BusinessDay 06 Mar 2019

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Access, Diamond Bank shareholders approve merger …aggressive loan recovery seen post-completion IHEANYI NWACHUKWU & LOLADE AKINMURELE

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he shareholders of Access Bank plc on Tuesday approved the scheme of merger with Diamond Bank plc.

At a court-ordered meeting held in Lagos, 1,569 shareholders of Access Bank plc who own 14.405 billion units voted. A total Continues on page 38

GROUNDBREAKING CLOSING: Chinua Azubike, CEO, InfraCredit (l), and Olubunmi Peters, executive vice chairman/CEO, North South Power Company, at the guarantee signing meeting for the generation company’s N8.5 billion 15-Year 15.60% Series 1 Guaranteed Fixed Rate Senior Green Infrastructure Bonds Due 2034 (the “Series 1 Green Bonds”) in Abuja recently. The historic bond, which is part of a N50 billion Debt Issuance Programme, is the first certified green corporate bond and the longest tenored (15-year) corporate infrastructure bond in the Nigerian debt capital markets.

NAICOM slams mega fines on insurers I MODESTUS ANAESORONYE

nsurance companies in the country are feeling the heat from the National Insurance Commission (NAICOM) over infractions bordering on failure to comply with local content laws, issuance of blind covers, corporate governance breaches and other unethical practices.

Over local content infractions, blind covers Members have been warned, says NIA

The industry regulator has been imposing heavy fines on insurance companies in a bid, it claims, to sanitise the industry.

Some insurance companies have

been fined as much as N2 billion per infraction depending on the infraction or the currency of the business transaction, especially in oil and gas risks.

The latest fine, to the tune of $8 million (N2.88 billion), was slammed on a company for

Continues on page 38

Retraction BusinessDay reported on Wednesday, April 4, 2018, that Erisco Foods Limited took N2 billion from the Central Bank of Nigeria in two tranches for the purpose of processing fresh tomatoes into triple concentrate. Erisco Foods has come out to state that it did not take money from the CBN for this purpose. On this basis, we express our apologies to Erisco Foods Limited for this report.

Inside Understanding the economy of Nigeria’s 36 states – Kebbi & Sokoto

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Atiku, PDP commence legal firework ‘to reclaim mandate’

Mangosuthu Buthelezi (l), founder, South Africa’s Inkatha Freedom Party/ guest lecturer, presenting a portrait to Olusegun Obasanjo, former Nigerian president/celebrant, and Bola Obasanjo, wife of the former president, at a lecture marking Obasanjo’s 82nd birthday at Olusegun Obasanjo Presidential Library in Abeokuta, Ogun State, yesterday.

…Party protests outcome of presidential election ... We are anxious to meet Atiku in court – Keyamo FELIX OMOHOMHION, OWEDE AGBAJILEKE & JAMES KWEN, Abuja

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he presidential candidate of the People’s Democratic Party (PDP) in the February 23 presidential election, Atiku Abubakar, and his party on Tuesday approached the Appeal Court sitting in Abuja with an exparte motion to challenge the outcome of the election.

The application, which prays for an order compelling the Independent National Electoral Commission (INEC) to allow the candidate and his party to inspect the register and other vital documents used in the conduct of the election, has INEC, President Muhammadu Buhari and the All Progressives Congress (APC) as the respondents.

In the ex-parte motion dated March 4 and filed March 5, Atiku and the PDP prayed the apellate court serving as the presidential election petition tribunal to compel the electoral body to allow their agents to scan and make photocopies of vital documents used in the last presidential election for the purpose of maintaining their petition against the election.

The ex-parte application filed

by Chris Uche (SAN) specifically said the order requested against INEC was for the purpose of “filing and maintaining election petition” before the tribunal.

The ex-parte motion sighted by BusinessDay is supported with a 12-paragraph affidavit deposed to by one Colonel Austin Akobundu (retd.), director of contact and mobilisation, Atiku Abubakar Presidential Campaign Council.

Atiku has cried foul since the electoral umpire declared Buhari winner of the election, alleging the election was massively rigged against him and

vowing to challenge the outcome and process of the election in court.

The PDP on Tuesday also protested the outcome of the February 23 presidential election in Abuja.

Led by Uche Secondus, its national chairman, the PDP members marched from their presidential campaign office in Maitama, Abuja, to INEC headquarters.

The members in their hundreds, who carried placards with various inscriptions, demanded the release of the original election results from the last presidential election.

Secondus maintained that the exercise was characterised by irregularities, including militarisation of the process, manipulation of figures and disruption of the election in PDP strongholds.

He condemned what he called harassment of PDP members by the Economic and Financial Crimes Commission (EFCC) to frustrate them from challenging the election outcome at the tribunal.

Presenting a petition to May Agbamuche-Mbu, INEC national commissioner, legal services, titled ‘Cases of infractions and deliberate violations of the electoral law and guidelines’ and addressed to Mahmood Yakubu, INEC chairman, Secondus kicked against “deliberate non-deployment of the electronic collation system (e-collation) for the elections results” from polling units to the National Collation Centre.

As at the time of the protest, members of the diplomatic community, including Stuart Symington, US Ambassador to Nigeria, Catriona Laing, British High Commissioner to Nigeria, among others, were driving out of INEC’s headquarters where they paid a courtesy call on the electoral body.

•Continues online at www.businessday.ng

CBN bans FX for textile import, plans single-digit lending for sector ... estimates local market at over $10bn annually ONYINYE NWACHUKWU, Abuja

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he Central Bank of Nigeria (CBN) on Tuesday announced a ban on foreign exchange (FX) access for the importation of all forms of textiles as part of measures to revive the ailing sector.

The inclusion of textile brings to 43 the number of items which the apex bank has banned from FX access since 2015 when that policy was first announced.

“Effective immediately, the CBN hereby places the access to FX for all forms of textile materials on the FX restriction list. Accordingly, all FX dealers in Nigeria are to desist from granting any importer of textile material access to FX in the Nigerian foreign exchange market,” Godwin Emefiele, CBN governor, announced at a meeting with textile industry stakeholders in Abuja.

“In addition, we shall adopt a range of other strategies that will make it difficult for recalcitrant

smugglers to operate banking business in Nigeria. The details of those strategies will be unfolded in due course,” the governor said.

Apart from the FX ban, the apex bank would also provide some financial support to textile manufacturers, specifically funds at single-digit interest rate, to refit, retool and upgrade their factories in order to produce high-quality textile materials for the local and export market.

Emefiele said the CBN intervention had become necessary due to immense challenges the sector faces and especially considering that Nigeria currently spends over $4 billion annually on imported textiles and ready-made clothing.

The governor emphasised that with a projected population of over 180 million, the needs of the domestic market are huge and varied, with immense prospects not only for job creation, but also for growth of the domestic textile industry.

•Continues online at www.businessday.ng

Wednesday 06 March 2019

South Africa’s $368bn economy overtakes Nigeria’s $357bn – Rencap ... Naira to end year at NGN395/$ on base case ... Nigeria needs to triple investment to match Ethiopia ... Raise adult literacy from 60% to 80%, double electricity tariff HOPE MOSES-ASHIKE & ENDURANCE OKAFOR

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outh Africa released its Gross Domestic Product (GDP) for the fourth quarter of 2018 on Tuesday, March 5, 2019, with figures showing it has overtaken Nigeria as Africa’s biggest economy in actual dollar terms.

A report by Renaissance Capital, a leading emerging and frontier markets investment bank, showed that South African economy grew to US$368 billion in 2018 in GDP terms compared to Nigeria’s US$357 billion, using the N362 per dollar Nigerian Autonomous Foreign Exchange Fixing (NAFEX) window.

“The market average from January 1 to December 13, 2018, as per Bloomberg – which is ZAR13.2/$ (13.2497/$ if you want to be unnecessarily accurate). So ZAR4871.784bn (up 220bn from the previous year) divided by 13.2497 = $367.69bn,” Charlie Robertson, Rencap’s global chief economist and one of the writers of the report, explained regarding the calculations.

Nigeria’s economy, which is tied to crude oil price, grew sluggishly in

2018. This was despite a higher oil price of $70 per barrel as against the all-year highest of about $52.51 per barrel in 2017, figures by OPEC show.

Nigeria emerged from its first recession in 25 years, largely caused by low oil prices and militant attacks on energy facilities, in the second quarter of 2017. The nation’s GDP grew by 1.93 percent for the full year 2018, compared to its 0.82 percent in rate in 2017, data by the National Bureau of Statistics (NBS) show.

The figure aligns with the projection of the World Bank Group and International Monetary Fund, which had projected that Nigeria’s economy will grow by 1.9 percent in the review year.

According to the report, the 2018 fourth quarter GDP grew by 2.38 percent as against the 1.81 percent recorded in the third quarter. The figure is 1.6 percentage points less than the 3.0 percent projected by the Federal Government in the 2019-2021 medium-term expenditure framework and fiscal strategy paper (MTEF).

Going by the IMF estimate using the mixture of official and NAFEX exchange rate windows, Nigeria’s

GDP stood at US$397 billion in 2018.

“This is complicated in Nigeria’s case because what exchange rate do you use? The 306.9 rate on the CBN website or the NAFEX rate? Or a mix of the two? IMF has chosen a mix of the two for 2018 giving $397bn – we chose the NAFEX rate giving $357bn.

We prefer the market rate because otherwise governments could all decide to make up any rate they like and say that is the ‘right rate’. South Africa could introduce a new exchange rate of ZAR10/$ and say its GDP is $470bn. It is the market rate which is most realistic,” Robertson said.

“With some rapid reforms, a better value currency, accelerating growth – Nigeria could become an overweight again,” he said.

Nigeria makes too little from mineral resources to have this option.

The analysts estimate the average Nigerian (children included) makes just over $0.30 per day from oil revenues, which accounts for over 90 percent of exports. The 2 million bpd is sold at $65/bl, worth $130m, to be divided between 197m people,

Continues on page 38

Wheat gulps N362bn as Nigeria’s agricultural imports remained high in 2018 CALEB OJEWALE

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gricultural productivity in Nigeria has been growing according to rhetoric in the public sphere, but the numbers show what appears to be a different reality, suggesting production is still far from meeting local demands. Importation of agricultural goods, apart from highlighting the dearth in achieving sufficiency in local production, also indicates the huge financial opportunity that currently eludes the agricultural community in Nigeria.

BusinessDay analysis of the quarterly Foreign Trade Statistics released by the National Bureau of Statistics in 2018 has shown that

importation of agricultural produce into the country steadily increased for most part of the year. Of note is wheat importation, which drove agricultural goods importation into Nigeria and accounted for N362.4 billion throughout 2018, representing 42.5 percent of the N852 billion officially captured to have been spent importing agricultural goods.

“If you look at the derivatives of wheat, it is top line food for the younger (upper and lower) middleincome class, and that population is growing,” Ayodeji Balogun, country manager, AFEX Commodities Exchange Limited, told BusinessDay. “The population of people eating pasta will continue to increase, and every sachet of noodles is a part of

wheat. That number will keep growing and wheat is not a crop we have any efficiency in producing,” he said.

The Agriculture Promotion Policy (2016-2020) puts annual demand for wheat in Nigeria at 4.7 million metric tonnes, whereas local production is only 60,000 metric tonnes, leaving a deficit of 4.64 million metric tonnes driven by demand for various types of wheat (white, hard, durum), etc. for bread, biscuits and semovita.

However, according to Oluwasina Olabanji, executive director, Lake Chad Research Institute, Nigerian wheat farmers churned out less than 300,000 metric tonnes at the end of 2017/2018 farming season. Even

Continues on page 38

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ZOLA Electric’s expansion into Nigeria to bridge electricity access deficit DANIEL OBI

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OLA Electric, a renewable energy brand in Africa, with 200,000 installations and more than 1,000,000 daily users has revealed plans to bring clean, affordable, reliable 24-hour power to Nigeria.

According to Bill Lenihan, CEO, in a statement, ZOLA’s entry into the Nigerian market is in line with the mission of the company to use distributed renewable energy solutions to make clean, affordable reliable 24hour power accessible for anyone, anywhere.

“ZOLA Electric is a power solutions pioneer that is now one of the most trusted brands in Africa’s distributed renewable energy market. We have successfully delivered our clean, affordable and reliable power solutions across Tanzania, Rwanda, Côte d’Ivoire, and Ghana.

We’re super excited to make our clean, affordable and

reliable 24 power solutions available to Nigerian homes, business and organisations,” Lenihan said.

ZOLA will expand its distributed smart storage + solar energy model and launch an affordable renewable energy alternative for Nigerians in a bid to deliver clean energy access to over one million households and businesses over the next three years, Lenihan said.

This expansion is focused on improving environmental, health and economic outcomes while driving the transition to clean, renewable energy.

Nigeria is a rapidly expanding economic powerhouse, with population growth tipped to surpass the United States by 2050. It is Africa’s largest economy and its biggest oil producer. Despite this, the Nigerian electrical grid is unable to meet basic energy demands. Power from the grid is unreliable and expensive and this has driven more than 100 mil-

lion Nigerians to rely on diesel generators to power their basic energy needs in their homes or apartments.

“With the current electricity access deficit in Nigeria affecting an estimated 80 million people each day, ZOLA’s expansion will help Nigerian homes and businesses to access reliable 24 hour, with smart storage + solar for a monthly price that is less than the average energy outlay on diesel generators. By combining our PAYGo micro-finance leasing and mobile money payments, ZOLA’s energy access model is financially inclusive and adaptable to energy need and income,” Lenihan said.

He further revealed that the affordability of ZOLA’s systems allows customers to redirect their current energy spend on diesel and power bills towards a smart storage and solar system that they will own in the long-term resulting in significant cost savings for customers.

BDCs reiterate support for CBN’s monetary policy, financial stability efforts HOPE MOSES-ASHIKE

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ureaux De Change Operators (BDCs) have reiterated their support for the Central Bank of Nigeria’s (CBN) financial stability and monetary policy functions.

The CBN’s sound monetary policy decisions have also impacted positively on the banking system and economy, as bank customers now have confidence in the financial system.

Aminu Gwadabe, president, Association of Bureaux De Change Operators of Nigeria (ABCON), said in a statement on Tuesday, that the apex bank under Godwin Emefiele as governor the CBN had achieved financial stability and promoted monetary policy initiatives that had kept the economy on the right paths.

Gwadabe said the monetary policy decisions of the CBN had helped to lower inflation rate, boosted foreign reserves and stabilised the naira.

He said the local currency had also been continuously strengthened by the CBN dollar/Yuan interventions and other policy initiatives.

“The monetary policy decisions, Anchor Borrowers’ Programme and foreign exchange interventions are among the measures that brought inflation down from 17.2 percent in April, 2017 to 11.37 percent in January 2019. The CBN-led Monetary Policy Committee (MPC) has kept bench-

mark interest rate steady at 14 percent for over two years to curb inflation and support the naira,” he said.

He said CBN’s registration of more International Money Transfer Operators

(IMTOs) from 11 to 60 operators had also boosted Diaspora remittance inflows into the economy, adding that the short-term outlook of the Nigerian economy remained good.

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Obaseki inspects road projects in Amagba Community, assures of more development

E L-R: Herbert Wigwe, GMD/CEO, Access Bank plc; Ajoritsedere Josephine Awosika, acting chairman, and Sunday Ekwochi, company secretary, during the court ordered meeting of Access Bank plc in Lagos, yesterday.

Pic by Olawale Amoo

Dangote Cement targets $600m annual export

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resident of Dangote Industries Limited, Aliko Dangote, has restated his Group’s commitment to Nigeria’s economic development through continuous innovation, value creation and investments.

According to Dangote, the Group’s cement export is targeted to rise to $600 million yearly, with the management intensifying efforts at actualising the planned increase.

Declaring that his massive investment in Nigeria’s economy is borne out of his firm belief in her vast economic potential, Dangote said, “By next year, we will be the largest exporter of cement in sub-Saharan Africa with about $600 million worth of cement export to other African countries with limited access to limestone.

“In addition, we also have

… fetes distributors new terminals coming up at Onne and in Lagos, and we are hopeful the congestion at Apapa will soon be behind us helping us meet our export targets.”

Speaking at the 2018 Dangote Cement Distributors’ Award Night held in Lagos, he said the Group was committed to ensuring “Nigeria becomes self-sufficient in all the sectors where it operates, such as cement, agriculture, mining and petroleum.

“Let me reiterate that our continuous efforts to innovate, create value and invest in Nigeria are borne out of our firm belief in the vast economic potential of Nigeria. This has also informed our desire to invest massively in agriculture in some states across the country.

“Our target is to ensure that Nigeria becomes self-

Google trains 180 women in ICT, leadership in FCT

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n ICT expert, Hassanah Ibrahim, on Tuesday in Abuja, said Google, through its “Women Will’’ project, trained 180 women in ICT and leadership skills in the Federal Capital Territory (FCT).

Ibrahim, who is the CEO, Durian Technology Limited and the coordinator for Google Women Will project for FCT, told the News Agency of Nigeria that the “Women Will’’ project, an initiative of Google Business Group, was aimed at bringing more women into technology.

Durian Technologies, one of the fastest growing companies that provide quality IT consulting services and innovative solutions to customers, had been collaborating with Google to drive its programmes in the country, she said.

According to her, Google has many community business groups such as the Google Development Group and the Women Will, under Google business group.

She added that the Women Will initiative was to encourage women to make use of technology in their businesses instead of sitting at home doing nothing.

She explained, “We are supposed to organise workshops and training every three months to enlighten women on leadership skills and technology.

“The Women Will initiative started last year after a summit in Singapore and so far, we have conducted three workshops to educate women and girls about the advantages of using technology to project their businesses.

“And during those workshops, we trained 60 women in different topics in ICT and leadership skills and ways they can make use of their skills in technology to get better at whatever they do.

“Sometimes, we ask the women to bring up topics on issues that bother them and we discuss them and take feedback to Google to find a way to support them.’’

sufficient in all the sectors where we play; cement, agriculture, mining and petroleum. We are leaders in all the sectors where we play, and this demands continuous improvement and partnership with you, our customers.

“We are front-runners in keying into the diversification of the economy by the Government. We have continued to roll out massive agricultural projects across the country. We have started in rice, while plans are underway for dairy farming.

“Our push for backward integration in providing our own raw materials on a massive scale has led to the planned investment of $4.6 billion over the next three years in sugar, rice and dairy production alone. That will eliminate the country’s reliance on imported food, and

the foreign exchange outflow that comes with it.”

Dangote, who commended the award winners for their commitment, noted that the ceremony was to celebrate the Group’s valued customers and distributors for their unflinching partnership in ensuring that Dangote Cement products remained the first choice for construction purposes across the country.

“Tonight, we celebrate excellence for 2018 performance and I am hopeful 2019 customers award ceremony will be an even bigger event. We have worked with our customers to agree on targets, we will also be giving out bonuses and working together to achieve our collective goals and objectives. We value our customers and we will continue to treat them as king, because without them we don’t have a business.

March 9 polls: Observer tasks security agencies on safety of lives, properties JAMES KWEN, Abuja

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he Integrity Friends for Truth and Peace Initiative (TIFPI), observer group, has urged security agencies to give special attention to all red line states during the coming March 9 Governorship and State Houses of Assembly elections to ensure protection of lives and properties.

Livingstone Wechie, executive director and lead observer of the organisation, made the call in Abuja.

TIFPI is an accredited Domestic Observer group for the 2019 general elections in Nigeria that deployed 785 observers in 26 states, including the FCT Abuja for February 23 Presidential and National Assembly elections.

“Relevant security agencies should give special attention to all red line states during the governorship and states Assembly elections.

“This is to ensure that all

violence indicators are arrested to protect and save lives and properties as well as give voters the confidence to freely participate in the process.

“TIFPI advised that in a state like Rivers, where the highest number of deaths was reportedly recorded with continuous post-election killings/violence, that electoral malpractices should be investigated.

“Sponsors and perpetrators of violence be brought to justice beginning with the setting up of a Commission of Inquiry and containment measures taken as we approach the March 9th elections,” he said.

According to him, security agencies should be beef up security networks nationwide to contain any postelection violence.

TIFPI, he said, had raised a red flag over a ground-swell of suspected post-election violence in parts of the country.

do State governor, Godwin Obaseki, on Tuesday, inspected ongoing road projects in Amagba Community, Oredo Local Government Area of the state, with an assurance to provide more infrastructural projects in the area.

Obaseki, who was represented by his Chief of Staff, Taiwo Akerele, expressed satisfaction with the progress of work, noting that the state government was fulfilling its promise of infrastructural development of the state.

“I am impressed with the work. When we came to inspect the West Africa Examination Council (WAEC) Computer-Based-Test Centre in this community, the governor promised to support the host community with road projects to give easy access to the centre.

“This is a government that does not fail in keeping to its promise; in the next two years, the quality of life of people in this area will have improved.”

The governor urged people of the community to cast a vote of confidence on his administration by voting for Osaro Obaze and Chris Okaeben, both candidates of the APC in the March 9 election in the area.

Enogie of Amagba Community, Frank Igbinenikaro, noted that the community had been deprived of good roads in the past, and commended the Governor Obaseki-led administration for putting smiles on their faces with the construction of link roads in the locality.

“We are seeing the handwork of Governor Obaseki in our community. We are pledging continued support for the All Progressives Congress (APC) and we will vote the party’s candidates in the March 9, House of Assembly election.

Meanwhile, the site engineer for the WAEC CBT Road, Paul Nwankolo, said about 10 inter-connecting roads measuring 5km were being constructed, saying the WAEC

Total to buy 10% stake in Arctic LNG 2 project from Russia’s Novatek

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otal has agreed to buy a 10-percent stake in the Arctic LNG 2 project from Russia’s Novatek. This is coming as the French energy group looks to build up its presence in the area to service a fast-growing Asian market.

The companies said on Tuesday that Total would also have the opportunity to buy a 10 to 15 percent direct interest in all Novatek’s future liquefied Natural Gas (LNG) projects on the Yamal and Gydan peninsulas.

Novatek said that, as well as paying for the 10 percent stake, Total would provide

some financing through capital investment for Arctic LNG 2. The Russian company added that it expected preliminary capex for the project to be $20 to $21 billion.

“Arctic LNG 2 fits into our strategy of growing our LNG portfolio through competitive developments based on giant low cost resources primarily destined for the fast growing Asian markets,” said Total’s chairman and chief executive Patrick Pouyanne.

Total said its overall economic interest in the new project would be around 21.6 percent, taking into account its 19.4 percent stake in Novatek.

EFCC frees Atiku’s son-in-law, promises to prosecute him INNOCENT ODOH, Abuja

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abalele Abdullahi, the detained son-in-law of Atiku Abubakar, former Vice President and Presidential candidate of the People’s Democratic Party (PDP), has been freed by the Economic and Financial Crimes Commission (EFCC).

The EFCC’s acting spokesman, Tony Orilade, told BusinessDay that Babalele was released on Tuesday after the anti-graft agency allegedly invited Tanimu Turaki, a senior advocate of Nigeria (SAN) leading the defence team of Atiku to sign a bail document for him.

The Commission had slammed a €150 million money laundering allegation

on Babalele, stressing that he intended to use the hard currency to unduly influence the outcome of many polls taking place in the country.

The PDP had vehemently protested the arrest saying that it was not justified. Atiku had also alleged persecution of family and associates over his intention to challenge the results of the presidential election, which declared President Muhammadu Buhari as the winner, adding that no form of intimidation or harassment would deter him from challenging the results in court.

Orilade told BusinessDay further that Babalele would face prosecution after investigation, adding that the details of the allegations against him would be made public soon.

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Leanness as sign of good health: SMEs in post-election recovery Small Business handbook

Emeka Osuji

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ast week, we likened the general elections in Nigeria, which happens every four years, to a wilderness or desert experience or even a recession; indeed a disaster– some kind of bind that grips everything and everyone, spelling uncertainty everywhere, from business activity to social welfare.

We explained the similarity, which election season in our country shares with a recession. It was evident, from that discussion that SMEs in Nigeria pass through a near-death experience; something akin to a recession or probably worse, when inventories pile up, sales plummet and output shrinks. Disposable income crashes and the almighty consumer spending power vaporises.

We christened this situation Desert, Wilderness or Purgatory experience – some self-mortification and purification processes in which some religious groups indulge.

Booms and burst do not last forever and so do wilderness and purgatory experiences. They all come to an end someday, and those that endured would have their lives back and continue to live. The challenge is that the benefits of a wilderness experience are not automatic. Only those businesses that have the discipline, and who follow through,

will pick up easily after a disaster, and quickly return to profitability. Today, we look at life after political or electioninduced recession, as a resource for the survival of SMEs. Without doubt, Nigerians, and in particular SME operators, cannot wait for the elections to pass this Saturday so they can have their lives back.

Unfortunately, the statistics on the rate at which small businesses reopen their doors after a disaster is a very sad one. As much as 60 percent of them never reopen their doors after major disasters, including fire, flooding, security breaches or serious system compromises. Comparing some of these disasters with the negative consequences of our general elections might appear like putting apples against oranges, they are comparable. The problem is that the bulk of our entrepreneurs are not famous for record-keeping, so they hardly know the massive disasters that have been hitting them ever since.

Beside, when we consider the financial strength of the average SME in Nigeria we know that an “election recession” is a major one and actually something in the family of a tsunami. For our kind of SMEs, an election carries consequences that compare favourably with any other kind of serious disaster. Granted that unlike a regular recession, “election recession”, while destroying jobs, may also create some new ones, especially in the thuggery industry, but the net effect is still a minus for the economy.

At the end of it all, there is a recovery to be achieved by all businesses, after an election in Nigeria.

For SMEs that want to recover quickly, the first thing to do is a proper and comprehensive environmental scan.

Proper diagnosis, they say, is the foundation of any effective medical treatment. It is therefore important that the

operator understands what happened to his business during the layover period. During layovers that occur in the transport field, the vehicle stops and passengers do a few things but they do not move forward along their routes. In the rail travel industry, passengers may disembark to change trains but the time they spend doing this is usually short compared to a layover that occurs in the air travel industry. Here passengers disembark, and sometimes wait for several hours to catch the next plane. So during this election recession layover, many things happened to the small businesses operated by our entrepreneurs.

The primary action, after the disaster therefore, is to review the business in general, and take inventory of what has happened to know the extent of the damage. This process begins with a determination of the status of its staff complement. During recessions, staff are let go and some are “stood off”. The company needs to know how many staff have been disengaged, how many are temporarily laid off and how many of these are available, should the company want them back. Obviously, many would have moved on and it is important to know how they may be reached or replaced if need be.

In a similar fashion, it is necessary to determine how many customers (those to whom the business sells goods and services) survived the disaster, and if they did, what is their capacity to return to regular, albeit, reduced business relationship from this new outset. What about the suppliers (the customers that provide the business with services or raw materials)? How did they fare?

Having solid information about the customers prepares the business to be better able to take orders and deliver timeously.

The next important environmental

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The SMEs that will pick up fast after this “election recession”, are the lean, quick and fleet-footed players; not the fat, twoleft-footed ones

scanning challenge is to review the state of contracts that may have been signed with clients, some of which may have been mutually varied on agreement or suspended. It is necessary to know if there is need for renewals and updating of agreements and contract relationships. This should go hand in hand with equipment review. There may have been modifications in equipment use and the relevant sources of those that are usually hired, needs to be reassured. In the Nigerian situation, advertising and publicity usually receive a boost during elections.

It would be good strategy to see if those bill boards and other advertisement insertions on radio and television that pervaded the landscape, during the campaign periods, could provide leads to new streams of business, both in advertising and publicity in particular and other areas inn general.

There used to be a time when small was beautiful in business. Things have changed and companies are now better off big. Even policy makers tend to encourage companies to expand their girths. This may be easily observed in the financial sector. The Central Bank of Nigeria (CBN) has a history of compelling institutions under its supervision to consolidate, in order to gain financial strength and technical capacity. This helps them to take on big ticket transactions that were hitherto the preserve of foreign banks. It happened during the time of the then Governor of Central Bank, Prof Chukwuma Soludo. Once again, it is happening in the Microfinance Banking Sector.

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr Emeka Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

Letter to the editor ‘Chido Nwakanma’ and the Tinubu Doctrine Dear Sir,

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hido Nwakanma argues in his article, No to Apartheid in Lagos, in BusinessDay of February 28, 2019 that the incidents that took place in significant Igbo residential neighbourhoods during the presidential and National Assembly elections on February 23, this year were executed in pursuance of a Tinubu Doctrine which he defined as an attempt to blackmail the Igbo to support the All Progressives Congress.

He lied. The narrative that defined the context in which the incidents took place did not start with the address to party members by APC National Leader and former Governor of Lagos State, Asiwaju Bola Ahmed Tinubu on Wednesday February 20, 2019.

It started the day the dominant faction of the Igbo political organization, Ohaneze Ndigbo formed an alliance with the Peoples Democratic Party to deliver the votes of the Ndigbo to the party at the Nike Lake Resort on November 14, 2018. This was forcefully articulated again on January 24, 2019 when its president-general, Dr. Nnia Nwodo pronounced the Nwodo Doctrine as follows: “The nomination of our son, Peter Obi as the Vice Presidential Candidate has given Ndigbo an opportunity for inclusivity. Ndigbo must seize the moment”.

The second excuse for handing over Ohaneze to the PDP was an alleged pledge of the PDP candidate to restructuring. According to Nwodo: “That the presidential candidate of the PDP,

Alhaji Atiku Abubakar has made an avowed commitment to the restructuring of the federation”.

The fallacies in these propositions were quickly exposed by the secretary-general, Uche Okwukwu who contended that Nwodo used Ohaneze to make a deal with his friend, Abubakar rather than to protect the Ndigbo.

Okwukwu argued that it was best to “seize the moment” with a candidate such as Kingsley Moghalu, an Igbo running for the presidency, or at the least, support Muhammadu Buhari, who appointed Igbo such as Ibe Kachikwu and Chris Ngige ministers and whose second term tenure is more viable to provide opportunity for Ndigbo to run for presidency on the APC platform in 2023 than the wild goose chase Nwodo was taking the Ndigbo on by supporting a potentially two-term candidate.

Indeed, APC senatorial candidate in Enugu State, Mrs. Juliet Ibekaku-Nwagu summed it up as follows: “It is now clear that the organization has stopped representing the common interest of Ndigbo and as such ceased to be the mouthpiece of the Igbo nation.”

Allegedly empowered with a 300million pocket money, the Nwodo faction suspended dissentients such as Okwukwu and launched a ferocious campaign of intimidation to force Ndigbo in the heartland and other parts of Nigeria to abandon their individual right, guaranteed by the Nigerian Constitution, to choose candidates of their free will. As Churchil Nnobi has argued, this was unnecessary because Igbo already knew Peter Obi as their kinsman and did not need the

Ohaneze’s coercion to do the right thing.

Nwakanma is active in the Igbo movement.

He knows that the Ohaneze works through the town unions. So he should be aware of the threats issued at such meetings. These include the threat that those who didn’t comply will have to shoulder the burden of taking the corpses of their late relatives’ home and that their shops in markets controlled by Igbo leaders would be shut.

There is no doubt that this hiring of Ohaneze by the PDP posed strategic difficulties to the APC in Lagos State. The party’s precursor, Alliance for Democracy began as a coalition of ethnogeographical forces and civil liberty associations against the annulment of June 12, 1993 election.

At various times, several Igbo groups including Aka Ikenga and Amaka have allied with the party to sustain a positive environment for the promotion of the economic interests of the Ndigbo.

But this ruptured during the Jonathan for President Campaign when traditional allies of the party among the Ndigbo switched camp and made a deal with the PDP which upset the existing power relations and expectations. The party diagnosed this development as the result of inadequate integration of the Ndigbo and other non-Yoruba elements and adjusted appropriately by opening opportunities for “inclusivity” in the party structures and elective offices. in Oshodi-isolo Constituency II, covering Isolo and Ejigbo, this policy led to the sponsorship and election of Ohafia-born Grace Okere as the councilor for Ifoshi ward. In the March

9, 2019 election, the APC is sponsoring Hon. Jude Idimogu from Imo State as its candidate for the House of Assembly. As a nationalist, I played significant roles to make these happen to create a truly cosmopolitan community where love and brotherhood are not undermined by the promotion of tribal bigotry.

The Tinubu doctrine, which Nwakanma quotes copiously and derides as “blackmail” is based on the principle of reciprocity. If indeed, landowning families of Lagos welcome nonYorubas by trading off their lands: if the governments put in place by the party have created the environment that has enabled the exercise of rights and acquisition of privileges; if the Lagos APC has integrated the Ndigbo into its political system by presenting them on its platform, it deserves their support. The Tinubu doctrine demands that the citizens and residents of Lagos of Igbo extraction be allowed to vote according to their conscience, in appreciation of the progressive developments which make Lagos their destination of prosperity and not in fear of the coercive threats and intimidation of the Ohaneze.

It is a doctrine that urges Ohaneze to revert to its socio-cultural status as a common platform for the Ndigbo irrespective of the partisan interests of members and not to be hired to the highest bidder to undermine the political interests of fellow Igbo by its current mercantile leadership.

Kehinde Bamigbetan, is Commissioner for Information and Strategy, Lagos state

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comment

Dapo Akande

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learned so much from my parents by way of counsel and deeds. Many of such, o n e ab s o rb e d su b c o n sciously. It’s quite remarkable just how much seeps in to ultimately mould one’s character, without one being remotely conscious of it. Of course, neither of them was perfect but then who is?

Still, I will remain eternally grateful for the effort they consciously made to shape my outlook, by instilling values and teaching me the things that really matter in life.

They were indeed my inspiration.

With fondness, I remember one of my mum’s idiosyncrasies which seemed so normal to me as a child.

After all, how could I know any different then? It was only many years later I came to have some understanding of the psyche behind this rather odd behaviour. If she mistakenly steps on your foot she will immediately insist you do the same back to her. And you must. It wasn’t a tit for tat sort of thing but it revealed a heart which didn’t believe you should do to others what

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So who won?

Character Matters with Daps

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you wouldn’t want done to you; and a belief that whatever you do, good or bad, will eventually come back to you. So maybe it was a form of penance. It seemed so pointless at the time but looking back now, it was undoubtedly pregnant with meaning. Whatever it was, it came from an acute consciousness of the sensibilities of others and a sense of justice. This brings me to the recently concluded Presidential elections.

But before I go any further, permit to ask here, why should anyone gloat because their candidate won? I honestly don’t get it. My wife is a member of a WhatsApp group where several heated debates took place between the Buharists and the Atikulators; supporters of the two main Presidential contenders. When President Buhari won, his supporters on this group platform, just like some front line APC members too, took to gloating and rubbing the face of Atiku supporters in it. Ignoring completely the president’s plea for his party members to remain magnanimous in victory. Kudos to PMB here, I must say.

If we’re to look at it logically though, it makes no sense whatsoever for anyone to gloat and this is why: 99% of us are after the same thing; good governance, a virile and vibrant economy that puts three square meals on our table and a dramatically enhanced standard of living; adequate secu-

rity of life and property, a sense of belonging, good roads, a good health care system, equity and equitable distribution of the commonwealth, justice and all that naturally accompanies good governance. The fact that your candidate won doesn’t automatically translate into the materialization of these collective desires of ours.

If two years down the line, we all begin to enjoy the dividends of a good government, ehen, then you can thank God for directing you to play a part in putting it into office.

Not gloat! Why? Because by then, even those who didn’t vote for him would be thanking God for a performing leader, meaning everyone ultimately wins, not just those who voted for that candidate. At the end of the day, most of us want the same thing but of course there are those to whom it may make sense to gloat but they are a tiny minority; those who know whether the government performs or not, they will get what they desire because of their closeness to the powers that be; be it contracts, appointments etc. But they represent a miniscule fraction of the population.

So regarding our elections, who actually won? We’re destined to discover that within the next 4 years, for it’s definitely not a matter of who breast the tape first. The taste of the pudding is always in the eating. Some of you may even be asking yourself, “So who did this chap vote for?” Well, that’s

‘

We’re destined to discover that within the next 4 years, for it’s definitely not a matter of who breast the tape first

for me to know and for you to keep guessing. I will say this though, like most of you out there, I pray the people will win.

My mum, sisi Comfort as she was fondly called by many, was a tremendously principled, industrious, beautiful and wonderful woman who counted amongst those who dominated the textiles trading business in the 1970s and 1980s. She totally epitomised the popular “Warri no dey carry last” idiom as she was of Urhobo and Itshekiri extraction. Sadly, her rise in the business world was cut short very abruptly by a devastating stroke in 1985 at the unusually young age of just 49. We enjoyed another 15 years with her but the feisty, never-say-die sisi Comfort was long gone.

Mrs Comfort Omawumi Akande (née Okonedo), it’s been nineteen years almost to the day that I watched helplessly as you laboured to breathe your last few breaths on that hospital bed. It’s a day I’ll never forget. Though umbilical chords are severed at birth there’s an undeniable umbilical connection between mother and child which remains in tact until the passing of one of them. Continue to rest in peace. And for our dear nation, we will rise again.

Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

Do we forget gold?

The possibilities of rise in Palladium prices: A boost to our commodities market & effect on global change NANCY EZEONUGO & ABISINUOLA DAVID-OLUSA

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n the 9th January 2019, Palladium prices rose by 2% to a record high of $1,337 and has continued to rise to $1,518 by close of trade on the 25th February, 2019, amidst low precious metal prices. Palladium is currently priced higher than gold and platinum which both closed at $1,331.05 and $856 respectively on the 25th February, 2019.

We cannot fail to mention that Palladium is a member of the Platinum Group Metals (PGMs) and the most important commercially. It is critical in the use of Catalytic Converters, a pollution-control device found in cars and trucks. A catalytic converter is an emission control device that converts harmful gases such as hydrocarbons and carbon monoxide to harmless gases by catalyzing a redox reaction. Palladium is also used as a catalyst for bulk chemical production, petroleum refining, computer hard disks and thermocouples, dental restorative materials (silver-palladium alloys), amongst others.

About 80% of palladium demand is from the auto catalyst sector.

Although the record high on the 9th of January, 2019 was merely due to the announcement by a Chinese official stating that the Chinese government is considering policies that would aid the domestic

consumption of United States’ automobiles, we believe that Palladium might just be the next gold. Would this be an opportunity for the Nigerian economy through the Nigerian Commodities Market?

The Commodities Market which is simply a market, a medium for connecting buyers and sellers of commodities. Our focus is however, primarily on promoting the formal or organized market such as commodity exchanges, which provide a formal and more structured mechanism for trading in designated commodities.

It is also believed that such markets provide significant value addition to economies; a reason why countries make concerted efforts to develop them. This opinion was reinforced by Chuck Kowalskiwho observed that “it’s unlikely that the United States would have experienced as much economic growth in the last 100 years as it has without them (commodity exchanges).’’

Stricter pollution regulations around the world has made production of catalytic converters a top priority for car makers. A positive sales outlook for the automotive industry is an indicator of a prospective rise in demand for palladium as there would be a rise in production of catalytic converters.

A quick look into HIS Markit Light Vehicle sales forecast, global light vehicle sales are projected to reach about 110 million vehicles by 2025. From its current 95 million, this is an impressive 1.9% Compound Annual Growth rate (CAGR) in vehicle sales between 2019 – 2025. This estimate rides on the back of strong sales in emerging markets.

“The prospect of significant growth in Chinese palladium loadings has moved closer, because it looks increasingly likely that some cities and provinces will implement” new regulations early, Peter Duncan, the general manager of market research at U.K.-based Matthey, said in the report. “This could happen as early as next year and would result in a double-digit increase in palladium consumption on Chinese cars”. With the rise

in usage by various governments especially the Chinese government, tighter regulations on vehicle pollution which forces car makers to increase the amount of palladium used, amongst other things, have led to increased demand which does not commensurate with the current global supply.

Our take If Palladium has climbed up more than 600% since its 10-year low (the 2008 financial crisis), we are of the view that there is a further upside for this commodity. This strong upward potential may only be dampened by the increase in production of electric cars which may largely not need the metal for its production. However, we may not witness this for another decade or so.

The demand for “Platinum” from investors, as holdings in exchange-traded products collectively surpassed 1.5 million oz. in 2011 since the first Platinum ETF was launched in 2007, following this pattern, investment demand could be a significant surprise factor in driving Palladium prices higher.

We would be open to a structure by the Nigerian Commodities Exchange (“NCX”) where palladium and other metals could be traded to meet investor’s demands and to promote economic growth.

Ezeonugo is a Legal Practitioner and an Investment Banker and David-Olusa is an Investment Banker with Planet Capital Limited.

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Wednesday 06 March 2019

Decline in academic thinking in Nigeria

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nowledge, we all know, is the driver of the modern global economy and is now fundamental to development and growth in any society. It is the human mind that makes possible all advancements, from health and agricultural innovations to efficient public administration and private sector growth. No country or society can truly develop without unleashing the potential of the human mind in forms of knowledge, innovations, technologies and theories.

Theories are the main building blocs of knowledge. A theory, to be sure, is a set of concepts and propositions that provide an orderly way to view phenomena. Its purpose, especially in scientific disciplines, is to guide research to enhance knowledge by support existing knowledge or generating new knowledge. All scientific and technological advances were only possible through the deployment of theories.

A way of knowing the quality of knowledge generated in every society is the number and quality of home-grown theories and conceptual frameworks generated to solve societal problems.

In the hey days of knowledge generation in Nigerian universities, our academics churned out quality theories to help explain complex phenomena in our countries. We cannot but remember the great contribution of the Ibadan school of history, for instance, to the reconstruction and understanding of Nigerian and African history even after the colonialists and western education tried to present the continent as a people without history and culture. We also fondly remember the contributions of great scholars like Billy J. Dudley, Peter Ekeh and Claude Ake to the understanding of Nigerian and African politics and economy. That our country has not deployed these generated knowledge towards solving the many problems of our society says a lot about the towngown disconnect.

Sadly, in recent times and despite the proliferation of universities and so-called academics, there has been a noticeable absence of quality theories coming from the ivory towers. It appears Nigerian academics have completely outsourced the huge task of generating theories to explain events in Nigeria to foreign academics while they busy themselves with debating and applying these foreign generated

theories.

Of course we know why. Our universities in Nigeria are now a caricature of what a university should be. They are now bereft of any serious academic endeavours and our so-called academics are lost in the conversations within their disciplines due to constant strikes, poor funding and continuous watering of standards.

Haven cut themselves off from ‘the conversations’ with their global colleagues, they now create illusory ‘fiefdoms’ in the various universities where they are lords, create their own journals where they ‘converse’ with themselves, assess themselves and award themselves professorships with relish. Meanwhile, the degrees from the universities are almost meaningless.

It wasn’t always like that, but the glory years are long gone and what is left is just a carcass whose miasma pollutes and threatens the health of society. At a time when progressive universities are outlawing any form of sexual or romantic relationships between students and teachers, our universities are centres of sexual harassment, rapes and transactional sex. Pray, how can any meaningful knowledge be learnt and transmitted in such

environment?

We have been deceived all along by the Academic Staff Union of University (ASUU) to think that the major problem of our universities is that of government neglect or insufficient funding. The former Executive Secretary of the NUC captured it more bluntly at the event when he said that the ranking of Nigerian Universities on the global index will remain poor unless the issue of academic integrity is seriously tackled.

True, the entire society, and not just the university system, is out of joint. The university is part of the society and is not immune to influences from the society. But the society must not and cannot dictate the pace for the university.

The University, by nature, is a place for the teaching, acquisition and diffusion of universal knowledge.

It sure depends on society for its sustenance, but more importantly, the society depends on it for fresh and revolutionary ideas and knowledge that drives the progress and development of society.

True academics must rise up the challenge of reclaiming and changing the narratives of Nigerian universities and position them to begin to perform the functions they should perform in the society.

HEAD, HUMAN RESOURCES Adeola Obisesan

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Mechanisation: World moves without Nigeria Nigeria’s dream of feeding its rapidly growing population may never crystallise if farmers fails to adopt mechanisation to steer agricultural revolution in the country, writers JOSEPHINE OKOJIE

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the country, thus making agriculture laborious and giving farmers scanty yields and poverty.

When measured on mechanisation scale in 2003, 16 years ago, Nigeria had only 30,000 tractors and is currently adding 1,000 new ones each year, according to the Agricultural Ministry, which is still not considered sufficient in replacing the aging, worn out, and the ones that are broken down.

On a per capita basis, Nigeria ranks 132nd out of the 188 countries worldwide, measured by FAO and the United Nations (UN) in terms of the number of tractors in the country.

Available statistics show 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 for Africa and other developing countries.

While Iceland with a population of 337,780 has 37.2 tractors per 1,000 people, Nigeria with a population of 190 million has 0.223 tractors per 1,000 people.

This implies that Iceland has almost one tractor for each farmer and 166 times more mechanisation in their farming than Nigeria, Africa’s most populous nation.

Still at the early stage Despite a renewed commitment by government at all levels and the creation of various mechanisation schemes for farmers in the last four years, Nigeria is still at the very early stage of mechanisation.

Even though the country is blessed with arable land, the cultivation of food in Nigeria is generally very labour intensive, particularly with the small holder farmers. The manual

work embarked on by farmers and their families is very strenuous and time consuming.

In Nigeria, a significantly high proportion of farming area is cultivated by hand tools.

The international Food Policy Research Institute (IFPRI) reckons that the country is still in the early stage of agricultural mechanisation.

“Currently, more than 70 percent of farm labour is provided by human power; over 20 percent is provided with draft animal power and less than 10 percent by mechanical power,” Elesa Yakubu, national president, Tractor Owners and Operators Association of Nigeria (TOOAN), told BusinessDay. This is not because the farmers are not interested in using mechanised farming tools but they are faced with some challenges.

Ademola Adefemi, who owns a five hectare of maize and cassava farm

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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 for Africa and other developing countries

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damu Usman is a 45year old farmer in Jigawa State who farms maize, cowpeas and sorghum on 15 hectares of land in Bamaina town in Birnin Kudu Local Government Area.

Despite being a farmer in the 21st century, Usman still makes use of crude farming implements used by his father who is over 90 years old to farm.

Usman wants to use tractors and other farm machines like farmers in other countries, but is limited to do so because modern farm implements are lacking in the community where his farm is located.

He has to travel to Birnin Kudu, the local government area to hire and if eventually he finds a tractor, Usman has to book for it two months earlier than the required date for use or he would be disappointed by the hiring firm.

“I love using tractors for ploughing but most times it is difficult to get them on time because the number of tractors available to farmers in Bamaina town is few and other farmers want to hire them too,” he says.

“The few tractors available are not being given to farmers because government officials prefer keeping them in the local council than leasing them out to farmers.

“Recently, I visited a government office for tractor hiring and I discovered that there were 17 tractors that have not been used. Only two tractors are being leased to farmers and I had to queue for three weeks before I could hire a tractor,” he adds.

Owing to the rigorous process and procedure in hiring a tractor, he resorted in hiring labourers instead, to clear and make ridges manually on his farm.

This is time consuming, as Usman and the hired labourers take an average of a month to till and make the ridges before each planting season commence.

Usman’s situation is similar to what a lot of farmers in Nigeria experience and this has led to low level of mechanised farming in the country.

This has continued to limit the capacity of Nigerian farmers to expand their cultivation areas, perform timely operations and achieve economies of scales.

Similarly, farmers have continued to record scanty yields, as opposed to their counterparts in developed countries who make use of advanced farming machines.

The use of hoes, cutlasses, and in some cases- tool- mounting animals is responsible for poor agric output in

in Ogun State, said that it is difficult for him to hire tractors because of his farm size.

“Each time I go to Abeokuta to hire a tractor to clear my farm, they usually decline my request, saying that my farm size is too small,” he says.

Most of the tractors available for hire in Nigeria are of bigger sizes that are difficult to operate on smaller pieces of land.

Nigeria has over 80 percent of smallholder farmers with less than five hectares of farmland dispersed across the country.

According to experts, this makes it difficult for them as individual farmers to hire tractors except they come together in clusters or associations to hire.

“There are two major challenges in the development of mechanisation in Nigeria; one is the size of the farm and inability of government to give affordable finance to drive mechanisation,” Antti Ritvonen, former country manager of Dizengoff says.

“If you compare the rest of Africa in terms of mechanisation; Nigeria is like half of what is obtainable from average. Nigeria is very far behind and we are in the very early stage of mechanisation,” Ritvonen adds.

The level of mechanisation in Nigerian farming is still very low.

Kenya had 25 tractors per 100 square kilometres of arable land in 2009 while Nigeria has almost seven, according to the most recent data from the World Bank. That compares with an average of 271 machines in the United States, most recent data from World Bank states.

Self-sufficiency Nigeria’s political and economic stability and a push by government at all levels for food self-sufficiency has

made the country more attractive for investments by tractor companies, farmers are yet to get the number of tractors their farms requires.

“Mechanisation is a very critical issue. We cannot feed ourselves w i t h o u t m e c ha n i s at i o n a n d eradicate poverty for rural farmers,” Sani Dangote, president, Nigeria Agribusiness Group (NABG) and vice president of Dangote Industries Limited, says in an interview with BusinessDay. “With mechanisation, agriculture becomes attractive for the youths and they can take it up as a profession,” Dangote adds.

With the continual drift of the young population from the rural to urban centres in search of white-collar jobs and away from the drudgery of manual farm labour, self-sufficiency in food production is becoming a herculean task.

N i g e r i a’s a g r i c u l t u r a l fundamentals are robust and include an estimated 84 million hectares of arable land out of which only 40 percent is cultivated and only 10 percent of the 40 percent is cultivated optimally, according to the Federal Ministry of Agriculture.

Two of Africa’s largest rivers (the Niger and Benue) flow through and within the borders of the country.

There is adequate annual rainfall, a large and young workforce and over 180 million consumers that offer a domestic market to support increased food production and processing.

But the innovation and technology to unlock the potential are what is lacking.

“We have all the farmers we need, at around 12.3 million, making Nigeria 14th in the world, “we simply will not properly equip them,” Dizengoff says in a statement.

Government efforts The Federal and State governments have provided tractors to farmers under different agric mechanisation schemes but most of the efforts are being frustrated by civil servants, who ensure such schemes never benefit ordinary Nigerian farmers.

“We have over ten tractors lying idle at the local government in Abeokuta but it is only two that are being leased out to farmers,” Adefemi says.

He notes that government officials are frustrating the efforts of the government who has provided the tractors for farmers in the first place.

According to the Ministry of Agriculture, Nigeria needs a minimum of 746,666 tractors equipped with tillers and other support gadgetry to sufficiently mechanise agriculture going by best practices.

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Sesame exports hit N89bn in 2018 as crop gains traction in Asia Josephine Okojie

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s Nigeria explores opportunities t o e a r n substantial dollars through the non-oil export, sesame seeds could play a vital role, as export figures for the crop in 2018 hits N89 billion.

The crop is gaining a lot of traction in Asia and Nigerian exporters are positioning to supply the market.

The latest foreign trade report released by the National Bureau of Statistics (NBS) shows that sesame seeds worth N34billion was exported in q4 2018 from N15.8billion over the same period in 2017, representing 115 percent year-on-year increase.

While on a quarter on quarter basis the country

export for the period rose by 278 percent from N9 billion in q3 2018 to N34 billion in q4 2018.

Stakeholders say the export numbers are an indication that the sesame

seed production has the capacity to grow and earn the country huge foreign exchange and create hundreds of jobs as long as the government draws a master plan for the sub-

I will stimulate economic growth via agriculture, says Adebola SIKIRAT SHEHU, Ilorin

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lajide Adebola, the governorship candidate of the Social Democratic Party (SDP) in Kwara State has stated that he will stimulate the state’s economic growth through Rapid Agricultural Reform Initiative (RARI), if elected governor.

Adebola, who made the declaration recently in an interview with some journalists in Ilorin, explained that RARI was intended to shift the state economic focus towards agricbusiness and entrepreneurship.

“What we intend to do with that is to create jobs

for as many people and investment opportunity for as many people in agriculture.

“By 2021 RARI seeks to employ 200,000 youths and by 2022 each one in the agricultural business chain will be self-sufficient,” he said.

Adebola explained that the gap in the agricultural sector is as a result of low domestic production and lack of market access, among others.

He asserted that RARI centre would be established in each local government, based on their areas of comparative advantage and the crops their soil type can support.

This, he said would increase the revenue base

o f t h e s t at e a n d c re at e employment for people in the state and reduce youth restiveness.

He added that fisheries would be set up in area close to bodies of water in the state.

On infrastructure, Adebola promised to make Kwara State a transportation hub of the country.

“In 2015, there was a study done by Kwara State, w h i c h s h ow e d t hat t h e infrastructural gap in the state is about N255 billion.

That is a lot and it is not just roads, but other sectors like health, education etc.

“Our orange vision intends to map out the state i nt o s i x s o c i o e c o n o m i c development zones using road networks. We will ensure that rather than our citizens going through Oyo State to get to Kaiama, Baruten, the road from Bode Sadu to Kaiama to Gure is fixed and create another one.

“If that is done, it will f a c i l i t a t e m ov e m e n t o f goods and services. As part of our infrastructure plan for transportation, one of the goals is to make Kwara a transportation hub for goods and services in Nigeria,” he explained.

sector, as it has done in rice.

“Sesame has a lot of potentials. It has both commercial and medicinal value and oil extracted from the seeds is better than every other seed oil,”

Mutairu Mamudu, national president, Sesame Farmers Association of Nigeria told BusinessDay in a telephone response to questions.

“It is 100 percent free of cholesterol and that is why the demand for it is very huge both locally and internationally,” said Mamudu.

He noted that the country is still not exploiting the full potentials of sesame, urging the government to encourage more investments in the value chain of the crop.

N i g e r i a’s s e s a m e production is put at 200,000 metr ic tonnes with an average of 0.8 metric tonnes per hectare, according to data obtained from the Federal Ministry of Agriculture and Rural Development (FMARD).

Sesame seed is Nigeria’s biggest agricultural produce exported to Japan.

It is considered as one of the world’s oldest oilseed crop that has the highest oil content than any other seed.

The oil extracted from the seed is used in making vegetable oil and for medicinal purposes for treatment of ulcers and burnt. The stem as well as the oil is used by cosmetic industry in the production of soaps and other beauty products.

Mamudu stated that a kilo of sesame is sold for N350 while a metric ton is sold for N350, 000 at the farm gate. Sesame is mainly grown in the northern region of the country.

S e s a m e wa s ma i n l y exported to China and Japan.

Agricultural sector exported a total of N302 billion agro commodity for the year.

Dizengoff Nigeria appoints Graham Leslie as country manager Josephine Okojie

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izengoff Nigeria, a leading tractor and greenhouse provider in the countr y, has appointed Graham Leslie as its new country manager.

Leslie takes over from Antti Ritvonen, who has served as the country manager for three years. Prior to his appointment, Leslie was sales and commercial director of synergy, covering Europe and the United Kingdom.

He brings to bear his 30 years’ experience, having spent most of his career in agribusiness, where he has worked in various segments including; fertilizers, crop protection chemicals, seeds, biotechnology and most recently, biological crop protection products.

He had worked for Monsanto for 11 years, where he was involved in the post patent sales strategy for Roundup – the organisation’s leading herbicide, working in South Africa, Holland and Southern Africa, after which he went to head up the Sub-Saharan Region as the area director.

Graham Leslie

W h i l e a t M o n s a n t o, Leslie was instrumental in launching Roundup Ready and BT crops in South Africa.

His strength lies in the field of agricultural sales, essentially B2B sales and he has a wealth of experience in general management, having held MD roles at Monsanto, Greeff-Christies, PGP and GM at Farmsecure Agriscience.

Lesile also had an entrepreneurial interlude in the property sector, where as a partner in the business,

he was involved in a growth strategy for a niche market, Real Estate Company in Cape Town, South Africa, before returning to where his passion lay, in agriculture.

With this appointment, he will continue to provide strategic leadership and d i re c t i o n f o r Ni g e r i a’s agribusiness.

He holds a BSc in Agricproduction and an MBA in economics and marketing f ro m t h e Un i v e r s i t y o f Stellenbosch, South Africa.

16

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Leadership

Wednesday 06 March 2019

SHAPING PEOPLE INTO A TEAM

Life’s Work: Cal Ripken Jr. (Part 1) league season the Orioles won the World Series. How did it feel to achieve that so early but never again?

When you’re part of a great team to start, you assume it will happen again. Then you come to appreciate just how difficult it is and how lucky you were to have experienced one. We did return to the playoffs in ’96 and ’97 and had some years when we were in the pennant race down the stretch, but if I have one regret, it’s that I didn’t have enough chances to play in the postseason. I was extremely jealous of the likes of Chipper Jones and Derek Jeter.

ALISON BEARD

THE ALL-STAR RELISHED GETTING TO PLAY A GAME FOR A LIVING. n a two-decade career as an All-Star shortstop and third baseman for the Baltimore Orioles, Ripken played — at times alongside his coach and manager father, Cal Sr., and his second baseman brother, Billy — in a record-shattering 2,632 consecutive games, earning him the nickname Iron Man. Since retiring, in 2001, he has run a youth baseball organization and a charitable foundation.

I

You grew up with baseball.

When did you realize it would become your career?

I don’t know if there was one exact moment. But I remember my dad managed in Asheville, North Carolina, for three straight summers. I think I was 10, 11, 12 — old enough for him to feel comfortable taking me to the ballpark, so I was a paid batboy. I shagged fly balls. I helped out around the clubhouse. And hanging out in that minor league scene as a kid, I realized that my dream was to be a professional player. I thought, “This is the best job in the world.

I want to do this.” I didn’t look at it as work. I looked at it as you get to play a game for a living.

Your dad was a mentor and coach to you. What were some of the most important lessons he taught you?

Our whole life seemed to be baseball. It dominated every part of every day. And he taught us about life through the game: the principles of hard work and being part of a team and that you can improve your chance of success with practice, by working on your weaknesses as well as your strengths. It was less about

words and more about example — the way Dad went about his job. When he put his uniform on, he transformed into the happiest person in the world.

You were drafted into the minors out of high school at age 17. Was that a difficult transition?

I was a little intimidated. I’d been a big fish in a small pond.

But when they assembled all the big fishes around the country, I felt pretty small. I had to gain my confidence day by day. My dad used to say to other players, “No matter where they put you, know that you belong.” And at some point I just looked around and thought, “I’m as good as this guy and that one.” But it took me about a year and a half and a few more home runs to really feel that I had a chance to make it in the big leagues.

You had been a pitcher and a shortstop. How did you

end up choosing the latter?

The Orioles gave me a choice. I think they wanted me to pitch.

But my dad’s view was that if you start as a regular player and it doesn’t work out, you can always move to pitcher, whereas if you do it in reverse, you don’t have much success. My own thinking was that pitchers get to play only one out of every five games. And I wanted to play every day. In the minors our third baseman got injured, so I went there, and it felt like a more natural, easier position. But in the big leagues, as soon as I got my feet on the ground, Earl Weaver moved me to short. I hadn’t played it in years, and it felt different, but Earl said, “Just catch the ball and throw guys out at first base. It’s as simple as that.”

I liked the added responsibility, being in the middle of things.

There was more to think about, to do.

You played for the Orioles your entire career, through good times and bad. Were you ever tempted to take your talents elsewhere?

The only time I thought I didn’t want to be an Oriole was when they fired my dad. He was a company guy, spent the first 14 years of my life in their minors, got called to the big leagues, and was next in line to be manager after Earl Weaver retired but was passed over when we had a good team. It wasn’t until we failed and lost a lot of our talent that he got the opportunity. We were in total rebuilding mode, but nobody admitted that, so expectations weren’t in line. When we lost the first six games of the ’88 season, they fired Dad. And then we went on to lose 15 more. That was the most miserable time. I was a free agent at the end of that year, so people assumed I wouldn’t stay. I was mad, thinking, “This is not the organization I know.”

But then I thought, “Where else would I want to play?” I did some soul-searching and ultimately decided that I could withstand the rebuilding and, well, it was still the place I wanted to be.

In your second major-

It seems that those days of

c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

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franchise players willing to work through a few bad seasons have passed. What did it take to stick with the same team for 21 years?

There are ups and downs in life, and I certainly experienced the extremes of baseball, from being a World Series winner to losing more than 100 games in a season. But you find out a lot about yourself in those challenges. I’m thankful that I could persevere.

Eventually the downs don’t seem so down; they’re easier to cope with, knowing there will be light at the end of the tunnel.

When your father coached and managed you, was it hard to have him as your boss?

At times, yes, especially that year when we lost the first six games.

I felt a little extra pressure to perform, to help him, because I wanted him to succeed. But there was always a professional understanding: You do your job, I’ll do mine. In the big leagues no one can protect you. What gives you job security is your performance.

My dad couldn’t play shortstop for me. He couldn’t play second base for my brother Billy. We couldn’t do his job. So we were mechanical in the relationship. I remember my dad being asked, “Are you proud to have two sons on the team? Are you proud of Cal?” His answer was “I feel like all the players on my team are my sons.” Sometimes I wanted to scream, “No, they’re not your sons! We are!” But when he was a third-base coach, and I hit a home run and came running around and shook his hand, I could tell that he felt a special joy.

Alison Beard is a senior editor at Harvard Business Review.

Wednesday 06 March 2019

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BUSINESS DAY

17

Diamond Bank stock hits 1-year high, up 8.23% in one day

Pg. 18

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

DEALS

In expansion push, Olam acquires Indonesian cocoa processor OLUFIKAYO OWOEYE

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oodandagri-business giant, Olam International has announced the acquisition of Indonesia’s largest cocoa processor, BT Cocoa.

The deal saw Olam acquire 85% stake in YTS Holdings, which has a 100% stake in Indonesia’s cocoa processor PT Bumitangerang Mesindotama (BT Cocoa), for a consideration of $90m, while the remaining 15% of shares are to be held by the founding members of BT Cocoa, Piter Jasman and family.

The acquisition will add 120,000 metric tonnes of cocoa bean processing capacity and 30,000 metric tonnes of cocoa mass pressing capacity to Olam Cocoa, which is seeing increasing demand for cocoa products in Asia, especially cocoa powder.

According to Olam, the acquisition satisfies the increasing customer demand for full integration within the cocoa supply chain by bringing together Olam Cocoa, a world leader in traceable cocoa bean sourcing and a leading processor of cocoa

ingredients, and BT Cocoa, the largest cocoa processor in Indonesia.

The global chocolate consumption in 2018 was above 6 million metric tonnes and is expected to increase in the next five years. Indonesia is currently the world’s 6th largest cocoa producing country and Asia is set to become the second largest consumer of cocoa ingredients in the world led by China, India, Japan and the Philippines.

The Asian demand for cocoa powder in particular is increasing with a 5 year Compound Annual Growth Rate (CAGR) projection of 8%2. Growth in snack food categories like sweet biscuits and cookies, which accounted for 40% of new product development in Asia in 2018, is driving this trend.

Earlier this year, Olam revealed plans to to sell off four business segments in the next six years to release $1.6 billion in cash for reinvestment.

As part of its 2019-2024 strategic plan, it will offload its sugar, rubber, wood products and fertiliser businesses as well as other assets that no longer fit with its priorities

L-R: Adesanya Abby, account executive/campaign manager, West-Africa, Goal.Com; Olufemi Olatunji, media officer, Higher Institutions Football League (HiFL); Thelma Edinbus, senior sales executive, West-Africa, Goal.Com, and Olamide Adeyemo, chief strategy officer, Pace Sports and Entertainment Marketing, at the Pace Sports & Entertainment Marketing and Goal.com MOU Signing for the Higher Institutions Football League (HiFL) 2019 season in Lagos

and also invest $3.5 million in 12 high-potential growth areas to strengthen and focus its business portfolio.

Figures from its 2018 full year results show that Profit After Tax and Minor-

ity Interests(PATMI) down 40.1% to S$347.8 million due to the large exceptional gain of S$149.2 million in 2017, its Operational PATMI down 19.7% to S$346.6 million. It however recorded Strong,

positive free cash flow in 2018 higher than prior year Free Cash Flow to Firm at S$1.53 billion, Free Cash Flow to Equity S$1.1 billion.

In 1989, the Kewalram Chanrai Group established

Olam Nigeria Plc to set up a non-oil based export operation out of Nigeria to secure hard currency earnings to meet the foreignexchangerequirements of the other Group Companies operating in Nigeria

CONSUMER GOODS

McNichols’ grows profit by 2.6 percent ISRAEL ODUBOLA

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fter-tax profit of McNichols Consolidated Plc, a Lagos-based food and beverage company, appreciated by 2.65 percent to N39.24 million for 12 months ended December 31, 2018, triggered by a big increase in interest income.

A dividend of 5 kobo per share of 50 kobo ordinary shares was proposed by the firm, subject to appropriate withholding tax.

In a release filed with the Lagos bourse, the company noted that dividends would be paid to shareholders whose names appear on the Register of Members at the close of business on April 8, 2019. Dividends are scheduled to be paid on April 26, 2019.

Revenue from goods delivered and invoiced pared

18.64 percent N786.91 million in 2018FY compared with N967.19 million posted a year earlier.

Meanwhile, cost efficiency improved in the review year evidenced by 21.24 percent decline in cost of sales and 1.33 percent drop in distribution & administrative expenses. Cost of sales to revenue ratio, which measures the efficiency of a company’s sales operations, declined by 2.71 percent points to 82.17 percent in 2018 FY compared with 84.88 percent in the previous year.

Profit before taxation notched up to N42.6 million in the review period, representing 2.61 percent increase over N41.52 million posted a year earlier, driven by 781.53 percent expansion in other operating income.

The food and beverage firm posted improved profitability in 2018 FY. Profit margin

jumped to 4.99 percent in the review period compared with 3.95 percent in 2017 FY. This implies that for every N100 the firm earns as revenue, about N5 is retained as profit.

Also, earnings per share rose to N12.50 in 2018 FY, 19.97

percent higher than N10.42 reported in 2017FY. The company’s total assets hit N825.69 million in the review period, representing 53.12 percent higher than N539.24 reported in 2017FY, thanks to current assets which

spiked 242.51 percent.

Total equity of the food & beverage firm rose marginally by 2.26 percent to N333.15 million in 2018FY as against N325.78 million posted a year prior.

After trading flat at N0.51 throughout the previous trad-

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: David Ogar

ing week, share price of McNichols advanced 9.8 percent to N0.56 at the close of trading Monday March 4. The stock has returned 19.15 percent since the start of the year.

According to the report of the independent auditors, Abraham Shalom & Co, the company secured N297 million loan from the Bank of Industry in the review year. The facility was acquired to purchase Sugar, and repayment will be made in the next 66 months.

McNichols Conslidated Plc is a relatively new player in the fast moving consumer goods sector, having just been incorporated in 2004.

The company produces granulated sugar, cube sugar, icing sugar, baking sugar, chocolate powder, custard powders and corn flakes. The company has 326.7 million shares outstanding, and market capitalization of N166.6 million.

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Wednesday 06 March 2019

Business Event

BANKING

Diamond Bank stock hits 1-year high, up 8.23% in one day DAVID IBIDAPO & ENDURANCE OKAFOR

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iamond Bank shares started the week on a bullish note, after gaining 8.23 percent Monday, 1.77 below market ceiling of 10 percent.

Ahead of the final merger talks with Access Bank plc, the stock hit a 1-year high of N2.50 and has added.

Diamond bank also emerged as the most traded stock by volume on Monday with over 33.03 million units of shares valued at N82.11 million on the Nigerian stock

Bank, customers are at the heart of its decision to create one of Nigeria’s leading banks; therefore, customers of the bank will continue to enjoy all the bank’s unique products and services even after the merger.

The products and services that Diamond Bank’s clients enjoy, including its commitment to digital innovation, will continue unchanged and will be backed by Access Bank’s own commitment to customers, financial inclusion and sustainability, and the bank’s corporate expertise and strong balance sheet.

Interestingly, these prod-

borderless banking from any Access Bank branch. In other words, whenever they walk into any Access Bank Plc branch and initiate payment in their local currency, the beneficiary will receive an instant direct credit to their account or cash in their local currency. This service will be available in all Access Bank subsidiaries in Nigeria, Ghana, Gambia, Democratic Republic of Congo, Rwanda, Zambia and Sierra Leone.

Also, following the merger, any Diamond Bank or Access Bank cards that get trapped in either bank’s ATMs will not be destroyed. Instead, such cards

L-R: Hauwa Allabura, producer, Code Wilo; Femi Odugbemi, executive producer, Code Wilo; Yeni Kuti, founder, Felaboration, at the private screening of Code Wilo hosted by Heritage Bank in Lagos.

Ayuba Jacob, acting director, National Environmental Standards and Regulations Enforcement Agency (NESREA); Ibrahim Goni, conservation-general of Nigeria National Park Service; and Bolatito Obisesan, representative of the Minister of Environmental, during the 2019 World Wildlife Day celebration organized by Federal Department of Forestry, in Abuja. NAN

exchange market (NSE).

Since making a public disclosure on the merger with Access in November 2018, Diamond bank’s share price has continued to rally owing to investors’ sentiment on a seamless merger.

The share price surged by 284.6 percent to N2.50 on Monday, 4th of March 2019 from N0.65 last November.

Year-to-date analysis of the stock’s performance revealed a return by 14.7 percent.

Meanwhile, in less than a month, Diamond-Access bank will hold the record as the Nigerian bank with the largest customer base in Sub-Saharan Africa.

Through the merger, the employees, customers, depositors and shareholders of Diamond, Nigeria’s largest retail bank will reap from the bank’s operations, as compiled from a statement by the bank.

Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of two (2) New Access Bank ordinary shares for every seven (7) Diamond Bank ordinary shares held as at the implementation Date.

The offer represents a premium of 260 percent to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange (“NSE”) as of December 13, 2018, the date of the final binding offer.

According to Diamond

ucts and services will become better improved under the new entity, thanks to the combination of expertise between the leading lenders.

“Together, we will bring the power of banking to millions across Nigeria, focused on speed, service and security.

We are determined to ensure that both Access Bank and Diamond Bank customers will experience no disruption to normal banking services while we join forces to create Nigeria and Africa’s largest retail bank by customers. While there may be some changes in due course, we are committed to inform you ahead of time and in a way that is most convenient for you,” Diamond Bank said.

Diamond Bank’s customers will continue to enjoy DiamondXtra, an interest yielding hybrid account which allows deposit of both cash and third party cheques. Hybrid means a combination of both savings and current account features.

According to the bank, the reward scheme, which was launched in 2008 and has continued to run till date, will remain unchanged, even as new winners will continue to emerge and be paid. As a matter of fact, the merger with Access Bank will ensure that DiamondXtra becomes bigger and better because the scheme will be opened to Access Bank customers as well.

Secondly, Diamond Bank customers will enjoy instant,

will be released to cardholders upon validation of ownership.

In the same vein, customers of both Diamond Bank and Access Bank will have access to over six hundred branches, where they can enjoy Same Day Clearing of cheques in either bank, just as they will get rewarded for using either Diamond Bank or Access Bank POS terminals. In the meantime, more lounges for the Diamond Bank XclusivePlus subscribers will be created.

According to Diamond Bank’s statement, when the highly anticipated merger eventually takes effect, Diamond Bank Plc and Access Bank Plc would have successfully combined efforts to bring the power of banking to millions of account holders across Nigeria and beyond.

The new entity will have 29 million customers with 13 million mobile customers, with a wide spread of over 3,000 ATMs and over 13,000 digital/financial inclusion customers.

Also much emphasis will be on the need for speedy and secured service delivery, the partnership will ensure that customers of both banks continue to experience the best banking experience, with zero disruptions to normal banking services.

Diamond Bank also noted that although there may be some changes in the future, any such changes will be duly communicated to the customers ahead of time.

Charles Dokubo (m), special adviser to the President on Niger Delta Affairs and coordinator presidential amnesty programme, congratulates Sotunde Songonuga (2nd r), chairman of the special investigative panel committee, and other members of the committee, during the inauguration of the committee to probe the invasion and looting of the Presidential Amnesty Programme’s Vocational Training Centre, at Kaiama in Bayelsa. NAN

APPOINTMENTS

MRS Oil appoints Priscilla Ogwemoh to Board SEGUN ADAMS

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he board of MRS Oil, a downstream oil and gas company in Nigeria, has announced the appointment of Priscilla Ogwemoh as a Director of the company.

According to the statement filed on the exchange, March 1, Ogwemoh was appointed on the Board of MRS Oil Nigeria Plc. on February 28, 2019.

Ogwemoh is a graduate of Law and holds a Masters Degree in Law. Ogwemoh, whose appointment comes barely two months after Priscilla Thorpe-Apezteguia took over as Director and Managing Director of MRS Oil, serves on the board of a few other Companies and she carries out multilevel tasks in branding, marketing, management and professional services.

In January, the Board of MRS Oil Nigeria announced in a written resolution dated January 7, 2019, the review and approval of the resignation of Andrew Gbodume as Managing Director/ Chief Executive Officer of the Company.

Although the company didn’t state the reason for Gbodume’s exit, Apezteguia was immediately appointed to take reins of control at MRS which relocated its corporate headquarters to Apapa from Onikan, early January.

The Company’s unaudited financials for period to September 30, 2018, show a 7.2 per cent decline in revenue to N76.07 billion in the 9-month period of 2018.

Gross Profit of the Oil and Gas Company slumped 32 per cent to N4.09 billion, a decline of N2 billion compared to

earnings in the corresponding period of 2017.

Although other income almost doubled from N122.58 million recorded in 2017, MRS posted a Loss Before Tax of N202.4 million compared to over a billion naira made in 9 months of 2017 as Cost of Carry was a negative of N386 million.

Tax expense declined by 55 per cent to N223.34 million and total income for the period was a loss of N425.8 million as against a profit of N809.3 million in similar periods of 2017.

Shares of the Oil and Gas Company at the close of trading, Monday, remained flat at N20.85 per share where it has been since February 18.

Although the price of MRS shares stood much higher at the start of the New Year, it has declined by 18.87 per cent so far in 2019.

BUSINESS DAY

Wednesday 06 March 2019

19

CITYFile

Army to establish zoos, parks in barracks

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he Nigerian Army says it is working to establish zoos and parks in all military cantonments across the country to preserve the ecosystem and help to conserve natural and cultural heritage.

Adekunle Shodunke (a major general), Chief of Army Standards and Evaluation (CASE) disclosed this when he visited the conservatorgeneral, National Park Service, Abuja.

Shoduke said that the zoos and parks would enhance recreational activities for the personnel of the Nigerian Army in particular and the nation in general.

“We came to solicit the service’s support being the lead agency for the conservation of biodiversity and preservation of the nation’s cultural and historical heritage.

“It is therefore necessary that we collaborate with the service for the development of ecotourisim in the zoos and parks and to have them meet international standards.”

He said the department also acts as a link between the army and other governmental organisations for possible areas of collaboration.

“The Standards and Evaluation Department of the Nigerian Army is saddled with the responsibility of enforcing standards, inspection of procedures safety and evaluation in accordance with the Nigerian Army establishment.

“We have ventured into several partnerships and cooperation arrangements with government agencies to enhance the development of its several sectors,’’ Shodunke said.

Ibrahim Goni, conservator-general of the service, welcomed the idea of establishing zoos and parks in military cantonments and pledged his support.

Ondo: Community rescued from 3 years’ power outage

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fter three years of being left in darkness, the Plaza Arc community in Akure, Ondo State is start enjoying electricity supply following the donation of a 300 KVA transformer to the area by the state government.

The community comprises four streets of Ifelodun, Olorunsogo, Bada and Ibukunoluwa.

Presenting the transformer to the community on Monday, Tunji Ariyomo, the special adviser to the state governor on public utility, said that the government was shock to learn about the three years of power outage in the area in spite of its proximity to the state capital.

Ariyomo said that the government was only recently informed about the plight of the community and swung into action immediately.

According to him, a power sub-station will be sited in the community so as to improve the quality of electricity supply to the area.

The special adviser applauded the patience, equanimity and calmness exhibited by the residents over the years without resorting to violence.

He recalled that the state government recently signed a power purchase agreement with a private firm for the construction of 15 megawatts power plant to be located in Alagbaka, Akure.

Ariyomo said if the plant was completed, it would supply electricity to Alagbaka area and Ijapo Estate in the state capital as well as extending it to Oba Ile Housing Estate, the suburb of Akure.

“The strategy is that if we can take these key areas off national grid, then we will be able to free more watts to the use of people in Akure and its environs.

“Governor also has been able to sign PPA with a firm to provide alternative independent power supply for the people of Ondo South Senatorial District to be sited in Igbokoda.

“So, ultimately, we are building newer opportunity for the generation of electricity and this initiative is anchored by the Ondo State government as our own input to national grid strength.

“We are ensuring that issue of electricity supply is permanently resolved,” he promised.

Protest by #OccupyNigeria against irregularities in just concluded Presidential and National Assembly elections in Nigeria in Abuja. Pic by Tunde Adeniyi

FG probes invasion, looting of PAP equipment in Bayelsa

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he Presidential Amnesty Programme (PAP) has inaugurated a six-man special investigative panel to probe the invasion and looting of training equipment at its vocational centre in Kaima, Bayelsa.

The coordinator of the programme, Charles Dokubo, while inaugurating the panel in Abuja, Monday, said that the investigative team chaired by Sotunde Songonuga, a retired army general, would ascertain among others the remote and immediate cause of the looting.

According to him, on February 13, the eve of commissioning the PAP’s vocational training centre in Kaima, in Kolokuma/Opokuma local government area of Bayelsa State, unknown persons overpowered security personnel guarding the centre.

They looted all movable government assets in the facility, Dokubo said. He said that preliminary findings showed that items carted away by the looters included equipment procured and already installed in the centre for seamless training of ex-agitators enlisted in the programme.

According to him, the training enlisted for ex-agitators and other youths in the Niger Delta were carpentry, hotel and catering management, tailoring, shoemaking, welding and fabrication, event planning, decoration and hair dressing.

“Our initial findings also revealed that post-training empowerment startup packs warehoused in sections of the vocational training centre in Kaima were completely looted by these persons.

“The plunderers even proceeded to thoroughly vandalised the completed lecture halls, administrative block and

other structures in the centre.

“I want the perpetrators of this nefarious act severely punished according to laid down laws of our great nation. And this is why the panel is constituted and we shall provide them with whatever they need to do their job effectively,’’ he said.

Dokubo said that the panel was also expected to offer practical suggestions on ways of preventing a recurrence of the incident in the vocational centre. He said that the panel has seven working days to complete and submit its report.

Chairman of the investigative panel, Songonuga, pledged readiness of the members to unravel the circumstances surrounding the looting.

“I promise to work with the team to give a detailed report of the looting without fear or favour. We will give an insight on what actually happened,’’ he said.

Experts decry incessant building collapse in Abia GODFREY OFURUM, Aba igerian Institute of Architects (NIA) and Architect Registration Council of Nigeria (ARCON) have decried incessant building collapse in Aba, the commercial hub of aBIA STATE. They urged the state government to set up a panel of inquiry to examine the causes and find lasting solutions to the incidents that have caused the death of many people.

They, however, advised investors in real estate and other individuals, who want to build in the state, to desist from patronising quacks, as it would do them more harm than good.

The bodies made the call in Aba, during their tour of sites of recent building collapse in the city. They said the call was necessary, following recent occurrences that took lives without any serious action taken against those responsible.

The fact-finding mission which took the

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members of NIA and ARCON, to the offices of the Town Planning Authorities of Aba South, Aba North and Osisioma Ngwa local government areas, was aimed at ascertaining the authenticity of the architects involved in the collapsed building and how they got their approvals.

Ikechi Ochiulo, chairman, Abia chapter of NIA, urged the Abia State government to look into the issue of regular collapse of buildings and work out a strategy that would help punish those who cut corners.

Ochiulo decried the presence of quacks in the state and wondered how they get their drawings approved by the town planning authorities.

“We have a situation that when collapses happen in this state, no panel, no investigation takes place. On the part of the government, no panel of inquiry is set up for culprits to be brought to book, so that others will learn.

“That is why we plead with the government to investigate these recent incidents;

they should not be swept under the carpet, as usual. Things must be done properly to help everyone.

“We have procedures to stop this evil. ARCON has made provisions that before town planners are to approve any drawing, they must see the seal of a registered and licensed architect. We put a security stamp on the drawing of every true professional architect.

“Here in Abia, we have also improved on that by even having what we call ‘authentication form’ for which every practicing architect must attach his license, so that the town planning authorities will see all those things before approving any building drawing.

“But sadly the drawing of one of the collapsed buildings we saw at the town planning office, has none of these things that I just mentioned, which tells you where the problems are coming from,” he said.

Recall that three buildings, (including two three storey buildings), collapsed in Aba in February, 2019.

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INTERVIEW

21

‘Nigerian ports are attracting cargo from other countries and we need to get the infrastructural connectivity right’ Over the years, lack of efficient transport infrastructure, especially for the movement of import and export cargoes to and from the port, has been a major factor threatening the efficiency of Nigerian ports. This is now obvious in the lingering traffic congestion on the roads leading to the nation’s major economic gateways, Apapa and Tin-Can Island ports. HASSAN BELLO, the executive secretary/CEO of the Nigerian Shippers’ Council (NSC), in this interview with AMAKA ANAGOR-EWUZIE, gives insight into the activities of the Council as the economic regulator of the port and Federal Ministry of Transportation (FMOT) to ensure transport efficiency in Nigeria. He also spoke on other issues. Excerpts:

S

ir, let’s look at the maritime industry in 2018 and make projections into

2019?

In 2018, the general policy framework was set-up by the Federal Ministry of Transportation and is in three major forms. First, is the multimodal approach to transportation, which preaches against reliance on one mode of transportation, road. Road now carries about 90 percent of goods and passengers’ movement in the country.

There is a cautious effort to introduce other means of transportation for choice and reduction of cost of transportation.

The cost of transport in Nigeria is high and it contributes to the inflationary trend businesses are experiencing. No country can develop without its manufacturing sector growing, and we have to reduce the cost of production by introducing and increasing the rail connectivity to the ports. This means that goods can be evacuated from the ports faster and it carries more volume than the road and it is also more reliable.

You would agree with me that there is a deliberate attempt by the government to open-up the rail system. In 2018, we had the Christianisation of the railway, and in 2019, the Lagos-Ibadan is already being test-run. There is rehabilitation of the LagosIbadan-Kaduna-Kano rail corridor as well as the rehabilitation of the narrow gauge and extension of the rail line to every port in the country.

You can imagine the impact, which means that there would be ease on the road and we will not see this number of trailers that we see today on our roads.

Our roads were built to carry certain weight but this is always being disregarded. That is why Nigerian roads do not last and are always under maintenance.

Another alternative to road transportation is the inland waterway. The managing director of the Nigerian Inland Waterways Authority (NIWA) said that the load of about 10 trailers can be conveniently carried by one barge. In terms of development, port infrastructure such as Baro River port has been commissioned but 2019 will be the year of realisation and materialisation of the policy framework.

Then, we have to build a modern infrastructure because there must be linkages, coordination and connections. The Baro River Port must be linked with Kaduna Inland Dry Port, which is called inland con-

nectivity. The port is efficient if there is inland connectivity. If it is not there, it is the same problem all over. I think the Federal Ministry of Transportation and its agencies have become serious with the fact that we are going to have a multimodal approach to transportation in Nigeria.

The aim is to bring efficiency because we are in competition with our neighbouring countries. We will like Niger, Chad and northern Cameroun to take Nigeria as a hub. Nigeria will be the hub if we have a deep seaport in Lekki, which is another very fundamental thing that Nigeria is doing. You will see the impact in the economy in terms of growth, inclusiveness, employment creation and GDP contribution to growth. We have the Kaduna dry port, Jos dry port and Enugu Truck Transit Park.

With the rebuilding and opening of rail infrastructure in Nigeria, how do you think this will impact on the Inland Container Depot projects of the Nigerian Shippers Council?

Rail is cardinal to the success of dry port because the main aim of dry port is to reduce congestion in the seaport. Road alone cannot reduce the congestion and to reduce cost because the cost of transporting cargo from Apapa to Kaduna by truck is astronomical and is as much as over N800,000 because of the abnormal traffic situation, which is being addressed.

If we have the rail, it will reduce one quarter of the cost.

There would be seamless connection from the seaport to the inland dry port because it is based on rail. Now, what we have is road transportation of cargo by truck. The Kaduna dry port would have been busier if we had effective rail transportation of cargo. We have been working with the Nigeria Railway Corporation (NRC) to provide us with wagons. They said they are going to provide 10 wagons and two locomotives because importers and exporters are complaining of the cost of using road.

According to import performance rating in Kaduna Port, activities went up one time but because of the crisis at the port it dropped. We want to boost our exports through the dry ports, which is the centre of export.

The Federal Government is also giving attention to the workability of the dry port. We have got Kaduna commissioned and we are working on Funtua and Jos. There is one coming up in Ibadan and if we complete that,

For instance, Seaport Terminal Operation, who are supposed to pay N1 million as registration fee are now going to pay N50,000; shippers will pay N1,000; cargo surveyors will pay N5,000; shippers association N5,000; stevedoring companies N5,000; warehousing N5,000; haulage companies to pay N5,000; freight forwarding and clearing agents N5,000; off dock terminals N10,000; cargo consolidators N10,000; inland container depot N25,000; shipping lines and agencies N50,000.

This is the basic registration and it is a one-ff thing.

We have listened to the reactions of the people and we are going to the public with the new fee. We do not need much enforcement because Shippers Council is the one to offer service to these providers but if you are not registered with us, there will be sanction but I don’t think that it will be necessary.

What is the state of national fleet implementation committee? Has the committee been able to achieve its mandate?

The National Fleet Implementation Committee headed by the Nigerian Shippers Council has done a lot of work in 2018. We have realised that the operating atmosphere in Nigeria will not attract international and local investors that will enable us to have national fleet.

This is because there are lots of laws, policies and cost that hinder investment. If you recall, the ministry of transportation signed a Memorandum of Understanding (MoU) with the PIL, a Singaporean shipping line. But when the PIL came and did analysis, they found out that the structure would not last, that

it means transport efficiency will increase and there will be reduction in the cost of doing business. We have to make all these centres to become centres of ease of doing business. It is going to be automated so that electronically, we can control transport infrastructure using a modern way of doing business, different from what we have in the seaports because we will try to avoid all the problems in the seaports.

Nigerian seaports are attracting cargoes from other countries.

So, we need to get the infrastructural connectivity right in order to enable Nigeria become the hub that we crave for.

Where are we now with the Truck Transit Park project of the Nigerian Shippers Council? Have investors started expressing interest?

Yes, if you remember there was

a focus lab on which we had extreme interest on the Truck Transit Park. Our problem was that we have to handover the parks to investors free from any encumbrances. Land issue has been our problem but fortunately in Obolo-Afor, Enugu, the land issue has been resolved. In Lokoja, compensation for the land has not been paid by the government but we have just received a letter of approval from the Infrastructure Concession Regulatory Commission (ICRC) that we can go ahead and advertise for the request for qualification (RFQ) because we have appointed a transaction adviser. Very soon, we will advertise especially after elections.

What is the current status of National Transport Commission (NTC) Bill?

The National Transport Commission (NTC) Bill has been worked on by the National Assembly but the President sent

it back on some three areas including the removal of safety issues because it is purely economic regulations and this has been weeded off. The President also said that the royalty to be paid to the commission as source of funds which was pegged at 10 percent should be reduced to 5 percent. The president also asked the National Assembly to look at the freight stabilisation fee, which was put at 3 percent to be reduced to 1 percent just like it is in the Nigerian Shippers Council Act, and this has been done.

We have to commend the National Assembly’s interest in the NTC, which would soon be transmuted to Mr President. Actually the comments made by the Minster of transportation and Mr President have been noted and what we have now is a clean bill. One thing people should know is that NTC is an industry bill and not a Shippers Council Bill. It is not that Nigerian Shippers Council that is going to transmute into NTC. No, Shippers Council will be the nucleus where other stakeholders like the NPA, Aviation, and Railway will

come to constitute the National Transport Commission. We hope that the President will assent to the bill after he is satisfied with all the corrections that have been made.

Let’s look at the newly introduced registration fee for the service providers at the port?

What is the registration about?

It is of much interest how people reacted to the newly introduced registration fee for the service providers at the port and it is good because Shippers Council must consult stakeholders before taking certain actions. Stakeholders have the right to make observations and nobody is quarrelling with the registration because it is good to have database and not to make it an all comers’ affair.

Some people have started to register but the issue is the fee. Some said the fee is on the high side and I think that they are right; we have to look at them again. Shippers Council is the one to reduce the cost of doing business and not the one to increase the cost. Now, we have brought down the fees.

‘

If we have rail, it will reduce one quarter of the cost.

There would be seamless connection from the seaport to inland dry ports because it is based on rail

what we need is to have a private sector-led national fleet.

To do that, we have to make it possible for the investment to be profitable and sustainable.

We could have continued with PIL and bring in about two ships and say this is a national carrier and everybody will clap but no.

We need something that is sustainable, meaning that we have to guarantee contracts. There are many taxes and incentives that we have to look into, which we are doing right now. We are working with the Federal Inland Revenue Service (FIRS), Ministry of Finance, Customs and many other agencies including NEXIM Bank. We are looking for reduction in 5 percent holiday from 3 percent Nigerian Maritime Administration and Safety (NIMASA) fees. We are looking at Free on Board (FoB) and Cost Insurance and Freight (CIS) issue to see that Nigerians will be able to participate in shipping business as well as the issue of Local Content. So, setting up a national fleet has not been an easy thing because it takes a lot of work for it to be done.

We need supporting industries like ship repair and ship building.

If we don’t have that we will continue to tow ships to Singapore and Ghana for repair, then all the profits would be gone. We need our banks and insurance companies to participate in this. We need to look at the ship registration regime in NIMASA and make them electronic and modern.

Let’s look at shipping development in Nigeria generally. Is Nigeria where she is supposed to be, looking at the state of our indigenous shipping companies?

No, we are not, but we are going there because for the first time in so many years we have a target. The target is the consideration by Nigeria that shipping is a specialised business and a source of income or revenue for the country. It is also a source of transportation, wealth creation, employment, and helps in building modern infrastructure and contributes to the GDP. In very creative years to come, you will find that shipping and transportation will be able to finance the budget of this country.

It is also a way to diversify the economy because shipping has many aspects that cut across life. Shipping reflects the state of the economy because without good and efficient shipping and transportation infrastructure, the economy will not grow.

Shipping and transportation drive the economy and we have started with building of multimodal transport system. It is not just to build the infrastructure especially ports but they must be linked with one another.

What are the things to see in Nigerian Shippers Council in 2019?

We have set for ourselves an agenda for two to three years. First is to earn the trust of the people we are regulating and we have done that successfully. We have become a reference point in the issues of shipping and we advise the government. We are also investment

coordinators by bringing investment into the country.

Internally, we have gone through a lot of re-organisation and we now have nine divisions for the sake of efficiency. We have our three years strategic plan which everybody has his or her KPI. We are undergoing so much training to become the economic agency in the shipping transportation.

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Maritime e-Commerce

Morocco, Egypt, SA, Djibouti, Togo lead as most connected ports in Africa

...China, Singapore, Korea, Hong Kong, Malaysia tops in global connectivity Index amaka Anagor-Ewuzie

M

orocco, Egypt, South Africa, Djibouti and To g o h av e been listed among the best maritime connected countries in 2018, the Level of Maritime Connectivity Index, published by the Nigerian Maritime Administration and Safety Agency (NIMASA) in its recent report has revealed.

According to the index, Morocco was ranked the best connected port in Africa with 71.5 points; Egypt followed as the second with70.3 points; South Africa took the third position with 40.1 points; Djibouti ranks fourth, with 37.0 while Togo was rated as the fifth with 35.9 points, all in 2018.

Nigeria, which is ranked as the biggest economy in Africa, was seen missing in the maritime connectivity index apparently due the unfriendly state of doing business at the ports; high port inefficiency and cumbersome, as well as clumsy cargo clearing procedures.

Ironically, the maritime value chain plays a crucial role in the Nigerian economy, as around 80 percent of Nigerian trade is transported by sea and via ports. In today’s world economy, business and societies depend on the efficient clearance of vessels and goods in ports to function, develop and prosper, which Nigerian ports still struggle with.

China ranks as having the best connected ports globally, with 187.8 points; Singapore was rated as the country with the second most connected ports in the global maritime connectivity index with 133.9 points; Korea Republic emerged the third best with

118.8 points; Hong Kong was rated as the fourth with 113.5 points while Malaysia was rated as the fifth best connected port with 109.9 ranking in 2018.

Other countries include the Netherlands, which emerged as having the sixth most connected ports of the world with 98.0 points; Germany was rated as the seventh with 97.1; The United States ranked eighth with 96.7; The United Kingdom was rated as ninth with 95.6 ranking while Belgium 91.1, took the tenth position in the 2018 index.

On the other hand, countries with least connected maritime domain include Montserrat with 3.0 ranking;

Montenegro with 3.0; Albania with 3.0; Anguilla with 3.2 and Palau with 3.3.

In the global space, Norfolk Island ranked first with 0.6; Christmas Island ranked second with 0.6; Cayman Islands rated third position with 1.2; Bermuda ranked fourth with 1.5; Tuvalu rated fifth 1.6, the report said.

The report further stated that Wallis and Futuna Islands was rated sixth with 1.6; Nauru ranked seventh with 1.9; Cook Islands was rated eighth with 2.0 points; Greenland ranked ninth with 2.3 while Timor-Leste ranked tenth with 2.5 points.

The report said that world’s seaborne trade is blooming,

and it was strengthened by the solid improvements in the global economy since 2017.

“Growing at 4 percent, the fastest growth in five years, global maritime trade gathered thrust and elevated sentiment in the shipping industry. Total volumes reached 10.7 billion tons, reflecting an additional 411 million tons, nearly half of which were made of dry bulk commodities.

“Global containerised trade recorded an increase of 6.4 percent, after seeing historical dips in two previous years. Dry bulk cargo increased by 4.0 percent, up from 1.7 percent in 2016, whereas growth in crude oil shipments slowed to

2.4 percent,” the report stated.

The report states: “The Nigerian maritime industry could be the most competitive maritime economy on the continent, as all economic performance indices show strong potential.

“The Nigerian maritime industry has continued to receive support from stakeholders in repositioning it for efficiency and global best practices. For instance, over the last two years, the present administration has focused on repositioning the ports through the National Action Plans on cross border trading coordinated by the Presidential Ease of Doing Business Council (PEBEC)

and series of Presidential Executive Orders targeted at port efficiency.

This has therefore resulted in improvements in some of the maritime industry indicators such as the Liner Shipping Connectivity Index (which captures how well countries are connected to global shipping networks).

Liner shipping connectivity index in Nigeria was reported at 18.93 in 2018, according to the UNCTAD collection of maritime transport indicators representing a marked increase in Liner Shipping Connectivity from the Port Liberalisation Reforms of the 2005 to 2015.

NIMASA nears CVFF disbursement, change of crude oil trade policy amaka Anagor-Ewuzie

T

he Nigerian Maritime Administration and Safety Agency (NIMASA), has restated its commitment to the disbursement of the much awaited Cabotage Vessel Finance Fund (CVFF), an accumulation of the 2 percent contributing funds by indigenous ship owners, to deserving firms.

Speaking at the weekend during a courtesy visit by the

Shipping Correspondents Association of Nigeria (SCAN), Dakuku Peterside, directorgeneral of NIMASA, said that all necessary conditions as stipulated by the Minister of Transportation, Chibuike Amaechi, must be met before disbursing the fund.

Peterside, who was represented by Bashir Jamoh, executive director, Finance and Administration, assured that the money was safe, contrary to the assumption that it has been tempered with.

“All I can say categori-

cally is that the money will be disbursed, but I can’t say the particular time because it is not the responsibility of NIMASA to disburse, unless we get directive. We will release it on the instruction of the minister,” he said.

According to Jamoh, the issue of changing crude oil trading policy from Free on Board (FOB) to Cost, Insurance and Freight (CIF) trade terms, will soon become successful to enable indigenous ship owners to benefit from the nation’s crude oil trading.

“We are talking with the Nigerian National Petroleum Corporation (NNPC) and with time, we will have a breakthrough in ensuring that Nigerian ship owners get the right to lift our crude oil.

Nigerians are already lifting oil but we cannot unveil those involved. The NNPC has indicated that some of them are already lifting,” He added.

Jamoh disclosed that the agency is taking a lot of measures that are targeted at getting cargo support to ensure that Nigerian owned ships do not lack cargo

to lift, if shipping companies successful get the CVFF. “The cargo support scheme will make government cargo, project cargo and others go through NIMASA as a way of assisting the ship owners, and it will forestall a situation where vessels funded with CVFF have to go searching for cargo to carry,” he said.

Jamoh said: “We are looking at different windows in terms of favourable foreign exchange rate for the ship owners for handling, purchasing, repairing ships.

He further said that the agency remains committed to the ideals of actualising the Blue Economy, which deals with the totality of all economic activity associated with the oceans, seas, harbours and coastal zones.

He listed the concept to include aquaculture, biomedicine, boats and shipbuilding, ship repairs, defense and security, among others all geared towards wealth and job creation for the growth and development of the Nigerian economy.

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Maritime e-Commerce

African Circle acquires two new patrol boats to enhance service delivery Stories by amaka Anagor-Ewuzie

D

etermined to fulfill its mandate as contained in the joint venture agreement with the Federal Government through the Nigerian Ports Authority (NPA), African Circle Pollution Management Limited (ACPML) has procured two new patrol boats for effective waste management on Nigerian waters.

The procurement of the two Coast Guard 36 patrol boats, named Aderinsola and Hadiza, is in line with the requirements of Maritime Pollution (MARPOL) 73/78, a key guideline of the International Maritime Organisation (IMO).

According to the provisions of MARPOL 73/78, the NPA is mandated to provide

R-L: Suleiman Abdulbaki, general manager, Health, Safety and Environment (HSE), representing Hadiza Bala Usman, NPA managing director; Olajide Oluwayemi, Africa Circle Pollution Management Limited (ACPML) regional manager, East; Yunusa Ibrahim, NPA principal manager environment; Olukayode Omiwole, NPA assistant general manager, Safety; Faruk Abubakar, NPA manager, Safety, and others at the formal unveiling of two Coast Guard 36 patrol boats procured by ACPML at Tin-Can Island Port, Apapa, Lagos...recently.

adequate waste reception facilities for waste generated in vessels calling in Nigerian ports.

The vessels are fitted with

modern technological features to cope with their functions in Nigerian territorial waters, particularly around Lagos, Port Harcourt, Warri

and Calabar.

Speaking at the unveiling of the boats at the Tin-Can Island Port (TCIP), Apapa, Lagos recently, Hadiza Bala

Usman, managing director of the NPA, commended the ACPML for the strides recorded since it signed the agreement with the Federal Government over the last two decades.

Represented by Suleiman Abdulbaki, general manager, Health Safety and Environment (HSE) of the NPA, Usman said that ACPML has done well in the execution of the provisions of the agreement it signed with the government.

“African Circle has been in partnership with the NPA for over two decades in the areas of pollution control monitoring, and management of ports reception facilities. ACPML operates in the most excellent way to the highest standard,” she said.

She added that the acquisition of two patrol boats would go a long way in enhancing the effective man-

agement of ship generated waste on our water channels in accordance with the provisions in the Annexes of MARPOL 73/78 convention.

Olajide Oluwayemi, representative of ACPML’s regional manager, east stated that the acquisition was geared towards ensuring that the company’s surveillance operations on Nigeria waters are not hindered.

Oluwayemi noted that the procurement was in furtherance ACPML’s commitment to the International Convention for the Prevention of Pollution of Ships (MARPOL 73/78) and the provisions of port reception facilities for the NPA as contained in the JV agreement.

The popping of wine to herald the maiden voyage of the boats was performed

by Deborah David, finance manager, ACPML to the delight of dignitaries gathered to witness the occasion.

is a pointer to the readiness of all stakeholders to move Warri towards economic development and social integration. I want to urge you to take advantage of the environment to positively affect the host communities especially in the area of job creation,” Ogiame Ikenwoli advised.

Earlier, Taiwo Afolabi, chairman of Ocean and Cargo Terminal Services Limited, solicited the cooperation and support of the monarch and his people, adding that the company was interested in collaborating with all relevant stakeholders in the industry and host community for the benefit of all concerned.

Ocean and Cargo Terminal gets monarch’s approval to operate Warri Port

O

giame Ikenwoli, the Olu of Warri, has given his approval by promising to support the Ocean and Cargo Terminal Services Limited as it formally takes possession of the Warri Port Terminal B. The approval was given when the board and manage-

ment team of the company paid a courtesy visit on the Olu in Warri, Delta State.

Ogiame Ikenwoli, who expressed delight at the concession of the terminal, added that he has been mounting pressure on relevant government agencies to do something about the hitherto abandoned terminal.

He tasked the management of Ocean and Cargo Terminal Services Limited to bring their ingenuity and business acumen to bear to enable the terminal becomes economically viable and a source of blessing to the Warri kingdom.

He promised to lend fatherly assistance at all times

to the concessionaire towards the success of its operations in Warri port.

“I am very delighted with your coming to Warri. It has always been my wish that the port is fully utilised. Warri is now ready for business and economic growth. The relative peace that the town had enjoyed in the last few years

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Insurers need to address, regional impacts of global warming – Munich Re advises

I

Insurer’s annuity portfolio grows to N275b – NAICOM Stories by Modestus Anaesoronye

I

nsurance regulator, the National Insurance Commission (NAICOM) said the annuity portfolio managed by insurance companies has grown to N275 billion as at the end of 2018.

The annuity portfolio includes the annuity funds of individuals managed by insurers, as well as those from retirement savings accounts of retirees under the Contributory Pensions Scheme.

Sunday Thomas, deputy commissioner for insurance, Technical, said volume of annuity received by the insurance sector has dropped in 2018 because some life companies were weighing the volatility of the risks.

Statistics from the National Pension Commis-

sion (PenCom) show that it has approved a total of 2,831 applications for retirement under life annuity during the quarter ended November 2018, bringing the total number of retirees receiving their retirement benefits through the annuity plan to 57,302. The 2,831 retirees received N1.7 billion as lump sum payment and paid premium of N16.04 billion to insurance companies. This resulted in total lumps sum payment of N68.17 billion and monthly annuity payments of N3.00 billion.

Growing interest of retirees in taking up annuity for retirement benefits as provided in the Pension Reform Act 2014 has spiked monumental growth in life business of insurance companies.

This development which has led to increase in premium of life companies offering annuity has seen the

industry life premium grow by 37 percent as at the end of 2014.

S. 7 (1a) Pension Reform Act 2014 states that an employee on retirement shall procure Annuity for Life Policy or Programmed Withdrawal.

The lump sum for the procurement of Annuity for Life Policy or Programmed withdrawal must have been accumulated through series of employer/employee contributions into the Retirement Savings Account of the retiring employee throughout his/her working career.

Annuity for Life Policy is a retirement instrument option for retiring employees, offered by a Life Insurance Company licensed by the National Insurance Commission (NAICOM).

Annuity for life as is popularly called, is a type of annuity contract that provides, in return for a lump sum, a

monthly or quarterly payment starting immediately after retirement and continuing for the rest of the retiree’s life.

The contract is often purchased by retiring persons who want an income that is guaranteed to last for the rest of their lives, no matter how long that might be.

Analysts say this is likely to grow over time, given that a lot of the retirees under the Contributory Pension Scheme were beginning to be more aware of the benefits of annuity, but raises concern over the capacity of the market to absorb the size of the risk.

According to the African Insurance Barometer, launched recently by the African Insurance Organisation(AIO), individual annuity business is the fastest growing personal line business, particularly in the Sub-Sahara Africa including Nigeria.

t’s neither possible nor wise for insurers and reinsurers to speculate and make price changes in models to account for global warming that people think will occur in two decades time, according to Torsten Jeworrek, chief executive officer (CEO) of Reinsurance, Munich Re. In the light of increased catastrophe losses in both 2017 and 2018, including unprecedented wildfires in some parts of the world, the potential for more frequent and severe natural catastrophe events as a result of the impacts of climate change is again a hot industry topic.

Speaking during the reinsurance giant’s investor call surrounding its January 1st 2019 renewals experience, Jeworrek said that whether or not global warming is reflected in catastrophe reinsurance pricing, depends on what you expect from global warming, and “which type of regional implications you anticipate in the future.

So, the answer is not clear in my opinion.”

For insurers, reinsurers and third-party capital participants, 2017 and 2018 served as a reminder that, after a decade without a major land falling U.S. hurricane, it’s always a matter of when and not if disaster strikes. 2017 is one of the costliest catastrophe loss years on record for the re/insurance market, and while 2018 losses were somewhat lower, they remained above the longterm average.

The potential impacts of climate change and the connection with more frequent and severe storms, droughts, flooding, and other natural catastrophe events is an ongoing debate that is inherently complex and chal-

lenging to predict, model and price.

Jeworrek noted that where we see changes in risk and exposures driven by climate change, the models need to be updated to reflect these changes, but continued to caution re/insurers against being speculative about the future.

“What is not possible and not wise, is to make rough speculations and make price changes in models for global warming that we think will come in 20 years from now. It is big and bad for society, but for insurance and reinsurance we have to make very gradual and regional changes to take in the impacts of that,” said Jeworrek.

Interestingly, Jeworrek added that one of the global warming impacts where the firm believes changes are evident are with wildfires, and here models are updated accordingly. The reinsurer announced that it is reviewing its exposure to wildfires globally after outbreaks in California, Chile, South Africa, parts of Europe, Canada, and elsewhere, resulting in consecutive years of large event wildfire losses of between €400 million to €500 million.

At the same time, Munich Re said one small portfolio had suffered from the accumulation of many smaller weather claims, an aggregate loss cover, and, as a result is reducing this exposure. But despite rising wildfire losses and high levels of cat losses over the last two years, Jeworrek said Munich Re sees no reason to revisit or increase its large natural catastrophe budget.

“In what direction would it develop overtime and accordingly to our model? Most likely no change.

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Pension Today

BUSINESS DAY

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In Association with

Pension Compliance: Key to measuring governors seeking re-election Modestus Anaesoronye

A

their offices, and want to continue or install their representatives in the ongoing elections.

According to the Pension Reform Act 2014, the objective of the CPS among others, is to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory, States and Local Governments or the Private Sector, receives his retirement benefits as and when due. Apart from that, it is also to assist individuals by ensuring that they save in order to cater for themselves in old age.

This development, market analysts say, reveals how poorly governments in third world countries like Nigeria are responsive to workers welfare and social security, if pension and insurance of their employees could be ignored while they seek re-election into political offices.

According to analysts, while these kinds of social security services should form key planks of political promises and manifestos in seeking for political positions or re-election into political offices, as found in other jurisdictions, Nigerian’s are deceived with promises of good roads and electricity.

Longe Eguarekhide, managing director/CEO, AIICO Pension Managers Limited, who commended government of states that have complied, had said it takes

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

‘

The savings culture thus introduced, provides an autonomous pool of long-term capital that can be accessed to propel development in critical need areas

‘

key plank to measuring the performance of state governors and why they or their nominees should be re-elected into office next Saturday, should be on how much they value their citizen’s welfare, particularly on pensions.

So, the electorate across the states should measure governors seeking re-election on whether or not they have complied with the countries Contributory Pension Scheme (CPS), which targets to guarantee regular pensions in retirement.

As at the end of the third quarter of 2018, twenty four (24) States of the Federation had enacted laws on the Contributory Pension Scheme (CPS), with four having fully complied with provisions of the Pension Reform Act 2014.

While six states were at the bill stage, five states had decided to adopt a pension scheme other than the CPS. In this regard, two states had already drafted pension reform bills that were undergoing legislative processes. One state had not commenced reforming its pension system.

From the data obtained from the National Pension Commission, only four states - Lagos, Niger, Rivers and Osun have fully complied, contributing to their employee’s Retirement Savings Account (RSA); payment of accrued rights and provision of group life insurance, as provided in the Contributory Pension Scheme(CPS).

While another eight states Anambra, Delta, Ogun, Kaduna, Zamfara, Edo, Ondo and Ekiti, have complied half way, contributing to their employees Retirement Savings Account (RSA) and payment of accrued rights, but yet to provide group life insurance.

While 17 other states - Imo, Jigawa, Kogi, Oyo, Nasarawa, Taraba, Akwa Ibom, Kebbi, Sokoto, Benue, Kwara, Plateu, Cross River, Bayelsa, Abia, Ebonyi, and Katsina, have failed to provide these key welfare programmes to their employees, are enjoying the luxury of

courage, compassion and interest in citizens welfare, for a sitting governor to provide these for its employees.

While confirming that only four states in Nigeria are fully compliant with the CPS, he urged workers in other states to push for their rights to adequate pension arrangements.

“The savings culture thus introduced, provides an autonomous pool of long-term capital that can be accessed to propel development in critical need areas. Successfully done, this can spark off a virtuous cycle of development.”

Aderonke Adedeji, president,

Pension Fund Operators Association of Nigeria(PenOp) also had said the states are at different stages of implementation, but the good thing about it is that some progresses is being made.

Adedeji said getting the states to comply with provisions of the CPS is a long and pain staking process.

“For a lot of the states, you cannot go in and get a yes for an answer. It literally does take years to talk to the executives, labour unions, and other stakeholders.”

She said PenOp and PenCom have continued a joint effortof going round the states to encourage them to comply with the pension law.

The Contributory Pension Scheme, as the name suggests, is contributory in nature, making it mandatory on employers and employees in both the public sector and private sector organisations with three or more workers to contribute 10 and 8 percent respectively of the emoluments of the employee into a Retirement Savings Account (RSA).

Apart from ensuring that every worker receives his entitlement as and when due, the other objectives of the scheme includes to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

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

Despite rise in collapsing houses, building insurance yet to find market Stories by Modestus Anaesoronye

I

n the last three years more than 15 incidents of collapsed buildings have been reported across the country with high human casualties. In Abuja, Cross River, Kwara, Lagos and Osun States, the story is the same: sudden collapse of buildings either under construction or renovation. In certain cases, more floors were being added to the existing floors (possibly without appropriate approvals) and without consideration for the structural strength or quality of the initial foundation, say’s Funmi Babington-Ashaye, managing director/CEO, Risk Analysts Insurance Brokers Ltd, in a recent article on ‘Spate of building collapse and what insurance can do’.

Babington-Ashaye stated that the regularity, huge loss of human lives and property, as well as the adverse impact of these incidents call for serious introspection and greater care by landlords, property developers, professionals and regulatory agencies in the building industry.

She said it is time for more regulatory activism in this sector. “The

L-R: Segun Bankole, head, Corporate Communications and Brand Management, Sovereign Trust Insurance Plc; Oladipo Alu, senior. partner, J. Chrystal & Co.(celebrant) and Abdul Imoyo, head, PR & Media Relations, Access Bank Plc at the 50th birthday party held in Lagos.

weight of the law should be brought to bear on culprits of non-compliance to laws, regulations and standards. It is time for greater premium to be attached to the lives of Nigerians.”

Babington-Ashaye stated that despite these precautionary measures, risks are still there, underscoring the need for adequate insurance for public buildings, as well as contractor risks for building under construction.

Unfortunately, the insurance industry is sitting on billions of naira that is yet to be exploited.

The ‘sleeping fortune’ is on taking advantage of building insurance made effective in the Insurance Act 2003, as a compulsory policy to take care of occupiers liability in the event of accidents. Its impact, analysts have said, is capable of generating several billion naira premiums annually if implemented.

Section 64 of the Insur-

ance Act 2003 provides that “No person shall cause to be constructed any building of more than two floors without insuring with a registered insurer, his liability, in respect of construction risks caused by his negligence or the negligence of his servants, agents or consultants, which may result in bodily injury or loss of life to, or damage to property of any workman on the site or of any member of the public.

A person who contra-

venes the provision of this law commits an offence and on conviction shall be liable to a fine of N250,000 or imprisonment for three years, or both.

While section 65 of the Insurance Act stipulates that “Every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood. The penalty for non-compliance with this occupier’s liability insurance is N100,000 or

one year imprisonment, or both.

The National Insurance Commission (NAICOM) through its Market Development and Restructuring Initiative (MDRI) to enforcing these compulsory insurances in Nigeria, which occupier’s liability insurance of public buildings and building under construction above two floors fall into.

The MDRI project is a medium term plan (20092012) of installing the first phase of the necessary reforms in the areas of industry capacity, market efficiency and consumer protection in the Nigerian Insurance market.

However, like many other areas of insurance which remained crawling as a result of reasons including low awareness, apathy and most importantly, operators’ inability to take proactive steps on implementation, this goldmine has largely remained a dream.

While the operators themselves have unanimously agreed that the regulator is conceivably doing what it is supposed to do in terms of creating awareness, having launched in the six geopolitical zones of the country, it is left for the operators to step up action and sell the product.

STI links efficient operation, quality service to increased technology adoption

S

overeign Trust Insurance has revealed that technology has been very instrumental to its continued growth trajectory despite challenges in the industry.

Olaotan Soyinka, managing director/CEO of the Company made this assertion at a recent media parley held during the company’s Transformation Retreat in Lagos. Soyinka said that more than ever, the company is set to take optimal advantage of what technology brings to the table in driving operational efficiency. Furthermore, he posited that the business model currently being run by the organisation is basically customer-centric, as it has been identified that the customer is supreme in the everyday operations of the underwriting firm.

Lekan Oguntunde, head of ICT for Sovereign Trust

Insurance Plc, asserted that “any forward-looking organisation must have real time, cutting-edge technology at the fulcrum of its business operations and that is what Sovereign Trust Insurance Plc has adopted in pushing the frontiers of its operations beyond the

shores of the country”.

He noted that the company has identified that 21st century technology is the hallmark and arrow-head of any successful business, which was what informed the company’s adoption of the second-to-none business application software

in the insurance industry, known as Eskadenia, in 2009 with several upgrades over the years to ensure seamless service delivery that will delight the teeming customers of the underwriting firm.

According to him, the software was developed using an Object-Oriented

programming language which was designed to automate the General Insurance policy life cycles of the company’s customers, reduce operational gridlock, enhance job quality, maintain up-to-date historical data on all businesses generated, while ensuring high level of customer confidentiality and security.

Lekan Oguntunde further mentioned that in order to meet all the functional specifications and technical capabilities as required by its teeming customers, all necessary enhancements have been made on the Eskadenia Software to accommodate the recent changes and ensure the successful execution of the new business model. Conclusively, he stated that “tapping into modern technology can yield a plethora of opportunities for any upwardly

mobile organisation”.

In the same vein, the company’s spokesperson, Segun Bankole, said that in furtherance of the implementation of the adopted business model, technology, especially the social media platforms would be employed in reaching out to the insuring public, while at the same time using the medium to sensitise Nigerians both home and abroad, on the benefits of taking up an insurance policy with the company.

Sovereign Trust Insurance Plc will continue to provide insurance and financial risk- based management solutions that will strategically position the company as a market leader in the Insurance Industry and consequently impact on the fortunes of its teeming customers and shareholders alike, the company said.

PRIVATEEQUITY & FUNDRAISING 27

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Why PFAs see private equities as less attractive to invest MICHEAL ANI

D

espite having over N8trillion sitting as Asset Under Management (AUM), Pension fund administrators still see the private equity space as less attracting to invest due to its enormous technicality, industry experts confirmed to BusinessDay. Some of such technicalities are its high expertise skills as well as the in-depth technical know-how that is required, making fund investors shrug off investment into the asset class, according to two CEOs of leading pension houses in the country.

“Private equity space is an asset class that is very risky because it requires more expertise and knowledge of how it works.

That is why the percentage allocation by the pension industry into space is smaller than expected”, said Misbahu Yola, Managing Director and CEO, FCMB Pensions.

Regulation by the National pension commission stipulates a maximum of 10 per cent aggregate investment stake of Assets under management (AUM) in private equity funds by PFAs. Also, in single private equity, PFAs are not to exceed a stake of 5 per cent of assets under management.

However, data from the Na-

Domestic Credit Indicators

tional Bureau of statistics shows that over time, the entire investment by the industry is below one per cent.

This, however, begins to arouse questions that an asset class that as being viable and rewarding good long term investment returns despite political uncertainties is receiving such poor investment from pension fund administrators.

Eguarekhide Longe CEO/ MD AIICO pensions said in a phone response to BusinessDay that “the limit by the regulator for investment in private equity funds is 5 per cent of funds under management, so as such we can’t expect to see a very high uptake,” “Secondly, private equity is place vanilla, as you need to put up so much together, there

has to be a team of people who must come together to propose a certain style of investment of real companies.Hence, we won’t find a lot of private equity offers coming up and the one that comes up, people will review them and decide whether they can back the sponsors that also, is a reason why you will not see a huge commitment to private equity funds,”

“Lastly, not every PFA operator is comfortable with the private equity offtake because they do not understand it very well, or they are not comfortable with feeding their contributors money to the third party to do real sector investing, that is why you will find out that most people that have committed much to private equity funds are those that have some certain degree of investment banking backgrounds, which makes it a little easier for them to understand what the people are offering, the process by which the private equity investment is made and harvested” As at the second quarter of 2018, investments by pension administrators into private equity funds stood at N38.3 billion, representing about o.5 per cent of the total N8.23 trillion fund assets by the industry.

Federal government securities including bonds and treasury bills gulped a larger chunk of the asset, accounting for about 70 per cent of the total funds’ asset by the industry, while money market instruments came next accounting about 9 per cent of the total asset funds.

“Exiting private equity is not as easy as that of its public equity counterpart or even exiting a bank account. Hence, there is a lot more risk and that is why exposure to the industry is minimal” Yola said.

New AVCA study shows private credit as a viable solution for SME financing in Africa

P

rivate credit remains a niche sector in Africa, with 32 per cent of respondents seeing it as a preferred strategy when investing in African PE over the next three years, according to a report by African Private Equity and Venture Capital Association (AVCA) -- the pan-African industry association— in its first comprehensive report looking at the private credit asset class in Africa The report notes that while private equity (PE) has historically been more prevalent in Africa than private credit, this asset class encompasses a range of strategies that can provide attractive alternative financing options for African small and medium-sized enterprises (SMEs).

They also play a key role in redressing the shortfalls in financing that are commonly faced by private businesses on the continent by providing other options for the consideration of investors desirous of greater clarity over returns.

“A major factor behind increased interest in private credit

Funds raised in final closes in Africa, 2012-2017

in Africa relates to the difficulties that small and medium-sized enterprises (SMEs) in Africa often face in accessing financing through traditional avenues, such as banks”, the report says. “As noted by the African Development Bank, 18 per cent of small firms and nearly 14 per cent of medium-sized firms in Africa cite lack of finance as their biggest business obstacle”.

Medium-sized enterprises can be particularly hamstrung given

that their financing needs are of a size rendering them unable to access credit either from microfinance institutions or commercial banks, according to AVCA. In 2017, the IFC estimated the finance gap for the 44 million micro, small and medium-sized enterprises in sub-Saharan Africa to be US$331bn, with over half of these enterprises being financially constrained.

African SMEs often face chal-

lenges in accessing capital from traditional providers (banks) and may be reticent to dilute their ownership with private equity - this is the gap that private credit can mitigate.

The report also presented the results of interviews conducted with firms currently or formerly active in Africa’s private credit markets.

Respondents touch upon different topics pertinent to the industry, from its level of competition and the method in which opportunities are sourced, to the strength of the protections for debt covenants in Africa, to the extent and nature of the market’s exposure to macroeconomic cycles.

A key theme that emerged from the research revealed despite the high level of demand from African SMEs, private credit remains constrained. Respondents noted that misperceptions around private credit’s risk-return profile need to be addressed for institutional investors to become more open to backing the industry.

Private Credit in Africa provides

further context to these themes through an LP survey. It found that while most LPs expect African private credit to be more attractive compared to other emerging markets and to developed markets over a ten-year time horizon, factors such as currency risk, GPs’ limited track records, and legal, regulatory, and tax issues are some of the key challenges that they face when seeking to invest in the asset class in Africa.

“This is AVCA’s first in-depth research undertaken on the private credit market in Africa,” Enitan Obasanjo-Adeleye, Director, Head of Research, AVCA, says.

“As the data reveals, there are encouraging signs that adoption of this asset class is set to grow on the continent, providing additional avenues for companies to raise capital for their expansion and create much-needed jobs. We look forward to building on this work at our upcoming annual conference in Nairobi where we will be presenting our findings and hosting a panel discussion on the topic.”

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: OGAR DAVID ) 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

Continues on page 34

28

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In Association with

Baobab MFB targets N28bn loan disbursement in 2019 Stories by Hope Moses-Ashike

B

aobab Microfinance Bank Limited plans to disburse the sum of N28 billion in 2019, which is a 40 percent increase above N20 billion targeted in 2018.

The bank in 2018 disbursed a total of N14 billion out of the targeted amount, based on customer demand.

Meanwhile, the bank added 22,000 customers to increase its customer base to 87,000 in 2018 from 65,000 recorded in 2017.

“You will see that we have consistently grown. By my estimate, every year we grow on the average 60 percent in our loan book and in our deposit and everything and this we

intend to maintain”, Kazeem Olanrewaju, managing director/CEO, said on the sideline of the bank’s customers forum in Lagos.

The bank is determined to make business much more convenient for the customer to do with the bank. In view of this, he said the bank is going more digital so that customers can do their transaction seamlessly wherever they are.

“It has been implemented in two of our subsidiaries in other countries and this is going to be done in Nigeria.

Now aside from this, we have also introduced a whole lot of products to take care of variety of customers”.

Such products include micro housing loan, TAKA, which is electronic small loans, and also, the bank can give moratorium, three

Kazeem Olanrewaju, Baobab MFB, managing director/CEO

months, a month or two months as the case may be.

“All these are put together

to make sure that the customers have a very good experience and have an excellent

experience with Baobab, so our plan for the future is to be able to render excellent service that will take our customer to the top. The growth of our customer is indirectly the growth of the company, so today the customer is at the centre of everything that we are doing and that is going to continue”, Olanrewaju added.

He disclosed that the bank’s board has set September this year to make sure that the bank is fully recapitalised to N5 billion, in line with the directive of the Central Bank of Nigeria (CBN).

“Let me also say that all the shareholders are very eager to make their contribution. I think it is just a matter of how is it going to be done. Interestingly, I have four banks in Nigeria who said let’s pay the remaining part of your capi-

tal. They made that proposal to us. We also even have the Nigerian Stock Exchange (NSE) saying they want to do this for us. We have a lot of capital firms who said they want to raise bond and all the rest. So, it’s given, but when I look at the performance of the company in the last one year, I can tell you that our earning has grown more than 500 percent. So the shareholders will be interested in taking up their right and you know by regulation we have up to April 2020 to recapitalise. The other thing that we are looking at is that given what has happened last year, by the time we end this year, its most likely that we will be close to that capital base even with our profit without anybody making any contribution.

Sterling Bank reaffirms pledge for sustainability, joins UN Global Compact Heritage Bank’s tech start-ups

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terling Bank Plc, has become a participatory member of the United Nations (UN) Global Compact - the world’s largest sustainability initiative with more than 9,000 businesses and non- business participants in 135 countries.

The Global Compact is a voluntary initiative to promote sustainable development and good corporate citizenship, a set of values based on universally accepted principles, a network of companies and other stakeholders as well as a forum for learning and exchange of experiences.

The UN Global Compact Office said in a statement that as a participant, Sterling Bank has committed to set in motion changes to its business operations so that the UN Global Compact and her ten (10) principles become part of its business strategy, day-to-day operations and organisational culture. Furthermore, to incorporate the UN Global Compact and its principles in the decisionmaking processes of the high-

est-level governance body like its board of directors.

Sterling Bank is expected to advocate the UN Global Compact and her ten principles via available communication channels and communicate annually with its stakeholders on efforts to implement the UN Global Compact principles and post this Communication on Progress (COP) on the UN Global Compact website.

The bank is also expected to take actions in support of the UN goals and issues, in-

cluding the Sustainable Development Goals (SDGs) and to communicate efforts made in achieving these goals.

Prior to being a member, Sterling Bank had already adopted some sustainability initiatives in line with the UN Global Compact principles.

They include the Sustainable Banking Policy which contains elements of human rights, labour relations and denouncing child labour.

The bank has also developed a Diversity & Equality Policy which incorporates

gender equality and women empowerment.

Besides this, the Bank’s Carbon Footprint Policy highlights its commitment to protecting the environment; and it has also developed an Anti-corruption policy which explicitly emphasizes its zero tolerance for corruption.

The 10 principles of the United Nations Global Compact is centered around human rights, labour, environment and anti-corruption.

The concept of human rights acknowledges that every single human being is entitled to enjoy his or her human rights without distinction as to race, colour, sex, language, religion, political or other opinions, national or social origin, property, birth or other status.

The UN Global Compact’s labour principles are derived from the International Labour Organisation’s (ILO) Declaration on Fundamental Principles and Rights at Work.

Other principles are those that relate to the environment and anti-corruption.

initiative to boost economic growth

H

eritage Bank Plc, is adopting a focused approach that removes barriers and galvanises the critical sector of the economy around a bold growth agenda with the launching of its innovation accelerator programme tagged, “HB LAB”.

The maiden edition of HB LAB is a 12-week programme, expected to provide technology startups with an enabling environment, resources and support required to innovate and accelerate impactful solutions with the potential to radically improve financial Inclusion/Intermediation, agriculture and other related problems affecting critical sectors of the economy.

About 154 applicants were reviewed and 24 of them scored above 60, while the final selection will produce seven successful applicants, from which the winner will emerge.

Speaking on the HB LAB, , Ifie Sekibo managing director/CEO of the bank, explained that in Nigeria, tech-

nology startups still account for a relatively small share of all businesses, but they have an outsized impact on economic growth, because they provide better-paying, longer-lasting jobs than other start-ups, and they contribute more to innovation, productivity, and competitiveness.

Sekibo disclosed that the team with the most compelling solution will be awarded a $25,000 grant alongside access to workspace and IT infrastructure for solution testing and development for a defined period.

According to him, the HB Innovation Lab Programme is open to product development teams and technology driven startups across Nigeria.

Sekibo stated that the critical areas of focus are fintech, agriculture, education, digital, security and power, whilst noting that the application requirements include names, age, gender, contact number, home and email addresses of the participants.

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New loco engines ready by year-end, says NRC Pg 30

JLR gives XE more purposeful, assertive stance

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occupants. Every aspect of the cabin has been enhanced for increased convenience, improved stowage and better passenger comfort.

The influence of Jaguar’s flagship two-seater sportscar is also evident as both the SportShift gear selector and JaguarDrive Control switch shared with the F-Type are on the revised centre console.

A new steering wheel, shared with the all-electric I-PACE, features hidden-until-lit graphics and capacitive switches for intuitive, tactile control of key functions.

The new XE is also the smartest and most connected yet. Jaguar’s Touch Pro Duo infotainment system, shared with I-PACE, is also available for the first time in the XE, delivering instinctive control through a pair of seamlessly integrated high-resolution touchscreens. Wireless device charging and clever Smart Settings technology also make their first appearance in the XE. The first-in-segment ClearSight interior rear-view mirror improves

safety and convenience by ensuring the driver has an unobstructed view of the road behind. Using a wide-angle rear-facing camera, the system feeds images to a high-definition screen within the frameless rear view mirror; unhindered by tall rear passengers, poor light or rain on the rear screen.

Explaining more on the latest addition to the JLR family, Ian Callum, Jaguar Design Director, said: “XE’s uniqueness is its totality. Customers get a complete package of progressive design, innovative technology and extraordinary driving dynamics.

We don’t do ordinary and new XE personifies this’’.

The design chief said that, his team and himself got huge satisfaction out of improving a car that they are all so familiar with and had lived with it.

In his submission, ‘’We understand its character and it’s a wonderful opportunity to make a great car even better. With new XE, we’ve done just that in every way imaginable’’. He stated.

Jaguar XE’s lightweight aluminium

ber has extended its PartnerInjury-Protection (PIP) cover for driver-partners to include a daily payment benefit. Since 2017, Uber driver-partners and riders across Nigeria have been protected on the road, however, but with this new update, driver-partners in the country can now have more peace of mind when using Uber.

Lola Kassim, general manager for West Africa explains that, “We believe this extended partnership with AXA Mansard Insurance will play a huge role in achieving our goal of reliable, affordable, and safe transportation options for all driver-partners and riders across Nigeria’’.

According to her, this updates forms part of Uber’s global commitment across the Middle East and Africa (MEA) region and is a unique, first of its kind solution for driverpartners and riders using technology apps across Nigeria.”

Driver-partners are covered from the moment they accept a trip, while driving to pick up a rider, and until the trip ends, and riders will be covered from the moment a trips starts, until intensive body structure continues the trip ends. to play a major role in the car’s agile In an accident resulting in injury handling, exceptional safety and ef- during a trip, driver-partners and ridficiency. ers will have access to some benefits Standard on all XE models, Dy- like medical cover, death and funeral namic mode amplifies the car’s sport- payment, permanent disability and ing character, with faster gear shifts, sharper throttle response and increased steering weighting.

The new XE is available with a choice of clean and efficient Ingenium petrol engines. The 2.0-litre Ingenium petrol is available with 184kW and 221kW outputs, badged P250 and P300 respectively.

XE’s entry-level specification now features an automatic transmission, 18-inch wheels, electric leather seats, new daily payment benefit (injury).

Medical cover: If an accident all-LED headlights and tail-lights with updated signature graphics, front and happens during trip, this cover reimrear park aid, rear camera and lane burses driver-partners and riders for necessary medical treatment costs up keep assist.

Depending on the market, cus- to N600,000. In addition, the cover retomers can select from S, SE and HSE imburses ground ambulance service trim levels, with each also available costs up to N20,000.

Death and funeral payment: In in sporty R-Dynamic guise. A range of option packs provide even greater the unfortunate event that a driverpartner or rider dies as a result of an personalisation. accident on-trip, their dependents or heirs will benefit from a lump sum payment of N2million andN100,000 to cover funeral expenses will be reimbursed.

Permanent disability: In the unKia Motors in meeting the objective fortunate event that a user suffers a permanent disability as a result of an of providing world class service that accident on-trip, they will benefit from is second to none in the local auto a lump sum payment of up to NGN industry.

2,000,000 (the amount depends on In addition to bringing to the the severity of the disability). foray, vehicles that deliver best-inNew|daily payment benefit (inclass features and affordable price jury): If a driver-partner is hospitalized for value, the vision of Ka is to bring for more than 24 hours as a result of an its world-class facilities closer to its accident that happened on-trip and customers and offer a model range are thereafter unable to drive because of vehicles that meet their dreams of those injuries, they will receive a daily payment of N1,000 for up to 30 and aspirations.

The new appointment of Kamlik days whilst they are medically certiMotors in Kaduna is aimed at keep- fied by a doctor as unfit to conduct ing pace with consumers’ evolving their transportation business.

The Injury Protection cover has wants and needs in order to remain competitive. The shifting consumer been tailored specifically for those interests and the need to meet on the road, building on the security their expectations with exceptional available through the Uber app and service delivery has propelled Kia ensuring a safer ride during every journey booked through the Uber Motors Nigeria to extend its reach app. This is an innovative and first of by signing a new dealership agree- its kind solution for driver-partners ment with Kamlik Motors Limited to and riders using technology apps continue to offer cutting edge auto- across Nigeria.

Kamlik Motors joins Kia dealership in Nigeria

K

ia Motors Nigeria has announced a new partnership with Kamlik Motors Limited in order to further expand its market reach and ease of access to teeming customers in the country. Sources at Kia said that, the dealership agreement will facilitate in bringing the brand closer to the people in Kaduna and its environs.

Speaking on the new partnership, Olu Tikolo, vice president, Kia Motors Nigeria, said, “this joint venture with Kamlik Motors is an important step in our expansion plans for the Nigerian market.

Finding the right partners to work with in satisfying our customers is very vital to us. We are delighted to work with the experienced team of Kamlik Motors and are confident that our customers and automobile enthusiasts will be the ultimate beneficiaries of this relationship.”

Mohammed Ndakogi, Chair-

…At no extra cost

U

MIKE OCHONMA mikeochonma@gmail.com hings are looking up for the iconic Jaguar Land Rover (JLR) British automakers that has continued to cross the T’s and dot the I’s within the global automotive landscape judging from the newly enhanced new Jaguar XE. In the manufacture of the vehicle, it delivers an enhanced exterior design, all-new luxurious interior and advanced technologies, nourished with an updated exterior design that gives the XE a more purposeful and assertive stance.

Continuing on from the beautifully judged proportions of the original car, the new XE’s sporting intent has been taken up a level, with contemporary design cues inspired by the F-Type sportscar.

Over all, the XE appears wider and lower than before, with larger front apertures, bold graphics and muscular forms eluding to the car’s performance and advanced aerodynamics.

New all-led headlights with a striking ‘J’ blade daytime running light signature create a more purposeful look.The rear of the car also features a new bumper design and slender allled tail-lights with updated signature graphics which accentuate the visual width of the car, giving the XE a more planted appearance.

For an even more performanceorientated character, R-Dynamic models include additional exterior design elements including aircraft winglet-inspired sculpted surfaces, dark mesh detailing to the rear valance and alternative wheel styles.

On the interior, the sporting influences continue with sports-style seats with contrast stitching, Satin Chrome gearshift paddles and R-Dynamic treadplates.

The beautifully-crafted all-new interior features extensive use of softtouch materials, premium veneers and all-new door trims that improve usability and practicality.

New XE’s luxurious and technology-packed interior delivers more comfort, quality and connectivity for all

Uber updates ‘PIP’ cover for Nigeria’s driver-partners

man/CEO, Kamlik Motors Limited, said, “our relationship with Kia Motors Nigeria is in furtherance of our corporate mission to provide customers with quality vehicles and services. We constantly seek ways to exceed our customers’ expectations and we believe this partnership will give us the opportunity to do just that.”

He disclosed that, the new Kia

franchisee will offer a full range of Kia vehicles, from the Kia Rio to the Kia Quoris, wherein the customers will have ease of access and buy their preferred Kia cars.

It is indeed a significant step forward for Kia who has seen substantial growth over the years, making the vehicles available to a wider marketplace. The new dealership with Kamlik Motors will facilitate

mobile technology in the country.

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Local and global rail news as it breaks

New loco engines ready by year-end, says NRC MIKE OCHONMA mikeochonma@gmail.com

T

h e Ni g e r i a n R a i l way Corporation has cleared the air on the importation and delivery of 18 units of wagons two weeks without the locomotive engines to operate it.

Only last week, stakeholders in the railway sub-sector expressed worry over the recent importation of open wagons from China by Nigerian Railway Corporation (NRC) for use on the existing narrow gauge, even though there are no functional locomotive engines that can travel as far as Kano and Kaduna with container loaded wagons.

But in a swift reaction to the concerns raised by some critical stakeholders within the railway industry over the non-inclusion of locomotives to run the wagons, Jerry Oche, an engineer and Regional District Manager, Nigerian Railway Corporation, with the headquarters in Ebutte Metta, Lagos, told BusinesssDay, that the locomotives are expected to arrive the country towards the end of this year.

According to the senior NRC official in telephone chat with our reporter on Monday this week, ‘’Production time for railroad locomotive engines and wagons across the globe is not the same because of the design processes’’.

Responding to the implications for the NRC and how it will cope with its operational demands in the face of existing fewer locos being over stretched, Jerry Oche said, ‘’We will use the available locos until the new ones arrive. We have also ordered new spare parts which on arrival will enable us

turn our more locomotive engines after servicing’’.

Fidet Okhiria, managing director of the corporation, had meanwhile attributed the importation of the 18 wagons to the renewed efforts by the Federal government to decongestant Apapa ports.

The wagons imported from China which is to be used container traffic and general cargo movement will be deployed immediately to Inland Container Nigeria Limited (ICNL), Kaduna to help decongest the Apapa port.

Last month, the China Civil Engineering Construction Corp awarded CRRC Qishuyan a contract to supply diesel locomotives and multiple-units for use in Nigeria.

The order covers four NDJ3N diesel multiple-units, two DF7GN shunting locomotives, six DF11GN passenger locomotives and nine DF8BN freight locomotives. The first batch of 10 locomotives is scheduled to be delivered in October.

The fleet is to be used on the 187 km standard gauge line between Kaduna and Abuja which was inaugurated in July 2016, and the 156 km standard gauge line between Lagos and Ibadan which is under construction for opening in 2020.

CRRC Qishuyan said the contract signed last month was the largest locomotive export order that it had won. It hoped this would open the West African main line locomotive market for

its products.

Over the years, the problems at Apapa and other ports such as Calabar and Port Harcourt have been a headache for successive administrations, which have failed to fix decaying infrastructure, reduce stifling red tape and tackle corruption.

Terminal operators, including APM Terminals, a unit of Denmark’s AP Moller-Maersk A/S, rely on generators because power cuts are so frequent. But it’s worsened in recent years, especially at Apapa.

Crumbling roads have all but ground trucks to a halt. Once they do manage to enter, drivers and businesses have to contend with a plethora of customs, immigration

Wabtec-GE Transportation merger completed

W

abtec last week completed its merger with GE Transportation, creating a Fortune 500 company that is expected to generate revenues of more than $8bn in 2019.

The $11.1bn merger rounded off on February 25 was approved by the boards of Wabtec and General Electric (GE) on May 21 last year.

Under the terms of the transaction agreed on January 28, GE sold a portion of GE Transportation’s assets to Wabtec and spun off the business to GE shareholders before GE Transportation merged with a wholly owned subsidiary of Wabtec.

Wabtec shareholders own approximately 50.8% of Wabtec on a fully diluted basis and GE shareholders own around 24.3 percent of Wabtec on a fully-diluted basis.

GE owns common stock and nonvoting convertible preferred stock, which together represent around a 24.9 percent economic interest in

Wabtec on a fully-diluted basis. GE also received around $2.9bn in cash at closing.

Wabtec has also been notified that it will now be included in the S&P 500 Index. The United States Department of Justice (DOJ) closed its review of the pending merger between Wabtec and GE Transportation on January 14.

The merger combines Wabtec’s range of freight, transit and elec-

tronics products with GE Transportation’s equipment, services and digital solutions in the locomotive, mining, marine, stationary power and drilling industries.

The merged company brings to market a robust installed base of more than 23,000 locomotives globally, with an expanded international reach with 27,000 employees across 50 countries.

The company will base its cor-

porate headquarters in Pittsburgh, Pennsylvania, with its global freight headquarters in Chicago, Illinois, and its global transit headquarters in Paris, France.

Wabtec says the merger allows the strategic combination of complementary portfolios, which is expected to create a number of synergies including creation of leading equipment, aftermarket services and digital solutions provider across the transportation sector, which can accelerate lifecycle solutions for the transportation industry and unlock significant productivity for customers by improving interoperability, efficiency and competitiveness.

Wabtec expects to benefit from the cyclical tailwinds the industry saw in 2018, including volume growth of 38 million carloads and intermodal units.

Improved utilisation and an accelerated path to automation, with the combination of GE Transportation’s digital solutions and analytics systems with Wabtec’s electronic

and security agents before they can pick up containers.

Recall that just last year, the planned refurbishment of the narrow gauge line suffered a setback when General Electric (GE) announced its withdrawal as the lead concessioner of the Nigerian railways in consortium with other international industry partners and handed it over the lead role to Transnet SOC Limited in line with its strategy to exit the transportation business.

Agreements GE reached with the Nigerian government “are now being negotiated by Transnet and its consortium partners” including Sino Hydro of China and APM Terminals, the Boston, the company said.

systems and Positive Train Control (PTC) capabilities expected to improve safety, efficiency and productivity across the industry and accelerate the path to train automation.

Deliver improved customer outcomes through expanded monitoring and services, as the combined company will have an expanded footprint of skilled technicians and repair shops.

This is expected to drive productivity gains for customers by reducing cycle time, lowering production costs and improving asset performance. The integration of Wabtec products within locomotive control systems and leveraging GE Transportation’s remote monitoring and diagnostics systems is expected to enhance performance monitoring.

Drive increased value for shareholders, with forecast average double-digit EPS growth and synergies of about $ 250m. The combined company has a multi-year backlog of more than $23bn.

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31

Tax Issues

Nigeria’s revenue authorities seen continuing tax activism Iheanyi Nwachukwu

D

espite a muted approach ahead of Nigeria’s general elections, the nation’s revenue authorities will no doubt continue with their plans to earn more revenue.

Last year witnessed a form of increased tax activism by the revenue authorities as so many events clearly demonstrated the government’s intention to widen the tax net and raise additional revenue.

In the year 2018, the Federal Inland Revenue Service (FIRS) recorded a total tax revenue collection of about N5.32 trillion. The oil component of the N5.32 trillion is N2.467trillion (46.38 percent), while the non-oil component is N2.852 trillion (53.62percent). The FIRS has a revenue target of N8 trillion for 2019.

The proposed total expenditure for the year 2019 is estimated at N8.83 trillion which is 3.22percent less than the 2018 appropriated expenditure. The Federal Government’s estimated revenue is N6.97 trillion and the estimated expenditure is N8.83trillion. This creates a budget deficit of N1.86 trillion which is a 4.9percent decrease from the 2018 budget deficit.

“Given the level of information that will become available to the

FIRS, taxpayers, especially the multinational enterprises (MNEs), are likely to experience increased information/document requests from the FIRS as well as transfer pricing (TP) audits and disputes in a bid to shore up government revenue”, according to Anderson Tax analysts.

Anderson Tax had stated in their January 2019 note tilted “Nigerian tax and fiscal outlook” that although the proposed budget for the year 2019 indicates a reduction in the projected

revenue and expenditure for the year, “the revenue from Companies Income Tax (CIT) and Value Added Tax (VAT) is expected to increase from the 2018 budgetary figures.”

“Thus, it would appear that the Federal Government would continue to drive increased tax compliance.

It is also anticipated that the Federal Government’s strategy of increasing revenue by focusing on non-oil revenue sources will continue in 2019”.

“It is also possible that the gov-

ernment will introduce new items to the list of items banned from importation within the course of the year. Although this move may result in a reduction in revenue from Customs Duties as projected by the 2019 budget, it would be in line with the government’s overall objective to clamp down on importations and encourage local manufacturing”, Anderson Tax stated further.

The Federal Inland Revenue Service (FIRS) recently issued Letters

of Substitution, pursuant to Section 49 of the Companies Income Tax Act (CITA) 2004 and Section 31 of the Federal Inland Revenue Service Establishment Act (FIRSEA) 2007, to banks in Nigeria, appointing them as tax collecting agents for certain listed customers (affected companies) maintaining bank accounts with such banks.

FIRS wanted Nigerian banks to seek its approval to execute transaction in the accounts of no fewer than 2,933 companies it said to have been identified for not paying taxes.

Ahead of the elections, Federal Inland Revenue Service (FIRS) wrote to banks, directing them to lift the lien on tax defaulters’ bank accounts for 30 days. The directive, which takes immediate effect, was contained in a letter from the Chairman, FIRS, to bank Managing Directors.

The FIRS had explained that it issued the directive because of the large number of taxpayers, who have besieged itself offices in their bid to regularize their tax positions and the inconveniences they are going through.

“The drive to diversify government revenue via improving the efficiency of tax authorities such as the FIRS, Customs and Ports Authorities will continue”, according to Lagos-based United Capital analysts in their March 1 note titled “Outlook for the Nigerian Economy in Buhari’s 2nd Term.”

Insight

Words into action: investing for impact Why it’s time to join the growing global band of sustainable investors Didier von Daeniken

O

ne of the most exciting trends to come out of wealth management in the last couple of years is the growing interest among clients to invest sustainably, and create a positive social and economic impact.

This was hugely evident at Davos this year where sustainability was one of the biggest topics brought up by our clients as well as business and political leaders. It was also clear that the interest spans across all ages, with the children of our clients – brought to Davos by us for our Future Global Leaders Alumni Programme – being as engaged as many of their parents.

It’s something I see every day as a private banker: affluent and high net worth individuals are increasingly thinking about their role as responsible global citizens. With the risks from major challenges,

such as climate change and lack of access to healthcare and education, becoming ever clearer, our clients are looking actively for opportunities to effect positive change.

Bridging the SDG financing gap While governments and multilateral initiatives work to provide scalable solutions to the major issues of our time, these efforts are unfortunately not enough to eliminate them. The United Nations estimates that $5-7 trillion is needed annually to achieve the Sustainable Development Goals (SDGs), with a significant and persistent financing gap of an estimated $2.5 trillion per year in developing countries alone.

I believe financial institutions and investors have a critical role to play in raising and directing new capital towards the SDGs. One example is access to healthcare, which is so fundamental to the prosperity of individuals and communities. At a global level, huge strides have been made globally to

eradicate polio, reduce child mortality and tackling HIV. However, the global health market is still subject to substantial failings, and overcoming them requires continued innovation and participation from the private sector.

Financial services firms have been eager to front-run the opportunity, developing instruments to direct funds towards healthcare initiatives in underserved markets.

An investor looking to help improve healthcare in a certain country can invest his money for a financial return and at the same time, help to bridge a gap for positive social impact.

Beyond healthcare, sustainable and impact investing solutions now cover a range of sectors from infrastructure financing to initiatives to tackle climate change. More broadly, companies are rapidly incorporating ESG (Environmental, Social and Governance) criteria in their business models, to signal the long-term viability of their business models to investors and

consumers.

The power of information sharing As wealth managers, we connect our clients to opportunities and equip them with the information they need to make good decisions. Our Asia Sustainable Investing Review 2018 showed that 86 per cent of investors lack a clear understanding of the impact and returns that sustainable investing can deliver. That’s why we also have a responsibility to educate and inform. For instance, commonly-held myths such as an unavoidable trade-off between financial gain and positive impact can be debunked by the strong performance of many sustainable investing solutions.

And as leaders in financial services and wealth management, it’s important for us to collaborate, to share information and experiences, and harness data and insights, so that together, we can shape the future of sustainable investing. Our clear aim should be to turn this

from a niche investment avenue into a core part of investor portfolios, helping to drive private funds towards the success of the SDGs.

Didier von Daeniken

Global Head of Private Banking and Wealth Management at Standard Chartered Bank

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33

Odunayo Oyasiji

Decided court cases on businesses and the principles they established/emphasized

I

Introduction t is important that every business person should have basic knowledge of the position of law on business (especially through decided cases). Having this knowledge will go a long way to equip the person as all business transactions have the tendency of becoming a subject of litigation. It will help to the person to protect himself and have an insight into the legal implications of the steps he or she is taking.

Cases Ashibuogwu v A.G. Bendel (1988) 1 NWLR (Pt. 69) 138 at 169. - The document on the face of it shows it is marked ‘Without Prejudice.’ The law has long been established that such documents cannot be received in evidence.

This kind of document is presumed not to have created a legal binding contract. Therefore, a document with such inscription does not have the value of a valid contract.

There are some other phrases that are also used which can have the same implication- example of such is ‘subject to contract’.

Dahiru v Kamale (2001) 9 NWLR (Pt. 929) 8 at 50. - A contract of employment, like any other contract, must have certain elements – offer, acceptance, requisite capacity of parties, consideration and intention to create legal relations. In other words, for an employment contract to exist there must be an offer and an unqualified acceptance of that offer. There must also be a legal consideration and mutuality of purpose and intention. In essence, a contract of employment follows the pattern of normal contracts. One of the essential elements is that there must be offer and the acceptance must be an unqualified one i.e. the person accepting must not vary the terms in any way but must accept it as it is for the contract to come into place. If the person accepting the offer varies its terms then that is not an acceptance but a counter offer.

Udoh v O.H.M.B. (1998) 7 NWLR (Pt. 304) 139 at 148 and Ehuwa v O.S.I.E.C. (2006) 18 NWLR (Pt. 1012) 544 at 568 – 569- It is an established rule of interpretation that express mention of one thing is the exclusion of the other. This simply indicates that you cannot just import things that are not mentioned into an agreement. For it to be part of it then it must be specifically mentioned.

UBA Ltd v Umeh & Sons Ltd (1990) 3 NWLR (Pt. 138) 380 at 389 and Section 128 (1) of the Evidence Act 2011 - Also important is the principle that where parties have embodied the terms of their agreement in a written document, extrinsic evidence is not admissible to add to, vary, subtract from or

contradict the terms of the written document.

Egharevba v Osagie (2009) 12 SC (Pt. III) 123 at 159 - “It is trite law that where there is oral as well as documentary evidence, the latter should be used as a hanger from which to assess the oral evidence…. This is because documentary evidence is said to be more reliable than oral evidence and it is used as a hanger to test the credibility of oral evidence…”.

The foregoing shows the weight attached to written agreements over oral. Therefore, it is very essential that agreements between parties doing business should always be reduced into writing. It is easier for the court to give effect to such agreements.

Civil Design Construction Nig. Ltd v SCOA Nigeria Limited (2007) 2 SC 195 at 271, -: “Finally, this case leading to the instant appeal is a classic and eloquent evidence or demonstration of the importance of documentary evidence, and being permanent in form, is more reliable than oral evidence.” This further buttresses the fact that the court prefers agreements to be in written form over just leaving it at the oral agreement level. The court considers documentary evidence as more reliable.

A.G. Rivers State v A.G. Akwa Ibom State (2011) 3 SC 1 at 138, the Supreme Court held: “Let me start with the doctrine of estoppel by contract. This is a bar that prevents a person from deny-

ing a term, fact or performance arising from a contract that the person has entered into.” Estoppel by contract simply means that a person is not allowed to deny the terms of a valid contract he or she entered into. The person is to fully bear the consequences and abide by the terms of the contract he or she has voluntarily entered.

Odutola v Papersack (Nig.) Ltd (2006) 18 NWLR (Pt. 1012) 470- The law is settled that where the terms of a contract are

‘

The only duty the court will take up is to interpret the simple wordings of the contract and give effect to it. The court will not read what does not exist into the contract

uncertain or vague, there can never be a valid agreement which can be said to offer itself for enforceability.

Terms of a contract must be clear and unequivocal for the court to give effect to it. The meaning of what is being said or what a term in a contract means must not be in the dark. It must be crystal clear. No room must be left for misinterpretation or misunderstanding of what is intended. Clear, unambiguous language must be used.

UBN v Ozigi (1994) 3 NWLR (Pt. 333) 385 at 404It has been consistently held that it is not the duty of a court to make a contract for parties or rewrite the one which they have made. The only duty the court will take up is to interpret the simple wordings of the contract and give effect to it.

The court will not read what does not exist into the contract.

Baba v N.C.A.T.C. (1991) 5 NWLR (Pt. 192) 388 at 413where the Supreme Court held: “That parties enjoy their freedom of contract which carries with it the inevitable implication of sanctity of their contracts. This means that if any question should arise with respect to the contract, the terms in any document which constitute the contract, are invariably the guide to its interpretation.” Courts give effect to and respect the sanctity of contracts. The Latin maxim pacta sunt servanda is a sacred doctrine for the preservation of contracts.

Hence, where parties have reduced the terms and conditions of service into an agreement, the terms re-

main binding.

UBN Ltd v Umeh & Sons Ltd (1996) 1 NWLR (Pt. 426) 565 at 605.- Where parties reduce their contracts into writing, the express terms of such contract cannot be varied or modified by anything outside of those terms.

The court is altogether bound to give effect to those terms without much ado.

Chami v UBA Plc (2010) 6 NWLR (Pt. 1191) 474 at 501.- The law is clear that where a person guarantees the liability of a third party by entering into a Personal Guarantee, a distinct and separate contract from the principal debtor’s is thereby created between the Guarantor and the Creditor. Therefore, the guarantor is liable to pay where the principal debtor fails to pay.

Oceanic Bank Int. Ltd. v Chitex Ind. Ltd (2000) All FWLR (Pt. 4) 678 at 693-Breach of contract is the failure without legal excuse to perform any promise which forms the whole or part of the contract. It is also an unequivocal and absolute refusal to perform an undertaking or obligation under an agreement.

See Omega Bank Nig Plc v OBC Ltd (2005) 8 NWLR (Pt. 928) 547 at 576- It is trite that where a valid and binding contract has been presented before a court of law, its only duty is to interpret same in enforcement terms without more.

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Hope of HIV, world’s second patient cured in London ANTHONIA OBOKOH, with wired report

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or only the second time since the beginning of the AIDS epidemic, a patient with HIV is reported to be cured in London after a bone marrow transplant, raising hope of a cure for AIDS. This is the second time a patient treated this way has ended up in remission from HIV. According to the report published by The New York Times, the news comes nearly 12 years to the day after the first patient known to be cured, a feat that researchers have long tried, and failed, to duplicate. The surprise success now confirms that a cure for HIV infection is possible, although difficult, researchers said.

The investigators published their report on Tuesday in the journal Nature and to present some of the details at the Conference on Retroviruses and Opportunistic Infections in Seattle.

The male London patient, who has not been named, was diagnosed with

HIV in 2003 and advanced Hodgkin’s lymphoma in 2012.

The donor - who was unrelated - had a genetic mutation known as ‘CCR5 delta 32’, which confers resistance to HIV. He had chemotherapy to treat the Hodgkin’s cancer and, in addition, stem cells were implanted into the patient from a donor resistant to HIV, leading to both his cancer and HIV going into remission.

Researchers from University College London, Imperial College London, Cambridge and Oxford Universities were all involved in the case.

Reports from the most experts say it is inconceivable such treatments could be a way of curing all patients. The procedure is expensive, complex and risky.

To do this in others, exact match donors would have to be found in the tiny proportion of people — most of them of northern European descent — who have the CCR5 mutation that makes them resistant to the virus.

Meanwhile, Ten years

ago, another patient in Berlin received a bone-marrow transplant from a donor with natural immunity to the virus.

Timothy Brown, said to be the first person to “beat” HIV/Aids, was given two transplants and total body irradiation (radiotherapy) for leukaemia - a much more aggressive treatment.

“By achieving remission in a second patient using a similar approach, we have shown that the Berlin patient was not an anomaly and that it really was the treatment approaches that eliminated HIV in these two people,” said lead study author Professor Ravindra Gupta, from UCL. However, according to the World Health Organisation about 37 million people worldwide are currently infected with HIV and the AIDS pandemic has killed about 35 million people worldwide since it began in the 1980s.

Scientific research into the complex virus has in recent years led to the development of drug combinations that can keep it at bay in most patients.

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35 NEWS

BUSINESS DAY

Mainstream Energy supplies power to eligible customers in Lagos, Eastern Nigeria OLUSOLA BELLO

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overnment’s efforts at getting stranded electricity to customers that need it through the Eligible Customer Policy has kicked off, as one of the generating companies is currently supplying power consumers in parts of the country different from its immediate operational environment.

One company that has actively engaged in this is Mainstream Energy Solutions, owner of Kainji and Jebba generating plants in North Central Nigeria, which supplies some consumers in Lagos in South West.

The company supplies 10 megawatts of electricity to its customers in Lagos currently through the Transmission Company of Nigeria for a fee.

An unidentified official of the company confirmed to BusinessDay that Mainstream was indeed involved in the process, taking advantage of the Eligible Customer Policy of the government to reach out to customers that

need its service.

“You know we operate a centralised transmission system. So it is easy for us to supply customers anywhere in the country. Or do you have customer for us?” he asked.

He added that besides Lagos, the company also supplies customers in the eastern part of the country and was prepared to service any customer in any part of the country. “We have a lot of spare capacity,” he explained.

The company produces an average of 922mw from both of its plants, but only 650mw is taken on a monthly average, because the distribution segment lacks adequate infrastructure network to get the power to homes, offices and industries where it is needed.

There are about 2000 megawatts that the government said are stranded and cannot be evacuated because of infrastructure constraints being experienced by electricity distribution companies or rejected by them because of fear of not being able to collect the tariff be-

cause the consumers would not pay for it.

Joy Ogaji, executive secretary of Association of Power Generation Companies (APGC), explained in response to a question, that company had signed agreement with a number of customers for power supply under the Eligible Consumers Policy.

She said there was no limit to the number of customers that Mainstream can supply as far as the TCN can transmit it.

In his own reaction, Kola Adesina, chairman of Egbin Power plc, said that it was easy for the company to do that because it is hydro and it costs nothing to get water, unlike the thermal plants that must pay for gas and so many other overhead costs before they can generate power.

He stated that increasing the electricity tariff may make some companies to key into it, but with the current level of tariff it is an uphill task for many of the generating companies to do.

NNPC to build fertilizer plant in Brass, power plants in Abuja, Kaduna, Kano HARRISON EDEH, ABUJA

N L-R: Abisola Oshin, head legal, CWG plc; Moruf Ireti Yusuf, vice president, service delivery, CWG; Tinu Adeyemi, group head, HR/general services, CWG; Olusegun Ajayi, business solutions manager, CWG; Efunremi Adeyipo; Adewale Adeyipo, CEO, CWG; Oluwabunmi, business intelligence analyst, CWG, and Dapo Akinsipe, Treasury Manager, CWG, at the IoD induction of the CEO, CWG in Lagos.

Uniport Business School partners CCSLD Consulting on management, leadership solutions DANIEL OBI

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niversity of Port Harcourt Business School, one of Nigeria’s frontline management and leadership training centres, has entered into partnership with Centre for Cultural Savvy and Leadership Development (CCSLD Consulting), a talent management company based in Manchester, UK. CCSLD is involved in developing people across socio-economic divides to prepare high-end professionals for leadership roles.

Under the partnership, according to a statement, Uniport Business School will

certify clients drawn from diverse ethnic national, gender, socio-economic and religious backgrounds trained, coached and mentored by CCSLD. Okey Onuchukwu, director of Uniport Business School, and Osoba Otaigbe, CCSLD director, according to the statement, endorsed the pact at the director’s Uniport office in Port Harcourt, Rivers State Onuchukwu and Otaigbe expressed delight at the prospect of taking professional excellence to a new pedestal through a clientcentric collaboration and teamwork.

The Centre for Cultural Savvy and Leadership De-

velopment is a bespoke business solution consulting and training company with core competencies in leadership development, change management and building inter-cultural proficiency.

CCSLD has developed learning solutions to address the many challenges facing today’s business administration, management, leadership and inter-cultural competence based on the following strategy: Acting as a catalyst for change, development and improvement through shared knowledge, experience and expertise.

It is also committed to a vibrant and diverse working community, and creating a

rewarding work and learning environment, equipping clients with the practical tools and resources necessary to continually enhance and build capacity across their organisations and providing achievable solutions that measurably support goal-focused business priorities and objectives In addition to partnering with the University of Port Harcourt Business School to deliver effective and efficient individual and organisational success in the Nigerian market, CCSLD is also in partnership with the Centre for Cultural Intelligence, USA, to provide robust solutions to its clients.

igerian National Petroleum Corporation (NNPC) says it is ready to build additional Independent Power Plants (IPP) in Abuja, Kaduna and Kano, which is expected to add 4,0000 megawatts of power to stabilise the national grid.

The National Oil Company also announced that it would construct a fertilizer plant in Brass, Bayelsa State.

Chief financial officer of NNPC and chairman of the Board of NNPC Power Subsidiary, Gas and Power Investment Company (GPIC), Isiaka Abdulrazaq, gave the information at the inaugural board meeting of GPIC in Abuja.

Ndu Uhgammadu, the corporation’s General Manager, Group Public Affairs Division, confirmed the development in a statement on Tuesday. He noted that the GPIC was established as a subsidiary under the Gas and Power Directorate to enable the corporation monetise the abundant gas resources in the country for the benefit of the nation’s economy.

Abdulrazaq said the GPIC was a very strategic company through which the NNPC would create more value for the country, stressing that by the time

the IPPs comes on stream in Abuja, Kaduna and Kano, the Small Medium Enterprises (SMEs) in the areas would be better for it.

Abdulrazaq added that the company would focus on developing power stations, fertilizer plants as well as petrochemical plants across the states,” He noted that NNPC set up the board to enable the company achieve its set targets within a very short period, saying the board meeting had mapped out strategies to properly guide the company to articulate its Key Performance Indicators (KPI).

Abdulrazaq said the setting up of the company would add value in terms of payment of taxes and generating more revenue for the country, stressing that the company and all the IPPs that would emanate from it would also generate more job opportunities for Nigerians.

He explained that the fertilizer plant to be established in Brass, Bayelsa State, would produce fertilizer to boost agriculture in the South-South and other regions of the country.

Saidu Mohammed, chief operating officer, Gas and Power, said the coming on stream of GPIC would help the NNPC transform into an integrated energy company with the production of 4,000 megawatts of power at strategic locations.

36

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Live @ The Exchanges Top Gainers/Losers as at Tuesday 05 March 2019 GAINERS Company

Market Statistics as at Tuesday 05 March 2019

LOSERS Opening

Closing

Change

Company

Opening

Closing

Change

NASCON

N19.2

N20

0.8

DANGCEM

N197

N196

-1

DANGFLOUR

N10.4

N11

0.6

REDSTAREX

N5.5

N5

-0.5

GUARANTY

N37.2

N37.6

0.4

UACN

N8.25

N8.1

-0.15

UBN ZENITHBANK

N6.7

N7

0.3

CAVERTON

N2.45

N2.3

-0.15

N24.5

N24.7

0.2

CUSTODIAN

N6.05

N5.9

-0.15

ASI (Points) DEALS (Numbers)

MARKET CAP (N Trn

S

L-R: Olutola Mobolurin, chairman, Capital Market Master Plan Implementation Council; Mary Uduk, acting director general, Securities and Exchange Commission and Hajiya Zainab Ahmed, minister of finance, during a meeting between SEC Management and Minister of Finance in Abuja.

Express followed after its share price dipped from N5.5 to N5, down by 50kobo or 9.09percent; while UAC of Nigeria Plc decreased from N8.25 to N8.1, losing 15kobo or 1.82percent.

The volume of stocks traded increased by 75.45percent, from 228.48 million to 400.86 million, while the total

value of stocks traded increased by 32.49percent, from N2.61 billion to N3.46billion in 3,885 deals.

The Financial Services sector led the activity chart with 338.6million shares exchanged for N3.01billion; followed by Services with 19.35million shares traded for N96million.

NSE sets to list 30-year FGN Eurobond

T

3.464

tranche Eurobonds released in November 2018 respectively.

These Eurobond issuances are expected to spur private sector participation in the Nigerian capital markets as domestic investors

stand to gain increased access to instruments in the secondary markets and a widened opportunity for portfolio diversification as this listing will bring FGN Eurobonds listed on the bourse to a total of eight.

It will also facilitate the inflow of foreign investment from international fund managers seeking to diversify their portfolios from both asset class and geographical perspectives, augments the domestic savings base, and ultimately is expected to lead to more sustainable growth and development of the economy.

This five-tranche listing of the FGN Eurobonds comes on the trail of recent Federal Government bond listed on the Exchange, that include N10.69billion, 5-year, Federal Government Sovereign Green Bond at coupon rate of 13.48% in July 2018 and the N100billion, 7-year, Federal Government Ijarah Sukuk with a rental rate of 16.47% on Tuesday, April 10, 2018.

11.998

FG eyes National Savings to boost capital market liquidity

T

from N10.4 to N11, adding 60kobo or 5.77percent; while GTBank Plc joined the top gainers league after its share price moved from N37.2 to N37.6, up by 40kobo or 1.08percent.

On the laggards table, Dangote Cement Plc declined most from N197 to N196, losing N1 or 0.51percent; Red Star

400,869,168.00

VALUE (N billion)

Stories by Iheanyi Nwachukwu

he Nigerian Stock Exchange (NSE) will on Thursday March 7, 2019 list 5 tranches of the Federal Government (FGN) Eurobond; 7.143%, 12-Year, $1.25bn FGN Eurobond; 7.696%, 20-Year, $1.25bn FGN Eurobond; 7.625%, 7-Year, $1.118bn FGN Eurobond; 8.747%, 12-Year, $1bn FGN Eurobond and 9.248%, 30-Year, $750m Eurobond under the auspices of Nigeria’s newly established Global Medium Term Note programme.

The listing is in line with the Federal Government’s drive to re-balance the country’s debt portfolio, following the Debt Management Office’s (DMO) issuance of five Eurobonds in 2018; the dual tranche which was issued in February and subsequently the triple

3,885.00

VOLUME (Numbers)

Investors gain N16bn as stocks rally further tock investors booked additional N16billion gain at the close of trading on Tuesday March 5, 2019 as more equities recorded price increase.

At the sound of closing gong, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) increased by 0.14percent, while the Year-to-Date (ytd) return stood at 2.36percent.

The All Share Index closed at 32,173.66 points as against the preceding day close of 32,129.94 points while Market Capitalisation closed at N11.998 trillion against the preceding day close of N11.982 trillion.

Nascon Plc stock price rallied most after its share price increased from N19.2 to N20, adding 80kobo or 4.17percent; Dangote Flourmills Plc followed after its share price moved up

32,173.66

he Federal Government is willing to set up a National Savings Committee that will make recommendations to the government on the best ways to mobilise savings that would lead to economic growth.

Zainab Ahmed, Minister of Finance stated this when she held a meeting with members of the Capital Market Master Plan Implementation Council, CAMMIC, in Abuja, Tuesday.

She said there is need for Nigerians to imbibe the culture of savings so as to be able to participate actively in the capital market as a means of growing the economy.

“We need to grow domestic investments that will be here to stay, not just people that are shopping around for where to make profit alone. It is true that the current financial system is still tiled largely toward the banks.

There is a need to look at all the players and help solve the problems. We are open to setting up the working group so we can have a review, extract recommendations and get to work. Those that can be done immediately we will try to do them and the long term ones we can then plan to do them as we move along Ahmed said the government is concerned about the volatility of the capital market and is ready to work with CAMMIC to ensure that the market is stable.

According to her “We know we need foreign investors in our market, but most importantly we need to grow our domestic investors that are here to stay. The foreign investors come in and when anything happens, they quickly take their money and go away but our domestic investors will always be here with us.

“We are open to setting up the working group so we can have a review, extract recommendations and get to work. Those that can be done immediately we will try to do them

and the long term ones we can then plan to do them as we move along “We have worked assiduously to diversify away from our over dependence on oil and gas and the first sector the president is interested in is in the Agricultural sector.

We know that we have not yet addressed the whole value chain and this can be driven if we have a very active commodities exchange market because our goods will be of high standards as required by industries in Nigeria and outside the country.

Speaking earlier, Olutola Mobolurin, Chairman of CAMMIC expressed the need for Government to pay more attention to the capital market being the Centre of the economy as regulation of the market is paramount because the industry relies on confidence of investors Mobolurin therefore canvassed for the setting up of a National Savings Committee to drive the process of fund mobilization among Nigerians and work on a robust savings initiative that can drive the growth of the economy.

He listed some of the achievements of the council to include dematerialization, recapitalization, e-dividend mandate, financial literacy, National Savings Strategy, Streamlined Bond Issuance Progress, Access to alternative investments and Tax incentive programmes.

Other achievements are enhancing commodities trading ecosystem, enhancing market liquidity and facilitate the establishment of a credit enhancement facility.

For the year 2019, Mobolurin disclosed that CAMMIC will embark on a review of the Master Plan, conduct an impact assessment of programmes and initiatives like e-dividend, dematerialization, Direct Cash Settlement among others, expansion of commodities through registered exchanges as well as the introduction of derivatives and related instruments.

Wednesday 06 March 2019

BUSINESS DAY

37

38 BUSINESS DAY NEWS NAICOM slams mega fines on insurers...

Continued from page 1 failure to adhere to guidelines on relationship with co-insurers,

placement of risks, and premium remittance within allowable period, BusinessDay gathered.

The heavy fines have been coming from failure of some companies to adhere to local content development laws, which require that risks emanating from the domestic market, particularly oil and gas, be domiciled within Nigeria and not be taken away until local capacity is exhausted.

“We have seen situations where some insurance companies will secure risks, take the volume they want to retain, give some co-insurers what they want to give them, and take the rest abroad without getting permission from the commission,” a source in NAICOM alleged.

“This is where we come in with sanctions on such company. And there are even worse cases,” the source said.

Section 49 of the Nigerian Oil and

Gas Industry Content Development Act, 2010 requires all investors in the oil and gas industry to insure all their insurable risks relating to the oil and gas business, operations or contracts with an insurance company through an insurance broker registered in Nigeria under the provisions of the Insurance Act as amended. However, Section 50 of the same Act specifies that where an operator desires to place insurance risk outside Nigeria, it can only do so with the written consent of NAICOM which shall ensure that Nigerian local capacity has been fully exhausted.

The local content regulations of the oil and gas industry seek to increase indigenous participation by prescribing thresholds for the use of local services and materials and promoting transfer of technology and skills.

NAICOM is in collaboration with the Nigerian Content Development and Monitoring Board (NCDMB) to ensure compliance with the provisions of the Nigeria Oil & Gas Industry Content Development Act 2010,

C002D5556

Sunday Thomas, the commission’s deputy commissioner for insurance (technical), said at the 2019 business outlook for the insurance industry organised by the Chartered Insurance Institute of Nigeria (CIIN).

To achieve this, he said, it would become compulsory for all companies operating in the sector to insure their assets first with local insurers before seeking permission from the NAICOM to insure with a foreign firm.

But in an emailed response to BusinessDay inquiries on Monday regarding the heavy fines, Thomas said he was not sure which infractions were being referred to.

“However, whatever penalty that may have been imposed on any company must have resulted from a breach of known regulation or guidelines,” he said.

Thomas said with respect to the size of the penalty, any penalty imposed was known ahead of the breach, implying that operators must have weighed the cost of the infraction.

“Penalties are meant to deter misconduct, institute discipline and orderliness,” he said.

On the impact of the infractions on the industry, he said such penalised actions must have been considered as risks to the interest of policyholders, to return on investment, and to the growth of the industry.

Mohammed Kari, commissioner for insurance, said recently that NAICOM would up its ante in the area of supervision, warning that any operator that failed to comply with the rules of the market would pay commensurate penalties.

Speaking at a seminar for insurance correspondents, Kari said the commission had stepped up its regulatory action and there would be no sacred cows. He said any defaulting operator would be given opportunity to defend itself, but would be made to pay the price if found to have defaulted, adding that adequate warnings had been given to the operators.

Kari said operators were in the past granting blind insurance covers to clientswithouthavinginformationordata of the type of risks they were insuring,

Access, Diamond Bank shareholders...

Continued from page 1

of 1,529 voted for the merger, 10

voted against it, while 30 shareholders were absent. The shareholders that voted represent 97.89 percent, while those that voted against represent 2.10 percent.

The shareholders who lauded the board and management of Access Bank for the decision to combine business with Diamond Bank also urged the former to aggressively go after debtors of Diamond Bank.

Herbert Wigwe, GMD, Access Bank, assured the shareholders that their request on loan recovery was in line with the enlarged entity’s plan.

“All of us here have the same objective and there is no way the cost of the scheme of merger should be higher than the benefits of the merger,” Wigwe said.

“Diamond Bank has its own benefit, its retail reach. This merger will go a long way in improving returnson-equity,” he said.

Also at a court-ordered meeting of Diamond Bank plc on Tuesday, the voting results at the resolutions showed that 99.98 percent (representing 15.1 billion shares) of Diamond Bank shareholders voted in favour of the merger; 0.02 percent voted to abstain from the merger, while there was not a single vote against the merger.

With the approvals, the solicitors of the banks will be seeking orders of the court sanctioning the scheme and the resolutions at the meetings as well as such other incidental, consequential or supplemental orders as are necessary or required to give full effect to the scheme.

The court-ordered meetings by both banks followed the signing of the Memorandum of Agreement and announcement of headline terms, which valued Diamond Bank at approximately N72.5 billion ($200 million) and will see Diamond Bank shareholders receive N3.13 per share in cash and two of Access Bank’s shares for every seven of Diamond Bank.

Following the approvals by the banks’ shareholders, regulatory approvals from the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC) are expected to be obtained this month.

A timely approval from the CBN and SEC is crucial for the banks to meet the April 2019 timeline given for the completion of the merger.

At the close of market on Tuesday, Access gained 0.8 percent to N6/ share while Diamond was flat at N2.50/share.

Chapel Hill Denham Advisory Limited and Union Capital Markets Limited are acting as financial advisers in respect of the scheme of

merger between Access Bank plc and Diamond Bank plc.

Access Bank and Diamond Bank had announced further details post-merger which included the rationale and benefits of the deal, the estimated cost synergies, the capital management plan and the timetable.

The merger will form a leading Tier1 Nigerian bank and the largest bank in Africa by number of customers spanning three continents, 12 countries and 29 million clients. It will bring together treasury, risk management and corporate banking expertise with strong retail and digital banking capabilities to create a financial institution operating across the full suite of products for all customer segments.

The merger’s cost synergies, conservatively estimated at N30 billion per annum pre-tax, are to be fully realised within three years postcompletion.

The pro-forma capital position of the merged bank will be in full compliance with regulatory requirements for significant financial institutions with an international banking presence. However, in order to meet international standards of best practice and ensure a robust capital buffer, Access Bank and Diamond Bank have jointly agreed a strategic capital management plan and expect to achieve a post-completion Capital Adequacy Ratio (CAR) of 20 percent at the bank level and 22 percent at the group level.

pointing out that the commission was trying to eliminate blind covers that had caused the industry a lot of trouble.

“For instance, insurers grant covers to government agencies and parastatals without knowing, or having the data of workers to be covered. But no company will dare do it again because we have issued circulars to them to stop such transactions from occurring again. They must not even insure the Ministry of Defence without having their information, otherwise insurance cannot be granted,” Kari said.

“There is nowhere in the world where blind covers are granted. We have stepped into it and have issued appropriate circulars warning the underwriters and we are sure they heard us very clearly,” he said.

Tope Smart, chairman, Nigerian Insurers Association (NIA), said, “We have advised our members to play by the rules so as to avoid these heavy fines because their impact is heavy on the bottom lines of the companies concerned.”

South Africa’s $368bn economy overtakes...

Continued from page 2

Olakunle Alake (l), group managing director, Dangote Industries Limited; Beatrice Okika (2nd l), best national distributor of Dangote Cement/MD, D.C. Okika Nigeria Limited, receiving an award from Aliko Dangote (2nd r), president/CE, Dangote Industries Limited, and Joseph Makoju, group managing director, Dangote Cement plc, at the Dangote Cement plc 2018 Distributors’ Award Night, in Lagos on Monday.

Wednesday 06 March 2019

giving $0.65 a day.

“But if we assume half of this is accounted for by costs (exploration, investment in pipelines and rigs, and labour), this leaves just $0.33 a day per person,” Rencap analysts said.

But Rafiq Raji, chief economist at Macroafricaintel, said it is the quality of growth that matters more.

“South Africa is undoubtedly the more advanced economy. However, both leading African giants have been growing far below potential lately,” Raji said.

“In any case, it is not something to celebrate when Nigeria surpasses South Africa in economic output. We should only celebrate when we equal or surpass it in the other metrics that matter, like infrastructure, rule of law, power supply and so on,” he said.

Nigeria collects very little in the way of other government revenues.

As a consequence, it has little to spend, and most of that is accounted for by recurrent spending (e.g., wages) rather than investment.

In fact, rather than do all it can to lift investment, all governments in recent times have done the reverse by supporting a fuel subsidy which supports consumption. IMF estimated the implicit fuel subsidy would cost N633bn ($2bn) in 2018 and N597bn in 2019 (0.4 percent of GDP).

The Russia-headquartered investment bank outlined the 2019-23 outlook for Nigeria as it tries to regain the top spot.

For Nigeria to get real per capita GDP growth up to 4-6 percent (i.e., headlineGDPgrowthof7-9percent)requires either a doubling of the oil price, or industrialisation. Without it, per capitaGDPgrowthmaybearoundzero percent which implies headline GDP rising at roughly 3 percent annually.

To achieve industrialisation, Nigeria needs to raise the adult literacy rate from 60 percent to 70-80 percent, which the analysts at Rencap think can happen from 2024 onwards.

An adult literacy campaign could accelerate this, copying what the super-poor, war-torn state of South Korea did in the 1950s.

Nigeria needs to treble electricity consumption, which is assumed requires at least a doubling of the electricity tariff. Buhari’s team has not forced through any of the annual increases due since 2016. As a result, Nigeria has three times more installed generating capacity than actual distribution.

“We are too glib to suggest it is just about the electricity price – but a big hike will surely be part of the solution,” Rencap analysts said.

•Continues online at www.businessday.ng

Wheat gulps N362bn as Nigeria’s agricultural ...

Continued from page 2

with this, Nigeria’s wheat deficit will be at least 4.5 million metric tonnes, considering consumption would have equally gone up.

With world leader by yield, New Zealand, producing an estimated 10 metric tonnes per hectare, and in Africa, Egypt, about 7 metric tonnes per hectare, Nigeria’s wheat production yield has hovered around 2 metric tonnes per hectare. Beyond the yield, even land under cultivation is far below what is required to achieve the needed scale.

BusinessDay’s findings during a trip to Borno State last year revealed about 67,000 hectares of land that was farmed for wheat in the Chad basin has been uncultivated for several years now owing to the Boko Haram insurgency.

Abdulkadir Jidda, chairman, All FarmersAssociationofNigeria(AFAN), Borno State chapter, told BusinessDay the 67,000 hectares are spread across Ngara, Marte (which is the largest), to Baga, small pockets in Gamboru Ngala, and some other locations.

“But, nobody can go there now,”

he said.

Salim Muhammad, president, Wheat Farmers Association of Nigeria (WFAN), told BusinessDay in a previous interview that the body has not received any intervention from the current government. The last time they got support was during the Growth Enhancement Scheme (GES) programme under former President Goodluck Jonathan, when seeds were distributed to farmers, he said.

“Since it stopped, nothing like intervention came to wheat farming,” Muhammad said.

Wheat budget between 2016 and 2018 shows that while there has been growth in budgetary allocation for wheat every year, ironically, there has been a decline in wheat production, BusinessDay checks show.

This has suggested possible corrupt management of N8.85 billion Federal Government-approved budget for wheat by the Ministry of Agriculture is stunting the development of the crop, leading to rising import bills.

•Continues online at www.businessday.ng

Wednesday 06 March 2019

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Agbaje visits Bariga, pledges to transform Lagos if elected

Uche Olowu, president/ chairman of council, The Chartered Institute of Bankers of Nigeria (CIBN) (2nd r) presenting the Institute’s crest to Patrick Akinwuntan, managing director/CEO, Ecobank Nigeria (2nd l), with Bayo Olugbemi, 1st vice president, CIBN (1st l), and Seye Awojobi, registrar/CEO, CIBN (1st r), during the Stakeholders Engagement with the bank, at the Bankers House in Lagos, yesterday.

… as Oba laments electoral rigging INIOBONG IWOK

J

imi Agbaje, the Governorship Candidate of Nigeria’s main opposition party, the People’s Democratic Party (PDP) in Lagos, took his campaigns to Bariga, a suburb close to the University of Lagos, and promised that his administration would prioritise education and health sector in the state, if elected governor.

Agbaje promised to initiate a health insurance policy that would transfer the burden of hospital bills from the citizens to the government.

Paramount ruler of Bariga, Oba Gbolahan Barudeen Timson, Jagunmolu 3, bemoaned the politician’s past failed governorship election attempts in the state, describing him as a victim of serial electoral manipulations.

Oba Gbolahan Barudeen Timson, Jagunmolu 3, who received Agbaje in his palace, recalled that in

2015, celebrations and rejoicing had broken out on the streets of Bariga by residents who were confident that results at their disposal recorded victory for the PDP candidate.

According to him, “Some will win election and the result will be given to another person. In the 2015 election, my people trooped out to dance when they saw the result of the election that it favoured PDP. Suddenly, the results were changed.

When election is conducted and another thing is announced, then this country has problems.”

The PDP candidate also visited the Adaranijo Central Mosque, at Pedro area of Bariga, and also met with Muslim clerics under the Chief Imam, Ishaq Olohuniyo.

The Monarch urged PDP and the authorities to tackle the matter of rigging and electoral manipulation in Nigeria as it was an albatross on the country’s democracy and economy.

Edo JAAC declares N2.77bn allocation for LGAs

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do State Joint Account and Allocation Committee (JAAC) has declared N2,769,964,452 as total allocation that accrued to the 18 local government areas (LGAs) of the state from the Federation Account for the month of February, shared in March 2019.

Chairman, Oredo Local Government Area, Jenkins Osunde, disclosed this at the end of the monthly JAAC meeting presided over by Governor Godwin Obaseki, at Government House, in

Benin City, Edo State.

Osunde, who is also chairman, Edo State chapter of the Association of Local Government of Nigeria (ALGON), noted that teachers’ and non-teachers’ salaries gulped N1,143,184,336, while local government contributions for pension was N276,144,513.

“Total deduction from LGAs is N1,740,183,728 and net allocation to LGAs is put at N1,029,780,723. Total amount transferred to LGAs stands at N1,015,930,901,” he said.

‘We have a valid 36-year concession on MMA2’ IFEOMA OKEKE

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i-Courtney Aviation Services Limited (BASL), operator of Murtala Muhammed Airport Two (MMA2), has established that it has a valid 36-year concession on the terminal.

This statement is coming three days after Sahara Reporters reported that a source close to the Ministry of Transport, Aviation Unit, said the ministry had given the management of Federal Airports Authority of Nigeria (FAAN) the approval to take over the terminal on the expiration of the 12 years consensual agreement between BASL and the agency.

The report stated that the 12 years would elapse on May 7, 2019, which was

WAEC releases 2019 WASSCE private candidates examination results KELECHI EWUZIE

W

est Africa Examination Council on Tuesday released the results of the West African Senior School Certificate Examination (WASSCE) for private candidates, First Series January/ February 2019 results with a total of 3,102 candidates representing 26.08 percent obtained credit and above in a minimum of five subjects including English Language and General Mathematics.

Olutise Adenipekun, head of the Nigeria National Office of WAEC at a press briefing at the WAEC National Office, Yaba, Lagos, said out of the total number of candidates that sat for the examination in Nigeria, 11,686 candidates, representing 98.27 percent have their results fully pro-

cessed and released, while 206 candidates representing 1.73 percent have a few of their subjects still being processed due to errors traceable to the candidates in the course of registration or writing the examination.

Adenipekun, while giving a detailed statistics of the result, disclosed that the results of 376 candidates, representing 3.16 percent of the total candidature for the examination were being withheld in connection with various reported cases of examination malpractice.

He stated that a total of 11,892 candidates sat for the examination. Of this number of candidates, 6,180 were male and 5,712 were female, representing 52 percent and 48 percent, respectively.

Analysis of the results shows that 8,782 candidates representing 75.15 percent obtained credit and above in two subjects; 7,332 can-

39 NEWS

BUSINESS DAY

didates representing 62.74 percent obtained credit and above in three subjects.

The results further show that 5,850 candidates representing 50.06 percent obtained credit and above in four subjects and 4,314 candidates representing 36.28 percent obtained credit and above in five subjects.

He said the First Edition of the new diet of the West African Senior School Certificate Examination (WASSCE) for private candidates – First Series was successfully conducted in January/ February 2018. A total of 11,721 candidates sat for the first diet in 2018 while for the 2019 diet, 12,202 candidates registered for the examination.

He enjoined candidates who sat for the examination to check the details of their performance on the Council’s results website within the next few hours.

the exact date the terminal commenced operations with flight service by the rested Chanchangi Airlines.

However, in a statement sent by BASL Tuesday, it stressed that Bi-Courtney entered into a Concession Agreement with the Federal Republic of Nigeria, for the Build, Operate and Transfer of the MMA2 for 36 years, adding that the terminal was the most well designed and run terminal in the country, operating on very limited revenue and a masterpiece in the provision of public infrastructure through private capital.

According to the statement, “FAAN offered BiCourtney a 36-year lease in a letter dated 12th of October 2006, and an agreement was duly signed on the 2nd of February 2007 by the Minister of Aviation.

“The agreement was further confirmed at a meeting held on 7th of July 2009 chaired by Late Mallam Umaru Musa Yar’adua, the former President of the Federal Republic of Nigeria in attendance with the minister of Aviation, Secretary General to the Federal Government, Attorney General of the Federation/

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Minister of Justice, Minister of Finance, MD/CEO of FAAN and the Chairman of Bi-Courtney, among others.”

The statement by the spokesperson of Bi-Courtney, Eniola Ade-Solanke, stated that the clear provisions of the concession agreement between BiCourtney and the Government upheld the operation of the MMA2 terminal for an undisputed period of 36 years.

“Since inception, FAAN has not complied with the agreement to handover the GAT, which is a property of Bi-Courtney. FAAN through its actions has consistently breached its obligations in the concession agreement and has caused Bi-Courtney a loss of over N250 billion.

“The erroneous claims against the chairman of BiCourtney in making frantic efforts in the presidency to frustrate a takeover of the terminal is not unconnected to purported attempts to

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stir up a false sense of alarm and acrimony against the concession.

“The public and media should stop listening to naysayers who have no interest in the growth and development of Nigeria.

MMA2 remains the best terminal in Nigeria and no terminal that has been built compares with it. The appropriate thing is to encourage Bi-Courtney and other private investors and developers to save FAAN from itself and its abysmal management of airport infrastructure,” Ade-Solanke said.

He also noted that the fictitious claim of alarm and panic causing instability among Bi-Courtney staff bore no iota of truth and was absolutely nonexistent, adding that BiCourtney remained a key employer of labour in the aviation industry, committed to providing an environment for strong corporate health without fear, pressure or prejudice.

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40 BUSINESS DAY NEWS

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Business confidence on macro economy declines by 22.1 points on election uncertainties HOPE MOSES-ASHIKE

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verall confidence on the macro economy by Nigerian businesses declined to 22.1 index point in February compared with 25.9 points in January 2019, due to uncertainties surrounding the 2019 general elections.

Central Bank of Nigeria (CBN) on Tuesday released its Business Expectations Survey (BES), which was carried out during the period February 1115, 2019, with a sample size of 1050 businesses nationwide.

Also, the outlook of businesses on the macro economy for the next month declined to 58.5 in February from 62.1 points in January 2019.

“I think this can be largely attributed to the uncertainties around the general elections as investors adopted a “wait and see strategy””, Ayodeji Ebo,

managing director, Afrinvest Securities Limited, said.

A response rate of 97.4 per cent was achieved, and the sample covered the services, industrial, wholesale/retail trade, and construction sectors.

According to the report, At 22.1 index points, respondents expressed optimism on the overall confidence index (CI) on the macro economy in February 2019. The businesses outlook for March 2019 showed greater confidence on the macro economy with 58.5 index points.

The optimism on the macro economy in the current month was driven by the opinion of respondents from services by (12.9 points), industrial (7.3 points), wholesale/retail trade (1.0 points) and construction sectors (0.8 points). Whereas the major drivers of the optimism for next month were services (33.4 points), industrial (17.7

points), wholesale/retail trade (5.3 points) and construction sectors (2.1 points).

“I feel the coast is clearer now with the conclusion of the Presidential election, hence we expect business confidence to improve in March albeit slightly,” Ebo said.

The positive outlook by type of business in February 2019 was driven by businesses that are neither importnor export-oriented (14.3 points), import-oriented (4.0 points), both import- and export-oriented (3.2 points), and those that are exportrelated (0.6 points).

All sectors except the construction sector, expressed optimism on own operations in February 2019. Respondents from the services sector expressed the greatest optimism on own operation with an index of 8.8 points, followed by the industrial sector with 3.4 points and then

the wholesale and retail trade with 2.2 index points.

Respondents’ outlook on the volume of total order and business activity in February 2019 remained positive, as the index stood at 15.9 and 15.4 points, respectively. Similarly, respondents’ outlook on financial conditions (working capital) and average capacity utilisation was optimistic, as the indices stood at 14.4 and 21.7 index points, respectively.

However, the surveyed firms identified insufficient power supply (63.3 points), high interest rate (55.2 points), unfavourable economic climate (55.2 points), financial problems (53.0 points), unfavourable political climate (51.8 points), unclear economic laws (48.9 points), insufficient demand (42.4 points) and access to credit (41.4 points) as the major factors constraining business activity in the current month.

L-R: Obafemi Hamzat, deputy governorship candidate for APC, in Lagos State; Akinwunmi Ambode, Lagos State governor, and Babajide Sanwo-Olu, governorship candidate for APC, in Lagos State, during a campaign tour of SanwoOlu and Governor Ambode to Ajegunle, in Ajeromi Ifelodun Lagos.

APC plans to use ex-militants for dirty actions during guber/state assembly elections – Delta PDP cries out MERCY ENOCH, Asaba

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head March 9 governorship and state assembly elections in Nigeria, the People’s Democratic Party (PDP) in Delta State has cried out over what it described as grand plan of the All Progressives Congress (APC) to capture Delta State as well as enslave Deltans, alleging that APC would be using exmilitants for their ‘dirty actions’ in the state, on the election day.

The party accused APC of setting a dangerous plan in motion to mobilise a large number of ex-militants, move them into a concealed location, provide them with military uniforms, arm them with weapons and fil-

ter them into specific areas of the state during the elections.

Funkekeme Solomon, directorgeneral, Delta State PDP Campaign, raised the alarm at a media briefing in Asaba, Tuesday.

The party alleged that masterminds behind the plan include the APC national chairman, Adams Oshiomhole, in connivance with former Delta State governor, Emmanuel Uduaghan, and the governorship candidate, Great Ogboru, as well as top officials of APC in Abuja and other APC stakeholders in Delta State.

Solomon said, “We have been informed that these ex-militants, when fully dressed as military personnel and armed with

weapons, will now be deployed and filtered into PDP strongholds, particularly in the riverine areas where they are familiar with the terrain and in places like Delta North, which is easy to navigate, with strict instructions to perform dirty actions.”

He said such dirty actions include to psychologically disorganise the PDP members in the identified areas by arresting and/ or placing key members of the state governor, Ifeanyi Okowa’s Cabinet and top PDP officials of the state, under forced house arrest in order to dissolve their resolve, quarantine them to prevent free movement to go and cast their votes and weaken the stronghold of the PDP in those areas.

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Wednesday 06 March 2019

Kwara: Presidential, NASS election, a rape on democracy - CNPP SIKIRAT SHEHU, Ilorin

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onference of Nigeria Political Parties (CNPP), Kwara State chapter, Tuesday described the Presidential and National Assembly elections in the state as nothing but a rape on democracy and the subversion of the will of the people.

Adebayo Lawal, state chairman of CNPP who stated this at a press conference in Ilorin, alleged that the exercise was largely marred by irregularities, obviously perpetrated to favour the ruling All Progressives Congress (APC).

He posited that in most polling units across the state, card readers malfunctioned during the elections.

“Facts available to us show that less than 20 per cent of the 486,254 voters who voted during the presidential and national assembly elections in Kwara were validated by card readers. Many of those who voted did so manually.

And this was with the approval of INEC officials. This resulted in over voting and the use of unclaimed PVCs by agents of a certain political party to vote during the elections.

“This is clearly against the initial guideline given

by INEC that only voters accredited through card readers would be allowed to vote, and that any voting not verified and authenticated by the card readers would be declared null and void,” he said.

While berating the Independent National Electoral Commission (INEC) for allowing manual accreditation of voters during the elections in violation of extant guidelines set by it, Lawal warned the electoral against repeating the same error as Nigerians prepare for the gubernatorial and state assembly elections this weekend.

Lawal lamented that the use of manual accreditation

allowed for manipulation of the election, saying his association has written the state INEC on the matter.

He stated further, “As we prepare for next Saturday’s governorship and state assembly elections, we considered it necessary to draw the attention of the media, civil society groups, local and foreign observers, international community and the general public to the widespread indiscretions that characterized the presidential and national assembly elections of 23rd February, 2019 in Kwara State, and to caution against recurrence of such anomalies in the forthcoming polls.

“The Conference of Nigeria Political Parties (CNPP), Kwara State chapter reviewed the conduct of the February 23 Presidential and National Assembly elections in the State, and observed that the exercise was largely marred by irregularities, obviously perpetrated to favour the ruling All Progressives Congress, APC. This was nothing but a rape on democracy and the subversion of the will of the people.

“In most polling units across the State, card readers malfunctioned during the elections. Facts available to us show that less than 20 percent of the 486,254 voters, who voted during the presidential and national assembly elections in Kwara were validated by card readers. Many of those who voted did so manually. And this was with the approval of INEC officials. This resulted in over voting and the use of unclaimed PVCs by agents of a certain political party to vote during the elections.

“This is clearly against the initial guideline given

by INEC that only voters accredited through card readers would be allowed to vote, and that any voting not verified and authenticated by the card readers would be declared null and void.”

SMEDAN wants MSMEs to promote made-in-Nigeria products

S

mall and Medium Enterprises Development Agency of Nigeria (SMEDAN) has urged Micro, Small and Medium Enterprises (MSMEs) owners to promote made-inNigeria products and services to aid economic growth.

Dikko Umaru, directorgeneral, SMEDAN, made the appeal at a programme on Tuesday in Oshogbo tagged `Opportunity Fair for MSMEs.’ Umaru was represented by Elwans Monday, director of Entrepreneurship Development and Promotions, SMEDAN, at the programme, with the theme: “Expanding Market Frontiers for MSMEs.’’ He said the fair was organised to help nurture local

entrepreneurial capabilities, technical skills, technological innovativeness and managerial competencies.

The SMEDAN directorgeneral noted that MSMEs were the key to the growth and development of any developing economy, adding that Osun was privileged to be hosting the second edition of the fair in the Southwest.

He said Katsina State would host a similar event in the northern part of the country.

According to Umaru, the fair will help to attract new customers for businesses, networking and interaction with peers, development of strategic partnerships and also strengthen capacity with capability improvement.

He commended the Osun government for its support to the agency and the mutually beneficial work relationship that existed between them.

The SMEDAN director-general urged MSMEs stakeholders to always visit its offices for expert advice, business counselling, and mentoring and advisory services. In his keynote address, Gov. Gboyega Oyetola of Osun, said for any serious economy to grow and develop, focus must be on MSMEs. The governor, who was represented by Bola Oyebamiji, the Supervisory Director for the Ministry of Finance, said the state had done credibly well in funding more than 133 SMEs in the state.

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Carlos Ghosn granted bail after months in detention Former Nissan boss to be monitored by surveillance cameras at his Tokyo residence KANA INAGAKI AND LEO LEWIS

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he Tokyo District Court has taken the rare decision to grant Carlos Ghosn bail, 107 days after the former Nissan chairman was arrested, jailed and charged on allegations of financial misconduct.

According to the court announcement on Tuesday, which emerged after extended deliberations, Mr Ghosn’s bail was set at ¥1bn ($9m).

The approval came with conditions including a ban on him travelling outside of Japan.

The decision raised the prospect Mr Ghosn could be released from detention as early as Tuesday, but prosecutors have filed an appeal. If the appeal is rejected, Junichiro Hironaka, Mr Ghosn’s lawyer, told reporters that the release was likely to be on Wednesday since it will take time to process the payment of his bail.

The court’s ruling followed mounting international criticism of Japan’s so-called hostage justice system, which prolongs the detention of defendants who, like Mr Ghosn, assert their innocence and refuse to make a confession.

Mr Ghosn’s long detention, and the effective silencing of one of the most prominent voices in the global auto industry, has been a source of intense frustration. From behind bars, he has given a handful of brief interviews and has issued a statement in which he vowed to fight all

charges against him and restore his reputation.

Tuesday’s approval followed Mr Ghosn’s third attempt to secure bail — a bid mounted by a new legal team assembled in February, whose lineup included a lawyer who made his name securing acquittals in a justice system with a notoriously high conviction rate of more than 99 per cent.

In his latest bail application, Mr Ghosn agreed to be monitored by surveillance cameras to ensure that he did not flee Japan or tamper with evidence. In a previous bail application, Mr Ghosn had pledged to surrender his passport and accept round-the-clock electronic tagging at a secure Japanese apartment — all efforts to counter the prosecutors’ claim that he was a flight risk.

Mr Hironaka told reporters that surveillance cameras would be set up at the entrance of his residence in Tokyo to deter Mr Ghosn from contacting people linked to the investigation.

“I’m glad the [court] decision came out quickly. We submitted specific proposals to the court to make fleeing or tampering of evidence impossible,” Japanese media quoted Mr Hironaka as saying.

The former Nissan boss, who has also resigned as chairman of Renault, has denied charges of understating his pay and allegations that he made several payments through a Nissan subsidiary to a Saudi friend who helped Mr Ghosn address unrealised losses from a derivatives

Exxon and Chevron plan Permian shale boom The two largest US oil groups sharply increase production targets in the heartland of the shale boom ED CROOKS

E

xxonMobil and Chevron, the two largest US oil groups, have sharply lifted their expectations for production in the Permian Basin, the heartland of the shale boom, in the first half of the 2020s.

In a presentation to analysts this week, Exxon is revising up its projection of oil and gas production in the Permian region of Texas and New Mexico from 600,000 barrels equivalent a day to 1m in 2024, while Chevron has lifted its estimate from 650,000 b/d to 900,000 b/d in 2023.

The revised projections demonstrate the company’s confidence in the continued growth of US oil and gas production, and also reflect the way that the shale industry, which was pioneered by small and mid-sized companies, is increasingly being dominated by larger players.

The growth plans mean that both companies expect approximately to triple their Permian production from 2018 levels over the next five to six years.

Both companies said they expected their Permian production to be profitable and generate free cash flow, despite the shale industry’s record of needing continual infusions of capital to finance drilling programmes.

Chevron highlighted what

Jay Johnson, its head of oil and gas production, described as the company’s “unique position” in the Permian, because it owns most of its land outright, rather than having to pay landowners for drilling rights.

Michael Wirth, Chevron’s chief executive, said that overall the group’s “advantaged portfolio is driving strong production growth with lower execution risk, higher cash flow and increased cash returns to shareholders.”

However Exxon also expects to be able to be profitable in the Permian Basin even at lower oil prices, saying it can earn an average return of more than 10 per cent there even with crude at $35 a barrel.

Neil Chapman, a senior vicepresident at Exxon, said in a statement: “We’re increasingly confident about our Permian growth strategy due to our unique development plans.”

The company has been buying drilling rights in the Permian to build up large contiguous areas, allowing it to drill longer horizontal wells and have more efficient development.

It is also investing in pipelines and other infrastructure to address some of the challenges created by the breakneck pace of development in the Permian region, including water shortages and a surplus of gas, produced as a byproduct along with the oil.

Japanese prosecutors have filed an appeal against the court decision to grant Carlos Ghosn bail © Reuters

transaction in the wake of the global financial crisis.

In media interviews from a Tokyo prison, Mr Ghosn said his downfall was a result of a “plot and treason” by Nissan executives opposed to his plan to fully merge the Japanese carmaker with its French partner Renault.

Nissan has said its internal investigation uncovered “substantial evidence of blatantly unethical conduct” that led to Mr Ghosn’s

dismissal as chairman. The Japanese company has said there was no link between its investigation and merger talks with Renault.

Nissan declined to comment on Tuesday’s court decision.

The long detention of Mr Ghosn has drawn intense international scrutiny not only of Japan’s justice system but also the still-opaque circumstances that led to his downfall.

His dramatic arrest on November 19 on the runway apron of Haneda air-

port was filmed live by a Japanese TV crew who had been tipped off that prosecutors were about to swoop.

An undisclosed number of Nissan executives made plea bargains with the Japanese prosecutors in order to focus the charges around Mr Ghosn, according to people familiar with the investigations.

On Monday, Mr Hironaka said he was looking into whether the Japanese trade ministry played any role in the lead-up to the arrest of his client.

China sets lower GDP target as trade war hits home Beijing targets growth of between 6% and 6.5% for 2019 DON WEINLAND AND LUCY HORNBY

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hina has lowered its target for economic growth this year, blaming in a rare admission the slowdown on the impact of the trade war with the US. China’s premier Li Keqiang said on Tuesday the country was aiming for economic growth in 2019 in a range of 6-6.5 per cent, down from a hard target of 6.5 per cent over the past two years.

The choice to set a range gives Beijing policy flexibility as it steers the economy out of years of debtfuelled growth that has also buoyed the international economy.

“What we faced was profound change in our external environment,” Mr Li said in a report at the opening of China’s National People’s Congress in Beijing. International events “and especially the China-US economic and trade frictions, had an adverse effect on the production and business operations of some companies and on market expectations”.

China faces a number of challenges as growth slows — corporate defaults are on the rise and bad debt at the country’s banks is reaching a level not seen in nearly 20 years.

Policymakers have long feared that a downturn in growth would impact ordinary Chinese people’s pockets and lead to social unrest.

The country is locked in talks with the US to prevent an escalation of tariffs imposed by Washington on $250bn of Chinese goods. China has countered with tariffs on $110bn of US imports but media reports in recent days suggest the two sides could be nearing a deal to resolve the trade war.

Mr Li gave Beijing full marks for its response to the pressure from the US. “We handled economic frictions with the United States appropriately,” he told the 5,000 delegates in attendance.

But the premier acknowledged domestic concerns about the economic slowdown in his address, at times striking a dour tone.

“Instability and uncertainty are visibly increasing and externally generated risks are on the rise,” Mr Li said. “Downward pressure on the Chinese economy continues to increase, growth in consumption is slowing, and growth in effective investment lacks momentum.”

The move to change China’s economic growth target to a range from a single figure while maintaining growth above 6 per cent was in line with what many economists had expected.

The change would deliver two messages, Ting Lu, Nomura’s chief China economist, said in a note to investors. “Beijing recognises the current down-cycle and the inevitable decline in potential GDP

growth rate, and it’s determined to achieve above-6 per cent growth to deliver its promise to double real GDP in the decade to 2020.”

The lowered target for growth in gross domestic product comes after China posted 6.6 per cent growth for the full year of 2018, the slowest annual growth in almost three decades.

“The government seems to understand the challenging growth environment as well as the economic and financial risks it faces on many fronts, but the emphasis seems to be on stability rather than reforms,” said Eswar Prasad, a senior fellow at the Brookings Institution.

Mr Li said China would not resort to a “flood of strong stimulus policies” to boost economic growth.

However, the quota for local governments to issue bonds aimed at funding infrastructure will rise by about Rmb800bn ($120bn), a sign that spending on new projects will be an important source of growth this year.

China’s Ministry of Finance said on Tuesday it would target a fiscal deficit of 2.8 per cent, up 0.2 percentage points from last year, saying the economic slowdown would put its budget under pressure this year.

“Taking all factors into account, fiscal revenue faces a grim situation in 2019 and there will be great pressure to keep the budget balanced,” said the report from the Ministry of Finance.

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FT Oxford college in turmoil over priestly pay row

Investors urge debtbloated US companies to shape up

Christ Church dean and governing body at loggerheads over money and governance

AT&T, AB InBev and others try to trim leverage as markets fret about downgrades

MADISON MARRIAGE, HENRY MANCE AND ROBERT WRIGHT

JOE RENNISON

R

I

t provided the inspiration for Alice in Wonderland. Now Christ Church, Oxford, appears to have gone truly through the looking glass.

The college — one of the university’s richest and most prestigious — has been riven by an acrimonious dispute between its dean, 56-year-old cleric Martyn Percy, and its governing body, formed of dozens of tutors.

According to several people close to the college or the dean, Rev Percy is accused of trying to change the composition of the panel that decided his £90,000 salary, and of reacting furiously when he was denied a pay increase. His supporters counter that the row has been used as a pretext to dislodge him by a powerful faction of senior staff unhappy with his attempts to reform the 472-year-old institution.

The affair has raised serious questions about the governance of Oxford’s autonomous colleges, some of which control assets worth hundreds of millions of pounds — Christ Church’s total funds were £512.9m, according to its 2017 annual report — but are often run by individuals with limited management experience.

It also highlights the difficulty of resolving complicated remuneration controversies when they become public — a problem that has engulfed large companies including Spanish bank Santander and UK housebuilder Persimmon in recent months, as well as numerous universities that have been accused of overpaying vicechancellors and other senior staff.

The dispute is all the more striking because it is being discussed in oak-panelled meeting rooms within the imposing grounds of Christ Church, which was founded in 1546 by King Henry VIII, rather than highly charged corporate boardrooms in the City of London.

Christ Church is the alma mater of 13 prime ministers, including William Gladstone. It is unique among Oxford colleges because the dean is also head of the cathedral located on its grounds, and the “visitor” — Christ Church’s ultimate authority, who in theory has the final word on any dispute — is the Queen.

Rev Percy is already one of the best-paid clergymen in the country, earning more than the Archbishop of Canterbury, but his salary is lower than the heads of some smaller Oxford colleges.

He was appointed dean of Christ Church in 2014 with a reputation as an excellent theologian, a talented orator, and for going out of his way to support colleagues.

As a result, the accusation by Christ Church’s governing body that Rev Percy had indulged in “immoral, scandalous or disgraceful” conduct — allegations that were for months shrouded in mystery — caused shockwaves throughout the tightly knit college community and led to an ugly legal battle with its officials.

President Donald Trump’s decision to end preferential trade status for India and Turkey comes as the US closes in on an agreement to end its trade war with China © Reuters

Trump to drop preferential trade status for India and Turkey Move comes after India failed to assure US of ‘equitable and reasonable’ market access JAMES POLITI, AMY KAZMIN, LAURA PITEL AND EDWARD WHITE

P

resident Donald Trump has thrown a wrench into trade relations with India and Turkey in his latest move to shake up the global trading system, after deciding goods from the two countries were no longer eligible for preferential, tariff-free access to the US market.

In a statement late on Monday, the US trade representative (USTR) said Turkey and India no longer qualified as “beneficiary developing countries” under Washington’s Generalised System of Preferences (GSP), which provides many lowincome and emerging economies with duty-free access to the US market for some exports.

New Delhi had failed to assure the US of “equitable and reasonable” market access while Turkey was now “sufficiently economically developed”, the USTR said.

The impact on total exports in Turkey and India will be relatively small. But the move risks stoking tension between New Delhi and Washington as Mr Trump closes in on an agreement with Beijing to end the trade war between the US and China.

It could also exacerbate strains between Ankara and Washington as the two Nato allies are seeking to reach agreement across a batch of disputes, and comes at a time of fragility for the Turkish economy, which has suffered a sharp slowdown in growth following last year’s lira crisis.

Trade tension between Washington and New Delhi intensified over the past year, as the US business community fumed over a range of

Indian tariff and regulatory policies that hurt their prospects in the Indian market.

India has been the largest beneficiary of the US GSP programme.

In 2017, its duty-free exports to the US under the GSP were around $5.6bn, or just over 11 per cent of the approximately $48bn of goods it exported to the US that year.

Washington launched a review of India’s preferential trade privileges in April 2018, complaining New Delhi had not sufficiently opened up its market to justify duty-free access to the US. “India has implemented a wide array of trade barriers that create serious negative effects on United States commerce,” the USTR said at the time. “Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion.”

Mr Trump’s frustration with India’s trade policies has been reflected in his repeated lashing out at India for its high tariffs on US Harley-Davidson motorcycles, a theme he returned to this weekend while addressing conservative activists outside Washington.

“India is a very high tariff nation. They charge us a lot,” the US president said. “When we send a motorcycle to India, it’s a 100 per cent tariff. They charge 100 per cent.

When India sends a motorcycle to us, we brilliantly charge them nothing.”

But frustration with India is widespread among US businesses.

In the past year, India has raised import duties on a wide range of goods as part of Indian prime minister Narendra Modi’s campaign to promote domestic manufacturing, hitting companies such as Apple and Ford.

India’s price controls on drugs and medical devices such as cardiac stents, and its intellectual property policies, are another big source of friction, as are New Delhi’s volatile restrictions on agricultural commodity imports.

Recent months have also brought trouble for Walmart and Amazon, which have invested billions of dollars in Indian ecommerce. New Delhi last month overhauled its regulations as a way to give greater advantage to large domestic players, such as Mukesh Ambani’s Jio. Anup Wadhawan, a senior official in India’s commerce ministry, on Tuesday played down the impact of the US move, saying the benefits of GSP to Indian exporters were small when set against the volume of trade.

“Our total GSP benefits were to the tune of $190m on [exports] of $5.6bn,” he told journalists in New Delhi. “So the benefits, both in an absolute sense and as a percentage of the trade involved, are very minimal and moderate.”

The decision to drop Turkey’s status comes as tension between Turkey’s president Recep Tayyip Erdogan and Mr Trump continues.

The USTR first announced a review of Turkey’s participation in the programme in August, shortly after the eruption of a bitter row between Ankara and Washington over a detained US pastor.

The preacher, Andrew Brunson, was later released following a painful meltdown in the Turkish lira.

Relations between Mr Trump and Mr Erdogan have since become less fraught but remain volatile, with disagreements over the US withdrawal from Syria and Turkey’s plan to purchase an air defence system from Russia.

South Africa posts fifth straight year of sluggish economic growth JOSEPH COTTERILL

S

outh Africa’s economy grew by 0.8 per cent in 2018 — the fifth year running it has posted growth below two per cent — as expansion slowed in the year’s last quarter, the country’s statistics office said.

Gross domestic product expanded by 1.4 per cent during the fourth quarter on an annualised basis, compared to 2.6 per cent in the previous three months, according to statistics released on Tuesday.

Africa’s most industrialised

economy has failed to grow by more than two per cent a year since 2013, and its GDP is falling on a per-capita basis as the population grows faster than the economy.

President Cyril Ramaphosa has struggled to revive activity since he replaced the stagnant and corruption-plagued rule of Jacob Zuma last year. The former trade unionist turned tycoon has pledged a “new dawn” for the economy by stabilising regulations and promoting foreign investment.

Mr Ramaphosa faces resistance

from Mr Zuma’s remaining allies in the ruling African National Congress over reforms such as shoring up the battered power monopoly, Eskom, which received a nearly $5bn bailout last month to avert a default on rising debts.

Eskom’s crisis has led to the imposition of rolling blackouts in recent weeks that have throttled industry.

South Africa’s Treasury, which is battling to retain the country’s last investment-grade credit rating bestowed by Moody’s, has forecast 1.5 per cent growth this year.

andall Stephenson, chairman and chief executive of telecoms company AT&T, which bought Time Warner for $80bn last year, was unequivocal on the company’s recent fourth-quarter earnings call: “Our top priority for 2019 is driving down the debt from the . . . acquisition,” he said.

AT&T, which has over $150bn of bonds outstanding according to Dealogic, is one of many big US companies which spent the years since the financial crisis gorging on cheap debt. As they have done so, they have forgone higher credit ratings and slipped down into the lower reaches of borrowers deemed “investment grade”, which implies a relatively low risk of default.

Now, under pressure from investors, some have started 2019 with a resolution: to get into shape.

Growing debt piles have fed fears among investors that if companies do not start to get a grip on their borrowing, worsening economic conditions could imperil their ability to fund themselves. That could potentially send credit ratings even lower, into the junkyard of “high yield”.

A global survey of investors carried out recently by Bank of America Merrill Lynch found that 50 per cent of respondents would rather see companies using their cash to mend balance sheets than spending it on plants or equipment, or returning it via buybacks or dividends. That was the highest percentage since September 2009.

“Now is the time to address balance sheets,” says Peter Tchir, chief macro strategist at Academy Securities in New York. “These companies took full advantage of low interest rates and now they need to focus on deleveraging.”

At a recent investor day, Verizon said it trimmed its ratio of net unsecured debt to earnings before interest, tax, depreciation and amortisation from 2.4 times to 2.1 in 2018. The company, which is currently rated BBB+ by Standard & Poor’s, is targeting a ratio of between 1.75 and 2, “consistent with a . . . low single-A credit profile”, according to Matt Ellis, chief financial officer.

Anheuser-Busch InBev, the world’s largest brewer, issued $15.5bn of bonds in January — the largest bond sale of the year so far.

The deal was designed to pay off debt maturing this year, buying the company — rated A- by Standard & Poor’s, four notches above junk — some time to improve its balance sheet.

“This is new territory,” said Neil Begley, an analyst at Moody’s. “We have not gone through a market meltdown with [investmentgrade] companies with this much indebtedness.”

The shift is a welcome development for bondholders but could come at the expense of equity investors.

While borrowing costs have been low, companies have used debt to buy back stock and to pay higher dividends. But as attention turns to reducing leverage on balance sheets, analysts warn that some of that equity-friendly activity could slow.

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COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

US stocks buck global trend as China forecasts slower growth Pound slips with Brexit politics leaving traders shy of recent 7-month highs EDWARD WHITE , MICHAEL HUNTER AND PETER WELLS

U

Markets Briefing S stocks were weaker in morning trade, but dollar continued to climb, as investors processed remarks from China’s premier forecasting slower growth in the world’s second-biggest economy.

A breakthrough on trade talks between Beijing and Washington, which could help alleviate global growth concerns, is still yet to come.

The S&P 500 was down 0.2 per cent in mid-morning trade, facing both back-to-back declines and a fifth drop in six sessions.

The Nasdaq Composite was flat.

The slide, which had energy, financials and telecommunications sectors worst off, came despite data showing activity in the US’s service sector picked up in February.

That helped continue an upward trend for the dollar. The index tracking the world’s reserve currency was up 0.3 per cent at 96.934.

Investors were not rushing for

government bonds, though, allowing yields to drift higher. The yield on the benchmark 10-year US Treasury was up 1.3 basis points to 2.735 per cent.

Stocks in Europe and Asia held their nerve on Tuesday. The CSI 300 index of major Shanghai and Shenzhen-listed stocks was up 0.6 per cent, while the Europe-wide Stoxx 600 was up 0.1 per cent.

The moves came as Chinese premier Li Keqiang, speaking at the country’s legislative session in Beijing, announced a target of 6-6.5 per cent in 2019, lower than the previous year’s target of around 6.5 per cent. Mr Li also confirmed a series of tax cuts to boost economic growth.

Sterling moved away from $1.32 — a level which depends on the UK avoiding a hard Brexit according to a range of analysts.

The pound was weaker by 0.5 per cent at $1.3112, around a fivesession low, as doubts about the passage of a Brexit deal through Parliament took a toll. Earlier, the Bank of England took further steps to guard against the dangers of a no-deal departure from the EU.

Greece wins €11.8bn of bids for first 10-year bond since crisis Long-dated debt sale raises €2.5bn after Moody’s upgrade

KATE ALLEN

G

reece has sold its first 10-year bond for nine years, in the latest sign of the ‘Goldilocks’ conditions in the eurozone’s sovereign debt market.

The country, which formed the focal point of Europe’s debt crisis from 2009, raised €2.5bn of paper priced at a 3.9 per cent yield; order books topped €11.8bn.

This is Greece’s first 10-year bond issue since March 2010, weeks before it was shut out of international capital markets and forced to seek the first of three bailouts from the EU and the International Monetary Fund.

A series of blockbuster bond sales since the start of the year has bucked forecasts that demand might suffer after the European Central Bank put an end to its bond-buying programme.

The market began to thrive after January’s policy U-turn by the US Federal Reserve, which was followed by a gloomy update from the ECB, confirming to investors that global interest rates were unlikely to rise in coming months.

That is a boon for European governments with debt to sell, as investors are drawn to the additional yield on offer from longer-dated bonds.

Greece’s move comes just days after Moody’s applauded progress in repairing the country’s battered finances.

Late on Friday the rating agency lifted Greece by two notches to a B1 rating — still among the so-called junk ratings that indicate a higher level of risk, but nonetheless a sign of rehabilitation for a country now aiming to deliver primary budget surpluses every year between 2018 and 2022.

The move saw Greek bond yields

fall to their lowest levels since before the eurozone debt crisis, indicating a rise in price. On Monday, the thinlytraded Greek 10-year bond yield hit a low of 3.6 per cent.

Greece emerged last August from a €86bn bailout, its third, after enduring the deepest recession on record. By then it had ventured into the international bond markets twice, raising €3bn of five-year money in July 2017 and a further €3bn of seven-year bonds in February last year.

But turmoil in the wider international markets forced the postponement of the country’s first post-bailout debt sale until the start of this year, when it raised €2.5bn in five-year debt priced at a yield of 3.6 per cent.

Christina Cho, a senior debt markets banker at BNP Paribas who acted for Greece on Tuesday’s deal, said the country’s strategy was “about returning to normality and becoming a normal sovereign issuer in the capital markets again, building incrementally over each successive issue”.

Greece was attracting a growing number of investors and more international interest in each successive debt sale, according to Ms Cho. “They don’t have to issue til the early 2020s for financing needs — their cash buffer covers all disbursements — so the point of accessing the capital markets now is as much a confidence exercise as it is a funding exercise,” she said.

Greece’s 2019 budget provides for raising €4bn on capital markets, but the debt management agency hopes to raise as much as €7bn if market conditions allow.

BNP Paribas, Citi, Credit Suisse, Goldman Sachs, HSBC and JPMorgan acted as joint lead managers on Tuesday’s bond sale.

Stubborn lack of clarity on Brexit leaves pound exposed Sterling’s move lower and away from $1.32 gathers pace as political tensions remain MICHAEL HUNTER

S

terling is not looking quite so strong after lunch.

The pound is the weakest performer among G7 currencies, with investors looking askance at stubbornly turbulent Westminster politics. Combined with a wider trend for a stronger dollar, sterling’s recent seven-month highs above $1.32 are looking vulnerable and it is picking up speed heading away from them.

Investors’ confidence in the govenment’s ability to head off the threat of a hard Brexit was cooling, having been lifted by the range

of options put forward by prime minister Theresa May last week for the eventual vote on the terms of departure.

The stubborn lack of clarity has persisted since from the House of Commons set a more cautious tone. There was also something of a wake-up call from purchasing managers’ index data from the UK’s dominant services sector.

While it was somewhat brighter than forecast, analysts pointed out that it remained sobering.

In afternoon London trade on Wednesday, the UK currency hit a five-day dollar low, down 0.4 per cent at $1.3130. It was 0.2 per cent weaker

against the euro, with a unit of the shared currency costing £0.8625, leaving it 0.9 per cent off its strong point against its nearest neighbour, also touched five sessions ago.

There was also a reminder of the potential disruption ahead for the UK from the Bank of England, which outlined plans to hold weekly auctions of euros to ensure banks do not run short of cash in the “significant market volatility” expected in a disorderly Brexit.

Without clearer signs from Westminster that such a risk will be avoided at the end of the month, sterling could remain looking exposed.

Insurer Phoenix raises key targets from Standard Life Aberdeen deal Group says it will deliver higher capital benefits and slash costs more than expected OLIVER RALPH

P

hoenix, the life insurer, has raised the targets from last year’s acquisition of Standard Life Aberdeen’s insurance business, saying it will cut more costs and deliver higher capital benefits than it initially expected.

The £3.2bn deal hastened Standard Life Aberdeen’s shift into asset management and more than trebled the assets of Phoenix, which specialises in buying up old books of life insurance business that other companies no longer want.

On Tuesday Phoenix said that it would generate £1.2bn of synergies from the deal, a 40 per cent increase from an initial target of £720m.

Clive Bannister, Phoenix’s chief executive, said that the annual cost base of the combined business would fall from £600m to £525m, largely thanks to changes to IT systems and processes. The company has given no indication on how many jobs will go as a result of the integration.

The company also set a new cash generation target for 2019-

23 of £3.8bn. Phoenix said capital synergies would rise from the £440m initially expected to £720m as it changed the asset allocation in its investment portfolio and combined its life insurance businesses into one legal entity.

Phoenix has traditionally focused on consolidating old books of life insurance and Mr Bannister said that the company was “open for business” for future deals.

He expects more opportunities as old-fashioned insurance conglomerates break themselves up and focus on growth: “How long can you stick a thoroughbred next to a plough horse?

They’re both legitimate, but need to be broken up.”

But he added that the company did not need to do a deal.

As well as giving Phoenix a book of old business, the Standard Life Aberdeen deal brought an open business selling pensions products. Mr Bannister said that within five to 10 years, the flow of new business coming in would match the natural run off of the group’s closed books.

The new targets came as

Phoenix reported results for 2018. Operating profit rose from £368m to £708m, which was ahead of analysts’ expectations.

According to Paul De’Ath, analyst at Shore Capital, that was “thanks in part to a large £168m release of longevity reserves due to the decline in life expectancy increases in the UK”.

Gordon Aitken, analyst at RBC Capital Markets, said that the mortality reserve releases “are not a one-off ” and that there will be more to come once UK mortality data for 2018 is released.

The final dividend was increased by 3.5 per cent to 23.4p per share.

Mr Bannister said 2018 had been “a very successful year for Phoenix in which we exceeded our cash generation targets, further improved our capital resilience and transformed the business through the acquisition of the Standard Life Assurance businesses”.

Phoenix’s share price rose 2.5 per cent on Tuesday, and is up 29 per cent this year. The shares will go into the FTSE 100 later this month.

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ANALYSIS The fallen superpower: US foreign policy from triumph to hubris Veteran diplomat William Burns details shifts under five presidents in ‘The Back Channel’ LIONEL BARBER

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Mueller road map: the next steps for the Trump investigation The end of the special counsel’s probe will lead to a fierce fight about what is made public KADHIM SHUBBER

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n August 2016, when the US presidential election campaign was in full swing, two top officials in Donald Trump’s team had a rendezvous at the Grand Havana Room, a members-only cigar club just a few blocks from Trump Tower in New York.

At a time when publication of hacked emails from the Democratic National Committee was dominating headlines, Paul Manafort, the longtime Republican lobbyist who was Mr Trump’s campaign chairman, and Rick Gates, his deputy, met a Russian national who the FBI alleged has ties to the country’s intelligence services.

Although Manafort and Mr Gates had worked with the Russian, Konstantin Kilimnik, in Ukraine, the meeting itself was curious enough, given the intense focus from the media and law enforcement on whether Russia was behind the email hacking.

But what appears to have transpired at the encounter is stranger still. While full details have yet to be made public, a heavily-redacted transcript of a court hearing suggests that prosecutors believe the Trump campaign officials discussed in-depth polling data with Mr Kilimnik. Such was the sensitive nature of the encounter, Manafort and Mr Gates took care to exit the Grand Havana separately from Mr Kilimnik.

The importance of the meeting was emphasised during a sealed hearing last month by a top prosecutor for Robert Mueller, the special counsel appointed in May 2017 to investigate any links or co-ordination between members of the 2016 Trump campaign team and Russia.

“This goes, I think, very much to the heart of what the special counsel’s office is investigating,” said Andrew Weissman, according to a hearing transcript.

In the 21 months since Mr Mueller’s appointment, the 74-year-old former FBI director has moved with remarkable speed and revealed a morass of criminality and deception among Mr Trump’s associates.

Washington is now rife with rumours that the end of the inquiry is approaching. The team of prosecutors detailed to the special counsel’s office has whittled down in recent months and most of the cases Mr Mueller has brought thus far are reaching their conclusion.

And that inevitably raises the question of whether the special counsel will reveal a broader plot to influence the elections, or will he limit himself to the indictments already issued. In his court filings, Mr Mueller has dropped breadcrumbs

— such as the Kilimnik meeting — that hint at something below the surface, but he has so far stopped short of alleging any criminal conspiracy between the Russian government and the 2016 Trump campaign.

Leading Democrats believe the evidence of such a conspiracy is already evident. Adam Schiff, chair of the House intelligence committee, said at the weekend that there was “direct evidence” of collusion between the campaign and the Russian government.

How e v e r, s o m e o b s e r v e r s caution that Mr Mueller will be wary of passing broad judgments.

Throughout the probe, he has spoken through criminal indictments and other court filings, which has set a high bar on the information he has disclosed.

“It’s possible they have found facts and admissible evidence that describe conduct closely related to their core mandate, but that fall short of warranting criminal prosecution,” says David Laufman, a former justice department counterintelligence chief who helped oversee the Russia investigation before Mr Mueller’s appointment.

Either way, the filing of Mr Mueller’s report will kick-start a new phase of the Trump presidency, one where the principal threats stem from Democratic-controlled committees in the House of Representatives, and from prosecutors in New York. It will also spark a battle between the White House, the justice department and Congress over how much of Mr Mueller’s work and conclusions will be made public — an outcome that could help determine Mr Trump’s political fate.

“You should buy your popcorn now,” says David Kris, former head of the national security division of the justice department.

The document authorising Mr Mueller’s appointment in May 2017, just days after Mr Trump took the dramatic step of firing the then FBI director James Comey, is sparse. Order 3915-2017 is a single page and authorised Mr Mueller to investigate “any links and/or co-ordination between the Russian government and individuals associated with the campaign of President Donald Trump”, as well as any possible obstruction of justice, or other matters arising from the investigation. The word “collusion” does not appear.

Since then, Mr Mueller has secured guilty pleas from five Trump associates, indicted a sixth, and charged 35 Russian individuals and entities. He has revealed an expansive web of contacts between Russians and Trump campaign officials and associates, as well as a great deal of deception about those

contacts. He even conspicuously noted that Russian hackers targeted Mrs Clinton’s personal office for the first time on the same day that Mr Trump invited Russia to hack the Democratic candidate’s emails at a press conference.

Yet for the most part, Mr Mueller has indicted Trump associates for lying about what happened in 2016 — especially contacts with Russian officials — rather than for the underlying conduct. Michael Flynn, Mr Trump’s former national security adviser, pleaded guilty to lying to the FBI about contacts with the Russian ambassador, while Michael Cohen, the former Trump fixer, pleaded guilty to lying to Congress about a deal to build a Trump Tower in Moscow. Manafort and Mr Gates pleaded guilty to charges relating to their lobbying work prior to the 2016 election.

In addition to the meeting with Mr Kilimnik, who has denied having any links to Russian intelligence, there are a number of other key events that his report could clarify — including the June 2016 Trump Tower meeting, where Donald Trump Jr, the president’s son, Jared Kushner, the president’s sonin-law, and Manafort met a Russian lawyer. Mr Trump Jr agreed to the meeting on the expectation they would receive “dirt” on Mrs Clinton from the Russian government.

Yet Mr Mueller has so far been silent on what any of these interactions with Russians mean when taken together. The extent to which the Mueller investigation provides a public accounting for any of these controversies will depend on both what actually happens to his report and how the former FBI director interprets his mandate.

Mr Trump has regularly denounced the probe. “I am an innocent man,” he said in a weekend tweet, “being persecuted by some very bad, conflicted & corrupt people in a Witch Hunt.”

When William Barr, the attorneygeneral, appeared at a January Senate confirmation hearing, he drew the battle lines for what is likely to happen when the Mueller inquiry ends. Mr Barr drew attention to a critical word in the regulations governing the special counsel’s work describing the nature of Mr Mueller’s final report: “confidential”.

“There are two different reports,” Mr Barr informed the senators. He would receive one, Mr Mueller’s report, and Congress would get another — Mr Barr’s own summary of the special counsel’s conclusions.

Moreover, Mr Barr reminded the committee that justice department policy was to avoid criticising individuals for conduct for which they were not being charged.

illiam Burns ranks among the foremost American diplomats of his generation, serving five presidents and 10 secretaries of state. His memoir is a plain-spoken defence of an unfashionable craft. It is also a testament to the perils of wishful thinking in US foreign policy.

“Present at the Destruction” might serve as an alternative title to The Back Channel. Burns seethes at the “active sabotage” of the state department under President Donald Trump. He highlights the hubris of President George W Bush’s decision to invade Iraq, “the original sin” that sacrificed US influence in the Middle East. He is sympathetic but critical of his successor, Barack Obama, who comes across as cool, thoughtful and inflexible.

“After the recklessness of his predecessor, Obama’s mantra of ‘not doing stupid shit’ was a sensible guidance,” writes Burns. “But there were other scatological realities in

enjoyed the trust of the president.

Bush Sr understood the importance of restraint. His decision not to topple Saddam Hussein in the first Gulf war looks even wiser given the debacle after the second Gulf war.

But, as Burns recognises, the US stood at the pinnacle of power in 1991. One year later, as Bill Clinton prepared to enter the White House, Burns warned in a prescient memo that victory in the cold war masked more malign developments. The forces of fragmentation were on the rise, with the risk of a retreat into nationalism or religious extremism or a combination of the two.

“Ideological competition was not over — it was simply reshaped,” Burns wrote, “In much of the world . . . Islamic conservatism remains a potent alternative to democracy as an organising principle.”

These warning shots were ignored or lost in the daily churn of events. Other memos from the state department, helpfully declassified, show Burns fretting about premature enlargement of Nato, especially

William Burns, right, at the Kremlin in 2005 with Russian President Vladimir Putin, centre, whom he describes as ‘an apostle of payback’ © Reuters

foreign policy: shit happened too, and reacting to events outside neat policy boxes would be a persistent challenge.”

Naturally, these criticisms are hedged by obligatory references to incomplete information and a complex world. By and large, however, Burns is refreshingly candid about the use and abuse of US power in the second half of his 30-year career. This is particularly true after the September 11 2001 terrorist attacks, when the natural urge to retaliate led to open-ended wars at enormous cost in blood and treasure.

“Americans are often tempted to believe that the world revolves around us, our problems and our analysis,” he writes, “As I learned the hard way, other people and other societies have their own realities, which are not always hospitable to ours.

That does not mean that we have to accept or indulge those perspectives, but understanding them is the starting point for sensible diplomacy.”

His dilemma, freely acknowledged, is that the diplomatic profession has lost its near monopoly on presence, access, insight and influence. In the age of WikiLeaks and transnational actors, secrecy is porous, information ubiquitous.

Those like Burns who have practised statecraft risk being drowned out.

Lost in the Twittersphere are the age-old virtues of diplomacy: the ability to convene, communicate and manoeuvre for future gain, especially through alliances.

Burns correctly singles out the elder Bush’s administration as the model. The national security team that managed the end of the cold war was top drawer. James Baker was a shrewd secretary of state who

given Baker and Bush’s informal commitments to Mikhail Gorbachev, Soviet leader. The risk was a new stab-in-the-back conspiracy theory gaining ground in Boris Yeltsin’s Russia. In fact, maintaining “the lands between” such as Poland in a cordon sanitaire between Europe and Russia was never tenable after the collapse of the Soviet Union. And, as Burns admits: “Russia was never ours to lose.”

Burns has few illusions about Vladimir Putin. Yeltsin’s successor was bent on restoring Russian state power and influence. The mistake was to push Nato enlargement to Georgia and Ukraine. Two train wrecks ensued, in 2008 and 2014, when Russia invaded its neighbours.

“It was another lesson in the complexities of diplomacy and the risks of wishful thinking,” says Burns, ruefully reflecting on 25 years of intermittently working on US-Russia relations, latterly as ambassador in Moscow.

Burns has a gift for the pithy insight. Putin is “an apostle of payback”.

Newly installed President Bashar al-Assad is “pleasant but cocksure”, a study in “the banality of evil”. James Baker was a superb negotiator, “unchained by ideology and open to alternative views and challenges to convention.”

At times, Burns the diplomat is too reasonable. A former US ambassador to Jordan, he glosses over King Hussein’s failure to join the US-led coalition against Saddam Hussein after the invasion of Kuwait (even Assad Sr of Syria signed up). He suggests that a 2011 compact with China significantly reduced cyber-enabled commercial thefts — surely a stretch.

He is most vulnerable when defending President Obama’s nuclear deal with Iran.

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Fixing agricultural sector to engineer economic prosperity ODINAKA ANUDU & JOSEPHINE OKOJIE

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he agriculture sector is important for job creation, food provision and security as well as employment generation. It is also a major source of foreign exchange.

According to the National Bureau of Statistics (NBS), the sector grew by 18.58 percent year-on-year in nominal terms in the fourth quarter (Q4) of 2018, showing an increase of 8.45 percent points from the same quarter of 2017, and 0.26 percent points increase from the third quarter of 2018.

Agriculture contributed 23.08 percent to nominal GDP in Q4 of 2018 , which is higher than its contribution in Q4 of 2017 (21.93 percent) but lower than it was in Q3 2018 (25.52 percent ). On an annual basis, the sector contributed 21.42 percent to nominal GDP in 2018.

Agriculture sector contribution to real GDP in 2018 was recorded at 25.13 percent, up from 25.08 percent in 2017.

Despite these numbers and the potential of the agricultural sector to change the fortunes of the Nigerian economy, the sec-

tor is still plagued with a number of issues.

Over the years, government has mouthed support for agriculture, saying it is serious with making agriculture one of the largest employers of labour and foreign exchange earners.

But this is yet to go beyond the talking stage as the sector is still largely limited by lingering issues.

The Anchor Borrowers Programme (ABP) has made considerable progress, without addressing fundamental issues of mechanisation, irrigation, seeds, extension service, insurance, research and development, among others.

As a result, yields have continued to remain low and progress made initially is now on a downward trajectory. This is evident in the country’s Gross Domestic Product (GDP) report.

Data from the National Bureau of Statistics (NBS) GDP report shows that growth in the sector has been on the decline since first quarter 2017, with marginal growth recorded only in the fourth quarter of the same year.

The GDP report shows that growth in the sector contracted from 3.06 percent in q3 2017 to 1.91 percent in q3 2018 year on year.

“We have increased our crop

production of various commodities but the government has still not done anything in addressing fundamental issues. We still do not have sufficient seeds and seedlings, nothing in place to increase mechanisation,” said Abiodun Oyelekan, chief executive officer, Farm Fresh Agric Ventures.

“The only thing the government has done is shifting attention to the agricultural sector.

People now want to invest in the sector than before and this is why there is increase in production,” Oyelekan added.

Also, lots of youths that invested in the sector through entrepreneurship are diverting into other sector owing to the high failure rate caused by some underlying problems in the country’s agricultural sector.

Nigeria still operates the land use act of 1978, which vested the ownership of land to the governor of a state or the president in the case of the Federal Capital Territory.

AfricaFarmer Mogaji, chief executive officer, X-Ray Consulting Limited, said that people take the issue of land ownership very serious and see it as the next thing after life.

Mogaji noted that with ap-

propriate legislation and synergy with stakeholder and town union leaders it will be easy to acquire land for agricultural purposes.

“We need land and infrastructural reforms to ensure food security especially in a country like Nigeria where our population is growing very fast,” Akin Laoye, executive director, FTN Cocoa Processors PLC told BusinessDay in an exclusive interview.

“Every nation has land kept for housing, agriculture and industries in urban areas. In Nigeria, these things are there but it is never followed because we lack institutions to drive these policies,” Laoye said.

He stated that lands in urban areas are taken over by housing estates which are not good for the sector as most youths wants to who are into agriculture wants to remain in the cities or nearby locations.

Similarly, critical infrastructure to aid growth for the agricultural sector is lacking. Indubitably, one of the greatest problems confronting rural farmers and communities in Nigeria is the absence of critical infrastructure such as ‘motorable’ roads.

Farmers continue to suffer low levels of agricultural pro-

ductivity due to infrastructural deficit across the country, which reduces their profit and impact their capacity to expand.

“The problem with agriculture is infrastructure. It is not that we do not grow enough but the infrastructure to move, store and process what is harvested are not there,” said Aboidun Olorundenro, operations manager, Aquashoots Nigeria.

“Without critical infrastructure, agriculture will continue to suffer and our diversification through the sector would only be a dream,” Olorundenro said.

He recommended the development of linkages between farmers and the market, stating that youths can only find agric attractive when such linkages are provided.

Stakeholders say developing agriculture requires the rehabilitation of dams and irrigation facilities to boost farmers’ productivity and also motor-able roads to aid access to the market.

There is also a problem with the seeds. Some seeds that are locally available are substandard, leading to low yield. Experts say there is a need to fund research institutes more to enable them to come up with high-yielding seeds that can increase yield.

NEWS

Opening African continent through the Access, Diamond merger SEGUN ADAMS

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ith the potential merger of Access Bank and Diamond Bank becoming a reality in a few months, customers and stakeholders globally are set to witness the formation of Africa’s largest retail bank, spanning three continents, 12 countries and 29 million clients.

Since both banks possess complementary operating platforms and similar values, a merger with Diamond Bank, with its leadership in digital and mobile-led retail banking, would accelerate Access Bank’s ambition to become a leading pan-African financial institution.

In 2017, Access Bank unveiled a five-year strategy to position it as the No. 1 Nigerian bank by 2022, while also creating a Universal Payments Gateway to dominate international trade and inter-African payments. This was built on six levers - digitally led; analytics driven, with robust risk management; retail banking growth and consolidation

in wholesale markets; customer focused; strong global collaboration in key gateway markets and the creation of a universal payments gateway.

Following the signing of the Memorandum of Agreement and announcement of headline terms, Herbert Wigwe, CEO of Access Bank, says the two banks’ mobile application platforms would be upgraded to create a strong and formidable mobile app that would be accessible and make instantaneous settlement across Africa, while also attracting more opportunities from international partners.

More specifically, with Access Bank unveiling ‘borderless banking,’ which meant easy payment initiation and receipt, speedy and straight-through processing, secure payment solution, transparency in pricing and low cost of transactions to customers, elimination of risk associated with cash based transactions in the region, the use of local currency to effect cross currency payment, especially for retail clients, easy tracking of transactions and also

create an opportunity to maintain ties with family and friends.

Although Diamond Bank would be absorbed into Access Bank and will cease to exist under Nigerian law upon completion of the merger, some of its products such as the Diamond Xtra will remain accessible for customers.

In addition, starting from January 1, 2019, customers of both banks enjoy free access to 3,100 Automated Teller Machines (ATMs) for seamless banking services, the largest network in the country.

The merger expands the banking opportunities for customers in both local and international markets. Uzoma Dozie, Diamond Bank’s managing director has confirmed that the transaction will be completed in the first half of 2019, with the merger completion currently being subjected to shareholder and regulatory approvals.

The next phase is a journey to deliver an ambitious goal - a bank that is digital, innovative and nimble – with the intent to serve Africa, the global market, and to become Africa’s Gateway to the World.

NNPC recovers N771m forfeited assets from defaulting marketers HARRISON EDEH, Abuja

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igerian National Petroleum Corporation (NNPC) on Tuesday said it had recovered assets worth over N771 million from some marketers who had under-paid for petroleum products supplied to them from Petroleum Products Marketing Company (PPMC) Kaduna depot.

Chairman of NNPC Anti-Corruption Committee, Mike Balami, said the committee, in collaboration with Federal Government’s Intelligence and Anti-Corruption agencies such as the Department of State Security Services (DSS), Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and Other Related Offences Commission, recovered the assets from the defaulting marketers.

Ndu Ughamadu, NNPC group general manager, group public affairs division, in the statement on Tuesday affirmed that NNPC Anti-Corruption Committee brought in forensic experts to uncover the shady deals by some of the marketers affected.

Balami disclosed that some of the assets recovered include filling stations, water factories and six sports utility vehicles, adding that the forensic investigation would be extended to the other depots across the country to stop the bleeding of the national oil company.

He noted that it was established that the affected marketers lifted petroleum products from the PPMC Kaduna depot without evidence of payment and when confronted with the evidence they admitted to the offence and failed to pay their liabilities.

He stated that Maikanti Baru, NNPC group managing director, was passionate about stopping all the leakage in the corporation, stressing that the forfeited assets would be handed over to NNPC Corporate Asset Boarding and Disposal Committee (CABDC) for immediate disposal.

He said investigation into lifting of petroleum products without evidence of payment was continuing, urging all relevant stakeholders to support the NNPC Anti-Corruption Committee in its onerous task of recovering all its monies outside NNPC’s system.

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Guber race: 42 candidates struggling to take over Enugu Government House commission is, the REC stated that the state has received and confirmed all the sensitive materials for gubernatorial election and the twenty four House of Assembly seats in Enugu.

“We have recorded 100percent completion of smart card reader configuration and charged, now ready for deployment,” he said.

Ononamadu pointed out that they have equally distributed all the outstanding materials and funds for activation of the 260 registration Area centers in the 17 local Government Areas of Enugu state.

According to him to avoid some of the mistakes and delay made in the last election where voting did not start on time in some pulling units because materials were not distributed on time, INEC Enugu he said would start sorting of available sensitive materials at the CBN on 5th of march 2019 in presence of party

Regis Anukwuoji, Enugu

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bout 42 persons will be contesting to take over Enugu Lion Building while over 310 candidates will be contesting for the 24 seats in the state House of Assembly in the coming governorship and House of Assembly election on Saturday.

Resident Electoral Commissioner (INEC), Enugu Emeka Ononamadu, said the INEC Enugu office has made every necessary arrangement to ensure that all materials get to all the pulling units on time.

Ononamadu appealed to the residents of Enugu state to come out and vote for candidates of their choice in the 9th March Gubernatorial and state House of Assembly election in Enugu.

Speaking at the stakeholders meeting at the INEC office in Enugu on how prepared the

Ifeanyi Ugwuanyi

Taraba LG boss tasks INEC, security agencies on credible polls Nathaniel Gbaoron, Jalingo

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he Executive Chairman of Donga Local Government Council in Taraba State, Nashuka Ipeyen on Tuesday called on the Independent National Electoral Commission (INEC) and the security agencies in the state to ensure that the Saturday’s governorship and State Assembly elections were peaceful.

Ipeyen, who made the call in an interview with journalists in Jalingo, said the violent celebration of President Muhammadu Buhari’s victory last Wednesday in Jalingo and some parts of the state was an indication that there might be break down of law and order if proactive measures were not put in place.

“Hundreds of youths aged between 8 and 20 years armed with dangerous weapons last Wednesday took over the major streets of Jalingo celebrating the President’s victory and in the process destroyed campaign billboards

belonging to the PDP. “They also destroyed valuable items and pavements at the Government House junction. This unnecessary provocation of PDP supporters have to stop.

“We are aware of the plot by the APC to cause violent in the state so that election will be postponed and a new date set aside for them to replicate the Ekiti and Osun rigging.

“We are sure of victory on Saturday because the people of Taraba are with us and the achievements of Governor Darius Ishaku will make the people return him again on Saturday,” he said.

The Council Chairman called on the people of the state to come out en masse on Saturday and vote Governor Ishaku and all the PDP candidates for the good of the state.

He called on the Federal Government not to interfere in the election in Taraba as being alleged in some quarters, insisting that the people of Taraba should be allowed to elect leaders of their choice in a free and fair contest.

agents, electoral observers and security.

“On the same 6th, sorting of sensitive and non-sensitive materials according to Registration Areas will start and end on the 7th March. Party agents, CSO observers and security agencies are also encouraged to observe the process,” he said.

Movement of materials from Local Government RAC will commence from the hours of 9.00am on the 8 of March, all the 260 RACs in Enugu are expected to have been activated on before 3.pm on 8th.

He warned contestants to stay away from their local government area offices and send only their valid representatives.

He further advised party members not to come near the polling units with any of their party logos or T-Shirts, saying that it is against the rules guiding the election.

I will focus on economic development of Warri Federal Constituency - Ereyetomi inner of the February 23 National Assembly elections for Warri Federal Constituency seat, Chief Thomas Ereyitomi of the People’s Democratic Party, PDP, during the weekend, has said he would focus on the economic development of the constituency.

He also promised to tackle poverty and communal conflicts in the area.

Director-General, Chief Thomas Ereyitomi Constituency Office, Robinson Ariyo, disclosed this in chat with our correspondent in Warri.

Unveiling his cardinal plans for the next four years, which include economic development, capacity building, peace building and research and advocacy, the DG pointed out that the plans were in tandem with the Niger

Delta Development Commission (NDDC), as well as the Delta State Oil Producing Areas Development Commission (DES OPADEC ), masterplan.

Lamenting that the economy of Warri has suffered for too long, he said: “It is one thing to promise, it is another thing to deliver on the promise. Our people have been left behind for far too long. We need to take our proper place in the comity of oil producing communities.

“If the society, Warri Federal Constituency is better today, it will be better for all of us. It is on record that Nigeria is at the top of poverty rating in the world.

He explained that the high poverty rate, conflicts in communities among others, informed the four themes.

While noting that the constituency office may not be able to succeed in everything it hopes to deliver, Ariyo stated that each intervention that is embarked on

will be done in a way that it will be sustainable.

“In the area of peace building, most of our communities are polarised. But there is no conflict that is unesolvable. We want to make a deliberate effort to ensure that our communities live in peace.”

Expressing gratitude to the people for their support throughout the elections, Ariyo urged aggrieved individuals “to sheathe” swords and pursue development of the land.

He also urged candidates of the APC and the Social Democratic Party, Alex Eyengho and Hon. Daniel Reyenieju, respectively, to sheath their swords and join hands with him to move Wa r r i Fe dera l Co nstitu enc y forward.

“I am here to reach out to those aggrieved. It is time to sheath our swords and come to the table. Our people have been abandoned for too long,” Ereyetomi said.

this was far from the truth.

It is unfortunate that Makinde has to resort to barefaced lies in his desperation to canvass for votes.

At this time, it is irresponsible of anyone to whip up undue sentiments that could pitch the Ndigbos against their host.

We note that our brothers from the East have always been law-abiding

and it will be foolhardy of anyone to want to toy with the peace that permits the nooks and crannies of Oyo State.

It is unbecoming of Makinde who has employed outright lies, deceit and sentiments since the kick off of campaigns in Oyo State.

We have adviced him severally that since it has become obvious that he was not adequately in a frame of

mind to diligently prosecute this election, he should go back to the drawing board and prepare himself against 2023 election.

Adelabu had a robust relationship with the Ndigbo, as such he cannot plan to attack a community he plans to govern, by the grace of God and the votes of the good people of Oyo State from May 29, 2019.

Francis Sadhere, Warri

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Igbos are secured in Oyo, says Adelabu Akinremi Feyisipo, Ibadan

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he governorship candidate of the All Progressives Congress (APC) in the March 9, 2019 election in Oyo State, Adebayo Adelabu has assured members of the Ndigbo community of the safety of their lives and properties.

Adelabu gave this assurance

following the insinuation by Seyi Makinde of the Peoples Democratic Party (PDP) while featuring on a radio programme, Sunday evening that plans were afoot to attack Igbos living in the state.

In a statement, signed by the spokesperson for Friends of Bayo Adelabu Campaign Organization (FOBACO), Bayo Busari stated that

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UNDERSTANDING THE ECONOMY OF NIGERIA’S 36 STATES

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he purpose of this series is to present evidence-based picture of Nigeria vis-a-vis the current presentations by politicians and various interest groups which are not backed by facts and figures. Such presumptuous speculations have driven the various national discourses or debates on the future of Nigeria, including such thorny issues as restructuring, whether fiscal, political, geographical or administrative.

Facts are sacred, they say, and as such must be given priority in our search for national viability and survival.

‘Understanding the Economy of Nigeria’s 36 States’ series presents such an objective, dispassionate picture of the state of the economy and so viability and sustainability of the various component parts, sub-nationals or federating units of the country going forward. This series will serve to either buttress or discountenance some of the claims made on both sides of the restructuring argument.

The series, written by Cambridge-trained economist, Dr. Ayo Teriba, looks at each state at a glance in the context of its geopoliti-

cal zone and as it compares to other states. The data present irrefutable facts about each region and its component states and raise the question: are they viable as constituted today and going forward?

Each series examines a state’s realities from the perspectives of economy, resource endowment, state of wellbeing of its populace, and its budget (revenue and expenditure profile).

Today’s edition covers Kebbi State and Sokoto State, in the North-West region.

KEBBI • Economy

Kebbi State Summary

Kebbi’s Gross State Product (GSP) was 0.96 percent of Nigeria’s GDP in 2017, 7th in the North-West, 12th in the North and 21st among the 36 States and the FCT. Agriculture was 62 percent of Kebbi’s GSP, Services were 35 percent and NonOil Industry was 3 percent.

• Endowments

Land Area of Kebbi is 4.07 percent of Nigeria’s, 3rd in the North-West, 9th in the North and in Nigeria. Without a coastline, the State shares boarders with Benin Republic to the Southwest, Niger Republic to the Northwest, and is bounded by three States: Sokoto and Zamfara from its region, and Niger from the North-Central.

• Wellbeing

Kebbi’s population is 2.3 percent of Nigeria’s, the least populated State in the North-West, 12th in the North and 23rd in Nigeria. The State is Nigeria’s 29th most dense, 35th in literacy and 8th in life expectancy, and has the least Per Capita GSP in the North-West, 12th in the North and 20th in the country.

• Budget

Kebbi retained 1.69 percent of States’ revenue in 2017, 29th in the country, expended 1.45 percent of States’ outlays, 28th in the country, incurred a deficit, and held 1.4 percent of total debt, 27th in the country.

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ricultural produce in the country, the smallest in the North-West, 11th in the North and in Nigeria.

• N568.1 billion in crops was 84 percent of the State’s agricultural output, • N54.6 billion in livestock was 8 percent, and • N53.9 billion in fishery was 8 percent.

• Forestry was Nil. – Kebbi State’s N31.3 billion 2017 Non-Oil Industrial output was 0.2 percent of the gross Non-Oil Industrial output in Nigeria, the 6th in the North-West, 15th in the North and 32nd in the Country. 98 percent of the State’s non-oil was jointly dominated by Manufacturing and Construction.

– The State’s N379.1 billion Service output was 0.6 percent of Nigeria’s Service output, the 7th in the North-West, 16th in the North and 33rd in Nigeria.

Inter-State Comparisons With a Gross State Product (GSP) of N1.1 trillion or 0.96 percent of the gross outputs produced in the country was the 7th in the North-West, 12th in the North and 21st among the 36 States and the FCT. Kebbi’s 4.6 million Population is 2.3 percent of national population, the least populated in the North-West, 12th in the North, and 23rd in Nigeria. Land Area of 35,700/km2 is 4.07 percent of Nigeria’s land mass, 3rd in the North-West, 9th in the North and in Nigeria. The State’s N50.6billion Revenue is 1.7 percent of all States’ total revenue, the 7th in the North-West, 16th in the North, and 29th among the 36 States and the FCT.

Economy

Structure Kebbi State’s estimated Gross State Product (GSP) in 2017 was N1.1 trillion or 0.96 percent of Nigeria’s GDP, 7th economy in the North-West, 12th in the North and 21stin the country. Agriculture was 62 percent of Kebbi’s GSP, Services were 35 percent and Non-Oil Industry was 3 percent.

– N676.6 billion 2017 Agricultural output in the State was 2.8 percent of all ag-

2.

Endowments

Kebbi State was carved from Sokoto State in 1991. The State has no coastline, shares boarders with Benin Republic to the South-West and Niger Republic to the NorthWest and is bounded by three States, Sokoto to the North, Zamfara to the East, and Niger to the South.

37,000/km2 land area in Kebbi State is 4.07 percent of total land mass in Nigeria, 3rd in the North-West, 9th in the North and in Nigeria. Major towns and cities are; Aleiro, Argungu, Jega, Birnin Kebbi, Gwandu, Bunza, Fakai, Sakaba, Suru, Zuru, Maiyama, Arewa Dandi, Augie, Kalgo, Danko, Yauri, Koko.

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UNDERSTANDING THE ECONOMY OF NIGERIA’S 36 STATES • Value Added Tax of N9.9 billion was 2.09 percent of States’ total, the 6th in the NorthWest, 13th in the North and 25th in the country.

4.1.2.2. Spending N55billion total expenditure in Kebbi State was in 1.45 percent of actual total spending by all States, 6th among its peers in the North-West, 16th in the North and 28th in the country. The spending components in 2017 were: • Recurrent Spending of N26.7 billion was1.01 percent of the recurrent outlays of all the States and the FCT, the 7th in the North-West, 20th in the North, and 35th in the country.

• Capital Spending of N28.2 billion in the State was 2.7 percent of States and FCT’s total capital outlays, 2nd in the North-West region, 3rd in the North, and the 7th in Nigeria.

4.1.2.3. Deficits Kebbi State is one of the 25 States and the FCT that had deficits in 2017. The State made an overall deficit of N4.3 billion, 5th among the 6 States in the North-West, the 15th among the 17 Northern States that had deficits and 23rd among the States that had deficits in the country.

4.1.2.4. Debt Total outstanding debt of N63.3 billion in the State was 1.4 percent of the States and FCT’s total debts, the 4th in the North-West, 12th in the North and 27th in the country.

• Domestic Debt of N48.7 billion in December 2017 was 1.5 percent of States and FCT’s domestic debts, the 4th in the North-West, 13th in the North and 28th in the country.

• Foreign Debt of N14.5 billion in December 2017 was 1.2 percent of the total foreign debts of the States and FCT, the 4th in the North-West, 9th in the North and 25th in the country.

Kebbi State’s 4.6 million Population is 2.3 percent of national population, the least populated State in the North-West, 12th in the North and 23rd in Nigeria. With a land area of 37,000/km2, density in the State is 125 people per km2 compared to the country average of 219 people/km2, 6th in the North-West, 12th among the Northern States and 29th in the country. Kebbi’s literacy is the least among its equals in the North-West, 18th in the North, and the 35th in Nigeria. Life expectancy of 52 years in the State is the highest in the North-West, 2nd in the North and 8th in the country. The State’s female life expectancy of 50 years is 5th in the North-West, 14th in the North and 29th in the country. Male life expectancy of 48 years is the 2nd in the North-West, 4th in the North and 14th among the States and FCT. Per Capita GSP of N235 thousand in the State is the least in the North-West, 12th in the North and 20th in the country.

4.

Budget

4.1.3. 2013-2017 Trends Kebbi’s Total Revenue: Total Revenue declined from N67.9 billion in 2014 to N50.6 billion in 2017. The slump in revenue came from gross statutory allocations (GSA) while internally generated revenue and value added tax increased slightly to offset part of the GSA loss.

Kebbi’s Total Spending: Total Spending fell from N65.9 billion in 2014 to N55 billion in 2017; Recurrent spending fell steadily from N43.9 billion in 2014 to N26.7 billion in 2017, while capital spending grew from N22 billion in 2014 to N28.2 billion in 2017.

4.1. Fiscal Realities of Kebbi State 4.1.1. 2018 Aspirations Kebbi’s 2018 budget of N151.2 billion is 1.6 percent of all States’ and FCT’s 2018 budget, the 5th in the North-West, 11th in Northern Nigeria and 24th among the 36 States and FCT. 4.1.2. 2017 Realities

Revenue Use: Kebbi consistently kept current surpluses with which it funds most of its capital to outlays, resorting to deficits to finance the rest of the capital budget since 2015.

Financing: Revenue financing: overall surplus of 2.9 percent of total revenue in 2014 gave way to overall deficits of 56.4 percent of total revenue in 2016 and 8.5 in 2017.

Spending finance: overall surplus of 3 percent of total spending in 2014 gave way to an overall deficit of 36 percent of total spending in 2016 and 7.8 percent in 2017.

Capital budget: overall surplus of 9.1 percent of capital budget in 2014 gave way to overall deficits of 65.9 percent of capital budget in 2016, and 16.2 percent in 2017.

Kebbi’s Debt • Domestic debt stock grew from N0.8 billion in 2013 to N63.8 billion in 2015 before declining to N48.7 billion in 2017; from1.3 percent of the State’s revenue in 2013, to 140.2 percent in 2015 and 96.3 in 2017.

• Foreign debt stock by the State rose from N7.4 billion in 2013 to N14.6 billion in 2017; from 11.9 percent of revenue in 2013 to 28.8 percent in 2017.

• Total debt stock rose from 12.9 percent of revenue in 2013 to 125.2 percent in 2017.

4.1.2.1. Revenue 2017 actual total revenue of N50.6 billion in the State was1.69 percent of all States’ actual total revenue, the 7th in the North-West, 16th in Northern Nigeria, and 29th among the 36 States and the FCT. The revenue components in 2017 were: • Statutory Allocations of N29.9 billion was 2.05 percent of the total allocations to all States and the FCT, 6th in the North-West, 12th in the North, and 22nd in the country.

• Internally Generated Revenue of N6.9 billion was 0.9 percent of total, the 3rd in the North-West, 8th in the North and 23rd in Nigeria.

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UNDERSTANDING THE ECONOMY OF NIGERIA’S 36 STATES

SOKOTO Sokoto State Summary • Economy

Sokoto’s GSP was 2.77 percent of Nigeria’s GDP; 3rd in the North-West, 6th in the North and 10th among the 36 States and the FCT. Agriculture was 75 percent of the State’s GSP, Services were 18 percent and Non-Oil Industry was 7 percent.

• Endowments

The State’s Land Area is 3.06 percent of Nigeria’s, 4th in the North-West and 13th in the North and country. With no coastline, Sokoto shares a boarder with Niger Republic and is bounded by Kebbi and Zamfara States, both from its region.

4th in the North-West, 5th in the North and 16th in Nigeria.

Inter-State Comparisons With a Gross State Product (GSP) of N3.15 trillion or 2.77 percent of the gross outputs produced in the country, the State’s GSP was the 3rd in the North-West, 6th in the North and 10th among the 36 States and the FCT. The State’s 5.3million Population is 2.6 percent of national population, the 5th most populated in the North-West, 9th in the North and 18th most populated in Nigeria. 27,800/km2 Land Area in the State is 3.06 percent of Nigeria’s land mass, 4th in the North-West 13th in the North and the country. N52.5billion Government Revenue in the State is 1.7 percent of all States’ total revenue, the 6th in the North-West, 14th in the North and 27th among 36 States and the FCT.

• Wellbeing

Population of Sokoto is 2.6 percent of Nigeria’s, 5th in the North-West, 9th in the North and 18th in Nigeria, 24th most densely populated in the country, 33rd in literacy with the 17th life expectancy, and a Per Capita GSP that is the highest in the North-West, 3rd in the North and 7th in Nigeria.

• Budget

Sokoto retained 1.7 percent of States’ revenue in 2017, the 27th in the country; expended 1.3 percent of States’ outlays, 32nd in the country, maintained a surplus, and held 0.8 percent of total debt, 35th in the country.

1. Economy

Structure Sokoto’s estimated 2017 Gross State Product (GSP) was N3.15 trillion or 2.77 percent of Nigeria’s GDP; 3rd in the North-West, 6th in the North and 10th in the country. Agriculture was 75 percent of the State’s GSP, Services, 18 percent and Non-Oil Industry, 7 percent.

N2.4 trillion Agricultural output in the State was 9.86 percent of all agricultural produce in the country, 2nd in the North-West, 4th in the North and in Nigeria.

2.

Endowments

Sokoto State was originally created by the division of the old North-Western State into Niger and Sokoto States in 1976. Two more states have since been carved out of it, Kebbi in 1991, and Zamfara in 1996. The State has no coastline, shares a boarder with Niger Republic to the North and is bounded by two States, Kebbi to its southwest, Zamfara to its southeast.

Sokoto’s 27,800/km2 land area is 3.06 percent of Nigeria’s, 4th in the North-West 13th in the North and the country. Major towns and cities are; Binji, Sabon Birni, Shagari, Sokoto, Rabah, Illela, Gudu, Bodinga, Yabo, Isa, Silame, Gada, Tambuwal, Kebbe, Wamako, Goronyo, Kware,

N2.18 trillion in crops was 92 percent of the State’s agricultural output, N164 billion in livestock was 7 percent, and N16 billion in fishery was 1 percent.

Forestry was Nil. Sokoto’s N200 billion Non-Oil Industry was 1.4 percent of the Nigeria’s, 2nd in the North-West, 6th in the North and 10th in the country. Manufacturing and Construction were 100 percent of the State’s non-oil output.

Services of N600 billion in the State was 0.9 percent of Nigeria’s Service output, the

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UNDERSTANDING THE ECONOMY OF NIGERIA’S 36 STATES 3. Wellbeing

Sokoto State’s 5.3 million Population is 2.6 percent of national population, 5th most populated State in the North-West, 9th in the North, the 18th in Nigeria. With a land area of 27,800/km2, the State has a density of 190 people per km2 compared to the country average of 219 people/km2, 5th most densely populated in the North-West, 8th among the Northern States, and 24th in the country. Sokoto’s literacy rate is the 5th in the North-West, 16th in the North, and 33rd in the country. The State’s life expectancy of 50 years is 3rd in the North-West after Kebbi and Zamfara, 6th in the North and 17th in Nigeria. Female life expectancy of 52 years is 2nd to Katsina in the North-West, 6th in the North and 18th among the 36 States and FCT. Male life expectancy of 49 years is the highest in the North-West region, 3rd among the Northern States and 12th in the country. The State’s Per Capita GSP of N597 thousand is the highest in the North-West, 3rd in the North and 7th in Nigeria.

Revenue The State’s 2017 Actual total revenue of N52.5 billion was 1.7 percent of all States’ actual total revenue, the 6th in the North-West, 14th in the North, and 27th in the country. The revenue components in 2017 were: Statutory Allocations of N21.2 billion was 2.1 percent of the total allocations to all States and the FCT, 5th in the North-West, 11th in the North and 20th among the 36 States and FCT. Internally Generated Revenue of N5.7 billion was 0.7 percent of total, the 5th in the North-West, 13th in the North and 28th in Nigeria.

Value Added Tax of N10.3 billion was 2.17 percent of States’ total, the 5th in the North-West, 9th in the North, the 19th in the country Spending Total expenditure of N48.4 billion in the State was 1.3 percent of actual total spending by all States, the least in the North-West, 19th in the North and 32nd in the country. The spending components in 2017 were: Recurrent Spending of N43.6 billion was 1.6 percent of the recurrent outlays of all the States and the FCT, 5th in the North-West, 13th the North, the 22nd in the country.

Capital Spending of N4.8 billion in the State was 0.46 percent of States and FCT’s total capital outlays, the least North-West, 19th in the North, 35th in Nigeria.

Deficits Sokoto State is one of the 11 States that had surpluses in 2017. The State made an overall surplus of N4.1 billion, the highest and only State that had a surplus in the North-West, the 2nd among the 3 States in the North that had surpluses and 9th among the States that had surpluses in the country.

Debt Total outstanding debt of N38.6 billion in the State was 0.8 percent of the States and FCT’s total debts, the 7th in the North-West, 19th in the North and 35th in the country.

Domestic Debt of N26 billion in December 2017 was 0.8 percent of States and FCT’s domestic debts, the 7th in the North-West, 20th in the North and 36th in the country.

Foreign Debt of N12.5 billion in December 2017 was 1.0 percent of the total foreign debts of the States and FCT, 5th in the North-West, 10th in the North and 27th in the country.

2013-2017 Trends Total Revenue: Total Revenue declined from N68.5 billion in 2014 to N52.5 billion in 2017 as both Gross statutory allocations (GSA) and internally generated revenue

Sokoto’s Total Spending: Total Spending declined from N61.9 billion in 2014 to N48.4 billion in 2017; Recurrent spending increased from N33.5 billion in 2014 to N43.6 billion in 2017 while capital spending fell rather steeply from N28.4 billion in 2014 to N4.8 billion in 2017.

4. Budget 4.1. Fiscal Realities of Sokoto State2 4.1.1 2018 Aspirations Sokoto’s N220.5 billion 2018 budget is 2.37 percent of all States’ and FCT’s 2018 budget, 2nd in the North-West and the North, 10th among the 36 States and FCT. 4.1.2 2017 Realities

Revenue Use: Sokoto maintained current and overall surpluses, even at the expense of steep cuts in capital outlays.

Financing: Revenue financing: overall surpluses were 9.7 percent of total revenue in 2014, 54.3 percent in 2015, and 7.8 percent in 2017.

Spending finance: overall surpluses as a fraction of total spending were 10.8 percent in 2014, 101.3 percent in 2015, and 8.4 percent in 2017.

Capital budget: overall surpluses as a fraction of the capital budget were 23.5 percent in 2014, 423.9 percent in 2015 and 85.4 percent in 2017.

Sokoto’s Debt: Domestic debt stock grew from N5.7 billion in 2013 to N26 billion in 2017; from 7.8 percent of revenue in 2013 to 49.6 percent in 2017.

Foreign debt stock grew from N6.9 billion in 2013 to N12.5 billion in 2017; from 9.5 percent of revenue in 2013, to 23.9 percent in 2017.

Total debt stock rose from 17.3 percent of revenue in 2013 to 73.5 percent in 2017.

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West Africa: Total sees oil and gas growth shift from West Africa to Brazil, Gulf of Mexico Page 53 GAS

LNG Market: Russia record higher LNG volumes to Europe than Nigeria, Algeria, Qatar Page 54 Market Insight

Debrief

Soon, no one will buy Nigeria’s crude. Not even India FRANK UZUEGBUNAM

O Oil rises on US-China trade deal hopes, OPEC’s ongoing supply cuts

Page 58

OPEC weekly basket price DAY

PRICE

1/3/19

65.32

28/2/19

65.28

27/2/19

64.97

26/2/19

64.08

25/2/19

65.36 Source: OPEC

nce, US was the highest off taker of Nigerian crude.

In 2010, US imported 358.9 million barrels of crude from Nigeria. With the advent of shale oil boom in 2012, US imported 148.48 million barrels of crude from Nigeria and as at 2018, the figure has nosedived to about 36 million barrels.

Current estimates from the US Energy Information Administration (EIA) show that US crude oil production averaged 12 million bpd in January 2019, up 90,000 bpd from December 2018 level, setting yet another all-time US oil output record. A new set of output forecasts show US crude oil production would average 12.4 million bpd in 2019 and 13.2 million bpd in 2020. Thus, there is less likelihood that US import of Nigerian crude will rise to pre2012 levels again.

Having lost the US market, India may be next on the line.

The Asian country imports four out of every five barrels of crude

oil it consumes and this has benefitted Nigeria thus far. According to a report published by the Nigerian National Petroleum Corporation (NNPC) on its website in 2018, India was the largest importer of Nigeria’s crude oil in 2017 with over 131 million barrels. However, there are indications India’s uptake of Nigerian crude would diminish in the near future.

The electric vehicles’ gambit India has approved a scheme to spend $1.4 billion to subsidise sales of electric and hybrid vehicles as part of its efforts to curb pollution and reduce dependency on fossil fuels.

The scheme, known as Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME), would provide subsidies based on the battery capacity of the vehicle, ranging from buses and cars to three-wheelers and motorbikes. The incentives would be applicable only on vehicles costing less than $21,177. The government had set a target in 2017 for all new vehicles to be electric by 2030.

Actualizing this means less im-

port of crude oil.

Overhauling rules to drive output India is overhauling its oil and gas exploration rules in a bid to attract private investment and increase domestic production. The new framework moves away from revenue maximization to production maximization, with a focus on attracting international oil companies.

“Under the new rules, producers will be given pricing and marketing freedom that is currently non-existent in natural gas blocks in India. Explorers will also be given financial incentives for early production from their blocks”, Dharmendra Pradhan, India’s oil minister said.

The Indian cabinet, chaired

by Prime Minister Narendra Modi, decided give 66 fields of national oil companies to private operators for increasing the production.

Link-up play with Saudi Saudi Arabia, the world’s largest crude oil exporter, is prioritizing India as its number one investment destination according to Khalid al-Fa-

lih, the Kingdom’s oil minister.

Saudi is planning to invest $100 billion in India, with the bulk of funds going toward infrastructure and energy sectors, including downstream segments like refining and petrochemicals.

One of the biggest downstream projects planned in India is the Ratnagiri refinery, a mega refinery and petrochemicals complex on the western coast with a capacity of 60 million mt/year. It is being jointly built by state-run refiners Indian Oil Corp., Hindustan Petroleum Corp. and Bharat Petroleum Corp., with Saudi Aramco and ADNOC signed on for an initial agreement to jointly take a stake in that project.

“We are not limited to that investment, which is the mega refinery. We are looking at other opportunities. India is an investment priority for Saudi Aramco”, said Amin Nasser, Saudi Aramco CEO. The implication is that India would emerge as number destination for Saudi’s crude, thereby, blighting Nigeria’s exports to the Asian country.

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WEST AFRICA

Outlook

West Africa: Total sees oil and gas growth shift from West Africa to Brazil, Gulf of Mexico

T

otal expects to see its marketleading oil and gas production growth driven by rising deepwater volumes from Brazil and the Gulf of Mexico over the coming years as output from its aging West African assets declines, Arnaud Breuillac, the company’s upstream head said.

Total pumped 654,000 b/d of oil equivalent from its sub-Saharan acreage

in 2017, most of which came from its Angolan deepwater fields off West Africa.

Despite a number of recent project start-ups in West Africa, Total is still “fighting the decline” in its existing upstream portfolio in the region, and expects output to slip at least in the short term, Breuillac said.

Total’s strategy in the region for the coming two years is to focus on short cycle projects that are tie-

53

backs to existing facilities, he said.

“We have a lot of marginal developments in West Africa which are very profitable because they do not need big infrastructure investment, you need just to drill, drilling costs have gone down very significantly in the last four years, and tie back,” Breuillac said.

Total is outpacing its oil major peers in terms of upstream growth with a raft of new projects,

helped by efforts to hold decline rates at around 3 percent. The company expects to grow its production by 9 percent this year after hitting record levels in 2018, supported by a number of major new LNG and oil projects.

This year, Total expects rising flows from Kaombo Norte in Angola, Egina in Nigeria and the Ichthys field off northwest Australia to boost production by a further 9 percent.

The company also expects the planned startup of Iara 1 field off Brazil, Kaombo South in Angola, Culzean in the UK and Norway’s giant Johan Sverdrup project to support its sector-leading production growth in 2019.

Breuillac said any return to output growth from West Africa would depend on future exploration success in the region.

The company, which made a “significant” gas condensate discovery offshore South Africa earlier this month, is planning exploration drilling off Senegal, Mauritania, and Namibia this year.

Brief Congo: Former president awarded oil block in UNESCO heritage site

F

ormer Democratic Republic of Congo President Joseph Kabila in December 2018 awarded an oil drilling licence that overlaps a wildlife-rich UNESCO world heritage site, according to official records, reviving concerns about environmental protections.

Congo, Africa’s leading copper producer, has long aimed to boost oil output above 25,000 barrels per day but corruption and conflict have hampered development on its Atlantic coast, in the its central rainforests and near its eastern border with Uganda.

While in office, Kabila drew criticism for offering drilling deals that encroached on protected areas. His successor Felix Tshisekedi, who was declared president after a contested December election, has yet to outline his policy on the issue.

Environmentalists worry that developing oil reserves could threaten the Congo Basin, the world’s second largest rainforest, which contains rare forest elephants, peacocks and bonobos, which are also known as dwarf chimpanzees. Drilling risks releasing massive amounts

of global warming-causing gases.

One of three licences awarded to South Africa’s DIG Oil on December 13, in the final weeks of Kabila’s rule, encroaches on the 33,350 square km Salonga national park, according to reports.

The deal was signed by Kabila and his Prime Minister Bruno Tshibala, who remains in office as Tshisekedi is yet to appoint a new government.

Oil firms are not allowed to drill in protected areas. But Kabila’s government said last year it would open up parts of Salonga and Virunga national park, another a world heritage site that is home to gorillas, to oil drilling.

Kabila awarded drilling rights to a privatelyowned oil producer called COMICO in 2018 that also encroached on Salonga.

West Africa: BP awards contract for offshore Africa FPSO

B

P PLC has awarded TechnipFMC an engineering, procurement, construction, installation and commissioning (EPCIC) contract for the Greater Tortue Ahmeyim offshore West Africa on the Mauritania-Senegal maritime border, TechnipFMC reported.

“We are honored to be entrusted with the execution of this prestigious contract in West Africa which is a testimonial to our longterm partnership with BP and our leadership in the gas monetization industry,” Nello Uccelletti, president of TechnipFMC’s Onshore/Offshore unit, said in a statement.

In April 2018, BP had awarded TechnipFMC the front end engineering design (FEED) contract for the FPSO that will operate in the C-8 block offshore Mauritania and the Saint-Louis Profond block offshore Senegal. In December 2018, BP and partners Kosmos Energy and national oil companies Petrosen and SMHPM took a final investment decision to develop Phase 1 of the Greater Tortue Ahmeyim development.

The project will produce and process gas from an ultra-deepwater subsea system and mid-water FPSO, and transfer the gas to a floating liquefied natural gas facility near the

Mauritania-Senegal maritime border, BP has stated.

Moreover, the company noted that the project will provide approximately 2.5 million tons of LNG per annum for global export and for domestic use in the West African countries.

“This award is one of our strategic ‘early engagement’ achievements, following the successful completion by TechnipFMC of the FEED study,” Uccelletti stated in the announcement. “We look forward to collaborating with BP to unlock the full potential of this important project.”

TechnipFMC stated that the contract ranges in value from $500 million to $1 billion.

54

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the first phase of the Greater Tortue Ahmeyim project and be located at an innovative nearshore hub located on the Mauritania and Senegal maritime border. Expected to commence production in 2022, FLNG Gimi is designed to produce an average of approximately 2.5 million tonnes of LNG per annum, using the Black & Veatch Prico liquefaction process, with the total gas resources in the field estimated to be around 15 trillion cubic feet.

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ENERGY intelligence

West Africa: Golar to supply FLNG for BP

G

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Brief

olar LNG Limited announced that its newly incorporated subsidiary Gimi MS Corporation has entered into a 20-year Lease and Operate Agreement (LOA) with BP for the charter of a floating liquefied natural gas (FLNG) unit, Gimi, to service the Greater Tortue Ahmeyim project offshore Mauritania and Senegal.

The FLNG unit Gimi will liquefy gas as part of

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Construction of FLNG Gimi is expected to cost approximately $1.3 billion, excluding financing costs.

Once accepted under the contract, annual earnings before interest, tax, depreciation and amortization of approximately $215 million with potential upside for over performance are expected. Golar is also in the final stages of receiving an underwritten credit commitment for a $700 million long-term financing facility from a syndicate of international banks that will be available during construction. Golar said its plan is that together with other financing facilities, by the end of the fouryear construction period the anticipated maximum total equity contribution from the company in respect of its 70 percent stake will be approximately $300 million.

“This landmark 20year agreement with BP, which is Golar’s second FLNG tolling agreement, is the culmination of a lot of hard work and commitment from the project and commercial teams that commenced late 2017.

The potential of Golar’s floating LNG solution was reinforced by FLNG Hilli Episeyo’s proof of concept, Heads of Terms were agreed with BP and its partners in April 2018 and work has been ongoing via the previously reported Limited Notice to Proceed.

LNG Market: Russia record higher LNG volumes to Europe than Nigeria, Algeria, Qatar

R

ussia delivered a record amount of liquefied natural gas (LNG) to Europe in February, thus, becoming the biggest supplier of the chilled fuel to the continent for the first time.

A total of 19 cargoes, or 1.41 million tonnes, of LNG from the Yamal LNG plant in Russia’s Arctic reached regasification terminals in Europe in February, with the majority of those going to northwest Europe, Refinitiv Eikon data shows. This is the largest monthly amount of LNG from Yamal to arrive in Europe since the plant was launched in December 2017 and also the first time Russia has become the biggest LNG supplier to Europe, surpassing traditional suppliers, such as Qatar, Nigeria and Algeria, as well as a newcomer, the United States.

Nigeria delivered 16 cargoes in February, against 18 in January. Algeria supplied 18 cargoes to Europe this month, one cargo less than in January while Supplies from Qatar have been stable at between 17-19 cargoes per month since October.

In February, 18 cargoes, or 1.33 million tonnes, were delivered to Europe, which is five cargoes more than at the same month a

year ago.

In February, shipments from the United States to Europe dropped to nine cargoes, or 0.64 million tonnes, the lowest level since November, largely due to lower loadings in the US caused by maintenances and fog conditions at the Gulf of Mexico plants. US exports dropped to the lowest level since October in Febru-

ary. This is a change from January, when the US was the second largest supplier of LNG to Europe after Qatar.

The jump in Russia’s deliveries to Europe shows how lower-thanexpected LNG demand and lower prices in Asia have made Europe a top destination for LNG produced in the Atlantic basin this winter, a drastic

change from the previous winter.

Some traders expect the price spread will remain tight throughout 2019, with Atlantic-produced cargoes continuing to come to Europe.

Novatek and China’s PetroChina, another Yamal offtaker, have been active selling spot Yamal cargoes to Europe this winter.

Angola: Angola LNG offers cargo for March delivery as Asian prices slide

A

ngola’s liquefied natural gas (LNG) export plant has offered a cargo for delivery in March, two industry sources said. The cargo is offered on a destination ex-ship (DES) basis for furthest delivery into India over March 24 to 27, they said.

Also, Nigeria LNG’s train 1 and 2 which were recently offline, are now back online and normal operations have resumed.

“There was no cargo

delivery loss recorded as the cargoes were rescheduled,” NLNG’s spokesman told Reuters.

Meanwhile, Asian spot prices for liquefied natural gas (LNG) fell to their lowest in nearly 19 months, pressured as buying interest remained slow and as some supply came back online.

Spot prices for April delivery to Northeast Asia LNG-AS are currently at around $6.00 per million British thermal units (mmBtu), down 20 cents at the lowest since Aug. 4,

2017 when they hit $5.90 per mmBtu, Eikon data showed.

Spot demand from China, the world’s second-largest LNG im-

porter, remained slow, but there were some enquiries for April cargoes,

trade sources said.

Total shipments of the LNG into Japan, China, South Korea and Taiwan were at about 15.94 million tonnes in February, down nearly 19 percent from the previous month, shipping data from Refinitiv Eikon showed.

While it is common for monthly import volumes to drop in February as peak-winter demand tapers off, that marked the biggest monthly decline from January to February since at least 2013, the data showed.

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BUSINESS DAY

55

power

WEST AFRICA

ENERGY intelligence

Togo: Government approves subsidy for off-grid solar

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ogo began offering subsidies to its citizens to cover the cost of offgrid solar power systems in a move that if replicated elsewhere in Africa, could help accelerate the adoption of the green technology across the energy-starved continent.

The subsidy is meant to cover the relatively hefty price of the hard-

ware, leaving customers to pay only the cost of the energy consumption.

UK-based BBOXX won a tender to electrify 300,000 Togolese households without access to the national grid. France’s EDF Group took a 50-percent stake in BBOXX’s Togo operation last year. A second company, Soleva, a consortium of Aphlion Energy and Wawa Energy Solutions, signed a simi-

lar agreement with Togo in August.

Under the programme, the government will issue monthly vouchers to households operating a BBOXX or Soleva system.

“This pioneering initiative is a major stride forward in tackling a key obstacle to achieving universal electrification in Africa, this being that many customers are still living in poverty,” said

BBOXX CEO Mansoor Hamayun.

Around 10,000 kits were installed in rural Togo last year. Another 100,000 households are due to be connected by 2020, and a total of 550,000 by 2030. Such household kits form a cornerstone of Togo’s strategy to bring electricity to all of its nearly 8 million people by 2030.

Less than 40 percent of African households are connected to a national grid, representing a huge underexploited power market. Off-grid power solutions are now aiming to fill that gap, and have begun to attract the attention of large European power utilities.

“Access to electricity is a basic need and the government of Togo is committed to achieving 100 percent access for all by ensuring that no one is left behind,” Marc AblyBidamon, Energy Minister said in a statement with partner company BBOXX. Some 285,000 solar home systems were sold in Africa in the first half of last year alone, according to the latest data from GOGLA, an independent off-grid industry association. Global revenues from the pay-as-you-go systems are expected to reach $6 billion to $7 billion by 2022.

France added 1.5 GW of wind power capacity in 2018

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rance added 1.5 gigawatts (GW) of wind power capacity in 2018, taking its total installed power generation from wind turbines to 15.1 GW, the energy ministry said.

Electricity production from renewable wind sources was at 26.1 terawatt hour (TWh) in 2018, compared with 22.6 TWh a year ago, and accounted for 5.5 percent of French electricity consumption during the year.

The ministry said solar power sources connected to the electricity grid rose 9 GW of installed capacity as of December 2018, short of its 10 GW target, after 862 megawatts (MW) of projects were added during the calendar year. It said 11.5 GW of wind projects were in the pipeline.

Power output from solar panels connected to the French power grid produced 9.2 TWh of

electricity in 2018, up 7 percent year-on-year and covered 2 percent of electricity consumption.

As of the end of December, 635 biogas projects have been installed to produce electricity across France, the ministry said, adding that these projects have a total capacity of 456 MW, including 26 MW added during the year.

Electricity from biogas generators rose 11 percent year-on-year to 2.1 TWh and accounted for 0.4 percent of French power consumption, the ministry said.

France is racing to triple wind power capacity by 2030 and multiply by five its solar generation and boost the share of renewables in its energy mix to 40 percent.

Frances hopes that this will enable it to curb its dependence on nuclear generation which accounts for over 75 percent of its power consumption.

Central Africa: Zambia, Zimbabwe shortlist foreign firms to build hydro plant

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ambia and Zimbabwe have shortlisted American, European and Chinese companies to build the Batoka Gorge hydro power plant planned to be on the Zambezi River across the International border between Zambia and Zimbabwe.

Preparatory studies, including engineering feasibility, for the 2,400 megawatt (MW) power station will be completed by end of the first quarter, it said.

A request for proposals will be launched by April and the final devel-

oper will be appointed by September, the statement said.

“The project will be schemed on a Build-Operate-Transfer financing model and will not put any fiscal strain on the government of Zambia and Zimbabwe as no sovereign guarantees will be required,” it said.

Those shortlisted are a consortium of General Electric and Power Construction Corporation of China, Salini Impregilo of Italy and a joint venture of Chinese firms Three Gorges Corporation, China International and

Water Electric Corporation and China Gezhouba Group Company Ltd. The proposed power station will be located on the Zambezi River, approximately 54 kilometres downstream of Victoria Falls, straddling the international border between Zambia and Zimbabwe.

The project is being implemented by the Zambezi River Authority, a bi-national organisation mandated to operate, monitor and maintain the Kariba Dam Complex as well as exploit the full potential of the Zambezi River.

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POLICY

European majors set to withstand oil price volatility - Fitch Ratings DIPO OLADEHINDE

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ew York based, Fitch ratings has said the strong 2018 full-year results from International Oil Companies (IOC), including British-Dutch oil and gas company Shell, French multinational Total and British Petroleum, and contained breakeven oil prices indicates the companies’ capacity to withstand potential oil price volatility in 2019.

“We believe lower oil prices will exert little pressure on the companies’ ratings unless they fall and remain below $50/bbl.

The main credit pressures for oil majors in the coming years include cost inflation and demands for shareholders returns,” said Fitch Ratings, one of the “Big Three credit rating agencies”, the other two being Moody’s and Standard & Poor’s.

Based on their 2018 results, Fitch estimated that based on European majors’ breakeven oil prices have broadly remained at $50-60/bbl which they said may have been higher for French multinational Total given the company’s increased investments during this period, which can reduce materially if needed.

Fitch noted that the breakeven oil price is the price at which companies can fund CAPEX and cash dividends from operating cash flows before working capital changes. In 2018, Brent prices averaged $71/bbl, which enabled European oil majors to generate strong post-dividend free cash flows (FCFs) adjusted for working capital changes, ranging from $2/bbl for Total to

$6/bbl for Shell.

“We assume that Brent prices will average USD65/bbl in 2019, which is marginally higher than

Snapshot

We assume that Brent prices will average USD65/bbl in 2019, which is marginally higher than the current spot price. At this level, oil majors are likely to keep generating positive FCFs although weaker than in 2018

the current spot price. At this level, oil majors are likely to keep generating positive FCFs although weaker than in 2018,” Fitch said.

Fitch said oil majors will need to keep costs under control in order to preserve their ability to withstand lower oil prices as cost reduction has stalled in 2018, with cost inflation already rising in the US, which may affect other regions over time.

“However, we think this will likely be a longer term rather than an immediate issue, given sluggish oil prices. Therefore, we expect unit operating costs to remain broadly unchanged in 2019-2020,” Fitch noted.

Fitch admitted that another potential pressure on oil majors’ credit profiles could result from demands for higher shareholder returns as the three companies have effectively switched to full cash dividends

as oil prices improved, either by cancelling scrips, like Shell and Total, or committing to eliminate the dilution effect through share buy-backs, like BP. Shell has launched its massive $25 billion buy-back programme over 2018-2020, while British Petroleum increased its Q4 2018 dividend marginally by 2.5 percent year on year and Total is planning to raise its dividend by 10percent over 2018-2020.

“We believe that these plans are consistent with the reduced cost base and the current level of oil prices, but we assume, in our rating case, that the companies will show flexibility should oil prices decline (eg by postponing buy-backs or re-introducing scrip dividends),”Fitch said.

Fitch said changes in net debt during 2018 showed differences in risk tolerance and varying stages of the investment cycle. “Shell reduced its

net debt by almost $15 billion, mainly due to positive FCF and disposals, which prompted us to stabilize its rating outlook in November.”

Fitch admitted that debt reduction continues to be Shell’s main financial priority. Conversely, Total and BP increased their net debt, mainly as a result of acquisitions completed in 2018.

“However, while Total remains well below its conservative gearing target at 15.5percent vs the company’s 20percent maximum threshold, BP’s gearing was just above the targeted range of 20percent-30percent at 30.3percent. BP’s management is committed to reducing debt through $10 billion of disposals over the next two years, but the company’s leverage will still likely be higher than that of Shell and Total, which explains the difference in ratings,” Fitch concluded.

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Brief

Tullow Oil board hits UK gender target

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frican-focused Tullow Oil has appointed Sheila Khama and Genevieve Sangudi as non-executive directors to its board. In addition, Tutu Agyare will resign as a director immediately after the London-listed group’s AGM in April.

Following the changes Tullow will have reached the 33 percent target of women in top roles on

listed companies in Britain.

A UK governmentbacked report issued in 2015 made the recommendation on gender representation by 2020.

Khama is a policy adviser on the mineral, oil and gas industries at the World Bank in Washington, focusing on host government relations with commercial companies.

She took up her position at the World Bank in 2016, having worked in a similar role for three years at the African Development Bank.

Genevieve Sangudi is a managing director for The Carlyle Group based in South Africa. Sangudi has more than 15 years of investment experience in Africa in the healthcare, financial services, oil and gas, petrochemicals, agribusiness and telecommunications sectors.

Sangudi joined Carlyle in 2011 and played a lead role in launching its maiden Sub-Saharan Africa fund, including fundraising, strategy, origination and execution.

Meanwhile, Agyare joined Tullow in 2010 as a director and has provided “significant support and insight” to Tullow, particularly with regards to Ghana during his time as a director, a statement from the group said.

Yinson, Nigeria’s First E&P in $902m FPSO deal

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alaysia’s floating pro duction storage and offloading (FPSO) operator Yinson and Nigerian oil company First Exploration & Petroleum Development Company Ltd (First E&P) have executed a contract for an FPSO to be deployed offshore Nigeria.

The contracts worth

$901.79 million were entered into via its whollyowned subsidiary Yinson Nepeta Production Ltd (YNPL) and indirect subsidiary Yinson Operations & Production West Africa Ltd (YOPWAL).

The estimated aggregate value of the contract is based on the assumption that the extension options are fully exercised, comprising the bareboat charter contract of $617.09

million and the O&M contract of $284.7 million.

The FPSO is expected to commence operations at the Anyala and Madu fields by the fourth quarter of 2019.

Lim Chern Yuan, Yinson group chief executive officer said the group would be redeploying one of its existing vessels, FPSO Allan, to Anyala & Madu, and the vessel would be renamed FPSO

Abigail-Joseph.

FPSO Allan ceased operations on January 31, after a tenure of nearly 10 years at the Olowi Field in Gabon.

“The redeployment of FPSO Allan is a strategic decision that has enabled us to bring forward the project schedule at the same time delivering a more cost-effective solution for our client,” the Yinson CEO said.

Algeria extends oil swap deal with trader Vitol to April

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lgeria’s state oil firm Sonatrach has extended its crude for oil products deal with major trading firm Vitol from the end of 2018 until the end of April this year.

As part of the deal that kicked off in February last year, Vitol would load up to 2 million barrels a month of crude and send back refined products like gasoline and gasoil in return.

One of the sources said Sonatrach could allocate more crude to Vitol based on the country’s fuel needs.

Vitol is one of the four companies that Sonatrach has shortlisted for a trad-

ing joint venture which is expected to be finalised by mid-year according to sources.

The two companies have also jointly bid for a 50.1 percent stake in Greece’s biggest refiner, Hellenic Petroleum.

Sonatrach is the OPEC member’s only domestic oil producer with an output of over 1 million bpd of crude.

The deal with Vitol is an example of Sonatrach’s efforts to trim its domestic fuel bill that ballooned over the past few years.

Last year, Sonatrach acquired ExxonMobil’s 175,000 bpd Augusta refinery in Sicily, as part of the same efforts. The plant

is currently undergoing maintenance.

Algeria’s downstream and trading expansion drive is part of a bigger trend among national oil firms to have more control over how their oil is sold and to reap more profits.

State-owned Abu Dhabi National Oil Company (ADNOC) sold a stake worth $5.8 billion dollars earlier this month to Italy’s Eni and Austria’s OMV in its refining business.

The companies also plan to establish a new trading operation.

Saudi Aramco’s trading arm plans to open an office in London as soon as it expands its international business.

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and eliminates retaliatory tariffs on US goods, a source briefed on negotiations said in Washington.

Hopes of an end to the trade spat between the two world’s biggest economies added support to a market that has been rallying for the past two months on cuts to production.

ENERGY intelligence

Supply from OPEC fell to a four-year low in February, as top exporter Saudi Arabia and its allies overdelivered on the group’s supply pact while Venezuelan output registered a further involuntary decline.

“OPEC exports are off by over 1.5 million barrels per day (bpd) since Novem-

ber,” Barclays bank said in a note.

Oil prices have been further pushed up by US sanctions against OPECmembers Iran and Venezuela, which Barclays bank estimates to have resulted in a reduction of around 2 million bpd in global crude supply.

US to sell 6m barrels of sweet crude oil from Strategic Petroleum Reserve

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he US Energy Department (DOE) will sell up to 6 million barrels of sweet crude oil from three of its four Strategic Petroleum Reserve (SPR) storage facilities along the US Gulf Coast, with deliveries planned for May, the agen-

cy said in a notice.

The DOE is selling up to 3 million barrels of crude from the Bryan Mound site in Texas, up to 1.5 million barrels from the West Hackberry site in Louisiana, and up to 1.5 million barrels from the Big Hill site in Texas. Deliveries will be

Wednesday 06 March 2019

WEST AFRICA

Oil rises on US-China trade deal hopes, OPEC’s ongoing supply cuts il prices rose, buoyed by output cuts

by Organization of the Petroleum Exporting Countries (OPEC) and reports that the United States and China are close to a deal to end a bitter tariff row that has slowed global economic growth.

International Brent futures were at $65.36 a barrel, up 29 cents, or 0.5 percent, from their last close.

US West Texas Intermediate (WTI) crude futures were at $56.07 per barrel, up 27 cents, or 0.5 percent.

The rally followed reports that the United States and China are close to ending their bitter year-long trade dispute.

The two countries appear close to a deal that would roll back US tariffs on at least $200 billion worth of Chinese goods, as Beijing makes pledges on structural economic changes

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made from May 1 to May 14 from West Hackberry and Big Hill and from May 1 to May 31 from Bryan Mound, DOE said.

Offers on the crude are due by March 13, DOE said.

The deliveries of this SPR crude will come as sixmonth “significant reduc-

tion exemptions” the US granted some of Iran’s top crude buyers, including China, India, Japan, South Korea, and Turkey, are set to expire.

The exemptions allow these countries to continue to import a specified amount of Iranian crude after the US re-imposed sanctions on Iran in November. It remains unclear if the US plans to extend or modify these waivers before they expire on May 4.

In September, US Secretary of Energy Rick Perry said he opposed a release of SPR crude to blunt the impact of re-imposed sanctions on Iranian oil exports.

The sales will fulfill the requirements of a section of the Bipartisan Budget Act of 2015 which authorized DOE to sell up to $2 billion worth of SPR crude for fiscal years 2017 through 2020 to complete a modernization of the SPR. DOE is permitted to sell up to $300 million worth of SPR crude in fiscal 2019 for the modernization program.

OPEC Flakes OPEC bill could cause oil spikes long term

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he US energy secretary said the United States needs to be cautious about legislation allowing the Trump administration to sue OPEC and other oil producers over supply cuts because it could have the unintended consequence of higher prices in the long term.

“We need to be really careful before we pass legislation that may have an impact that goes way past its intended consequences,” Rick Perry, Energy Secretary said at a press conference at Department of Energy headquarters.

Perry said the bill could reduce supply management by oil producers in global markets, possibly leading to a glut of oil and lower prices. That could have the unintended effect of eventually pushing many producers out of the market, which would send prices back up, he said.

The House Judiciary Committee unanimously passed on February 7 a bipartisan bill known as the No Oil Producing and Exporting Cartels Act, or NOPEC. The legislation would

change US antitrust law to revoke the sovereign immunity that has long protected OPEC members from US lawsuits. It allows the Department of Justice to sue the oil producers group or any of its members on grounds of collusion.

A similar bill was introduced by US Senator Chuck Grassley, a Republican and a proponent of the cornbased motor fuel ethanol, and Senator Amy Klobuchar, a Democrat.

Versions of the bill have come up in Congress for the last 20 years. A bill passed in 2008 but President George W. Bush never signed the legislation into law.

Oil prices have been generally rising this year as OPEC and Russia stick to supply cuts despite pressure from US President Donald Trump.

Russian energy minister says no decision yet on whether to extend OPEC+ deal

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ussian energy minister Alexander Novak said OPEC and nonOPEC countries taking part in the crude production cut deal have yet to decide whether to extend the deal beyond the first half of 2019, and need to conduct further analysis, Russian news agency reported.

When asked if the deal may be extended, Novak said: “There is no answer to this question yet. It is a ministerial decision and it cannot be taken at the meeting in Baku,” according to the report.

A key six-country OPEC/non-OPEC market monitoring committee co-chaired Novak and his Saudi counterpart Khalid al-Falih will meet March 18 in Baku.

Earlier, Falih said he was “leaning toward the likelihood of an extension in the second half [of 2019],” though he added that the bloc would ensure “no unnecessary tightening in the market.”

Novak said that only two months into the current agreement it is too early to assess whether an extension is necessary.

“We need to look at how events will develop over the first and second quarters, and the forecasts for the summer and fall periods. It is unprofessional to pronounce as-

sessments too early,” Novak said, according to the report.

Novak is meeting representatives of Russian energy companies to discuss the crude production agreement.

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59 talking points BUSINESS DAY

Nigeria’s planned refining capacity is world’s second largest STEPHEN ONYEKWELU

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lobal refining capacity is set to increase in the next four years and Nigeria’s contribution will be the second largest after China’s, GlobalData, a data and analytics’ company has said.

GlobalData showed Nigeria is the second largest country in terms of planned refining capacity additions. The country is expected to add around 2,225 mbd of refining capacity by 2023. It has a planned and announced new-build capital expenditure of $40.5bn to be spent on upcoming refineries during the outlook period.

Investors and analysts see a coming boom in refining. Femi Otedola, chairman of Forte Oil Plc recently said he was selling his entire 75 percent shareholding in the company to explore and optimise business opportunities in refining and petrochemicals.

“Refiners dictate the price” Ayodele Oni, energy partner at Lagos-based Bloomfield law firm said.

Total global planned and announced refining capacity in 2023 will be 17.88 million barrels a day. Around the world, there are 158 new planned refineries to start operations between 2019 and 2023.

This comprises a total new-build capital expenditure (CAPEX) of around $520bn

expected to be spent globally on planned and announced refineries during the outlook period.

China leads the field in terms of planned refining capacity additions during the forecast period with 3,121 mbd from 10 planned and announced refineries. The country has planned and announced new-build CAPEX of $53.2bn to be spent on the upcoming refineries over the next four years.

“In Africa, the Dangote refinery is a huge story; one of the biggest refineries in the world being built in Nigeria, likely to supply

most of or all of the Nigeria’s consumption,” said Andrew Bonnington, editorial director, Strategic Oil Markets Development, S&P Global Platts.

Petrochemicals are set to drive growth in world oil demand. Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then. They are also poised to consume an additional 56 billion cubic metres (bcm) of natural gas by 2030, and 83 bcm by 2050.

“Our economies are heavily dependent

Snapshot

In Africa, the Dangote refinery is a huge story; one of the biggest refineries in the world being built in Nigeria, likely to supply most of or all of the Nigeria’s consumption,” said Andrew Bonnington, editorial director, Strategic Oil Markets Development, S&P Global Platts

on petrochemicals, but the sector receives far less attention than it deserves,” Fatih Birol, the IEA’s executive director said.

Birol said petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. “Our analysis shows they will have a greater influence on the future of oil demand than cars, trucks and aviation.”

Nigeria’s three government owned refineries with a nameplate refining capacity of 450, 000 barrels of oil a day has been running below 30 percent of installed capacity.

The country lost an opportunity to privatise them in 2007. In July 2007, Bluestar oil, partly owned by Aliko Dangote’s Dangote Oil (with 55 percent), Zenon Oil (25 percent) owned by Femi Otedola; and Transcop (5 percent), majorly owned by Tony Elumelu; and the Rivers State government also holding a 15 percent stake, announced that they were pulling out of a deal to buy two of the refineries.

However, Aliko Dangote, Africa’s richest is now on the verge of owning Africa’s largest refinery with a capacity that is bigger than the country’s existing three refineries.

The Dangote refinery, which he says, will come on stream in 2020, will have a capacity to refine 650,000 barrels of crude oil per day and has the potential of meeting all of the country’s local refining needs.

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Opinion

Buhari’s landslide Opeyemi Agbaje

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he term “landslide” was popularised in Nigeria in 1983-the National Party of Nigeria (NPN) having gotten president Shehu Shagari elected in 1979 by the notorious “twelve two thirds” electoral formula, was determined to “secure” an overwhelming “victory” for his second term commencing October 1983.

The NPN had needed an alliance with Nnamdi Azikiwe’s Nigeria Peoples Party (NPP) in 1979 in order to govern and had to concede the Deputy Senate Presidency, Speaker of the House of Representatives and quite a few ministerial positions to the NPP. The NPN/NPP Accord duly broke down and the ruling party wanted to rule comfortably in its second term.

With Justice Ovie-Whiskey as electoral umpire, the elections became a charade with massive rigging in Oyo, Ondo and (the old) Bendel States as well as Anambra and other states.

The reaction (especially in Ondo State where NPN’s candidate, Akin Omoboriowo was declared the winner) was bloody and the NPN’s victory in Ondo was reversed by the courts.

Now while the term “landslide” was introduced into Nigeria’s politicodemocratic lexicon in 1983, the propensity of parties which won an initial legitimate mandate in the first election to pervert every norm of democracy in seeking to consolidate power in a second election dated back to the notorious 1964/65 federal elections in Nigeria.

The Northern Peoples Congress (NPC) won a fairly understandable (given the British gerrymandering of Nigeria to give the Northern region a presumed majority in parliament) victory in the 1959 independence elections but just like it’s geopolitical and ideological successor – the NPN of the second republic it needed an alliance with the Igbo-centric NCNC (National Council of Nigerian Citizens) to form a governing majority. “Zik” and his colleagues in the NCNC had forsaken a senior partnership with Awolowo’s Action Group in favour of a junior relationship in the NPC accord probably due to resentment of “Awo” and with encouragement from the British. By 1964, NPC sought total hegemony over Nigeria and had switched its alliance partnership from Azikiwe’s NCNC to Chief Ladoke Akintola’s “Demo” party after his split from the great Chief Obafemi Awolowo. The 1964 federal elections and the Western Region version of 1965 were a fiasco, a blatantly rigged process and led directly to the fall of the first republic. Of course the 1983 NPN landslide also led directly to the December 31, 1983 coup led by General Muhamadu Buhari just three months into Shagari’s second tenure!

‘

The Southern politicians, who helped create such a semblance of political false reality in expectation of benefitting from such in the future, may be either surprisingly naive or blinded by their ambitions

As they say, those who make peaceful change impossible, tend to make violent change inevitable!

In my article of 13/2/19 (repeated 20/2/19 in the wake of the postponement of the presidential elections) titled “Atiku Abubakar wins a fair contest”, it was deliberate that I qualified the type of elections, opposition candidate Atiku Abubakar could win-“... a fair contest” and not one undermined through massive vote buying facilitated in some cases reportedly through bullion vans (!), political violence targeted at opponents and their supporters, structural voter suppression through PVC collection, voting procedures and requirements, voter intimidation through the president’s orders to security agencies to be “ruthless” and to summarily execute electoral offenders (an order it turned out did not apply to those committing electoral offenses on behalf of the ruling party!) and massive deployment of the military, who in many instances particularly in Rivers, Bayelsa and some Eastern states were involved directly as protagonists of violence deliberately targeted at opposition strongholds and supporters; it does seem from reports that soldiers were in many instances actively involved in perpetrating electoral malpractices!

Many innocent lives, including of electoral officers and ordinary voters were lost in the process.

It was also deliberate that I started the article by highlighting the “...large incumbency advantages in Nigeria’s

PMB: Heal thy divided nation!

FRANKLIN NNAEMEKA NGWU (PHD)

F

or your victory at the just concluded presidential election, I say big congratulations Sir! It is really a victory worth celebrating given the tedious campaigns, the tough competition and most importantly the tasks ahead! To be elected to lead and govern almost 200 million people is neither an easy feat nor a small task.

As the celebratory visits and messages pour in, it is important Mr. President to sit back and have a deep reflection on the country you are leading and ask a few but very important questions- First, what is the purpose of this nation called Nigeria? Second, what is the vision for this nation in the next 5, 10, 15, 20 and 25 years? Third, are we as a nation and people in the right direction and do we have what it takes to achieve the vision. Fourth, what did you do right and wrong in the last four years in line with expectations and vision for Nigeria. As you have another four years to lead and direct this nation, the fifth question is what are those key tasks expected of you that will help Nigeria achieve her

short, medium and long term visions.

Mr. President, at 76 years, you have seen it all and your utmost concern should be the kind of legacy you will leave behind. Looking at your life trajectories and contributions to national development, you come across as a full-time recipient of Nigeria’s generosity. You will make the list of the first five of the very few Nigerians that have immensely benefitted from Nigeria far more than they can ever repay. I implore you to deeply appreciate that your privileged position and achievements cannot be attributed only to your hard work and intellect but mainly due to the good heartedness and generosity of Nigerians and God. I beseech you to focus on Nigeria. A constant question that should be on your mind Mr. President is ‘How to give back to Nigerians for all the unmerited received gifts and blessings? What legacy are you leaving behind?

Mr. President, our dear nation is terribly divided; the economy is about to go into recession again; there is extreme poverty and frightful insecurity pervades.

Nigeria is in a serious crisis and urgently requires serious thinking and governance. It is the reason why your victory was somehow greeted with muted joy even among your supporters and the business community. As you celebrate your victory and set to begin your last four years, you need to be sensitive to how you will be remembered. Will you prefer to be remembered as the President that exacerbated Nigeria’s socio-economic and political problems or the one that

significantly contributed to the sustainable amelioration and resolution of our problems?

With the belief that you will prefer the latter, the question then is what you should do to be remembered as such. Of all the problems facing Nigeria such as corruption, insecurity, economic crisis, unemployment and lack of infrastructure, the most devastating one is the lack of unity- the intense division in the country.

It is the fulcrum causation or solution to many of our problems. With unity, fixing the next major problem which is the economy becomes a lot easier. As you won the presidential election with about 15 million votes, it is important to be sensitive to the feelings of about 11 million Nigerians that voted for Atiku Abubarkar and the over 150 million Nigerians that did not vote. You have been elected to lead and be President of all Nigerians!

While your caution to your supporters to be humble in celebration is commendable, what will be more important and impactful are your actions, inactions and policies of your government.

Mr. President, as there is strength in unity, enthroning peace and unity will unleash the productive capacity and innovation of every section of Nigeria and launch Nigeria on the path of sustainable development. Do whatever it takes in terms of policies, actions and inactions, inclusive appointments, dialogue and engagement to rescue the precarious state of our dear country Nigeria. While you have rejected calls for the restructuring of the country, I passionately implore you to rethink

‘

All that is required is a courageous, committed economic team and leadership with proactive, innovative solutions to our problems

politics stemming from control of ...

INEC, police, armed forces, DSS and NNPC!” I also noted that “more than any of its predecessors, the Buhari’s Presidency... has shown a willingness to pervert the institutions of state, ... especially security services...” and ended the write-up noting that any analysis and projections of the outcome of the elections will “... be irrelevant in the context of a blatantly rigged process”. President Buhari, in the event has been declared winner of the 2019 presidential elections by a landslide of 15,191,847 to Atiku’s 11,262,978, a margin of almost 4 million votes! The vote institutionalises a process which began in 2015-in which there are two different voting systems North and South of Nigeria; and in which particularly in 2019, Southern Nigeria is projected as politically irrelevant in the electoral outcome. The Southern politicians, who helped create such a semblance of political false reality in expectation of benefitting from such in the future, may be either surprisingly naive or blinded by their ambitions.

Meanwhile the jury is out whether Buhari’s imminent second term will be different or better than the first. The President himself has already hinted that it will be “tougher”(God forbid!) and noted towards the end of the campaign that Nigerians should live within their means! I was reminded of Rehoboam in 1 Kings12:14! A people deserved the leadership they get! opeyemiagbaje@rtcadvisory.com

your position and appreciate how it will enthrone unity and economic prosperity across the nation. Its demand is wide and cuts across almost every region of our dear country. That is the main reason why Afenifere, Ohanaeze Ndigbo, PANDEF, middle belt forum and Northern Elders Forum supported and endorsed Atiku Abubarkar.

Mr President, wise counsels of young and old Nigerians, elder statesmen and women such as Chief Emeka Anyoku, Pa Edwin Clark, Gen Ibrahim Babangida, Professor Ango Abdulahi, Pa Ayo Adebanjo and many others that are genuinely interested in the unity and progress of our dear country should be appreciated and utilized.

On the economic front Mr. President, I implore you to quickly assemble a competent economic team made up of some members of your forthcoming cabinet and others selected purely on merit. A suggestion will be to include all past CBN governors, six renowned academic economists chosen from one top university from each of the six geo-political zones and three members from the Organized Private Sector (OPS). It can be described as a Council of Economic Advisers and headed by a thorough-bred economist with an unconvincing inclination for home-grown solutions.

Continues online at www.businessday.ng

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum.

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