restaurants and homes. However, plastics out of sight is not plastics

out of life. Tons of these materials end up in the gutters, rivers and the oceans. 15 tons of plastics are said to end up in the ocean every minute with more than 8 million tonsbeing dumped into the oceans every year. An incredible 1 million seabirds and 100,000 marine mammals lose their lives to plastic pollution every year Reports by Ocean Conservancy, suggest that there will be more plastics than fish in the oceans by 2050. Already, plastics have been found in over 60 percent of all seabirds and in all sea turtles species that mistake plastic for food. We must beat plastics, for our survival and for the survival of other species. We need fish, not plastics. Floating on the waves It is interesting when we consider how long it takes for some of the plastics that end up in the oceans to decompose. Tissue papers decompose in 2 to 4 weeks. Cigarettes decompose in 5 years. The plastic cups in which coffee is served at cafes and fast food shops float around for 50 years. Plastic bottles will swirl about for 450 years. And, wait for it, the plastic in baby diapers will equally hang around for 450 years - long after the babies who wore themwould havebecome ancestors. Even the balloons that are used as decorative items- when released to float around

for a few minutes or hours, end up taking years to degrade in the oceans and water ways. And, so, there was I in the belly of the Plastic Whale Museum, a museum set up at the University of Bergen, Norway, to serve as a poignant reminder of the harm that plastics pose to our oceans and to marine life in particular. This museum hosts displays of the plastics recovered from the belly of the whale that was stranded on the Sotra Island, west of Bergen, on 28th January 2017. The whale had more than 30 plastic bags and a large quantity of microplastics in its belly. As we gathered in the museum todiscuss plastics, oil pollution and the threat to our communities as well as to marine ecosystems, the plastic backdrop was a haunting reminder of the harm that we are doing to our environment. When we eat fish that feeds on plastics, it is reasonable to say that we are actually eating plastics. On that day, I ended my talk with a rendition of my poem, We Thought it Was Oil, but It Was Blood. Perhaps I should have changed that to read We Thought it Was Fish,butIt Was Plastic.We simply have to beat plastic pollution.

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Shall we tell president Buhari?

SOLA ONI Oni, Communications Consultant and Chartered Stockbroker is the CEO, Sofunix Investment and Communications. He sent the piece via onisola2000@yahoo.com

ne of the five best performing stock exchanges globally, the Nigerian Stock Exchange, is bleeding. It’s measure of corporate gains, All-Shares Index and value of listed securities, market capitalization fell by 6.38 per cent in one week to close at 36,818.29 and N13.336 trillion respectively on Friday, June 1st., 2018. Medical experts are not required to detect the financial hemorrhage that The Exchange has been plunged for two consecutive weeks. Innocent shareholders watch the volatility helplessly as their investment is plundered by the prolonged bear market. The Nigerian Stock Exchange’s Chief Executive Officer, Mr Oscar Onyema sweats under his corporate jackets while our resilient stockbroking firms lose jumbo commissions daily from fat cat clients. The Chartered Institute of Stockbrokers (CIS), an umbrella body that certifies stockbrokers and Association of Stockbroking Houses of Nigeria (ASHON) are under pressure to calm nervous domestic investors that bear trading provides an opportunity for investors to beef up portfolio as market fundamentals on The Exchange remain strong. The market has not fully commenced trading in derivatives. This would have provided hedging opportunities for the shareholders. After all, an investor cannot lose simultaneously in both the spot and derivative market. They would have been enjoying zero-sum game by now. We should

commend the CIS for making training in Managing Equity Derivatives compulsory for all stockbrokers as part of the Institute’s compulsory continuous professional development programme. There shall be opportunities to implement the training in Nigeria one day. The Exchange has recorded trajectory of superior performance by global standard after the market meltdown of 2008. The battle for investor confidence is no longer a major issue as aggressive foreign portfolio investors have since discovered huge opportunities for superior Return On Investment (ROI) in the acclaimed frontier market. They know that investment is a game of trade off between risk and return. The Exchange is a leading market by any parameter. The market is respected in the World Federation of Exchanges (WFE) and African Stock Exchanges Association (ASEA), where Onyema is the current President. Shall we tell President Mohammad Buhari that the fingered enemy of The Exchange is the government of Nigeria through its political and economic activities that unleash anguish on many investments? Every stock market mirrors and responds to the happenings in its political, economic and social space. Any market that operates at variance is voodoo. Newspapers headlines is daily replete with news on sucide bombings and kidnapping by Boko Haram, callous killings by Fulani herdsmen, emerging political assassination, high tension armed robbery, uncertainty of the government’s fiscal and monetary policies that have polarized our economic experts into two camps on the hazards of continuous retention of the nominal anchor, the Monetary Policy Rate (MPR) at 14 percent by the Central Bank of Nigeria (CBN) and perceived fear of economic and political crisis as we gradually approach 2019 general election. These are called systematic or market risks. They are external and beyond the control of The Exchange.

As uncertainty of policies thickens, captains of our manufacturing firms are losing weight as they continue to contend with forex challenges despite all the publicity about the special window created for them. Some analysts have sworn that the current monetary policy is pro-foreign portfolio investors and anti-domestic ones. Foreign portfolio investors are more active on our bourse than their domestic counterparts. By the analysis of The Exchange, “ Foreign Investors outperformed domestic investors by 15.48% in April 2018. Total domestic transactions reduced by 36.05% from N140.27 billion in March to N89.70 billion in April 2018. Foreign transactions also reduced by 7.32% from N132.21 billion to N122.53 billion within the same period”. Foreign investors deploy mutual funds as investment vehicle. Mutual funds are baskets of investments that enable an investor to use the same amount of money to own shares and fixed income securities in many companies. It is managed by professional fund managers. Most mutual funds seek capital gains as investment philosophy. Some invest over 80 percent of their net assets on equity securities market in the emerging markets like Nigeria. They frequently take positions on large and mediumcapitalized firms. They dive into volatile markets without qualms. This investment model is credited with transparency through regulation, diversification and economies of scale in terms of bulk purchase. But mutual fund’s challenges range from cash drag as they must keep huge amount for unforeseen redemption, huge tax, high maintenance costs and relative illiquidity compared with stocks on redemption procedures. There are fillers that the current share dumping by foreign investors is oiled by some mutual funds that are paying returns of five percent and above in the United States and Europe. Nobody can rule out fear of impending general election as well. Unfortunately, herd instinct usually propel many domestic

investors to take queue by selling off whenever the foreign investors blow wistle.Foreign investors are adept at risk analysis. Some of them are ahead of our risk managers in Nigeria. They accord importance to country risk before they invest trillions of hard currencies. The naked truth is that uncertainty characterised our operating environment in Nigeria. Why should MTN give priority to Ghana Stock Exchange for its Initial Public Offering (IPO) ? There is just no solid explanation other than MTN’s perceived unfriendly operating environment in Nigeria. By market capitalization, The Nigerian Stock Exchange can acquire Ghana Stock Exchange theoretically as Ghana is about onethird of Nigeria’s Stock market. Apart from insecurity issues and management of interest rate, the apex regulator of the capital market, the Securities and Exchange Commission (SEC) which represents the government on the market is unstable. The senior prefect of the capital market has been operating without a board for a long time and nobody seems to care. In six months, three staff of the Commission occupied the hot seat of Director General, two in acting capacities. Mallam Mounir Gwarzo who took over from Ms Arumah Otteh was suspended by the Finance Minister, Mrs Kemi Adeosun for breaching Public Service Rules. He was replaced in acting capacity with the SEC’s head of External Relations, Dr Abdul Zubair whose appointment was dramatically short lived . Zubair surrendered the baton to Ms Mary Uduk, one of the longest serving staff of the Commission, expectedly in acting capacity. Adeosun also appointment in acting capacity, Reginald Karawusa as Executive Commissioner, Legal and Enforcement, Isiyaku Tilde, Executive Commissioner, Operations and Henry Rolland Adekunle, Executive Commissioner, Corporate Services. The immutable law of acting capacity

by Nigerian convention is to operate under extreme caution because the status is still uncertain until confirmation by the powers that be. Foreign investors understand the roles of SEC in the market development and the implications of an organization without a board in the context of corporate governance. Capital market thrives on trust and confidence of investors! Government is not a priority one man show. Adeosun should pull trigger to ensure that in the interest of re-branding our economy, SEC should now have a board while it’s top management staff should operate in confirmed capacity. This is a trying period for the federal government, hence, capital market operators should be fully involved in all economic policies to avert the perennial gap between economic policies and market development. It is not out of place if the CBN can organize a strong forum where key operators in the capital market can rob minds on how monetary and fiscal policies impact stock market activities. Capital market regulators and operators can also set up a strong advocacy group for meeting with the apex bank. There is an urgent need for the government to practically convince the entire world that Nigeria is safe for investment. One can sympathize with the CBN’s Governor, Godwin Emefiele. He is passionate about managing forex issues. But the consumate banker ought to have realized by now that solution to our interest rate controversy is not onesize-fits-all. He needs more options. Globally, Central Banks are under pressure. Models are failing.

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BUSINESS DAY

Wednesday 06 June 2018

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EDITORIAL PUBLISHER/CEO

Frank Aigbogun

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

Bashir Ibrahim Hassan

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

Making the national ID work

he National Identity Management Commission recently confessed its inability to deliver national identity cards to millions of citizens waiting for it. According to the commission, national identity cards that are ready are mainly for people who enrolled in 2012 and 2013, noting that it was adopting a first-come, first-served approach. The Director-General of NIMC, Aliyu Aziz, said the focus of the agency right now is on National Identification Number and not on the card. According to Aziz: “The focus is actually on the National Identification Number. Your NIN gives you your identity and not the card. Historically, we focused ourselves on the card to be the output of what we do; but when the country went into recession, we stepped back and che cke d and found out

that in the United States, it is the Social Security Number that connects all the other agencies. “In the United Kingdom, it is the National Insurance Number; and in India where recently they enrolled about 1.4 billion people, they only gave the number. This means you can now pull your own NIN and then print it the way you want it. “Recently in Nigeria, we did the Bank Verification Number ; and again, what you get is a number and not a BVN card. But Aziz realised the Nigerian law ultimately requires that citizens be given identity card and he quickly chipped in: “However, this does not mean that we won’t give out cards, because it is there in the law that we should issue a general multipurpose card that is secure.” NIMC’s confession of incapacity c omes a full 10 years after it was e stablishe d and 8 years sinc e it commenced operation. For national identification,

just giving each person a number would not do. Citizens across the world hold physical cards. In c oun tries like the US, which Aziz cited as using only a social security number, states are empowered by law to give out identity cards and drivers license. The national Social Security Number is used mainly as employee identifier for tax reporting, r e t i r e m e nt a n d b e n e f i t s purposes. Nigeria chose the national ID card model and that is why NIMC was created in the first place. But NIMC has been about talk than delivering on the card it was established to deliver. In the last seven years, it has received a N80.2 billion from the federal government but has only been able to capture a mere 25 percent of Nigeria’s 180 million population (put conservatively) into its database while not more than five percent of those captured have been issued with the National Identification Number (NIN), which

is soon to become a compulsor y document for all Nigerians residing in the country. This is no judicious use of funds. But lack of funds is no good reason not to deliver on the national ID card scheme. NIMC can explore several options like charging for the cards, like banks and all other card-issuing institutions do, concessioning the management of the issuance to the committee of banks that have proved adept at managing the enrolment process. The government and the National Ass embly must take stock of the work of NIMC to see whether it is delivering value for money and whether, as constituted, the agency has the capacity to deliver on the assignment it was created to deliver. It is time we adopt a business appro a ch to g o v ernan c e and the public s e ctor in Nigeria where institutions and agencies justify their existence and funds given to them.

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Wednesday 06 June 2018

BUSINESS

COMPANIES & MARKETS

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‘Union Bank’s robotic process automation, a first in the industry’

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C o m pa n y n e w s a n a ly s i s a n d i n s i g h t

Zenith Insurance navigates headwind as premium jumps BALA AUGIE

enith Bank Insurance Limited has navigated the economic headwinds caused by a lower oil price as the insurer’s premium incomes spiked. The impressive performance means the company’s diversified product base are adding to top lines (revenue) while contemporaneously adding value to shareholder’s wealth. For the year ended December 2017, Zenith Insurance’s gross premium written increased by 12 percent to N12.50 billion from N11.11 billion the previous year. Gross premium income and net premium income increased by 14.50 percent and 7.51 percent to N12.80 billion and N8.09 billion respectively in the period under review.

Similarly, the company’s financial statements, which were approved by the National Insurance Commission (NAICOM) on the 20th of April 2018, showed healthy net assets of N23 billion. Investors and shareholders need not fret over the company’s financial strength as solvency ratio stood at 634 percent in 2017, meaning that it is able to cover its minimum regulatory solvency requirement six times over. Analysis of the company’s results for FY2017, a copy of which was obtained by this correspondent, showed that fees and commission income jumped by 37 per cent from N907 million in 2016 to N1.245 billion in 2017. The results showed that net underwriting income also rose from N8.354 billion in 2016 to N9.336 billion while the profit before tax dropped to N4.750 billion from N5.927 billion in 2016 owing to the

high claims, increase in management expenses and high taxation expenses. However, the company’s stellar performance shone through with a return on equity of 15.5 per cent despite the strong economic headwinds in 2017. The company’s financial strength was also apparent from total claims of N6.7billion paid out in 2017 representing an increase of 36 per cent from the N4.7 billion paid out in 2016 and a total claims ratio of 58 per cent in 2017. Zenith Insurance is one of the insurance companies in Nigeria, offering a wide range of corporate, commercial and individual insurance services at the right price and with the best service infrastructure to ensure clients’ satisfaction. The company has total shareholders’ fund of N22.37 billion and a total asset base of N34.37 billion.

L-R: Victoria Francis, head, HR and administration, Nigerian-German Business Association; Gbenga Adebija, director–general, Nigerian-German Business Association (NGBA); Modupe Oyekunle, National President NECA’s Network of Entrepreneurial Women (NNEW), and Titilayo Eko, executive director, NNEW, during the signing of a Memorandum of Understanding between Nigerian German Business Association and NECA Network of Entrepreneurial Women (NNEW) in Lagos.

Expert backs effort for revival of Ajaokuta Steel Company

lawyer and social reformer, Natasha Akpoti, has expressed confidence over the full take off of the Ajaokuta Steel Company, assuring that everything about the project will soon be resolved and that there was no cause for alarm as the company was on a sure path of revival. Speaking to newsmen in Abuja, the legal practitioner also expressed delight with the high degree of determination so far exhibited by the Kogi State governor, Yahaya Bello to move Ajaokuta Steel Company forward. She said, “On the brighter side, Ajaokuta Steel Company is on a sure path of revival because the much needed political will is being stimulated across the tiers of government. I, alongside the reputable Nigerian Society of Engineers (NSE), African Iron and Steel Association (AISA) and a host of other professional stakeholders are working with the National Assembly to create a set of laws to establish a responsive and protective ecosystem for the steel sector. “We are also advocating for the establishments of a Steel Development Authority, just like we had in the

70s. The rationale behind this is to promote the separation of powers which are presently mumbled up in the Ministry of Solid minerals. In essence, the Steel Authority shall oversee the operations and productivity of the steel sector; while the ministry shall serve as regulators for pricing, policy formulations and others. “With all the right collaborations being set in place, however late, I have no doubt the resuscitation of Ajaokuta’s steel complex for the good of Nigeria will be a dream come true.” Speaking on the commitment of the Kogi State governor to see the actualization of the project, Akpoti said, “as a governor, Yahaya Bello must be met daily with tons of ideas, Ajaokuta Kogi Nigeria Limited could have been one of those he ventured into based on recommendations best available to him at that moment in time. “I hold no brief for him and I still believe that in the spirit of democracy, his government owes an explanation to the good people of Nigeria. However, while focusing ahead, it’s good to know Bello supports the call for TPE of Russia as technical partners and has openly appreciated

the resilience of our advocacy. So I chose to hold the governor to his words,” she said. Akpoti who dismissed insinuations of being sponsored by some individuals in the country, also spoke on her friendship with Governor Bello, “In the past months, there has been some relationships forged between the Kogi State governor, Yahaya Bello and myself, clearly, we are collaborating towards an accelerated resuscitation of Ajaokuta Steel Company amongst others. “This alliance will no way overturn or tamper with our code of ethics and societal ethos which has laid the foundation upon which we seek economic justice for Ajaokuta Steel Company and her captive mine - National Iron Ore Company, Itakpe both in Kogi State.” According to her, the involvement of the Kogi State Government in the alleged lopsided attempted acquisition of the steel complex via a vehicle registered as Ajaokuta Kogi Nigeria Limited as exposed during the March 1, 2018 presentation before the House of Representatives was true. “Whether such actions were taken with the full

GTBank tests creative minds in visual arts, photography knowledge of Governor Yahaya Bello or not or in the best interest of the state and country or not shall be decided in the course of the House of Representatives investigation which commences on Monday, June 4, 2018” The leader of Ajaokuta/ Itakpe Revival Movement provided what may well be an insight into the twists and turns in the journey to revive the steel company “However, as every journey has a destination, so also before I embarked upon this herculean task alongside millions of patriotic Nigerians; there was a destination at heart. This was unequivocally to pursue and influence good government decisions towards the judicious revival of Ajaokuta Steel Company and the steel sector in general. “Without mincing words, we stood against its privatisation and pressed for a government to government engagement between Russia and Nigeria in order to reengage the original builders TyazhPpromExport (TPE) directly as technical partners for a short term thereby cutting out the middle men/companies to help curb corruption and in turn, yield desired socio-economic benefit of the masses.

SEYI JOHN SALAU

n a move to create more opportunity for young creative minds to thrive in Nigeria, the Days of Dorcas photography competition sponsored by GTBank seek to provide platforms for talented female artists to enhance their career in visual arts and photography. The Days of Dorcas Photography competition held last week is part of the Art635 Gallery, a GTBank initiative that was launched to promote African art and culture. Oyinade Adegbite, head, Communications and External Affairs, GTBank in a statement said the vision of the bank is to provide a platform to empower young people, encourage creative people, and to help them connect. “Days of Dorcas is about female photographers and we have 213 applications; it is about finding the connection that can help them progress their career. We want to partner with people in the creative space, people who have passion for what they do, and to be able to help them. For us we find it easy creating platforms using events, to help people find the platforms,” said Adegbite. According to Adegbite, the MD of bank is passionate about giving back as a way of bridging the gap between

the have and have not in the society. “Now it is the time for organisations to step-up and give back to the society where they operate,” she stated. The 213 applicants were shortlisted to 25 by the facilitators before the six days intensive training that involves both theory and practical classes focused on giving the trainees the right exposure to leapfrog their career. After the six days of training, two winners emerged and will be made to undergo a 12 month internship programme with the facilitators. The internship will be semiformal and informal while the bank will put some structures in place with full access to all the facilitators and the bank. Grace Ekpu, who emerges winner of the competition, said it was an exciting moment for her to learn more about photography. “When I got here I was not aware of the fact that my pictures have to tell a story; and I had to make a conscious effort to tell a story with my pictures,” said Ekpu. Ekpu, a documentary photographer caption her work “Puncture above Weight,” the story of a female boxer in the street of Bariga, a Lagos suburb. She said the facilitators pushed me into taking the particular picture that got her the prize, as she opined that photography has been a passion for her.

BUSINESS DAY

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COMPANIES & MARKETS

‘Union Bank’s robotic process automation, a first in the industry’ Union Bank’s marked technological advancement in recent times is a major element of its transformation programme which kicked off in 2015 and has included there definition of the Bank’s business model, reengineering of its work force and rebuilding of its physical infrastructure. Recently, the Bank became the first to adopt the Robotic Process Automation (RPA) technology, a cutting edge technology which automates repetitive back end processes, freeing up employees to handle more strategic tasks. Nath Ude, executive director, Union Bank of Nigeria, who heads the bank’s Services and Technology Department in this interview discusses the Bank’s adoption of the technology and how it has improved its processes. Please tell us in simple terms what Robotic Process Automation (RPA) means? obots are software tools engaged to simplify business process delivery. Robotic Process Automation (RPA) is the technology behind this development. The interesting thing about this technology is that it automates repetitive tasks without altering existing infrastructure and systems. Many people assume it is the same thing as Artificial Intelligence but it’s different. What are some of the benefits of RPA for organisations that adopt this technology? The adoption of the Robotic Process Automationtechnology offers a wide range of benefits including improved business efficiency, data security and effectiveness. These are some of the factors which differentiate organisations, like Union Bank, who have adopted RPA, giving us acompetitive edge in the market. Other benefits of adopt-

ing RPA include cost savings, reduced cycle time as well as improved accuracy and compliance which culminate in enhanced productivity for organisations that adopt the technology All of these are benefits which we at Union Bank have accrued since our adoption of the RPA technology. How has Union Bank actually adopted this technology in its operations? As the very first bank in Nigeria to embrace this innovation, our adoption of RPA stems majorly from our central objective to leverage technology and innovation to deliver on our promise of providing simpler, smarter banking services to our customers. For us, ensuring excellent service delivery across our various touch points is paramount and RPA helps us achieve this. In the first phase of itsdeployment at Union Bank, the reconciliation of all Automated Teller Machine (ATM) transactions has now been automated across the bank. This has resulted in prompt

Nath Ude

and accurate reconciliation of these transactions as against a previous manual process which took place across over 250 Union Bank branchesin Nigeria. In tangible terms, this means ourATM reconciliation time has been reduced by over 60%. For our customers, the

Lifemate furniture to reward customers on 11 years anniversary OLALEKAN IPELE

urniture manufacturing company in Nigeria, Lifemate furniture, which clocks 11 years this month has lined up activities to mark its anniversary celebration that will become memorable and exciting to its consumers and stakeholders. In this vein, the Company has decided to roll out key activities under what it has called buy more and get more at a giveaway price event. Lifemate started its manufacturing operations as a small company at its Ikosi road Oregun, Ikeja current head office location some eleven years ago, and it has since grown to become a household name in quality furniture making in Nigeria. Currently, it has 13 branches spread across Nigeria; and 5 area head offices in Lagos, Abuja, Ibadan,

Warri and Port Harcourt. Speaking to journalist on the continued success of Lifemate, the Managing Director of the company Derick Dai explained that Lifemate has come to make live and living better in Nigeria. He said the company has consistently manufactured quality home furniture, outdoor furniture, office furniture, kitchen cabinet, sanitary ware and lately massaging machine to demonstrate its commitment to making the lives of its customers better. He further said that Lifemate products are manufactured here in Nigeria with global standard in mind. Though few quality accessories are sourced abroad, the raw materials for the company’s products are majorly sourced in Nigeria thereby contributing to the GDP and enhancing government’s efforts to revamp the nation’s economy. In her own response, the

Sales Director of the company, Allan, said Lifemate products is now popular among the people of Nigeria. Hence, the company is poised to open more worldclass showrooms to ensure availability and easy access to its products in Nigeria. She said the company would need more Nigerians on its workforce in the nearest future to cope with the increasing demands for its products. She said this eleventh year is unique because it coincides with the opening of the largest showroom in Lagos by the company as an avenue to increase its products offerings. Describing the buy more and get more at a giveaway price season, the Head of Advertising at Lifemate, Yemi Akindele commended the good gesture of the company to delight its consumers by ways of sales discount promo, price slash, special gifts and stakeholders party.

benefit of adopting this technology for this process is that it has also improved our turnaround time for processing customers’ refunds for failed transactions on our ATMs. Where normally they had to wait two to three days to get their refund, they will now get it faster and with less hassle.

For us, this will increase customers’ confidence in our services which we are quite happy about. With this innovation, are there any concerns for the security of customers’ data? Customers’ data remains secure and even more so. Union Bank was recently certified to Global standards of Information Security Management - International Organisation for Standardisation ISO/ IEC 27001:2013 standard and the Payment Card Industry Data Security Standard (PCI DSS) version 3.2 standard which provide optimum assurance that our data is secure. Do we anticipate any quality issues with the deployment of RPA in the Bank’s processes? The way RPA functions are that it will follow the rules exactly how they are programmed. Once you program it right and test properly before launching, there is no risk that the program will forget any step. Our service assurance teams set rigorous processes to ensure the right program is

set up for our RPA.Adequate measures have also been put in place to ensure benchmarked quality standards are met. What does the introduction of RPA portend for the Staff of Union Bank? Will this new development lead to loss of jobs? One of the major reasons for the introduction of RPA is actually to drive staff productivity. The focus is to enhance output by freeing up our employees to focus on more strategic and value adding activities such as interfacing with customers and solving their individual and business needs. We need our employees for this important work. Regardless of the technological innovations we adopt, at every point in time, we are looking to be the right size; to be optimally staffed with respect to the available roles. This is why we are one of the few banks in Nigeria that has a formal conversion process for our employees in support functions to transition into full time roles.

FCMB launches education advisory services for overseas studies

irst City Monument Bank (FCMB), has unveiled a scheme tagged, ‘’FCMB Education Advisory Service’’, that would ensure convenient and affordable education support for its customers who or their children desire to study abroad and obtain undergraduate and post-graduate degrees. The support includes overseas admission information services, school fees remittance, school living allowances and travel fares, loans to support school fees payments, visa process, travels and examination preparation. Access to customers and other aspiring candidates is said to be available on FCMB website with branches where operational desks are currently located, listed. It is part of the Bank’s contributions towards developing a new generation of brilliant minds that would take Nigeria to the next level. The scheme is in partnership with MOD Group, a foremost interna-

tional education promotion and marketing company with operations deeply rooted in Nigeria and covering the West Africa sub-region. Under the initiative which was launched at a ceremony on May 30, 2018 in Lagos, FCMB is offering a full range of core financial services, tailored to meet the needs of its customers in the area of acquiring education abroad. This is in addition to a wide range of benefits that the Bank is providing for potential and existing students under the Education Advisory Service initiative. Among these are, up to N5million school fees support to customers from the Bank and Credit Direct Limited, one of the subsidiaries of FCMB Group Plc (the holding company), Flexx account (in foreign exchange) for students going abroad to study, prompt and secure international funds transfer through internet banking platforms for the payment of school fees and other educa-

tional expenses abroad. There is also the issuance of FCMB debit cards, including the pocket money card (pre-loaded) that can be used to withdraw cash from overseas ATMs and make payments at stores and supermarkets. On the other hand, MOD Group will provide advisory services, such as, school admission processing, visa processing and examination preparation for beneficiaries of the FCMB Education Advisory Service. Speaking at the launch of the initiative, Olu Akanmu, executive director, Retail Banking of FCMB stated the commitment of the Bank to champion and execute initiatives that would promote education and knowledge acquisition among Nigerians. According to him, ‘’at FCMB, we walk and work with our customers to fulfill their life aspirations for themselves, their families and their businesses, including the provision of the best education.

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BUSINESS DAY

COMPANIES & MARKETS Microsoft, First Bank partners to empower SME’s Jumoke Akiyode-Lawanson

n furtherance of its bid to increase technology adoption, skills and build capacity in Small and Medium Enterprises (SMEs) in Nigeria, Microsoft has collaborated with First Bank of Nigeria Limited to empower and create an enabling environment to boost the growth of SMEs in the country. To this end, the two long standing companies recently signed a Memorandum of Understanding (MoU) for the purpose of providing SME’s value-added products, services and offerings covering access to premium content, business networks, capacity building initiatives and innovative offers of banking and technology

services. Speaking at the MoU signing ceremony at Microsoft’s head office in Lagos, Gbenga Shobo, deputy managing director, First Bank Nigeria, expressed First Bank’s unwavering commitment to the business success of SMEs in Nigeria with its array of products and bespoke solutions, specially designed to help grow and sustain SMEs. “We are committed to the development of Small and Medium Enterprises (SMEs) and ensuring their sustained business growth as well as providing the necessary tools to support that growth and Nigeria’s economy at large,” Shobo said. In the same vein, Akin Banuso, general manager, Microsoft Nigeria, who was excited about how both organisations

are empowering Small and Medium Enterprises (SMEs) to achieve more, mentioned that; “Our approach at Microsoft has been one of empowerment and collaboration.” “Initially, our work with SMEs was strongly focused on bringing them online to boost their productivity and competitiveness. Over the years, as we have worked with and learned from SMEs, our focus has evolved to provide them with a more holistic and gamechanging offering, which is: Access to technology, markets, finance, information, skills, and services,” Banuso added. First Bank and Microsoft strongly believe that their joint effort in support will help to achieve increased product and service offerings to First Bank’s SME customers.

Business Event

L-R: Oyet Gogomary, GM, EHSSQ OVH Energy; chief S.N. Jiala, paramount ruler of Ekara, Onne and chairman of Onne council of chiefs representing J.D. Osaronu, the clan head of Onne kingdom of Eleme; Casca Ogosu, chairman Police Community Relations Committee (PCRC), Rivers State and member, Neighborhood’s Watch and Safety Corps, River State; Alex Akhigbe, CEO African Clean-Up Initiative at the roll back malaria programme organized by OVH Energy for the Onne Community women and children in Rivers State.

Coca Cola, others advocate increased collaborations to tackle water scarcity Daniel Obi

takeholders drawn from water related fields in the public sector, non-governmental organizations and corporate organizations including Coca-Cola Nigeria have agreed on the need for increased level of collaborations to tackle the challenges associated with water scarcity and its waste in Nigeria. Speaking during a sustainable development symposium organized by Pan Atlantic University (Lagos Business School) with the theme ‘From Global Goals to Local Action: Catalyzing Action Towards Sustainable Water Development’ the stakeholders declared that there was the need for government, corporate organizations as well as nongovernmental organizations to partner in promoting sustainable

water provisions and management in Nigeria which they noted would go a long way in bridging the demand gap for water access in communities. Speaking during a panel discussion session of the symposium, Director, Public Affairs, Communications and Sustainability, Coca Cola West Africa Business Unit, Clem Ugorji stated that it has become increasingly imperative for government and other critical stakeholders to work together to ensure water availability for all considering the population growth and limited access to potable water. Ugorji disclosed that The Coca-Cola Company has been at the forefront of the campaign of sustainability, safe and clean environment through its numerous water initiatives but called for more collaborative and concerted efforts of the relevant stakeholders to ensure

that water becomes readily accessible. He restated the commitment of the company to continue to provide clean water to the environment noting that the drive for water efficiency by the company is anchored on these three key pillars; Reduce, Recycle and Replenish. The company is committed to achieving water neutrality in the year 2020 by reducing the amount of water used . Ugorji said “We recycle the water we use for manufacturing and return it to the environment safely. We give back to communities through local water initiatives. Beyond that, we also believe we have a broader responsibility to replenish water. In several African countries, we are working with a range of partners to protect and improve water sources and provide access to clean water to communities”.

Maintain competitive edge as professionals, Ecobank chairman charges ICSAN

lose to 200 people including men and women, and comprising fellows, associates and graduates who were recently inducted into the membership of the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN), having successfully completed their various courses at the institute, have been charged to maintain a competitive edge as professionals who desire to be successful in life. Making the charge at the 17th induction ceremony of the institute in Lagos, John Aboh, chairman, Ecobank, and guest speaker who spoke

on “Maintaining a Competitive Edge as a Professional,” said for a professional to maintain a competitive edge, he or she must maintain a reputation for integrity, accountability and industry. Aboh said he or she must hone both professional and leadership skills, keep pace with changes in customer needs, industry, technology and the economy as a whole, stressing that the professional must equally maintain visibility in his or her your industry and expand his or her professional networks. He noted that the professional must participate in his

or her professional groups and associations such as the Institute of Chartered Secretaries and Administrators of Nigeria “By being inducted into the Institute as members today, each and everyone of you already have a competitive edge. This is because ICSAN’s qualifying scheme is unique. “No other professional body provides a post-graduate qualification that is as broad-based. Chartered Secretaries and Administrators are trained in business, company law, corporate governance, management, finance, administration and company secretaryship,” he said.

L-R: Lynda Saint-Nwafor, chief enterprise business officer, MTN Nigeria; Rahul De, chief marketing officer, MTN Nigeria; Esther Akinnukawe, human resources executive, MTN Nigeria; Ferdi Moolman, chief executive officer, MTN Nigeria, at the opening ceremony of MTN Nigeria’s 21 Days Of Y’ello Care Campaign

L-R: Oluwakemi Kalesanwo, director, Lagos State Agency for Mass Education representing Special Adviser to the Lagos State Governor on Education; Ifunanya Obiakor, marketing manager, TG Arla Dairy Nigeria; Titilayo Solarin, permanent secretary/Tutor-General, Education District III Falomo representing deputy governor, Lagos State; Mads Burmester, managing director, TG Arla Dairy Nigeria, and Jumoke Benson, representative of First Lady of Lagos, during Dano 2018 World Milk Day in Lagos.

L-R: Edemekong Uyoh, head, communications, British Council; Azuka Ogundeji, trade commissioner, High Commission of Canada; Alex Malley, representative of London South Bank University, United Kingdom; Olu Akanmu, executive director, retail banking, First City Monument Bank (FCMB); Michael Dosunmu, managing director, MOD Group, and Ngozi Nkwoh, senior commercial specialist, Embassy of the United States of America, during the launch of the FCMB Education Advisory Service in partnership with MOD Group in Lagos.

BUSINESS DAY

Wednesday 06 June 2018

Politics & Policy

Ekiti guber: APC re-strategizes after gunshot 19

Wednesday 06 June 2018

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BUSINESS DAY

How Gov Okorocha lost grip of Imo APC JAMES KWEN, Abuja

head of the forth coming National Convention of the All Progressives Congress, APC, fresh facts have indicated that Chairman of the Party’s Governors Forum and Imo State Governor Rochas Okorocha has lost grip of the party structures in his state. For any keen observer of political permutations in Imo state and the entire South- East geopolitical Zone, all has not been well with Okorocha, the supposed leader or at least, APC arrow head in the zone recently. The Imo State Governor has been in a battle royale with his political friends turned enemies led by Osita Izunaso, APC National Organising Secretary and strongly supported by Senator Ben Uwajumogu, Senator Hope Uzodinma who recently defected from PDP to APC, among others for the past months. The Izunaso group usually commanded by Uwajumogu has accused Okorocha of many political sins which according to them if left unchecked would have boomerang effect on APC fortunes in the 2019 general elections in the entire South- East. More than once, the group under the auspices of Imo APC Stakeholders stormed the National Secretariat of APC Abuja where they accused Okorocha of many political iniquities and above all, the governor’s alleged plot to hand over the baton of governorship to his son -in- law, Uche Nwosu. The group which criminalised Okorocha’s intent of pocketing APC structures to achieve his alleged anti- people political objective seems to be winning the war against Okorocha. They first staged a supposedly political coup when they hijacked the ward congress to the chagrin of their opponent who could not stay behind to face the music but ran to Daura that day, obviously to seek President Muhammadu Buhari intervention but to no avail. The same thing applied during the

Okorocha

local government congress which prompted Okorocha to sponsor a delegation of 24 Members of the Imo State House of Assembly and some Members of the House of Representatives loyal to him for a protest visit to the APC National Secretariat where they alleged that both Ward and Local Government Congresses did not take place in Imo State. Achor Ihim, Speaker of the Imo state House of the Assembly, who led the Okorocha delegation, told journalists after a closed door meeting with the APC National Working, NWC that, they came to reconfirm the fact that there was no election(congresses) held in all the wards and local governments in Imo state. “There was no congress in Imo state and we are here to reaffirm, to send and demand that an announcement be made for a new date for the ward congresses, Local congresses and we can now talk about the state. “As such we demand that they issue statement and announcement be made about the congresses that did not hold. The new date should be announced and the whole thing should be ratified so that there will be peace in the state. The shenanigans that we saw can never be taken for congresses,” he said.

While the APC National Secretariat was yet to act on the petition of Okorocha group, the Izunaso group bounced back to the APC National Secretariat saying the congresses were free and fair. Ironically too, in a counter notice copied to the APC National Leadership, the President, APC Governors and Security Agencies signed by Senators Ben Uwajimogu, Hope Uzodinma, Ifeanyi Araraume, Osita Izunaso among others recounted that Okorocha was the reason APC performed abysmally in the last general elections and if urgent steps are not taken the same thing would repeat in the next round of elections. The Izunaso group noted that the ward and local government congresses were conducted credibly except that Okorocha with his cohorts who felt rejected by the delegates resorted to perpetration of violence plunging the state into anarchy which calls for a state of emergency. “This attempt to drag the state into further violence in the face of a non -existent state assembly only points to the complete breakdown of an already non-existent governance for which the state of emergency envisaged in the Section 305 of our Constitution is to be declared”, they stressed.

The pro Okorocha group in fulfilment of the Latin phrase: Aluta continua Victoria acerta(struggle continues victory is certain)procured an interim injunction from a Federal High Court, Owerri stopping the state congress few hours to its conduct but the court injunction was disregarded as APC went ahead and conducted the state Congress in Imo. Accordingly, Okorocha, as a governor who is the leader of APC at least in his state has been stripped naked of the party’s structures from ward to state level by his opponents, hence Izunaso, Uwajumogu, Uzodinma now have the party structures and can decides who gets what, when and how. As if that was not enough, the battle ground has been shifted to the National Convention of the APC as the Zonal Caucus of South- East at its recent meeting in Abuja endorsed all National officials from the Zone for a second term including the Okorocha’s arch political rival, Osita Izunaso. Addressing journalists after the meeting, Orji Kalu, a former governor of Abia, stated that, “We had a very successful fruitful meeting and have decided to endorse by affirmation from all the states, the return, through democratic means of the three members occupying national offices. “They are the National Organising Secretary, Senator Osita Izunaso, the vice chairman, Emma Enukwu and the auditor, Chief George Moghalu. “We have equally secured the support of the National Convention Committee chairman who is also the governor of Jigawa state. We have told him that they are our candidates and we did it through democratic arrangements,” Kalu said. Even at this stage Okorocha has not yet taken a defeatist stance because speaking through Henry Igbokwe, leader of APC South East Caucus in the House of Representatives, Governor Okorocha condemned the endorsement of some southeast leaders of the APC. The governor said the leadership positions zoned to the southeast

would be contested as according to him, “all the 24 members of Imo state House of Assembly were shut out of the meeting”. True to his assertion, Emma Ibejiro has been penciled down to contest the position of the National Organising Secretary at the convention and has already obtained the expression of interest and nomination forms to that effect. Meanwhile, as the battle ensued, Governor Okorocha was said to have made attempt to return to his erstwhile party, All Progressives Grand Alliance, APGA under which platform he was first elected as Governor of IMO State. However, National Chairman of the All Progressives Grand Alliance (APGA) Victor Oye, recently told the Imo State Governor to stay away from APGA as he described the overtures allegedly being made by Okorocha to rejoin the APGA to advance his political interest as dead on arrival. Oye described Okorocha as worse than a prodigal son, saying the Imo governor was an ingrate that bit the finger that fed him. The APGA national chairman said Okorocha committed an unpardonable sin against APGA by filtering away the opportunity and platform the party afforded him to realise his ‘’long-sought ambition of becoming a governor. “I’m a Christian and I’m familiar with the story of the prodigal son who returned to his father after squandering his wealth, but Okorocha’s case is worse than the prodigal son because he is still wallowing in “humongous sins and atrocities. “Okorocha has not directly approached me for anything, but he has been making overtures through members of our party in Imo State. But I wish to use this medium to ask him to stop wasting his time because we have no place for him in APGA. “Okorocha has been deserted by God and man. He has no credibility, and anytime a leader shows that he has no credibility, that’s the end of that leader.

“There were only 23 INEC registration centers in the state but I have made it 39 and at the moment we have established over 50 centers. Benue state is the total highest in the North for voters’ registration even above Kano state,” he said. Speaking on the challenges of the commission in the state, Yilwatda identified inadequate sensitization of the public but noted that with the meetings with traditional institutions, civil society organizations, political parties and other stakeholders on regular basis to sort out some grey areas, INEC

is good for it. He pointed out that even though the commission was hit by trained manpower shortage in the course of its operations but administrative staffers were deployed to the field hence the challenged was over. He added that in some cases where some ‘area boys’ were allegedly collecting N200 from potential registrants at Kanshio and Oturkpo before allowing them access to INEC officials at registration centers, security agents were invited and they have restored law and order.

INEC targets 3 million voters in Benue GEORGE KAJO, Makurdi

he Independent National Electoral Commission, INEC, is targeting to register at least three million eligible voters during the continuous voters registration exercise in Benue state ahead of the 2019 general elections. The Residence Electoral Commissioner (REC) in charge of Benue state, Nentawe Yilwatda, who made the disclosure in Makurdi Saturday, said, to achieve this, the commis-

sion has expanded the registration of voters from the usual venues to what he described as ‘mobile units’ aimed at easing the process. He explained that with the innovations he introduced since assumption of office as REC in Benue state in the past six months, he has changed the narratives as uncollected 300,000 PVCs during the 2015 general election, has reduced to less than 200,000 thousands since the involvement of Councilors, traditional rulers, council chairmen and other stakeholders.

The REC stated that in the past, PVCs were being distributed by INEC at the polling units which made it cumbersome for registrants to come for collection; pointing out that some PVCs left uncollected could be as a result of some students of higher institutions that may have graduated and left, death of others as well as transfer of some federal workers like the soldiers, police, immigration who may not be willing to use their money to transport themselves back to the state for collections.

BUSINESS DAY

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Wednesday 06 June 2018

Politics & Policy

2019: APC, PDP ‘war’ on high tempo over NTYR Bill, others INNOCENT ODOH, Abuja

he battle of wits between the ruling All Progressives Congress (APC) and the main opposition party, the People’s Democratic Party (PDP) has taken hardened dimensions over national issues and increasingly becoming belligerent ahead of the 2019 general elections. Over the weekend both sides took on each other over the Not-TooYoung To Run Bill, (NTYR) which was signed into law by President Muhammadu Buhari on Thursday last week. Both parties have since the beginning of the year been throwing mud at each other in a most brazen manner almost devoid of decency. Following the NTYR Act, the APC had averred that it was part of its promise of the dividend of democracy to make young Nigerians have an opportunity to run for elective positions, which they were hitherto hindered by law. The APC in a statement issued on Saturday by its National Publicity Secretary, Bolaji Abdullahi said “this is indeed another promise kept by the President during his 2018 Democracy Day address and in our 2015 APC election manifesto in which we promised to provide the opportunities for youths to realize, harness, and develop their full potentials and to facilitate the emergence of a new generation of citizens committed to the sustenance of good governance and service to the people and the country. “We believe the massive support the Bill received particularly from APC members in the National Assembly speaks volume of the progressive ideals the Party continues to identify with and champion, irrespective of partisan considerations and interests. “This is indeed a major milestone in advocacy efforts to ensure increased participation and inclusion of marginalised groups, in this case the youth in Nigerian politics. The youth comprise roughly half of the Nigerian population, it is only right that they take their rightful place within Party leadership structures and elective positions at all levels. “We are confident that the new law will inspire a new thinking among many Nigerian youths pertaining

Ologbondiyan

their roles in elections and politics. Youths should not be used as disruptive elements, thugs and social media mobs, it is possible for young people to lead politically and occupy elective positions,” the APC said. But the PDP responded almost immediately claiming that NTYR bill was its initiative even as it lampooned President Muhammadu Buhari and the APC for attempting to parade themselves as the architects of the ‘Not Too Young to Run Act, which it claimed was sponsored and pursued by the PDP members in the National Assembly and State houses of assembly. The PDP in a statement issued at the weekend by its National Publicity Secretary, Kola Ologbondiyan, said “it is instructive to note that President Buhari had no input whatsoever in the bill; never showed any support or enthusiasm towards the initiative and had no option than to perform a mandatory constitutional duty of assenting to the bill, as a clear reflection of the mood of the nation, given that the bill had already found an easy passage to the crucibles of the required approval of two-third of states in the federation. “This development is indeed a democratic victory for the Nigerian youths over forces, particularly, the APC, that had hitherto disdained and disregarded them as lazy and inconsequential, but had to succumb to the dictates of the law and pressure by the youths and the PDP.” The PDP noted that in preparation for the passage of the bill, it had since

Abdullahi

launched a ‘Generation Next Movement’, which has already put younger Nigerians at vantage positions to participate in elective positions ahead of the 2019 general elections. “In line with the ‘Generation Next Movement’, the rebranded PDP among other pro-youth incentives, has since approved certain critical clauses and waivers so that the young people will actively vie for positions in the 2019 general elections. “In line with our dream of providing enabling environment for youths participation in elections and governance, the PDP, after winning in 2019, will further lower the age qualification to entrench our vision that ‘whoever can vote can be voted for’, which is a global standard. “The PDP therefore urged the Nigerian youths to immediately take advantage of the Generation Next platform and incentives already established by the repositioned PDP and actively participate in the collective quest to rescue our nation from the misrule of the APC,” the statement said. The APC and the PDP had days before exchanged words over the Democracy Day Speech of President Buhari and as usual disagreed over the contents of the speech. While the APC boasted that it has achieved a lot with very little at its disposal in three years of its leadership, especially in the areas of war against corruption, insecurity and economic development, the PDP almost tore the ruling party to shreds with its caustic

criticism. The PDP according to its national spokesman noted that President Buhari and the APC have allegedly failed having squandered the goodwill that brought them into office in 2015, due to his abysmal failure. It added that the Buhari –led APC is afraid of facing Nigerians in the polls because of the hardship it subjected the people to in three years. “In the last three years, the Buhari-led APC administration wrecked our resilient economy, which was thriving under the PDP; escalated hatred, violence and daily bloodletting by insurgents and marauders across our country; brought acute hunger and starvation, institutionalized siege mentality, persecution and trampling of rights of citizens while turning our nation into one of the worst places to live. “It is indeed pitiable that instead of seeking ways of regaining the support of Nigerians, President Buhari and his APC are engaging in needless propaganda and working on how to financially sway voters. Unfortunately, Nigerians have already moved beyond the deceits of APC,” the PDP said. It also accused the President of fighting a fake war against corruption and instead perpetrating acts of corruption by allegedly syphoning off trillions of naira by the cabal at the Buhari Presidency through sleazy oil subsidy deals in the NNPC and the Ministry of Petroleum, in addition to

the looting of public funds in other agencies, under the APC, which are all allegedly preparatory for the manipulation of votes for President Buhari in 2019. “Perhaps this accounts for why a government that claims to be fighting corruption is breaking new grounds in corruption-related activities. We want President Buhari and the sinking APC to know that the repositioned PDP will not rely on money to win the 2019 general elections. The goodwill and support of Nigerians are enough resources for our victory. “President Buhari should therefore not think that he is addressing Nigerians of 2015, who gave him votes by listening to mere rhetoric and tales by moonlight,” It said. A public affairs commentator, who preferred anonymity, told BusinessDay on Sunday that “the debate between the two parties is not issue-based but the usual rhetoric devoid of sound ideology. The bickering is not about tact and strategy required to revamp the badly damaged Nigerian economy. We are also concerned about the hollowness of the parties over issues of social dislocation and political instability ravaging the country.” The war of words between the two main parties will likely degenerate into more hostile proportions as the general elections draw closer but the Nigerian masses are increasingly concerned about the quality of the debates.

‘Politicking caused exclusion of governors, senators from #NotTooYoungToRun law’ OWEDE AGBAJILEKE, Abuja

ontroversy has trailed the exclusion of governors and senators from the #NotTooYoungToRun bill signed into law by President Muhammadu Buhari. Sponsor of the act and member representing Oshodi-Isolo II Federal Constituency of Lagos State, Tony Nwulu, dropped a bombshell when he attributed the exclusion of governors and senators from the constitutional age limits to high-level politicking. The new law signed by President Muhammadu Buhari last week, alters Sections 65, 106, 131 and 177 of the 1999 Constitution and reduces the age qualification for some elective positions in the country. It lowers the constitutional age limits for the office of the President from 40 to 35 years; House of Repre-

sentatives from 30 to 25 and House of Assembly from 30 to 25. However, the age limits for senators and governors were both retained at the age of 35 years. Assenting to the bill last week Thursday, President Buhari had questioned why senators and governors were not affected. “Surprisingly, the age limits for senators and governors was not reduced, as originally proposed by the sponsors of this bill. This is an issue that may need to be addressed going forward,” Buhari had said while signing the bill into law. But speaking in Abuja, sponsor of the act and a member of the House of Representatives, Tony Nwulu, revealed that politicking by governors and senators was responsible for the exclusion. “I will tell you that there was a little bit of politics there but it’s an ongoing engagement. We thank God that

we have been able to get the ones we have gotten. But we have also requested for more. And we will keep pressuring until we get all of them,” the Peoples Democratic Party (PDP) lawmaker said. He disclosed that the three state assemblies that rejected the proposal namely: Kano, Lagos and Zamfara have been inducted into the hall of shame. Also speaking on the non-reduction of age qualification for the office of the Governor, Deputy Senate President, Ike Ekweremadu, explained that the majority opinion was that 35 years should be ideal for now to enable the would-be governors acquire the requisite experience to pilot the affairs of their respective states. Ekweremadu, who is also the Chairman of the Senate Committee on Constitution Review, however pointed out that anyone above 18 years and eligible to vote should also

be qualified to contest. A statement by his Special Adviser on Media, Uche Anichukwu, quoted him as saying: “The Not-Too-YoungTo-Run amendment is just one giant step forward. It is not the end of the road, but just the beginning of the road. It is not an end in itself, but a means to an end. “I believe that anyone, who is 18 years old and qualified to vote should also be qualified to stand for an election. This is our ultimate target and I believe we will get there. So, it is work in progress because constitution amendment is a continuum. “However, in the meantime, I urge the youth to mobilise into the political parties in their numbers to begin to influence party decisions, push for direct primary elections, internal democracy, level playing ground, and other reforms that will complement the provisions of the current millage

achieved by way of the Not-TooYoung-To-Run amendment”. The lawmaker explained that the 35 years age qualification for the Senate was retained to correct the initial disparity in the 1999 Constitution between the age qualification for the Senate and that of the President, which used to be 40 years, but now reduced to 35 years. According to him, the National Assembly reasoned that going by the provisions of Section 146 of the 1999 Constitution (as amended), the President of the Senate could hold the office of the President for a period not exceeding three months should the offices of the President and Vice President be vacant at the same time for any reason. “Since the President of the Senate, a Senator, could become an Acting President by happenstance, it is only right that the qualifications for both offices are the same,” he added.

Wednesday 06 June 2018

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BUSINESS DAY

Politics & Policy

Ekiti guber: APC re-strategizes after gunshot …But faces knotty challenge from Ayo Fayose INNOCENT ODOH AND JAMES KWEN, Abuja

ast week, the All Progressives Congress (APC) in Ekiti State suffered what many considered a setback in its massive campaign to clinch the Ekiti state governorship seat in the July 14, 2018 governorship election. The APC governorship candidate in the election, Kayode Fayemi, escaped death when a police officer released accidental bullets during a huge rally at Ado Ekiti on Friday, July 1, that hit and injured APC chieftain Opeyemi Bamidele and another unidentified person who reportedly died in the incident. Although Opeyemi survived the gunshot and is currently receiving treatment, so far the ugly development has led to the postponement of campaigns by the party in the state, but our correspondent gathered that the party is re-strategizing on the best way to ‘re-capture’ the state from the People’s Democratic Party (PDP). Fayemi will face the flag bearer of the People’s Democratic Party (PDP), Kolapo Olusola Eleka, a relatively unknown figure in the state. However, the real battle appears to be a naked fight between the Ekiti state governor, Ayo Fayose and the entire APC national and state political machinery. This is understandably so because Fayose has been an irreparable critic of the President Muhammdu Buhari and the APC federal government. According to an APC source said “Fayose must be taught a lesson.” The source at the party’s headquarters in Abuja, who wished to remain anonymous told BusinessDay at the weekend that the APC is not deterred by the recent gunshot incident and is set to use the July 14 Ekiti State Governorship Election as launch pad to test its electoral strength ahead of 2019. The APC has set up a threatening 77-member committee studded with governors, ministers, and lawmakers among others, making the Ekiti contest a “do or die affair”. APC which came into power in 2015 with popular votes from Nigerians who were disillusioned with the PDP -led federal and states governments, appeared to have lost the support of the people especially as the nation marches towards another general election. Ekiti state on the other hand is the only state in the South- West which is another stronghold of APC but it is governed by the main opposition Peoples’ Democratic Party (PDP) with Governor Ayodele Fayose as the helmsman. Though, Ekiti may not be the only state where governorship election will hold before 2019 as Osun is next in line but ruling party seems to be poised to win the state almost at all cost. The 77-man gang In the demonstration of its resolve if not desperation to recapture Ekiti whether by hook or crook, APC inaugurated a very powerful National Campaign Council for the Ekiti Governorship Election made up of 14 sitting governors, a former governor of the state, 8 strategic Minsters, key serving and former members of National

Fayemi

Assembly, some members of APC National Working Committee and other political juggernauts. The governors in the 77-member Campaign Council are; the Chairman, Atiku Bagudu of Kebbi State; Rotimi Akeredolu of Ondo state; Akinwumi Ambode, Lagos; Ibikunle Amosun, Ogun; Abiola Ajimobi of Oyo; Rauf Aregbesola of Osun; Abdufatah Ahmed, Kwara; Abdulazeez Yari, Zamfara and Godwin Obaseki of Edo State. Others include Yahaya Bello, Kogi state; Simon Lalong, Plateau; Kashim Shetima, Borno; Umar Jibrilla, Adamawa; Abubakar Badaru, Jigawa as well former Ekiti state governor Segun Oni. The Ministers that are in the Council are, Mansur Dan-Ali – Defence; Abdulrahman Dambazau –Interior; Bawa Bwari Abubakar - State, Solid Minerals; Ibe Kachikwu -State, Petroleum; Babatunde Fashola - Power, Works and Housing; Rotimi Amaechi – Transport; Chris Ngige – Labour; Isaac Adewole - Health, while some two principal officers of National Assembly in the team are Sola Adeyeye, Senate Chief Whip and Yusuf Lasun, Deputy Speaker, House of Representatives. The Campaign Team is strategically composed to ensure victory as it has all the Yoruba speaking governors except Fayose of PDP, chairman of Nigerian Governors Forum, Yari and the Amaechi who anchored the campaign that brought President Muhammadu Buhari to power in 2015 and has been appointed again to anchor the President reelection in 2019. While this may look like just part of concerted efforts to enthrone Kayode Fayemi APC flag bearer as the next Ekiti Governor, political pundits view the arrangement as ploy to subdue the Fayose led PDP which is obviously more popular in the state. Fayose has remained an ardent critic of the President Muhammadu Buhari-led APC federal government. For instance, observers alleged that the presence of the Minister of Defence, Ali in the Campaign Council is aimed at using the military to coerce, harass, intimidate the electorate and ultimately, rig the election in favour of the ruling party. The same thing applies to the Minister of Interior who superintendents the Police, Para military and security agencies, which may be used to the advantage of APC but to the detriment of other parties, particularly PDP. This is in addition to the inclusion of the Minister of State, Petroleum who is obviously not a politician in the Council, according to analysts, his role as the one who controls the nation’s main revenue earner is to make much money available for the Ekiti project.

Eleka

A member of the APC at the national level, who does not want his name on prints, told BusinessDay on Friday that “everything possible including the money, the men and the influence required to disgrace the ‘noisy’ Fayose is being put in place. The APC must win Ekiti in order to prove that it is still politically virile in the South West.” He disclosed that all the governors and the ministers are expected to contribute funds to the Ekiti project. He however, feared that the collection of 77 members, who are mostly not Ekiti indigenes, may lead to failure, adding that “too many cooks spoil the broth.” Recall that during the 2014 Ekiti Governorship election when the then former governor now the incumbent, Fayose, defeated the sitting Governor, Fayemi, the PDP controlled Federal Government through former Minister of Defence, Musliu Obanikoro allegedly used the military to capture the state for PDP. That the Ekiti governorship election is a do or die affair is no longer news as had even before his nomination as APC candidate told a gathering in Ado - Ekiti that the election is a must win for APC and, “ federal might will be used to win the election.” Also, APC Deputy National Chairman,(North) Lawali Shuaibu bluntly said during inauguration of the Campaign Council that: “The election in Ekiti is very important for the APC. In fact, we feel the level of importance of the election is slightly below the importance of the presidential election to us. We are not going to relent in our effort to win Ekiti State. The responsibility now rest on your shoulders”. Similarly, Chairman of the APC National Campaign Council for Ekiti, Governor Bagudu after his inauguration left no one in doubt of what the election means for APC when he said; “We have faced enough of affront as a Party”. “Challenge has been thrown to us not only by the PDP, but by Governor Fayose. So we must be united to confront that challenge. We will give our all to ensure that we win Ekiti State for the APC. “This will be a second battle. Somebody I read on Facebook said something about Ekiti and I said by the Grace of God, it will happen that way. I tell you what he said, ‘Akeredolu contested against Mimiko, he lost. He contested thereafter against Mimiko’s candidate, he won. So if Fayemi contested against Fayose and lost, he is now contesting against Fayose’s candidate he will win”. Experts React Reacting to the APC mobilization

for Ekiti election, a chieftain of the Northern Elders Forum, who wished to remain anonymous, told BusinessDay on Friday in an interview that the massive force being mobilized by the APC to dislodge the PDP in Ekiti is because the ruling party is afraid of Fayose. “They are afraid of the popularity of the Fayose who is on ground in Ekiti state. If they (APC) are on ground, they will not need to do all that,” he said. However, Majeed Dahiru a security expert and columnist, was very scathing of the APC saying that the party is threatening democracy. He added that the APC wants to intimidate the voters and force on the people of Ekiti, an outcome that could undermine their democratic choice. “This is a very, very ugly political culture evolving under the APC dominated polity today. An election that is supposed to be decided by the people is now being threatened by brute and naked force by the federal government. “It is something that spells doom for our democracy. I can’t imagine how a party that claims to effect change in the polity has deepened impunity to this level. This is share waste of resources. 77 people and about 14 governors I am told will leave their duty posts and converge in Ekiti for a week just to influence election for one candidate. “It is also an indication that politics under the APC administration has become self-service, an avenue to convert public resources for personal enterprise. Otherwise why the desperation to become governor in this manner, they should let people make their choice between the contenders. “This is political abomination, it is not supposed to happen in modern time for a party that professes change, this is disheartening. “You can imagine if Rivers state, Governor Wike, Emmanuel Udom of Akwa Ibom and other PDP Governors also mobilise such large entourage to converge in Ekiti for the election. It means the desperation will become so much that there will be tension in the state. I expect the president who is supposed to represent change to deviate from this political culture. If it was done in the past it should not be done in the present. This raw show of force is not democratic,” he said. But Ezenwa Nwagwu, Chairman Partners for Electoral Reforms, a civil society organization, told BusinessDay that there is nothing wrong in the APC setting up such council for the election as long as they will not compromise the election process because it is a party affair. “If the APC set up the council and include its members who are in

government I don’t see how that is undemocratic. APC can appoint those in government to its election committee. “If the federal government set a committee of that nature then that is an abuse of office. The party has interest in winning the election so it will throw everything it has. But I agree that it is uncalled for and it is unnecessary to constitute a 77-man council. However, it is now for us as citizens to ensure that they don’t abuse their office in the cause of dong that,” he said. A public affairs analyst and a chieftain of the PDP, Katch Ononuju, told BusinnessDay that despite what appears desperation of the APC government, PDP might still carry the day in the Ekiti election because Governor Fayose has a lot of popularity in the state. He said that APC stalwart Bola Ahmed Tinubu is not likely to give support to Fayemi because since the former Minister of Solid Minerals came to the centre, he allegedly teamed up with the President Muhammadu Buhari’s Congress for Progressive Change (CPC) faction of the APC coalition to sideline Tinubu’s faction of the Action Congress of Nigeria (ACN). He added that Fayose has courted friendship with the Tinubu faction, which is desperate not to be swallowed up by the CPC faction. “The PDP is likely to go into alliance with the Bola Tinubu faction of the ACN. Since Fayemi came to the center, he has teamed up with the CPC faction against the ACN. What you are seeing is desperation to unleash their alliance members and those who will work to get Ekiti. But that day will come and the people on ground might defeat them. The 77 members of the APC campaign council are mostly not from Ekiti state and all politics are local. “It is likely that day will come and only the indigenes, the local players will be there and these 77 men and women will just be in their hotel room without any serious impact. The fact that the APC failed to coalesce into a national political party simply means that the interest of the factions that formed the coalition must be protected by its members. Nobody wants to be swallowed by another faction. “Fayemi wants to drag the ACN faction into the pockets of the CPC and that is what the ACN seems to be resisting. Tinubu’s wife once complained that after helping the APC win the 2015 elections, her husband was thrashed and thrown in to the dustbin. It is now that Buhari wants to contest another election that he wants to use Tinubu again. So history will see if Tinubu will allow himself to be used and dumped two straight times,” he said. Ekiti state Governor, Fayose is however not perturbed by the enormous array of men and materials being assembled to beat his candidate, Eleka. The governor over the weekend averred that the PDP candidate will trounce the APC. He however raised alarm over the attempts by the APC to allegedly rig the elections. The die is cast and the people of the state are left to determine their destiny once again but whether the polls will be free and fair with the desperation on both sides lies within the bowels of time.

BUSINESS DAY

Wednesday 06 June 2018

BUSINESS DAY

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Wednesday 06 June 2018

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Nigeria needs 750,000 tractors to be at par with global average – Ritvonen Stories by JOSEPHINE OKOJIE

ntti Ritvonen, chief e x e c u t i v e o f f i c e r, Dizengoff Nigeria has said that for Nigeria to be at par with global average on mechanisation scale, the country still need to acquire about 750,000tractors. Ritvonen who stated this during a roundtable discussion with agricultural correspondents in Lagos recently, said that the country is still at the early stage of agricultural mechanisation. “Nigeria is half on mechanisation scale in African’s and very far from the global average. There is still so much tractors needed in Nigeria and the country need about 750,000 additional tractors to be at par with global farm mechanisation standards,” he said. The chief executive officer identified small farm sizes a n d i na d e q u at e f i na n c e f o r mechanisation investments in Nigeria, as the two major problems that have continued to slowdown the country’s mechanisation process. “Most of the farm sizes in the country are small and this can be addressed when farmers come into cooperatives or clusters to create bigger units to make it easier to finance mechanisation. This makes

L- R – Stephen Adeniran, agro-chemical manager; Oscar Walumbe, integrated project country manager for Greenhouses; Antti Ritvonen, chief executive office and Humphrey Otalor, marketing communications manager, all of Dizengoff Nigeria , during a media roundtable meeting with agric correspondents in Lagos recently.

it possible for smallholder farmers get access to tractors. “Despite governments supporting mechanisation schemes it is still difficult to get affordable finance for mechanisation investments in the country. A good tractor cost about N10 million,” he added. Nigeria has continue to suffer

from low level of agricultural mechanisation and this has continued to limit farmers capacity to expand their cultivation areas, perform timely farming operations and achieve economies of scale in food production. Available statistics has shown that Nigeria is one of the least

mechanised farming countries in the world with the country’s tractor density put at 0.27 hp/ hectare which is far below the Food and Agriculture Organisation (FAO)’s 1.5hp/hectare recommended tractor density. When measured in 2003, 12 years ago, Nigeria had only 30,000 tractors. African largest economy is currently

adding 1,000 new ones each year, which is still not considered sufficient in replacing the aging, worn out, and broken down ones. This means on a per capita basis, Nigeria ranks 132nd out of the 188 countries worldwide measured by FAO / United Nations in terms of the number of tractors in the country. Nigeria has fewer tractors than minnow countries like Serbia & Montenegro, with 400,000, Pakistan with 320,000, or Uzbekistan with 170,000 tractors. Speaking on what Dizengoff is doing to assist the country in addressing its mechanisation challenge; Ritvonen said that the organisation is working closely with other leading service providers in the country to find finance solutions for farmers. He noted that the organisation is yet to get results from the finance solutions it is seeking for farmers owing to the high demands the financial institutions are making. “We are yet to get some results on this finance area. Most local commercial banks are talking about agriculture but there is no action. The high demands the banks are making is too high for customers. “The banks want us to provide a 200 per cent credit guarantee from us and another 200 guarantee from the farmers. The banks do not want to take any risks,” he said.

BATN to spend N700m on enhancing farmers’ capacity

NBMA seeks collaboration with Interpol

...launches 4 years country plan

h e Nat i o na l Bi o sa f e t y Management Agency is seeking to collaborate with the Interpol as part of efforts to ensure the safe application of modern biotechnology and the use of its products which includes genetically modified organisms (GMOS). Rufus Ebegba, director general of the Agency said this when he led the management team of the agency who paid a courtesy visit to Olushola Subair, the office of the commissioner of police and head of Interpol National Centre Bureau (NCB) who is also the head of the Interpol committee delegate

he British American Tobacco Nigeria (BATN) Foundation is planning to spend N7oo million on Nigeria’s smallholder farmers to improve their yield per hectare and livelihood. The foundation has also launched a four-year strategy programme for Nigeria targeted at improving farmers’ productivity and consequently food security “The launch of the 2020 country program for Nigeria confirms the passion and commitment that guides the foundation’s programs and implementation of activities that are geared to empower rural Nigeria for a sustainable future that star ts w ith agr iculture,” Kola Jamodu, chairman, BATN Foundation said during the launch in Lagos recently. “Smallholder farmers cannot be ignored in the agricultural value chain if growth and development is expected in the sector, but they are limited due to their subsistent way of farming and the unfavourable business environment that leaves them vulnerable to big players in the field “In the spirit of leaving no

one behind, BATN Foundation e m p ow e r s r u ra l s ma l l h o l d e r farmers to move from subsistence to commercial agriculture by providing them with practical means to mitigate these challenges through grants and technical expertise,” Jamodu added. He said that the four year strategy plan will help support government efforts in promoting agriculture and food security in the country. According to him, the foundation in its 18 years of promoting social economic development in Nigeria has spent a total of N1.5 billion on 180 programs across the 36 states of the federation. Highlighting the agenda of the 2022 country programme, Lolade Johnson-Agiri, general manager, BATN Foundation said that a total of N700 million has been made available for the four year plan and will bring the total investments in the country’s agricultural sector to N2.2 billion. J o h n s o n -A g i r i n o t e d t h a t the focus will be on enterprise development, ABC of crop management, humanitarian aid, grants and government led

interventions, farmers for the future-youth entrepreneurship and development and communication for agriculture. “We intend to reach 26,000 beneficiaries at the end of the period to impact the economy through sustainable agriculture,” Johnson-Agiri said. Chris McAlister, managing director, BAT Nigeria in his remarks said “many farmers in the country struggle with the pre-requisite needed to move from small scale to large scale farming and the inability to transit threatens their ability to rise out of poverty.” He said that the foundation will continue to provide funding and other necessary assistance to constantly support agricultural enterpr is es and improve the livelihood of those living in the rural areas. In her closing remark, Abimbola Okoya, executive director, BATN foundation said “we need to come for the realisation of a safe Nigeria where entrepreneurial dreams thrives.” Okoya stated that the foundation will continue to train farmers on good agricultural practices.

representing Africa. The DG said the essence of the collaboration is to synergise with the Interpol and to make sure that the Agency is promptly alerted whenever GM seed or grain comes into the country without Biosafety per mit and to also ascer tain the country of origin and those involved. Rufus said the Agency h a s s i g n e d m e m o ra n d u m o f understanding with other sister agencies all in a bid to ensure that its mandate is achieved, noting that a collaboration with the centre will help the Agency in its bid to deliver on its mandate. Responding, Olushola Subair, head of the Interpol NCB said the Interpol is ready and very willing to collaborate with the Agency to ensure that the mandate of the NBMA is achieved, noting that there are very key areas Interpol can collaborate with the Agency. The CP said the Interpol will collaborate with the Agency in terms of training for staff; provide protective kits and equipment for staff of the NBMA among others. T h e C P l e d t h e N B M A’s d e l e g a t i o n t o t h e c e n t r e ’s cybercrime unit and the digital resource centre.

Wednesday 06 June 2018

C002D5556

BUSINESS DAY

ag@businessdayonline.com

AFGEAN exhibits Nigeria’s processed farm produce in Brussels …partners DHL

JOSEPHINE OKOJIE

he Agricultural Fresh Produce Growers and Exporters Association of Nigeria (AFGEAN) will be showcasing Nigeria’s processed farm produce at the on-going European Development Day summit, taking place at Brussels, Belgium. According to AFEGEAN, eight producers w ill be representing Nigeria and exhibiting about 40 value added products at the summit with women accounting for 90 percent of them. Some of the produce exhibited includes; dried fruits, plantain flour, yam flour, smoke catfish fillet, beans flour and dried pumpkin leaves, among others. “The ideal of our exhibiting at the summit is to showcase Nigerian processed produce at the international market and also showcase a handful o f Ni g e r i a n p r o d u c e r s ,

Detoun Abbi-Olaniyan, director general, AFGEAN Farmers Market working with some cargo officials at the NACHO export complex in Lagos recently.

particularly women running small businesses,” Akin Sawyerr, executive secretary, AFEAN told BusinessDay. “We are trying to show Europe that there are producers in Nigeria who can produce processed fruits and vegetables in a way that is appealing to the

European market. “ The produce will be showcase to people who are already in business that may want to bulk buy from Nigerian producers and redistribute through their own chains,” Sawyerr said. He commended DHL for

their continuous support and for airlifting the exhibited produce to Brussels for free, while calling on the government to ease the processes for export requirements. Producers exhibiting at the summit are; Sofi Foods, Kaptain Foods, Omonidde Farms

Limited, Reel Fruit, Delitz, Kalos Farms, Aace Foods, and Etal Farms. Detoun Abbi-Olaniyan, director general, AFGEAN Farmers Market and also an exhibitor at the summit said that the initiative was made possible owing to the collaborations among various stakeholders within and outside the association. Abbi- Olaniyan stated that the organisation will continue to create market access for the country’s agricultural products both locally and internationally. Also speaking, Tajudeen Dantata, president of AFGEAN said that the initiative is in line with the Federal Government export drive, adding that the association is ensuring that the produce meet standards. “We are working closely with global gap to make sure that we are using generally acceptable processes in terms of farming, harvesting, processing and exporting of agricultural produce,” Dantata said. “We are happy to see that our women have embraced this and

are making a good head way in exporting their produce, while playing a crucial role in the country’s agriculture,” he added. He noted that the association is proud to have achieve this objective, adding that with this Nigeria’s agricultural produce can be seen in most super markets in Europe. Speaking on the partnership between AFGEAN and DHL, Abayomi Adetola, cargo manager, Sub-Sahara Africa for DHL Aviation Nigeria Limited, said that the partnership is to drive export of agricultural pro duce in the countr y especially for fresh produce. Adetola said that fresh produce exports from Nigeria are low compared to other West African countries. “Nigeria is mainly an importing nation and we hardly export. Most cargo airlines that come into Nigeria drop their goods and go back near empty. Most times they go to other West African countries to pick perishable to fill up their cargo flights back to Europe,” he said.

Bauchi flags off school lab for 10, 000 maize farmers HARRISON EDEH, Abuja

o v e r n o r Mohammed A b d u l l a h i Abubakar, of Bauchi state has flagged-off a ‘School Lab’ innovative programme for 10,000 smallholder maize farmers to increase the yield per hectare and improve their livelihood in 70 communities across the state. The OCP School is both a school and a lab that will operates in a caravan of trucks to provides mobile interactive training sessions on good agricultural practices for rural farmers, using live demos and animated videos. Akintunde Akinwande Business development manager OCP Africa, Nigeria Office, said in a statement that the schools is being manned by trained personnel that will offer farmers on-site soil testing to determine the peculiar needs of the soil and fertilizer recommendations. He noted that the program will also educate farmers on the rate of fertilizer useage, and the best time for its application. According to the statement, the initiative is the first of its kind launched by a fertilizer producer in Africa, bringing latest soil testing innovations and effective agronomical training to serve the needs of farmers across the continent. Speaking during the flagoff ceremony, held recently at Nabordo, Toro L ocal

Government Area of the state, Governor Abubakar lauded the OCP Group for the warm reception the company gave him and his delegation when they recently visited its headquarters in Morocco. He expressed his appreciation to the company for choosing Bauchi as its c e n t re o f o p e r a t i o n t o implement OCP School Lab across the four states of Bauchi, Kano, Katsina and Kaduna. “This extensive agricultural soil testing is not only happening for the first time in the state, but it also promises to significantly lift up the productivity of rural smallholder farmers. Bauchi is mainly an agrarian state, and one of the major developmental agenda of our government is to transform the fortunes of farmers in the state,” the governor explained. Speaking on behalf of Karim Lotfi Senhadji, CEO of OCP Group, Caleb Usoh, the country manager of the company in Nigeria, thanked Governor Abubakar, saying that the biggest reception and encouragement that his company has benefitted from, so far, has come from the Government of Bauchi State. Usoh explained that, OCP School Lab is one of the technological methods that the fertilizer company has put in place to help small holder farmers to drastically improve their productivity. He stated that the caravan goes round to take soil samples

in the locations where the farmers are based, analyse them, and then produce specific fertilizers for the crop type and soil type. “We seek to feed the soil in the right manner. The soil then feeds the crop. And finally, the crop feeds the people,” he added. OCP School Lab is being implemented by OCP Africa, in partnership with Bauchi State Agricultural Development Programme (BSADP), which is responsible for the farmers’ mobilization, training, and logistics for the caravan. Another partner of this program is International Plant Nutrition Institute (IPNI), which is in charge of agronomic advice based on soil nutrient experts, as well as providing a mobile application for fertilizer recommendations. OCP Africa is a subsidiary of the Morocco’s OCP Group, a leading global provider of phosphate and its derivatives, with almost 100 years of experience. The subsidiary was established in 2016 to work directly with farmers to contribute to unlocking Africa’s vast agricultural potential. The company produces fertilizer solutions, customized to local conditions and crop needs, and also works with African governments, nonprofits and private enterprises to connect farmers to the knowledge, services and resources that they need in order to prosper.

Participants at World Skills Event at Abu Dhabi

ALP set to hold seminar on agriculture

he Akindelano Legal Practitioners (ALP) is set to hold its annual agricultural seminar in Lagos on 2s1t of June, 2018. The seminar follows on from last year theme: T r a n s f o r m i n g Ni g e r i a’s Agriculture and Agro-Allied Industry Challenges and Opportunities. Once again, APL has par tnere d w ith the International Institute o f T ro p i ca l A g r i c u l t u re (IITA) to convene a group of technically sound and influential speakers and expert panellists to discuss the challenges and strategies for a successful transition to modern agriculture. His Excellenc y, Aliyu

Bagudu, Executive Governor of Kebbi State has agreed to deliver the Special keynote address. Other speakers include Aliyu Abdulhameed, managing director of NIRSAL; Kenton Dashiell, deputy director general of IITA; Ade Adefeko VP, Olam among others. Special Guest include Captains of Industry, as well as Segun Awolowo, Nigerian Enterprise Promotion Council, Nigerian EXIM Bank, African Development Bank, agric commissioners from the South West and Kebbi State. The seminar will pick up on last year’s discussion looking at issues around self- sufficiency,

commercialization of research facilities, the use of new technology, value chain challenges, crowdfunding and investment opportunities and attracting the b est talent within the young entrepreneurs. It is expected that the speakers will expand on the 2017 premise that improved productivity is one thing, translating it into increased revenue, through derivatives is vital. Now in its seventh year, we expect the seminars to strengthen existing synergies and help create new ones. The Seminar series is propelled by an advisory committee of professionals with diverse business expertise.

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E-mail: insurancetoday@businessdayonline.com

L-R: Olusola Ladipo-Ajayi, past chairman, Nigerian Insurers Association (NIA); Dolapo Balogun, past NIA; Eddie Efekoha, chairman of the governing Council (NIA); Olorundare Sunday Thomas, deputy commissioner, Technical, National Insurance Commission; Wole Oshin, past chairman; Tope Smart, deputy chairman; Oye Hassan-Odukale, past chairman, during the ground breaking ceremony for the NIA Towers in Victoria Island, Lagos

L-R: Sakiru Oyefeso, council member, Chartered Insurance Institute of Nigeria; Uju Chukwu, deputy DG, CIIN; Richard Borokini, DG, CIIN; Funmi Babington-Ashaye, president, CIIN; Eddie Efekoha, deputy president, CIIN; Wale Onaolapo, council member and Muftau O. Oyegunl, council member during the CIIN press conference in Lagos.

Rebranding project: Insurers target individuals to embrace insurance ...set to tell sector story Stories by Modestus Anaesoronye

nsurance industry in Nigeria for the first time and collectively as group, wants to strategically and in a unique way tell their own story. They want individual Nigerians embrace and see insurance as a veritable financial tool that they require to protect their future and that of their families. The want the Nigeria public know that the industry has got the capacity to provide effective risk management that is needed to help the economy attain economic growth and development. They also want to reassure Nigerian’s it has got the capacity to meet

claims obligation when they arise, and will be ready to assist those who run into difficulty address their challemges. Specifically, the insurance industry rebranding project which commenced 1st June 2018 under the watch of the Nigerian Insurers Committee with Alder Consulting as arrow head, targets to change the mindset of Nigerians on the business of insurance; ensure the public understands the importance, values and benefits of insurance. The project is also going to showcase the advancement made in delivering efficient services within the insurance sector, to encourage more Nigerians take insurance. It is also to sell insurance as the engine that drives key sectors and keeps them in business.

NIA begins construction of 6-story towers corporate head office

he governing council of the Nigerian Insurers Association (NIA) dream to have a befitting towers as its corporate head office, that will projects the image of the nation’s insurance industry will soon become a reality. This is following a successful ground breaking and foundation laying ceremony to herald construction of a 6-story tower of the trade group on its Saka Tinubu land in Victoria Island. Eddie Efekoha, chairman of the NIA who appreciated the past chairman and governing council of the Association for the overwhelming support and fulfilment of the vision has the initiative has been on since 2015. Efekoha stated that “the NIA Tower, as we have christened it, consists of an office complex on ground and 6 floors with an elevated car park on the 1st floor.

The total floor area of the building is 974.83m2. The features of the building include: four office spaces on 2nd to 5th floors with total lettable area of 2,094m2 and multipurpose hall on the 6th floor with a lettable area of 214.74 m2. Other utilities are; elevators, transformer and generators, UPS, CCTV, fire protection and detection services, Borehole & Water treatment plant, Sewage treatment plant, landscaping and green areas.” According to him, the expected project duration is 30 months, as the design phase is estimated to take 6 months while the construction phase is projected to last between 18-24months. He said in order to achieve this lofty target, the building Committee has selected the cream of professionals in the building industry to be led by the project managers, The Architects’ Collective Ltd.

Oye Hassan-Odukale, chairman publicity sub-committee of the Insurers Committee said during the flag-off of the rebranding campaign in Lagos that the industry wants to sell itself to the Nigerian public. He said investment cannot come into the Nigerian economy without insurance, stating that advanced economics of the world know the value of insurance and cannot afford to do big business in Nigeria without a strong insurance sector. “It has come to that stage that insurance have to support the economy to grow, have to support individuals to grow, by everyone embracing risks management and effective financial planning with insurance, he said.

While he appreciated the fact the corporate institutions understand the benefits of insurance and use it to protect their businesses, Oye said that individual Nigerians have to come on board for the impact of insurance to reflect on the overall growth of the economy. “Insurance growth will not come unless individuals embrace it. Abroad people insure their life, motor, home, properties, their families, their funerals to take away the burden on dependants, so that is the message we are taking to the Nigeria people, Oye said. Ebele Nwachukwu, vice chairman, publicity sub-committee said we want to help people plan the different stages in their life using insurance.

We also want to help them easily resolve the issues that arise in the course of insurance contract so that at the end they have a different perception about insurance and the services of insurance companies. Nwachukwu stated that one of the key planks of the campaign will be how to access insurance services, where to access them and those behind the insurance companies. “One of the things we want to do in the course of this project is to teach and educate people on how to file claims in the insurance contract”. According to her, this is a three year project, expected to engulf N300 million with the first phase starting this June.

PenCom prepares FG retiring employees on documentation, verifications …holds pre-retirement workshop in Lagos

s part of its commitment towards ensuring that retiring federal government employees have smooth exit into retirement, the National Pension Commission (PenCom) has commenced its nationwide pre-retirement workshop. Aisha Dahir-Umar, acting Director-General, PenCom speaking at the pre-retirement workshop for federal government employees due to retire in 2019 under the Contributory Pension Scheme (CPS) held in Lagos said one of the salient objectives of the Pension Reform Act (PRA 2014) is to make pension administration transparent and

seamless. Dahir-Umar said the Commission has established uniform set of rules, regulations and standards for all aspects of pension administration, including payment of retirement benefits to retirees. “As part of our annual regulatory activities, the Commission has finalised arrangements to commence the verification of prospective retirees who would be retiring in year 2019 from the public service. The verification exercise is scheduled to be undertaken from 25th June, to 17 August, 2018 in 15 centers across the country.” She said the impending ex-

ercise, therefore, necessitated the need to undertake adequate sensitization and public enlightenment in order to prepare prospective retirees on the steps to take towards a hitch free retirement life. According to her, Papers will be presented on three topics. These are Enrolment Exercise and Documentation Requirements, Accessing Retirement and Terminal Benefits under the CPS and Life after Retirement. “It is our hope that the Workshop would educate participants on what they need to know on documentation requirements, payment of retirement benefits and life after retirement.”

Wednesday 06 June 2018

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Pension Today

BUSINESS DAY

In Association with

How to avoid losing your pension savings …ensure your PFA knows your new address, telephone numbers

kpan worked in amid-sized engineering firm in Lagos and his employer had enrolled him into the Contributory Pension Scheme (CPS)with one of the Pension Fund Administrators (PFAs), with a lot of money already accumulated in his Retirement Savings Account (RSA). After five years of working in the engineering company, Akpan got a new job with a private oil service firm in Calabar, River State where he relocated with his family, including his wife and two children. In the process of relocating, Akpan lost his phone and got a new mobile line that he used while working with his new employer in Calabar. Few years later, Akpan and his wife divorced and the woman went away with their two kids. To ensure his former husband did not reach heragain dropped her old phone number and went for a new one which Akpan didn’tknow. Following a boat mishap (accident) that happened during one of his official trips offshore, Akpan died and was buried in his home town in the suburb area of Calabar. Two years gone, no one heard from Akpan, and his pension contributions no longer coming. Three years gone, the story remained the same. The PFAhaving been sending communications and updates on Akpan’s fund to his email, house address out of curiosity tried reaching out to Akpan on telephone number found in his file with the PFA, but without success. Again out of curiosity, the PFA sent customer service unit to his house address that was in his file with the PFA, and only to

L-R: Inyang Sani Orungbe, managing partner, Averti Professional Managers; Peter Aghahowa, head, Corporate Communications Department, National Pension Commission and Ekanem Aikhomu, head , Benefits & Insurance representing the director general PenCom during the 2018 Pre-retirement workshop organised by the National Pension Commission in Lagos.

discover that Akpan and his family had left their Lagos home over four years ago. On checking the file to get the contactof his next of kin, who happens to be his divorced wife to find out about Akpan and his new contact details, the line also did not go through. Now, the PFA does not know how to reach Akpan, his family or his where about. No one has come for his death benefits, or pension contributions. But why should he change his address, phone number and employment without notifying the PFA where his life savings for retirement is domiciled? That is the story of Akpan. He changed his residential address without notifying his PFA. He changed his phone number without also notifying his PFA. He probably changed his next

of kin, without notifying his PFA. Now, his pension contribution is in his RSA account, without any way to reach him or his family members. This is the mistake many pension employees and contributors are making, and the irony of it all is that even the PFAs cannot take this money as their own.

The PFAs are never happy when this kind of thing happens because the objective of the CPS on such individual was not met and the way the CPS is structured, nobody can corner such money. It belongs to the owner of the RSA PIN. Are you an employee, contributing alongside your employer into your RSA

The objectives of CPS is to ensure that every person who worked in either the public Service of the Federation, Federal Capital Territory, States and Local government or the Private Sector receives his retirement benefits as and when due

RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State. Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@diamondpfc.com Website: www.diamondpfc.com

PIN, ensure that you update your records with your PFA from time to time, including details of your next of Kin, if you make changes. This is important for the effective management of your pensions, Ronke Adedeji, chairman, Pension Fund Operators Association of Nigeria(PenOp) said. Adedeji said one of the challenges PFAs have with management of contributor’sfunds is tracking difficulties. “We have a situation of changes in customer data not communicated to PFAs leading to difficulties in locating some clients” She noted that another challenge is low adoption of self-help platforms.According to her, despite huge investments in technology by industry players, a high percentage of clients remain comfortable with the old,

manual way of doing things. From our PFAs websites, which are general online real-time, you can actually communicate changes in your profile and status for the knowledge of your PFA and subsequent update of your file. She said that many customers do not pay attention until retirement, which is why certain changes in their profile and statues are not communicated to their PFA leading to tracking difficulties. According to her, employees and contributors must be active participant for effective running of the scheme. The objectives of CPS is to ensure that every person who worked in either the public Service of the Federation, Federal Capital Territory, States and Local government or the Private Sector receives his retirement benefits as and when due ; and to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age. The provisions of this Act shall apply to any employment in the public service of the Federation, the public Service of the Federal Capital Territory, the Public Service of the state, the public service of the local governments and the private sector. In the case of the Private Sector, the Scheme shall apply to employees who are in the employment of an organization in which there are 3 or more employees. Notwithstanding the provision of subsection (2) of this section, employee of organization with less than three employees as well as self-employed persons shall be entitled to participate under the scheme in accordance with guidelines issued by the National Pension Commission.

This section is created to increase awarness and deepen knowledge about the contributory pension scheme. If you have enquiries or contributions, send to this e-mail: diamondpfcbusday@yahoo.com

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E-mail: insurancetoday@businessdayonline.com Having operated since 2011, what has the business environment looked like? hen we talk of reinsurance, reinsurance has no bounds really, so to say. We started out as WAICA Re belonging to the West African English speaking countries Nigeria, Ghana, Sierra Leone, Liberia, and Gambia predominantly and then it was a Pool really. The reinsurers in the region came together to set up the Pool but their intention then was that this company we are setting up will eventually become a reinsurance company but it took them almost 30 years or more before they could achieve that goal in 2011. So when you are running a reinsurance that’s why it is difficult or not very common to see an individual having a reinsurance company. Reinsurance Company by nature is an international business. One of the differences between insurance and reinsurance is that insurance is local, reinsurance is international. Another one is reinsurance is secondary, insurance is primary. If you want to do reinsurance it has to be international. You meet people, you do business from anywhere in the world. If you want to concentrate on your country or your neighborhood, you won’t go anywhere. That’s why when we started really because we inherited WAICA Re from WAICA Pool, even that year we started to get business from all over Africa, from North Africa, West Africa, East Africa, from all over we were getting business. It is not possible as a reinsurance company to concentrate on your country alone, so we have even gone beyond Africa now. We do little from the Asian countries. So the environment you cannot say is conducive or not, it is global. You look at your business as a global business then you want to approach it globally which is

‘In Nigeria alone we lost over $3m in 2016 over currency devaluation’ Abiola Ekundayo, managing director/CEO, WAICA Reinsurance Company said reinsurance business is an international business and not limited by boundaries. In this interview Modestus Anaesoronye in Accra, Ghana bares his mind on the company’s expansion, business models. Excerpt: exactly what WIACA Re has done. Yes if you look at the business from West Africa, when I say West Africa I mean English speaking West Africa, we are still okay. We are very close to almost half of the market size. But when we started I told my team that, look, I don’t want us to concentrate on only West Africa, I want us to go globally, I want us to go anywhere and do business, and you know there are areas you don’t go to but even in Africa if you want to concentrate in Africa alone you can do well. That’s where you see some reinsurance they don’t want to go beyond Africa but in our own case we have gone a little bit beyond Africa. We are conscious of where we are going, that’s why when others are burning their fingers here and there we thank God it’s not it’s not the same with us. It is not by our own making we have successful scaled hurdles. You can see the earth quake that occurred 2015 April in Napa. We used to do business in NAPA but honestly we only paid small claim. But our colleagues there burnt their fingers. Today some people have approached us to be doing business from India; I told them that we are not ready for it now. It’s not because we can’t do it but we have to study the market and know exactly where we want to go. They have been on my neck that is why we can’t do from Philippines and so on but let me tell you something 2014 or so there was a case, one of us accepted business from Philip-

Abiola Ekundayo

pine because it is an electricity something and I told you, we made a wrong decision but because of our image we were not able to cancel the business because it will affect us so we kept it. You are planning expansion to mother markets across Africa; take us through where and where you are currently operating? This is how we have been structured in WAIC Re. We have the head office in Sierra Leone. Under Sierra Leone we have the head office in Abidjan Cote D’ivoire writing business for the French speaking countries. Then we have a contact in Nigeria, then Sierra Leone, Tunisia, Ghana, we are

together. But now we have set up a subsidiary in Kenya. We wanted to register the contact office here but they said no that the window of contact office is closed shortly after they granted to SICCA Re. So we had no choice so we set up a subsidiary in Kenya so far we have paid 10 million dollars they have given us approval in principle. Our license will be out any moment from now. We have taken accommodation well furnished. We have an office now also in Southern Africa, that is in Zimbabwe. What we did in Zimbabwe was to acquire a reinsurance company and then the minimal capital in Zimbabwe is 5 million dollars which we also

paid. Tunisia is a contact office under Sierra Leone. When we wanted to start we approached their insurance commission that we wanted a subsidiary then they advised us that we should set up a contact office so that we don’t pay much. They only requested us to pay 7,000 euros which we paid last year so we have given them our papers. Even before then we wanted morocco. Morocco is a closed market so we could not do business in morocco so we abandoned that one and went for Tunisia. Tunisia is friendly. It is a liberalized market and they received us. They even said pending the time you get your certificate you can be doing business, then we started our business. It’s not Tunisia alone we have Algeria, Mauritania but not Egypt because Egypt speaks English and we get business also from the Middle East. So in Tunisia the potentials are there. It is a good place to do marketing. It is friendly and of course the currency is very strong. So any money you make there is good but our philosophy is that you don’t transfer money from any country to another we keep the money in the country where we are. We have investment account, we have premium account so we don’t need to touch anything even in Nigeria we don’t transfer money. Give us highlights of what you did in 2017 in terms of performance? I can say 2017 was as good

as any other year as from the time we started. We have been able to write about 62.5 million dollars premium and profit of almost 7 million. We have been paying dividend to our shareholders continuously. This is the fourth now since we started. We paid the first one in the first year of operation and up till now we have continued to pay. So we have paid about 2.5 million dollars to our shareholders as dividend. Not that everything was rosy in 2017, there were issues and even in 2016, but WAIC Re would have been able to do better in term of what we are doing except for currency devaluation in all the countries and policies are not stable. In Nigeria lone in 2016 we lost about 3 million dollars then. things will get better, but generally speaking we are trying our best because there is more competition now but we are just lucky that the brokers want to do business with us. For 2018, we are looking to surpass what we did last year by the grace of God. Another problem that we have been facing is the collection of outstanding premium. But now this year we are taking a giant stride. I told my team I will not recognize premium production. What I will recognize is collection. So your collection is your production for the year. If you have produced 10 million and you collected 4 million, 4 million is what I will recognize and honestly from January till now it is working, we have collected almost all our premiums.

Akwa Ibom Governor commission’s Anchor Insurance house in Uyo

overnor Udom Emmanuel of Akwa Ibom State has commissioned the Anchor Insurance UltraModern Office Complex in Uyo, charging the underwriting company to strive to become Nigeria’s topmost insurer. Emmanuel who described insurance business as the highest employer of labour in the country urged the management of the company to do everything possible to raise the bar in its profiteering and also give it a pride of place as the best insurance firm in the country. He assured that the state government would give its maximum support for it to succeed and directed both the State Ministry of Finance and the office of the Secretary to the State Government to en-

force the state government’s directive towards ensuring that all its insurance activities are handled by Anchor Insurance Company Limited. While congratulating the company for the edifice, he maintained that the state government would work to increase its shareholding capital by 80 per cent and called on the management to look at taking advantage of the state government owned assets in Lagos as a basis to increase its shareholding in the company. Elijah Akpan, the executive chairman of the company said as the only surviving state government investment in the financial services sector of the Nigerian economy, the company is involved in general insurance business with registered office in Uyo, corporate office in Lagos and branches

Udom Emmanuel, governor of Akwa Ibom State (m) cutting the tape to commission Anchor Insurance Company Limited building in Uyo. He is assisted from the left Elder Imoh Oko, chairman of Uyo Local Government Area; Ebose Augustine, MD/CEO, Anchor Insurance; Elijah Akpan, chairman of the company and Moses Ekpo, deputy governor and two other dignitaries who were past military governors of the state.

nation-wide with state government stake of 60.76 per cent equity capital after privatization in 2002. He said the company has performed very well, ranking among the top 20 insurers in the country with enormous contribution towards the economic growth of the state through employment, income redistribution and corporate social responsibility by paying its dividends since 2010. Akpan said the four floors ultra-modern office which completes with kitchenette, lift, water facility, standby generating set, large parking area and trained security personnel now adorning the landscape of Uyo metropolis, was conceived and designed to meet the demands for office accommodation by other corporate entities in the state.

BUSINESS DAY

Wednesday 06 June 2018

CityFile

FRSC urges Kaduna to create bicycle lanes

aduna sector command of the Federal Road Safety Corps (FRSC) has called on the Kaduna State government to provide bicycle lanes in its urban roads and other cycling facilities at traffic intersections. The sector commander, Umar Ibrahim, made the call in Kaduna on Monday after a mass bicycle ride by members of the corps and some staff of the state’s ministry of works in commemoration of the World Bicycle Day. Ibrahim also called on the state government to provide bicycle parking facilities at public places such as secretariats, shopping malls, schools, worship centres, motor parks, and bus stops, among other places. He explained that the measure would encourage members of the public to take up cycling as a mode of transportation. He said that contrary to the erroneous belief that associated bicycle with poverty, cycling improved health of the rider and reduced the cost that would have been incurred on fuel or transportation. He described bicycle “a simple, affordable, reliable, clean and sustainable” means of transportation. “Not only that, cycling as a means of commuting within reasonable distance to work and other places reduces traffic congestion, pollution and urban noise. “To erase the notion that cycling is a symbol of poverty, public officials must take up cycling, from time to time. “We will continue with this campaign in Churches, Mosques and public places to encourage people to take up cycling; we need the media for support to create the needed awareness, “the commander said. The United Nations in April this year declared June 3rd as World Bicycle Day.

Police train 163 on counter-terrorism, kidnapping A total of 163 officers of the Nigeria Police and related security agencies in zone 1 are being trained on counter terrorism, to improve the security situation in the country. The Inspector-General of Police, Ibrahim Idris, disclosed this at the opening session of a five-day national counter terrorism incidents commanders’ management course held in Kano, in collaboration with the British High Commission. Idris, represented by the AIG Zone 1, Dan Bature, emphasised that the officers should be well-trained to enable them have a firmer hold on the challenges of counter-terrorism and kidnapping. “The training, in collaboration with the British High Commission, has been approved to train officers in all the 36 states of the federation. “We have done up to 90 per cent of such trainings and hopefully, the capacity of our officers will improve in counter-terrorism. According to him, the job of security does not fall only on police officers, even the civilians and other security agencies would collaborate to work together to have a peaceful society. “The Nigeria Police will continue to partner with other sister agencies to curb any form of criminal activities, especially terrorism in the country,” he said. Kano State Commissioner of Police (CP) Rabiu Yusuf, urged the participants to pay serious attention to the course. Yusuf said that the training would expose the participants to taking urgent steps in responding to emergencies.

Members of Cycology Club, and Ronald Kayanja director, United Nations Information Centre, Lagos, (in white top, standing) during bicycle ride to mark World Bicycle Day, in Lagos, last weekend.

1,000 jobs expected as Ibadan central abattoir begins operation AKINREMI FEYISIPO, Ibadan

ver 1,000 jobs are to be created with the flag off of operation of the newly constructed central abattoir in Ibadan, the Oyo State capital. Although jointly owned by Oyo State government and the 11 local government areas of the state, the facility will, however, be operated by a private firm, C & E Limited, with whom the owners have signed a Public Private Partnership (PPP) agreement. The new abattoir boosts of such facilities as stalls for 1,000 meat sellers, 170 shops, administrative building, clinic, canteen, cold room, incinerator and a car park for 300 vehicles. It is also equipped with two standard cold rooms, which run with two 25KVA generators, as well as buildings with toilets, bathrooms and changing rooms. Yinka Fatoki, the executive secretary,

Oyo State Bureau of Investment Promotion, says that the state, the local governments and other partners have agreed to work together in the interest of the state. Fatoki, who spoke at the flag of operation of the facility on Monday, said that there had been no legal slaughter slab or abattoir in Ibadan since 2014 on account of unsanitary circumstances of the major slaughter slabs like Bodija, Aleshinloye and Gege. He explained that the situation necessitated the construction of the new facility. He said that the state government will be offering butchers at the facility microcredit loans as well as assist them acquire meat vans. “This is a state of the art facility. It is a plus to the Ajimobi-led administration,” Fatoki said, adding that the facility will be coordinated by professionals to ensure the production of wholesome meats for public consumption. “The veterinary doctor in charge of the facility, Ibikunle Akanbi, who led other

professionals on anti-mortem of some cattle to certify their health fitness, noted that any of the cows discovered to be unfit would be condemned and later incinerated or buried. Meanwhile, butchers in Ibadan metropolis under the auspices of the National Butchers Union of Nigeria (NUBN) have lauded the state government for the resuscitation of the abandoned Ibadan central abattoir. The NUBN South Western Coordinator including Kwara, Biliaminu Elesinmeta, said that the commencement of operations at the abattoir was a welcome development, noting that the project would create more than 1000 jobs and wholesome meat are produced for peoples’ consumption. Lateef Olagoke, Oyo State secretary, National Butchers Union of Nigeria (NBUN), commended inauguration of the abattoir saying “government has directed us to move down to this place, and accordingly, we will ensure that our members comply with this directive.”

LCCI decries abandoned FG property in Lagos JOSHUA BASSEY

agos Chamber of Commerce and Industry (LCCI) has criticised Federal Government’s abandonment of several of its property in Lagos and described the development as economic waste. In the light of this, the LCCI has urged the Federal Government to do the needful by handing over such property to the state government or lease them out to the private sector. The LCCI’s position comes as the Lagos State government is presently lobbying the federal authorities to cede the poorly maintained National Stadium in Surulere to the state. Babatunde Ruwase, president of LCCI, who stated the position of the LCCI on the issue while speaking in Lagos, said the abandoned assets could be put into use and made to add value to the nation’s economy. Ruwase listed some of the property to include old Federal Secretariat, old National Assembly Complex at Tafawa

…urges return of assets to LASG, lease to private sector

Balewa Square, Independence Building that housed the Defence Ministry and former Federal Ministry of Commerce, at Tinubu Square. According to him, “the Federal Government should either return the property to the Lagos State which is the original owner of the land or give them out on lease to the private sector.” He noted that aside the economic waste, many of the buildings served as hideouts for hoodlums, criminals and posed security risks to residents. The state government is presently pushing to also have the poorly maintained National Stadium in Surulere handed over to the state. Kweku Adedayo Tandoh, chairman, Lagos Sports Commission, told journalists on May 14 this year that the Federal and Lagos State Government were resuming talks to have the National Stadium handed over to Lagos. The state governor, Akinwunmi Ambode and the minister of sports, Solomon

Dalung had in March 2017, undertook the inspection of the National Stadium, with a view to ascertaining the level of decay and the state of its facilities following the request by Lagos to have it ceded to the state. Discussions on the issue were stalled after it was discovered that officials at the federal level were pushing to have part of the stadium concessioned to Lagos rather than completely handing it over to the state government. Governor Ambode later took advantage of President Muhammadu Buhari’s official to Lagos in April this year to reopen discussion on the issue, following which the president gave a verbal assurance to have the stadium released to Lagos. The Federal Government in 2017 similarly handed over the Presidential Lodge, Marina, Lagos, and the Muritala Muhammed International Airport Road, to Lagos State Government, on the request of Ambode.

BUSINESS DAY

Wednesday 06 June 2018

In Association with

‘Our desire is to offer excellent financial services’ As part of activities to commemorate its five years of existence in Nigeria, FirstRand Group, the parent company of Rand Merchant Bank limited, will tomorrow (Thursday) launch its stockbroking business, Abiola Adekoya, CEO, RMB Nigeria Stockbrokers, explains more in this interview. HOPE MOSES-ASHIKE brings the excerpt. Why has FirstR an d through RMB opened a stockbroking business in the country? MB is a member of the FirstRand Group, one of the leading and largest financial services group in Africa with a market capitalisation of over US$19bn and footprints in various African countries. Outside of South Africa, Nigeria is a core focus for the RMB group as the group seeks to diversify its earnings base. To achieve this, RMB has been operating in Nigeria for over a decade. RMB initially operated as a representative office. In the last five years, however, in tangible recognition of FirstRand’s view of Nigeria as a critical financial hub in Africa, RMB Nigeria has operated as a merchant bank providing solutions and services such as debt financing, corporate finance and advisory, corporate banking and global market services such as trade, working capital, fixed income, forex and derivatives products. In 2017, FirstRand through RMB established the brokerage business in a bid to further its long-term vision of being an end-

to-end financial services provider to its clients. The stockbroking business is envisaged over time to offer a strong distribution platform for RMB Nigeria’s products and services particularly with investment banking transactions and products. Currently, the brokerage business provides a unique platform for our domestic and institutional equities fund managers to invest in Nigerian equities and achieve their fund What kinds of clients will RMB Nigeria Stockbrokers be offering its services to? RMB Nigeria Stockbrokers currently offers services to both domestic and international investors. Our clients include pension fund administrators, asset managers, insurance companies, offshore funds investing in frontier, emerging and sub-Saharan Africa markets, and sovereign funds. What made RMB think there is a market here for Equities Brokerage? We strongly believe in the growth potential of the Nigerian equities market. To put this into perspective, the daily trade of Nigerian equities is around US$20m, far less than the

Our goal is to build a leading stockbroking firm that will provide investors (domestic and international) best in class trade execution services, equity sales distribution, strong corporate access, distribution of primary market products and a highly rated sub-Saharan Africa research product

Abiola Adekoya

US$1bn daily turnover on the South African stock exchange, despite Nigeria being the largest economy in Africa. At RMB, we see this structural market deficienc y as a potential upside for long-term, sustainable growth in the stock market. More importantly, we see ongoing macro and regulatory reforms such as improved ranking in the “ease of doing business” and the introduction of NAFEX and Naira NDFs as supportive of business performance in Nigeria, and inherently the equities market. On a broader scale, the government’s renewed focus on investment in infrastructure, as well as increased participation of the private sector are all supportive of sustainable growth and development of the capital markets. Recent PENCOM reforms should also support increased participation in

the equities markets by PFAs. We also believe the ongoing transformation being undertaken by the NSE including the introduction of securities lending, Central Counter Party Clearing House “CCP” and other derivative products will further deepen and broaden the capital markets. Is there much competition for stockbroking in Nigeria? We acknowledge the level of intense competition in the Nigerian equities market, especially as it concerns plain vanilla equities brokerage offerings. However, we continue to position the RMB Nigeria Stockbrokers’ brand and offerings, from a thought leadership and value adding perspective. On this basis, we have seen some traction with investors and expect it to grow overtime. For the broader market,

we think there are opportunities to grow the pie with potential primary market offerings in the pipeline. Furthermore, the introduction of equity-linked products in addition to primary and secondary equity offerings will be positive in driving market depth. Overall, RMB is well positioned to take advantage of the growth we foresee in the market. What makes you different from other stockbrokers in the market? We are driven by the FirsRand Group’s mantra: “passion for possibilities”. Our desire to offer excellent financial services and best execution as well as quality research products in a homogenous market, at competitive prices, makes us stand out as a broker of choice. RMB has successfully built a world-class stockbroking franchise in South Africa with its partner Morgan Stanley. RMB Morgan Stanley has consistently maintained it top ranking on the Johannesburg Stock Exchange (JSE) in the last few years, by being strategically focused on best execution, strong access to corporates, an innovative product offering and active participation in primary market deals. With this success and drawing on lessons learned and best practices, RMB Nigeria Stockbrokers has a unique advantage to compete favourably as we are able to harness the compelling RMB Morgan Stanley’s experiences and strengths as we participate in the innovate products in the Nigerian market. What is your relationship with RMB Morgan Stanley and how will this enable RMB Nigeria Stock-

brokers? RMB Morgan Stanley is a joint venture (JV) between RMB and Morgan Stanley and also a part of the FirstRand Group. This JV birthed a successful brokerage franchise, which is currently the number one stockbroking firm on the JSE by market turnover and also the top ranked broker for participation in equity capital market deals in South Africa. RMB Nigeria Stockbrokers is able to leverage RMB Morgan Stanley’s strong relationships and extensive network with international investors. In addition, the RMB Morgan Stanley platform provides us with the requisite support when it comes to product innovations such as derivatives which the Nigerian Stock Exchange is currently introducing. What is your goal for RMB Nigeria Stockbroking over the next five years? Our goal is to build a leading stockbroking firm that will provide investors (domestic and international) best in class trade execution services, equity sales distribution, strong corporate access, distribution of primary market products and a highly rated sub-Saharan Africa research product. FirstRand Group has a long term strategic vision of financial services offering in the Nigerian market and RMBNS is part of the strategy. RMB Nigeria Stockbrokers prides itself as a business being driven by an experienced and high performance team focused on providing solutions to our clients, underpinned by a sound knowledge of the Nigerian and African equities market.

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Wednesday 06 June 2018

Lagos district to decongest EBJ container traffic Page 31

ReDiscover Dominica campaign to reignite tourism

Singapore plans world’s longest commercial flight

Page 30

Ongoing rail projects as 2019 campaign tool Page 31

Auto policy in neutral gear as election nears

holders meeting that many hoped would find solutions to the lack of motion under the automotive policy, in addition to some legislative moves to that effect, yet there is no light at the end of the tunnel. Confronted with all the bottlenecks and current challenges, it seems we are back to square one, as inertia and confusion is now the order of the day. To Oseme Oigiagbe, past chairman of the Automobile and Allied sectoral group of the Lagos Chamber of Commerce and Industry (LCCI), ‘’the implementation of the policy has been that of more motion without movement’’. Apart from Innoson and PAN that has supply orders to execute, is doing serious auto as-

sembly, there seems to be little or no serious assembly of vehicles ongoing in the country. Analysts say this negative development is not unconnected with the inherent bottlenecks and encumbrances in the system as well as the change in policy drivers and the general economic downturn which have plagued the nation few years back. These include but not limited to the pervasive low demand of brand new vehicles occasioned by decreasing purchasing power of the buying public, persistent economic recession, spiralling inflation, non availability of capital and financial resources to buy new cars, devaluation of the naira against major currencies and lack of access to funds for investment

in the sector. There is high cost of assembled vehicles in the country as a result of lack of access to foreign exchange, high cost of production, availability of cheaper alternatives especially functional second hand cars. Other factors include ineffective implementation of government’s policy on buy Nigeria made goods and poor state of infrastructure such as electricity, roads and sea and airports. To cap it all, there is no law backing the policy and a lot of areas in the policy are opaque with grey imports still flooding the market and the regulatory authorities like the Nigeria Customs Service incapable of making accurate data of imports available.

Cost cutting drive improves Toyota profit by 43%

oyota Motor Corporation’s operating profit surged 43 per cent in the latest quarter as cost cutting, lower selling outlays and falling warranty expenses offset unfavourable foreign exchange rates and helped pilot Japan’s biggest automaker to a record full-year net income. Operating profit rose to 629.6 billion yen ($5.93 billion) in the carmaker’s fiscal fourth quarter ended March 31, while net income advanced 21 per cent to 480.8 billion yen ($4.53 billion), even as revenue rose

udi’s first-ever Q8 has been let loose by the automaker to the global market, thereby giving the brand a genuine rival to the likes of BMW’s X6 and Merc’s GLE Coupe. Whereas its rivals are essentially just ‘coupe-like’ iterations of the X5 and regular GLE, it appears as if the Audi will have a more distinct design that shares nothing with its more vanilla Q7 sibling. With the release of a new teaser sketch on the company’s global Facebook page, car freaks now have a good idea of how Audi’s new flagship SUV will appear from the front. Audi also released a rear sketch, showing that

Stories by MIKE OCHONMA

ith less than one year into the next general elections, an air of uncertainty and confusion is still the order of the day among auto dealers otherwise referred to as Original Equipment Manufacturers (OEMs) representatives in the country that had invested heavily in setting up local plants in what could be described as motion without movement under the purported 10 year National Automtive Industrial Development Plan (2013-2023). The automotive policy appeared to have gained traction under the former administration of former President Goodluck Jonathan. For some of these assemblers that has invested massively into assembling locally, it has been years of lamentations as they are yet to feel the positive impacts of their investment and benefits of the policy. The euphoria that greeted the policy has almost become extinct as disenchantment and outright conviction that the policy will suffer the same ill-fate as the ones precedeing it are becoming obvious. Vehicles prices are still on the roof top, while the middle class cannot afford brand new cars any longer. According Daniel Nwosai, ‘’both Olusegun Aganga, the former minister of trade and industry, trade and investment under ex-president Jonathan and Okechukwu Enelamah, his present successor are some of the best brains in the cabinet, it is baffling why the auto assembly plants are still where it is. Under the present administration, it would be recalled that Okechukwu Enelamah, minister of industries, trade and investment have held several stake-

Sketches give closer look at Audi’s Q8

1.9 per cent to 7.58 trillion yen ($71.36 billion). Global retail sales increased 2.2 per cent to 2.6 million ve-

hicles in the Ja nu a r y - Ma rch period, including results from its Daihatsu smallcar subsidiary and truck-making affiliate Hino. Worldwide wholesale volume declined 1.8 per cent to 2.3 million. In announcing the earnings results, Koji Kobayashi, executive vice president and CFO Koji Kobayashi credited companywide cost

control and restraints on spiffs and marketing expenses for the uptick in quarterly profit. Results were also lifted by a 145 billion yen ($1.37 billion) thanks to lower outlays on quality-related issues such as the recall of faulty Takata airbags. Foreign exchange rates dragged on Toyota’s fourth-quarter earnings. The Japanese yen’s appreciation against the U.S. dollar and other currencies lopped 30 billion yen (US$282.4 million) off quarterly earnings. But that was offset by cost cutting of 30 billion yen ($282.4 million).

the newcomer will sport a full-length tail light design as per the latest A8 sedan. Beneath the distinctive design, the Q8 is expected to share much of its hardware with the Audi Q7, which is based on the VW Group’s MLB platform that also underpins the new VW Touareg, Bentley Bentayga, Porsche Panamera and Lamborghini Urus. Power is set to come from the latest range of V6 and V8 engines co-developed with Porsche, and the Q8 is also likely to come with some (if not all) of the autonomous driving features that debuted on the A8. In addition to the teaser pics, Audi has launched a video teaser campaign on YouTube, with a series of short action films showing small snippets of the Q8 although they don’t actually show much of the car.

30 BUSINESS DAY

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MTRAVEL

Wednesday 06 June 2018

odern

Hotel groups to help conservation in Africa

ReDiscover Dominica campaign to reignite tourism …Encourages more travellers as Nigeria dithers Stories by MIKE OCHONMA

hile Nigeria grapples with the problem of redefining her direction in terms of tourism and putting the country further front as a tourist destination among nations, Dominica has launched the new “ReDiscover Dominica Campaign” to encourage travellers to visit the island. Visitors, friends of Dominica, and Dominicans can enjoy discounts on a trip to the Nature Island and, in doing so; help the country on its path to recovery. The ReDiscover Dominica Campaign will offer deals on hotel accommodations and on-island activities to attract travellers. The promotion features one free night on a minimum four-night stay at nine participating hotels. Visitors are encouraged to book through their respective tour operators within their geographic location or book directly with participating hotels on the campaign website. It would be recalled that Dominica was hit hard by Hurricane Maria in September last year. Tourism officials have been working closely with key industry players to reaffirm

Dominica’s position as a desirable Caribbean destination. The destination is rebuilding, and it is a great time for nature lovers, meaningful travellers, adventure seekers, leisure travellers, wellness enthusiasts, educational travellers and others to visit the ‘Nature Island’. The ReDiscover Dominica Campaign will run in all of island’s major source markets including the United States, United Kingdom, Canada, France, Germany, Caribbean and French West Indies. Dominica is an island republic. The capital, Roseau, is located on the leeward side of the island. It is part of the Windward Islands in the Lesser Antilles archipelago in the Caribbean Sea. The island is bordered by Guadeloupe to the northwest and Martinique to the south-southeast. Its name is pronounced with emphasis on the third syllable, related to its French name of Dominique. It has been nicknamed the “Nature Isle of the Caribbean” for its natural environment. It is the youngest island in the Lesser Antilles, and in fact it is still being formed by geothermal-volcanic activity, as evidenced by the world’s second-largest hot spring, called Boiling Lake. The island has lush mountain-

ous rainforests, and it is the home of many rare plants, animals, and bird species. There are xeric areas in some of the western coastal regions, but heavy rainfall occurs inland. Sisserou parrot, also known as the imperial amazon and found only on Dominica, is the island’s national bird and featured on the national flag. Island’s economy depends on tourism and agriculture. Once ruled by Spain, the Dominican Republic shares the island of Hispaniola with Haiti, a former French colony. The Caribbean nation is a major tourist destination. This, coupled with free-trade zones, has become the country’s major employer and key sources of revenue, replacing dependence on sugar, coffee and other exports. It is inhabited mostly by people of mixed European and African origins. Western influence is seen in the colonial buildings of the capital, Santo Domingo, as well as in art and literature. African heritage is reflected in music. Today the country still exports sugar and coffee but tourism is a rapidly growing industry, and although it is still poor, the economy with a population of 10.6 million people is growing strongly.

Singapore plans world’s longest commercial flight

bout 19 hours non-stop commercial flight measuring 8,277 nautical mile (15,329 kilometer) is planned for take-off by October by Singapore Airlines Ltd (SIAL.SI) from Singapore to the New York in what industry followers described as the world’s longest commercial flight . The flight from Singapore to Newark, New Jersey with 161 business class and premium economy seats will eclipse the 7,843 nautical mile Qatar Airways flight from Doha to Auckland as the world’s longest, according to airline data provider OAG. Airlines including Singapore Airlines, Australia’s Qantas Airways Ltd and U.S.-based United Continental Holdings Inc are adding ultra-long haul flights that can capture an airfare premium of around 20 percent versus flights involving one or more stops.

The Singapore-Newark flight marks the return of a popular route for Singapore Airlines. The carrier had flown the marathon flights until 2013, when high fuel prices made the use of four-engine Airbus SE A340-500 jets uneconomic. It has since flown to New York’s JFK Airport via Frankfurt. Singapore Airlines is Airbus’ first and to date only customer for the A350-900ULR, an ultra-long range version of the fuel-efficient twinengine A350 jet.

Qantas has said it is considering the purchase of the A350-900ULR or Boeing Co’s 777X to allow it to fly non-stop from Sydney to London from 2022, an even longer 9,200 nautical mile journey. Singapore Airlines said that it also plans to introduce non-stop flights from Singapore to Los Angeles with the A350-900ULR at a later date. The airline expects to receive its first A350-900ULR in September, with all seven on order due by the end of the year.

ccorHotels; world-leading travel and lifestyle group and Mantis, a renowned South African-based conservation and hospitality group have formalised a joint conservation venture. This is coming six weeks of signing their strategic partnership agreement. The Community Conservation Fund Africa (CCFA), a soon-to-be registered nonprofit organisation, was created by the two hotels to support the work of 3 internationally renowned conservation organisations, namely the Wilderness Foundation, Tusk Trust and African Parks. Andrew Muir, CEO of Wilderness Foundation Global and spokesperson for the CCFA said that pilot seed-funding of $600 000(R7.5m) for year one has been donated by Mantis and AccorHotels. This seed funding will be used to support projects across Africa through the three arms of the fund. The fund was officially launched during the Conserva-

tion Lab conference brought together by We Are Africa and Beyond Luxury, which took place at Spier, near Stellenbosch, between last month. Two awards were announced at the Fund’s launch. An award was made to African conservation leaders to enable their participation in the Conservation Lab, and USD Mantis Founder and Chairman, Adrian Gardiner said the Community Conservation Fund Africa will amplify both Mantis and AccorHotels’ commitment towards halting the accelerating decline of Africa’s wildlife and bring together three internationally renowned conservation organisations. Mantis and AccorHotels signed a partnership agreement in April, which saw the Parisbased travel and lifestyle group acquiring a 50% stake in the South African conservation and hospitality group. Around $25,000(R312 648) was awarded to The Mahenye Community Conservancy for conservation work in Zimbabwe via the Tusk Trust.

Hertz sees losses widen in first quarter

ar rental giant Hertz has reported a first quarter loss before income taxes of $231 million. The figure compares to a loss of $294 million in the same period last year. The first quarter net loss was $202 million, or $2.43 loss per diluted share, compared with a net loss of $223 million during the first quarter 2017, or $2.69 loss per diluted share. Total revenues for the period were $2.1 billion, an eight per cent increase versus the first quarter 2017 But is a swift reaction, said Kathryn Marinello, president and chief executive officer of Hertz said, “We entered 2018 a stronger company than oneyear ago with positive underlying revenue momentum as our strategies to enhance fleet, customer service and brand value are gaining traction,”.

The CEO said that at the same time, Hertz have fortified its leadership team and are managing its assets more effectively. The early progress is motivating for its employees and being recognised by our customers. But Hertz still have work to do, reflecting the significant opportunities ahead as we position our business for sustainable, long-term growth.

Wednesday 06 June 2018

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BUSINESS DAY

Local and global rail news as it breaks

Ongoing rail projects as 2019 campaign tool Stories by MIKE OCHONMA

ne common recurring decimal in some critical capital projects execution in Nigeria by successive governments both at the federal and state levels is the slowing down strategy with such projects few months or one year to the next major general election so that the incumbent in power they could be voted back to power by the electorates. Some of the projects currently being executed in the country is the rail projects. At the time of filing this report, the Lagos to Ibadan standard gauge rail project is in progress, the Itakpe-Warri standard gauge rail is on-going, while discussions are on to secure loans for the Lagos-Calabar corridor. Speaking recently during television programme, Rotimi Amaechi, Nigeria’s minister of transportation said, the government cannot complete all the on-going rail projects under one to the end of its first term in office. He said that that government is seeking a second term in office is to enable it complete the entire rail projects across the country which are at various stages of work considering the paucity of funds and complexity of work involved. He said that, the Itapke rail line which goes through Ajaokuta to Warri for instance which is the first standard gauge rail line in Africa abandoned 32 years ago is expected to be completed this year. He some of the problems being encountered is the case of a contractor that went to court because it bidded for the contract and lost,

adding that government is trying to get all the institutions that were involved in awarding that contract to go through all the processes. Amaechi said government is determined to complete it this year and put wagons and locomotives to operate on the corridor. The corridor is divided into two segments which comprised of the rehabilitation of the 52 kilometer railway line and the second segment (271km) comprised the rehabilitation of some segments of the tracks that are damaged, the building of the stations, access roads, clearing the thick vegetation that had buried the tracks and other works. In August 2017, the minister of transportation conducted a site inspection of the Itakpe-Warri standard gauge rail project that was hitherto abandoned for more than 30 years directed that the rail line should be completed and put to commercial use by June 2018. The scope of job done so far car-

ried out by CCECC indicates the contractor has cleared the track of overgrown vegetation, de-sitting of the drainages and has commenced the replacement of damaged rails and sleepers. Amaechi had earlier argued that rather than allow the rail facilities decay further, it would be beneficial to convert the rail line to commercial rail system that will move both passengers and freight. When operational, the ItakpeWarri rail is designed to have 12 stations and 12 access roads. Including cargo shades in some stations, culverts and drainages. When completed, if a train does 80km/hour on the rail line, it can move from Itakpe to Warri in four hours. Following the commencement of work on the Lagos-Ibadan line, the federal government has also signed contract for the Lagos to Kano project and sent to China to secure the sum of $6.7 billion to carry out the project, even as

federal authorities are presently sourcing for loan to execute the Lagos to Calabar corridor, otherwise referred to as the coastal lines which links Lagos through Ore, Benin, with a spur that leads to Agbor, Asaba and Onitsha. It then continues from Benin, it links to Ughelli, Sapele, Warri, Yenegoa, Port Harcourt, Aba, Uyo. There is another one from Port Harcourt to Maiduguri which connects the old alignment link the city to Aba, Umuahia, Enugu, Makurdi, Lafia, Jos, Bauchi, Gombe and Makurdi. The essence according to the transport minister is in consonance with presidential directive to have rail interconnectivity to all the state capitals. The project from Lagos to Ibadan is to be completed with a contract sum of $11.17 billion and the one from Port Harcourt to Maiduguri will cost about $16 billion. The reason for seeking for second is to enable us complete the project.

Lagos district to decongest EBJ container traffic

he Lagos district of the Nigerian Railway Corporation said it is working closely with the Lagos state government and trailer owners to identify some of the causes of long queues of trailer waiting to pick up containers brought by train from the Apapa port to the Ebutte Metta Junction (NRC) stacking facility of NRC for onward delivery by trucks to other parts of the country. Jerry Oche, the Lagos Railway District Manager disclosed that, at the moment, NRC said that in terms of container examination, it depends on the type of containers involved. For imports, the container examinations are carried out at the imports, while it is only bonded containers that, the Customs follow and do the examination at the destination, while for unbounded, examination is carried out at the originating port. There are Customs bonded warehouses

Strong growth forecast for Africa, Middle East market

in Kaduna and Kano. Oche said for the unbounded containers at EBJ, such examination is done at the terminal before it is pulled out. He said, on the average, the NRC do one or two trips a day. For those that are not bonded, the destinations are Ajuba depot, EBJ, Ijoko, Ogun State and Omi Adio in Oyo State

which was started recently. The Nigeria Railways also has exports from Ijoko, EBJ and Ajuba going into the seaport. Those ones are to be inspected at the port and shipped out and some of which are agricultural products and metals. We also do fertiliser and animal feeds up-north to Min-

na and to Kaduna and of recent we started doing fertiliser from the north. When we send fertiliser, some of the wagons com back with animal feeds. The RDM said the movement of pipes out of the port has been on for about three months now, as the NRC has only moved half of what was shipped into

ccording to a report by SCI Verkehr, the market for railway products and services in Africa and the Middle East is forging ahead, with an average annual growth rate of 4% predicted between now and 2022. SCI says the passenger market has recently become a significant factor with metro and light rail networks in the region expected to almost quadruple in size by 2022. As a result, sales of metro trains and LRVs are forecast to grow by an average 9% per annum. Even stronger growth of more than 11% annually is predicted for mainline passenger rolling stock. The total market volume for Africa and the Middle East is slightly more than €8bn, of which approximately one third is accounted for by the Middle East, where an above-average market growth rate of more than 6.5% per annum is expected.

Italy rejects plans to increase speed to 350km/h

taly’s Ministry for Infrastructure and Transport and the National Railway Safety Agency (ANSF) have rejected a plan by Italy’s infrastructure manager Italian Rail Network (RFI) to increase the maximum speed on some sections of the high-speed network from 300km/h to 350km/h plus a 10% tolerance. The two organisations have objected to the plan on both technical and economic grounds and have concluded that the disadvantages outweigh the benefits. Among other things, the main benefit of increasing the speed would be to reduce journey times. Increasing the maximum speed to 350km/h could cut around 10 minutes off the 568km Rome - Milan trip which currently takes 2 hours 55min non-stop with Trenitalia’s Frecciarossa 1000 trains. However, the ministry and ANSF say the increase in energy consumption and operating costs would be too high to justify the time saving and the likely increase in traffic. Moreover, they say that there is an unacceptable risk from flying ballast when two trains travelling at 350km/hour pass each other.

32 BUSINESS DAY Financial Inclusion

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& INNOVATION

Wednesday 06 June 2018

Supported by:

BusinessDay Radio programme; Financial Inclusion Today ...aired yesterday by 11:30am on Rhythm 93.7 FM Themed: The importance of partnerships and collaboration in financial inclusion. ith special guest Ye w a n d e Adewusi, a financial inclusion consultant, BusinessDay analysts; Patrick Atuanya, Bala Augie, Lolade Akinmurele and Endurance Okafor, and anchored by Lehle Balde Addressing issues surrounding partnership and collaboration as a way to help achieve the set financial inclusion target by the Central Bank of NIgheria (CBN), which involves all stakeholders working together in order to bring in more Nigerians into the financial circle. Yewande Adewusi, a consultant, with a strong financial inclusion background from both Airtel Nigeria and EFInA, the Enhancing Financial Innovation & Access organisation, cited out challenges and the ways to go for collaboration to be possible between telecoms, fintechs and the banks. On the major hindrance to collaboration, she said the central bank mobile payment policy specifically states that mobile money services can be run by banks and nonbank operators excluding techos, and that she said is the biggest challenge. “There is a situation where by some models in certain markets are actually led by techos, that is not concluding that it has to be led by techos but you can see the advantages of tech involvement in achieving skill and reach,” Adewusi said. Meanwhile, the CBN has a set target to include 80 percent of Nigerians into the financial circle by the year 2020, thereby reducing the number of the citizens without access to financial services and product to 20 percent by the same year. Although, that goal seems threatened considering the financial inclusion performance of Africa’s largest economy in the World Banks’ Global Findex Database released 19, April 2018. According to the report, Nigerian adults who are 25 years and above with bank accounts declined by 5 basis points from 49 percent in 2014 to 44 percent in 2017. This was not different with account holders over 15 years, as their numbers fell 4 percentage points from 44

percent in 2014 to 40 percent in 2017. “So before now, I thought if CBN is not achieving the targets, surely they are going to say techos will come into play but I was in Airtel for nearly five years and I did not see that happen so in my opinion I said if we cannot be able to owe a license, then partnership is the only way to go,” the guest said. She however pointed out that financial inclusion sector should not be seen as a Corporate Social Responsibility (CSR) and that also the sector is not a very quick return kind of business and such a patient capital is required. So on the way to go, she said partnership, as this will make it easier to provide patient capital. “The partnership could include; the banks, tehco, the small fintech start-up, startup that have got an amazing product because the advantages of fintech start-ups is that they are innovative, willing to take risk and they are very nibble, as supposed to thinking of product development in a bank, which would take time, considering risk management, MD requesting

ROY of the product and the regulator also asking if the product will cause risk to the financial sector,etc,” Adewusi added. The financial inclusion consultant said if the banks, techos and fintech work together, they we have the skills, the advantages of different entities coming into play, and with all of them working together, it will make achieving the financial goal easier. As at the time Nigeria was considering the optimal approach needed to leverage new, innovative technology to deliver financial services to its people, the Central Bank analysed in some detail how to structure the guidelines and the regulatory environment to deliver the benefits on offer, without compromising the integrity of the financial system. Africa’s largest economy needed to see how the regulation of mobile money could evolve owning to significant volumes of currency that could be circulating in mobile wallets, and may not be visible to the regulatory authorities. As such it was clear that a better balance between the

market and the regulatory structures was required. Meanwhile since then there has been an explosion in mobile money wallet usage in Kenya and other Africa peers, the Nigeria’s CBN was rather focused on an independent bank led model that would supplement and support the existing banking system, as compiled from BusinessDay survey. “The central bank in its policy, compared to certain markets is very hands-on in Nigeria market, as it is not very ‘go forth and try and see’ it’s very ‘this is the policy, this is what you can do and this is what you cannot do and do

The show airs every Tuesday at 11.30am on Silverbird rhythm 93.7 FM with BellaNaija being a media supporter of the radio program

not deviate from that’,” This she said can be hard if you are trying to innovate because there is no real answer and if one is stringent in the beginning when thinking out the solution, it will mean confining oneself. The key challenges in the collaboration of both banks and techos as mentioned by the consultant were; who owes the customers? Who owes the infrastructure? Who is spending what well? In the way to go for the CBN in achieving its set 80 percent financial inclusion target by 2020, Adewusi said there have to be some consistency in the policy, as this is very important, and as such if a policy is implemented, it should be left to stick for a while because that will build trust in the players, in terms of constant regulatory environment but if otherwise, people are going to hold back their investment for the fear of CBN changing its policies. The CBN also have to be able to work with their regulatory counterparts, which are the telecom regulator s and those of the fintech. She however stated that the CBN seem consistent

these days, compared to the early days when it was not. On the policy that could serve as catalyst to including more Nigerians into the financial circle, she said agency banking could be the way as it could also involve techos. The guest on the radio programme recommended for the CBN to allow people to develop different models that will work for them but should be on the watch on when to tighten it because of consumers protection and financial system sustainability, however should loosen up on trying new models as they would not know the one that best work for Nigeria. She was nevertheless optimistic about achieving the set 80 percent target but stressed on the CBN to achieve it. “The Nigeria apex bank would have to do something radical and as such trying out loosed policy and not locking down kind of policy, introduction of new products and different channels of distribution that will add different and better value to consumers should be the way to help achieve the financial inclusion gaol,” Adewusi concluded. Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way. According to the Central Bank of Nigeria (CBN) only 41.6 percent of Nigerians are considered to be financially included. Following a support from the Bill and Melinda Gates Foundation, BusinessDay is aiming to drive some of the financial inclusion conversation in Nigeria, and one of the ways is through a radio show titled Financial Inclusion Today (FIT). The show airs every Tuesday at 11.30am on Silverbird rhythm 93.7 FM with BellaNaija being a media supporter of the radio program. The shows aims to foster conversations around financial inclusion issues in Nigeria and to raise awareness by bringing together stake holders, decision makers, policy makers, and BusinessDay’s financial analysts; Lehlé Baldé, Patrick Atuanya, Lolade Akinmurele, Bala Augie, and Endurance Okafor to further this cause in Nigeria.

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

research@businessdayonline.com

08106395676

Government regulatory bodies default on release of annual financial reports ...CBN, SEC, PENCOM, others affected ISAAC ESOWE

igeria’s top financial regulatory bodies are yet to release their latest annual financial reports even when the institutions they regulate have made their latest audited financial reports public, investigations carried out by the Businessday Research and Intelligence Unit (BRIU) have shown. The regulatory institutions in question include the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Commission (NDIC), Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), National Pension Commission (PENCOM), National Insurance Commission (NAICOM), among others. The Central Bank of Nigeria (CBN) whose statutory responsibility is to regulate the affairs of banks and other financial institutions in the country released its 2015 annual financial report in 2017, which was a year and three months after its 2015 financial year ended. The Nigeria Deposit Insurance Commission (NDIC), National Pension Commission (PENCOM), Nigeria Port Authority (NPA), National Insurance Commission (NAICOM) and Nigeria Sovereign Investment Authority (NSIA) last released their annual reports in 2016, while the Securities and Exchange Commission (SEC) last released its annual report in 2013. The Corporate Affairs Commission (CAC) does not have any of its annual reports on its official website. This non release of annual reports is of interest to analysts, policy makers and researchers because transparency and timeliness of financial reports should not be limited to the companies they regulate only, because information contained therein can be used to facilitate decision making and could give the general public an idea of where the nation is heading to. A brief comparison between the CBN and the Bank of Ghana shows that the CBN is yet to release its 2016 annual report, while the Bank of Ghana released its 2016 annual report on July 19, 2017, seven months after the end of financial year. Based on research carried out by Businessday Research and Intelligence Unit (BRIU), the Bank of Ghana has the tradition of releasing its annual report between June and July of the following year, while CBN released its 2015 annual report after one year and 3 months; 2014 annual report

Source: Official websites of regulators, BRIU

after one year and seven months just as the 2013 annual report was released after one year and a month. The delay in release of annual report is most likely to impair the quality of decisions made by firms, particularly decisions that must be based on the information and data contained in the regulators’ annual reports. Therefore, the non-availability of the regulators’ audited financial reports will enhance the decision making process of businesses in different sectors of the Nigerian economy. Consequently, delay could also hamper decisions of local and foreign investors due to the absence of policy direction from the country’s highest monetary regulator. For retail investors who may not have direct access to these regulators, the nonavailability of their audited financial statements could force them from making financial commitment to any sectors of the economy, as in many cases the audited reports communicate the state of a country’s financial strength and health. Investors look

Source: Official websites of regulators, BRIU

out for proofs of sound management when assessing the financial data in the annual reports of regulators and the likely impact on their investment. In particular, the CBN’s annual report is beneficial to the citizenry as it gives them insight of how much is been allocated to state governments as some sections in the report deal with finances of sub national governments. With this knowledge, the residents could evaluate if their state governments made judicious use of the allocations obtained from the federation account. It could form the basis of performance evaluation or an index to measure the performance of the governors. Researchers, academics and economists may not be able make futuristic forecast on the possible financial health of the nation if regulators annual reports are not made timely available. The need for the country’s regulators to release their annual reports has become more pertinent following the directives issued by CBN to banks and other financial

institutions recently that financial institutions should not exceed a certain deadline to publish their annual reports. The directives further state that sanctions will be applied in the event of a default by any firm. This policy is to ensure that financial reports are published promptly and as at when due. While it is a welcome development as this will in a way encourage transparency and accountability amongst financial institutions, but such directives would have been more exemplary if the apex bank and other primary regulators could lead by examples that will foster transparency at all levels. With all this delay in release of important information by the government and regulatory bodies, one can easily establish that it has become a standard in Nigeria. Timeliness of financial reports is one of the qualitative attributes of financial reports because it determines the relevance of information and influence on the decisions that could be made by the users and beneficiaries. Financial transparency is imperative for a government to conserve both public and investor’s trust. The annual financial statement (AFR) is a meticulous detailed presentation of a nation’s financial situation. It gives a breakdown of country activities and balances for each fiscal year, and provides valuable handy information on how a nation manages its finance and how healthy the country’s finance is. It gives the citizenry insight about what the government does with public funds and allocations given to different sectors of the economy. The provision of credit to the various sectors of the economy will prop up the growth of the economy in a holistic manner and this will make

improvement go on at a faster rate provided the needed data and information is readily made available by the appropriate bodies. The banking public, particularly account holders with the deposit money banks (DMBs) look forward to the release of the National Deposit Insurance Corporation’s (NDIC) annual report to have an understanding of the position of the economy, from the standpoint of the banking sector. Therefore, NDIC’s annual report captures the performance of the DMBS at the end of each financial year, particularly in area of risk assessment of the DMBs which is done in alliance with CBN to provide reliable information as regards the quality of risk assets, quality of assets and status of banks. Surprisingly, the NDIC last released its annual report in 2016. The delay in release of its annual report will directly deprive account holders and analysts from knowing the performance and status of the financial institutions. The Securities and Exchange Commission’s (SEC) mission is to protect investors, maintain fair, orderly, and efficient markets, and felicitate capital formation. SEC last released its annual report in 2013. The report discloses publicly traded corporation financial results and companies planning to issue securities for the first time and those whose shares are already trading. The annual report is enshrined with information on how the SEC intends to put policy in place to ensure the market is running on a fair and orderly basis by monitoring the activities of those who are actively involved in the process of buying and selling stocks. The delay of its annual report could deprive the public and investors from getting the necessary data needed to make careful decisions on buying and selling. The annual report captures the brokerage firms who are solvent and the ones about to go into bankruptcy and this in a way to safeguard investors’ assets against losses arising from the bankruptcy of brokerage firms. Nevertheless, all primary regulators should ensure prompt release of their annual reports to promote transparency at all levels of the sector, the delay could make such information losses its economic value, which will affect decision making by the users of the data at a given period of time.

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June sees N60bn deals as month sets off on early start LOLADE AKINMURELE

t’s only five days into the month, yet deal activity is relatively off the roof, with deals running at an estimated N60 billion in four deals including one with an undisclosed amount. The deals include German multinational, Daimler Group’s $175 million (N63 billion) splurge on

Estonia-based ride hailing company, Taxify, which the company says it will use to further develop their technology and expand to all bigger cities in Nigeria. Though Taxify’s City Manager, Uche Okafor, said “Unfortunately, we are not able to disclose an exact share at this point,” in response to Business Day questions on how much its largest market

was getting, conservative estimates suggest Nigeria may get at least 50 percent of the total cash which comes to N31.5 billion. Other deals include Allianz Group’s N29 billion bet on Africa Reinsurance company and a seed funding of N394 million for online savings platform, Piggy bank. Nigerian-based Argentile also announced plans to snap up some stake in

Tempo Housing Limited but for an undisclosed amount. The June splurge reflects the highest monthly activity this year and takes the total for the year to over N220 billion. It’s a 1.49 percent increase from May, which saw a lone deal of Stanbic Africa staking a N60 billion bet on its local subsidiary, Stanbic IBTC Holdings on the 31st

COMPANIES & MARKETS

Allianz Group acquires $81mn stake in Africa Re ENDURANCE OKAFOR

frica Reinsurance Corporation (Africa Re), one of Africa’s leading reinsurer got $81 million or N29.25 billion worth of investment in May 2018 from Allianz Group, one of the world’s leading insurers, in what will see Allianz having an 8 percent stake in Africa Re. The acquisition comes six months after Allianz acquired 98 percent stake in Nigerian insurer, Ensure Insurance Plc. The deal with Africa Re is aimed at jointly supporting insurance penetration in Africa and the economic development of the continent. This partnership is a strategically complementary one for both companies, as well as being beneficial to their clients.

Africa Re will be bringing its 42 years operational experience on the continent coupled with its indepth business knowledge of the African markets and an expansive network across both regions and linguistic communities on board thereby allowing it unmatched proximity to its clients. “Having identified Africa as one of the future growth markets, we continue to invest step-bystep in the continent. This investment in Africa Re is a major milestone for Allianz’s long-term growth strategy in Africa,” Niran Peiris, Member of the Board of Management of Allianz SE, responsible for Global Insurance Lines & Anglo Markets, Reinsurance, Middle East, Africa, said of the transaction.

According to Corneille Karekezi, Africa Re’s Group Managing Director and Chief Executive Officer, this partnership with Allianz Group, is a reliable and strong partner with a global network, particularly in agriculture and the emerging field of cyber insurance which will definitely strengthen Africa Re’s capacity to offer its clients services of higher quality. According to BusinessDay survey Africa Re last attracted investment in 2015 when it signed two agreements with global leading investors, Fairfax Financial holdings and AXA Insurance which made them to become new shareholders of Africa Re. A breakdown of the deal showed that Fairfax acquired a 7.15 percent

stake and a seat on the Board of Africa Re on March 25, 2015 while the Reinsurance giant also signed investment deal of $61m with AXA for 7.15 percent equity on February 20 the same year. Africa Re has operations across the continent and has a diversified set of shareholders, including 44 African states (35 percent), over 110 African insurance and reinsurance companies (34 percent), the ADB (8 percent) and non-African investors (23 percent). It has physical presence in eight locations including Lagos (Nigeria), Casablanca (Morocco), Nairobi (Kenya), Abidjan (Ivory Coast), Johannesburg (South Africa), Ebene (Mauritius), Cairo (Egypt) and Addis Ababa (Ethiopia).

COMPANIES & MARKETS Argentil Capital buys 20% stake in Tempo Housing MICHEAL ANI

rgentil Capital Partners, a Nigerian based energy and infrastructure advisory firm has acquired a 20 percent stake in real estate developing firm, Tempo Housing Nigeria Limited. The advisory firm said the investment is being done through a facilitator by name Àrgentil Principal Investment Portfolio II (“APIP II), an evergreen SME vehicle which invests equity and debt in small and medium scale companies operating in Nigeria. According to Argentil, this is APIP II’s third investment having previously backed Winchester Farms, a meat and poultry processing company and Chocolate City Lounge, a consumer and entertainment retailer. In an emailed response to BusinessDay inquiries, Joanne Akozor of Tempo Housing said “there’s no comment at this time.” Tempo Housing specialises in developing flexible and affordable residential and work spaces using modern prefabricated technology. Àrgentil also provided debt as part of its overall financing to the Company. Argentil’s financing said it will support Tempo Housing to execute its expanding portfolio in the residential segment of the market where the Company is developing affordable housing projects to meet the significant demand-supply gap, as well as flexible work and commercial spaces for many of its clients.

Stanbic Africa Holdings stakes N60bn bet on local subsidiary OLALEKAN IPELE

tanbic Africa Holdings last week jacked up its percentage shareholding stake in Stanbic IBTC Holding to 64.4 percent with the acquisition of an additional 1.1 billion ordinary shares worth over N60billion. Chidi Okezie, Company Secretary, Stanbic IBTC Holdings Plc, in a notice informed the Nigerian Stock Exchange (NSE) that Stanbic Africa Holdings Limited, has recently acquired an additional 1,141,191,94 ordinary shares in Stanbic IBTC Holdings PLC in an “Off-Market” transaction. The acquisition increased shareholdings stake of Stanbic Africa Holdings Limited in Stanbic IBTC by 11.35 percentage points to 64.44 percent from 53.09 percent. BusinessDay analysis of the companies audited financial statement for December 31, 2017 show that the majority shareholders with percentage shareholding above 5 percent in Stanbic IBTC Holdings were Stanbic Africa Holdings Limited with 5,333,569,874 ordinary shares representing 53.07 percent and First Century International Limited with 750,504,089 ordinary shares representing 7.57 percent. It is expected that the latest cross deal could have come from one of the 11 shareholders that controlled 7,378,393,724 ordinary shares, representing 73.42 percent of the total shares outstanding other than Stanbic Africa Holdings. The Nigerian equity market has lost the momentum it recorded in the first two months of the year. In January and February 2018, the All Share Index (ASI) posted 16 percent and 13.30 percent returns but that steam has been lost as the market returns are worse off now compared with the same period a year ago. It further closed lower at 8.53 percent in March; 7.91 percent in April while in May 2018, ASI ended in the negative territory at -0.36 percent. In spite of the current market downturn, Stanbic Africa Holdings paying over N60bn for additional 1.1bn shares in Stanbic IBTC Holdings give credence to the prodigious potential of the Nigerian equity market.

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: DAVID OGAR ) Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.

Email the PE & F team loladeakinmurele@gmail.com

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People & Perspectives

BUSINESS DAY

Demand brews for compliance lawyers for African businesses

Regulators around the world are increasing their focus on compliance issues and that will trigger a substantial increase in demand for compliance lawyers in Africa, according to Darryl Bernstein, Partner and Head of the Dispute Resolution Practice at multinational law firm, BAKER MCKENZIE, in Johannesburg. Bernstein also talks about what businesses should do to ensure they are protected from regulatory compliance risks. Business Day’s Private equity editor, LOLADE AKINMURELE, summarized his thoughts.

n Africa, the demand for local compliance lawyers has risen significantly as having on-the-ground expertise in the countries where business dealings are taking place, is essential. Knowledge of local law, culture and practice is crucial to managing a compliance investigation. According to Bernstein, all companies operating in Africa need to ensure they are not only compliant with local law but also are aware of the so-called extraterritorial legislation that may impact their operations and business outside of their regional headquarters. Areas of interest to law enforcement and other regulatory authorities include the appointment of third parties, whether as agents, distributors or other general contractors, as well as the integration of newly acquired operations. Companies who rely on the support of third parties in their regional business operations, whether these third parties are procuring local licenses, rendering services or obtaining and maintaining business, need to be aware that the

unlawful conduct of such third parties have become grounds for prosecutions of the companies that appoint them. Similarly, a failure to integrate newly acquired business following mergers and acquisitions also results in significant fines and penalties arising out of the conduct of these new business units. Bernstein notes that compliance law has both proactive and reactive ele-

ments. While most businesses tend to commence compliance investigations as a reactive measure to bad behaviour, businesses are able to be proactive in managing their exposure to compliance risk. “Compliance diligence has become an absolute necessity in the context of due diligences carried out either on the appointment of a new third party in a high-risk environment, or in the context

of an intended acquisition, as is making sure that there is comprehensive integration plan in place following a corporate acquisition. Conducting ongoing risk assessments should not be overlooked and businesses should be periodically kicking the tyres to ensure operations are running smoothly,” he says. He notes that a proactive approach by organisations operating in Africa is simple to implement against some basic guidelines. “In the current opaque environment, an entity’s links to parties potentially involved in misconduct are not always easily ascertainable. A thorough due diligence review of business partners and, in certain circumstances, customers is critical. Given the potentially significant damage to a company’s reputation by affiliation, companies should screen their business partner and customer lists against organisations that have been implicated in recent corruption scandals, and indirect beneficiaries should be scrutinised,” he notes. “Businesses should also confirm the appropriate ongoing monitoring and,

in some cases, re-vetting of partners that may be necessary in light of the ongoing allegations. For all third parties, companies should be able to document how the business partner was selected, demonstrate a clear business justification for hiring the partner, confirm bona fide tasks performed commensurate with compensation, and establish that all applicable controls and procedures were properly followed. In many circumstances, such controls for partners should be expanded and companies should consider exercising audit rights included in contracts agents, have partners sign (or re-sign) certifications of compliance, and update diligence files where warranted,” he explains. Bernstein explains that, based on risk profile, companies should consider revisions to any existing usage of agents in state contracting. “Where warranted, it may be prudent to revise a partner’s responsibilities to limit interactions with officials on a company’s behalf. In certain cases, terminating the partner may be the best course of action. Revising

compensation structures of partners involved in state business can also mitigate risk and increase transparency,” he says. Companies should also confirm full compliance with local content regulations. “Companies should ensure that their compliance with local content law is legitimate and upholds the purpose of the framework, and that the local criminal offense of “fronting” is not committed (the feigned use of a black economic empowerment partner to obtain contracts without actual value-add by the partner),” he notes. “Lastly, companies should consider a targeted risk assessment of operations in Africa. “Right now is a good time for any company doing business in Africa to consider conducting a practical, riskbased compliance assessment of all their operations in Africa, tailored to the company’s operation and following best practices. This includes investigating all reports of illegal or improper activities and promptly remediating all issues that are identified,” Bernstein adds.

Taxify eyes further expansion after growing Nigeria client base 900-fold Estonia-based ride-hailing company, Taxify, last week sealed a $175 million investment from Daimler AG, the parent company of Mercedes-Benz, along with European venture capital fund Korelya Capital and TransferWise co-founder TaavetHinrikus. Uche Okafor, City Manager, in this exclusive interview with BusinessDay’s Private Equity & Fund Raising editor, Lolade Akinmurele, spoke of plans to deploy the funds and gave an evaluation of how its Nigerian market is kicking on.

e combed your website and only found achievement scorecards for South Africa and Kenya. How are you kicking on in Nigeria? How many registered drivers do you have today and how does than compare to your period of inception in 2016? How many clients, trips etc, do you have now and how do these also compare over time? We have seen tremendous growth since our launch in Nigeria in November of 2016. We started with a few hundred rides

and today Lagos and Abuja are top performing Taxify cities. We currently have thousands of registered driver-partners and riders in Nigeria and thousands of trips are made every day in the country. We are very excited by the love Nigeria has shown us and are looking forward to expanding to as many parts of the country that will have us. Does your newly secured investment put you miles ahead (pun intended) of competition in Nigeria? Nigeria is already one of our top markets in terms of volume of rides and Taxify

already has a substantial market share in Lagos and Abuja. However, the investment will definitely help us further grow the business and solidify our position. The entire $175mn is unlikely to go to Nigeria alone, but what share is your largest market getting? That is assuming Nigeria is your largest market. Taxify will use this money to further develop its technology and expand to all bigger cities in Nigeria. Unfortunately, we are not able to disclose an exact share at this point.

What is your take on private equity funds targeting tech firms in Nigeria? 2018 looks to be kicking on well for digital and tech firms whether it’s Cellulant who raised some $47.5 million or the latest- piggy bank.ng which raised $1.1 million. What is the attraction, do you think and what expectations do you have for full-year in terms of fund raising activity? The attraction is simple - Nigeria on a whole has a very large market size and more interestingly a booming tech start-up scene. Venture capitalists from across the world are

noticing this wave and it is no surprise that Nigerian entrepreneurs across industries from fintech to retail have attracted capital inflow. We expect this trend to continue and for ride-hailing companies being the future of transportation to benefit from this. Taxify CEO and cofounder Markus Villig said last month that “We go into markets where ride-sharing is already a proven concept… we come in and we improve on that by having just cheaper commissions and giving more back to the

riders and drivers. We don’t want to get into these regulatory troubles and be wasting millions in lobby battles.” How is he finding the Nigerian terrain? We’ve been very careful in picking the cities around the world that have a proven need for ridesharing, e.g. Lagos, where urban transport is a big problem. We’ve been able to couple that with smart use of technology and a lean approach to marketing which can be a huge cost. This allows us pass savings on to our customers in the form of better service and competitive prices.

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Banking operations disrupted in five banks ... as LASG enforces physical planning law in Ikeja JOSHUA BASSEY

anking operations were disrupted in five banks on the popular Allen Avenue, Ikeja, as Lagos State gove r n m e nt s t e p s u p e n forcement of the state’s urban and physical planning laws, leading to the s e a l i n g o f t h e b a n k s’ premises. Also sealed are 80 other buildings including eateries, over what officials of the state government described as illegal conversion of residential property to commercial uses. Officials of the Lagos State Building Control Agency (LASBCA) backed by armed security personnel, shut the property on Tuesday. Affected in the exercise were three new and two old generation banks, Tant al i ze r, Ad eb owa l e Electronics, Panasonic, among s everal others. Customers of the affected business concerns were also prevented from accessing the business

premises. The officials began the exercise from AllenAw o l o w o Wa y r o u n d about to the Allen-Opebi roundabout, sealing buildings on both sides of the dual carriageway from around 7:45am. The operation was led by Tayo Fakolujo, LASBCA s e cretar y, and Kayode Daramola, a director in the Lagos State Physical Planning Permit Authority (LASPPPA). The officials said the affected buildings were giving approval for residential and but later converted to commercial without approval by the government. Lekan Shodeinde, the general manager, LASBCA, said the affected buildings had been issue d not ic es over o ne month ago to regularise their documents and get commercial approval, but only a few property owners complied. According to Shodeinde, under the physical planning law, a resid e nt i a l p ro p e r t y mu s t obtain due permit before

it could be converted to commercial, saying that it was inappropriate to convert a residential property to commercial. He said LASBCA had been given the mandate to carry out audit on buildings in Lagos State for safety purposes and ensure that people did not take laws into their hands. He said the government had also given six months grace period for people who did not have permit before erecting their structures to regularise them without paying the penalties for such violations. The LASBCA boss lamented that owners of properties served notices on Allen Avenue did not come forward to regularise their papers, hence the need to enforce the law for compliance purpose. G overnment w ill no l o n g e r t o l e rat e i l l e ga l conversion of residential properties to commercial without permit, as the law will descend heavily on those who trampled the law, he said.

NERC denies alleged dumping of Multi Year Tariff order framework … says performance improvement plans underway HARRISON EDEH, Abuja

ollowing recent reports in some section of the media, the Nigerian Electricity Regulatory Commission (NERC) has reaffirmed that there are no plans to dump the Multi Year Tariff Order (MYTO) framework, as said in some section of the media. The MYTO framework is used in determining end-user tariffs based on revenue requirement of the electricity industry. NERC in a statement issued by Vivian Mbonu, head of its media unit on Tuesday, said, “As part of the periodic evaluation of software models utilised by the Commission, the Commission plans to review the MYTO financial model to ensure its integrity and consistency of the platform with approved tariff principles pursuant to the numerous updates undertaken since inception of the methodology in 2008.” In the statement, NERC clarified that the holistic

review of the MYTO model also included aligning the basic assumptions and parameters with the underlying principles of the tariff methodology, and ascertaining the full workability of the macros and other formulae. “This is an important i n i t i at i v e o f t h e C o m mission as we prepare to commence review of Performance Improvement Plans (PIP) to be submitted by utilities for the tar iff per iod 20192023,” according to the statement. The Commission reaffirmed further that it would continue to use the MYTO as the framework for determining tariffs, and in line with the provisions of the Electricity Power Sector Reform (EPSR) Act 2005, to ensure that prices charged by licensees are fair to consumers and are sufficient to allow licensees recover the efficient cost of their business activities while earning a reasonable return on the capital invested in the business.

Wednesday 06 June 2018

Edo plans special intervention fund, school feeding programme for Uhunmwode LGA

overnor of Edo State, Godwin Obaseki, says his administration has resolved to set aside special intervention fund that will be used for the development of infrastructure in Uhunmwode Local Government Area of the state. Obaseki said this at an interactive session with indigenes and residents of Uhunmwode, at the council’s headquarters in Ehor at the weekend, noting that the special fund would be expended in developing basic education, healthcare system, roads, and rural electrification. He explained, “I have decided to have in place a master plan for thedevelopmentofUhunmwode Local Council Area. Certain amount of money will be set aside asspecialinterventionfundwhich will be used for the development of Uhunmwode LGA in the next three years.” He noted that the objectives of the master plan are to make the councilareaattractiveforinvestors and assist the council’s administration improve its Internally GeneratedRevenue(IGR)receipts to meet its financial obligations. According to Obaseki, “In the next six months, all the 90 pri ers will be assigned to teach in all these schools. The schools will be automatically integrated into the Edo Basic Education Sector Transformation (EDO-Best) programme. We will introduce the school feeding programme across the state.”

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Airport privatisation: IATA urges governments to take caution … as Nigeria clears $600m airlines’ trapped funds IFEOMA OKEKE

he International Air Transport Association (IATA) 74th Annual General Meeting (AGM) urged governments to take a cautious approach when considering airport privatisation. In a unanimously passed resolution, IATA members called on governments to prioritise the long-term economic and social benefits delivered by an effective airport ahead of the short-term financial gains provided by a poorly thought-out privatisation. This is as the association said it was encouraged by the recent developments in Nigeria where the Federal Government succeeded in clearing $600 million backlog of airline funds trapped “We are in an infrastructure crisis. Cash-strapped governments are looking to the private sector to help develop much needed airport capacity. But it is wrong to assume that the private sector has all the answers. “Airlines have not yet experienced an airport privatization that has fully lived up to its promised benefits over the long term. Airports are critical infrastructure. It is important that governments take a long-term view focusing on solutions that will deliver the best economic and social benefits. Selling airport assets for a short-term cash injec-

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tion to the treasury is a mistake,” Alexandre de Juniac, IATA’s director-general/ CEO, said. Currently, about 14 percent of airports globally have some level of privatisation. As they tend to be large hubs, they handle about 40 percent of global traffic. “IATA research shows that private sector airports are more expensive. But we could not see any gains in efficiency or levels of investment. This runs counter to the experience of airline privatisation where enhanced competition resulted in lower pricing to consumers. “So we don’t accept that airport privatisation must lead to higher costs. Airports have significant market power. Effective regulation is critical to avoiding its abuse, particularly when run for profit by private sector interests,” de Juniac said. IATA member airlines r e s o l v e d t o u r g e g o vernments considering airport privatisation to: Focus on the long-term economic and social benefits of an effective airport, learn from our positive experiences with corporatisation, new financing models, and alternative ways of tapping private sector participation and make informed decisions on ownership and operating models to best protect consumer interests.

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Fresh opportunity for homeowners as live, let, transfer initiative enters property market CHUKA UROKO

new window of opportunity has opened for prospective homeowners and investors as the property market received recently the live, let and transfer (LET) initiative that allows them to live or invest in mansions, villas or townhouses at upscale and secure environments. Typically, this initiative gives a homeowner the opportunity to live in his home, be it a mansion, villa or townhouse, at most soughtafter and secured locations such as South East and South West Ikoyi, Banana Island, Victoria Island, Lekki, Ikeja GRA, and Abuja. Homeowners can, through this initiative, potentially earn annual rental income while living in their homes and watch their investments grow in value overtime. Thereafter, they transfer assets to their loved ones and family members as an inheritance and, by that action, have their wealth outlive them. The initiative, which is coming from the stable of Caswell Limited, is a neverdone-before, everlasting architectural masterpieces of mansions, villas and townhouses which the company

CONFIRMATION OF NAME This is to confirm that I, Okechukwu Collins Nwafor is same person as Okechukwu Ashibuogwu collins. All former documents remain valid. General public please take note.

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I, formerly known and addressed as Okonkwo Onyinye Rita now wish to be known and addressed as Okonkwo Onyebuchi Rita. All former documents remain valid. General public please take note.

I, formerly known and addressed as Miss Abdullah - Lokoja, Binta Ajoke now wish to be known and addressed as Mrs Balogun Abdullah – Lokoja, Binta Ajoke. All former documents remain valid. General public please take note.

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CORRECTION OF NAME This is to notify the general public that my name was wrongly written as Christian Okechukwu Ezeokoye intead of my correct name Chris Okechukwu Ezeokoye. All former documents remain valid. General public should take note.

I, formerly known and addressed as Miss Duru Oluchi Rita now wish to be known and addressed as Mrs Aguodili Oluchi Chinenyenwa Rita. All former documents remain valid. General public please take note.

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has categorised as ‘life-cycle assets.’ “We envisioned this initiative as a place for homeowners to ‘live, earn and transfer’ (LET). Typically, it completes the human life cycle but, uniquely, keeps the legacy going. In-so-far as life has become more fastpaced and competitive, we realise that people are busy and can barely keep track of their loaded work and family schedules let alone plan for the future. “All these efforts are clearly geared towards the pursuit of one aspiration or the other, hence there is no other meaningful aspiration than to think wisely and buy into the ‘life-cycle LET’ concept,” Nekpen Emokpae, Cadwell’s head, concepts and marketing, said in a statement in Lagos. The new initiative is part of the outcomes of the company’s recent decision to reposition as an investmentled company in their belief in the infinite investment nature of real estate. They have decided to be the apostles of such message. “We examined the market, identified the imbalance

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in demand and supply, and came up with this noble idea to correct the market’s unevenness which effectively made us reshape and rescope our product concept and design,” Emokpae said. Globally, the first stage in the life cycle of a real estate buyer or investor occurs between the ages of 25 and 35. This is when young adults are coming into their own, getting married, starting families, and growing their businesses; it is no wonder, therefore, that this demography typically accounts for 30 to 40 percent of first-time home buyers globally. It is usually at this point that most young professionals start to seriously prepare and plan for the future, they understand that there is a need to invest in a home, especially in a secured environment for their families to be happy and healthy. This is also the time they begin what Cadwell refers to as the “aspirational pursuit” of a new generation of primary and secondary homeowners. “We intend to help this new and matured generation find the right path home, perhaps build castle of life-

Air transport contributes significantly to plastic pollution of environment – experts IFEOMA OKEKE

xperts in environment and aviation sectors have revealed that air transport contributes significantly to plastic pollution of the environment. Airlines operating in Nigeria that have continued to serve meals to over 12 million passengers annually with disposable plastic plates, bottles and tray, leaving behind millions of plastic trashes, have been called upon to abstain from this act in a bid to reduce Nigeria’s plastic pollution footprint globally. Speaking during the 2018 World Environment Day organised by the Federal Airports Authority of Nigeria (FAAN) with focus on ‘Beat Plastic Pollution in Aviation Sector,’ Babajide Alo, keynote speaker, said in a bid to address plastic pollutions, airlines should refuse disposable plastics and choose items not packaged in plastics. Alo suggested that airlines could serve meals using refined wood plates, ceramics and glasses, among others in order to reduce Nigeria’s usage of plastic footprints, globally.

38 BUSINESS DAY NEWS NSIA’s assets rise by 27% to N534bn but profit... Continued from page 1

absence of the windfall gains the fund made from the unstable naira in 2016 and also massive local investments in the domestic market, particularly infrastructure. In 2016, the NSIA made N93 billion in “Net Foreign Exchange Gains” compared to just N1.65 billion made in 2017. Total comprehensive income also fell to about N28 billion as contained in an abridged version of the Authority’s financial statement seen by BusinessDay on Tuesday, but yet to be publicly announced. But the Authority’s interest income doubled to N22 billion in 2017 compared to N11 billion in 2016. The Fund’s holdings of investment securities almost doubled to N430 billion compared to about N250 billion in 2016. But the Funds says it has made commitment to invest more locally, which would take some time

to mature and yield profitability. However, the Fund booked a N2.15 billion loss on ‘infrastructure subsidiaries investments.” “The stability in naira meant that what we recognized for exchange rate gains was insignificant, that resulted up to the 70 percent drop you see in profit, while our investments in infrastructure which will take some time to mature contributed to the remaining 30 percent,” an NSIA source explained. “We believe that in two to three years’ time, we will return to the kind of profitability we are used to when those investments will begin to yield gains,” he added. NSIA is rebalancing the investment structure of the over$1.25bn Sovereign Wealth Fund in favour of more domestic commitments following huge opportunities within the local market. Uche Orji NSIA Managing Director had warned then of a possible slowdown in profitability as

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investments would be driven more by value creation for the country in dire need of local investments, infrastructure development and jobs. According to him, those investments would include massive commitments in the country’s poorly funded infrastructure, agriculture, real estate, power, health care system, water resources, mainstream oil and gas, among very many other key sectors of the economy. “We have this broad area of possible investments but we focused on agriculture, health care, real estate and power. Of late we are adding a few new sectors that were not in the initial focus. So you are going to see us add mainstream oil and gas - gas pipeline and storage and processing and potential refining.” “You will also see us in some water resources projects soon,” he had told BusinessDay. “The areas of investment is expanding, so we are driven by the huge local investment opportunities and not the volatility in the currency market which is not peculiar to the naira.”

Godwin Emefiele, governor, Central Bank of Nigeria (far r) and Aisha Usman Mahmood, special adviser to the CBN governor on sustainable banking (m), visiting the Visionscape polymer recycling and processing exhibition stand, at the Central Bank of Nigeria 2018 World Environment Day Celebration held at the Central Bank of Nigeria headquarters in Abuja, yesterday.

Budget delay disrupt statitics office data... Continued from page 1

shows the direction and performance of various sectors of Africa’s largest economy. This was made known to BusinessDay when it asked a source from the agency if a scheduled Labour force statistics report in its calendar was going to be released yesterday, June 5th 2018 as planned. The source said the NBS was not be able to release the report as intended due to the unapproved 2018 budget which has delayed the disbursement of funds, and as such without the needed resources, they are not able to go on the field to gather primary data. “We do not have any approved budget and hence no funding. Work cannot start till we have funds. It is fieldwork not numbers manufactured in the office so nothing can be done till capital releases are made,” a source from the agency who preferred to stay anonymous because of the sensitivity of the matter told BusinessDay. BusinessDay confirmed that the scheduled report as at the close of office hours yesterday, was not published, which is unlike the culture of the agency, as it usually

publishes its report as planned and even makes announcements a day before the released on its social media platform. “Delayed budget affects everyone and that is not good for the country and the economy, as this has a broader effect on the people, as delay in salary payment extends to the slowdown in purchasing power,” Ayo Akinwumi, Head of Research at FSDH Merchant Bank said. The credibility of the NBS as the only statistics gathering agency funded by the Nigeria government gave it acknowledgement by several bodies and organisation. It was awarded the Best Public Institution in Nigeria by the Lagos Chamber of Commerce and Industry (LCCI) in 2016, the Best Public Sector website for the year 2016 and 2017 and among others. The source however said the agency turns out some report on credit because they do not cost too much. “Like we have been doing, some report we turn out on credit till budget are released because they do not cost much, like employment but others are bigger,” the source said. On when they will start rolling out reports, the anonymous

source said as soon as they get capital following budget approvals they will be able to do others that they cannot carry out on credit. The inside source disclosed that the issue was not peculiar to the agency alone but also to all Ministries, Department and Agencies (MDA) in the country. “Till budget is passed nobody can do their work,” the source concluded. The Federal government frequent distortion of the budgetary cycle, is telling badly on the nation developmental process, hindering key infrastructural growth and productivity in the country. The budget cycle refers to the life of a budget from its formulation, through its legislative approval to its execution and evaluation. Unfortunately, scarcely has the budget implementation at the federal level commenced officially in January of any fiscal year except in 2001, 2007, 2009 and in 2013. Rather, as it has always done in the past, the government extends the timeline of the budget from December to Q1 of the next year. Analysis by BusinessDay therefore showed that Nigeria budget cycle has only been completed four times in 19 years.

Wednesday 06 June 2018

National Assembly makes 11 demands... Continued from page 1

that could suffer in the face of this escalating conflict. Already, BusinessDay gathered that some aggrieved lawmakers have collected over 100 signatures that will culminate in serving impeachment notice on the President. Gudaje Kazaure (APC-Jigawa) disclosed this at the end of over three hours closed door session held by Senators and members of the House of Representatives. Kazaure who confirmed the collection of signature, however noted that the move was halted by Speaker Yakubu Dogara who expressed optimism that the issue will be addressed at the joint session. “It is true that some people are collecting signatures in the name of serving impeachment notice. It is just the leadership, Speaker Dogara that said they should keep that aside. “But I know that even if they serve the President with the impeachment notice, it will not work,” the Jigawa lawmaker said authoritatively. He disclosed that 162 lawmakers from the North loyal to President Buhari have floated a pressure group called Justice and Fairness, to protect their interest on the heels of the lingering crisis. He added that some Senators are also aligning with their House of Representatives’ counterparts to thwart the impeachment plan or any other steps aimed at ridiculing the President. Kazaure also alleged that the impeachment moves were spearheaded by some members of Peoples Democratic Party (PDP), namely Kingsley Chinda (PDPRivers) and Ossai Nicholas Ossai (PDP-Delta). While reacting to question on the counter-move to impeach Speaker Dogara by Buhari’s faithfuls, he argued that based on unanimous resolution taken by both Chambers, nobody will lead the impeachment of both the Speaker and Senate President. Details of the 11 point demand from the joint session include; a demand that the Security Agencies must be given marching orders to curtail the sustained killings of Nigerians across the country and protect life and properties of Nigerians as this is the primary duty of any responsible Government Buhari should stop the systematic harassment and humiliation by the Executive of perceived political opponents, people with

contrary opinions including Legislators and Judiciary by the police and other security agencies and that there must be strict adherence to the Rule of Law and protection for all citizens by the President and his appointees. The lawmakers also demanded that the President must be held accountable for the actions of his appointees and must be ready to sanction those that carry out any act which will ridicule or endanger the country and democracy. The Government should show sincerity in the fight against corruption by not being selective and also prosecute current appointees that have cases pending against them. The sanctity of the National Assembly should be protected and preserved by the Federal Government of Nigeria by not interfering in its business and prosecuting those who invaded the Senate to seize the mace. The National Assembly also resolved to liaise with International Communities through the IPU, APU, ECOWAS, CPA, Parliament, Pan African Parliament, EU, UN, US congress and UK Parliament to secure Nigeria’s democracy while demanding that democratic elections must be competitive and inclusive by removing the present reign of fear and intimidation particularly “as we approach the forthcoming 2019 elections.” The National Assembly also resolved to work closely with Civil Society Organisations, Trade Unions and NGOs to further deepen and protect our democracy while asking that that President Buhari must take immediate steps to contain the growing level of unemployment and poverty in Nigeria especially now that oil prices have risen to $80 per barrel. Finally, both chambers of the National Assembly passed a vote of confidence on the Senate President and the Speaker of the House of Representatives and the entire leadership of the National Assembly but reaffirmed its earlier resolution of vote of no confidence on the Inspector General of Police “who does nothing other than preside over the killing of innocent Nigerian and consistent framing up of perceived political opponents of the President and outright disregard for constitutional authority, both executive and legislative.” Finally, the National Assembly threatened that it will not hesitate to invoke its Constitutional powers if nothing is done to address the above resolutions passed yesterday.

Nigeria oil reserves remain stagnant... Continued from page 4

international oil companies are technically difficult and more expensive to develop. Government policy has also hindered progress,” a source who works for one of the IOCs and does not want to be identified said. Despite the conundrum in Nigeria, BusinessDay’s analysis of the financial reports of three publicly traded international oil companies such as British Petroleum (BP), Exxon Mobile and Chevron show aggressive race to replace prove oil and gas reserves annually.

In 2017, BP Plc pumped 3.6 million barrels of oil equivalent per day and incurred total exploration expense of $2.1 billion to achieve group reserves replacement ratio of 143 percent. Exxon Mobil pumped 4.0 million net oil equivalent barrels per day of production, added 2.80 billion oil equivalent barrels proved reserves with 53 million new exploration acres captured. Exxon Mobil’s exploration expenditure for 2017 cost $23.10 billion. Its exploration resource additions cost $3.38 billion. Continues on wwwbusinessday online

Wednesday 06 June 2018

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receives award for highest Nigeria’s drug makers upgrade factories Paga transaction performance from NIBBS to push for more WHO certifications or the third year in a tive, partnering with Paga ODINAKA ANUDU

he quest to obtain the World Health Organisation’s (WHO) prequalification is pushingmorelocalpharmaceutical companies into upgrading their machinery and factories, withanumberoftheminvesting in new facilities. The WHO prequalification enables a pharmaceutical company to participate in drug supply bids globally. Already, Swiss Pharma, Evans Medical, Chi Pharmaceuticals and May & Baker have all obtainedtheWHOprequalification and many more are on line to obtain this certification. FidsonHealthcarehasanew N9 billion ultra-modern factoryatSango-OttainOgunState, which enables it to produce affordable drugs that compete in the industry. The drug maker’s organic expansion into new products has enabled it to deliver sustainable earnings. Also, an Anambra Statebased Juhel Nigeria has acquired two Blow Fill Seal’ (BFS) machines,whichcosthundreds of thousands of dollars. Thefacilitieshavehelpedthe drug maker manufacture new Oxytocin injection for pregnant women, seen as the first of its kind in Africa.

“The innovation we are doing costs a lot of money. The BFS machines are expensive machines and only very few manufacturers have them in Nigeria,” Ifeanyi Okoye, CEO of Juhel Nigeria Limited, said, while unveiling Oxytocin injection in Lagos. Despite crisis recently faced by Emzor Pharmaceutical, the firm has been in the forefront of expansion at its factory in Lagos. Emzor has over 150 different product lines. BusinessDay gathered that the firm was due to be visited by the WHO team as part of the prequalification processbeforethecodeinecrisis. Drugfield Pharmaceuticals Limited has made huge investments in research and development, which enabled it to recently evolve Chlorhexidine gel, which caters for the umbilical cord. Similarly, SKG Pharma has locally produced Amino Acid and Vitamins, seen as first in Africa. The drug maker recently introduced Lumal dispersible malaria tablets for infants. Moreover,DailyNeedIndustries has produced Amoxicillin Dispersible Tablets (DT), used for the cure of Pneumonia. Nigerian pharmaceutical industry has so far made over N300 billion worth of investments in land, plants, vehicles

andotherequipment,according to Okey Akpa, chairman of the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMGMAN). Independent findings show that Afrab, Tuyil Pharmaceuticals, Dana Pharmaceuticals, Unique Pharmaceuticals and Pharmatex are among the 15 companiesreadyingtheirplants for WHO certifications. Out of over 100 drugs firms, only nine are listed on the Nigerian Stock Exchange- Neimeth, Neros, Emzor, May & Baker Nigeria, Fidson, Drugfield, Nigerian German Chemical Plc (NGC), Novartis and GSK. Capacity utilisation in the industry is still less than 40 percent as critical issues such as overreliance on imported inputs, poor power supply, unbridled drug importation and inconsistent policies. Pharma spend in Nigeria is still 15 to 20 percent of the total health expenditure compared with five percent in other countries. Emzor Pharmaceuticals, Juhel Pharmaceuticals, Pharmatex Nigeria Limited, May & Baker and Chi Pharmaceuticals Limited, and Chi are among the companies already exporting drugs to countries in West, East and Central Africa.

row, Paga has been presented an award by the Nigeria Inter-Bank Settlement Systems Plc (NIBBS) for the mobile money operator’s outstanding performance in achieving the highest transaction count on the Global Mobile Regulatory & Monitoring Platform in 2017, and named Top Mobile Money Operator. “When I started Paga in 2009 I set out to solve two problems — make it easy to send money to anyone, and to deliver financial services to the unbanked and underbanked,” says CEO Tayo Oviosu. “Since launching our service to the market in 2012, we have realized that our journey to solving these problems is making life possible for Nigerians, every single day. We are very grateful that our platform has earned the faith and trust of the people, and we continue to be your number one platform for mobile money transfers.” Paga, which is licensed by CBN, continues to pave the way as the leading mobile money operator in Nigeria today. CBN recently announced its SANEF initia-

amongst others, to grow the reach of agents providing financial services to 500,000, in order to ramp up inclusion for all Nigerians. Of all the MMO’s, Paga has the largest reaching agent network, with over 15,000 transacting agents serving their dedicated communities. Since its launch in 2012, Paga has shown impressive growth, recording a milestone of 8,000,000+ users at the end of 2017 and a sum total of approximately 42.7 million transactions till date, with a total value of over N660 billion. Of these numbers, in 2017, the total volume of transactions exceeded 13.5 million with a total transaction value of about N297 billion. Paga continues to innovate through its PCI, DSS, Level 1, world class secured mobile wallet, joining the ranks of Visa and Mastercard, which enables customers to carry out a myriad of seamless transactions including bill payments, money transfers and Cardless cash withdrawals, with promises of more financial products to be rolled out through the year.

CBN takes steps to cut down hazards from disposable plastics ONYINYE NWACHUKWU, Abuja

ommittee of governors of the Central Bank of Nigeria (CBN) will be making very serious considerations and alternativestoplasticsinastrategic step to reduce the present overdependence on disposable plastics, which comes with attendant, severe health and environmental consequences. CBN governor, Godwin Emefiele announced this on Tuesday in Abuja at an event organised by the apex bank to commemorate this year’s World Environment Day titled, ‘Beat Plastic Pollution.’ “… we would be encouraging the use of paper bags as alternatives to plastic bags. First of all, management have put the recyclingof our paper waste into tissue paper, which will be donated to the society as part of our corporate social responsibility. “Management is also in the process of concluding the recycling of our polymer bank load waste into everyday use plastics such as flower pots, dustbins, etc., and the disposal of our electronic waste in an environmentally sound manner,” the governor stressed. Introduced in 1974 by the United Nations, World Environment Day aims to facilitate awareness and encourage action across the world for the protection of the environment. “The annual celebration provides opportunity to broaden the basis for an enlightened opinion and responsible conduct by individuals, enterprises and communities in preserving and enhancing the environment.”

L-R: Chuka Uroko, property editor, Businessday; Zebulon Agomuo, editor, BD Sunday; Frank Aigbogun, publisher/CEO, BusinessDay; Bode Karunwi, principal dentist, Schubbs Dental Clinics/guest lecturer; Anthony Osae-Brown, editor, and Bill Okenedo, deputy editor, both of BusinessDay, at the knowledge sharing lecture Series of the newspaper at the BusinessDay corporate head office, Apapa, Lagos yesterday. Pic by Pius Okeosisi

World Environment Day: Edo seeks attitudinal change in waste management

overnor of Edo State, Godwin Obaseki, has warned on the danger posed by poor waste management system to humans and the environment, and has recommended innovative ways to eliminate the heaps of debris and garbage that dot most cities of the world. Obaseki, who gave the advice on Tuesday, in commemoration of the United Nations World Environment Day, observed on June 5, each year, said that stakeholders in the environment sector must activate a common operational template that promotes a proactive approach to waste management, beginning with the right attitude. “The right attitude will help

in the choices we make on waste accumulation, disposal and whether we will support government policies on environmental protection and preservation and embrace waste recycling and other waste to wealth initiatives,” the governor said. He noted that “with the avalanche of ideas, new research findings and innovations on waste management that can be sourced through international partnerships and the information super highway, poor capacity to waste management is inexcusable.” He assured that “with the ongoing reforms in the Edo State Ministry of Environment and Sustainability, his administra-

tion is fine-tuning measures to exceed the expectations of Edo people and residents, as a clean and green Edo environment is non-negotiable.” Speaking on the 2018 World Env At an event organised by the Edo State government to mark the World Environment Day, the governor who was represented by the Commissioner for Environment and Sustainability, Omoua Alonge Oni-Okpaku, said the state government is committed to reforms that are designed to preserve the environment against threat to human existence. According to the UN, “World Environment Day is principal vehicle for encouraging awareness

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and action for the protection of our environment. “First held in 1974, it has been a flagship campaign for raising awareness on emerging environmental issues from marine pollution, human overpopulation, and global warming, to sustainable consumption and wildlife crime.” The global body added that the day “has grown to become a global platform for public outreach, with participation from over 143 countries annually. Each year, WED has a new theme that major corporations, NGOs, communities, governments and celebrities worldwide adopt to advocate environmental causes.”

Senate, Reps fault Buhari’s selective corruption campaign ... stop dragging N/Assembly into your corruption cases - Jibrin group

KEHINDE AKINTOLA, Abuja

ederal lawmakers across party lines, on Tuesday threatened to hold President Muhammadu Buhari accountable for the actions and inactions of all the political appointees. The aggrieved lawmakers, who brainstormed over the state of the nation during a closed-door meeting that lasted for three hours in the House of Representatives chamber, accused Buhari of engaging in “systematic harassment and humiliation” of perceived political opponents, people with contrary opinions including Legislators and Judiciary through the police and other security agencies. While warning against high level of impunity being perpetuated against the democratic institution and infringing on the fundamental human rights of Nigerians, the lawmakers unanimously opted to rally the support of international community with the view to salvage the nation’s democracy. After robust deliberation on the prevailing socio-economic and security challenges facing the country, the National Assembly issued a 12-point resolution, with a threat to invoke its constitutional powers against the President. “The Security Agencies must be given marching orders to curtail the sustained killings of Nigerians across the country and protect life and properties of Nigerians as this is the primary duty of any responsible Government. “The systematic harassment and humiliation by the Executive of perceived political opponents, people with contrary opinions including Legislators and Judiciary by the police and other security agencies must stop. “There must be strict adherence to the Rule of Law and protection for all citizens by the President and his appointees. “The President must be held accountable for the actions of his appointees and must be ready to sanction those that carry out any act which will ridicule or endanger our country and democracy. “The Government should show sincerity in the fight against corruption by not being selective also prosecute current appointees that have cases pending against them. “The Security Agencies must be given marching orders to curtail the sustained killings of Nigerians across the country and protect life and properties of Nigerians, as this is the primary duty of any responsible Government. “The systematic harassment and humiliation by the Executive of perceived political opponents, people with contrary opinions including Legislators and Judiciary by the police and other security agencies must stop. “There must be strict adherence to the Rule of Law and protection for all citizens by the President and his appointees. “The President must be held accountable for the actions of his appointees and must be ready to sanction those that carry out any act which will ridicule or endanger our country and democracy.

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Wednesday 06 June 2018

Tax Issues

Still on new excise duties regime for tobacco, alcoholic beverages In 2018 alone, a cigarette pack of 20 will increase by N20, beer and stout costs will rise by 30kobo per centiliter; while per centiliter price of wines will increase by N1.25kobo, writes Iheanyi Nwachukwu

h e n e w e xc i s e duties for tobacco, alcoholic beverages earlier approved by President Muhammadu Buhari took effect from Monday, June 4, 2018. No doubt, the habitual consumers of these goods will be on the receiving side of expected price hike. T h e n e w re g i m e a p plies only to tobacco and its products (such as cigarettes) and alcoholic beverages (beers and stouts, spirits and wines). As manufacturers are persuaded to carry this additional tax burden on their products, it will either be passed in part or full to their various consumers. What is excise duty? It is a tax levied by the government on goods manufactured inside the country. It is payable by the manufacturers. The news is that in addition to a 20 percent tax on tobacco, the government has just added an extra fixed tax per cigarette. A percentage tax on alcoholic beverages has also been replaced by taxes of fixed amounts based on volume. The increase which has been faulted by manufacturers and organised private sector is in phases over a three-year period (from 2018 to 2020) to moderate the impact of the increment on the price of the products. The new regime…how it applies Tobacco: For 2018, in addition to the 20 percent (20percent) advalorem rate, a specific rate of N1 will be paid on each cigarette stick (N20 per pack of 20 sticks). In 2019, the specific rate will increase to N2 per stick (N40 per pack of 20 sticks) and N2.90kobo per stick (N58 per pack of 20 sticks) in 2020. With respect to alcohol beverages, no advalorem rate is applicable. For Beer and Stout in 2018, N0.30kobo per centiliter (Cl) would be payable and N0.35kobo per Cl for both 2019 and 2020. For Wines, N1.25kobo per Cl is payable in 2018 and N1.50kobo per Cl for both 2019 and 2020. For S p i r i t s, N 1 . 5 0 k o b o p e r Cl was approved in 2018, N1.75kobo per Cl in 2019 and N2kobo per Cl in 2020.

A g ra c e p e r i o d o f 90 days was granted before the commencement of the new regime. The suspension of excise on other goods that the Nigerian Customs Service (NCS) targeted in the past has been sustained (that is soaps and detergents, recharge cards, perfumes, paper boxes, tissue paper and polythene bags. President Buhari on the recommendation of the Tariff Technical Committee of the Ministry of Finance had in March approved an increase to the excise duties on tobacco and alcoholic beverages effective June 4, 2018. Kemi Adeosun, Minister of Finance had said that the duty would reduce the health hazards associated with tobacco-related diseases and alcohol abuse, raise government revenue, and align with the harmonisation of the Economic Community of West African States (ECOWAS) memberstates’ legislation on excise duties. Kenneth Erikume’s team of tax experts at PwC Nigeria noted that “it is clear that government is looking for various means to generate more tax revenue.” The PwC Nigeria team of experts noted that the choice of products affected by the new review suggests that government wants to avoid imposition of duties on necessities and basic products which may affect the wider population. “The new tax is regres-

sive given that it imposes relatively lower burden on premium products. Ultimately manufacturers of the affected products will have to consider whether to pass on the full increase, share with consumers or bear the additional cost. The phased approach for implementation should aid planning hence a welcome development”, PwC experts said. “Efforts to get government to rescind its decision were unsuccessful as the operators were asked to wait till government chooses to review the tariff. We are not happy with that answer as this is going to affect most of the companies that produce such items. Many of them are going to close shop. We cannot produce competitively as many will close shop except for those producing using underhand tactics,” according

The low tax level prevails even though Nigeria is the highest alcohol drinking country in Africa and leads the top 10 largest beer drinking countries

to Frank Jacobs, president, Manufacturers Association of Nigeria (MAN). Lateef Oyelekan, National President of National Union of Food Beverage and Tobacco Employees (NUFBTE) had said employers in the industry have notified the union that they may have to downsize as the new tariff would impact on the cost of production. The ECOWAS Council of Ministers had at its 62nd and 79th Ordinary Sessions in Abuja in May 2009 and December 2017, issued directives on the harmonisation of the ECOWAS Member States’ Legislations on Excise Duties. S i m i l a r l y , t h e I n t e rnational Monetary Fund (IMF) in its 2017 mission report advised Nigeria to raise the excise duty on a s t i c k c i g a re t t e t o N 5 , which is five times the approved amount. “The low tax level prevails even though Nigeria is the highest alcohol drinking country in Africa and leads the top 10 largest beer drinking countries,” the Fund said. The depreciation of the local currency led to some brands of tobacco no longer being available in the country, with the high import costs being a disincentive to importers. The most affected was the cigars brand Phillies and the pipe tobacco brand Bowmore. In cigarettes, the high import costs have led some companies that import

products to begin producing locally. PMINTL Nigeria Limited announced that it will begin producing locally in Nigeria. Cigarettes in Niger ia have traditionally been a near monopoly, with British American Tobacco (Nigeria) Limited dominating volume sales over the last 10 years. The company is, however, seeing greater competition as a wide range of competitively pr iced brands become available, such as the Dorchester and Sterling brands of the multinational GBO Japan Tobacco Inc and Bond Street, Chesterfield, and Marlboro brands of the multinational GBO Philip Morris International Inc. Other competing brands include Esse, which is distributed by Black Horse Tobacco Company Limited. These low-priced but high-quality brands offer a compelling alternative to British American Tobacco’s premium and mid-priced brands. Alcohol consumption in Africa is high and is thriving strongly. As per World H e a l t h O r g a n i s a t i o n ’s (WHO) ‘Global Status Report on Alcohol and Health’, Nigeria is estimated to have highest annual alcohol consumption in Africa. An average Nigerian consumes about 12.28 litres of alcohol per annum. Beer turnover in Nigeria is growing faster than its economy. The country has the second largest beer

market in Africa, after South Africa. It constitutes about 96percent of all alcoholic sales. Spirit : Spirit’s market comprises of whiskey, brandy and vodka, the market is valued at $2.84 billion according to an International Wine and Spirit Research (IWSR) report. It is estimated to be growing at about 7percent year-on-year. Premium spirit segment which occupies about 5-10percent of alcoholic beverages market is growing at much faster pace with an annual growth of 18-20percent. Imported brands account for $500 million of the spirits market. Wine: The wine market is currently valued at approximately $370 million and is expected to grow 6percent a year. Red wine accounts for 74percent of the sales. There is a robust appetite for premium and high-end South African wines in Nigeria. An estimated 5.2million people, representing the top 10 percent of earners among the 156million population account for 43percent of wine consumption in the country. The alcoholic drink market of Nigeria is one of the striving industries in Nigerian manufacturing sector, despite being at the maturity stage of its life cycle. Nigerian Breweries Plc and Guinness Nigeria Plc are two major players of the market. These leading breweries together hold close to 90percent of market share. SABMiller entry in the market has further intensified the competition with strategic aim to provide affordable alcoholic beverage to Nigerian consumers. Beer consumption in Nigeria has been experiencing growth of 9 per cent annually over the last 10 years. This growth was as a result of foreign investments in new production plants, rising disposable income, and changing consumption patterns. Major players definitely find the industry attractive in terms of profitability, specifically due to impressive growth and economies of scale. How e ver fr ing e p layers struggle owing to heavy capital investments, it also becomes major entry barrier in the market.

BUSINESS DAY

Wednesday 06 June 2018

Leadership SHAPING PEOPLE INTO A TEAM

Just how bad is business travel for your health? Here’s the data

hile checking into a hotel for a conference several years ago, I asked the receptionist where I could get some dinner. There was no restaurant in the hotel, I was told; my only options were ordering delivery from a fast food chain or a pizza joint. I went with the pizza, but the lack of choices was annoying — so much so that, when I got home, I started looking into the data on health and travel for work. My experience is far from unique. According to the Global Business Travel Association and American Express, Americans took more than 500 million domestic business trips in 2016. And while many workplace health programs for business travel provide immunizations, information about avoiding food-borne illnesses, and alerts about civil or political unrest, few focus on a more a common threat to health: the stress, sleep interruption, unhealthy eating and drinking and lack of exercise that are common side effects of being on the road. Over the long term, these issues can add up to chronic disease risks. To investigate the link between business travel and chronic disease, my colleagues and I turned to de-identified electronic medical record data from EHE, Inc., which provides preventive medicine exams, health screenings and wellness program services nationally to tens of thousands of employees a year working at companies in the United States. In addition to preventive medicine exams, the full patient encounter includes a comprehensive online health assessment that asks about the frequency of business travel. When we analyzed the data, we found a strong correlation between the frequency of business travel and a wide range of physical and behavioral health risks. Compared to those who spent one

to six nights a month away from home for business travel, those who spent 14 or more nights away from home per month had significantly higher body mass index scores and were significantly more likely to report the following: poor self-rated health; clinical symptoms of anxiety, depression and alcohol dependence; no physical activity or exercise; smoking; and trouble sleeping. The odds of being obese were 92% higher for those who traveled 21 or more nights per month compared to those who traveled only one to six nights per month, and this ultratraveling group also had higher diastolic blood pressure and lower high density lipoprotein (the good cholesterol). Although only about 12% of employees in the data we looked at traveled for business 14 or more nights per month, the clustering of all these health conditions among frequent business travelers is worrying, both for their own health and the health of the organizations they work for. Physical, behavioral and mental health issues such as obesity, hypertension, smoking, depression, anxiety, poor sleep, and alcohol dependence can create costs for employers

through higher medical claims, reduced employee productivity and performance, absenteeism, presenteeism, and short-term disability. The effects of these issues have the potential to strain or sever relationships with clients and suppliers. Our results are backed up by several other pieces of research. A study of health insurance claims among World Bank staff and consultants found that travelers had significantly higher claims than their non-traveling peers for all conditions considered, including chronic diseases such as asthma and back disorders. The highest increase in health related claims was for the stress-related disorders. A second World Bank study found that almost 75% of the staff reported high or very high stress related to business travel. And an analyses of health risk appraisal surveys conducted at a large multinational corporation found that international business travel was associated with higher alcohol consumption, lower confidence in keeping up with the pace of work and lower perceived flexibility in fulfilling commitments. So what can companies do to help their employees develop

healthy habits while traveling? We suggest a combination of employee education and improvements in employer policies around travel. First, employees simply need to be aware that business travel can predispose them to making poorer health decisions. The steak with fries and a late-night cocktail at the hotel bar might seem easily justifiable as a reward for acing a long day of client meetings. But research finds that restaurant food contains more calories per serving, is higher in total fat and saturated fat per calorie and contains less dietary fiber than meals prepared at home. Research also suggests that the higher calorie content of restaurant food is compounded by chronic stress, like that caused by frequent business travel, which is linked to preferences for even more high calorie foods. Given this, employers should help employees learn to identify and select the healthiest options available, and help them prepare in advance if they wind up at a hotel like the one I visited, with few good choices nearby. It’s harder to maintain an exercise regimen when you are on the road, too. Over the long term, many high-calorie rewards for a job well done can add up to weight gain and associated cardiovascular disease risks. Supporting exercise and physical activity among employees can help prevent weight gain, and the physical activity can help reduce stress. One fairly simple thing employers can do is to ensure that their preferred accommodations have well-equipped gyms. Employers can also use hotels that provide complementary workout clothes or in-room exercise equipment such as mats, weights, or workout videos. In general, hotel gyms can be minimalist and a bit depressing, but an alliance of sorts between employers and business hotel chains could work to improve

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the hotel gym experience. If hotel gyms aren’t an option, employers could also provide employees with memberships to gym and health club chains with a national presence. Employers can also provide their business travelers with training in a variety of stress management approaches and sleep hygiene techniques. Cognitive behavioral therapy and mindfulnessbased stress reduction training are therapeutic options that provide personal coping strategies and have been shown to be effective for managing depression, anxiety and workplace stress. These techniques may also be useful for employers to integrate into prevention and treatment programs for employees who engage in frequent travel and who may be more vulnerable to stress and negative emotions. The accumulating evidence linking extensive business travel to chronic disease and health risks needs to be factored into the cost-benefit analysis of the practice. Business travel can surely be educational, and even fun, not to mention necessary for many people; but the wear and tear resulting from constant trips may not be altogether worth it. If you travel for work regularly, it’s worth pausing to examine whether you actually need to be on the road frequently — and if you do, how you can mitigate the effects of stress and be mindful about your dietary choices. And if you have employees who are often between cities, you owe it to them to provide the education, tools and resources so they can maintain healthy lifestyles while on the road. (Andrew Rundle is an associate professor of epidemiology in the Mailman School of Public Health. His research focuses on the risks for, and consequences of, sedentary lifestyles and obesity.)

Wednesday 06 June 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES Howard Schultz steps down as Starbucks executive chairman

Investors’ calm over trade wars holds for now

Page A5

Page A4

World Business Newspaper

Mueller accuses Manafort of attempted witness tampering Special counsel asks judge to revoke or revise the order of pre-trial release NAOMI ROVNICK AND ALICE WOODHOUSE

he US prosecutor investigating alleged Russian interference in the 2016 presidential election has accused Paul Manafort, Donald Trump’s former campaign chairman, of attempting to tamper with witnesses in his tax and money laundering case. Special counsel Robert Mueller claimed in a court filing late on Monday that Mr Manafort tried to communicate with witnesses, including through an “encrypted messaging application”, while on house arrest awaiting trial. Mr Manafort has been accused of funnelling €2m to the Hapsburg group, a collection of former senior European politicians, in 2014 to induce them to help burnish the image of pro-Russia former Ukrainian president Viktor Yanukovich. In an October indictment, Mr Mueller accused Mr Manafort of violating federal laws by attempting to hide the proceeds he earned from the Yanukovich campaign. In Monday’s filing, Mr Mueller accused Mr Manafort of contacting two unnamed employees of a public relations group who served as “intermediaries” with Hapsburg after he was indicted. Mr Manafort, who served as Mr Trump’s campaign manager for only two months, has argued his indictment should be dismissed because the case falls outside the authority of the special counsel’s Russia investigation. Mr Mueller’s new charges allege the attempts to contact witnesses were “an effort to influence” their testimony. He argued that such efforts violated the terms of Mr Manafort’s release and he should be sent to jail until trial. “A violation

based on commission of a federal crime triggers the statutory presumption in favour of detention,” the filing reads. Mr Trump has recently tried to distance himself from his former campaign chief, writing on Twitter last week that Mr Manafort had “come into the campaign very late and was with us for a short period of time”. Mr Manafort’s indictment on 12 counts was the first in Mr Mueller’s investigation into the Trump campaign’s ties to Russia. The original charges alleged Mr Manafort and his business partner Rick Gates had laundered almost $18m of the $75m they earned working for Mr Yanukovich for almost a decade until the former Ukrainian president fled to Russia in 2014 on the heels of a pro-western revolution. Mr Trump, who has not given an interview to Mr Mueller since he launched his probe into Russian election meddling in May 2017, has also intensified his criticism of the special counsel’s investigation in recent weeks. In a tweet in late May, Mr Trump attacked the FBI and the Department of Justice for not telling him during his election campaign, “as one of only two people left who could become President”, that “they were secretly investigating Paul Manafort”. Mr Mueller has interviewed dozens of White House and Trump campaign staffers. Just days after his son-in-law and adviser Jared Kushner sat for another round of questioning, Mr Trump wrote on Twitter that the Russia probe was destroying “young and beautiful lives”. “They journeyed down to Washington DC, with stars in their eyes and wanting to help our nation,” he wrote on Twitter. “They went back home in tatters!”

Alibaba and Tencent tell bankers to pick sides China tech groups’ non-compete agreements stop investment banks working for both LOUISE LUCAS AND DON WEINLAND

encent and Alibaba’s fierce rivalry has extended into the world of investment banking, with China’s dominant tech duo demanding that bankers working for them avoid doing so for their rival. The requirements have in effect split investment banks into two camps, said several people with knowledge of the matter, highlighting the companies’ clout in virtually every sphere of China’s economy as well as their prolific dealmaking. Ant Financial, the Alibaba

payments affiliate that is closing a $10bn funding round, made a number of banks sign “very restrictive non-compete” agreements preventing them from working for Tencent entities, said one banker. “This isn’t unprecedented in the US,” he said. “In the US you bank Coke, you cannot bank Pepsi. That was always the way of the world. But companies need to be prolific in paying fees — when you’ve got small IPOs not wanting you to do business it gets more problematic.” Alibaba declined to comment. Another person familiar with the matter said the tech titans “valContinues on page A4

Paul Manafort, Donald Trump’s former campaign chairman, allegedly tried to communicate with witnesses while on house arrest awaiting trial © EPA

Former Citi and Deutsche bankers charged in Australian cartel case Lenders deny wrongdoing in ANZ probe after former executives named in sweeping inquiry

JAMIE SMYTH

ustralian prosecutors filed criminal charges against the former country heads of Deutsche Bank and Citigroup in Australia on Tuesday, alleging they engaged in cartel conduct when the banks led a A$2.5bn (US$1.9bn) share placement for ANZ Bank almost three years ago. Stephen Roberts, former country head of Citigroup Australia, and Michael Ormaechea, former chief executive of Deutsche Bank Australia, were charged following an investigation by Australia’s competition watchdog. Several other senior bankers at Deutsche, Citigroup and ANZ were also charged in the case — a rare example of criminal charges laid against senior bank executives despite the tide of scandals seen in the industry globally over the past decade. Individuals convicted of cartel offences face a maximum of 10 years in jail or hefty fines. Australia’s Competition and Con-

sumer Commission alleged the three banks and the individuals concerned colluded when they sold shares taken up during the ANZ share placement as part of their underwriting commitment. “These serious charges are the result of an ACCC investigation that has been running for more than two years,” said Rod Sims, ACCC chairman. “Charges have now been laid by the Commonwealth director of public prosecutions and the matter will be determined by the court.” All three banks denied wrongdoing and said they would fight the charges in court. A fourth bank, JPMorgan, which jointly underwrote the share placement with Citi and Deutsche, has not been charged by prosecutors and has reportedly been granted immunity after self-reporting certain issues to regulators. A spokesman for JPMorgan declined to comment. The alleged collusion occurred when ANZ announced a surprise

A$2.5bn share placement in 2015 to bolster its balance sheet ahead of tougher capital requirements imposed by regulators. The deal was poorly received by investors forcing the three investment banks underwriting the placement to take up 25.5m of the 80.8m shares issued. Citi said the cartel allegation was that the joint underwriters reached an understanding with respect to the subsequent disposal of the 25.5m shares. Citi signalled that the practices followed by the banks were considered a norm within the industry, saying if there were matters to address they should be clarified “by law or regulation or consultation”. Justin O’Brien, an expert of financial regulation at Monash University, said the high-profile cartel case would change how share placements were underwritten in Australia. He said JPMorgan likely disclosed questionable conduct to the regulator to protect its reputation and finances.

Former US intelligence officer accused of trying to spy for China Arrest comes amid tensions between Beijing and Washington over trade and security EDWARD WHITE AND EMILY FENG

former US intelligence officer has been arrested after allegedly trying to sell American defence secrets to China, during a period of heightened tension between Beijing and Washington over both trade and national security. Ron Hansen, a former Defense Intelligence Agency officer, was arrested by US authorities at the weekend on federal charges, including the attempted transmission of national defence information to China’s government. Mr Hansen “allegedly attempted to transmit national defence information to the People’s Republic of China’s intelligence service and also allegedly received hundreds of thousands of dollars while illegally acting as an agent of China”, said John C Demers, assistant attorney-general for national security. Mr Hansen faces charges of attempting to gather or deliver national defence information to aid a foreign government, acting as an unregistered foreign agent for China, bulk

cash smuggling, structuring monetary transactions and smuggling goods from the US, according to the US justice department. He could not be contacted for comment. The arrest comes as the world’s two largest economies remain set to start a $100bn trade war after the latest round of trade negotiations ended on Sunday without a breakthrough. New US tariffs on imports from China are intended to punish Beijing for what President Donald Trump has argued is a systematic campaign by China to steal US technology. Under Mr Trump, the US state department is also expected to give shortened visas to Chinese students studying in critical technological and industrial sectors starting June 11, according to two people briefed on the matter. The news was first reported by the Associated Press. “National security is our top priority when adjudicating visa applications . . . consular officers reserve the right to limit visas on a case-by-case basis, as appropriate to the specific

case,” said the US embassy in Beijing, noting that neither the visa application process nor maximum validity for student visas had changed. Mr Hansen, 58, is a former US army warrant officer hired by the DIA as a civilian intelligence case officer in 2006. He travelled regularly between the US and China between 2013 and 2017, the justice department said. Mr Hansen, who was arrested in the US en route to China, allegedly netted at least $800,000 after providing information and export-controlled technology to China. “His alleged actions are a betrayal of our nation’s security and the American people and are an affront to his former intelligence community colleagues,” Mr Demers said. Eric Barnhart, an FBI special agent, said the case “drives home the troubling reality of insider threats and that current and former clearance holders will be targeted by our adversaries”. If convicted of espionage Mr Hansen will face a maximum sentence of life in prison.

BUSINESS DAY

C002D5556

NATIONAL

New Apple software to help tackle screen addiction Tech group to roll out feature that would help users manage time spent on apps and games TIM BRADSHAW AND HANNAH KUCHLER

pple has a new solution to growing concerns about app addiction and excess screen time: more software. The iPhone maker on Monday promised that the next version of iOS,

the mobile operating system, would help its customers manage the time they and their children spend using apps and playing games. Measures include the option to place time limits on usage of specific apps. The updates will be released to hundreds of millions of iPhone owners alongside iOS 12 later this year. The operating

system update will also bring new kinds of personalised 3D emoji, augmented reality effects and group FaceTime video calls to iPhones and iPads. Smartphone companies such as Apple and Google, which develops the Android operating system, have come under pressure from shareholders and health campaigners to deal with

the constant distraction and compulsive behaviour associated with the use of mobile devices. Creators of social networking apps such as Facebook and Twitter, as well as games developers, risk being collateral damage if the tools Apple is offering become widely used. However, it is challenging for Silicon Valley companies to tell their customers to turn off their devices altogether, without threatening the huge profits produced by smart-

Alibaba and Tencent tell bankers to pick sides...

phones, and the apps and advertising they show. Craig Federighi, Apple’s software development chief, who introduced the changes at the company’s Worldwide Developer Conference on Monday, presented the tools it said would help individuals take control. “You can make decisions about how much time you spend with your device every day,” he said, with iOS 12’s “comprehensive set of built-in features to help you limit distraction”.

UK government takes £2.1bn loss with RBS stake sale

Continued from page A3 ue loyalty” and so did not want to hire bankers who were “going to be a service provider to competitors that will work against you when you do [a request for proposal] for the next deal”. He added that there were also issues of confidentiality. Both companies are dominant players in areas spanning ecommerce, cloud and payments, giving rise to possible conflicts of interest should a third party working for both be privy to data and strategy details. Tencent and Alibaba have large teams of in-house bankers, many plucked from Goldman Sachs — whose alumni also furnish the top management — which restricts the business meted out to external banks. Fees on initial public offerings have also dropped sharply. The two have backed a large proportion of China’s billion-dollar privately held “unicorns” and are behind most of the country’s big upcoming listings. Tencent is behind Tencent Music and Entertainment, which is being spun out in an IPO later this year, as well as Meituan-Dianping, the food delivery company that is also shooting to list this year. Tencent did not immediately respond to a request for comment. Meanwhile, Alibaba is behind Ant, valued at $150bn and expected to list next year. Didi Chuxing, the ride-hailing app that bested Uber in China, is unusually backed by both Alibaba and Tencent, the result of a merger between two competing apps in 2015. While Goldman Sachs worked on Alibaba’s initial public offering in 2014, it was not involved in the Ant fundraising, said one person familiar with the deal. Goldman declined to comment. Alibaba has been the driving force in creating the division among global banks, said one person who has worked on deals for the company. In the months before its September 2014 IPO, it requested its banks sign a strict engagement letter that specified its bankers would not work on JD.com or Tencent deals without its consent. The agreement lasted until the end of 2015. The conditions were relaxed when the agreement lapsed but the guidelines have persisted, especially when it comes to JD.com transactions because of its direct competition in ecommerce with Alibaba, the person said. “There’s no hard agreement now but there tends to be an Ali camp vs a Tencent camp,” the person said.

Wednesday 06 June 2018

Chancellor Philip Hammond says proceeds will help reduce national debt

NICHOLAS MEGAW

Howard Schultz has grown Starbucks from 11 stores to more than 28,000 stores in 77 countries.

Howard Schultz steps down as Starbucks executive chairBillionaire says he is considering ‘public service’, sparking talk of White House run PAN KWAN YUK AND ANNA NICOLAOU

oward Schultz is stepping down as executive chairman of Starbucks, marking the end of a 36-year run in which he transformed the Seattle company into the world’s largest coffee chain and fuelling speculation that he might run for US president in 2020. In a memo to employees, the billionaire appeared to open the door to a run for public office, after rumours of his presidential ambitions have swirled for some time. “I’ll be thinking about a range of options for myself, from philanthropy to public service, but I’m a long way from knowing what the future holds,” he wrote. The change comes a little over a year after Mr Schultz handed the role of chief executive to Kevin Johnson. During his near-four decades leading the company, Mr Schultz grew Starbucks from 11 stores to more

than 28,000 stores in 77 countries. “I set out to build a company that my father, a blue-collar worker and World War II veteran, never had a chance to work for,” Mr Schultz said in the memo. “Together we’ve done that, and so much more, by balancing profitability and social conscience, compassion and rigour, and love and responsibility.” The 2020 presidential race is an open field for the Democrats, with as many as a dozen different candidates rumoured as potential contenders. In light of the success of Donald Trump, a reality-TV star, business celebrities including Oprah Winfrey, Mark Cuban and Mr Schultz have all been mooted as plausible candidates. Mr Schultz, who endorsed Hillary Clinton in 2016, has previously demurred about his potential plans in politics, although he told CNN in 2016 that he would “never say never” regarding a presidential run.

On Monday, he told the New York Times: “For some time now, I have been deeply concerned about our country — the growing division at home and our standing in the world. One of the things I want to do in my next chapter is to figure out if there is a role I can play in giving back. I’m not exactly sure what that means yet.”Mr Schultz, 64, the son of a truck driver, grew up in public housing in Brooklyn. At Starbucks, he has been outspoken on issues ranging from healthcare and education to racism and rising nationalism, and earlier this decade he tried to cajole fellow businessmen into promising to withhold political donations in protest at gridlock in Congress. He has also repeatedly criticised Mr Trump, including as recently as last week when he told CNN that the president’s rhetoric on race has “given licence to people to feel as if they can emulate and copy the kind of behaviour and language that comes out of this administration”.

Expat Americans given one-year reprieve on US repatriation tax Levy aimed at encouraging multinationals to bring back profits would have affected 1m citizens ANDREW EDGECLIFFE-JOHNSON

xpatriate Americans have been granted a one-year reprieve from an unexpected levy on their overseas business interests, raising their hopes of Congress amending the tax reforms signed into law by Donald Trump six months ago. The one-off “deemed repatriation tax” of 15.5 per cent that the Tax Cuts and Jobs Act imposed was intended to persuade multinationals such as Apple and Google to bring back profits they had built up in other countries, but caught many far smaller business owners in its net. An estimated 1m US citizens and green card holders owning more than 10 per cent of a “controlled foreign corporation” and living overseas were facing the prospect of having to pay the

tax in stages over eight years, the full amount payable upfront if the initial payment was missed. On Monday, however, the Internal Revenue Service issued new guidance, saying that expatriate business owners with net tax liabilities of less than $1m for 2017 would no longer face penalties or the risk of the full eight years’ worth of payments being accelerated. The provision had been due to take effect in March, and had already been delayed once, to mid-June. The oneyear extension has given campaigners hope that Congress will amend the legislation. “We have bought time,” said Monte Silver, a US tax attorney with Silver & Co in Israel, who had warned in an International Tax Review article that the tax was “a growing concern for expats who may be driven out of business or forced

to become tax evaders”. “This was better than I expected,” he said on Monday, saying there was support from both Republicans and Democrats for a “fix” to the tax legislation. “It’s not easy, but look what we’ve done in three months and we now have a year,” he said. Groups representing overseas voters of both major parties had petitioned Congress to review the repatriation tax, with Republicans Overseas warning of its “severe and unintended consequences” on small businesses. Democrats Abroad, in a submission to a House Ways & Means Committee hearing in May, estimated that 1m Americans abroad were exposed to the repatriation tax, describing it as “a horrific surprise for Americans living abroad who own businesses in the countries where they live”.

he UK government has completed its first sale of Royal Bank of Scotland shares in three years, marking a further step in its quest to return the bank to private hands but incurring a large paper loss for taxpayers who bailed out the lender in the financial crisis. UK Government Investments, which controls the Treasury’s stake in RBS, announced its plans to sell a 7.7 per cent stake through an offer to investors on Monday evening. The sale cuts the Treasury’s stake from 70.1 per cent to 62.4 per cent. It completed the deal at 271p, a 3.5 per cent discount to Monday’s closing price, which means the sale raised £2.5bn. This represents a loss of £2.1bn for taxpayers compared with the amount paid for the shares in 2008. On Tuesday morning, RBS shares were trading in line with the offer price, down 3.5 per cent at 271p. Opposition politicians on Monday attacked the plans to sell the shares at a large loss. However, Philip Hammond, chancellor, has repeatedly argued that public ownership was a drag on RBS and the wider economy, and on Tuesday he said that “the government should not be in the business of owning banks”. “The proceeds of this sale will go towards reducing our national debt — this is the right thing to do for taxpayers as we build an economy that is fit for the future,” he added. The discount to Monday’s closing price was sharper than during the first government share sale in 2015. A larger discount can point to a lack of investor appetite, but a person close to the deal said that in 2015 RBS’s shares were already near a more than 12-month low, having dropped shortly before the plans were announced. People working on this week’s deal said strong demand meant the books were covered in less than 30 minutes, and were several times oversubscribed from a mix of long-only and hedge fund investors. The government had been expected to begin a sale process after RBS reached a settlement in a long-running US Department of Justice investigation in May. The threat of a large fine had been a drag on RBS’s share price and news of the lower than expected $4.9bn settlement helped lift shares as high as 296p. However, the market upheaval caused by last week’s political uncertainty in Italy wiped out all of the gains, and Monday’s sale price was lower than RBS’s share price before the DoJ agreement. The market volatility delayed RBS’s plans to sell shares until this week. People briefed on the deal said UKGI hoped to complete a sale before the European summit later this month and was encouraged by a market recovery on Friday and Monday.

Wednesday 06 June 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Investors’ calm over trade wars holds for now A meeting of G7 leaders will remind markets of the dangers of a full-blown trade war ROGER BLITZ

nother big slide in the Mexican peso suggests investors are again fearful about trade wars. The currency dropped almost 2 per cent on Tuesday, putting it back above the 20 mark against the dollar to levels it has not touched since early 2017. Yet judging by the limited number of markets affected by the escalation in trade tensions, investors have largely refused to allow Donald Trump’s protectionist policy to shape their behaviour. Since the US president’s election in November 2016, the peso and the Canadian dollar, which also fell heavily on Tuesday, have periodically taken hits from concerns about the demise of Nafta, the trade agreement between the US, Canada and Mexico. The price of steel and aluminium has risen markedly as the US threatened, then imposed, tariffs on these commodities. But trade tensions have left a lasting mark on little else. It is a wonder stock markets have proved so resilient, says Rabobank analyst Jane Foley, since a trade war has “the potential for being enormous if it runs to full steam”. There is no shortage of theories for the relative calm in markets. Some investors, savvier now about

Mr Trump’s approach than in the early days of his presidency, think trade rhetoric and tariff part of his negotiating tactics to extract concessions. Others look at the sum total of tariffs imposed and conclude they amount to just a fraction of global trade overall. The question of how to trade protectionist worries is more vexed than it looked. Selling the peso and the Canadian dollar on anxiety over the demise of Nafta fears look straightforward, says Derek Halpenny of MUFG, but more global protectionist fears are “not exactly easy to trade”. For all the calm, there are two reasons to guard against complacency on trade. First, it is having a more insidious impact on emerging markets. Investors talk a lot about it and there may be little tangible effect, says Kit Juckes at Société Générale, but one outcome is “a generally downbeat view of EM”. Second, the backdrop is less benign. Last year, US protectionism was being promulgated at a time of low market volatility and rising global growth. This year volatility has risen and the growth story is less clear. As Mr Trump heads for a frosty meeting of the G7 this week at which trade tensions will be unavoidable, markets have reason to begin to feel jumpy.

Wall Street mixed after Mexico tariff response Industry leader faces tough questions over how it already applies technology PETER WELLS

S stocks were mixed shortly after opening bell in the wake of Mexico’s plans to levy retaliatory tariffs on a wide range of US agricultural imports in response to the White House imposing duties on steel and aluminium imports from its southern neighbour. Concerns the Trump administration’s decision last week — to levy duties on those metals imports from the EU, Canada and Mexico from Friday — rattled

markets and reignited concerns the tiff could spill over into a broader trade war. The S&P 500 was fractionally higher, while the Dow Jones Industrial Average eased 0.8 per cent. The Nasdaq Composite was up 0.2 per cent, as major technology stocks continued to climb. Shares in companies that last Thursday were shaken by the White House’s plans, were mixed this morning. Jack Daniel’s maker Brown-Forman and Tyson Foods were higher, while Kellogg and Pilgrim’s Pride were down.

The US dollar gained 1.3 per cent against the Mexican currency and fetched 20.3525 pesos at pixel time. The buck strengthened 0.7 per cent against its Canadian counterpart, and bought C$1.3014. US Treasuries initially rallied as yields fell, but the short- and long-end of the market soon found themselves pulled in opposite directions. The yield on the benchmark 10-year Treasury was down 1.7 basis points at 2.9204 per cent, while that on the two-year Treasury was flat at 2.508 per cent. Yields move inversely to price.

Logistics industry says ‘too late’ to avoid Brexit disruption

Stocks to watch: RBS, IWG, Smurfit, Twitter, Aegean, WPP

Ports, Channel tunnel and freight companies criticise ministers for lack of exit plan

BRYCE ELDER

CHRIS GILES

reight industry, ports and Channel tunnel call for Brexit plan • Ports say they do not know what infrastructure to build • Revenue & Customs defends £20bn figure for cost of ‘maximum facilitation’ plan Britain’s logistics industry lost patience with the government on Tuesday, with lorry drivers saying their confidence in a well-managed Brexit is collapsing and the Channel tunnel warning it was “too late” to avoid serious disruption when the UK leaves the EU next March. With Westminster convulsed by arguments over the future of the UK’s borders the logistics industry hit out at ministers and officials for having no plan for how their operations are supposed to function in the future. The Freight Transport Association said “the industry’s frustration with the lack of progress is building daily” as logistics companies were unable to price for the period after March 2019 or answer basic questions from customers. James Hookham, deputy chief executive, complained that some parts of government simply dismissed their concerns as trivial. “This is a reckless attitude to take and is playing chicken with parts of the British economy and the livelihoods of the seven million Britons in the industry.” John Keefe, public affairs director of Getlink, the company which runs the Channel tunnel, warned against

any solution that did not involve smart border technology away from the congested area of Dover, which he said was “essential to ensuring that frictionless trade can be maintained”. “Delivering this level of sophistication will be a complex and lengthy process and it is already too late to envisage it being in place in March 2019,” he told MPs in evidence to parliament. The Port of Dover has previously warned that, such is the level of traffic through the port that a delay of only two minutes for each truck would create a 17-mile tailback of lorries No progress on freight concerns The FTA has been explaining its problems to government in private but it lost patience at the weekend when officials failed to respond as promised to the many issues that concerned its members. “Of the eight demands in FTA’s list of essentials to ‘Keep Britain Trading’ . . . not a single one has been progressed,” Mr Hookham said. He said there was no guarantee that UK haulage companies would be able to continue employing the 43,000 truck drivers in Britain that are nationals of another EU member state. There had been no progress in the UK seeking an agreement with the EU to allow UK truckers’ driving licences to be recognised in the EU. “Under European law, unless an agreement is reached, there will only be 103 international haulage permits to cover the 300,000 journeys made by British trucks to Europe each year,” he said.

Carnival drops after Morgan Stanley says cruise demand is fading

oyal Bank of Scotland was under pressure after the UK government completed its first sale of the lender’s shares in three years. The Treasury sold a 7.7 per cent stake in RBS at 271p to raise £2.5bn, which crystallised a £2.1bn loss against the cost to the taxpayer of the 2008 bailout. The sale cut the government’s RBS stake from 70.1 per cent to 62.4 per cent. While investors had expected the Treasury’s sale, there was still surprise at its decision to cut the stake just a week after the resignation of Ewen Stevenson, RBS’s chief financial officer. Investec analyst Ian Gordon said the timing was “not unreasonable” but noted that the shares were placed at a discount of 3.5 per cent to Monday’s close, which compared unfavourably to the 2.3 per cent discount on the previous sale in 2015. “We think it is conceivable that the government could exit its stake in full by 2023 through a combination of placings and directed buybacks, but this will likely serve to cap the share price,” he said. IWG slipped after Lone Star, the US private equity company, abandoned plans to bid for the Regus office owner. TDR Capital and Starwood have until Friday to confirm their intentions while US property group Prime Opportunities has a June 26 deadline.

“We still see a competitive auction as likely, given IWG’s global position, free cash generation, potential for growth and low valuation compared to WeWork,” said Peel Hunt. But the broker downgraded IWG to “hold” from “buy” based on a no-deal value potentially below 260p per share, compared with a likely takeover price of between 320p and 350p. Smurfit Kappa hit its lowest since March on expectations that International Paper will end its pursuit of the box maker ahead of Wednesday’s deadline to formalise a bid. The US group has reportedly been frustrated by Smurfit management’s refusal to engage. In the US, Twitter moved higher on demand from tracker funds and passive investors after S&P Dow Jones added the stock to its S&P 500 index. Aegean Marine Petroleum Network, a leading independent supplier of marine fuels and lubricants, lost three-quarters of its value after warning it had written off $200m owed by four counterparties. The loans “may have been, in full or in part, without economic substance”, said Aegean, which reported its preliminary findings to the Department of Justice. “This causes us to question the financial integrity of the company making it impossible to forecast,” said Stifel. With a possible criminal investigation ahead, Aegean may break covenants on convertible

debt notes due November 2018 and December 2019 and may see a contraction of credit from suppliers, said the broker. Sellside stories Berenberg cut WPP to “sell” from “hold” with a £10.75 target price. Profit margin growth at the advertising agency has “slowed to a crawl” and is at risk of slowing further over the next two years with the departure of Martin Sorrell adding pressure to fees, said the broker. “We expect WPP’s situation to get worse before it gets better,” Berenberg said. “Regardless of the reasons for recent management change, WPP’s first-quarter relative performance versus peers (particularly in North America) showed that all is not well from an operational perspective: we think that this will prove more difficult and costly to fix than consensus expects.” WPP’s falling profitability means “there is clear scope for cash return expectations to be rebased and we now assume a flat dividend”, while “an internal appointment for the CEO position would confirm our view that a meaningful break-up is not likely”, Berenberg added. Morgan Stanley cut its target price for Carnival, the cruise ship operator, to £48 on lowered earnings forecasts. Its 2018 and 2019 expectations fell 6 per cent and 11 per cent, respectively, to reflect indications of deteriorating industry demand as well as fuel costs and currency headwinds.

A6 BUSINESS DAY

C002D5556

Wednesday 06 June 2018

Live @ the Stock exchange Prices for Securities Traded as of Tuesday 05 June 2018 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 313,868.49 10.85 1.88 210 133,066,930 UNITED BANK FOR AFRICA PLC 386,453.46 11.30 2.73 195 23,228,747 849,275.16 27.05 4.04 304 19,962,414 ZENITH INTERNATIONAL BANK PLC 709 176,258,091 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 394,848.22 11.00 4.76 310 12,456,065 310 12,456,065 1,019 188,714,156 BUILDING MATERIALS DANGOTE CEMENT PLC 3,885,235.69 228.00 2.24 125 3,998,500 LAFARGE AFRICA PLC. 301,401.63 34.75 4.98 105 1,663,960 230 5,662,460 230 5,662,460 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD 435,448.98 740.00 - 6 5,618 6 5,618 6 5,618 1,255 194,382,234 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 2,500 80,128.44 84.00 5.00 39 570,657 OKOMU OIL PALM PLC. PRESCO PLC 70,350.00 70.35 -1.26 26 533,612 66 1,106,769 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 2,400.00 0.80 3.90 6 477,818 6 477,818 72 1,584,587 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,403.06 0.53 - 5 8,357 221.82 0.57 - 6 53,424 JOHN HOLT PLC. S C O A NIG. PLC. 2,111.93 3.25 - 0 0 54,061.83 1.33 4.72 50 4,176,820 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 40,338.15 14.00 -4.76 141 3,995,640 202 8,234,241 202 8,234,241 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 1 5 1 5 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 35,046.00 26.55 - 26 108,658 165.00 6.60 - 0 0 ROADS NIG PLC. 26 108,658 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT CO. LIMITED 5,326.71 2.05 - 9 26,467 9 26,467 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 2,000.00 100.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 26,682.70 10.00 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 0 0 36 135,130 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 1,431.80 0.30 - 2 6,895 2 6,895 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 15,658.99 2.00 - 8 56,584 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 208,086.37 95.00 - 44 111,682 INTERNATIONAL BREWERIES PLC. 361,026.20 42.00 7.69 51 690,140 NIGERIAN BREW. PLC. 890,055.20 111.30 5.00 140 4,231,376 243 5,089,782 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 46,750.00 9.35 4.47 55 777,032 DANGOTE SUGAR REFINERY PLC 220,200.00 18.35 6.38 57 1,151,438 FLOUR MILLS NIG. PLC. 127,726.82 31.15 3.49 67 1,042,117 HONEYWELL FLOUR MILL PLC 18,318.76 2.31 5.00 91 6,056,049 MULTI-TREX INTEGRATED FOODS PLC 1,489.00 0.40 - 0 0 N NIG. FLOUR MILLS PLC. 1,167.21 6.55 - 0 0 NASCON ALLIED INDUSTRIES PLC 51,399.10 19.40 4.86 18 135,823 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 288 9,162,459 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 21,599.32 11.50 - 39 206,664 NESTLE NIGERIA PLC. 1,133,498.44 1,430.00 - 43 22,708 82 229,372 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 3,387.70 3.25 -1.52 11 1,226,810 11 1,226,810 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 82,585.92 20.80 - 27 39,024 UNILEVER NIGERIA PLC. 296,155.03 51.55 0.19 34 298,054 61 337,078 687 16,052,396 BANKING DIAMOND BANK PLC 34,277.38 1.48 4.96 67 7,843,058 ECOBANK TRANSNATIONAL INCORPORATED 348,641.47 19.00 -0.52 48 963,547 FIDELITY BANK PLC 61,426.57 2.12 4.95 60 3,810,314 GUARANTY TRUST BANK PLC. 1,236,109.53 42.00 3.96 377 39,316,662 JAIZ BANK PLC 18,267.83 0.62 -3.12 43 4,526,700 SKYE BANK PLC 10,132.62 0.73 4.29 48 1,890,674 STERLING BANK PLC. 36,275.93 1.26 3.28 79 6,734,863 UNION BANK NIG.PLC. 160,164.14 5.50 3.77 91 1,430,196 UNITY BANK PLC 10,637.30 0.91 4.60 5 404,620 WEMA BANK PLC. 29,316.59 0.76 4.11 54 4,399,498 872 71,320,132 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE COMPANY PLC 4,117.00 0.20 - 2 28,300 AIICO INSURANCE PLC. 4,227.42 0.61 1.67 29 2,801,041 AXAMANSARD INSURANCE PLC 26,145.00 2.49 -0.40 7 219,823 CONSOLIDATED HALLMARK INSURANCE PLC 1,960.00 0.28 -6.67 5 146,800 CONTINENTAL REINSURANCE PLC 14,833.02 1.43 - 6 212,800 CORNERSTONE INSURANCE COMPANY PLC. 5,155.33 0.35 - 1 10,000 EQUITY ASSURANCE PLC. 2,800.00 0.20 - 14 2,548,063 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 2,456.00 0.40 - 0 0 INTERNATIONAL ENERGY INSURANCE COMPANY PLC 539.32 0.42 - 0 0 LASACO ASSURANCE PLC. 2,489.97 0.34 -2.86 20 1,027,500 LAW UNION AND ROCK INS. PLC. 3,694.84 0.86 - 7 147,000 LINKAGE ASSURANCE PLC 6,480.00 0.81 - 4 21,000 MUTUAL BENEFITS ASSURANCE PLC. 3,200.00 0.40 2.56 21 4,523,000 N.E.M INSURANCE CO (NIG) PLC. 13,201.26 2.50 - 24 731,100 NIGER INSURANCE CO. PLC. 1,934.87 0.25 - 10 1,515,574 PRESTIGE ASSURANCE CO. PLC. 1,832.36 0.48 - 0 0 REGENCY ALLIANCE INSURANCE COMPANY PLC 1,667.19 0.25 4.17 17 6,943,800 SOVEREIGN TRUST INSURANCE PLC 2,168.61 0.26 -3.70 8 418,000 STANDARD ALLIANCE INSURANCE PLC. 5,422.63 0.42 - 0 0 4,483.72 0.48 - 0 0 STANDARD TRUST ASSURANCE PLC UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 3 250,010 UNIVERSAL INSURANCE COMPANY PLC 8,000.00 0.50 - 0 0 VERITAS KAPITAL ASSURANCE PLC 4,021.33 0.29 -3.33 8 1,700,000 WAPIC INSURANCE PLC 6,557.54 0.49 4.26 38 1,994,719 224 25,238,530

MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,864.42 1.69 -3.43 13 436,476 13 436,476 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 5,460.00 1.30 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,940.00 3.97 - 61 671,151 CUSTODIAN AND ALLIED PLC 30,173.96 5.13 0.20 9 185,489 720.00 0.48 - 1 200 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 46,734.40 2.36 4.89 95 6,600,366 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND 1,646.52 0.32 -5.88 4 232,492 ROYAL EXCHANGE PLC. SIM CAPITAL ALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 463,280.37 46.10 3.90 46 540,666 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 19,140.00 3.19 4.25 110 2,394,692 326 10,625,056 1,435 107,620,194 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,492.32 0.42 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 0 0 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 1 1,051 1 1,051 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 9,000.00 6.00 -5.00 19 696,246 22,960.83 19.20 - 32 174,537 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 2,597.00 2.65 - 34 545,636 1,139.49 0.66 - 4 95,587 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 477.00 2.20 - 0 0 89 1,512,006 90 1,513,057 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 2 1,010 NCR (NIGERIA) PLC. 680.40 6.30 - 3 102 435.56 0.88 - 1 100 TRIPPLE GEE AND COMPANY PLC. 6 1,212 PROCESSING SYSTEMS CHAMS PLC 1,784.50 0.38 - 0 0 E-TRANZACT INTERNATIONAL PLC 19,110.00 4.55 - 0 0 0 0 6 1,212 BUILDING MATERIALS BERGER PAINTS PLC 2,608.41 9.00 - 17 64,593 25,760.00 36.80 - 2 290 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 36,380.82 28.95 3.58 87 1,049,768 FIRST ALUMINIUM NIGERIA PLC 886.35 0.42 -4.55 2 106,000 MEYER PLC. 361.24 0.68 - 0 0 PAINTS AND COATINGS MANUFACTURES PLC 467.82 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,626.50 2.05 - 2 7,439 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 110 1,228,090 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,765.28 3.14 4.67 8 295,350 8 295,350 PACKAGING/CONTAINERS BETA GLASS PLC. 43,672.55 87.35 - 2 755 GREIF NIGERIA PLC 388.02 9.10 - 0 0 2 755 120 1,524,195 CHEMICALS B.O.C. GASES PLC. 1,843.96 4.43 - 1 50 1 50 METALS ALUMINIUM EXTRUSION IND. PLC. 2,023.60 9.20 - 6 952 6 952 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 2 200,000 2 200,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 2 100,000 2 100,000 11 301,002 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,565.68 0.25 4.17 14 478,917 14 478,917 INTEGRATED OIL AND GAS SERVICES OANDO PLC 83,290.46 6.70 9.84 119 3,443,271 119 3,443,271 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 59,858.81 166.00 - 26 18,601 CONOIL PLC 22,067.68 31.80 - 27 38,374 9,024.68 6.92 4.22 57 1,334,860 ETERNA PLC. FORTE OIL PLC. 46,238.08 35.50 - 99 474,091 MRS OIL NIGERIA PLC. 8,699.11 34.25 - 11 3,057 TOTAL NIGERIA PLC. 65,629.57 193.30 -4.31 47 64,444 267 1,933,427 400 5,855,615 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 20,866.39 2.14 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 564.65 0.48 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,536.98 6.00 - 2 1,440 TRANS-NATIONWIDE EXPRESS PLC. 384.45 0.82 - 0 0 2 1,440 HOSPITALITY TANTALIZERS PLC 1,156.19 0.36 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,878.66 3.15 - 2 3,000 IKEJA HOTEL PLC 5,238.57 2.52 0.40 23 1,253,659 7,862.53 3.50 - 12 2,200 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 56,623.01 7.45 - 1 3 38 1,258,862 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,760.00 0.48 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0

Wednesday 07 June 2018

BUSINESS DAY

SHIPPING

C002D5556

LOGISTICS

Wednesday 06 June 2018

MARITIME e-COMMERCE

Nigeria’s seaports still struggle with clearing bottlenecks amid Executive Order …As NPA shows strong commitment to enforcing compliance Stories by UZOAMAKA ANAGOR-EWUZIE

ne year into the implementation of the P re s i d e n t i a l Order on Ease of Doing Business, the nation’s seaports still struggle with cargo clearing bottlenecks, which hinder timely delivery of consignments to importers’ warehouses. The development has been attributed to the failure of some government agencies involved in cargo clearance at the ports, to realign their operations into complying with the stipulations and tenets of the Presidential Order on Ease of Doing Business, issued by the office of the vice President Yemi Osinbajo in 2017. It is expected that the effective implementation of the order will lead to decline in cost of doing business at the ports as importers save the cost incurred on import and export cargoes in form of demurrage payment to shipping companies and rent payment to terminal operators for delayed cargo clearance. BusinessDay understands that apart from the failure of some government agencies to comply with the order, the poor and dilapidated portions of road infrastructure

L-R: Muhammad Uba Kuka, new commissioner of police, Ports Authority Police Command (Western); Hadiza Bala Usman, managing director of Nigerian Ports Authority (NPA) and Mohammed Anas, general manager, security (NPA), during the CP’s courtesy call to the MD at the NPA’s Corporate Headquarters in Marina, Lagos. Photo by NPA Media

leading to the seaports and the extortion of importers and their agents by officers of the Nigeria Customs Service (NCS), also get in the way of Ease of Doing Business at the ports. Also, the non-existence of multimodal transport system, which if in existence, would have seen the seaports effectively connected to alternative transportation modes like rail and inland waters, and the multiple checking points created by Customs as well as extortion by officers of Marine Police, impede the gains of the Executive Order. Listing reasons the Nigerian ports are yet to enjoy

the benefits of the Executive Order, Kayode Farinto, vice president of the Association of Nigerian Licensed Customs Agents (ANCLA), pointed out that NCS has failed to conform with the order on Ease of Doing Business by imposing double examination of containers; extortion of agents; arrest and re-arrest of containers and querying the valuation of already released consignment by men of Federal Operations Units (FOU) of Customs. Farinto also blamed Federal Government policy inconsistent and the bottlenecks created by some shipping companies while cargo

clearance, for the failure of the seaports to reap the benefits of the Executive Order on Ease of Doing Business. “The Comptroller General of Customs, Hameed Ali is not bigger than Nigeria, he and his men cannot continue to flout the Executive Order and actions not taken to address that. The Inspector General of Police should also come to the port and see how the officers of Marine Police left their statutory functions of securing life and property at the ports, to obtaining manifest from shipping companies in order to intercept containers so that agents will come to

them for settlement, where as much as N150,000 is paid per containers,” Farinto alleged in a statement issued at the weekend. He also identified the need for the NPA management to ensure that officials of the Nigerian Agricultural Quarantine are prevented from entering the ports. He however appealed to the NPA to ensure that the newly constructed temporary Truck Park at Tin-Can Island Port (TCIP), is put to immediate use. While calling on the Federal Government to declare state of emergency, Farinto stated that Nigeria needs not to pretend that all is well when there is total system collapse in the maritime industry. On its part, the Nigerian Ports Authority (NPA) has threatened to seek the intervention of the Vice President Yemi Osinbajo to handle the high level of non-compliance to the Presidential Order on the Ease of Doing Business at the nation’s seaports by some government agencies. This is because the office of the Vice President oversees the Presidential Enabling Business Environment Council (PEBEC), which issued the Presidential Order, and also streamlined the activities of all agencies in the seaport in order to achieve the 48-hour

cargo clearance. In a statement issued at the weekend, Hadiza Bala Usman, managing director of the NPA, in reaction to the complaints by some stakeholders that the level of compliance to the Presidential Order by some government agencies, one year after the order was issued, has left much to be desired, issued the . Receiving a delegation of the Association of Nigerian Licensed Customs Agent (ANLCA) in her office at the weekend, Usman said that the way some government agents flout the order has limited its positive impact and the Federal Government needs to know those flouting the rules. While assuring that the Authority would continue to fulfill its own part of the order, Usman stated that the authority has the limitation of compelling other agencies to do what they are supposed to do under the presidential directives. Reacting to the complain on the incessant cases of multiple checks on cargoes exiting the ports by officers of the Marine Police Command, Usman promised that she would report the matter to the Inspector General of Police for necessary action especially as regards the alleged cases of extortion.

Lloyd recognises APM Terminals for investing in port infrastructure devt

n recognition of its outstanding investment in port infrastructure development, which drives economic and social change in the Americas and improves surrounding environments, Lloyd’s List has given APM Terminals the ‘Port Infrastructure Development of the Year’ award. APM Terminals, which is one of the leading terminal operators in Nigeria and owed terminals in different countries of the world, received the award last week at the 2018 Lloyd’s List Americas Awards. In 2017, APM Terminals made substantial infrastructure investments throughout the Americas, which helped support trade growth, workplace safety

and discharging of larger vessels. Before the award, the judges were said to have looked at proven examples of innovation, efficiency and profitability of infrastructural investments. A statement issued by the company stated that special attention was given to projects that improve the living standards of local populations through access to employment opportunities, business opportunities and trade. The statement further stated that in April 2017, APM Terminals opened the most advanced container terminal in Latin America, APM Terminals Lázaro Cárdenas, a semi-automated deep-water facility that

represents an investment of $900 million, with an annual throughput capacity of 1.2 million Twenty-foot Equivalent Units (TEUs). The terminal, which just marked one year anniversary in April 2018, has a phase I of the construction that included 750 meters of quay, which can accommodate two 350-metre vessels of up to 15,000 TEU capacities simultaneously. The terminal is equipped with five Super-Post Panamax Cranes with a 23-container reach and on-dock rail access. It is directly linked to the national rail systems of Mexico and the USA for efficient and environmentally friendly intermodal inland container movements. The terminal

handled 345,000 TEUs in 2017. “This was part of more than $1 billion worth of investment in the Americas in 2017, which will continue to support local economies and international trade for many years to come,” said Mogens Larson, head, APM Terminals Latin America Portfolio. He said: “Our investment in the Americas has not only made these terminals some of the most environmental friendly in the world, but also the most efficient.” In June, APM Terminals Mobile, Alabama also completed a 20-acre expansion, and took delivery of two new Super Post-Panamax STS cranes. The cranes represent an investment of $13

million each and can accommodate vessels of up to 14,000 TEU capacities. The completion of the $47.5 million Phase II project has increased APM Terminals Mobile’s annual throughput capacity to 500,000 TEUs, and has been instrumental in the selection of Alabama by the Wal-Mart Corporation for the construction of a new regional distribution center, 15 miles from the port which will open this year. The terminal handled 313,000 TEUs in 2017. In Callao, APM Terminals took delivery of $10 million worth of new general cargo handling equipment at Peru’s busiest port, which handles 70 percent of all Peru’s general cargo

shipments. The first equipment delivery, in June 2017 included eight scoops for dry bulk cargo unloading; six hydraulic hoppers; three excavators; two front loaders; six skit steers and 10 forklifts. The second delivery included three Eco Hoppers, the first of their kind in Peru, which will increase productivity, and enable the handling of very dusty products in an environmentally sustainable manner. “Able to capture and extract the dust generated during cargo handling, the Eco Hoppers also provide a safe and clean work environment. The facility handled 963,000 TEUs in 2017, along with 5.8 million metric tons of bulk cargo.”

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I WEDNESDAY 06 JUNE 2018

Opinion

Sliding into despotism OPEYEMI AGBAJE opeyemiagbaje@rtcadvisory.com

he indicators of Nigeria’s slide towards dictatorship, despotism and anarchy are rising by the day and living in Nigeria is increasingly becoming hellish, short and brutish. A seventeenth century state of nature in which an ethnic Jihadist militia, believing god has granted them ownership rights over lands occupied by other people from time immemorial, proceeds to kill men, women and children, pillaging and destroying communities, raping and abducting women; removing fetuses from pregnant women’s wombs; invading Churches and spilling the blood of priests on the altar; burning homes and occupying territory, while the government of the day first ignores the carnage; then invents excuse after excuse on behalf of the murderers; next pressures communities and state governments to yield

land to the rampaging militia; and then goes outside the country to proclaim that the killings are being carried out by foreign mercenaries, contradicting all its earlier pronouncements. This in summary is how the government of President Muhammadu Buhari has responded to the activities of Buhari’s rampaging kinsmen, the so-called Fulani herdsmen. It is clear that there are only two plausible explanations left-complicity (or worse-instigation, encouragement and support) or incompetence, andsome may suggest both! When a country’s leader travels to another nation to visit that other nation’s leader, especially one who proudly proclaims his country’s interest come first; and excuses the large scale murder of his own citizens within his country, on the basis that the killers were foreign mercenaries, what he really does is forfeit his claim to leadership! The first duty of sovereign leaders surely is to protect the lives, property and well-being of their citizens. As the 2019 elections draw nearer, we now see an additional pattern-Senator Shehu Sani, who is engaged in a

running battle with his state governor, the tempestuous Nasir El-Rufai was suddenly said to have been named by some arrested criminals in some grievous offences; the same sequence has played out in respect of other regime “enemies” particularly in the National Assembly-Senators Isa Misau, Dino Melaye and now the Senate President himself, Bukola Saraki. The developments in respect of Melaye and Saraki were particularly scary! I do not defend the individual Senators on any specific allegations but surely the pattern we are observing suggests targeting of senior members of the legislature by the Inspector General of Police (IGP) Ibrahim Kpotum Idris on behalf of the Buhari presidency. It appears clear the intent was to incapacitate Dino Melaye while a recall effort was sponsored against him by his state governor Yahaya Bello; the matter with Saraki is more blatant, shocking and disconcerting-the IGP had refused several invitations from the Senate to discuss the prevailing insecurity in the land. The Senate had taken the trouble of tabulating all the killings in Nigeria in 2018,

running into thousands, but the IGP shunned the Senate sending subordinate officers to stand in for him. Instead the IGP then invites the Senate President to answer for charges of armed robbery in Offa, Kwara State by his alleged political thugs. I do not condone the keeping and/or arming of political thugs and indeed that practice is one of the major factors behind our failing political culture, but I certainly do not believe Senator Saraki is guilty of armed robbery! Can anyone imagine the damage to our national reputation and institutions as our Senate is so dragged into the mud? Reports indicate that both the Senate President and Speaker of the House of Representatives have received notifications from the Department of State Security and Police that their security details from both agencies were being significantly reduced! While other African countries are showing signs of a renaissance, Nigeria’s leadership seems focused entirely on a narrow ethnic and religious mission of re-enacting, or more appropriately in their minds, completing a 17th century Jihad and consolidating a sectarian and tribal hegemo-

ny over 21st century Nigeria. The mandate for changing Nigeria into a modern democratic and progressive nation, admittedly granted by naïve, deceivedor delusional Nigerian voters under false pretenses has been shunned in favour of nepotism, tribalism, hegemony and continued corruption, as long the corrupt person is “on our side” rather than the opposition. While Kenya under Uhuru Kenyatta seems poised for a new era, after achieving an unprecedented national reconciliation and launching a real battle against corruption; Nana Akuffo-Addo inspires hope of an intelligent and clear-thinking Ghanaian government ready to challenge African stereotypes of poverty and dependency; and my long term hero, Cyril Ramaphosa taking power in South-Africa and sparking a new African consciousness of government accountability and popular democracy, the conversation in Nigeria is about herdsmen killing thousands, accusations of murder and armed robbery against Senators and a leadership that cannot articulate an agenda for development but instead embraces ethnic, communal

and religious conquest! What a squandered opportunity! What lack of vision!!! In 2015, many Nigerians took our economic and political progress for granted when they voted for Muhammadu Buhari. His antecedents as a military dictator who had scant regard for democracy, the rule of law and fundamental human rights were well-known. His limitations in economic policy and management were also not hidden from anyone who paid attention to Nigeria’s history. Buhari however proclaimed himself a “reformed democrat” and many Nigerians chose to believe him. Three years into his tenure, Buhari has praised the late despot, General Sani Abacha who murdered his opponents and stole billions of dollars from the national coffers; and seems to be slipping fully into a military mindset determined to intimidate and subdue the National Assembly and the judiciary, including the Supreme Court. Nigerians and the international community must firmly discourage Buhari from this path, or else our democracy will be imperiled. We can’t afford to return to the days of despotism and dictatorship.

Listening to the East II

•Healing the rift, and implementing Soludo’s Awka exposition CHIDO NWAKANMA Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@gmail.com.

hat to do about the memories of Biafra brought to the fore, once again, by the current rift in Igboland. The gulf between citizens and the elected leadership and elders widened on May 30, 2018, as 80 percent of the citizens ignored the chiefs of state to sit at home. They insisted on mourning our departed compatriots, across many instances of loss. Only our brothers in Ebonyi State out of the five states did not participate, for whatever reasons. As stated last week, the SouthEast should place primacy on the internal issues before it rather than the external. I draw attention once

more to the need to heal this breach. It is “urgent and important”, as stated in the Time Management protocol. The fundamental disagreement between the youths (and even the larger citizenry) and the leadership of Igboland creates many complications. It is about BiafraExit or NigRemain. Indeed, there are three views. Restructure Nigeria and move for a sixyear single tenure presidency with a vice president from each region other than that of the President, as canvassed in the Awka Declaration of Ohanaeze Ndigbo. IPOB and MASSOB state that Biafra is the only solution. Then the Igbo should wait, support the Buhari presidency and pluck the low-hanging fruit of the presidency by rotation in 2023, as articulated by our brothers in APC. IPOB dismisses South East governors and elders as traitors and vassals of the ruling Hausa-Fulani oligarchy. The Governors and elders think the youth suffer from combative ignorance. Dissonance and heavy channel noise impede communication. Playing the ostrich on Biafra would no longer suffice for the South East. Nor would

romanticisation that includes uncontrolled sentiments and egbe onu(verbal fireworks) serve the purpose. The old aphorism about discretion and valour applies here, and the South East must be strategic. Force and the appeal to authority as the governors and chiefs of state have attempted would not work. It mimics the incendiary rhetoric of the Independent Peoples of Biafra (IPOB). I am on record as having condemned this approach (https://www. businessdayonline.com/ communication-failureheating-nigeria-biafra/). To its credit, IPOB forced on the agenda restructuring as an essential conversation for all Nigeria. They then went overboard, spewing hubris and hate. The Governors lost the plot when they issued commandments to citizens against the observance of the Igbo Remembrance Day. Their message suffered from being read alongside the call of the Arewa Consultative Forum on the Governors of the South East to rein in the citizens. They lost touch with the Igbo spirit. From the slave trade to date, the Igbo spirit is free, inde-

pendent but communal and untrammelled. You reason with and persuade the Igbo spirit. You do not frighten it into obeisance. It is critical to ensure there is no descent to a situation of two sovereigns in the South East. Elected officials should ensure they do not become Warrant Chiefs again, holders of titular offices with no real legitimacy over the people. It is the clear and present danger. A third party must come in to bring both parties together. The political, social and economic direction of Ala Igbo is at stake. Biafra is the elephant in the room. Unfortunately, the youth similarly distrust Ohanaeze Ndigbo. Anyone ready to serve as bridge builder? World Igbo Summit Group? Nzuko Umunna? Aka Ikenga? South East Society of Professionals? The Awka Declaration provides a plank for the South East to showcase the integrity of its affirmations and its willingness to walk its talk. Ndigbo call for citizenship by residency. Whoever has lived in a state for a minimum of ten years should qualify to be treated as an indigene of that state.

The South East states should lead the implementation of citizenship by residency. Anyone from any of the South East states who has lived in another South East state should obtain a certificate of citizenship from the Local Government or the State Government where he lives. My cousin from Olokoro, Abia State has resided in Onitsha, Anambra State for 32 years. He qualifies. The South East states should put modalities in place for the implementation of that aspect of the Awka Declaration for itself and a step towards regional integration. It would declare to the rest of Nigeria that the region is serious and mean what they say about the imperative of restructuring. Note that citizenship-byresidency is a double-edged sword for Ndigbo. Because Ndigbo are all over Nigeria, other groups may miscue this decision as Igbo seeking to take advantage of their migratory nature. The paradox is that the South East would suffer a net loss with the implementation of the scheme as it would lose more citizens to the rest of Nigeria. The voter records already show this, as people from the South

East register in several other states outside of their states of origin. Hence the reduced numbers for the region in the voters count. With due respect to the eggheads who canvassed the idea, ten years is too short. A paradigm-shift such as this may need a longer residency requirement such as 25 years. In a quarter of a century, commonly accepted as a generation, a citizen would establish enough roots to qualify for indigeneship indeed. Prof Charles Chukwuma Soludo was the spokesman for the Awka Declaration of May 2018. Soludo also canvassed what I call the Awka Exposition in 2017 as he made a case for the re-election of Chief Willie Obiano for a second term in the Governor’s Office of Anambra State. The Awka Exposition deserves examination, contemplation and action by the Igbo nation. First, Soludo characterises the Igbo as a global tribe. What are the implications of this designation for the South East? What are the other internal issues that Ndigbo should be tackling at this period? We would continue listening to the South East some more. Next week.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08116759801, 08082496194. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

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Nigeria trails peers as it consumes 1kg per capita of LPG Page 5 L-R: Charles Atiomo, Territorial sales manager, Phillipe Torres, Total Nigeria Plc; Adedeji Kola, managing director; maintenance supervisor, and Ehimen Joseph, marketing division territorial training manager (West), during the company’s Top Service Campaign in Lagos.

finance people appointments

US sanctions on Iran: The unfolding scenario FRANK UZUEGBUNAM

Diplomats visit NLNG Plant Page 6

OPEC weekly basket price DAY

Debrief

PRICE

1/6/18

74.02

25/5/18

76.26

18/5/18

75.2

11/5/18

73.5

4/5/18

70.75 Source: OPEC

he reality of the renewed US sanctions on Iran is beginning to unfold as the clock ticks for the 180-day period during which the wind down of crude oil transactions with Iran would happen. President Trump had earlier in May ended the United States’ participation in the Joint Comprehensive Plan of Action (JCPOA), better known as the “Iran nuclear deal” that had lifted various sanctions on Iran. Though other parties in the JCPOA, particularly the European Union and the United Nations, have not announced plans to join the United States in reimposing sanctions on Iran, the

first sign that the threat may be deterring buyers is the slight decline of Iran’s crude oil exports in May, according to estimates from Geneva-based Petro-Logistics, a leading tanker-tracking company. Iran exported 2.6 million barrels per day (bpd) in April, a record since the lifting of international sanctions in January 2016. However, shipping data suggests the country’s crude exports have dropped to around 2.5 million bpd in May, a fall of about 100,000 bpd from April. “Exports are down by more than 100,000 barrels per day (bpd) from the very high levels seen in April, but there is no sign of a mass exodus at this time,” Daniel Gerber, chief executive of Petro-Logistics, told Reuters. Iran has turned to OPEC for

succor. Bijan Zanganeh, Iran’s oil minister, wants a separate agenda at the next OPEC meeting, in Vienna on June 22-23, to discuss support for sanctions-hit Iran and outlined the case in a letter to Suhail al-Mazrouei, OPEC President and UAE Oil Minister. Zanganeh noted that the agenda should be titled “support by the OPEC ministerial meeting of members who go under illegal, unilateral and extraterritorial sanctions.” Thus far, the easing of curbs on outside investment in Iran’s oil and gas and petrochemicals sectors, had generated significant interest from multinationals. GE will end sales of oil and natural gas equipment in Iran later this year. GE had received contracts from Iran for tens of millions of dollars for oil and gas

equipment since 2017. For Iran, the withdrawal is a problem because the gear and equipment are crucial to maintaining and growing oil and gas production. Total is also putting a hold on its South Pars phase 11 development. The French oil giant has spent a little under $100 million on South Pars so far out of a potential $2 billion budget for phase one of the project, which also involves China’s CNPC and Iranian company Petropars. Two Indian banks have asked exporters to complete their financial transactions with Iran by August according to the country’s main exporters’ organisation and bank letters seen by Reuters. India and Iran have long-standing political and commercial ties, but New Delhi has been careful to not fall foul of US sanctions on Iran.

02 BUSINESS DAY WEST AFRICA Outlook West Africa: WAF crude oil grades tumble amid stronger freight, cheap US barrels

he ever-widening differential between Brent and WTI, coupled with a sharp jump in freight costs over the last several weeks has put pressure on arbitrage opportunities for West African crude oil to Asia. The pressure has been most evident in medium and heavy sweet crude markets which have seen values for much of the Angolan July program lower than June as volume has struggled to clear to Asia with the same degree of alacrity as in recent months. Only a handful of Angolan cargoes were taken as part of the first round of July trading cycle tenders to Asian refiners last week, market sources said, with many buyers taking large volumes of US crude instead. Taiwanese refiner CPC, usually a reliable buyer of West African volume, took eight million barrels

of WTI Midland’s crude in lieu of any West African for July delivery, trading sources said. “The whole West African market is changing a lot because of the growth in US oil,” a crude trader said. “Plus, you have Brazilian production going up, and a lot of those medium cargoes like Lula are

getting shipped to China at very cheap levels, which will really curb the WAF flow to Asia.” Brent’s persistent strength relative to WTI as well as Dubai, has meant arbitrage opportunities for Brent-pricing crude grades in the Atlantic Basin have thinned as they have had to compete with cheaper

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barrels from Brazil and the US for Asian refining demand. In addition to the relative value of West African barrels versus competing grades loading in the US and Latin America, freight costs between West African and China have started to push higher, further narrowing the arbitrage window. VLCC prices reached a near six-month high in West Africa recently. The WAF-China VLCC route, basis 260,000 mt, was assessed at $12.71/mt, its highest level since early December. Prices in the Atlantic have been pushing up because there has been a busy June 10-20 loading window in the Persian Gulf, which was holding vessels from ballasting back to the Atlantic, sources said. Other long-haul routes out of the Atlantic may also rise in line with West Africa, and the Brazil-East route may jump.

Senegal: Senegal’s oil can break even at $35 per barrel

here is a strategic interest emerging in oil from offshore Senegal, where a project can break even at $35 per barrel, Nic Limb, chairman of developer FAR Ltd. said. Limb said during the company’s annual general meeting the project offshore Senegal could break even at $35 per barrel. The price for Brent crude oil, the global benchmark, was around $76 per barrel. “Clearly the oil price is in recovery mode and we are seeing a lot of strategic interest in these barrels,”

he said. FAR is an Australian company, but has West African oil basins at the core of its portfolio. The company and its joint venture partners in March

completed a geotechnical study of a 2,900 square mile permit area off the coast of Senegal that includes the flagship SNE oil discovery. The results revealed another 198 million

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barrels to the estimated 641 million barrels in the best estimate scenario of contingent reserves. With 11 successful wells drilled to date, FAR Managing Director Cath Norman said the revision is a testament to the “fantastic opportunity” offshore Senegal. Acreage in neighboring Gambia, meanwhile, could be similar to SNE. The joint venture partners in early 2018 agreed on a development concept that includes the use of a floating production and storage offtake vessel for SNE development.

Kenya: Kenya closer to building an oil export pipeline

enya took a step toward building an export pipeline from its oil fields to the port city of Lamu with the award of an early-phase design contract, Wood said. Oil and gas engineering services company, Wood, said it was awarded the initial phase of a front-end engineering design contract to help build momentum behind a proposed pipeline. “The proposed pipeline will be used to export waxy crude oil from oil field developments in the South Lokichar basin to Lamu port on Kenya’s coast,” the company’s statement read. A third-party review found reserves in the South Lokichar basin of an estimated gross of 766 million barrels of oil, a 24 percent increase from earlier estimates. The contract was awarded by the Kenyan

subsidiary of Tullow Oil. Tullow said earlier this year it was busy reviewing all of the data from the South Lokichar basin and planned to outline a development plan as early as this year. In January, Manoah Esipisu, a spokesman for Kenyan President Uhuru Kenyatta, said French supermajor Total, a partner in the Lokichar fields, committed to a single pipeline to the port city of Lamu as the only option for exports. A March survey from the Central Bank of Kenya found inflation was on pace to decline and growth trajectories were tracking upward for the year. The bank’s survey revealed “almost unanimous optimism” in the private sector. Tullow in late 2014 came up empty-handed while drilling into frontier basins similar to Lokichar in northern Kenya, despite early optimism.

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ENERGY intelligence

Global LNG: LNG prices climb to highest since February on limited supply

cover their requirements promptly, two trade sources said. “Some traders are caught short in July,” one of the sources, based in Singapore, said. While some companies are offering cargoes through private negotiations, supply of the superchilled fuel is expected to be limited in August amid maintenance at Sakhalin Energy’s offshore gas platforms in Russia and at the Angola LNG project. Indian buyers may be reluctant to buy spot car-

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sian spot liquefied natural gas (LNG) prices has risen to their highest since February as buying interest from China remained firm and as supply is expected to be limited during maintenance in August. Spot prices for July LNG-AS delivery in Asia were at $9.60 per million British thermal units (Btu), gaining 40 cents from the previous week and are at the highest for this time of the year since 2014. Higher oil prices had been deterring some buyers from snapping up cargoes in the spot market in recent weeks but some of them may now need to

BUSINESS DAY

goes at higher prices and could turn to using coal instead, a source familiar with the market said. Demand from China remained firm with some willing to pay $9.70 to $9.80 per million Btu, a trader said. But details of the buyers’ purchase, if any, were not immediately clear. South Koreans are also expected to step up their purchases to meet summer demand, two traders familiar with that market said. Russia’s Novatek has offered a cargo in the spot market at prices above the Platts Japan Korea Marker (JKM) price, a trader said. Argentina’s Enarsa has offered eight cargoes for August and September

and September in a tender that closes on June 12, while Angola LNG has offered a cargo for loading in mid-June, traders said. Japan’s Inpex Corp said that it expects to start gas production from the wellhead for the Ichthys LNG project in Australia within a week or two following the final safety checks. The company said first shipments of liquefied petroleum gas (LPG), condensate, an ultra-light form of crude oil, and LNG would begin by the end of September.

Shell attempts to market some of its natural gas as clean energy

oyal Dutch Shell is attempting to market some of its natural gas as clean energy, packaging it with credits for eco-friendly projects that offset pollution coming from the fuel. The oil giant is offering business customers in Europe a combination of gas and certificates that show emissions are offset with financing for carbon-reduction projects. It is testing markets in Germany, Italy, Spain and Britain to gauge demand for what credits to use, according to David Wells, head of Shell Energy Europe. The move is the latest sign that oil companies are seeking to adapt to tighter environmental rules and the urge by policy makers worldwide to cut greenhouse gases. Natural gas is the cleanest of fossil fuels, though it still produces carbon dioxide blamed for heating the Earth’s atmosphere. By selling pollution offsets with the gas, Shell could “neutralize” the impact of that fuel on the climate. “Most companies are

fairly early in the sustainability journey, so there is a huge amount of interest” from potential customers, Wells said. “The point of transaction may be a little bit further down the track.” Shell is offering its credits as oil companies face increasing shareholder pressure to tackle global warming and recognize the need to shift their business plans toward cleanenergy targets in the 2015

Paris climate deal. Oil and gas products can be offset by selling emission credits, though it is unclear how to account for such transactions because nations have yet to agree on rules under the Paris deal. Shell’s emission-reduction credits will be verified by firms outside the company, Wells said. Shell already “has access” to offsets from the Reducing Emissions from

Deforestation and Forest Degradation program known as REDD+, according to spokeswoman Sally Donaldson. “Deforestation schemes are the most obvious ones,” Wells said. “This is a voluntary offset, so it has to be something that resonates with the customer. That is still a work in progress.” Other oil companies have taken steps to reduce the carbon footprint of their fuels. BP invests in emissionreduction projects worldwide to compensate for emissions in producing lubricants to acids. The program, called Target Neutral, has offset 3 million tons of carbon dioxide since 2006, about the same as taking 1.3 million cars off U.K. roads for a year. Total’s Ecosolutions focuses on improving development, production and marketing of its products. The Paris-based company said in November it had cut 8 MM tons of emissions under the program since 2009. The savings were 1.9 MM tons last year, according to data on the company’s website.

Ghana: Rosneft signs agreement to supply gas to Ghana

ussia’s biggest energy producer, Rosneft, has signed a package of documents to supply natural gas to Ghana National Petroleum Corporation. Rosneft will deliver liquefied natural gas of around 1.7 million mt/year (or 250 million cubic feet/ day) to the port of Tema over 12 years. Rosneft gas supplies will satisfy a quarter of Ghana’s energy demand, strengthen its energy security and rein-

force the country’s position as the key LNG hub in the region. “The signed documents open a new stage in the development of cooperation between Russia and Ghana,” Igor Sechin, Rosneft Chief Executive Officer said. “Rosneft is capable of meeting this growing Ghana demand including also through LNG and natural gas supplies. Further, the documents open up wide exploration, production and trading possibilities for

the company.” Rosneft and GNPC also signed a framework cooperation agreement that envisages a joint study of high-priority directions of mutually beneficial cooperation in the development of oil and gas fields, oil and oil product supplies. Rosneft and Oranto Petroleum Limited in Nigeria also signed a memorandum of understanding on potential cooperation in the implementation of oil and gas projects in Africa.

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S/Africa: South Africa to open bidding round for green energy contracts in November

dent

outh Africa’s next round of bids for renewable energy agreements with indepenpower producers

will be begin in November and could unlock investment worth up to 50 billion rand ($3.95 billion), the energy minister said. Renewable energy

contracts worth 56 billion rand were signed in April, the first major investment deal under President Cyril Ramaphosa who has promised to kick-start

economic growth since replacing his predecessor Jacob Zuma this year. So far, 27 mostly solar and wind projects that were stalled under Zuma who favoured plans to build new nuclear plants, have been signed, adding 2,305 MW to the grid. Jeff Radebe, Energy Minister said in prepared remarks that liquefied natural was a “very high priority” and that a gas strategy would be released in July or August of this year. Tanzania and Mozambique have huge gas reserves that South Africa is keen to tap as it seeks to reduce reliance on coal, which accounts for over 85 percent of the power generated in Africa’s most industrialised economy. Projects from the new bidding round will bring another 1,800 MW of power to the grid.

Kenya: Solar energy firm signs 40MW power deal with state-run utility

private Kenyan power firm has signed a 20-year deal to sell 40 megawatts it will generate from a solar plant it is building to the East African nation’s state-run dis-

tributor, Khilna Dodhia, its chief executive said. Kenergy Renewables signed the agreement to sell the electricity to Kenya Power at $0.08 per kilowatt hour, Dodhia said.

The company requires a letter of support from the government which will provide clarity on when the plant will become operational, she said. “Once you secure a

PPA (power purchase agreement) that is a sign you are on your way. But lenders require a letter of support from government to green light funding,” she said. Dodhia did not say what the total cost of the project would be, but said they typically cost $60 to $70 million. Kenergy has already invested more than $2 million in the early stages of development for the Rumuruti project in Laikipia County in northern Kenya, Dodhia said. Kenya has an installed generating capacity of 2,370 MW and peak demand of about 1,770 MW. It relies heavily on renewables such as geothermal and hydro power.

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power

India: India secures World Bank $300m loan to accelerate energy efficiency

he Indian government has secured $300 million in World Bank funding to scale up an energy efficiency programme. The World Bank has approved a $220 million loan and $80 million guarantee for use by Energy Efficiency Services Limited (EESL), an energy service company of the Government of India. EESL will direct the funds toward implementation of the India Energy Efficiency Scale-Up programme. The capital will be used to: Create sustainable markets for LED lights and energy efficient ceiling fans, Facilitate well-structured and scalable investments in public street lighting, Develop sustainable business models for emerging market segments such as super-efficient air conditioning and agricultural water pumping systems, Strengthening the insti-

tutional capacity of EESL and Increase private sector participation in energy efficiency, including through private sector energy service companies. EESL has plans to deploy 219 million LED bulbs and tube lights, 5.8 million ceiling fans, and 7.2 million street lights via private sector manufacturers and suppliers. The programme has been designed to increase energy efficiency savings for India to achieve its goal to reduce carbon emissions by between 33 percent and 35 percent from 2005 levels by 2030.

Kenya: French firm signs contract for a 50MW PV plant

oltalia, a Franceheadquarted renewable energy firm has signed a power sale contract for a 50MW solar photovoltaic (PV) power plant in Kenya. Voltalia, a producer and seller of renewable power, will leverage the expertise of its teams based in Portugal for both the construction and operation of the plant. The 50MW solar power plant project is located in Kopere (Nandi county), about 300 km NorthWest of Nairobi. Initiated by Martifer Solar, the development of the project has been finalised by joint teams. The Kopere project benefits from a 20-year

electricity sale contract signed with Kenya Power and Lightning Company (KPLC), the Kenyan electric power utility. It will be effective from the commissioning of the solar power plant. Located at the border of the Nandi and Kisumu counties, the solar plant benefits from an optimal solar irradiation level. The firm noted that it will contribute to reach the Kenyan government target of achieving universal electricity access by 2020.

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Nigeria trails peers as it consumes 1kg per capita of LPG …experts blame poor infrastructure, standards STEPHEN ONYEKWELU

iquefied Petroleum Gas (LPG or domestic cooking gas) has been described as clean source of cooking fuel but Nigeria trails peers in its adoption and use on the back of poor infrastructure and minimal adherence to global safety standards. Africa’s most populous nation consumed little above 1 kilogramme (kg) per capita, which is comparatively less its West African peers, such as, 4kg per capita in Ghana and 9kg per capita in Senegal according to data obtained from the World Liquefied Petroleum Gas Association. With urbanisation, LPG consumption is growing. BusinessDay’s Research and Intel-

ligence Unit’s survey of Lagos local government areas shows, overall, 54 percent of respondents made use of gas, 29 percent used kerosene, 13 percent applied electric cookers and 3 percent relied on charcoal for cooking fuel. Interestingly, Nigeria is a net exporter of domestic cooking gas in Africa, however, poor infrastructure and minimal adherence to global standards in the handling of products is stalling the growth of retail segment of the LPG value chain. “LPG bulk transportation could be very profitable, except for the very bad state of Nigerian roads. There is good reason to believe LPG retail segment could be consistently profitable, but then contingent on many factors, including degree of adherence to globally accepted best safety practices” Nuhu

Yakubu, the president of the Nigeria Liquefied Petroleum Gas Association (NLPGA) said in an interview. Currently, Lagos is the primary LPG distribution point in a country of 923, 768km2 and located in the extreme southern regions of Nigeria. The challenge is that the Lagos port is highly congested and unable to effectively serve as the major distribution point for the entire country. Opening up other distribution points in parts of the country as well as developing transportation modes to other discharge points will lead to the advancement of the domestic LPG (DLPG) market. Nigeria produces over 2 million metric tonnes of LPG per annum (MTPA) but consumes 600, 000 mtpa. LP Gas is the least utilised of the four major

cooking fuels – firewood, kerosene, charcoal and gas. Nigeria LNG Limited, a liquefied natural gas producing company and liquefied natural gas plant on Bonny Island, estimates that Nigeria spends over $1billion per annum on kerosene subsidy and face increasing environmental challenges with continuous deforestation as over 50 percent of households still rely on firewood as cooking fuel. Despite big improvements in the domestic LPG market, work still needs to be done to free up the market because the fundamentals are right: over 180 million people, a potential big middle class and rapid urbanisation. In 2007, LPG road tankers were less than 100, but at the end of third quarter of 2017, it was in excess of 1000. There is

a significant growth across the entire LPG value chain as with the demand also. LPG demand by 2007 was 70,000 metric tons per annum and has risen to over 600,000 metric tons as at end of 2017. On safety in handling the product to minimise incidences of explosions, Yakubu said, “LPG has been on the upward demand and there will be more demand for LPG this year and if something is not done about it proactively as we want to envisage, maybe more occurrences will happen. We want to carry along all the stakeholders in our activities including the press for proper reportage so the public will be aware of what to do or look out for.” Players in LPG subsector are putting measures in place to grow the LPG market to $10 billion in the next five years.

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Brief Total, Sonangol start to address Angolan oil output decline

ngola’s stateowned Sonangol and oil major Total are finally taking steps to stem the chronic two-year decline in the country’s crude oil output. Total and its partners took a final investment decision on Zinia Phase 2 in Block 17, which will be connected to the Pazflor floating production, storage and offloading vessel (FPSO).

The Zinia 2 project will have a production capacity of 40,000 b/d and will feed into the Pazflor export grade, which has seen its exports fall sharply in the past 12 months. The country has seen its output fall by almost 300,000 b/d in the past two years as several of its key oil fields are now in decline, exacerbated by a lack of new upstream investments and incentives. In summer 2018, the 230,000 b/d Kaombo field operated by Total will also come online providing a huge relief to Angola which hopes to maintain current production levels. Total said Angola’s new government had introduced “a favorable fiscal framework for satellite developments”, and other projects similar to Zinia 2 are currently under consideration on Block 17.

Tullow targets more oil blocks in Ghana

ullow says it is interested in taking up stake in the new oil blocks that would be sold by Ghana’s government later this year. The Ghanaian government earlier this year announced that it is working to start auctioning blocks on the country’s new oil fields in the last quarter of this year. It has subsequently established a committee to work out the modalities that would guide the auction process. Paul Mcdade, the Group Chief Executive of Tullow, said the move is meant to consolidate its stake in the oil business in Ghana, adding that it has nothing to do with the perception that Jubi-

lee and TEN may not be holding enough oil deposits to make up for its investments. Mcdade said “both fields are doing well with significant deposits and we are even looking at bringing in another rig to deal with this development” he added.

L-R: Sadeeq Mai-Bornu deputy managing director; H.E Marcelino Ansorena, Ambassador of Spain to Nigeria; Tony Attah, managing director/CEO, NLNG, and H.E Robert Petri, the Ambassador of the Netherlands to Nigeria, during a visit to NLNG Plant…recently.

Diplomats visit NLNG Plant

igeria LNG Limited is taking major steps at sustaining its reputation as a safe reliable and secure supplier of Liquefied Natural Gas (LNG) and Natural Gas Liquids (Condensate and LPG) worldwide. Tony Attah, Managing Director and Chief Executive Officer of the Company, made this disclosure when the company hosted the ambassadors of The Netherlands and Spain at its Plant Complex in Bonny. Sharing the NLNG business model and success rating with the visiting Diplomats, Attah said NLNG has capacity to load and safely deliver over 300 cargoes of its products to buyers around the world

annually from its six-train 22mtpa LNG nameplate production capacity and 5mtpa NGLs production capacity. He said NLNG is currently number 4 amongst the top LNG exporting nations in the world (as at 2016) with 7 percent of the global market share. According to Attah, “Nigeria is largely a gas country with little oil. There are huge economic prospects in investments to utilise the proven and unproven reserves, to solidify the country’s positioning in the international LNG space and also to serve the country’s growing domestic needs for power and industry. “NLNG believes that we can and must do more by convincing Nigeria that the future is Gas. We

need to invest more in Gas Development. If we do nothing, we will drop our global rating in the list of Gas nations.” ”We are working to grow our operations through the expansion of our plant by building Train 7. This will increase our production capacity by about 36 percent from 22MTPA to 30MTPA, boost revenue to the Federal Government and our shareholders; further help to monetize Nigeria’s gas and create about 10,000 jobs at the construction phase.” Attah added. In their separate responses, the Ambassador of the Netherlands, H.E Robert Petri and Ambassador of Spain, H.E Marcelino Ansorena, commended Nigeria LNG for

its outstanding commitment to the development of the gas sector and the host community, Bonny. H.E Robert Petri of the Netherlands commended the entrepreneurial spirit of Nigerians and gave assurance of his country’s support for the development of the private sector to create more business opportunities and jobs in the country. While his counterpart. H.E Marcelino Ansorena of Spain lauded NLNG’s commitment to the development of Bonny Island, as well as the company’s global listing as an Anti-Bribery and Corruption compliant company. He regarded the facility visit as a wonderful opportunity for economic diplomacy between the company and companies in his country.

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marketinsight

Crude retreats on trade concerns as dollar strengthens

il prices retreated after US President Donald Trump’s remarks on trade boosted the dollar, weakening greenback-denominated commodities, including crude. Trump told Canada and the European Union to do more to bring down trade surpluses, a day after hitting the two US allies and Mexico with import tariffs on steel and aluminium. The president’s comments boosted the dollar and sparked selling in dollar-denominated commodities, said John Kilduff, a partner at Again Capital Management. US West Texas Intermediate (WTI) crude futures fell 1 percent, or 64 cents, to $66.40 a barrel. WTI was on track for

a nearly 2.2 percent fall, adding to last week’s near 5 percent decline. Global benchmark Brent fell 51 cents to $77.05 a barrel, a 0.7 percent loss. It was set for a 0.8 percent gain for the

week. WTI’s discount to Brent widened to as much as $11.57 a barrel, largest since 2015, before narrowing to $10.76 a barrel as both grades retreated. Concerns about growing US crude production

and a glut trapped inland due to a lack of pipeline capacity have pressured prices of WTI, doubling its discount to Brent over the course of a month. US crude production rose in March by to 10.47 million bpd, a monthly record, the Energy Information Administration said. On a weekly basis, it rose to 10.8 million bpd last week, close to top producer Russia, the EIA said. Saudi Arabia, effective leader of the Organization of the Petroleum Exporting Countries, and Russia have discussed boosting output to compensate for supply losses from Venezuela and to address concerns about the impact of US sanctions on Iranian output. Any rise in production would be gradual, a Gulf source said.

IEA raises estimate of oil demand impact from electric vehicles

he International Energy Agency has raised its estimates for the impact of electric vehicles on global oil demand, bringing forward a previous forecast by a decade, as EV sales continue to surge. EVs will displace 2.5 million b/d of oil demand by 2030 on the back of increasing sales in all major automotive markets and growing support from government policy initiatives, Pierpaolo Cazzola, the lead author of IEA’s latest Global EV Outlook, said. The estimate forms part of projections in the report, which predicts 125 million EVs will be on the road globally by 2030, compared with 3 million

in 2017, Cazzola said at an event launching the report in Tokyo. “We refer to 2.5 million b/d (of oil demand im-

pact) in the case of 2030,” Cazzola said in reference to the IEA’s Global EV Outlook 2018 report. The IEA said it sees

BUSINESS DAY

OPEC Flakes Iran to exit OPEC deal if US sanctions cut its oil output

ran is taking a firm line with its OPEC counterparts that could threaten the current 24-country crude producer alliance, warning members not to take its market share it risks losing under US sanctions. Bijan Zanganeh, Iran’s oil minister, wants a separate agenda at the next OPEC meeting, in Vienna on June 22-23, to discuss support for sanctions-hit Iran and outlined the case in a letter to OPEC President and UAE Oil Minister Suhail al-Mazrouei. Zanganeh noted that the agenda should be titled “support by the OPEC ministerial meeting of members who go under illegal, unilateral and extraterritorial sanctions.” “If these sanctions lead to lowering the Is-

lamic republic’s share from the oil market, after removal of the imposed, illegal restrictions, Iran will return to its normal production level as quick as possible and will not accept any restriction in this regard,” the letter stated. Iran could lose up to 1 million b/d after US sanctions are re-imposed on OPEC’s third largest producer from November 5, but many analysts suggest the figure will be a lot lower in the early stages as key buyers begin to wind down positions.

Barkindo warns of underinvestment in global oil industry

scope for further supportive policies and battery cost reductions to continue to back “significant growth” in the EV market. “The growth of EVs has largely been driven by government policy, including public procurement programs, financial incentives reducing the cost of purchase of EVs, tightened fuel-economy standards and regulations on the emission of local pollutants,” the IEA said. By 2030, the IEA now estimates there will be 125 million EVs on the road, based on existing and announced policies. That could rise to 228 million EVs if policies become more ambitious to meet global climate goals and other sustainability targets.

he global oil industry should ramp up investment to ensure it can cope with future consumption growth and avoid supply shortages, OPEC SecretaryGeneral Mohammad Barkindo told a conference in Baku. The Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russia last year began withholding 1.8 million barrels per day (bpd) of supplies to tighten the market and prop up prices that in 2016 fell to their lowest in more than a decade at less than $30 a barrel. Both Russia and the OPEC leader Saudi Arabia have spoken about the need for a gradual increase in oil production

as the goal of removing excessive oil stockpiles has now been achieved and the market has broadly been balanced. “The next critical phase before of us in the whole process is to sustain this accomplishment of market rebalancing and gradual recovery in investments and the return of confidence in our industry,” Barkindo said.

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