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CBN’s bad CRR math squeezes banks, economy As effective reserve ratio hits 40% I N

Finally, Labour gets N30,000 bargain, suspends planned nationwide strike

KEHINDE AKINTOLA, Abuja

LOLADE AKINMURELE

i g e r i a n b a n kers say they are being forced to part with more cash than required under the Cash Reserve Ratio (CRR), which mandates lenders to stash 22.5 percent of total customer d e p o s i t s w i t h t h e C e nt ra l Bank at zero interest.

They say the effective CRR is as high as 40 percent and are left scratching their heads over the CBN’s calculations.

Dwindling deposits by bank customers who are increasingly pulling out their funds to invest in high-yielding government securities, imply that the cash equiva-

lent of the CBN’s 22.5 percent CRR should be dynamic.

“Most banks will tell you that the CRR is fictional but they can’t complain because no one wants any trouble with the regulator,” a senior bank official told Business Day on condition of anonymity.

The Central Bank’s spokesperson, Isaac Okorafor, did not immediately respond to a phone call seeking comment.

“The CBN is happy to keep effective CRR as high as 40 percent because it reduces naira liquidity which helps Continues on page 34

n confirmation of BusinessDay’ earlier report, the Organised labour has suspended the proposed nationwide strike scheduled to commence at 00:00 hours of Tuesday, 6th November, 2018.

BusinessDay authoritatively gathered that the recommended N30,000 as the new national minimum wage in the report to be submitted to President Muhammadu Buhari by 4:15pm on Tuesday, 6th November, 2018.

This was contained in a 38page report seen by our Correspondent.

Speaking on behalf of the leadership of Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and United Labour Congress (ULC), Ayuba Wabba, disclosed the resolve of the Organised Labour to suspend the strike action.

However the parties refused to make public the agreed new

Continues on page 34

Inside FMDQ commemorates fifth year anniversary P. 2

L-R: Anthony Osae-Brown, editor, BusinessDay; Bola Onadele. Koko, MD/CEO, FMDQ OTC Securities Exchange; Kaodi Ugoji, associate executive director, corporate development, and Frank Aigbogun, publisher/CEO, BusinessDay, during a courtesy visit by FMDQ management team to BusinessDay head office (The Brook), Apapa, Lagos, as part of their activities to celebrate 5 year anniversary of the company in Lagos, yesterday. Pic by Olawale Amoo

It must be minimum pay for minimum work – Sam Ohuabunwa

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Unilever, Nestle have outperformed consumer firm peers, here’s why BALA AUGIE

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nilever Nigeria Plc and Nestle Nigeria Plc have outperformed listed consumer goods peers as they consistently grow revenues, profit, and margins even amid a tough and volatile macroeconomic environment.

Unilever’s net income surged by 98.20 percent in the September 2018 period, compared to 2017, while net profit margins expanded by 7800 basis points to 13.22 percent in the same period.

In the 2017 period, net income surged by 208.16 percent compared to 2016, while net margins expanded by 3,840 basis points to 6.98 percent.

While other firms capitulated to the economic recession of 2016brought on by a precipitous drop in oil prices that stoked dollar scarcityonly Unilever weathered the storm as net income surged by 210.33 percent while net margins expanded by 11,430 basis points to 15.91 percent between periods 2016 and 2015.

Similarly, Nestle Nigeria’s net income increased by 35.40 percent in the period between September 2018 and 2017 while net profit margin expanded by 2890 basis points to 15.34 percent in the same period under review.

Net income surged by 4643 percent in the periods between 2017 and 2016 while net margins expanded by 1241 percent in the same period.

Analysts say these firms are ahead of peers because they have spent copiously on aggressive expansion while their products continue to dominate the market.

Industry experts also added that Unilever and Nestle have a broad and defensive products targeting the low income end of the market so they are able to navigate the market irrespective of the economic situation.

“These firms have been around for a while and they understand the Nigerian market. Their products are household names and these products account for large share of the market,” said Christian Orajekwe, equity research analyst at Cordros Capital Ltd. “They also spend a lot of money on efficiency of production,” said Orajekwe.

In December 2017, a year after the countryexiteditsfirstrecession,Unilever begantocashinasopeneda$12million BlueBandmargarinefactoryinNigeria’s south western state of Ogun so that it doesnothavetoimportmargarinefrom Ghana, as it has in recent years.

Similarly, in February, Nestlé Nigeria launched a new beverage production plant in Ogun state, Nigeria, following an N 4.1 billion ($11.4 million) investment.

The new plant is an extension of the brand’s existing Agbara facility

and will expand production of the brand’s Milo ready-to-drink (RTD) range, as demand for the product has risen in the country.

“Their management efficiency is superb and neither have suffered severe exchange loss,” said Johnson Chukwu, managing director and CEO of Cowry Assets Management Ltd. Unilever and Nestle stocks have returned -1.76 percent and -11.31 percent year to date, this compares with Flour Mills -36.31 percent, Honeywell Flour Mills -46.67 percent, Cadbury -36.82 percent, Dangote Flour Mills -52.62 percent, Dangote Sugar -35.50 percent, Nigerian Breweries -40.70 percent, Guinness Nigeria -22.34 percent, Northern Nigeria Flour Mills -14.94 percent, and PZ Cussons -51.46 percent.

Other consumer goods firms in Africa’s largest economy capitulated to a myriad challenges such as dwindling purchasing power among consumers, insecurity in the north part of the country, decrepit infrastructure, high incidence of smuggling, counterfeiting locally manufactured products, and the menacing grid lock at the Apapa Ports.

The cumulative net income of Northern Nigeria Flour Mills, Cadbury, Dangote Sugar, Dangote Flour, Nascon Allied Industries, Nigerian Breweries, Guinness Nigeria, PZ Cussons, Flour Mills Nigeria, and Honeywell fell by 43.60 percent to N44.53 billion in September 2018 from N79.0 billion the previous year.

A weak growth in sales and rising production costs crimped profit margins.

Combined average net profit margin fell to 4.25 percent in the period under review as against 6.05 percent the previous year.

To further exacerbate the already anaemic position of manufacturers, consumers have refused to open their wallets, as Nigerians are getting poorer by the minute, while unemployment rates are rising amid growing population.

According to a recent World Bank data, 92.10 percent of Nigerians live at below $5.50 a day. The reality is that most people cannot afford to buy a packet of Spaghetti or proteins.

Nigeria with a population of 180 million people, has 87 million people, nearly half its population, in extreme poverty; as high inflation environment continues to erode discretionary income.

More worrisome is that the country’s population is expected to hit 400 million by 2050, making it the third most populous nation in the world. This means there will be more mouths to feed in a country where growth is too anaemic to make a dent on poverty.

ANALYSIS

FMDQ commemorates fifth year anniversary

…Set to host maiden Gold awards for fixed income, currencies, Derivatives markets IHEANYI NWACHUKWU

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n what became a muchtalked about market event, the Niger ian financial market regulators, architects and founding t r e a s u r e r s , s u b j e c t- m a t t e r

experts and indeed, a host of other domestic and international stakeholders gathe re d t o w i t n e s s t h e l au n c h of a game-changing market i n f ra s t r u c t u re, F M D Q O T C

Continues on page 34

Back Row: L-R: Minister of State, United Arab Emirates and Group CEO, ADNOC, Sultan Al Jaber; president/CE, Dangote Industries Limited, Aliko Dangote; CEO of FedEx, Fred Smith; executive vice president, Business Development, Microsoft, Peggy Johnson; Mastercard president/CEO, Ajay Banger; chief executive officer, 3M, Mike Roman; chairman/CEO, ExxonMobil, Darren Wood. Front Row: Former U.S. Secretary of State and National security advisor, Henry A. Kissinger; vice president, People’s Republic of China, Wang Qishan; convener of the forum and founder of Bloomberg, Mike Bloomberg; chairman of the Paulson Institute, Former U.S. secretary of Treasury, Hank Paulson; Microsoft chief executive officer, Satya Nadella; Hyundai Motor Group executive chairman, Euisun Chung, and HSBC group chief executive, John M. Flint, at the reception for participants at the Bloomberg New Economy Forum, at Capella in Singapore. Nigeria’s Aliko Dangote was there.

SAHCOL targets N1.8bn from IPO on Lagos bourse Iheanyi Nwachukwu & Ifeoma Okeke

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he Skyway Aviation Handling Company Limited (SAHCOL) is going public and the company is targeting to raise N1.8billion through an Initial Public Offer (IPO) of 406,074,000 units of its shares at N4.65kobo per share.

Parties to the proposed initial public offering were at Southern Sun Ikoyi on Monday November 5, 2018 for the signing ceremony of the offer documents while awaiting the approvals of the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) to go public.

Vetiva Capital is the lead issuing house to the IPO while Cordros Capital is the joint issuing house, BusinessDay learnt.

SAHCOL is 100 percent owned by the Sifax Group and incorporated as an Aviation Ground Handling Service Provider under the Nigerian Company and Allied Matters Act of 1990.

The company’s decision to go public was part of the share purchase agreement that it had with Bureau of Public Enterprises (BPE).

Part of the share purchase agreement when its 100percent equity was handed over to the SIFAX group requires that after a period of time, some shares of the company will be diverted to the public and that is exactly what is happening sources say.

SAHCOL is involved in all the actions that take place from the time an aircraft touches down on the tarmac to the time it is airborne.

SAHCOL which was formerly known as Skypower Aviation Handling Company Limited, before it was privatized and handed over to the Sifax Group on the 23rd of December 2009, was carved out of the liquidated Nigeria Airways Limited as part of the Nigerian Federal Ministry of Aviation’s reform of 1996.

When contacted, Basil Agboarumi, Managing Director, SAHCOL said “The Skyway Aviation Handling Com-

pany Limited (SAHCOL) is going public. The process has been on and that is all I am permitted to say because we want SEC and NSE to give approval.”

He added, “When you get to a process, you understand how the process works. Today is the signing in ceremony, which had SAHCOL at the side. We do not have a control on the process. This is our first time going public; we are taking the company to the stock market.”

“The need to go public was part of the share purchase agreement that we had with Bureau of Public Enterprises, which is the government.

“SAHCOL was handed over to the SIFAX group 100percent. Part of the share purchase agreement states that after a period of time, some shares of the company will be diverted to the public and that is exactly what we are respecting today. We are aligning ourselves with the documents that were signed. SAHCOL becomes one of the first cases to complete this process,” Agboarumi noted.

EFG-Hermes to get Nigerian investment banking license next week MICHEAL ANI

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gyptian financial services giant, EFG Hermes anticipates getting an investmentbanking license in Nigeria next week, as part of its plans in expanding its capital market business across frontier markets, Ali Khalpey, the chief executive officer of the company’s frontier unit, said in Dubai.

“We have got all the boxes ticked, and we are just waiting for regulatory approval, we should receive the authorization if not this week, early next week,” Khalpey said, noting that the firm plans on hiring five people in Lagos this year.

In July this year, EFG-Hermes bought Primera Africa, its second foray into sub-Saharan Africa after obtaining a Kenyan stockbroking license in July 2017 that enables it to extend its operationstoTanzania,UgandaandRwanda.

The firm however did not disclose how much it was paying for the 100 percent

stake in Lagos-based Primera Africa.

The company’s investment-banking advisory business is targeting multinationals and big local companies as customers, according to Khalpey.

The lender aims to complete the acquisition of Primera Africa – announced in July – “in the next 10 days”, as it deepens its presence in Nigeria, as it plans to use Africa’s most populous nation as its regional hub.

The announcement comes five days after the Central Bank of Nigeria (CBN) released its half year economic reports citing the closure of two global banks (HSBC and UBS) local offices in Nigeria, for reasons not disclosed.

The apex bank also said foreign direct investment in Nigeria fell to N379.84 billion ($1.2 billion) in the first half of the year from N532.63 billion ($1.7 billion) a year earlier.

The brokerage and research house, which services local and foreign investors, will be rebranded as EFG Hermes Nigeria, Khalpey added.

Whilethefirm’sattentionin2019will be on consolidation in recently entered markets,includingthoseinAfrica,Pakistan and Bangladesh, Khalpey says it sees opportunitytoexpand inVietnam.

The Asian country “is definitely a market we would like to have some exposure to,” he said.

Khalpey was hired in January 2017 to build EFG-Hermes’ frontiermarkets business.

EFG Hermes announced its intention to expand its frontier markets unit last January, when Khalpey was appointed chief executive. The division, which has a particular focus on securities brokerage, investment banking and research, has since progressed its expansion strategy in five markets.

These are: the UK, where it is now fully licensed to service a broad spectrum of frontier markets; Kenya, where it has a greenfield presence; Nigeria; Pakistan; and Bangladesh, where it opened a representative office in January.

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ECOWAS, ICRC validate plan of action to implement int’l humanitarian law INNOCENT ODOH, Abuja

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he Commission of the Economic Community of West African States (ECOWAS) and the International Committee of the Red Cross (ICRC) have validated the ECOWAS Plan of Action on the implementation of the International Humanitarian Law (IHL) (2019-2023) during a four-day consultative meeting that ended November 2, in Abuja, Nigeria.

A statement issued at the weekend by the communication section of the ECO-

Access Bank reiterates support for African creativity

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n line with its commitment to promoting the best of Africa using vehicles like art, music, sports and fashion, Access Bank has once again partnered with Art X in Lagos to bring the third edition of West Africa’s first international art fair to life. Access Bank has been a proud partner of Art X Lagos since its debut in 2016.

Herbert Wigwe, GMD/ CEO, Access Bank plc, at the opening ceremony of Art X Lagos, weekend, expressed his delight that the bank is able to contribute to this initiative, which works to make Nigeria a noteworthy destination for art collectors far and wide.

Art X Lagos is an annual fair designed to showcase the best and most innovative contemporary art from the African continent and Diaspora. In three short years, Art X Lagos has succeeded in this goal, welcoming over 15,000 visitors, including art and culture lovers, curators from the world over, and the most avid of art collectors. It is a cornerstone of both Lagos and the international art calendar and, with Access Bank, it strives to not only showcase artists, but also enable them to reach their goals.

The Art X Prize with Access, which was created to recognize and support the best of emerging Nigerian visual art talent, has made a comeback this year, naming Bolatito Aderemi-Ibitola as the beneficiary. As a result of her project, “Scraps from Mama’s Floor”, Aderemi-Ibitola received a grant of N1,000,000 prior to this year’s event.

Aderemi-Ibitola’s work joined that of the immediate past winner of the Art X Prize with Access, Habeeb Andu, and many other artistes from over 18 galleries across Nigeria, Ethiopia, Kenya, South Africa, the UK, and Spain on display from November 2-4, 2018 at the Civic Centre in Lagos.

WAS Commission notes the Plan of Action seeks to ensure that International Humanitarian Laws are observed during armed conflict in the region thereby protecting the fundamental human rights of community citizen.

A key way to achieve this as stipulated by the validated Plan of Action is to disseminate information to security agencies and armed forces of Member States about the IHL, sensitize Civil Society Organisations, Non-Governmental Organisations and the judiciary as well as include IHL

to school curriculums in the region, the statement said.

The participants also recommended that Member States implement the ECOWAS IHL Plan of Action at the national level by integrating it in their national IHL strategies, which will enable the Commission attain its goal of implementing IHL in the region.

While addressing participants of the meeting, the Commissioner for Social Affairs and Gender of the ECOWAS Commission, Siga Fatima Jagne stated that IHL being an extension of the rule of law in situations

of armed conflict ought to be observed in West Africa due to the catastrophic effect such conflicts have had in region.

The Commissioner stated that the validation of the Plan of Action and its concerted implementation will contribute in no small part to achieving the human security vision of the Commission as reflected in the ECOWAS Conflict Prevention Framework.

She further informed participants of the meeting that the Plan of Action will be presented to the ECOWAS Council of Ministers for

adoption and subsequently to the Authority of Heads of States and Government for approval.

“The Plan of Action will serve as a basis for political and legal accountability for all of West Africa,” she said.

Also speaking during the meeting, Babatunde Nurudeen, the Permanent Representative of Nigeria to ECOWAS, highlighted the protection of children, the eradication of sexual violence, issues related to migration and the welfare of Internally Displace People (IDPs), the protection of health care and the Red

Cross emblem, counterterrorism and arms control as key components of the Plan of Action, which were reviewed.

The Head of the ICRC delegation to ECOWAS, Eloi Fillion reaffirmed the commitment of the ICRC to provide technical assistance to Member states where required in the implementation of the Plan of Action.

Similarly, the representative of the Nigerian minister for foreign affairs, Joseph Udo Oyi, assured Member States of Nigeria’s support in the implementation of the Plan of Action.

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The USMCA quest for ‘America First’ world trade

DAN STEINBOCK Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup.net/

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resident Trump seeks to redefine all major free trade agreements on the basis of U.S. economic and geopolitical leverage.

In these efforts, the United States Mexico Canada Agreement (USMCA) is likely to serve as a blueprint.

From NAFTA to U.S. First North America Despite all Trump’s hyperbole, the USMCA reads like a mix of Clinton’s NAFTA and Obama’s Trans-Pacific Partnership (TPP). Within North America, the treaty will tighten current restrictions on North American vehicle content and introduce new rules for manufacturing in highwage factories, mainly in the U.S. and Canada, though it may leave major supply networks largely intact.

Moreover, NAFTA’s dispute settlement mechanism, which the U.S. would have liked to eliminate, will carry over into the USMCA. To investors, businesses and consumers, the net effect means rising costs.

Internationally, the effects will be more ambiguous but potentially consequential. The contract is mined with fine-print clauses designed against possible Canadian or

STRATEGY & POLICY

Mexican deals with a “non-market economy” (read: China) - which, through the USMCA, Trump would like to extend into all other major U.S. free trade agreements.

What’s worse is that some provisions could make it easier for companies to challenge climate and environment regulations in the three countries, even before they are adopted. In this way, the USMCA has the potential to extend the Trump administration’s pollution agenda and thus prolong its climate damage legacy for years after he leaves the office, despite the justreleased UN (IPCC) warning about impending global climate risks.

From the failed FTAA to U.S.South America trade?

In the 1990s, President Clinton hoped to extend the NAFTA into a Free Trade Agreement of the Americas (FTAA). Venezuela’s Hugo Chavez condemned it as a “tool of imperialism.” Latin America’s leaders, including then-presidents of Brazil, Luiz Inácio Lula da Silva, and Argentina, Néstor Kirchner, demanded the pact eliminate U.S. agriculture subsidies and offer access to South American producers to U.S. markets. Yet, instead of opening South America to free trade, the FTAA split the region into two blocs, as President Lula had predicted.

Like the Reagan administration in the 1980s, the Trump White House is willing to resort to hard power and is now in a better position to superimpose U.S. trade terms on South America.

After the ‘soft coup’ in Brazil and the controversial imprisonment of former President Lula to prevent his likely victory in the 2018 presidential election, the first-round triumph of the extreme-right ex-paratrooper Jair Bolsonaro bodes well for U.S.

‘

The era of post1945 multilateralism is fading. After the revised NAFTA, Trump’s dream is U.S.dominated world trade and the ‘America First’ Asian Century

’ efforts. Bolsonaro is an admirer of its military dictatorship (1964-85), which heralded the rise of Chile’s Pinochet, Latin American juntas and Operation Condor; the U.S.backed campaign of political repression and terror by right-wing dictatorships. In Argentina, the pro-U.S. President Mauricio Macri has undermined the economy with a $50 billion deal with the International Monetary Fund (IMF) that led interest rates to a world record 60 percent.

In brief, the bargaining position of the key South American economies is currently significantly lower than it was only a decade ago. Nevertheless, an ‘America First’ South America deal will not materialize without resistance, thanks to Trump’s controversial immigration policies, and U.S. withdrawal from international trade and climate change agreements.

Stalemate in U.S.-EU trade talks When President Obama began talks on the Transatlantic Trade and Investment Partnership (TTIP) in early 2013, EU leaders were divided over goals and the Democratic White House was constrained by a Republican-controlled Congress. As the talks dragged out, transatlantic goals faced new head winds across Europe, where free trade is increasingly opposed and mainstream parties felt uneasy with the secret and opaque TTIP negotiating process.

Trump has alienated and weakened German Chancellor Angela Merkel. French President Macron has stated that he is not in favor of a “TTIP-style” U.S. deal. European public opinion is vehemently against the Trump White House. The series of disagreements between Washington and Brussels extend from trade and protectionism to the Iran nuclear deal, and the U.S. withdrawal from the Paris Accord. Moreover, the impending UK Brexit clouds projections.

Despite a short-term trade truce last July, the EU has warned that Trump’s pressure tactics will not work with Brussels. The outgoing European Commission president Jean-Claude Juncker has gone further highlighting the dependence of the US dollar on the euro, saying, “It is absurd that Europe pays for 80 percent of its energy import bill, worth €300bn a year, in U.S. dollars when only roughly 2 percent of our energy imports come from the United States.”

In brief, Brussels is posturing, positioning and transacting with Trump; just as Trump is with Brussels. The historical stress on “common values and interests” hasn’t crumbled but is eroding.

Toward ‘America First’ Asian Century In Asia Pacific, the most dynamic

world region, Trump killed the TPP during his first day in office. More recently, he has considered rejoining a revised TPP, but only if the U.S. is granted a better deal.In turn, some TPP-11 participants hope Trump will prove a one-term president and U.S. withdrawal will be reversed after 2020. Others have joined China-led talks at a Regional Comprehensive Economic Partnership (RCEP).

An Asia Pacific USMCA will not be an easy sell in the region. Even America’s allies - Japan and South Korea - feel unsettled about new protectionism. But as before, Trump is likely to use geopolitics as leverage to get an economic deal he wants.

Irrespective of the outcome of the mid-term elections, Trump is likely to push a new Asia Pacific alignment, which strategically will seek to cement America’s Indo-Pacific Vision to contain China’s rise. Economically, it aspires to neutralize China’s One Road One Belt initiative. Militarily, it is exploiting the “freedom of navigation” doctrine to dominate the South China Sea as 60 percent of U.S. naval fleet will be transferred into the region by 2020.

If U.S. protectionism will undermine free trade in Asia Pacific, the regional extension of the USMCA could prove more ‘moderate’ than initially projected, but it would split the region, seek to undermine China’s rise and thus derail the highlyanticipated Asian Century.

What Trump wants is an ‘America First’ Asian Century.

• A shorter version of this commentary was released by South China Morning Post (Hong Kong) on October 25, 2018 Send reactions to: comment@businessdayonline.com

AfCFTA: What is in it for Nigeria?

“Leadership from behind does not exist. If it exists, it does not last.”- Amb George Obiozor, former DG, NIIA.

MA JOHNSON Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

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he above quote was extracted from the opening remarks of George Obiozor, chairperson of the one-day conference on Nigeria and the African Union’s Continental Free Trade Area, organized by the Nigerian Institute of International Affairs (NIIA), Lagos, on October 31, 2018. It was a gathering of eminent scholars, academics, labour, captains of industry, members of the diplomatic corps (retired and serving) and media organizations among others.

Historically, the idea of a con-

tinental free trade is not new to Africa. In fact, the whole essence of international relations is trade. Perhaps, that was the reason why the NIIA assembled participants from diverse sectors of the economy to participate in the conference.

The lead paper titled “Nigeria in a changing global economy: Challenge and opportunity of the agreement establishing the African Continental Free Trade Area (AfCFTA) was delivered by Nigeria’s chief trade negotiator, Ambassador Chiedu Osakwe. Osakwe in his homily spoke extempore to convince the distinguished audience about the need for Nigeria to be part of the continental free trade area in Africa. Osakwe was not a lone voice in the wilderness, there were others who shared same sentiments with the diplomat that Nigeria should go ahead with the agreements initiated by the AfCFTA. This category of participants strongly feel that irrespective of the barrier that could hinder free flow of trade within the conti-

nent, Nigeria as the largest economy should be a signatory to the AfCFTA without wasting any time further.

To support their position, they say, Nigeria as an economic giant must display leadership in all matters relating to trade, bearing in mind the country’s population of 200 million.

It is believed that Nigeria didn’t sign the free trade agreement because of her commitment to ensuring that only what would benefit the nation’s economic interest is implemented as policy. But, if Nigeria was to diversify her economy and strengthen her industrial base, AfCFTA is the way forward, they further argued.

There is no doubting the fact that the delay exhibited by Nigeria in joining this trade arrangement would greatly affect the credibility of AfCFTA. So, one could only hope that Nigeria would make up her mind soon having weighed all factors that may affect the country’s national interest. Nevertheless, Nigeria must first put her house in order by attending promptly to numerous infrastructure challenges before signing any trade treaty. It is

because there is a direct relationship between quality of infrastructure and volume of trade.

Although, majority of the participants are of the understanding that Nigeria should sign the treaty and be part of the AfCFTA. But the question, this writer is asking is: Is Nigeria prepared for AfCFTA? If the answer is affirmative, what is in it for Nigeria? These questions are asked because little success was achieved in past initiatives even at sub-regional levels to promote intra-trade within members of the Economic Community of West African States (ECOWAS). Several reasons can be adduced for poor result in intra-trade within ECOWAS. Among them is poor infrastructural barriers and national interest.

For instance, if one wants to travel by road from Nigeria to Ghana, it takes about six hours ideally. But the reality is that the route from Nigeria to Ghana takes about 18 hours because of numerous security checkpoints. This writer is aware that a Nigerian firm in the chemi-

cal and paint industry exported goods to Ghana about two years ago, but when foreign exchange was to be remitted back to Nigeria for goods sold, the importing nation declined. Smuggling of goods through neighboring countries into Nigeria is a challenge that has affected the economy negatively for several years.

Representatives of the Manufacturers Association of Nigeria (MAN) have been very consistent on all occasions whenever the debate on AfCFTA takes place. In specific terms, MAN is of the view that Nigeria should not sign the AfCFTA based on bandwagon effect or on the grounds of diplomatic niceties. MAN wants the country to pay more attention to some big issues as the conversation on AfCFTA is deepened.

Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Send reactions to: comment@businessdayonline.

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Manufacturing in Nigeria (3) Rafiq Raji “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

M Challenges

anufacturing in Nigeria is beset with quite a few challenges; chief among them is power supply. Most firms rely on “emergency” power generators to run seamless operations, adding to costs. There are also regulatory issues, a multiplicity of taxes, and trade facilitation issues, among others. The country’s infrastructural deficiencies are also a major constraint. Export processing zones and special economic zones are the government’s workaround towards removing or mitigating this constraint. The challenges faced by manufacturers are probably best put by Frank Jacobs, president of the Manufacturers’ Association of Nigeria, in remarks to the media in April 2018: “A situation where you generate your own power for production does not make you competitive, because whatever is produced in this country is produced at a higher cost when compared to other parts of the world.

The same goes for the transportation system as we still move our good via roads, even the heavy duty goods. Such goods which should go by rail lack enough rail lines to carry them. There is need to develop the transportation sector to the point

where it can support the manufacturing sector and also support the economy”.

For more light on these challenges, a report on the Nigerian manufacturing sector by the National Bureau of Statistics (NBS) in 2014 put them as follows: inadequate and epileptic power supply, high taxes, poor infrastructure, and supply variability of rain-dependent agricultural inputs. There are some strengths, the NBS observes, though; labour is cheap, domestic demand is buoyant, and some inputs are available and cheaper domestically.

Government initiatives In the ERGP, the government highlights the following policies to boost manufacturing. It aims to “provide incentives to support industrial hubs, review local fiscal and regulatory incentives to support development of industrial cities, parks and clusters, especially around existing ports and transport corridors.” Furthermore, the government plans to “revitalize export processing zones by reviewing local fiscal and regulatory incentives, rationalize tariffs and waivers on the equipment and machinery imports required for agro-industry, establish special economic zones (SEZs) to provide dedicated infrastructure to support hub productivity and acquire suitable premises for SEZs.” Other highlights of the ERGP specifically targeted at the manufacturing sector around SEZs are as follows: The authorities would ensure connection to power and water infrastructure, facilitate technology acquisition and transfer in the SEZs by making available research output from local research institutes, ensure connection and access to critical ICT facilities.

Lekki Free Trade Zone in Lagos, Nigeria’s commercial capital, is perhaps the leading example of the efforts of the government in

‘

A situation where you generate your own power for production does not make you competitive, because whatever is produced in this country is produced at a higher cost when compared to other parts of the world

’

this regard. In its three years of existence thus far, more than $700 million worth of finished goods have been exported by the 18 manufacturing enterprises situated within it. Foreign direct investment to the tune of $500 million has also been recorded by the firms operating in the FTZ. To reduce the types of bottlenecks faced by firms at the ports, a customs processing centre is situated within the zone.

And although finished goods for export still have to be transported to the Apapa port downtown at the moment, that would not be necessary in a few years’ time when the Lekki Deep Sea Port in the FTZ would have been completed. In fact, the authorities reckon the port should berth its first ship by the first quarter of 2020.

More broadly, the authorities desire to “build adequate transportation network (road, rail, ports), im-

prove access to finance, expand the capabilities of the Bank of Industry to enable it to support manufacturing firms through low cost lending, enhance access to the N250 billion CBN MSME fund by reviewing its design and implementing enabling initiatives to encourage on-lending”, and the provision of micro-loans to women “through the Government Enterprise and Empowerment Programme (GEEP) and Women Empowerment Fund.

Launched in 2013, the central bank’s MSME development fund, provides long-term loans to micro, small and medium enterprises at a single-digit interest rate of 9 percent. To access it, interested MSMEs apply to participating banks. There have been reports of favouritism, secrecy and other malpractices related to the fund, however.

For GEEP, under the aegis of the Bank of Industry, its “MarketMoni” scheme has given out more than 350,000 micro credit loans thus far. And in mid-August 2018, bankers and the CBN agreed to provide 7-year fixed-rate loans of 9% (with a 2-year moratorium on principal payments) to firms in the agriculture and manufacturing sectors. There are also discriminatory foreign exchange policies by the Central Bank of Nigeria in favour of manufacturing firms.

Furthermore, the authorities’ Nigerian Industrial Policy and Competitiveness Advisory Council established in March 2017, with membership including leading African industrialist Aliko Dangote, assists “the government in formulating policies and strategies that would enhance the performance of the industrial sector.” The Presidential Enabling Business Environment Council established in July 2016 also monitors and assesses key sectors of the economy to ensure doing business in the country is easier;

with tangible improvement in the country’s ranking in the World Bank Doing Business survey.

The Nigerian government is also promoting local content by encouraging the sourcing of raw materials and spare parts locally, “leveraging public procurement of locally manufactured goods (with targets for MSME participation), and via a “Made in Nigeria” campaign. For the promotion of innovation and technology-led industries, the government’s plan includes the provision of fiscal incentives for private investment in research and development (R&D), improvement of intellectual property enforcement procedures, promotion of science parks and innovation hubs, encouragement of private equity and venture capital players through an attractive fiscal and regulatory framework, and the promotion of youth entrepreneurship and innovation through the “You-Win-Connect” programme.

Controversy recently trailed the YouWiN Connect programme, though, with participants complaining about not getting the funding that was promised for their businesses.

• The author, Dr Rafiq Raji, is a consultant at the NTU-SBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established

by Nanyang Technological University and the Singapore Business Federation. This article was specifically written for the NTU-SBF Centre for African Studies. This article was published on How We Made It In Africa on 27 September 2018.

Note: the rest of this article continues in the online edition of Business Day @ https://businessdayonline.com/

Send reactions to: comment@businessdayonline.com

Getting Africa fit for the future with impact investing

ANDREW SKIPPER Skipper, partner and head of Africa for global legal firm Hogan Lovells

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nvesting for positive environmental and social impact or good governance (ESG) is becoming the norm rather than the exception in Africa.

More than $428 billion in financial assets have been directed to ESG investing in southern, East and West Africa in the past year, according to African Investing for Impact Barometer (AIFIB).

To understand both the drivers and obstacles to this type of investment in Africa, global legal firm Hogan Lovells recently hosted CEO’s and thought leaders from across the continent to discuss the topic at the company’s annual Africa Forum held in Johannesburg.

The theme for the event was Africa Fit for the Future, where solutions were explored that will make a positive impact in shaping a sustainable and successful future for the continent.

Trillions of dollars are set to be invested in Africa by 2030 with a massive impact economically and socially, according the World Economic Forum. Smart investors are scrambling to lay the foundations now for African businesses which will soar over the course of the next decade alongside the continent’s population and spending prospects.

The term impact investing, which has grown in popularity globally, refers to investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.

For example we have seen a rise in green energy projects in South Africa recently with a R56 billion (about N1.42tn) agreement signed between Independent Power Producers (IPP’s) and government to increase investment in renewable

energy and move away from relying solely on fossil fuels.

According to the World Economic Forum, by 2030 the African population is set to soar to 1.7 billion people with combined consumer and business spending set to reach a massive $6.7 trillion with a huge investment potential. The UN estimates that subSaharan Africa will account for about half the increase in the global work force by 2030.

To benefit and take advantage of this projected growth Africa needs to address the three key drivers, or three C’s, of certainty, corruption and currency to encourage investment that will have a positive impact on the continent. Increasing impact investment will mean that there should be certainty around important government policies, corruption must be cleaned up and prevented, and currency stability must be encouraged.

Though investors look at the continent with a mixture of optimism and nervousness, initiatives like President Ramaphosa’s drive for $100 billion in new investment in South Africa signals that Africa is open for business and a new scramble for Africa is underway.

This drive for new investment opportunities on the continent is also being fuelled by global factors like Brexit and the trade wars by US president Donald Trump. Africa must become fit for the challenge to embrace these new investment opportunities that will make a tangible positive social impact.

Indeed, the recent visit to West Africa by German Chancellor Angela Merkel to focus on economic development and migration is testament that impact investing is a global priority - some Europeans hope that investing more in West Africa will help keep people from migrating, especially in a region plagued with unemployment, poor infrastructure, rising extremism and now the effects of climate change.

Panelists also agreed that education is of vital importance for the youth of the continent to make the most of the opportunities available to them, and for sustainable economic growth going forward.

James Campbell, MD of Botswana Diamonds, said there is a strong link between education and the economic growth of a country.

Vincent Raseroka, CEO at Bridge Taxi Finance, also believes the key for growth is a strong education system, with an emphasis on science, technology, engineering and maths, which unfortunately is lacking in many African countries.

He believes there needs to be an inclusive model for impact investment and it is vital that technology is leveraged the correct way without merely digitizing everything. There needs to be a balance and change management needs to play a role for inclusive development through impactful socio-economic investment.

Bonang Mohale, CEO of Business Leadership South Africa (BLSA) concluded by saying harnessing the continents raw materials and imparting the education and skills for processing materials into end products through impact investment will put Africa on the road to prosperity and have a positive social as well as a positive economic effect on the continent.

Send reactions to: comment@businessdayonline.com

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Frank Aigbogun editor Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

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GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Tuesday 06 November 2018

Politics of issues and imperative of debates for Nigerian General Elections 2019

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eneral Ele ctions Nigeria 2019 will formally kick off on November 17, 2018, when the Independent National Electoral Commission allows the contending parties and individuals to start their campaigns. The commencement of campaigns will not solve the current challenges in the economy, the country’s security status, declining and inadequate infrastructure and the composition of the federation. It should, however, offer an opportunity for robust engagement on these and the many other issues of currency in the nation.

We call for a different politics than that practised in the last two general elections. Nigeria deserves a politics of issues and a robust debate on its current state and envisaged future. The vision of the parties is what should animate the debate in the three months leading up to the February 2019 elections. In the last two electoral rounds, citizens fell for what seemed to be the wellintentioned disposition of the candidates. It resulted in serial disappointment. The people now agree that even the best of intentions devoid of competence and ability would matter very little.

This coming round of electioneering requires the following three as desiderata and code.

First, parties and candidates must offer a robust vision for tackling the issues that confront the country, the states and the lo-

cal governments. That vision must have what, in standard Requests for Proposals, are known as Technical and Financial components of the proposal. In other words, a vision and implementation modalities.

They should present it to citizens in town halls, via the media and in properly organised debates and platforms that allow articulation and subsequent interrogation of the ideas.

There are many issues. Foremost is the economy. The economic conditions of man affect all of his other conditions, political, sociological, psychological. The health of the economy is the number one indicator of health or sickness of a country and its people.

Nigeria requires and BusinessDay calls on all parties and candidates to proffer a vision for the economy. The Presidential candidates must of necessity bring to the table a Technical and Financial proposal in tabling their response to the RFP that citizens have placed on the table.

Requests for proposal for the management of Nigeria 2019 – 2023 The purpose of this solicitation is to select a competent person to serve as President of the Federal Republic of Nigeria with concurrent responsibility for the headship of its armed forces and leadership of the Executive Branch in a government that includes a two-tier legislature and the judiciary and other arms.

The selected person will function under the direction of the 1999 Nigerian Federal Constitution. In particular, he shall strive to ensure

adherence to Chapter 2, Fundamental Objectives and Directive Principles of State Policy, Chapter 4 on Fundamental Human Rights and other sections on the duties of the president.

Nigeria has an estimated population (2017) of 195million people, a population ranking of 7 in the world and a land area of 923,768 Sq Km. A vast and growing population has put pressures on the economy, and Nigeria will end 2018 with $4billion deficit as well as growing external and internal debts, inadequate infrastructure and low scores in the provision of social services of health and education.

Nigeria needs a CEO with a vision to grow the economy, heal the rifts among the constituent groups that have widened in the last three years due to divisive actions that run contrary to Chapter Two of the constitution aforesaid. The economy is the Number One issue.

Candidates must submit clear plans that would tackle the challenges in no fewer than ten areas, with a concentration on at least five principal deliverables. The areas are the economy, the future through education, health and social services, the structure of the federation and the relationship among the constituent units, security, and healing the land.

While the economy is primary, there are linkages among the areas.

For instance, the structure of the economy is a function of the preferred philosophy or ideology of government. Should Government

continue to hold on to large sections or open up and allow greater participation of the private sector?

What role should states play in the management of natural resources within their territory, particularly the hydrocarbons that have propelled the economy since the 1960s? In the face of growing volatility, what is the plan for growing other sectors of the economy such as agriculture, mining, manufacturing and knowledge work?

Responses to this RFP should come in various formats for the download and comprehension of citizens in their various capacities.

We expect candidates to present them first as a comprehensive policy document. They would then break this document in byte sizes addressing specific areas such as the economy, within which Management of the Key Rates, Agriculture, Manufacturing, Water Resources, Infrastructure provision.

It will address Education and new models to jumpstart contribution, value and relevance; Health, and improving Nigeria’s poor ratios; Works,Transportation, Infrastructure; and Internal dynamics including the nature and cost of the country’s democracy.

Apart from campaigning on the issues directly to the electorate, candidates must accept to participate in three rounds of debates that the broadcast organs would air nationwide. They would answer questions on their Vision and the Technical and Financial components as well as expected deliverables. Let’s do it right this time.

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BUSINESS DAY

Tuesday 06 November 2018

Poverty reduction, security, economy seen as central issues in 2019 political campaign Stories by Daniel Obi Media Business Editor

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overty reduction and improving the declining economy are major issues expected to top political party campaign promises ahead of Nigeria’s 2019 elections.

Campaigns to elect the next president and some other positions open November 18, 2018 and what Nigerians and corporates are expecting are concrete and well-designed strategies to improve their living standard and stop wanton pervading killings in the country.

Nigerians have been going through excruciating times and recent Brookings Institution report confirmed this when it stated in June that Nigeria has emerged as the country with the highest number of poor people in the world, overtaking India. It put Nigerians living in poverty at 87 million out of 170 million

population.

Nigeria’s quarter-onquarter gross domestic product (GDP) slowed from 2.11% in the last quarter of 2017 to 1.95% in the first quarter of 2018; and down to 1.5% in the second of 2018. Opeyemi Agbaje, a social commentator and columnist in BusinessDay said “the fact that oil prices averaged $75 per barrel in that quarter yet growth remained so weak, confirms that the problem with the

Nigerian economy is not oil prices but poor economic policy and management.”

Prior to 2015 elections, Muhammadu Buhari and his campaign team, including foreign public relations agency convinced Nigerians that corruption was the bane of the economy.

“But most of Buhari critics see corruption, not as the start and end of Nigeria’s problems but as a symptom of the manner in which we

have governed Nigeria that continues to squeeze the political and economic spaces in the country”, says Ogho Okiti, an economist.

Akonte Ekine, a PR practitioner based in Lagos told BusinessDay that Nigerians will vote politicians who they think have the competence and managerial skills to eradicate or reduce poverty in Nigeria, grow the economy, unify Nigerians and protect the lives of the citizens.

He said that it is now clear to many Nigerians that promises made on political rostrums do not necessarily translate to actions. Now, Nigerians perhaps need to look beyond promises and consider tested personalities on entrepreneurial and economic management as that is what Nigeria needs now to obviate the declining economic growth. As said, it takes more than enticing Nigerians with electoral promises to lead Nigeria, if not that government will be short-lived.

Over time, election of politicians has been based on sentiment and emotions but Akonte said this time, more than ever before, Nigerians will hopefully consider economic interest and security to cast their votes. “It is only those who pretend not to be economically affected or those who receive momentary gains during elections or those who strongly consider religion that will not mind about the economy when casting their votes.”

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World Quality Alliance holds Global Quality Award 2018

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s Nigeria joins the rest of the world to celebrate the World Quality Day (WQD) on the 8 of November 2018, the World Quality Alliance has concluded plans to hold the Global Quality Excellence Awards.

Ifeoma Favour Emeka, Secretary, Award General Committee,said the award scheduled for the Lagos Sheraton Hotel, said in a global economy where success depends on quality, innovation and sustainability, the award reinforces these commitment as foundation for improving brands and business performance.

With the theme this year as’ Quality: a Question of Trust’, Favour noted that the World Quality Alliance with the support of the Chartered Institute of Quality has made an alliance to intensify relationship promote global commitment to quality and their application in all segment of the society.

‘We have ramped-up our logistics capacity to meet Black Friday demands’ Black Friday is the most amazing time of the year when massive deals on extreme discounts on products than ever before are made. This year, Jumia has promised to offer up to 80% discounts. BusinessDay engaged Tolulope George-Yanwah, the country manager, Jumia Services, the logistics arm of Jumia to explain how the company will handle the delivery of orders during this year’s one month-long Black Friday campaign which kicked off last Friday. Excerpts.

What are your plans for a month-long Black Friday which kicked off last Friday? have been looking forward to this year’s Black Friday. If I follow the trend from last year, all indicators are looking very positive. First, mobile and internet penetration in Nigeria has increased compared to previous year. These are indicators for e-commerce business. In that connection, I foresee an increase in the number of customers on our platform. On logistics, this means that we have to ramp up our capacity exponentially because it will be one month of huge sales. It is like doing one month of everything we have done between January to October. I will summarise this in three categories - in terms of talent, space and thirdly in terms of tools. In terms of talent, we have been preparing for Black Friday for the past 10 months, almost after the last Black Friday. Scaling up to 5 times of our normal sales requires enormous preparation. In terms of talent, we

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have dedicated percentage of our manpower to temporary services and spend time in training them on our processes and learning to use our systems. In terms of space, we have expanded our last mile operations as we are everywhere in Nigeria. We have also bought new fleet within the group. In terms of tools, we have strengthened our technology to give a better user experience.

Could you take us through how orders are delivered to customers when they make orders on Jumia?

We have over 5 million unique products on our website. When a consumer goes to the website and selects an item, it becomes available for our customer service unit to confirm. This can be auto confirmation on the basis that the customer is old customer who understands the process, or manual confirmation by calling the customer who made the orders. When this confirmation is made, it is inputted into either Jumia Express stream, which means

that these items are picked, packed from Jumia warehouse or it goes to the vendors platform. The local or overseas vendors can fulfill the orders.

When these items are shipped, they are consolidated into a sorting center. This center will

Tolulope George-Yanwah

sort them into over 120 last mile hubs nationwide. When the goods arrive at the last mile, it is available for delivery associates to deliver.

What challenges do you face in this delivery chain?

The challenges range from

infrastructure, talent and others. In E-commerce, we have deficit of the right talent for warehouse management and logistics including delivery associates. Don’t forget the fact that e-commerce is still at its nascent stage in Nigeria.

The challenge is not different from those that affect other companies. But we have developed core competences effectively to manage these challenges.

Do you handle your delivery 100 percent?

Yes, we do. Understanding the fact that we are integrated network of logistics service providers, everything is managed through our chain, visibility and our technology.

What experiences do consumers expect from this year Black Friday?

Improved quality of service and reduced cost. Everything we have been doing throughout the year has been geared towards reducing cost. It is the season of right products, delivered to customer at the right time and the right location and right

quality.

What impact does technology have on orders tracking and delivery? Do you build the technology in-house?

We build the technology in-house to fit the needs of Africa. Technology offers a lot for the consumer education and visibility; in terms of what they are ordering, technology improves our processes and efficiency and improves the cost and gives better user experience.

What is your projection on number of orders this year compared to last year?

I estimate that we should be doing 5 times what we did last year. In 2017, we delivered 8 million products across Africa and Nigeria is the biggest market. And we have the capacity and logistics in place to meet orders. This will also promote the SME businesses because if we have more orders to handle, people who are within our network will need more people to do their job, and this means we are creating jobs.

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Nigeria’s market research industry has expanded - CEO Kantar Insight Adeola Tejumola is the CEO, Kantar Insight (West, East and Central Africa), the holding company of Kantar TNS ,Kantar Millward Brown , Kantar World Panel , Kantar Retail and Kantar Public. In this interview, he spoke on a number of issues, including the growth of research in Nigeria, how SMEs can leverage research for growth and political polls before elections. He says Kantar has deepened its CSR from fighting malaria to empowering communities. Excerpts Are there recent developments in marketing research in Africa? ew years back, we talked about creating awareness about market research business but the good news is that we have moved away from that in the sense that research bias themselves have become very sophisticated and knowledgeable in what and how research outcomes should be used.

The research community has long created the right awareness and its importance in our environment.

TNSRMS has been at forefront of that campaign as we have been in existence for over 38 years. One thing in our environment is to accept something but when we do, we leapfrog. We are now beyond awareness stage to the state of creating the right use, different approaches to the kind of research we do, different means of collecting data and extensive quality control and now we are strictly guided by global best practices.

This means that more firms must have embraced research in the recent time Absolutely. There is expansion and growth of market research community. This means the agencies and buyers of research have grown.

In our industry we now refer to some clients as local giants because what has happened is that there are people from multinationals who have moved to join indigenous firms and they go with those traits of understanding how to grow and sustain a good business.

Can you say then that the budget for market research has increased and could you put a figure to it?

It has increased significantly and it would have perhaps increased more but because of the challenges in Nigeria’s macro-economy which is prevalent in every industry. I will

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say that the Nigeria’s market research industry has expanded in great trajectory. Now there is health research which never existed which was as a result of new challenges and the industry is growing. Before now sicknesses are linked to various things but now people are aware of health issues. I don’t even think we have enough practitioners in the industry to handle demands and opportunities.

How would you say then that the public sector is keying into this expansion in terms of demand for research?

It is difficult for me to ascertain but I can only from the point of view of agency that I run vis a vis the opportunity that obtains out there say that it is by means no doubt that the private sector research still continues to lead. It is not different from the fact that the economy is largely private sector led. But this is not to say that the public sector is not fledging because we are big players in that sector.

Kantar is a big player in research market even in Africa, what does it take to sit on top?

The way we are structured, there are a lot of things that actually go on across the region which I am not privy to and this is not lack of efficiency but an indication that we are actually equipped and I have surrounded myself with people who are either equally as good as I am. This is the philosophy that cascades from the top. While I sit in Nigeria I could not tell you that I am on top of every single client across the region. What I do more is setting the direction of the business, resolving issues and setting budget target and ensuring that we meet it.

Your niche is leveraging technology to deliver results. Could you tell us more about it?

Leveraging technology is not unique to Kantar. Absolutely every

Adeola Tejumola

business across the world is leveraging on technology. It is either to embrace technology or perish. For Kantar, I cannot say we are ahead of curve in technology, but I can tell you that we are actually leaders in that space. Remember that about 6 years ago, we were still doing interview with pen and paper, but we transitioned into doing that with tablet. Even with our studies which we call connected lives, we realised that more people spend time on time on their mobile which is the future. This will change the face of research, digital is the future. All our interviews are on mobile and on exceptional cases on tablet. This comes with a lot of benefits which include of delivery, quality control, the ability to be agile is important.

How do you deal with the challenges of technology application, such as skills and apprehensive respondents?

With every new innovation comes an inherent challenge.

One of the key things we are dealing with is that you wake up one morning and find that devices are missing. This is costly to the business and we are tightening our process to deal with it by insurance or make it useless to use as voice enable phone. On apprehensiveness of respondents, we deal with it by increasing number of respondents against the figure we are looking for anticipating drop offs and bad interviews. Also servers can break down when you have uploaded information.

But we work with partners to provide solutions to all this.

How do you think government can leverage research for economic growth?

One of the things we have been doing, where we have partnered with FG and states is to provide solicited or un-solicited accurate, timely and unbiased information on happenings in the society. This information is provided to solve socioeconomic issues. The data is left for the government to use efficiently to improve governance.

Many SMEs cannot afford you but they need your products to grow their business, what do you advise them?

It is a myth that SMEs cannot afford our fees. There are different kinds of research and there are also different sizes of research. For instance, BMW has different products for different class of people. But there is a fundamental factor among all of them and that is quality. What I am saying is that even the micro businesses can afford our services, but it will depend whether they are going pan Nigeria or not. I believe in the future of this country and Africa and the local giants are the game changers. It is in our best interest to see them grow. However, SMEs still believe in the culture of thumps up rather than affordability of market research.

In 2015, there were political polls, which generated furore among some people, are we going to see political polls again as we enter 2019 elections?

There will always be divergent views in terms of acceptance of political polls but the overriding factor remains the result. If what researchers do is guided by best practices, it does not matter what the divergent views will be. What matters is that at the end of the day, how the result was compared with outcome.

Phillips Consulting underscores continuous learning in present changing landscape …introduces schedule for digital technology learning

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hillips Consulting (PCL), an innovator in instructor led and online trainings, has just announced the launch of its 2019 Training Timetable– highlighting the best, upto-date and most relevant training courses essential to all professionals and companies to meet expected goals and outcomes.

The company stated that it is crucial to empower people to perform at the very highest level and explained that PCL’s carefully

designed and executed programs are provided through methods designed for optimal impact on participants’ behaviour.

They also revealed that an ever-changing operating landscape means there is need to continuously evolve to ensure the provision of world-class learning interventions from creation through to delivery, in alliance with global thought-leader partners around the world.

Speaking on the offerings, Senior

Partner, Paul Ayim said “Over the years, several blue chip Organisations have trusted the quality of our classroom and digital learning interventions. This confidence has brought a paradigm shift in their mindset from seeing training as a cost to a significant investment in their most critical of all assets, their people.

Our digital learning interventions further enhance their ability to embed learning into their employees flow of work. Employing blend-

ed learning approaches has led to impressive results as knowledge gained is immediately applicable in the work people do and reduces the significance of scrap learning, which occurs when people do not use what they learn. Our aim is simple: to help your people succeed. We will go to any length to ensure that this happens.”

The 2019 training calendar features a wide range of In-House, Open-Standard, Technology-focused and In-

ternational programs that can be delivered locally and internationally at the client’s discretion.

Also speaking, Head of Classroom Learning Nwaji Jibunoh said “The 2019 calendar gives a full view of our wide range of learning interventions which includes: Instructor Led Facilitation courses, held at our training facilities with programmes covering Leadership and Management, Workforce Management, Infotech and Bespoke Learning Courses.

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iStore unveils new iPhone XS, XS Max for Nigerian market

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Why HSBC, UBS exit may not be such a big deal LOLADE AKINMURELE

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efore news broke of their exit from Nigeria, foreign lenders- HSBC Holdings and UBS Group were relatively out of sight in Nigeria.

Unlike global rivals, Standard Chartered and Citi Group, HSBC and UBS only had representative offices in the commercial capital of Lagos and didn’t operate a full banking unit in the country.

Between them, both banks had less than 10 staff in their representative offices.

Given their rather passive presence in Nigeria, talk about how their exit deals a blow on foreign capital inflow to Nigeria may be slightly exaggerated.

That is not to say news concerning two of the 10 biggest banks in the world would have no impact on capital inflows into an emerging economy.

Just that it will be difficult to track given that both banks do not officially import capital into Nigeria. They could easily be described as fringe players in the Nigerian banking sector.

The three biggest banks by capital imported are Stanbic IBTC, the local unit of South African lender, Standard Bank and the local units of Londonbased Standard Chartered and US lender, Citi Group. The three account for over 70 percent of total capital imported into Nigerian shores.

Of the three, Stanbic IBTC imported the largest capital into Nigeria in the first half of 2018 ($6.1 billion or 51.7 percent of the $11.8 billion total imported into Nigeria in that period) followed by Standard Chartered bank ($1.7 billion or 14.4 percent of the total) and Citi bank, ($1.2 billion or 10 percent of the total), according to NBS data.

So when all three were accused by the Nigerian central bank of using false certificates of capital importation for one of their many foreign clients with local operations, MTN Group, foreign investors panicked.

HSBC and UBS did not import any capital, at least not officially. So a direct impact from shutting down mere representative offices may not as significant as it is made to look.

However, the people who say the exit of both banks could deal a blow to foreign capital flows into struggling Nigeria make a good point.

They say that the sheer size and popularity of the banks means Nigeria is likely to get stick over the exit at a time when Abuja has a poor reputation for managing private capital. To make their claim,

they point to telecom giant, MTN’s regulatory struggles which took a turn for worse late August.

“The noise following their exit is not because they would be missed in Nigeria, rather as one of the top 10 banks in the world, they command market power such that news about them may move markets,” Bongo Adi, a development

economist, said.

“So we are concerned about the negative contagion that may follow this news.

Never forget that market runs on irrational exuberance that this sort of news carry and this is a time when our FDI isn’t doing well and the news of this exit does t help,” Adi said.

Nigeria is embroiled in a clash with its biggest non-oil

foreign investor, MTN, after regulators accused the telecoms company of illegally repatriating capital from almost a decade ago. A situation that the finance minister, Zainab Ahmed, now describes as “damaging” for the country’s reputation at a private sector conference last month.

While the CBN said Foreign Direct Investment (FDI)

to Nigeria declined by 29 percent to N379.84 billion naira ($1 billion) in the first half of the year, from N532.63 billion naira in the same period a year earlier, state-funded data agency, the National Bureau of Statistics (NBS) had earlier reported a 4.5 percent increase to $507.96 million in the first half of 2018 from $485.75 million the same pe-

riod a year ago.

FDI inflow to Nigeria is way below requirements for a country tipped to be the third most populous nation by 2050 with a population exceeding that of the United States. Nigeria’s FDI per capita was barely $5.6 in 2017, compared to $107 in Ghana, $78 in Egypt and $58 in South Africa, according to data from UNCTAD.

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BUSINESS DAY

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Tuesday 06 November 2018

COMPANIES & MARKETS Factoring & Supply Chain gets CBN license to financial markets

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actoring and Supply Chain Finance Limited (FSCF) has formally secured its Central Bank of Nigeria (CBN) operating License to commence business transactions in Factoring, Trade Receivables Finance and other related services.

Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivables (Invoices) to a third party (called Factor) at a discount.

With this License, FSCF is positioned to act as a channel of liquidity in the underserved Receivables Finance market. This is with a view to supporting Small and Medium-Sized Enterprises (SMEs) and Large Corporates that need to discount its receivables prior to the completion of payment cycles.

“We are excited to be a pioneer in the receivables

finance space in the country, says ‘Lanre Bakare, CEO, Factoring and Supply Chain Finance Limited.

“Together with the support from the CBN and other Development Finance Institutions, we look forward to supporting both SMEs and Large Corporates to turn their unpaid invoices into cash and eliminate the long account receivable cycles.

Chris Oshiafi, chairman, Board of Directors said, “We are encouraged by the progress and the significance of what this license represents. We are optimistic that this will improve trade and by extension boost the Nigerian economy.”

Fa c t o r i n g & S u p p l y Chain Finance Limited is a PanAfrican Capital Holdings Company and a member of Factors Chain International (FCI), a nonprofit association based

L-R: Sacko Seydou, programme officer trade, ECOWAS; Fatima Haram, vice president, Economic and Monetary Community of Central Africa Commission; Seni Adio SAN, chairman, Nigerian Bar Association-Section on Business Law; Joanne McNally, chief operating officer, Mark Eddo Media, and Amine Mari, senior resident representative and mission chief for Nigeria, African department, International Monetary Fund, at the Africa Trade Forum 2018 in Lagos.

Pic by Olawale Amoo

in the Netherlands representing the interests of the global open account re-

ceivables finance industry.

FCI has nearly 400 members based in 91 countries,

and form a trading network that provides cross border factoring services that al-

lows members to finance foreign receivables in a safe and secure manner.

Sterling-MTN Pay Small-Small VITAFOAM unveils three products CBN certifies Wider Perspectives frontline manuto its unique construction. as EDI for AGSMEIS fund to improve 141m Nigerian lives facturer of foams It is built to offer the same

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ore than 141million mobile subscribers in the country using feature phones can now upgrade to smartphones courtesy of Sterling Bank-MTN Pay Small Small device financing scheme recently launched in Lagos.

Introduced by Sterling Bank Plc, MTN Nigeria and Technology Distributions Limited (TD), the new scheme democratises the acquisition of smartphones as well as access to the digital ecosystem through smartphones pre-bundled with data.

Only 13 percent of Nigeria’s 162 million mobile phone subscribers use Smartphones and have robust access to the Internet, social and businessapplications,amongothers.

Speaking at the media launch of Sterling-MTN Pay Small Small, Shina Atilola, group head of Strategy and New Business, Sterling Bank Plc, said “Knowledge and information transforms economies. Our collaboration with MTN Nigeria, Technology Distributions Limited and Payjoy to democratise access to smartphones will make knowledge and information accessible to millions of Nigerians which will improve their lives and well-being.

It is important that a lot more Nigerians have the opportunity to engage in societal dialogues irrespective of their social class and education. A person without access to information cannot effectively grow a business, live well and contribute to the economy. We are excited about the

strong partnerships forged to deliver Pay Small Small to improve the lives of our people while delivering social impact.”

Atilola further noted that the bank will continue to be at the forefront of seeking valuable partnerships that will enrich the lives of Nigerians. “At Sterling Bank, growing the economy remains our priority, and that is why we always design solutions that will translate into value for Nigerians. This alliance with MTN NIgeria, TD and Payjoy is a testament to the bank’s commitment to ensuring that every Nigerian is availed the opportunity to own a smart phone with all its attendant benefits which include Insurance cover and free data.”

Also speaking at the event, Gozy Ijogun, Managing Director, Technology Distributions Limited, expressed delight that her organisation is part of the partnership that will increase smartphone penetration with its attendant benefits to Nigerians who ordinarily cannot afford to pay the lump sum that is required to acquire these devices.

“Things required for optimum living are paid upfront which makes life difficult for many Nigerians.

What we are unveiling today is a revolutionary partnership which makes it possible and affordable for anyone to visit the MTN Nigeria experience centre close to them and walk out with the latest smartphone device with as low as N7,000 (Seven thousand Naira) monthly payment in less than 10 minutes.”

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and allied products, Vitafoam Nigeria Plc has concluded arrangements to unveil three key products in pursuit of the company’s policy of satisfying diverse needs of its numerous clients.

The products, designed to enhance healthy living are Spring Mattress, Vita Pearl Pillows and Jumbo Leisure Mat. They shall be launched today at the company’s corporate headquarters in Oba Akran Industrial Avenue, Ikeja, Lagos.

The event shall attract a cross section of the company’s customers and the media. The Group Managing Director, Mr Taiwo Adeniyi is expected to deliver a keynote address while there will be display of the new products for effective interactive session.

Adeniyi has always explained that the company places high premium on diverse needs of the customers as they are at the center of the philosophy that underpins Vitafoam’s operations.

According to a statement from the company, spring mattresses are used in the core of innerspring mattress foam. The spring mattress lasts longer due

comfort for many years.

The mattress has considerable amount of space between them, an indication of ventilation. This helps to prevents accumulation of body heat and promotes better sleeps.

Vitapearl Pillow is also known as memory pillow and it is of. high quality.

A unique feature of the pillow is that it conforms to shape of the head and neck, offering therapeutic support and rises back to its original shape in 60 seconds after being compressed. The pillow’s excellent airflow enhances good sleep position. Apart from the pillows’ durability, they come in cartons and prevent collapse during transportation.

Vitapearl pillow is easy to maintain as the pillow comes with two washable covers.

Jumbo Leisure Mat is made of high density foam and covered with quality aqua clean textile that makes it resistant to tear.

The mat is easy to clean.

The foam is removable and can be washed individually at anytime. The mat comes in three fold and it can be folded. The mat can also be used for picnic, exercise and meditation.

GODFREY OFURUM,Aba

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he Central Bank of Nigeria (CBN), has certified Wider Perspectives Limited, a management consulting firm, with its headquarters in Port Harcourt, Rivers State, as an Entrepreneurship Development Institute, for its Agri-business small and medium investment (AGSMEIS) fund, BUSINESSDAY has gathered.

Consequently, Wider Perspective is to conduct pre-qualification training for micro, small and medium entrepreneurs (MSMEs) in the South-East/South-South regions of the country, to enable them access the fund.

This is also as the firm is working with relevant ministries in Abia State, in the implementation of the State’s MSME Development Programme.

The programme involves sensitization and selection of suitable SMEs using its selection criteria, capacity building, and access to finance, monitoring and evaluation.

The agri-business small and medium investment scheme is a voluntary initiative of the bankers committee at its 331st meeting held on February 9, 2017.

The initiative is to support Federal Government efforts and policy measures for the promotion of agri-businesses and MSME, as vehicle for sustainable economic development and employment generation.

The scheme requires all banks in Nigeria to set aside 5 percent of their profit tax annually.

Godwin Emefiele, governor, Central Bank of Nigeria (CBN) at the flag-off of the disbursement of

funds to the first set of beneficiaries of the scheme in April 2018, noted that the challenge of youth unemployment and restiveness must be confronted with strategic innovative thinking to provide sustainable solution.

Addressing over 300 beneficiaries at the flag-off ceremony held at the Head Office of the CBN in Abuja, said the disbursement was in fulfillment of the commitment jointly made by the Bankers’ Committee during its 2016 Retreat, to design and fund a suitable scheme aimed at reducing the huge financing gap for Micro, Small and Medium Enterprises (MSMEs).

He said the Fund also aimed at job creation, financial inclusion and inclusive growth for Nigerians, particularly the teeming youth population.

Further to the 2016 commitment, he recalled that the Bankers’ Committee at its 331st meeting held on February 9, 2017, came up with the AGSMEIS as an initiative to improve access to affordable financing for MSMEs, particularly those operating in the informal sector of the economy and to support the Federal Government’s efforts and policy measures to promote sustainable economic development and employment generation.

To ensure the successful implementation of the Scheme, he disclosed that all deposit money banks in the country, voluntarily agreed to set aside and contribute 5 percent of their Profit After Tax (PAT) annually to finance eligible projects under the Scheme, which currently stands at about N26 billion and is expected to exceed N60 billion by June 2018.

Tuesday 06 November 2018

BUSINESS

COMPANIES & MARKETS

Business Event

DAY

17

iStore unveils new iPhone XS, XS Max for Nigerian market

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Store, Apple Authorised Reseller has officially unveiled the latest iPhone models – iPhone iPhone XS and XS Max, which sales commenced 2nd November 2018.

When customers get their new iPhone at iStore they get access to iStore’s full range of exclusive benefits and services, such as Free Tech Support, Free Training and access to financing the device over 8 months, the Company said.

That’s what makes iStore the preferred destination for Apple customers which includes top corporates, education institutions and general public, the managing director/CEO of the Company said.

Upgrade to an iPhone XS and

save up to 50 percent when you trade in your existing iPhone at iStore. At the same time secure your iCare Extended Warranty. In addition, iStore is offering free wireless chargers to the first 100 customers who participate in offering. iStore is the biggest Apple Authorized Reseller in Nigeria - its premium store at Ikeja City Mall, iStore Mega Plaza, and Office Everything at Novare Mall, Lekki. iStore now also offers online purchases with delivery across all 36 states in Nigeria.

The iPhone XS, which the company say should be pronounced “Ten Ess” – will cost $999 for the basic 64GB version. Other than the option of acquiring the device in

gold, the phone looks largely identical to its predecessor, but features the now-standard array of internal improvements, including a better camera, faster processor, and more internal storage, with an upper limit of 512GB. The XS comes with a larger sibling, the iPhone XS Max, available for $1,099 for the 64GB version.

The XS Max has a 6.5-inch screen, significantly larger than that of the older iPhone 8 Plus, but with the edge-to-edge design of the iPhone X line, the phone’s body isn’t that much larger. Inside, the phone appears to be near identical to its little relative – unlike in previous years, both phones have the same cameras and processors.

L-R: Clare Omatseye, president, Healthcare Federation of Nigeria and Board Member, ACT Foundation; Oluwakemi Olawoye, winner of the 2018 ACT Foundation Impact Investment Award/CEO, Genuine Health Africa; Nike Akande, ex minister of industry and Osayi Alile, CEO, ACT Foundation, at the just concluded WIMBIZ annual conference in Lagos.

Stanbic IBTC underlines support for diligent implementation of public policy HOPE MOSES-ASHIKE

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egardless of how robust a policy framework may be, it requires diligent execution, which is backed by strict adherence to corporate governance to achieve its desired objectives. This was the submission of Stanbic IBTC as Nigeria seeks approaches to unlock its potential and navigate the economy towards sustainable growth and development.

As economic growth is driven by consistent investment and increase in productive outputs, the financial institution said it is committed to supporting Nigeria to actualize her developmental aspirations through interventions and partnerships in critical sectors of the economy.

On the sidelines of the 24th Nigerian Economic Summit, which held in Abuja between October 22 and 23, the bank avers that by examining the disconnect between policy formulation and implementation, chances of finding solutions to trigger socio-economic development in Nigeria are brighter.

Underpinning this year’s summit theme, “Poverty to Prosperity: Making Governance and Institu-

tions to work”, is a push for permanent structural changes that would unlock Nigeria’s capacity to attain her potential, a mission which the Stanbic IBTC Group shares.

Stanbic IBTC, as part of the Standard Bank Group, Africa’s largest financial services group, is a major stakeholder in the effort to develop the continent. This explains the bank’s focus on critical sectors of the economy, including social interventions that will position the Nigerian economy for sustainable growth and development. Stanbic IBTC’s rich pedigree in Corporate and Investment Banking, Personal and Business Banking and Wealth Management underscores its strategic goals of supporting all segments of society and clientele.

According to Stanbic IBTC, Nigeria’s economic potential is massive and it will continue to seek opportunities in strategic sectors of the economy to grow its business while helping to create sustainable prosperity for the people. “As an institution that is in Nigeria for the long term, we are very committed to helping the country achieve her developmental aspirations. We will

continue to identify partnership opportunities towards attainment of this goal.”

The Nigeria Economic Summit, which was initiated in 1993, has become a veritable platform for engagement between the public and private sectors where pressing economic issues and policies are dissected with the aim of proffering solutions to such issues.

It further expressed satisfaction with the strategic intent of the Startup Pitching Events, which was introduced into the Summit programme last year, to empower startups registered in Nigeria through access to opportunities that the summit avails. It would be recalled that Stanbic IBTC Bank has introduced a number of initiatives to empower start-ups and players in the small and medium enterprises segment.

On his part, the Minister of Budget and National Planning, Udoma Udo Udoma, who elaborated on the goals of the Economic Recovery and Growth Plan (ERGP), reiterated that execution priorities must be underpinned by a focus on governance and delivery to realize its objectives.

L-R: Shigeyo Nishizawa, trade commisioner/MD, Japanese External Trade Organization (JETRO) Lagos; Hiroshi SEKO, GM, Kaneka Africa Liaison Office; Esther Kanekalon, Miss Kanekalon 2015/ manager,Kanekalon beauty salon; Yuko Shiokawa, Trade Fair Division, JETRO and Chiharu Yamamura, deputy trade commisioner, JETRO Lagos, at the Lagos International Trade Fair 2018.

Pic by Pius Okeosisi

PZ repackages Morning Fresh for market appeal SANDRA OKOYE

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n an effort to continuously provide authentic, unrivalled value to its consumers, dishwashing liquid, PZ has relaunched Morning Fresh brand in new look transparent bottle.

Speaking at the relaunch event in Lagos, Ahusimere Ejiro, brand manager, Morning Fresh reiterated Morning Fresh’s commitment to maintaining its leadership position in the market by providing quality and unrivalled performance, ensuring the brand delivers on its promise of ‘superior grease-cutting power.’

“This is an exciting time for Morning Fresh as we continue to evolve and improve to meet and satisfy the needs of our consumers. Our brand relaunch further re-establishes our commitment to deliver superior kitchen cleaning performance clearly evident in squeaky clean results that can be seen, smelled, felt, and touched. Every drop of

Morning Fresh contains the power to clean more dishes than your regular dishwashing liquids” “This new packaging we believe will also help tackle the issue of counterfeiting and imitations of our brand – our consumers can easily identify our products and what they see is what they get.

Morning Fresh continues to raise the bar when it comes to ensuring that our consumers are provided with authentic products. We are indeed excited and we believe our consumers are too, as they can’t wait to experience the new Morning Fresh in all its colourful variants,” she said.

Morning Fresh has been in Nigeria for 25 years and has established itself as the foremost dishwashing liquid in the market, remaining relevant with consistent delivery on superior grease-cutting performance designed to tackle with ease, all food stains and providing squeaky clean results. Morning Fresh

delivers more power, more plates and more value.

Guests present at the relaunch event were treated to a day of brand showcase, entertainment and excitement. The event was also not short on star-power as it had in attendance some notable personalities in the entertainment industry, such as veteran actress, Mercy Johnson; popular actress, Dakore Egbuson-Akande; celebrity chef, Ifeyinwa Mogekwu of Ify’s Kitchen; food blogger, Yemisi Odunsanya, popularly known as Sisi Yemmie, amongst others. Nigerian hip-hop star, Oluwafemi OkeEko, a.k.a Slimcase, also gave a thrilling live performance as he serenaded the audience with his popular hit songs.

Also present at the event were senior member of staff of PZ Cussons, which include: Managing Director, PZ Cussons Consumer, Alex Goma; and head of Marketing, PZ Cussons Consumer, Charles Nnochiri.

L-R: Sola Fijabi, director, PACE Sports and Entertainment Marketing; Guillermo Perez, Laliga representative Nigeria, and President, Nigerian University Games Association (NUGA), Stephen Hamafyelto, at the finals of the 2018 Higher Institutions Football League in Lagos.

Obiageli Ezekwesili, ACPN presidential candidate, in a closed door meeting with former Head of State, Ibrahim Babangida, in Minna.

18

BUSINESS DAY

Harvard Business Review

C002D5556

Tips & Talking Points

W

hen you’re tired, you’re less effective at your job — it’s as simple as that. To prioritize sleep, start by accepting that working more doesn’t necessarily mean you’re doing better work. Sleep deprivation takes a toll on your cognitive abilities, whether you notice the effects or not. Your caffeine consumption can be a good litmus test: If you need coffee just to make it through the morning, or even the afternoon, that may be a red flag. Make a plan for how you’re going to sleep more. Some

Make your out-of-office message a little more personal

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will speak to your audience, like an article or a new piece of research. It could be related to taking a vacation (there are lots of great stats on why time off is so important!) or something that potential clients might be interested in. A personal — but still professional — message allows you to connect in a new way with colleagues, clients and vendors.

(Adapted from “Why You Should Put a Little More Thought Into Your Out-ofOffice Message,” by Michelle Gielan.)

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simple ideas: Set an alarm for when you’ll put down your work and leave the office. Stop using devices at least an hour before you go to bed. (Maybe even go to bed early once in a while.) Start the day with a short to-do list of essential tasks — and once it’s done, go home. Remember, there will always be more work to do tomorrow.

(Adapted from “You Know You Need More Sleep.

Here’s How to Get It,” by Christopher M. Barnes.)

isappointments are inevitable and unpleasant — a missed promotion, a failed project, a poor investment — but you can always learn something from them. To constructively deal with your next setback, think through what happened. Distinguish situations that were predictable and preventable from those that were unavoidable and beyond your control. Ruminating over something that didn’t go your way — and that you couldn’t control — will only frustrate you further. For situations that you could have handled differently, consider them in positive terms: What can you do differently next time? What lessons can you learn from the mistakes you made?

And remind yourself of what’s going well in your life, so you don’t let the disappointment take an outsize role in your brain. It might sound like a cliché, but keep the setback in perspective — and try to let it go.

You may be tempted to play the situation over and over in your head, but staying preoccupied with it will only create unnecessary stress.

(Adapted from “Dealing With Disappointment,” by Manfred F. R. Kets de Vries.)

Improve your emotional intelligence with The more you work from home, the more you need to build relationships with colleagues a specific, feedback-based plan orking from

W

I ost of us write our out-of-office messages as we’re running out the door for vacation or a business trip.

But putting more thought into what the message says can help you build relationships with the people who try to reach you while you’re away. Instead of just including the dates when you’re out and who to email in your absence, consider sharing why you’re gone. Where are you going on vacation, and why did you pick that location? What are you learning at the conference? You can also share a resource that

Getting Better at Handling Disappointments

Get. More. Sleep.

TALKING POINTS Protecting Workers 98%: The U.S. Bureau of Labor Statistics found that 98% of companies have sexual harassment policies in place. + Professional Ties 2 times: Research shows that candidates are twice as likely to be hired for a job through a connection from their professional network than their personal network. + Manager’s Remorse 19%: According to a study from Leadership IQ, companies consider only 19% of new employees to be successful hires. + Health Benefits $1.1 trillion: American companies pay an estimated $1.1 trillion on health insurance costs. + An Action Plan for Climate Change 500: Almost 500 companies around the world have set sciencebased targets to reduce emissions, according to the Science Based Targets initiative.

Tuesday 06 November 2018

t’s not always obvious how to improve your emotional intelligence skills, especially because we often don’t know how others perceive us.

To figure out where you can improve, start with a reality check: What are the major differences between how you see yourself and how others see you? You can get this kind of feedback from a 360-degree assessment, a coach or a skilled manager. Next, consider your goals. Do you want to eventually take on a leadership position? Be a better team member? Consider how your ambitions match up with the skills that others think you need to improve. Then

identify specific actions that you’ll take to improve those skills. Working on becoming a better listener? You might decide that when you’re talking with someone, you won’t reply until you’ve taken the time to pause and check that you understand what they said. Whatever skill you decide to improve, use every opportunity to practice it, no matter how small.

(Adapted from “Boost Your Emotional Intelligence With These 3 Questions,” by Daniel Goleman and Michele Nevarez.)

home can be a coveted perk (No commute! No interruptions!), but it can also cut you off from coworkers and your friends at the office. How can you combat loneliness when you work remotely? First, make sure you see your colleagues’ faces from time to time. Instead of phone calls, use videoconferencing so that you can see the other person. This helps you read their body language, creating a more natural conversation. Second, don’t skip the small talk. When you work from home, you may try to avoid “wasting time” by keeping the conversation on work topics.

But small talk is the cement that creates rapport. So before a meet-

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

ing starts, ask your colleagues about recent vacations, their kids’ sports matches or upcoming wedding plans. These small details can build deeper relationships that are both personally gratifying and professionally beneficial.

(Adapted from “How to Avoid Loneliness When You Work Entirely From Home,” by Dorie Clark.)

BDTECH

BUSINESS DAY

Tuesday 06 November 2018

19

In association with

‘Organisations should move to cloud to reduce data breaches’ Charles Harrington, vice president, corporate development and marketing, Netcom Africa speaks to Jumoke Lawanson about the evolution of information technology in Nigeria, the need for businesses to go into cloud and how colocation and shared telecommunication infrastructure can be used to drive down the cost of internet in the country. Excerpts.

What exactly is Netcom Africa operating as in Nigeria? etcom entered the market 15 years ago and we were primarily an internet service provider with a focus on corporate clients. As time went on our customers’ demanded for more solutions and this led us to expand our service offerings. Our focus has not shifted from the corporate market, but our area of expertise now lies in connectivity, managed services such as Office 365, Virtual servers using Microsoft Azure and Amazon, infrastructure as a service, and IT Outsourcing. Our IT outsourcing in particular is one area that is gaining a lot of momentum. We then decided to look at the IT needs of firms and we offer to handle the day to day duties of a company’s IT staff allowing them to focus on their core competencies while we handle their technology. In addition to taking over the responsibilities, we also set a technology roadmap showing them where they are and where we want to bring them to.

What are the specific technology services that Netcom provide?

At Netcom we offer data center colocation as well as VM’s. In addition, we now offer Amazon and Microsoft VM’s and we have in house experts to setup and manage these solutions for your company. One of our solutions for data backup and recovery is eVault. All companies should take data security seriously and it’s only after a disaster that some people think of it. Power outages, hardware failures, ransomware and even human error are threats that could compromise your servers.

We can custom tailor a data backup solution for whatever environment you have so that you can feel confident knowing your critical data and systems can be recovered in such an event. Network security, event monitoring and access are few of the solutions that you need to have in place.

Experts say that cloud servers and colocation are the way to go in this digital era. Do you think Nigeri-

N

Charles Harrington

an firms are adopting these as they should for digital advancement?

Nigerian companies are becoming more ready every day. One trend that I have noticed is that Nigeria is typically a bit behind in technology trends and then we leap to close that gap. This is what I am seeing with cloud servers and data center colocation as well. A couple of years ago companies would shudder to think that they could put their servers in someone else’s server room or data center, and even worse to put it in the cloud. Today companies here in Nigeria are embracing the idea.

What are the benefits for businesses who move their data centers to the cloud?

Well, cloud isn’t necessarily cheaper in the long run but there are lots of advantages. There are recurrent charges, but one advantage is that you don’t need to worry about power and infrastructure. It is more secure, it is easier to access and you don’t have to worry about many things like downtime. It is much easier to deploy and more convenient.

Nigeria is a data consuming country with lots of data breaches.

As a data specialist, how can you advise organisations?

Data breaches are lot more frequent lately, and this trend is going to continue, the best thing for companies to do is to ensure they get the protection that they need before thebreach. We encourage companies to have their mails on the clouds, their emails and file storage should be in the cloud. With bring your own device (BYOD) policies in place in some organisations today, companies must have their firewalls and put inside systems in place to protect themselves from security breach both internal and external.

As an infrastructure company (Infraco) and Data Center provider now into IT consultancy, how do you bridge the gap of data center usage in an era of big data?

Example is Microsoft which is in Nigeria, but doesn’t sell directly to end users. Microsoft uses their authorised experts to sell to the end users. These multinationals took thesecritical business decisions that they don’t have to worry about implementation; they know firms like us are capable of implementation

and deployment. So, this is where we either come in or bridge the gap. We have a lot of organisations that we are their intermediary like Microsoft and Avaya. We have the competent support system and skill to ensure that we get the implementation done.

This is one way we try to bridge this gap in a big data economy that Nigeria is trying to come to terms with.

These organisations believe in our capacity to handle the deployment and implementations for these global acclaimed ICT firms in Nigeria.

Companies feel secure dealing with us, as most companies are moving away from hosting their servers on premises and they outsource these things to us because we have the competency.

What advice can you give to firms in order for them to secure their data from physical to virtual and how do you render support?

The move to the cloud is never easy, and it’s even scary for some.

Change is something that we as humans fear the most, but we can all agree that constant, improving change is best. Part of the big change for data is moving it to the cloud and then trying to make it easy as possible for our clients. We go in and look at all of the data needs that they have and help develop a plan for what they need to move. You would be surprised at howmuch data they don’t actually need to move, or that’s been duplicated or simply unnecessary.

How many projects have you done in Nigeria and why should Nigerian corporates opt for Netcom services?

We have a handful now and see many more coming up in the near future. Our smart building solution is another product that was born out of a need from our clients. There are many companies providing facilities management service, but how many of those companies specialise in IT? That’s how we filled another gap in the market. We build out and maintain the entire building IT infrastructure ensuring that the tenants have access to the latest technology and

that the infrastructure is safely and professionally managed by a single company.

Issues with right of way (RoW) is something you have to deal with as an Infraco, how have you been able to surmount this?

Right of way is and will continue to be a huge barrier as long as all parties; both public and private come together and start to share infrastructure. As it is, there are so manylevels of government who have a stake in the RoW charges from federal to state to local. For national penetration to happen there needs to be one entity to deal with and then cooperation with all of the telco’s.

Would you like to talk about your new IP Telephony solution?

Yes. With our new Cloud PBX systems, intercompany communications is simple. There is no need to have physical box or server in your office anymore, everything runs on cloud. People might choose not to have their desk phone anymore but might decide to have their phones on their computers or their smartphones. This reduces the capital expenditures for the organisation and moves it to an OPEX model. We have partnered with Avaya, a global leader for this solution. All the client needs is an app on the computer or the phone and the license. We have similar solutions for call centers as well.

How flexible is this cloud PBX solution and can it be used by offsite workers and executives on the go?

You know that people usually give out their mobile numbers to people to contact them, but with this cloud PBX you don’t need to do that.

You can just give your extension for people to reach or communicate to you. The clients can also call you with this extension and you can communicate or have seamless access to your office. The need to give out your personal number would be reduced especially for those that do not want to give their cell phone numbers out. Once you have a data plan on your phone, this cloud PBX is meant for you.

20

BUSINESS DAY

Tuesday 06 November 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

What you need to know about MTN, Sterling Bank device financing scheme Stories by JUMOKE AKIYODE-LAWANSON

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TN Nigeria recently announced its par tnership with PayJoy, a Silicon Valley-based technology company, TD Mobile distributors and Sterling Bank to unveil a revolutionary, technologydriven device financing scheme which will enable Nigerians from all walks of life own highend devices by paying in flexible instalments.

The device financing scheme enables eligible customers access credit facilities to acquire smartphones and pay in instalments over a period of up to six months with an 18 percent interest rate and an insurance premium of four percent.

Although the loans are financed by sterling banks, MTN is offering this opportunity to all customers who can provide access to 3 months’ bank statements of their most active accounts from any bank. Once proven eligible, customers are allowed to access credit from N25,000 to up to N400, 000, for the purpose of acquiring a smartphone. An instant sterling bank account is opened to disburse the loan into the account

and customers a giving a minimum tenure of two months and maximum of six months to pay back loans.

What you need to register: Bank Verification Number (BVN) details, a valid means

of identification, recent passport photograph and a recent utility bill are all required for a registration that should take not more than 10 minutes at any approved MTN experience center or Sterling Bank center.

The smartphone devices will be provided by TD mobile, one of Africa’s largest mobile phone and technology distributors and PayJoy. Speaking at the launch of the device financing scheme,

L-R: Dominique Freidl; general manager PayJoy Africa, Sina Atilola; group head, strategy & innovation, Sterling Bank Plc, Gozy Ijogun; managing director, TD Mobile, Adekunle Adebiyi; sales & distribution executive, Rahul De; chief marketing officer, and Abiodun Ajayi; senior manager data & devices, all of MTN Nigeria at the launch of MTN Device Financing Scheme in partnership with PayJoy, Sterling Bank Plc and Samsung Mobile held in Lagos on October 31st, 2018.

ESET launches new security solutions to protect constantly-connected users

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he latest version of ESET NOD32 Antivirus, ESET Internet Security and ESET Smart Security Premium that offers fortified multilayered protection, enhanced internet of things (IoT) protection, product referral and a new security report feature has been released.

With these new security solutions, industry stakeholders are elated that users can rely on the best balance of speed, detection and usability acknowledged by multiple testing bodies to protect their constantly-connected devices.

It is predicted that by 2025, there will be over 75 billion connected devices worldwide – from smart home devices to e-health gadgets – this poses a real threat to cybersecurity.

As more connected devices are introduced to everyday life, the amount of personal and sensitive data shared increases, as does the number of entry points into networks.

“Hackers will use this rise in the number of internetconnected devices to their advantage and users, therefore, cannot afford to neglect taking security measures. The addition of IoT protection to our home user product suite means our customers can be safe in the knowledge that their devices, and the home routers they connect to, are properly secured,” says Matej Krištofík, product manager at ESET. Similar to previous years, to fight all these threats users can choose from ESET NOD32 Antivirus for basic protection, ESET Internet Security with additional layers of security on top of the basic anti-malware solution, and ESET Smart Security Premium for users seeking the most advanced protection and features on the market. This includes technologies such as password manager and banking protection.

Built on machine learning and three decades of knowl-

edge, ESET says that all its products run unnoticed in the background. The key offering provides users with comfortable and ultra-fast scanning without impacting the operating system or their experience.

“We built our products to provide an advantage over native Windows protection to show users how a multilayered approach to cybersecurity can battle the toughest of threats out there,” said Krištofík.

The latest version offers new features as well as improvements to existing ones including: • Product recommendation (referral) – a new feature that gives all ESET users an option to recommend our product to family or friends.

Trial users are rewarded – one friend referral equals one more month of protection for free.

• Security report – provides users with an overview of what ESET‘s solution has been actively detecting,

Gozy Ijogun, managing director, TD Mobile, expressed delight in the fact that this development creates an opportunity to further deepen smartphone penetration in Nigeria.

“With TD’s agility, millions of Nigerians are assured of the constant availability of the devices at multiple locations and in every MTN store nationwide. We are delighted at this development as it will not only empower more Nigerians to own devices that were hitherto out of their reach, but will also boost smartphone penetration in Nigeria.”

Dominique Friedl, general manager for Africa, PayJoy, affirmed the revolutionary nature of the device financing scheme which relies heavily on technology in creating a seamless process for subscribers.

“PayJoy’s mobile locking technology and data science enable financial inclusion for billions worldwide. Our secure mobile locking technology and world class data science enables people in emerging markets worldwide to qualify for smartphone financing and cash loans that would otherwise be unavailable.”

“You do not have to be a working-class Nigerian or salary earner to subscribe to this scheme or own that desired de-

vice. All you need to do is walk into the nearest MTN store,” he affirmed.

The scheme will be available in designated MTN stores in Lagos, Abuja and Port Harcourt this week.

Interestingly, the PayJoy offer stands out from other device financing schemes due to the convenient, flexible and valueadding benefits it provides to subscribers, a point Abiodun Ajayi, senior manager, data and devices, MTN Nigeria was quick to point out.

“There are loads of freebies and incentives to help interested customers derive more value. These include free 2GB data every month and access to a suite of MTN offerings such as MTN Pulse, MTN Music Plus and many others.”

Shina Atilola, group head, strategy and innovation, Sterling Bank said; “As financial partners, Sterling Bank is committed to ensuring that the devices are readily available for your convenience. The scheme is open to all classes of Nigerians and you do not necessarily have to be a salary earner to qualify, so I encourage everyone to sign up for it. This is one of the surest and most convenient ways to own a high-end smartphone without burning a hole in your pocket.”

Africa FinTech Summit selects Coker as Keynote speaker blocking and mitigating in the background, while users‘ computers run smoothly without any performance lag.

Users can choose from five pre-set items based on usergiven priorities and gain insight into other features such as Secure Data, Password Manager, Anti-theft or Parental Control.

• Connected home monitor – now allows users to test router-connected smart devices for vulnerabilities such as weak passwords and suggests possible fixes. It also allows users to scan for port vulnerabilities, known firmware vulnerabilities, malicious domains, weak or default router password and malware infections.

With its improved installation process, users save up to 40 percent on the installation time based on the set up of the device. The installation of new ESET products will now only take a couple of seconds, the company says. Also it assures that all ESET products are GDPR compliant.

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yotunde Coker, the managing director of Rack Centre will be joining an array of technological and business experts at this year’s Africa Fintech Summit holding in Lagos, Nigeria on November 8, 2018 where he will deliver a keynote speech on the ‘Role of Cloud and Data Services in the Fintech Ecosystems.’

Holding in Nigeria for the first time, the Africa Fintech Summit (AFTS), is a global gathering of innovators, investors, disruptors, technological and finance professionals, regulators, and investors to debate and discuss policies, compare best practices, and forge ventures from across Africa and the rest of the world on the transformation of the continent and unleashing its entrepreneurial spirit.

Coker a global technology industry leader heads Rack Centre, Africa’s pre-

mium Tier III constructed facility certified carrier neutral colocation data centre.

With over 30 years’ industry experience working with international companies across Europe, USA, Asia and Africa, Coker formerly held the position of group information officer at Access Bank in Nigeria, he was digital services director for Egg Bank in the UK, Europe’s first pure play internet Bank 15 years ago and has consulted for global banks such as ABN Amro, UBS, Merrill Lynch and JP Morgan. He asserts that Fintech has been around since his pioneering work at Egg Bank.

Rack Centre is one of Africa’s leading data centre colocation providers, the host of the Internet Exchange Point of Nigeria and provides Cloud on GroundTM, the most comprehensive heterogeneous marketplace for cloud services hosted within Rack Centre.

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EDUCATION

Weeklyinsightoncurrentandfuturetrendsineducation

Primary/Secondary

Higher

Human Capital

UNICEF, private sector collaborate to address challenge of out-of-school children Stories by KELECHI EWUZIE

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niversal Basic Education Commission (UBEC) recent figures reveal that 13.2 million primary school age children in Nigeria do not attend school. That number makes Nigeria number one in sub-Saharan Africa and the world for the number of out-ofschool children.

The vast majority of these children are out of school because their families cannot afford to send them to school.

Although the Nigerian government passed the Universal Basic Education Act in 2004, under-investment and uneven implementation have left millions of children without access to adequate primary education.

In a bid to raise awareness to this growing challenge, United Nations Children’s Fund (UNICEF) in partner-

Michael Larbie, managing director/ CEO, Rand Merchant Bank Nigeria (RMBN) Limited and regional head, West Africa teaching the pupils of Estate Senior Secondary School, Town Planning Way, Ilupeju as part of the bank’s activity to mark the World Savings Day in Lagos.

ship with Yellow Brick Road (YBR) a Lagos-based marketing communications agency is launching a campaign to mobilise Nigerian millennials as a force for positive change

in the country.

Nnenna Onyewuchi, Director of Strategy for YBR, observes that neglect of basic education by successive government an issue of vital

importance because when children do not receive basic primary education, it limits their opportunities.

Onyewuchi opines that for children with innate talents, a

Indomie investment strengthens academic excellence among students …as Spelling Bee winner emerges

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ndomie brand has reiterated that it continue to support quality education of the Nigerian child through the sponsorship of the Lagos spelling bee competition.

Lagos State Spelling Bee

Competition is organised with the aim of encouraging academic excellence among students in the state.

Tope Ashiwaju, Group Public Relations and Events Manager of Dufil Prima Foods in his address at the

L-R: Ikhariale Grace, 2nd place winner, 2018 Lagos State Spelling Bee Competition; Aramide Giwason, special adviser to the governor of Lagos State on Tourism, Art and Culture; Idiat Adebule, deputy governor of Lagos State; Ajala Gloria, 1st place winner, Tope Ashiwaju, group public relations and event manager, Dufil Prima Foods Plc, with Akinbodewa Oluwatosin, 3rd place winner, at the 2018 Lagos State Spelling Bee Competition sponsored by Indomie in Lagos.

event said Indomie decided to sponsor the competition to enhance learning outcome for students in Lagos state.

According to him, “Indomie as a brand has a keen interest in education development for the Nigerian child and is unwavering in its support of the Spelling Bee project in Lagos State.

As a company we are committed to the child’s whole development. We know that Spelling Bee does not only build phonetics, but also boosts memory and confidence of students,” Ashiwaju said.

He added that Indomie will continue to support quality education for the Nigerian child. “This is Indomie’s brand legacy and we hope that the partnership with Lagos State Government will continue to grow stronger,” he said.

Speaking at the event, Idiat Oluranti Adebule, Lagos State deputy governor commended all the winners in the competition and expressed satisfaction for the brilliance displayed by

the participants, adding that the competition has boosted reading habits among young students in the state.

The spelling competition had 57 preliminary winners from the six education districts in the state.

At the end of the keenly contested competition, Ajala Gloria, a 14-year-old student of Lafiaji Senior High School emerged as 2018 Lagos State One-Day Governor, after becoming overall winner of this year’s Spelling Bee competition held in Lagos.

Ikhariale Grace of Tin Can Island Senior High School came second while Akinbodewa Oluwatosin of Iworo Ajido Senior Secondary School came third. All the winners were handsomely rewarded with cash prizes, a trophy, school bags, dictionaries and other educational materials.

The Spelling Bee is an annual competition for public primary and secondary schools in Lagos. The Indomie Lagos State sponsored Spelling Bee has so far produced 17 One-Day Governors in the state.

lack of education can close the door to fulfilling their potential adding that there is no way a child can become an awardwinning writer if such a child never learnt ABCs. “How can you build the next great technological innovation if you never learn basic mathematics? When millions of children miss out on a basic education, an almost unimaginable amount of potential is wasted,” Onyewuchi said.

Eva Hinds, communication specialist with UNICEF in Nigeria said the organisation believes that if properly empowered, millennials can be a powerful voice to induce the government to invest more in primary education - giving all Nigerian children the opportunity to reach their full potential.

“We are delighted to be working with YBR, who have proven to be a very worthy communications partner on a project that has spanned many disciplines from research to strategy to campaign develop-

ment and then deployment.

“We are confident that the campaign will serve as an opportunity for millennials and Nigerians of other generations who care to effect change in their country and have their voices heard,” Hinds said.

UNICEF works in some of the world’s toughest places, to reach the world’s most disadvantaged children. Across 190 countries and territories, we work for every child, everywhere, to build a better world for everyone The Every Child in School campaign, which coincides with the run up to the 2019 elections, encourages millennials to become advocates for poor children by calling on the government to commit more money to primary education in the 2019 budget.

YBR and UNICEF have developed a campaign that will not only educate, inform, it will also provide millenials with tools and resources to become effective advocates for children living in poverty.

FMN advances vocational learning experience for pupils with disabilities

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lour Mills of Nigeria (FMN) plc says it will continue to invest in Methodist Primary School, Apapa as part of its commitment to improve the self reliance capabilities of physically challenged students.

Joseph Umolu, legal director and company secretary, Flour Mills Nigeria plc stated this in Lagos where the company donated a well-equipped standard vocational centre to children with disabilities.

Umolu says the company felt it is important that these children be given opportunity to be able to learn some skills that can carry them in life and make them self reliant rather than being unemployed.

He further stated that one of the strategic steps the company has taken to sustain the project is by taking up the responsibility of paying the teachers to ensure they are motivated enough to give in their best.

Waribo Hart, co-founder, Care Giver Initiative (CGI), a non-governmental organisation (NGO) in charge of impacting the vocational skills to the students lauded Flour

Mills of Nigeria (FMN) Plc. for buying into the project to empower and build capacity among the pupils.

Hart observes that the debut of the vocational centre for children with specially challenged has impacted positively on the pupils’ learning skills as they have been trained in different fields of specialisation to make them contribute positively to the economy and society.

According to him, “Our end goal is to see to how these children could be self-reliance so that when they grow up instead of them to be beggars on the streets they will be employers of labour who are contributing positively to the society and Nigerian economy in general”.

He further said that CGI is the NGO that oversees the vocational centre to ensure that physically challenged children are properly trained, empowered and become selfreliance as employers of labour, adding that this won’t have been possible without the FMN for building a state-of -the -art vocational centre for the physically challenged children at the Methodist Primary School in Apapa.

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EDUCATION Right education managers pivotal to institutional success - Varsity don

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Stories by KELECHI EWUZIE

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he need to engage the right education managers have being reiterated by experts in order to successfully unlock the lofty goal of education at different levels in the country.

Adebola Olufunlayo Jaiyeoba, A professor of Educational Management, faculty of Education, University of Ibadan, Nigeria, says government should ensure adequate preparations prior to the commencement of policies to be introduced into educational system, also, relevance of educational qualification, experience and exposure of school administrators should not be compromised.

Jaiyeoba stated this while delivering the 3rd Inaugural lecture on behalf of the Faculty of Education, University of Ibadan titled Management: The key to institutional Success.

The educationist added that regular training should be provided for administrators and management teams in order to enhance their management capability.

Jaiyeoba further opined that agencies such as National University Commission

How to resolve Nigeria’s leadership problem- expert

Abimbola Olashore (3rd from left ) Chairman Board of Trustees, Olashore International School; Derick Smith, (2nd from left) CEO/Principal of the School and members of board at the unveiling of the school 25th Anniversary logo in Lagos

(NUC), National Council for Colleges of Education (NCCE) and National Board on Technical Education (NBTE) should discharge their statutory duties with greater efficiency to promote institutional success.

The Educationist stressed that participation and motivation of stakeholders and staff of institutions needs to be encouraged, remunerated and motivated in a way

that would enhance performance.

She also emphasised that in view of the importance of management not only to organisations, but also to our everyday living, it is recommended that the University of Ibadan, should introduce a basic course in Management for all undergraduate students as a General Studies (GES) course, as, it will go a long

way to equip graduates from this University, with the necessary background to achieve success in their lives’ endeavours.

The university don viewed that to put education back to its proper position, as obtained before and after independence, concerned stake holders must sit down and make plans for a turnaround of our education system before it is too late to revive.

outhniversity Consult, the initiator of the Leadership Launch Pad intervention, has revealed plans to equip Nigerian youths with leadership skills to address the leadership challenges besetting the nation.

Youthniversity targets 50 million Nigerians through the Leadership Launch Pad initiative, starting with 50 people in first batch scheduled for November 19-21 and the second batch of 50 graduates in November, 2628, 2018. The Launch Pad is a training programme which offers an intensive leadership training designed for university and polytechnic graduates in Nigeria.

Bamidele Adedeji, managing director, Youthniversity Consult, disclosed this in an exclusive interview with BusinessDay, adding that the first and second batches of the training will be held in Lagos while future trainings will hold in Abuja, Port Harcourt and other parts of the country.

Adedeji said the training focuses on development of the leadership potential of Nigerian youths.

He stated: “When you look at Nigeria, it is not subject to any debate that we have leadership challenges. Youthniversity’s intervention is anchored on the conviction that the future lies in the hands of the youths who constitute more than 60 percent of our present population… youth are the future. So, it is important to train them on becoming good leaders.”

He said Youthniversity Consult’s concern is to rescue the future of Nigeria by training the youths and prepare them to lead well, adding that the free leadership training is available for registration on www. youthniversity.com According to Adedeji, through the programme, Youthniversity Consult is determined to prime and unleash the energy of our youths for the rapid advancement of the nation.

He stated that the training is open to graduates because it is believed that it would be easier for them to understand what will be imparted and to enable them cope with the intensity of the 3-day programme.

Student shares success tips to overcome Mathematics phobia

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finalist in the ongoing 2018 Cowbellpedia Secondary School Mathematics Television Quiz Show, Chiedozie Uzochukwu has disclosed that he turned Mathematics into his indispensable companion to master the otherwise challenging subject.

Chiedozie, a student of Nigerian Tulip International College for Boys, Federal Capital Territory, Abuja, said he committed six hours daily into horning his skills in very important subject.

After emerging from the semi-final of the competition, Chiedozie explained that Mathematics has become part of his life and likened the relationship to that of the Biblical Moses and his rod.

“I just decided I must know it and know it very well. And so, I devoted all my thoughts and energy to it. I gave it enough time too. Out of my daily 24 hours, I used about six hours to sit and practice my Maths. Gradually the fear began to recede until it disappeared,” he told journalists outside the studio in Lagos last weekend.

In the junior category second semi-final, Chiedozie found company in Gabriel Akogun of Welkin International School, Ota, Ogun State, to sail through the stormy waters at the expense of Iyunade Ogundana, a student

of Greater Tomorrow Model College, Ado Ekiti, Ekiti State, who were all semi-finalists.

Others who could not cross the ‘red sea’ included Ngozi Nworu of Bishop Otubelu Juniorate, Enugu, Enugu State; Toluwani Olatunji of The In-

ternational School University of Ibadan, Oyo State; and Beverly Ukoha from Topfaith International Secondary School, Uyo, AkwaIbom State.

Chiedozie, 14 who got a percent score in the qualifying examination, thanked his

L-R: Modupe Onabanjo, Chairman, Education Group, Lagos Chamber of Commerce and Industry; Sola Oyetayo, vice president, LCCI; Aleshinloye Hawwah. 6th position winner, 2018 LCCI Secondary School Essay Competition; Sarah Adebisi Sosan, former deputy governor of Lagos State, and Kayode Babatunde Olusola, chief examiner (2018 LCCI Secondary School Essay Competition), dean of faculty ofagriculture, LASU, during the 2018 LCCI Secondary School Essay Competition, recently in Lagos.

parents for firing his interest in Mathematics.

Gabriel, son of a teacher, scored 97 percent in the qualifying examination and expressed big confidence about his ability to win the ultimate prize.

In the captivating senior category semi-final encounter, Juliet Ekoko and Enoch Adelekan, both of The Ambassadors College, Ota, Ogun State, advanced to the final, while four other contestants exited from the competition.

These were: Amara Aronu, Emmanuel Igban and Oreofe Daniel, all from The Ambassadors College, Ota, Ogun State; and Ayomiposi Adiji of Preston International School, Akure, Ondo State.

Juliet, the 2016 junior category champion, disclosed that her experience on the Cowbellpedia TV Quiz show was quite exciting and interesting. “I have been a champion and will feel very great to be crowned a champion again,” she said.

On his part, Enoch expressed huge relief for getting to the final and prayed that he becomes the champion to

make himself, his parents and his school proud.

In the spirit of the landmark celebration of the 20th anniversary of Cowbell and Mathematics in Nigeria, this year’s prize money has been increased 100 percent. Winners in both categories will receive N2 million each with an all-expense paid educational excursion outside the country; while the first and second runners-up will win N1.5 million and N1 million respectively.

Aside from the students, teachers of the top prize winners will be awarded N500, 000, while those of the first and second runners-up will receive N400, 000 and N300, 000 respectively.

Also, each of the winning schools will be presented with Mathematics textbooks, desktop computers and printers.

Meanwhile, preparations have commenced for next year’s edition of the competition. According to the organisers, the 2019 Cowbellpedia registration portal is now open for secondary school students across the country to register.

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Energy Report Oil & Gas

Power

Renewables

Chevron, Egbin Plc to ramp electricity generation on new gas agreement

Nigeria inches up oil production by 30,000bpd in October …as OPEC succumb to pressure to up production Olusola Bello

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Olusola Bello

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he power sector may soon experience some quantum leap in generation as Chevron Nigeria Limited (“CNL”) and Egbin Power Plc. have signed agreements for the former to supply it dedicated gas for its operations.

Chevron and its joint venture partner, Nigerian National Petroleum Corporation (“NNPC”) (“NNPC/ CNL JV”), have initialled a Side Letter to the 2011 Gas Sale and Aggregation Agreement (“GSAA”) with Egbin Power Plc and Gas Aggregation Company of Nigeria (GACN), thereby bringing the GSAA to a formal start.

NNPC/CNL JV’s gas obligation under the Egbin GSAA is 145MMBtu/d. The gas will be delivered to Egbin’s transporter, which is the Nigerian Gas Company, at the delivery point, and the transporter will be responsible for transporting the gas to Egbin’s facilities.

The signing ceremony

Environment

which held last week at the Transcorp Hilton Hotel in Abuja was executed on behalf of the three companies

by Sanjay Narasimhalu, director Downstream Gas, CNL; Morgan Okwoche and Dallas Peavey Jr., managing director of GACN and Managing Director of Egbin, respectively.

The Egbin GSAA has been identified as the first in the country to be successfully made effective between a gas supplier and a power plant. It is a demonstra-

tion of more than a few pioneering initiatives that the NNPC/CNL JV has made to enable implementation of the Nigerian Gas Master Plan, of which the GSAAs are a key component.

According to Esimaje Brikinn, general manager, Policy governments and Public Affairs, Chevron, he said, it is noteworthy that the NNPC/CNL JV, Egbin and GACN were able to bring the Egbin GSAA to a formal start, in support of the Federal Government’s

efforts to significantly improve the power situation in the country.

The Egbin GSAA is another effort by the NNPC/ CNL JV to reinforce its commitment to supporting the socio-economic development of Nigeria by maintaining its leadership role.

The power plant has the capacity to generate 1,320 megawatts but it is generating far below this capacity because of lack of enough gas supply among other problems.

igeria, which is a prominent OPEC member and one of the world’s biggest crude producers, increased its output by 30,000 barrels per day in October. Alongside, Libya also increased output by some 170,000 barrels per day but Angola’s output was impeded.

This comes the against the background that the Organisation of Petroleum Exporting Countries (OPEC) may have finally succumbed to pressure to increase oil output, as available facts show that its members, last month, pumped the highest volume of crude since 2016 into the global oil market.

According to a Reuters Survey published recently, the increase in OPEC’s output was led by the United Arab Emirates (UAE), Libya, and others who altogether pumped an average of 33.31 million barrels of crude per day in October.

This is huge because back in September, the same OPEC only managed to put out an average of 390,000 barrels per day.

The increased OPEC output also inevitably helped to offset the shortage created by America’s ban on Iranian oil.

In June, OPEC members reached an agreement to increase crude output in a bid to curb a steady rally in global oil prices. The price increase followed the US ban on Iranian oil, which led to a shortage in supply with price eventually reaching some $86.74 per barrel in early October.

Recall that the United States’ President, who himself was adamant on imposing the Iranian sanctions despite its consequences, had also put pressure on OPEC to take action towards reducing the skyrocketing oil prices.

It is now unclear whether it was the Trump demands that actually pressured OPEC into loosening up on its 2017 output cuts policy.

Nigeria’s oil, gas industry to remain impervious as PIGB fades away STEPHEN ONYEKWELU

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igeria’s oil and gas industry may not harvest the low hanging fruits, which the petroleum industry governance bill (PIGB) would have brought with it had the President Muhammadu Buhari assented to the bill.

The only card on the table between now and March 2019 is for the National Assembly to overrule the President. This would require a 2/3rds majority of members present and voting in both houses of the Assembly. In view of the current political climate, this does not seem likely.

The opacity in Nigeria’s oil and gas sector stifles the inflow of new investments into the sector, which is estimated at $15 billion per annum, in

lost opportunities.

This comes with the possibility of keeping the sector marred in weakened institutions and sustaining a patron-client model common among states with less accountable and often less political constraints due to their rent-system.

“The category of Nigerian Disease is mainly caused by institutional weakness that leads to increased corruption and rent-seeking, as well as patron-client networks. The state loses institutional enforcement capacity and becomes less accountable and less predictable due to the nontransparent nature of informal processes” Marius Müller wrote in a Master Thesis submitted to the Faculty of Social and Behavioral Sciences Institute of Political Science, Leiden University, in the Netherlands.

President Muhammadu Buhari

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson.

The Nigerian Disease can only worsen as Muhammadu Buhari, president of the Federal Republic of Nigeria fears that moving the decision making centre in the oil and gas away from the whims of a petroleum minister to institutions such the proposed Nigeria Petroleum Regulatory Commisssion (NPRC), will dilute a long tradition of power concentration.

Meanwhile, the NPRC will report to the National Assembly, putting in place a system of checks and balances necessary for vibrant institutions in the oil and gas sector and drive investment inflows.

Perhaps, the best advice to Africans on governance was the one given by Barack Obama, former United States President, at a speech in Accra, Ghana in 2009 where he stated that Africa does not need strongmen but strong

institutions. He traced the violent history and poor economic performance of the continent to failure of institutions. The PIGB was designed to enthrone the reign of strong institutions in the governance of the oil and gas sector.

Sadly, his admonition did not cut any ice with Nigerians. They continued to believe in the possibility of a strongman coming to fix the country in one go. That was largely the motivation for electing Buhari as Nigeria’s president during the 2015 elections.

Buhari’s appeal, aside from his famed integrity, has a lot to do with his tyrannical past as a no-nonsense military dictator who could be brutal, bypass laws, if necessary, in dealing with corrupt people and in pursuance of the common good. He was seen as the Nigerian messiah.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378;

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Nestoil devices efficient system for gas, oil, water separations Olusola Bello

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estoil, an indigenous oil servicing group has performed the rare feat of solving what has been regarded as nightmare within the oil and gas industry by devising an efficient system of separating oil,gas and water at the Odidi and Jones Creek Flow stations.

This was carried out by the Group’s team of engineers operating on oil mining licence (OML) 42.

Some industry observers said if this technology can be adopted throughout the entire oil and gas sector, it would be easy to actually ascertain the real volume of crude at any particulars field in the country.

There have been controversies as regard whether Nigeria knows the actual volume of crude oil it produces from the various fields across the country.

Different figures are spewed around by the government agencies and other operators in the industry.

Chuka Eze, the man-

Nestoil laying the East-West gas pipeline

aging director of Impac (Engineering design company) one of the groups which did the job said with encouragement from the government and other stakeholders to develop such local capacity in the country, inflow of foreign expatriates that do such jobs would reduce.

He however lamented that in spite of the huge capacities of the group in different aspects of the oil

and gas industry, stakeholders are not leveraging on them enough to further consolidate the much preached local capacity development.

“Despite tremendous Installed Capacity – the Nestoil Group is operating well under capacity at a time successive governments have continued to promote local content in the oil and gas industry,” he said.

According to him, EWT, which is one the companies

in the group has the capacity to fabricate over 12 thousand metric tons of pressure vessels, Christmas Trees for local and foreign companies but is currently producing less than 20 percent of that capacity Impac, an engineering design and management company has capacity to deliver 400,000 man hours per annum but is currently delivering about 54,000 man hours.

Iran sanctions disappoint as waivers seen spiking oil production STEPHEN ONYEKWELU

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oreign policy analysts and energy experts have said that the second wave of U.S.A sanctions on Iran, which kicked in 24 hours ago, has disappointed expectation and may spike the volume of Iranian oil pumped into the Asian markets.

Despite the U.S. sanctions which were designed to push Iran’s oil exports to zero and President Trump’s initial hard line rhetoric, cracks are beginning to emerge in the sanctions’ anticipated effects, with countries that have already cut their purchases to zero now being granted waivers to buy Iran’s oil, the country’s exports

may well go up, not down, in November.

These were billed as the “strongest sanctions in history,” intended to prevent the Persian Gulf country from exporting any oil at all. But the reality hasn’t quite lived up to the hype: In the six months before they fully took effect, the impact of the Trump sanctions looks remarkably similar to those of his predecessor in 2012, Bloomberg reported.

On May 8, 2018, President Donald Trump of the United States of America withdrew from the Joint Comprehensive Plan of Action (JCPOA), a twoyear-long diplomatic initiative from Iran and a group of countries known as the P5+1 – the members of the United Nations Security Council (the US, United Kingdom, France,

China, Russia) along with Germany. Following this, the US Treasury Department had announced it will restore sanctions on a number of key Iranian sectors and activities on November 5.

The second wave of U.S. sanctions which kicked 24 hours ago targets Iran’s port operators, and shipping and shipbuilding sectors, including the Islamic Republic of Iran Shipping Lines (IRISL), South Shipping Line Iran, or their affiliates.

Other sectors of the Islamic Republic’s economy after by the sanctions included: petroleum-related transactions with, among others, the National Iranian Oil Company (NIOC), Naftiran Intertrade Company (NICO), and National Iranian Tanker Company (NITC), including the purchase of petroleum, petroleum products, or petrochemical products from Iran; sanctions on transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions; sanctions on the provision of specialised financial messaging services to the Central Bank of Iran and Iranian financial institutions; sanctions on the provision of

There is also another company in the group, Shipside Drydock which has just completed an ultra-modern fully furnished training centre with a capacity for 100 students at a time. The training facility will serve the entire O&G industry for training engineers, welders, machinists, fabricators etc. The Nigerian Content Development and Monitoring Board (NCDMB)

are working with Nestoil group to adopt the school.

All these capacities are available to further entrenched local capacities development and reduce capital flights the country.

Commenting on the March next year target of completing its own section of the of the multi billion Naira east- west gas pipeline, he said the company is working assiduously to meet the target.

To ensure we accomplished it on schedule we have gone to purchase a 500 metric ton rig that would complement the 400 ton rig on ground.

He said the new rig will arrive in Nigeria in December and would be immediately deployed to site. “We need to cross rivers, rail lines and roads. The job is one of the toughest one because of the terrain where we are doing it. By the time we are able to complete the job, the company it would have the capacity to carry out any job even in the most difficult terrains in Africa” As part of the efforts to ensure that the first quarter target is realized the company decided to purchase a new rig.

NIPCO reiterate committment to development of CNG … converted 5,600 vehicles to operate on CNG underwriting services, insurance, or reinsurance; sanctions on Iran’s energy sector.

Concerns that a total ban would spur a further rally in the price of crude led Iran’s biggest oil customers (all in Asia) to seek for sanction waivers to allow them to continue buying some of Iranian oil.

Oil prices rallied this year to a four-year high above $85 per barrel on fears that Washington may want to cut Iranian oil exports to zero.

South Korea and Japan have received waivers along with India, which rely heavily on Iranian supplies, Bloomberg reported.

India, the second-biggest importer of Iranian oil is cutting back, while signaling that it would not shut down the trade completely. And India’s government is not just buying crude from Iran. It is also preparing to buy missile defenses from Russia, another sanctionable offense in Washington’s eyes.

It is unclear how much crude those eight countries would be allowed to buy from Iran, whose oil exports have plummeted from an average of more than 2.5 million barrel per day in recent weeks, Reuters reported.

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s part of it efforts to boost gas utilization domestically, Nipco Plc has converted a total of 5,600 vehicles in Nigeria to use Compressed Natural Gas (CNG).

This development will also provide access and alternative to motorists to power their automobiles.

According to Sanjay Teotia, managing director of the company, he said, the gas sector of the economy has gone through series of legislations including the Gas Master Plan aimed primarily at addressing some of the challenges by way of proffering solutions to boost the economy.

“Nipco has since 2009 when it diversifies into gas being supporting government efforts to harness the nation’s gas resources through massive investment in pipelines infrastructure and construction of stations for both LPG & CNG across the nation,” he said, adding; He added that the company have inaugurated nine CNG stations and a compression station to aid natural gas access and utilisation across the country.”

The conversion of the 5,600 vehicles were done at

the company’s workshops in Benin, Edo State and Ibafo, Ogun State.

Expressing delight to be part of the Nigerian Gas Revolution debate with specific emphasis on the gains, challenges and opportunities; he said: “A total of 5,600 vehicles have been converted to use CNG at the company’s workshops in Benin, Edo State and Ibafo, Ogun State as one of the organisation efforts at providing access and alternative to motorist to power their vehicles.”

The NIPCO boss stated that with the inauguration of the compression station at ibafo in Ogun State in 2016 with a total capacity of 300.000 SCMD, gas is now being transported in cascades to other areas not linked with pipelines’ across the country.

The diversification of the company’s operations in natural gas he said has created lots of employment opportunities for Nigerian technicians and thus aiding local content in the industry.

The company’s efforts in the industry, according to him, are exposing Nigerians to the latest technology in gas compression and conversion of vehicles.

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INTERVIEW Nigeria’s economic growth depends on revenue expansion – Doyin Salami NESG ended its 2018 summit in Abuja recently with a panel discussion on ‘Leveraging Domestic Resource Mobilisation for Sustainable Development’. Our correspondent, Tony Ailemen spoke with Doyin Salami, co-chair/resident commissioner, Fiscal Policy Roundtable of the NESG. Excerpts Could you please explain to us the real essence of the Fiscal Policy Roundtable of the NESG? he idea is very simple; we are drawing attention that if Nigeria is going to grow, its fiscal space has to be expanded. When we have more revenues, then the opportunities for development through effective and efficient government spending on areas of national priority that boost the economy will improve significantly. We are trying to look at whole series of things but the issues and challenges must be addressed, such that government can leverage some wonderful ideas and proposals that have benefited from research and also inter agency conversations. It is not just NESG alone; we are working in collaboration with development partners, Civil Society Organisations, etc towards trying to help the expansion of Nigeria’s fiscal space.

What gaps have you identified in Nigeria tax system?

For us, it is about how we are raising the revenues because, tax is just one way and at the heart of it is a very simple notion- revenue earned from non- oil taxation are ridiculously low. You are looking at a total revenue of 72%- oil, and you are looking at the non- oil, somewhere around 3% of GDP. The moment you recognize that the non- oil is about 90% of economy and yet it contributes just 3% revenue, then immediately you see a striking contrast and it means our over- dependence on oil is already clear from these figures. So, what is the problem?

Is it that there are sectors that are not just amenable to taxation? Is it that we are not collecting the taxes? So, these are the questions we are trying to find answers to.

So, will it be right to assume that this is just about driving the non-oil revenue, or is there more to it?

It is about the fiscal policy frameworks, which is about expenditures and revenues. Yes, a lot of the conversations have been around the revenues, simply because the whole argument is because we do not have enough money to spend, if we had more money to spend, then we could

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Doyin Salami

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even if the figure has gone down between 2016 and 2017, you must understand that the reasons for this development is because oil prices have given us higher levels of revenue. It is not as if our indebtedness has gone down.

Indeed, if you look at the medium term expenditure framework, the government strategy to keep interest rates from rising is to try and borrow more from the international capital market, than from the domestic market. So, the challenge is a very real one. If you are going to bring your debt service to revenue ratio down, the way to do that is either your debt service goes down or your revenues go up. That is why we are saying that if we are to raise revenue, we will certainly see that ratio goes down. But again, l

One of the biggest challenges l think we need to face is to know how much of the top 1% of Nigerians are actually paying tax

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do more for the people. For us, we cannot continue to ask people to pay if they don’t feel they are getting value for their money. So, our mandate is not an exclusively revenue driven one, it is impact revenue, impact expenditures.

You also raised the issue of Nigeria’s debt levels not being sustainable, could you explain more?

Yes, we have gotten to a situation where at current levels, almost 50% of government revenues will be needed to service her debts. A lot has been said about how the debt to GDP is still very low, however, what is relevant is the debt service to government revenue ratio. What we are looking at in that area is a minimum of about 45 %, which is why the IMF Resident Rep, was very clear that

must emphasize that the expenditure side is as important as the revenue side.

What structural reforms are you proposing to push up revenue, given the revelations that the absence of trust is generating apathy in tax payments?

Well, l don’t know about apathy, but l think that issue of trust is a very important issue that we cannot just gloss over. There are number of clarities. When we talk about trust it is about the people and government. But don’t forget the people in this context include corporate. One thing that we must make abundantly clear is that it is those that are at the top of the income pile in other countries who pay the taxes. Between 1 and 3% of the population pay anything between 50 and 75% of the tax revenue, to the extent that you can persuade them that the use of their resources is efficient and effective, then, to that extent, you are able to incentivize them to be model citizens by paying.

The structural things that can be done, to begin with if you say 90% of the economy is producing just3% of the revenue, then the first that you need to do is to understand what is making it difficult for the other sectors to pay tax. There is need to begin to take a look at various kinds of opportunities and reforms. Yes, a lot has been said of the reform of VAT as Nigeria is said to have the lowest form of VAT. In some countries, when you look at the GDP from the consumption or expenditures sides, between 50 and 60% of that consumption expenditure is VATable.

In Nigeria,it is much lower than that. So, you may begin to say, should we raise the rate and keep the same number of VATable goods and services or should we expand the range of good that are VATable and keep the rates at the current levels. There has been suggestions around creating a luxury rate. In my view there are also chalkboard around how you can implement that. Indeed, there are some countries where they have brought down other taxes in other to raise the VAT. You must look at a basket of taxes.

One of the options will be to raise one and bring the other down such that the aggregate impact

is neutral whereas your income becomes higher.

Sir, looking at the real sector, don’t you think that the revenue will continue to remain alarmingly low with the way the sector is presently?

As you can see, the economy is beginning to grow even though slower than we had imagined or would like. But that is not to say that the revenue potentials are not there. I must make that point as forcefully as l can. On the average, African countries collect 222% of the GDP in revenues, but in Nigeria, we are currently doing 72% which means instead of collect 300 for example, we are collecting only 100 or 1/3. So, if we were to simply understand this gap, and respond to it appropriately, we will do better. Libya is already do8ng as much as 40%. The first challenge is not whether the real sector is growing or not. The real sector is growing slowly, The level at which revenue is yielding to government is far slower than in any other country. War ravaged Afghanistan has a better revenue income than Nigeria. If that is the case, then you must see that there are things we need to do. One of the biggest challenges l think we need to face is to know how much of the top 1% of Nigerians are actually paying tax. How many are also paying correct taxes. These are the issues that we must interrogate properly. Without data, it will be very difficult to deal with this. In the United States of America, it is the top 3% that are responsible for almost 60% of the tax revenues.

The important question therefore is the top of our own income pyramid paying taxes?

How do we handle the challenges of complaints about multiple taxations?

One of the things that is very instructive about the Kaduna experience is that the state now has a single tax authority that picks up taxes across all tiers.

And that if you want to know which taxes you are liable for, call them. So, they have taken up the process of streamlining, so that you don’t have cases of overlapping taxation, or multiple taxations. So, these are the kind of initiatives that would prove to be very useful.

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Stakeholders see CBN proposed MGCs bridging Nigeria’s housing deficit …as CBN proposes N6bn capital requirement for MGCs Endurance Okafor

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new dawn may be near for Nigeria’s housing industry, as stakeholders polled in a BusinesDay survey are optimistic that the Central Bank of Nigeria’s (CBN) proposed Mortgage Guarantee Company (MGC) may bring solution to the ever-widening housing deficit in the country.

This is following CBN’s exposure draft on the regulation for the operation of MGCs in Nigeria which was published on the apex bank’s website on October 20th and directed to banks, federal mortgage banks, Nigeria mortgage refinancing company and mortgage banking association of Nigeria.

The industry stakeholders said the initiative is a game changer and it is good for the market.

Adeniyi Akinlusi, President of Mortgage Banking Association of Nigeria (MBAN) and also Chief Executive, TrustBond Mortgage Bank said “we have been working with CBN and we know that MGCs is good for the industry. The initiative will help reduce the housing deficit, ownership deficit as Nigerians will have more access to mortgage.”

“Putting a guarantor in place will enable an average Nigerian to access mortgage, and this will go a long way in making home ownership in the country easier,” a property analyst who pleaded anonymity told BusinessDay on phone.

CBN disclosed in the exposure

draft that it is with effort to promote a mortgage financing and advance home ownership in the country that it has proposed the introduction of MGCs in Nigeria.

“MGCs are designed to deepen the mortgage market through increased access to mortgage finance and enhancing credit risk with mortgage lending institutions. This is in furtherance of the CBN’s objective of promoting affordable financing and a safe and sound financial system,” CBN explained.

A Mortgage Guarantee Company is a financial institution established to provide guarantees or partial guarantees to lenders against losses resulting from borrower’s defaults on residential mortgage

loan. It is expected that the company will help to bridge the estimated 17 million housing units deficit in a country that has the highest population in Africa.

Akinlusi explained that MGCs will help deepen the market because the volume of mortgage transactions will increase owing to the guarantees on mortgages. “This means that mortgage banks will be encouraged to give out more loans knowing that there is now guarantee on them,” he said.

Another industry expert, who asked not to be named because of the position he occupies, said the MGCs would help solve the housing challenges in the country, but to some extent. “This initiative will help to reduce capital requirement

for any mortgage by about 50 percent. This means less capital can be used, when a guaranteed loan is issued,” the expert said.

Meanwhile, Nigeria government had in time past introduced a number of laudable reforms to enable mortgage lending institutions achieve their core mandate of creating mortgages to improve home ownership. These reforms are aimed at addressing capital and governance requirements as well as restricting their activities to concentrate on mortgage and project financing.

However, the subsectors have been plagued with paucity of long terms funds, foreclosure difficulties, inability to meet existing underwriting standards, to concentration

of risk on the mortgage lender.

Nigeria’s current mortgage to GDP ratio is estimated at 0.6 percent, as opposed to 2 percent in Ghana, 31 percent in South Africa, 32 percent in Malaysia, 77 percent in the United States and about 80 percent in the United Kingdom.

Also, the 2018 second quarter figures reported by the National Bureau of Statistics (NBS) shows that the real estate sector reported Gross Domestic Product (GDP) growth of -3.88 percent compared to the -9.40 percent rate recorded in the previous quarter, in what is the 10th consecutive quarter in contraction since the first quarter of 2016.

“The concept of MGC is therefore designed to further deepen the mortgage market through access to mortgage finance and sharing of credit risk with mortgage lending institutions.

MGCs will reduce or replace equity contribution that would otherwise disqualify mortgagors from accessing mortgages as required by the uniform underwriting standards,” the CBN exposure draft reads.

The objectives of the MGCs as stated in the draft shall be to support mortgage originators such as Primary Mortgage Banks (PMBs) and commercial banks to increase mortgage lending by guaranteeing or partially guaranteeing against losses resulting from borrower defaults on their residential mortgages or on their mortgage loan portfolio.

“As a financial institution, the MGC would be under the regulatory and supervisory purview of the central bank of Nigeria,” CBN cited.

Growing student population creates fresh opportunities for real estate investors …as Student Accommod8 opens N350m Cedar House at PAU CHUKA UROKO

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tudent accommodation in Nigeria is still a new investment frontier in the real estate market, but increasingly, especially in the last couple of years, it has been gaining traction, offering opportunities to investors in that segment of the market.

Over this period, student accommodation market has become large driven by growing student

population which, at the moment, is estimated at 1.3 million with potential increase of 200-300 students per annum in both states and federal universities.

The increase in student population is a reflection of the national population growth which, as at October 31,2018, according to United Nations estimates, is 197.4 million—an equivalent of 2.5 percent of the total world population. The country’s annual growth rate is estimated at 2.6

L-R: Chief Operating Officer, Student Accommod8, Omotoyosi Belgore; Vice Chancellor, Pan Atlantic University, Juan Elegido; and Founder/CEO, Student Acommod8, Abayomi Onasanya, at the inauguration of Cedar House hostel for female students at Pan Atlantic University in Lagos… recently

percent.

Experts are of the view that so long as population continues to grow and Nigerians continue to marry and bear children, schools will continue to exist with growing student population, creating more opportunities for investors in real estate in general and student accommodation in particular.

According to the experts, student accommodation is a high yielding asset and, though it is a long term investment asset like other real estate investment assets class, investors can recoup their investment within three to five years.

“This investment asset gives about 22 percent returns which is more than double what commercial real estate gives, not to talk of residential real estate which gives 4-5 percent returns per annum. For this reason, we are encouraging other developers to come in”, Abayomi Onasanya, Founder/CEO, Student Accommod8, told BusinessDay in an interview in Lagos recently.

A relatively young company that opened for business about three years ago, Student Accommod8 is bullish with providing students hostels. It has already provided over 400 beds across three sites with plans

to start construction on 2,500 beds across five sites. Expectation is that in the next five years, the company shall have provided 8,000 beds which, Onasanya said, was just a scratch of the surface.

The company’s latest development is Cedar House, a N350 million facility comprising 140 beds situated in Pan Atlantic University (PAU) campus along Lekki-Epe Expressway, Lagos. Student Accommod8 is, arguably, Nigeria’s leading purpose-built student accommodation and Cedar House typifies that.

In addition to the bed spaces, Cedar House boasts of value-added services such as an impressive communal area, kitchenette, minimart, laundromat and a cafeteria. With the commissioning of this facility, Student Accommod8 has marked another milestone in its journey to growing its development and operating capabilities in the Nigerian student accommodation space.

The company offers good student accommodation experience and places great emphasis on good customer service as it does on providing stylish residences. Its facilities are generally in close proximity of the

universities they service. They are designed with the students’ needs in mind and aim to cultivate active community living spirit.

Apart from the good lifestyle living experience it offers, Cedar House also offers fees which Omotoyosi Belgore, the company’s chief operating officer, says is quite competitive at N850,000 per annum for single bed space; N700,000 for a double bed space, and N580,000 per student for a room with four bed spaces.

As a testament to the value it offers, the new hostel is already fully occupied. Juan Elegido, PAU’s Vice Chancellor, who performed the commissioning of the new hostel, commended the aggressive marketing that was involved in getting 100 percent occupancy in the hostel.

“Whilst devoting the time to finish the hostel, there was a marketing operation going on—reaching out to students and, clearly, it has paid off; Pan Atlantic University believes that whilst education is given in the classrooms, a lot of education is acquired through social interactions within the hostels and Student Accommod8 has succeeded in creating a community amongst the students”, he noted.

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‘We are in Edo State to offer affordable and quality housing to every stakeholder’ Mixta Nigeria, a subsidiary of Mixta Africa, is currently in Edo State to deliver its trademark real estate value to the people. Through a joint venture project it is doing with the state government, the company is developing Emortan Gardens Estate which holds promise to deliver 1,400 housing units. In this interview with select journalists, KOREDE LAWRENCE, the company’s Head, Business Development and Sales, speaks on the partnership, the ambitious JV project, the benefits and affordability. Excerpts

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ixta Nigeria is not just another company out there. Who are you and what do you do as a company?

We are a real estate development company focused on providing quality real estate products. We have operations across the entire market spectrum, but our main focus is on affordable housing market.

As our slogan says, we build communities across Africa.

Just as your fingers are in different sizes, in the communities we build, everybody is represented. So, we offer different house-types to everybody within these communities.

Despite the huge opportunities in the Nigerian housing sector, investment interest in the sector is not as much. From experience, what is your assessment of this sector?

The Nigerian market is growing and is characterised by an increased number of participants in the sector and across the value chain of operations from development to sales.

Everybody is a potential agent, whether they are trying to sell property or lease property which, in its entirety, is good for the sector.

It is a dynamic sector which is still growing but has a huge potential to do more. However, there is a huge challenge with regulating the sector which currently seems to be in-process spearheaded by developers and the professionals that offer service within the real estate value chain. At Mixta Nigeria, we strive to push boundaries and are deliberate about moving the real estate industry forward as a key stakeholder.

Your company is currently in Edo State. Tell

Korede Lawrence, Head, Business Development and Sales at Mixta Nigeria

us why you are there; what is the attraction?

We are in Edo State to develop Emotan Gardens Estate which is sitting on approximately 70.1 hectares of land on Upper Sokponba Road, Benin City.

The plan is to offer affordable and quality housing to every stakeholder in the state. To achieve this, we have partnered with the state government through the Edo Development and Property Agency (EDPA) to make sure this is a success.

There are a range of things that attracted us to Edo. I will touch on a few. For investment to come into any state, it is important to create a fertile, viable platform for such investment.

First of all, the people must believe that the government of the day is upstanding. When they say something, they would as much as possible keep to their word on transactions with you which is why you will go into a relationship with the government on a long term.

We intend to be here for a few years because we believe that the government of the day has said they would do something and put things in place

for the people and we have seen the commitment. We see the way they are going about their activities and that gives us the confidence to come here.

When the government of the day asks us to take a particular parcel of land with a Certificate of Occupancy (C-of-O), assuring that we will develop it together and that they would participate in one way or the other, we are ready to work with them.

Benin is not the first place we are building an estate. We know that the number of people who have uncles, aunts, brothers, sisters in the diaspora is huge. The remittance at some point last year was somewhere around N96 billion per month into the state. If we are to follow these numbers, verified or not, that alone offers a huge possibility and potential for anybody to invest in a state like this. So the time is right.

You said earlier that your main focus is on affordable housing. How affordable will houses in Emotan Gardens be, especially for low income

earners?

The thing about the word ‘affordable’ is that it is a relative term. We are, however, sensitive to the economic realities and have priced our offerings to cater to this. With as low as N5.7million, you can move into your own home in a fully serviced Emotan Gardens.

We also have mediumhigh priced homes in the same estate to cater to those in these categories. There is really a house for everyone within Emotan Gardens. But the bigger question really is about access to funding. So, that probably is one of the hindrances. With us, even though we are real estate developers that are into the business for financial gain, we are primarily into the business of creating real estate value.

Mixta Africa is wholly owned by Asset & Resource Management Holding Company Limited. From our investment background, spanning well over 20 years, we have sought to add value to people’s lives, from the cradle to even the legacies our customers leave after they exit this world.

How much value, in monetary terms, is Mixta Nigeria bringing to Edo State?

Really, our coming to Edo State is through a joint venture partnership. The Edo State government has taken it upon itself to offer value to Edo people.

First of all, to build an estate you need different people to participate. You will need labourers, technicians, engineers; you will need agents to sell the houses and what the state government has done is to create an avenue where all of these economic opportunities are open to the indigenes and residents of the state.

The investment Mixta Nigeria is bringing is substantial and I would not like to put a figure on that currently because it is still evolving. The thing about investment terrains is that you might have foreseen that you would do a particular amount, but as you come into the terrain and you engage with the people, you may see that you may want to do a little more.

Generally, it is still an evolving relationship. But our investment is significant.

Besides, we have different house-types within the estate and we are executing the project in phases, and as such the contribution for every phase is different.

Buyers will like to know how estate infrastructure and other facilities will be managed to ensure the Emotan Gardens does not become another failed project. What do you say?

The plan, as earlier stated, is to bring value. For us, value is what is on the table. I will go back to our pedigree. We have done this in Nigeria and we are in other African countries.

We are in Senegal, Ivory Coast, among others. We have experi-

ence in this field. Depending on where we build an estate, we inculcate some amenities and something to change that environment and give value.

In the case of Emotan Gardens, we will have a one-hectare lake, which is man-made.

It will allow the residents to relax. Road network and electricity are huge for us. In our estates, our pedigree is that we offer 24/7 electricity. It is what we do and what we have done.

All of these obviously come at a cost. The plan is that, within that community, in whichever direction you go, you should be able to either go five minutes to leisure or five minutes to an area that is planned specifically for commercial activities. As it is, there is a range of people that want to bring their businesses to the commercial areas such as hospitals, shopping malls and so on. The truth is that it will be a town within a town. That is what an estate is.

An estate is that location where you comfortably obtain everything that enriches your life without moving. That is what we want to bring to Emotan Gardens.

In doing all these, what are your challenges and what do you do to contain them to remain afloat?

Everyone in the sector has the same challenges, principal of which is access to funding which, when provided, is usually on short-term arrangements. How do you fund a long-term project with shortterm money? In addressing this challenge, Mixta Nigeria has approached the capital market for long term funds.

Our success in raising funds in the capital market shows investor-confidence in us and encourages other developers to explore similar options for financing.

Manufacturer says affordable housing achievable with appropriate pricing for value chain CHUKA UROKO

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hen housing development value chain are appropriately priced and made affordable, it will lead to the delivery of affordable housing in Nigeria, P Bhaskar Rao, the general manager of West African Ceramics Limited (WACL), has said.

P Bhaskar Rao, whose company is a foremost manufacturer of tiles, grouts, tile adhesives, marbles, and allied products in Nigeria, insists that efforts by housing sector stakeholders to achieve affordable housing would, to a large extent, yield the desired result when everybody thinks affordability,

especially in the entire development value chain.

As part of its sales outlet expansion strategies, WACL opened a new showroom in Makurdi, the Benue State capital, bringing to 13 the number of its brand Royal Exclusive Showroom which is a one-stop shop designed to enlighten customers about the applications of various designs and types of tiles and marbles in a building project and also to create a buying experience for them.

Rao explained that the showroom initiative was born out of the ‘think affordability’ consideration in their value chain, adding that it is a dealer-partnership drive aimed at ensuring the effective distribution of quality,

reliable and affordable tiles, marbles and allied products bearing the Royal tag to consumers in the various social strata who have the economic power to afford a house.

The Makurdi showroom which stands in the centre of the state capital has on display tiles, sanitary wares and allied building materials bearing the Royal brand in various sizes, types, and prices and the aim is to market these products easily accessible to the end users.

Rao noted that the cost of sourcing raw materials, the transformation process and requirements to produce the desired building material affects affordability in the long run aside other factors such

as consumer sophistication and crave for imported foreign goods.

He added that the uncoordinated efforts of multilateral agencies and private sector participants in terms of housing finance, formulating actionable regulatory frameworks and government policies are also strong factors affecting housing affordability.

“While the issue of affordable housing has been a dominant discourse for a long time and all stakeholders have done well in doing due diligence to it as a topical concern across several conferences, meetings, and symposiums, it is imperative that we at the private sector begin to rethink our effort”,

he said..

“In the value chain, we must work with deep understanding and insight on the social economic classifications and segmentation of the Nigerian workforce and trends to streamline processes that achieve cost reduction without compromising quality yet delivering output that meet standards with high quality at affordable price. If we play our role this way, we would have taken a significant step in the effort at achieving affordable housing,” Rao said.

Chidi Tobias Okenyi, CEO, Chiventis Investments Limited, noted that part of the focus of the federal government was to grow the real sector and revive the com-

munity of local manufacturers, adding that it could only be achieved when dealers in the value chain supported that drive by patronising locally produced goods and services especially when the quality surpassed imported products.

“There’s no disputing the fact that Royal is a household name with a formidable mark of quality which surpasses many imported products and brands. This partnership is well thought out and indeed would position us to fill the gap that may have been created by the forex situation deterring importation of goods and expected rising demand for local building materials particularly in tiles and sanitary wares,” Okenyi said.

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Friday 06 November 2018

Markets + Finance ‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

Seplat’s sales growth is best among listed firms BALA AUGIE

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eplat Petroleum Development Company (Seplat) Plc blistering start since the first quarter of 2018 means the company is taking advantage of the tailwind in crude oil price to strengthen cash flows, sales, balancesheet, and profitability.

The largest indigenous upstream oil and gas firm’s revenue growth of 103.15 perent as at period ended September 2019 is the best among the 30 largest companies quoted on the floor of the Nigeria Stock Exchange (NSE), according to data gathered by BusinessDay. Shareholders and investors will continue to drink wine poured from a flagon into a golden goblet as the company’s free cash flow and robust balance sheet gives it the leeway to pay dividend, reduce debt, and fund future expansion plans.

Following a review of Seplat’s operational, liquidity and

financial position the Board has decided to declare an interim dividend of $0.05 per share in line with our normal dividend distribution timetable.

This in effect makes the April 2018 dividend a special dividend payment to normalise returns to shareholders after the board had suspended dividends for 2016 & 2017.

Financial Overview for Q3 For the first nine months through September 2018, Seplat’s revenue surged by 103.15 percent to $567.95 million, the largest revenue growth in 5 years, based on data gathered

by BusinessDay. A breakdown of revenue shows crude sales- which make up 77.03 of total figure- spiked by 96.96 percent to $440.89 million in September 2018 from $223.85 million the previous year. Gas sales increased by 48.03 percent to $127.06 million in the period under review as against $85.87 million as at September 2017.

Seplat’s recorded profit

Austin Ojunekwu Avuru, chief executive officer, Seplat

after tax of $91.45 million as at September 2018, from a loss of $5.29 million the previous

year, and 33.17 percent increase from the $68.67 million recorded in 2015.

Earnings before interest and tax (EBIT) surged by 396.22 percent to $264.06 million as

BD MARKETS + FINANCE Analysts: BALA AUGIE

at September 2018, the fastest percentage increases in 5 years.

“Seplat has continued to deliver on its production targets which, combined with an oil price tailwind, has resulted in yet another consecutive quarter of very strong financial performance and profitability,” said Austin Avuru Seplat’s Chief Executive Officer.

Seplat has been able to manage direst costs attributable to projects while turning each Naira invested in sales into higher profit as evidence in margin expansion.

EBIT margin increased to 46.48 percent as at September 2018, from 36.49 percent in the third quarter of 2016 and 42.65 percent as at September 2014.

Net margins rose to 16.10 percent in the period under review from a negative figure 0.01 percent as at September 2017.

A 16 percent profit margin means for each $1 of revenue the company earns $0.10 in net profit Gross profit margins moved to 53.83 percent in September 2018 from 44.70 percent in the third quarter

of 2017, 36.46 percent in the third quarter of 2016, and 45.57 percent in the third quarter of 2015.

Seplat’s robust cash flow and strong balance has given it the leeway to restructure its capital structure as evidence in improved leverage position.

Times interest coverage ratio stood at 4.54 times operating profit, from 0.92 times in the third quarter of 2017, (97.23) in the third quarter of 2016 and 1.82 times in the third quarter of 2015. This means the oil and gas giant can pay interest on its outstanding debt.

When a company’s interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable.

Seplat has reduced the proportion of debt in its capital structure as debt to equity ratio fell to 34.25 percent in the period under review as against 63.62 percent in the third quarter of 2016.

Total debt (both long and short term) fell by 33.80 percent to $694.85 million in September 2018 $899.61 million as at September 2017.

The company repaid its $700 million seven year term loan and its US$300 million four year revolving loan facility.

In the reporting period, the upstream oil and gas giant also issued $350million senior notes at a contractual interest rate of 9.25 percent with interest payable on 1 April and 1 October, and principal repayable at maturity.

Seplat has a free cash flow of $357.17 million as at September 2018, this compares with $145.09 million in the third quarter of 2017, $80.13 million in 2016, and $60.09 million in the third quarter of 2014.

The company was able to maximise free cash flow by allocating capital to highest cash return, short cycle investment opportunities together with a focus on cost efficiency.

“With the current business generating significant free cash flow and combined with our robust balance sheet which we are in the process of deleveraging further, we plan to build on this performance in the coming quarters as we step up organic development activities across our existing portfolio with headroom to also capitalise on inorganic growth opportunities as and when they may arise, in line with our price disciplined approach,” said Avuru.

Tuesday 06 November 2018

AVIATION

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GUIDE

BUSINESS DAY

in association with

Competitiveness, infrastructure, key to delivering aviation’s benefits – IATA Stories by IFEOMA OKEKE

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he International Air Transport Association (IATA) urged governments to maximize the economic and social benefits of aviation. Aviation currently supports 7.2 million jobs and 156 billion dollars in economic activity across the Latin American and Caribbean region.

That represents 2.8percent of all employment and 3.3percent of all GDP in the region.

“While these are impressive numbers, aviation’s contribution could be even greater. For example, in the Middle East region, air transport supports 3.3percent of all employment and 4.4 percent of GDP. Achieving the same levels in Latin America would mean another 1.3 million jobs and an additional 52 billion dollars in GDP contribution, Alexandre de Juniac, IATA’s director general said at the Airline Leaders Forum organized by the Latin American and Caribbean Air Transport Association (ALTA).

Competitiveness “Latin America is a very expensive place to do business. Taxes, fees, and government policies impose a huge burden on airlines and stifle air travel by making it costlier than it would be otherwise,” de Juniac said.

Brazil’s jet fuel pricing policy inflates airline costs by 255 million dollars annually. Mexico has a handling fee in the jet fuel pricing formula that adds an extra 45 million dollars per year.

Peru has a tourism promotion tax on tickets, making it a less competitive destination; and its collection of VAT on over flight charges and international tickets adds to the cost burden while contravening ICAO

Group picture of regulators and other stakeholders at the Cargo Stakeholders Forum organised by nahco aviance at the Sojourner Hotel Ikeja. Seated are third from left, Sadiku Rafindadi, director, commercial and business development, FAAN, and to his left, the MD/CEO, nahco aviance, Idris Yakubu

standards.

Barbados recently imposed 70 dollars per ticket tax for long haul flights and $35 for travel within the Caribbean community making it a more-costly destination.

“These are just a few of many examples, all illustrating that too many governments see aviation and air travel as targets for heavy taxes and fees, rather than as a catalyst for economic growth and job creation.

That is short-sighted,” de Juniac said.

Infrastructure De Juniac also emphasized the need for adequate infrastructure to support current requirements and future growth. “The capacity challenges at key hub locations such as Buenos Aires, Bogota, Lima, Mexico City, Havana and Santiago are well documented. Unless they are ad-

dressed, the region’s economies will suffer.” He cited examples of unhelpful infrastructure actions: In Mexico, it is extremely disappointing that the government intends to cancel the project to build a new international air hub for Mexico City at Texcoco. The economic impact of not constructing a world class hub will be felt in jobs and economic growth. Today’s decision is a setback for the airline industry and the Mexican economy. (For further details see Notes to Editors.)

In Peru, long delays in constructing a new terminal and runway at Lima have impacted the country’s development as a regional hub.

In Jamaica, the government plans to invest 60 million dollars in funds raised from passenger charges for an unnecessary runway exten-

sion at Montego Bay. The money could be better spent on improving the passenger experience at the airport.

Harmonisation Regulatory harmonization is also essential. “Airlines in the region are at the forefront of creating multinational business models. Consumers have benefited with access to bigger route networks and more connecting options. However, the full scope of potential efficiencies is not being realized, because regulations remain nationally-based in areas like training, licensing and aircraft registration. This denies opportunities such as the ability to easily move aircraft and staff around an airline’s network to match market requirements,” de Juniac said.

Oladapo becomes Nahco’s chairman, as Oluwatoyin is appointed non-executive director

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he Nigerian Aviation Handling Company Plc (nahco aviance) has announced the appointment of Sehinde Fadeni Oladapo as its Chairman, Board of Directors.

Oladapo takes over from Arc Usman Arabi Bello, who resigned from the position on Thursday, October 25, 2018.

In a notice sent to the Nigerian Stock Exchange, (NSE), the Company stated that the appointment of Oladapo, who is the founder and Managing Director/ Chief Executive Officer of GMT Energy Resources Limited, took effect on October 25, 2018.

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The new NAHCO Chairman had his higher education at the University of Lagos where he bagged a Bachelor of Science Degree in Biology. A well travelled entrepreneur, he has attended various seminars and courses all over the world, including the Owners/President Management (OPM) programme at Harvard. He is also an Associate Member of the Nigeria Institute of Management (AMNIM), Nigerian Institute of Credit Management and the Port Harcourt Chamber of Commerce and Industry.

A recipient of several merit awards,

Oladapo is highly acclaimed by professional bodies in Nigeria in recognition of his many contributions to nation building.

Oladapo sits on the boards of a number of companies including MCI FZE Yard Development Limited, a joint venture between MCI FZE and Samsung Heavy Industries Nigeria where Total Upstream Nigeria Limited and her partners integrated their EGINA FPSO’s 6 topside modules; the Badagry Ship-repair Maintenance Engineering Consortium (BSMEC) and Elect & Chosen Limited, a reputable interior

design and furniture supply company.

He runs GMT, where he brings his great wealth of experience to bear on providing strategic direction and leadership in corporate reputation and sustainability and commercial negotiations.

Credited with incredible foresight and matchless skills in perceiving business needs and creating solutions to address such needs, Oladapo had over the years developed a network of high value contacts in international and domestic business communities, including the local and global regulators.

SAHCOL builds ground support equipment to enhance operations

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he Skyway Aviation Handling Company Limited (SAHCOL) team has built a Ground Support Equipment from scratch at the SAHCOL Engineering and Maintenance workshop to fuel Aviation Ground Support equipment in Lagos.

The fuel bowser is the first in the history of aviation of ground handling in Nigeria to be created from scratch from locally sourced materials. The idea to create the equipment was conceived by the engineering team of SAHCOL to align with the Nigerian maxim of Use Nigeria Buy Nigeria. The production of the equipment is aimed at leading to higher efficiency of safe and fast service delivery which is what SAHCOL stands for.

The 3,000 liter capacity equipment can be operated both manually and with battery. The equipment which is towable has all the features of an imported Fuel Bowser with modifications to fit the Nigerian terrain. The Bowser is designed to be both rugged and comfortable for use by the handlers to dispense rapid fueling in a safe and spillage free manner.

Before now the fuel bowser amongst other ground support equipment has been purchased from aviation ground handling ground support equipment making companies in Europe and other western countries.

This production has helped to overcome the problem of waiting incessantly for Ground Support Equipment to be shipped to the shores of Nigeria and also waiting for clearance by the authorities at the port before being brought to the workshop for use. Another reason is that the construction of this bowser has saved the company the cost of sourcing for foreign currency to purchase imported equipment As much as the tow fuel bowser is equipment that is overlooked as not been as important as other heavy duty ground support equipment, it is of great significance for a hitch free refueling of Ground Support Equipment on the ramp.

To remain profitable and true to her esteemed clients in terms of service delivery in delivering uninterrupted and punctual service and handling in all of SAHCOL’s stations nationwide, the engineering team put their intense training to use by producing the Fuel Bowser from scratch SAHCOL which is a SIFAX Group Company, is an aviation ground handling company that offers services in passenger handling, ramp handling, cargo handling and warehousing, aviation security, baggage reconciliation, crew bus and executive lounge services and other related ground handling services.

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BUSINESS DAY

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LegalPerspectives

With

Tuesday 06 November 2018

Odunayo Oyasiji

The legality and enforceability of training bonds in Nigeria

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mployers for the purpose of equipping expansion and capacity building do send staff on expensive training to further equip them to be able to take up bigger challenges.

Often times, this training makes such staff more attractive to other companies and organisations that are more likely to offer better pay to attract such staff. To prevent this and in order to reap the fruit of their investment, employers do make it a precondition for such staff to sign a training bond.

The bonds are usually targeted at ensuring that the employees work for some years with the employer.

The consequences of failure to work for the specified number of years will also be stated in the agreement. The target is usually for the employee to stay for the accomplishment of the project for which the training is meant and for the employee to train others in the company.

It must be noted that the general rule is that employment contracts that makes it compulsory for an employee to work with an employer for a specified period is illegal and unenforceable under the labour law. To avoid this, employers do tag the agreement as training bond. This simply indicates that whatever claim they bring against such employee is with regards to the monies invested by the court into the training of the staff. Furthermore, such training bonds are usually required to be signed by guarantors. Hence, the claim is not going to be against

the employee who breaches the terms alone but also against the employee’s guarantor.

Are such agreements legal under the Nigerian law? This is as a result of the provision of the constitution is section 34 (1)(a)(c) which provides that “Every individual is entitled to respect for the dignity of his person, and accordingly -(a) no person shall be subject to torture or to inhuman or degrading treatment; (b) no person shall he held in slavery or servitude; and (c) no person shall be required to perform forced of compulsory labour.” Therefore,

compulsory labour is not legal under our law and stipulating that a person must work for certain number of years seems to fall within this category. Also, section 73(1) of the Labour Act states that “Any person who requires any other person, or l permits any other person to be required, to perform forced labour contrary to section 31 (1) (c) of the Constitution of, the Federal Republic of Nigeria shall be guilty of an offence and on conviction shall be liable to a fine not exceeding N1,000 or to imprisonment for a period not exceeding two years, or to both”.

The foregoing also prohibits forced labour.

Compelling a staff to work for specific number of years ordinarily appears to be forced or compulsory labour. On the other hand, what will the fate of an employer that invests a lot of money on a staff for training be, if the staff leaves the organisation, without using the skills acquired from the training for a reasonable time in the organisation? It will be like a bad investment. From decided cases, what is likely going to be the attitude of the court with regards to such contract?

The case of Overland Airways Ltd V Captain Raymond Jam (suit number NICN/LA/597/2012) which was decided on April 15, 2015 at the National Industrial Court provides insight into what the position of court is likely to be in such cases. In this case, the court was faced with the question of the enforceability of a training bond against a pilot who changed employer and consequences of breach of terms of the bond.

The fact of the case is that Overland Airways sued its former employee (Raymond jam) to recover the cost of sponsoring his training. Under the training bond, the employee is expected to stay in the employment of Overland Airways for 36 months and 12 months respectively. However, Raymond Jam didn’t stay with Overland for the specified period of time before taking up another appointment.

In Raymond Jam argument, training bonds are unenforceable

as it amounts to unfair labour practice. Overland argued that it was an agreement that was voluntarily entered into by the parties and it is enforceable in other jurisdictions of the world. Also, it is meant to protect the interest of the company that has invested a lot of money in training the staff.

The court held that training bond is enforceable in Nigeria subject to the overriding condition of reasonableness. The National Industrial Court evaluated the reasonableness of the bond between Overland and Raymond Jam and held that the period of 36 months and 12 months are reasonable. The court in its decision adopted the practice in other jurisdictions and held that the amount that an employer is allowed to recover on the basis of breach of a training bond is limited to the cost of training.

The said cost of training will be pro-rated using the remainder of the bond period.

In conclusion, training bond is enforceable. However, the enforceability is based on the reasonableness of the bond i.e. its terms. Where the bond is reasonable, what the employer can recover is limited to the amount invested into the training of the employee. Furthermore, where the employee spends part of the bond period (period the employee is expected to stay in the employment of the employer after the training), the amount the employer can recover will be prorated on the basis of the unspent period.

Case ypdate Ikeja Electric Plc dragged to court over estimated and excessive billing

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he plaintiff, Mr Olayiwola Sadibo instituted suit number ID/2606GCM/18 against Ikeja Electric Plc over the issue of estimated and excessive billing on his apartment. The matter was instituted at the High Court of Lagos State, Ikeja judicial division. The matter was assigned to Honourable Justice Adebiyi.

When the matter came up for the first time, Ikeja Electric Plc was not represented by a staff and neither did any lawyer entered appearance on their behalf. The counsel to the plaintiff informed the court that the matter is for mention and that the defendant has been served the processes and evidence of service is in the court’s file already. Also, the court was informed that they have failed to file a defence to the matter. Therefore, they are aware that the matter is coming up. The court decided to adjourn the matter to No-

vember 27, 2018 for hearing to afford Ikeja Electric Plc the opportunity to defend the matter.

From the processes sighted

by Businessday, the plaintiff stated that he took several steps via telephone calls, emails and visits to the office of the defendant to get the matter resolved without success. Copies of emails and responses from the defendant were attached to the processes filed as evidence.

The matter was instituted by way of originating summons i.e. with more focus on the interpretation of various sections of the law governing the consumer- distributor relationship between the parties to the matter.

The issues submitted to the court for determination are 1. Whether by virtue of Regulation 1(1) of the Nigerian Electricity Regulatory Commission’s Meter Reading, Billing, Cash Collections and Credit Management for

Electricity Supplies Regulations of 2007 and Regulation 4(1) of the Nigerian Electricity Regulatory Commission (Methodology for Estimated Billing) Regulations of 2012 which were made pursuant to the Electric Power Sector Reform Act of 2005, the Defendant is required to obtain the actual reading of the meter serving the Claimant’s Apartment before the imposition, issuance and/or service of electricity bill on the Claimant.

2. Whether by virtue of Regulation 4(1) and (2) of the Nigerian Electricity Regulatory Commission (Methodology for Estimated Billing) Regulations of 2012 made pursuant to the Electric Power Sector Reform Act of 2005, the Defendant is required to bill the Defendant based on the last actual reading of the meter serving the Claimant’s Apartment which shall be obtained every month but

not later than once in every 3 (three) months.

3. Whether the Defendant can lawfully elect to impose, issue and/or serve estimated bills on the Claimant’s metered Apartment rather than bills which are issued based on the actual reading of the meter serving the Claimant’s Apartment in the manner required by Regulation 1(1) of the Nigerian Electricity Regulatory Commission’s Meter Reading, Billing, Cash Collections and Credit Management for Electricity Supplies Regulations of 2007 and Regulation 4(1) of the Nigerian Electricity Regulatory Commission (Methodology for Estimated Billing) Regulations of 2012.

4. Whether the Claimant, by virtue of Regulation 5(1) (f ) of the Nigerian Electricity Regulatory Commission’s Connection and Disconnection Procedures for Electricity Services of 2007 made

pursuant to the Electric Power Sector Reform Act of 2005, is entitled to a prior written warning before the Defendant can lawfully disconnect electricity supply to his apartment.

Furthermore, in a motion on notice for interlocutory injunction that was filed by the plaintiff, the plaintiff pointed out the fact that his apartment was disconnected on May 24, 2018. Despite the disconnection, Ikeja Electric Plc still kept on bringing outrageous estimated bills for subsequent months.

This matter will afford the court the opportunity to pronounce on the legality or otherwise of estimated billing in Nigeria. It is believed that the matter will be decided on time because it was instituted by way of originating summons which does not require going through the process of trial.

The next date when the matter will be coming up is November 27, 2018.

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Finally, Labour gets N30,000 ...

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minimum wage, stressing that the figure will be disclosed after the submission of the report to.Mr. President by 4:15pm on Tuesday, 6th November, 2018.

“Haven reached this position and also he fact that the assignment has been concluded and that the organised labour therefore decided that the nationwide strike as been suspended. The mutual agreement will be made

public together,” he said.

He also applauded the role of the organised private sector for the shared understanding On her part, Ama Pepple, chairman of the National Minimum Wage Committee said: “I am happy to report to you that we have concluded its assignment and will present the report to Mr. President tomorrow at 4:15pm and when you come there we will reveal the figure that we have

recommended.”

She however noted that the report that the Kebbi State Governor stormed out of the meeting was untrue, adding that he was commended as the only Governor who has been attending the negotiation in private capacity.

In his remarks, Boss Mustapha, Secretary to the Government of the Federation (SGF) described the outcome of the negotiation as win-win.

Vice President Yemi Osinbajo (m), acknowledging cheers from a trader at Oshodi Arena Market, while Akinwunmi Ambode (l), governor, Lagos state, and Babajide Sanwo-Olu (behind the VP), Lagos State APC governorship candidate, during the inauguration of Tradermoni at Oshodi Arena market in Lagos, yesterday. Pic by Olawale Amoo

CBN’s bad CRR math squeezes banks...

Continued from page 1

suppress exchange rate volatility, but it has a negative impact on credit growth as banks grow even more risk averse if they have cash stuck with the CBN,” another banking source said.

“It’s the small banks with relatively smaller balance sheets that are most affected by this,” the source added.

CRR is the amount of funds that commercial banks have to hold as reserves either in cash or as deposits with the CBN. The higher, the CRR, the less money commercial b a n k s have w i t h t h e m f o r lending purposes. The CBN also uses this benchmark to control the amount of money in circulation.

Bank lending to the private sector has dipped this year on account of weak economic activity and political uncertainty, with the big banks all cutting their loan books in the first half of 2018, according to data complied by Business Day and obtained from their financial reports.

The loan books of Guaranty Trust, Zenith, Access, United bank for Africa and

First bank, shrank cumulatively by 6.6 percent as at June 2018 compared to the level at the end of 2017, with the country’s largest bank by market capitalisation, GTB, and the largest bank by assets Zenith, contracting the most by 11 percent a piece.

Total credit by commercial banks to the private sector declined 1.7 percent to N15.34 trillion as at end June 2018, according to CBN data.

Worried by weak lending to the real sector, the CBN said in September that it will be refunding money from the Cash Reserve Ratio (CRR) to banks that fund projects in agriculture and manufacturing sectors.

But the apex bank contradicts its effort to boost lending by keeping effective CRR as high as 40 percent.

Aggressive naira liquidity management by the CBN and rising interest rates o n g ov e r n m e nt s e c u r i t i e s compound the woes of the private sector as the banks have little cash left for lending, leaving businesses star ved of credit and putting an economy that is yet to convincingly turn the corner on 2016’s recession, at risk of

stagnating.

“What ’s worse is that it appears even some members of the monetary policy committee do not have sufficient information on what is happening with the effective CRR,” one banker said.

“If they did, they will understand the 22.5 percent CRR is a mirage and would not have voted for a hike in the rate at the last committee meeting, when it is already around 40 percent for most banks,” the banker said.

At September’s Monetary Policy Committee where interest rates were held at 14 percent, where it has been for two years now, some members of the ten man committee voted for a hike in CRR, citing election spending risks to inflation, despite flailing economic growth.

N i g e r i a’s e c o n o m y e xpanded 1.7 percent in the first half of this year and is tipped by the International Monetary Fund (IMF) to grow 2 percent by year-end compared to 0.8 percent in 2017 and -1.6 percent in 2016.

In GDP per-capita terms, the economy is still in doldrums with economic growth rate below the population growth rate of around 3 percent.

Tuesday 06 November 2018

FMDQ commemorates fifth year anniversary...

Continued from page 2

Securities Exchange (“FMDQ or the OTC Exchange”), onto the Nigerian financial markets landscape, on November 7, 2013.

This marked the beginning of a unique and much-needed revolution for the Nigerian financial markets, particularly the fixed income, currencies and derivative markets space, which market analysts b e l i e v e h av e w i t n e s s e d a n unprecedented and favourable change – increase in operational efficienc y, reduction in transaction costs, product innovation, market development, and increased oppor tunity for creation of diversified market activities, amongst others.

The OTC Exchange, having sustained its commitment through the years to trans form and make the Nigerian financial markets “GOLD” – Globally Competitive, Operationally Excellent, Liquid and Diverse, with the invaluable support of market regulators including the Securities and E x c ha n g e C o m m i s s i o n a n d the Central Bank of Nigeria, among others, and stakeholders including the Financial Markets Dealers Association, will on Wednesday, November 7, 2018, turn five (5)! To comm e m o ra t e f i v e ( 5 ) y e a r s o f innovation, resilience, valueadding and most importantly, immeasurable collaboration w i t h i t s va r i e d s t a ke h o l d e r groups, FMDQ has announced that it will be embarking on a modest week-long ser ies of c o m m e m o ra t i o n a c t i v i t i e s, culminating w ith the Inaug u ra l F M D Q G O L D Aw a rd s on November 9, 2018, a first o f i t s k i n d i n t h e Ni g e r i a n fixed income, currencies and derivatives markets, geared at recognising the commitments and invaluable contributions o f F M D Q ’s m a r k e t p a r t i c i pants and stakeholders who have contributed towards the growth and development of the markets.

According to the Associate Executive Director, Corporate Development, Kaodi Ugoji, “It has been an extremely challenging but exciting run-up to five (5) years, from inception in November 2013 to date, for the OTC Exchange. From the activation of the FMDQ Listings and Quotations Franchise which saw the eventual listing o f p i o n e e r d e b t s e c u r i t i e s, including but not limited to the sovereign Eurobonds (first on a domestic securities exchange), Green Bonds & Sukuk on the platform of the OTC Exchange; to product and market development with the introduction of Short-Term Bonds, rejuvenation of the Commercial Pap ers market and the establishment of FMDQ Clear, the first Central Clearing House in Nigeria, providing efficient post-trade workflows to ensure settlement finality;

and the launch of the FMDQ Academy to support the OTC Exchange’s financial markets education drive for its stakeholders as well as FMDQ Next Generation Financial Market Empowerment Programme (FMD Q-Next) – a learning and de velopment initiative targ ete d at students across all levels (primary, secondary and tertiary), as well as fresh graduates, within the country; and finally, the recent hosting of the British Prime Minister, Theresa May, which followed the move to our new business complex , Exchange Place, FMDQ has steadily continued to impact development of the markets and by extension, the Nigerian economy.

She further stated that “in all of this, however, we recognise that the achievements over these past years could not have happened without the immense support and c o m m i t m e nt s h ow n by o u r world of stakeholders – from the regulators to our esteemed Members and other players in the Nigerian capital market – and during this week as we reflect on all that has brought us this far, we are desirous of acknowledging the collective feats achieved by us all within this period. Looking forward to our next five (5) years, we remain unyielding in our commitment to continue to accelerate in our innovative capabilities to provide unrivalled solutions that will aid the development of the Nigerian financial market in order to transcend it to international standards.”

Launched as an over-thecounter (OTC) market and self-regulatory organisation, FMDQ has steadily deployed product innovation and market development initiatives as well as provided the requisite market connectivity and architecture needed to transform the markets within its pur view. The OTC E xchange is swiftly evolving from a market organiser - driving market development and p ro m o t i n g t ra n s p a re n c y i n the fixed income, currencies and derivatives markets - to fully integrated and diversified exchange, impacting not only the financial markets landscape, but also fostering economic through its four (4) strategic roles as a market organiser ; an adviser to financial services regulators; a financial markets diplomat promoting the positive tenets of Nigeria ; and ver y important, a catalyst for unlocking the much-needed infrastructure capital in Nigeria.

Determined not to rest on its laurels, FMD Q will continue to challenge the norm and explore new frontiers in fulfilment of its mission to empower the financial markets to be innovative and c re d i b l e, i n s u p p o r t o f t h e Nigerian economy.

Tuesday 06 November 2018

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OPINION

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It must be minimum pay for minimum work

Mazi Sam Ohuabunwa OFR sam@starteamconsult.com

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he national labour movement represented by NLC and TUC is threatening to shut down the Nigerian economy soon if their demand for a minimum wage of N30,000 is not accepted by the governments of Nigeria in the next few days. The Nigerian economy is still struggling despite the efforts of government and it will be disastrous to allow the labour to proceed on the planned indefinite strike.

I must say that it is within the ambit of the labour movement to demand a review of the national minimum wage.

I also must state that I absolutely agree with labour that there is absolute need to review the minimum wage.

As at 2011 when the present minimum wage of eighteen thousand naira came to effect, the exchange rate of the naira against the US dollar was 156 naira. Today it is about 363 naira to the US dollar, and this represents 132 % depreciation. Since the last raise, inflation had climbed from 10.8 % to nearly 18% though it is now about 11.8%. Therefore from every objective analysis, the demand is justified. As we have always stated, agreements

on national wage reviews is a tripartite affair between labour, employers and government. It is must be negotiated, not imposed by any party. Ideally it is essentially between workers and their employers. Government is essentially a regulatory agent. However in Nigeria, government is also a significant employer and this dual role seems to complicate the issues. In this particular negotiation, the government’s conduct has been inelegant. Several months ago, the federal government assured Nigerians that a new minimum wage would be operative by quarter 3 of this year. We are now in the middle of Q4 and no agreement has been reached. So every often, the government has failed to convene the meeting of the negotiating team and the last time, the labour had to go on a warning strike before the government reconvened the meeting. I am always surprised at the way government treats negotiations regarding workers welfare. Whether it is NLC, ASUU or NASU, government seems to adopt the same strategy. Dillydally, evade the issues, make promises, break the promises, flex muscles, try to divide the unions and eventually precipitate a strike. Then the economy goes through rough patches, with everybody suffering. After damaging the economy for a while and causing pain for all- employees, employers and the citizen, they get back to the negotiating table, almost always accepting the demands of the labour and often paying arrears. I have always wandered why this strategy will not change.

‘ In Nigeria Saturday and Sunday are work free days thankfully. Therefore what is the purpose of declaring Monday and Tuesday as public holidays for events that happened on Saturday and Sunday?

’

May be because the governments have no real understanding of what harm is done to the economy when work is disrupted. They seem to have no idea of what losses businesses incur any hour work is stopped. Yet governments in Nigeria allow strikes to go on for many days and in some cases many months before they accept workers’ demands. Then they pay workers for the months they were on strike. This apparent lack of understanding of how work disruptions affect our economic growth is demonstrated each time, governments of Nigeria declare public holidays for no good reason. I am still at a loss to understand why events that fall on holidays should at-

News Bua Cement ready with new production line, pushes for bricks integrity in industry …bricks may soon be certified to reduce building collapse Ignatius Chukwu

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ua Cement says it is readying a new production line in its plants in Edo State to meet what the officials called growing market demands and to fight the competition.

This was disclosed in Port Harcourt by the General Manager, SouthSouth, Nasir Ladan, who said this may happen in January 2019 to increase Bua’s market share.

Ladan spoke at the workshop in Port Harcourt for block industry operators organized with the Industrial Training Fund (ITF) to enable them get the best from cement produced

by Bua Cement. The GM said the need for another production line came as a result of high demand for Bua cement.

On the competition in the cement market, the GM said; “We expect competition but we are prepared for it because competition is the bedrock of business success. Our selling point is high quality which makes builders to look for Bua.” On prices, he said; “We are working hard to bring prices down despite limiting factors especially high en-

ergy and transport costs.”

He said the company makes cement that suits every region of the country. “We have brands that fit into all regions and climatic conditions in Nigeria. Bua can serve well in Sokoto as well as in the Niger Delta. We have a combination that is good and strong at all times and in all regions.”

He said Port Harcourt is home to Bua where their work started in 2008 before they left about 2014. “We were the most popular brand in this city. Our activity is still most vibrant here. Good cement must go with a good mix to get the best blocks. So, exchange of ideas would help in this.”

Bua’s Qaulity Control Manager, Adesola Yinka, in a presentation, said Bua was always tested by the Standard Organisation of Nigeria (SON) and that the company has already secured the latest certification; NIS-441-2018.

He thrilled the block makers with details of standard blocks; “If the cement is of standard like Bua’s, you must ensure sand is good quality. It must not have clay or dirt or inorganic materials. The sand must preferably be from the river or pit. You must remove pebbles which create spaces in the block that admit air and later cause cracks.”

On water, he seemed to shock the audience by insisting that only drinkable (potable) water was good for block-making, free from salt, toxic waste, etc. On proportioning, Yinka gave the right dimensions between sand, cement and water and drying period. He said those changing the mold to produce slim blocks were cheating. He said proper mixing was important until the concrete has same colour. “Turn the sandcrete at least between six and eight times, if you are not using a mixer. Vibrating with a machine is best. If you hand to pound the mixture, it does not vibrate well. Sprinkle water from the next day for between three and six days.”

An official of the ITF, Area Manager/Deputy Director, Amaka Iwunze, spoke on influence of culture on business decisions as well as the need for sound business culture in Nigeria.

She said: “Culture plays a key role in how companies operate. The cultural values of a people affect decisions and actions. Types of business culture: Authoritative, interactive, mechanistic, types but what is important is that situations determine what type to apply. In times of emergency or crisis, you may need authoritative type. Change is inevitable but difficult in business organisations.

tract declaring normal working days as holidays. In Nigeria Saturday and Sunday are work free days thankfully.

Therefore what is the purpose of declaring Monday and Tuesday as public holidays for events that happened on Saturday and Sunday? Yes, developed economies may have the luxury of doing that (but many do not), but for a poor country like Nigeria to seek every opportunity to keep people out of work is preposterous in my view. Therefore it is imperative that the government gets serious, and avoids this hide & seek stance and delaying tactics. The issue of reviewing the minimum wage has merit and should be quickly concluded to avoid unnecessary disruption of the economy.

But I must also advise labour to show understanding on this matter.

First, they must realize that the ability to pay is a critical factor in negotiating wages. And it is clear to the blind and deaf that many states in Nigeria are patently unable to pay even at the current minimum wage level. So does it make much sense to force state governments to accept the N30,000 minimum wage when many are in arrears of several months at the current rate, despite the several bailout efforts by the Federal government?. What will be the point of forcing states to accept rates they cannot pay? Yes, if they managed their finances better, they could pay more.

But are the state resources only for paying workers emoluments? Nigeria currently spends up to 70% of the National Budget on recurrent expenditure and for some States it goes up to

90%. We therefore need the governments to be more efficient in resource disposition. But should we spend such savings on worker emoluments instead of on capital expenditure? My point is that Labour should be reasonable in their demands. Alternatively we may have two minimum wages: federal and states. I believe the federal can pay the N30,000 but states may pay N22,000 or N25,000. That to me is pragmatic and should receive proper consideration by labour. To insist on national minimum of N30,000 may be stretching the argument too far.

Finally, let me also add that we should not be trying to reward indolence and low productivity. It is well known that many in the civil or public service are over-paid. Many do not produce enough to merit their current pay, including the high and mighty in all the tiers and arms of government. So if we are making a case for increased minimum wage we must also make a case for increased minimum work. Otherwise, we may just be robbing Peter (ordinary Nigerian taxpayers) to pay Paul (fat-cat public servants in the executive, legislature & Judiciary). That will not help to improve our economy, it may actually drag us further down as we may end up paying 100% of our National income to less than 2 million public servants. That will be patently unfair to the people of Nigeria.

Send reactions to: comment@businessdayonline.com

NIPC invites suppliers, contractors to tender under 2018 budget CYNTHIA IKWUETOGHU

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he Nigerian Investment Promotion Commission (NIPC), a Federal Government Agency established to promote and co-ordinate investments in Nigeria, has invited reputable and experienced suppliers and contractors to submit quotations for three projects.

This is according to a procurement notice ‘Invitation to tender under 2018 Budget’ issued on their website and signed by the head procurement.

The commission is seeking quotations for the Construction of borehole at its head office in Maitama, Abuja, purchase of IT equipment and purchase of computer printer and scanner, as indicated in the notice.

According to the notice, the commission however intends to use the funds to procure the under listed goods and work in line.

Eligibility criteria includes; evidence of company’s registration with the Corporate Affairs Commission, company’s current tax clearance certificate for the last three years (2015, 2016, and 2017 expiring December 2018), and evidence of company’s value added tax (VAT) registration with Tax Identification Number (TIN).

“Interested companies should collect Tender Documents from the office of the Deputy Director of Procure-

ment, Ground floor, NIPC Maitama, Abuja, upon the presentation of evidence of payment of non-refundable tender fee of N5,000 payable into the NIPC Treasury Revenue Account (REMITA),” as indicated in the notice.

For the submission and opening of tenders, original documents along with two copies of Company profile and quotation are to be submitted in the same envelope. The envelope shall then be forwarded sealed, marked on the top left corner boldly written ‘Relevant Project Title’.

“The name and address of the bidder should be indicated on the envelope. The envelope should be addressed to the client at the address specified, bear the name of the project, and bear a statement “DO NOT OPEN BEFORE 9th November, 2018,” as stated in the notice.

“The documents are to be dropped in the Tender Box in the Front Desk of the Commission’s Main reception, Ground Floor, NIPC Maitama, Abuja, not later than 12.00 noon on 9th November, 2018 and the opening of tenders will take immediately in the presence of bidders’ representatives and members of the public who choose to attend.”

The commission however, advised bidders to sign the Bid Submission Register at the front desk main reception as the commission will not be held liable for misplaced of wrongly submitted documents.

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Pedabo urges govt to restructure tax multiplicity to grow revenue NPDC/Neconde JV begins production, ENDURANCE OKAFOR

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edabo, an indigenous accounting, audit, tax and business consulting firm, has stressed the need for Nigerian government to restructure the tax policy of the country in order to increase its tax-to-Gross Domestic Product (GDP) ratio.

On the areas to be considered, the Lagos-based firm cited tax rate, tax base and restricting the number of taxes paid by companies and individuals in order to increase tax revenue in a country where its tax only contributes about 6 percent to the economy.

“I think we need to restrict the number of taxes that people are expected to pay; taxes and levies. Nigerians complain about multiplicity of tax and that is not the same in other countries where their tax to GDP ratio is high. In the UK there is only one tax authority; His Majesty Revenue and Custom (HMRC ) and they collect tax from everybody,” Albert Folorunsho, the Managing

Consultant of Pedabo said.

He cited also that “other countries are reducing their income tax but in Nigeria it is 30 percent which is too high but VAT is 5 percent which on the other hand is too low, so we need some structural adjustment on the tax base and rate, just like in the new national tax policy, it emphasizes on the increase of indirect tax because it is the only way to bring in the informal sector.”

Meanwhile, financial analyst have described tax as a vital aspect of a nation’s economy, especially as a source of Internally Generated Revenue (IGR) and a way by which government finance social activities for citizens.

Nigeria’s tax to GDP ratio at less than two digit, is one of the poorest in Africa considering the figure is significantly lower than Egypt at 16 percent, Morocco at 22 percent and South Africa at 27 percent, this is despite having the largest economy in the continent .

“In Nigeria, we have FIRS, state internal revenue service,

local government revenue committee, and all sorts of other government agencies going after taxes, including those who are not supposed to do so, even the ministry of justice. So you really do not know who the tax authorities are any more,” Folorunsho explained.

This was disclosed to Businessday at Pedabo Lagos office, yesterday, where the firm celebrated its 20th anniversary. The company also suggested the way to go for Nigeria in order to grow its revenue through tax remittances.

“I suggest that tax authority should either be the FIRS or the state internal revenue, and FIRS can be collecting tax from companies while state can take from individuals.

But if they can synchronize and have one payment identification number, that will increase the level of compliance and as a result increase revenue because that has worked in other countries and as it is the kind of programme they practice,” the firm’s managing consultant added.

gas delivery to domestic market

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econde Energy Limited and its Joint Venture Partner – the National Petroleum Development Company (NPDC) in Oil Mining Lease (OML) 42 have begun production and delivery of gas to the domestic market through the Nigeria Gas Marketing Company.

This is in fulfilment of the commitment made by the Group Managing Director of Nestoil Group and Chairman of Neconde Energy Limited, Ernest AzudialuObiejesi, during the last Nigeria Gas Association Conference.

Obiejesi had promised that the NPDC/Neconde JV will deliver about 40MMScf per day to the domestic gas supply network. This is now being fulfilled with the successful startup and operation of Main Compres-

sor Module 1 (MCM1) of the Odidi Gas Processing Facility. He said the development is a milestone for indigenous companies operating in the Oil and Gas sector. He recalled that OML 42 from which gas is now being produced was acquired in 2011 but was fraught with a lot of challenges at the time it was sold by the IOCs. “The fact that a wholly indigenous Joint Venture (JV) has progressively revived this asset speaks to the capacity of indigenous companies in the Oil & Gas sector if given the right opportunities, ‘’ said Obiejesi.

OML 42 is located onshore West Delta covering an estimated area of 814 square kilometres. OML 42 has 7 fields which have produced hydrocarbons and 5 undeveloped discoveries. The existing assets, infrastructure and support facilities in OML 42 include

flow stations at Jones Creek, Egwa, Odidi and Batan. Neconde, a subsidiary of the Nestoil Group is an indigenous Nigerian company with offices in Lagos, Warri, Port Harcourt and Abuja.

Neconde is an independent Nigeria oil and gas company serving as a special purpose vehicle for the acquisition and development of petroleum assets. In January 2011, the company participated and emerged successful in the bid for the acquisition of 45 percent stake in OML 42 previously held by Shell Petroleum Development Company Limited. Neconde’s status as an indigenous company with an excellent management team offers a viable option through which the currently under developed reserves of the Niger Delta could be brought into production with attendant economic benefits for the country.

Osun stimulates economy, disburses N4.5bn to MSMEs operators BOLADALE BAMIGBOLA, Osogbo

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smaila Jayeoba-Alagbada, Osun state Commissioner of Commerce, Industries and Cooperatives, on Monday, listed gains of outgoing administration of Rauf Aregbesola in the area of empowering small scale business owners, saying the state government has so far disbursed N4.5 billion to 27,352 beneficiaries under combined scheme.

The commissioner stated that Governor Aregbesola’s administration also provided the initial sum of N100 million disbursable fund while the Central Bank of Nigeria added N2 billion.

He noted that the scheme tagged ‘Micro, Small and Medium Enterprises Development Fund’ was sponsored

by the state government and the Central Bank of Nigeria (CBN), adding that the state government gave good attention to SME in order to keep this vital segment of the economy in active operation for the purposes of growing into the formal sector.

The commissioner added that government established Osun Micro-credit Agency and structured it to effectively and efficiently render micro credit delivery services to all small scale business operators.

He further explained that, the State Government has through its Microcredit Agency undertaken another major step towards tackling the issue of MSME financing, stressing that the agency has implemented a digital transformation project.

L-R: Mitchell Elegbe, GMD/founder, Interswitch Group; Prasanna Kumar Burri, group chief information officer, Dangote Group; Akin Banuso, country manager, Microsoft Nigeria, and Akeem Lawal, divisional chief executive officer, payments processing, Interswitch Group at the launch of Interswitch Blockchain Service (Supply Chain Financing Module) in Lagos.

Foreign airlines may operate in Nigeria during strike IFEOMA OKEKE

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here are strong indications that foreign airlines coming into Nigeria may not be affected adversely by the planned grounding of activities in the country following agitations for wage increase by the nation’s labour unions.

This is as aviation unions said they empathised with the domestic operators and other business organisations in the industry that would be affected by the action, saying that as affiliated members of labour centres, they had to comply with their directives.

Illitrus Ahmadu, President of Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) said that if the tripartite meeting with the Federal Government

failed, the unions would obey the directive of the labour centres and shut down the airspace.

Ahmadu, however, said that the industry unions were not unmindful of existing Bilateral Air Services Agreement (BASA) Nigeria has with foreign countries whose airlines operate into the country, stressing that the issue at hand was a domestic one, which should not be allowed to affet international airline operators.

He recalled that during the fuel pump price hike of January 2012, the unions allowed international airline operators to reschedule their flights from 6am to 6pm, stressing that if the strike went on as planned, such treatment may recur.

Ahmadu stated that the

unions had allowed international carriers to operate into the country in the past because some Nigerians caught in the web had travelled into the country for holidays and needed to return to their respective countries to resume work, adding that some were equally travelling on scheduled medical attention.

He said: “The fact is that we are affiliated to labour centres and we are under obligation to comply with directives. So, from the strike notice issued so far, we are to shut down by mid-night of today. However, as we speak, the tripartite discussions have resumed; they are in a meeting and our hope is that something good will come out of the meeting so that we will no longer embark on the strike.

Focus on product formation studies, science minister tells research institutes SEYI JOHN SALAU

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he minister of Science and Technology, Ogbonnaya Onu, in his bid to promote educational research as a driver of sustainable economic growth, especially in the field of nanotechnology, has urged researchers and research institutes in the country to focus more on studies that can lead to product formation.

The minister stated this at the just concluded 3-day conference on nanotechnology organised by the Ladoke Akintola University of Technology (LAUTECH) Nanotechnology Research Group (NANO+), adding that a research center that

caters for nanotechnology research has been established in the country.

Represented by Mohammed Umar, the director of science infrastructure, National Agency for Science and Engineering Infrastructure (NASENI), the minister said the ministry is willing to support Nano+ in its research efforts.

The keynote address titled “Nanomaterials Research: A wonderful world of great opportunities in Africa” was delivered by Aremu Olajire Adegoke, a professor from the department of Pharmaceutical Chemistry, University of Ibadan. He noted that nanomaterials were fast becoming a wonderful world of research in science and technology.

According to him, governments in developed countries have hugely invested in nanotechnology because the products have great economic potentials and offer possible solutions to natural problems ranging from energy efficacy to detection of infectious agents in water.

Agbaje Lateef, the head of the Nano+ group, in his welcome address said the theme of the conference “Nanotechnology for Sustainable Development: Prospects for Africa” was to reflect on how nanotechnology could be used to solve problems in the continent, as he calls for funding from both private and public sectors for nanotechnology-based researches.

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Iran will continue to sell oil despite Trump’s ‘maximum pressure’ STEPHEN ONYEKWELU

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nited States sanctions on Iran’s vital energy and banking sectors were reimposed Nov. 5 but the Islamic republic will sell its oil and break sanctions, Hassan Rouhani, Iranian president said Monday.

“America wanted to cut to zero Iran’s oil sales, but we will continue to sell our oil, to break sanctions,” Rouhani said.

China, India, South Korea, Japan and Turkey - all top importers of Iranian oil - are among eight countries expected to be given temporary exemptions from the sanctions to ensure crude oil prices are not destabilised, Reuters reported.

The restoration of sanctions is part of a wider effort

by U.S. President Donald Trump to force Iran to curb its nuclear and missile programmes as well as its support for proxy forces in Yemen, Syria, Lebanon and other parts of the Middle East.

“America will not be able to carry out any measure against our great and brave nation. We have the knowledge and the capability to manage the country’s eco-

nomic affairs,” Bahram Qasemi, Iranian foreign ministry spokesperson told state TV on Friday.

In May, President Trump withdrew from the Joint Comprehensive Plan of Action (JCPOA), a two-yearlong diplomatic initiative from Iran and a group of countries known as the P5+1 – the members of the United Nations Security Council (the US, United Kingdom, France, China, Russia) along with Germany. Following this, the US Treasury Department had announced it will restore sanctions on a number of key Iranian sectors and activities on November 5.

The reimposed sanctions came as the U.S. focuses on Tuesday’s congressional and gubernatorial elections.

Campaigning in Chattanooga, Tenn., late on Sunday, Trump said his “maximum pressure” policy against Iran was working.

“Iran is a much different country than it was when I took office,” Trump said.

“They wanted to take over the whole Middle East. Right now they just want to survive.”

The U.S. said the sanctions are not aimed at toppling Iran’s government, but

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Eloy awards celebrates Why Oshodi Transport Interchange will not be delivered December 2018 10years of championing down due to the influx of the moment, 83 per cent JOSHUA BASSEY trucks and failed infrastruc- total work progress has exceptional women in Nigeria been achieved, including he ambitious Os- ture including roads.

IFEOMA OKEKE

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xquisite Lady of the Year (ELOY) Awards,

by Exquisite magazine, led by its publisher, Tewa Onasanya, will, this year, calebrate 10 years of championing exceptional women in Nigeria.

Speaking during a press conference to announce the Award nominees and date of the event, Onasanya, explained that the spotlight was beaming its searchlight on women and it is evident in Nigeria and around the world, as policymakers and business support organizations are waking up to the idea that women are good for the economic prosperity of a nation.

Onasanya noted that financial institutions, the government and others were recognizing the untapped potential of women.

“The exquisite magazine is organising the tenth edition of the Exquisite Lady of the Year (ELOY) Awards. The awards is first of its kind in Nigeria. The aim is to have it grow each year as we recognize and award outstanding women and their roles in society”.

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hodi Transport Interchange Project (OTIP) project being undertaken by the Lagos State government to link up with the expansion of the Murtala Mohammed International Airport, Lagos, will not be completed

by December 2018, as earlier promised by the state government, officials of the state government have revealed. Construction work on the project began in 2016.

No special reason was given by the state government for the shift in the project completion date, but BusinessDay gathered exclusively from a source close to the contractor handling the project, Planet Projects Limited, that there has been a delay in the evacuation of some of equipment required to complete the project, at the Apapa Port.

“There has been undue delay in the clearing of equipment imported for the project from the ports,” the source told BusinessDay on Monday.

Apapa and the ports remain a major challenge to the national economy as the area is perpetually locked

Importers of goods via the Apapa port including business groups like the Manufacturers Association of Nigeria (MAN) and Lagos Chamber of Commerce and Industry (LCCI) have continued to lament daily economic losses to the gridlock in Apapa and congestion at the port.

Governor Akinwunmi Ambode had, while inspecting progress of work on the project alongside the expansion of the Murtala Mohammed International Airport, in April this year, promised that the project would be deliver to Lagosians as “Christmas Gift” in December 2018.

But Adebowale Akinsanya, the state commissioner for works and infrastructure in a statement issued on Monday recanted, saying that the project is now to be delivered in the first quarter of 2019. Akinsanya did not give any reason for the change of date, but said “with the ongoing pace of work, the project would be completed within the first quarter of 2019, with operations commencing soon after”.

According to him” “At

completion of piling works on the three terminals and completion of the piling works for the Skywalks.

“Among others, we have also completed works on the pile caps for the three terminals, concrete works of the buildings, ground floor works on all the loading bays for the three terminals, erection of steelworks for the Skywalks and terminals and Taxi Park and car park area, while road works around the terminal are at an advanced stage as well as bus holding bays around the terminals also at an advanced stage”.

The Oshodi Transport Interchange project which is part of the Bus Reform Initiative (BRI) of the state government, is being designed to transform the axis forever and enhance connectivity. The project seeks to transform Oshodi into a world-class Central Business District (CBD) with business, travel and leisure activities conducted in a serene, secure, clean, orderly and hygienic environment, comparable with other transport terminals around the world.

The project, on comple-

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Senate will probe funding of fuel subsidy, Saraki assures Governors say Apapa gridlock

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he Senate will mount an investigation into why the Nigerian National Petroleum Corporation (NNPC) diverted the dividend from the Nigerian Liquefied Natural Gas (NLNG) to fund petroleum subsidy, President of the upper chamber, Bukola Saraki, has assured.

Saraki said the Senate, on resumption of plenary, would further probe the claims made before the Senate adhoc committee by the Group Managing Director of NNPC, Maikanti Baru, on how and why the corporation was diverting the dividend to defray the cost of under-recovery in the importation of fuel.

Saraki’s latest intervention is coming hours after press reports of how the federal government illegally diverted $1.05 billion (N378 billion at N360 to a dollar) to secretly fund subsidy payment on petroleum products.

Documents published by Premium Times show that the fund was sourced at the height of the fuel scarcity crisis between last December and January this year and was secretly diverted into payments on petrol supply and distribution.

Dividends from the gas firm are meant to be shared

by the federal, state and local governments of Nigeria.

The funds are supposed to be paid into the Consolidated Revenue Fund of the Federation rather than spent unilaterally by any tier of government.

The report, said that the President Muhammadu Buhari-led federal government unilaterally — without required consultation with states and the national assembly– tampered with the NLNG funds. That was also done without appropriation by the National Assembly.

While reacting to questions from journalists at the Ilorin airport, Saraki said he had been inundated by calls from Nigerians who wanted to know the position of the Senate on the matter.

His statement was captured in a press statement by his media aide, Yusuph Olaniyonu, Monday afternoon.

The Senate President stated that the disclosure by the NNPC boss in response to enquiries by the Senate adhoc committee probing the issue of illegal payment of subsidy on fuel, called for further investigation by the Senate and also showed that as alleged in a motion moved earlier by Senate Minority Leader, Senator Biodun Olu-

jinmi, a lot of illegal and unapproved spending are going on in the petroleum corporation.

“Let me assure Nigerians that there will be no cover up. We are confident the adhoc committee will do a thorough job. All the issues will be unearthed. That is why when the Senate set up investigative committees on issues, we want Nigerians to have confidence in us that we do not act because we want to embark on a wild goose chase. There must be some serious issues to be looked into. The revelations by the NNPC GMD have justified the need for this investigation and they have shown that we are acting in good faith.”

“When in my ruling on the motion raised by Senator Olujimi, I insisted that we want a transparent, honest and nonpartisan investigation on the fuel subsidy issue, it was clear to me and my colleagues that there are certain irregularities being perpetrated and we should let Nigerians know the truth.

That is why we set up the committee in the first place and to demonstrate the seriousness we attach to the issue, we decided that the adhoc committee should be led by the Leader of the Senate, Senator Ahmed Lawan.

threatens Southwest economy

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he South-West Governors’ Forum says the incessant gridlock on ApapaOshodi Expressway in Lagos State is posing a serious threat to the economy of the region and that of Nigeria as a whole.

The governors, in a communique at the end of its quarterly meeting on Monday in Osogbo, Osun State, urged the Federal Government to urgently find a lasting solution to the problem.

It said the region expressed great concerns about the situation and that FG should intervene by creating alternative routes as permanent solution to the gridlock.

The communique said the goods from the ports, which usually took few days to get to the hinterland, now take months due to the gridlock.

The forum also urged Federal Government to collaborate with Lagos Government in reviving alternative routes linking Tin Can Island through Tomoro Island via

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Ibafo in Ogun State.

The communique also said that the Nigeria Railway Corporation should be engaged as an alternative means to alleviate the gridlock.

According to the communique, Federal Government should enhance the capacity of NRC to use rail facility to evacuate goods from the port to alternative terminals from the Apapa area, thereby supporting the road decongestion process.

It also urged the Development Agenda for Western Nigeria Commission to engage the necessary institutions and development partners in accessing soil features of the region as an imperative to boosting agricultural potentials of western Nigeria.

Governor Akinwumi Ambode of Lagos State, according to the News Agency of Nigeria, was represented by his Deputy, Idiat Adebule, while his Oyo counterpart, Governor Abiola Ajimobi, was represented by his Deputy, Moses Adeyemo, at the meeting.

Strike: Dana Air to reschedule, reroute passengers at no cost

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ana Air has assured its guests of its commitment towards ensuring that they do not bear the impact of the imminent strike action by the Nigerian Labour Congress scheduled to commence today.

The airline in a statement signed by it Media and Communications Manager, Kingsley Ezenwa, said the airline will be available to reschedule or reroute its passengers at no cost to the passengers.

The airline rued the inconvenience of the likely effects of flight disruption on its passengers and the huge loss of income on its part and appealed to the Federal Government and the organized labour to find a middle ground and resolve the issue in the overall interest of Nigerians and the economy.

“While we regret the inconveniences on the part of our guests who are already on our scheduled flights for the week, and the likely loss of income on our part.

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CEO INTERVIEW

Tuesday 06 November 2018

Tuesday 06 November 2018

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Bola Onadele. Koko Managing Director/Chief Executive Officer, FMDQ OTC Securities Exchange

Interview with Private Sector Leaders

Fmdq’s conceptual identity is prosperity

“The Managing Director/Chief Executive Officer of FMDQ OTC Securities Exchange, Bola Onadele. Koko, in this interview, shares his views on the need for the market stakeholders - government, regulators, banks, Nigerian corporates, foreign investors, Nigerians - to effectively harness the potential and opportunities inherent in the Nigerian debt capital market (DCM).

Continued from yesterday With the issuance of the pioneer Sukuk by the Federal Government of Nigeria, do you think other issuers will favourably consider this alternative asset class? What can you say is the challenge faced by these issuers, if any, and how is FMDQ addressing this?

Permit me to begin by first noting that unlike conventional bonds whose proceeds can be used for a wide variety of purposes including recurrent expenditure, funds realised from a Sukuk issuance can only be deployed for specific purposes and to tangible assets like infrastructure and as such, Sukuk investors receive income based on those assets rather than interest, as is the case with conventional bonds.

Although the emergence of Sukuk and other non-interest capital market products have been seen by many as one of the most significant developments in global finance and indeed, in the DCM, perspectives from the Global Sukuk Market Report continue to point to issuers from countries in the Gulf Regions, Malaysia, Indonesia and Turkey as having dominated the Sukuk market; with only modest growth being so far made in Africa.

In the case of Nigeria, this market is still at a nascent stage, irrespective of the great potential it holds over the medium-to long-term, especially amidst the unprecedented infrastructural deficits which the nation is faced with. Rightly, a strategic objective of Nigeria’s Economic Recovery and Growth Plan (2017-2020) is hinged on building a globally competitive economy and one of the means of achieving this is by investing in and bridging the extensive infrastructure gap. Sukuk presents that viable opportunity where a variety of investors, like ethical and non-interest investors, can participate in the fixed income/debt capital markets. It is therefore very encouraging that the Federal Government of Nigeria, through the Debt Management Office, set the pace with the issuance of the N100 billion FGN Sukuk which was over-subscribed by investors and subsequently listed on FMDQ early this year. The success of the FGN Sukuk and indeed its impact in terms of use of the proceeds have been quite evident, validating the viability of the Sukuk market in the development of a nation’s DCM. Notwithstanding this, however, the non-sovereign Sukuk market remains relatively untapped in Nigeria and in Africa as a whole.

If you look at the population of Nigeria today, with well over 180 million people and the geographic and ethnic lines, Sukuk is probably that alternate

product through which both public and private sector participants can contribute to the development of the economy. From states to agencies and corporates, issuance of Sukuk will not only deepen financial inclusion, it will also significantly complement conventional bonds and further strengthen the Nigerian capital markets. From the structuring of a Sukuk instrument to its cost of borrowing (which is partly a function of the credit rating) and the pricing risk, amongst others, issuers are continuously presented with considerations for the issuance of Sukuk and can work with FMDQ-licenced Registration Member (Listings) to demystify any misconceptions and approach the market appropriately.

There is also inadequate education and market awareness about this important asset class and FMDQ, desirous of improving private sector involvement to unlock infrastructure capital, is leaving no stone unturned in engaging and educating relevant stakeholders about this market and the huge potential therein. From a regulatory perspective, the SEC has also demonstrated its willingness to support the growth of this market and has further shown this via the SEC’s approval of the FMDQ Sukuk Listing Rules.

It’s interesting that you raised the issue of the infrastructure deficit in Nigeria. What is FMDQ doing to support the Government’s agenda in this regard?

You see, when the operations of FMDQ began, the OTC Exchange’s mandate was essentially to perform the role of a market organiser and self-regulatory organisation in the markets within its purview, that is, the fixed income, currency and derivatives markets. With the product and market development initiatives underway, it wasn’t long before it was established that our strategic role in the markets also included being a catalyst for infrastructure capital, an advocate and adviser to governments/regulators and acting as a financial markets diplomat with the aim of positively positioning Nigeria in the global financial markets space. Interestingly, this was part of the discussion with the current CBN Governor when he assumed duty. He advised that FMDQ’s activities should have economic development impact.

We have, therefore, taken on these roles and strategically aligned them to our agenda of making the Nigerian markets “GOLD”.

Arguably, bridging the infrastructural deficit for Nigeria remains a burning topic for our government and beyond this, looking inwards at the different ways to drive this required

growth via the private sector is perhaps the most plausible way to achieve this audacious feat. The time to depend on the government to meet our every need is far gone. Huge potential exists in the private sector and indeed, via the debt capital markets, the credible avenue to tap domestic and offshore investible funds, and we must all turn our attention to these. On this premise, FMDQ activated an Infrastructure SubCommittee as part of the Debt Capital Markets Development (DCMD) Project 2025. The DCMD Project 2025 is a market-wide initiative championed

by FMDQ and its stakeholders and aimed at addressing and implementing solution to the issues that are hampering the development of the nation’s DCM. The Project’s agenda is achieved via transformation levers which include six (6) Sub-Committees, a Transformation Committee and a Steering Committee. The Infrastructure Sub-Committee is one of the six (6) Sub-Committees within the Project and is positioned to create a platform to identify and address impediments in the development of the Nigerian infrastructure sector, and through advocacy and regulatory engagements, unlock avenues for infrastructure financing through the DCM. I am in fact pleased to mention that the FMDQ infrastructure development mandate is further supported by two (2) other Sub-Committees within the Project the Housing Sub-Committee and the Sustainable Finance Sub-Committee aimed at tackling the Nigerian housing sector challenges towards improving home ownership in the medium- to long-term, and leveraging the green finance opportunity to begin addressing some of the basic-needs (sustainable energy to power, recycling/waste management, clean transportation and other environmentally friendly projects) confronting the citizenry.

Furthermore, the provision by FMDQ, of a credible platform for the listings, quotations and noting of long-term infrastructure-driven debt products/ securities such as green bonds, infrastructure bonds and funds, and Sukuk is the final piece of the puzzle that ensures success and sustainability.

Interestingly, the planned launch of derivatives into the Nigerian financial market by FMDQ will invariably support the government’s agenda.

For instance, cross-currency interest rate swaps may provide the long-term hedge required to attract foreign capital to fund infrastructure deficit in Nigeria. In line with the FMDQ mission, we are committed to innovation and initiatives that empower our economy and invariably, improve the lives of Nigerians. FMDQ’s conceptual identity is prosperity. Governments – federal and states, investors – domestic and foreign, institutional and individuals

and companies, are offered this ‘prosperity’ through FMDQ’s franchise i.e. a platform to access capital, invest, transfer value or transfer risks through hedging.

Tell us about the recently launched Nigerian Green Bond Market Development Programme. What does this initiative aim to address? Do we expect to see issuers access this market?

In today’s global financial markets space, the interests and focus on sustainability and green finance have taken centre stage, with increased emphasis on environmental, social and governance tenets for all organisations, and by extension, the economies.

Again, in Nigeria, these conversations have begun but are arguably still at the ground phase when compared to milestones achieved by other countries.

Through requiste research and stakeholder engagements, we saw and learnt about how countries around the world were using the Green Finance Strategy to support sustainable developments in their economies, and

essentially recognised the opportunities for Nigeria as a budding economy to tap into this notion, and very quickly too. In the usual FMDQ spirit, we set to work to adequately equip the Nigerian DCM to take advantage of this greenfield. If you recall, and as I earlier alluded to, in September 2017, a Sustainable Finance Sub-Committee was launched as part of the DCMD Project 2025, to focus on demanding environmental, social and governance (ESG) issues affecting business and investment decisions and how the Nigerian DCM can access long-term funding (over $60 trillion assets under management) for such impact-related projects in the country.

This was our first crucial step towards setting the pace and stage for integrating green finance into the Nigerian markets.

Subsequently, we went on to formalise our budding relationships with FSD Africa and CBI through the signing of a Cooperation Agreement geared towards the development of the Nigerian non-sovereign green bond market. Essentially, this collaboration has birthed a 3-year Green Bond Market Development Programme (“the Programme”) which will facilitate among others, marketwide education, capacity building, issuer preparedness and ultimately, the establishment of the green bond market in Nigeria.

The Programme will also include the development of requisite guidelines and regulations, as well as a pipeline of green investments with extant and potential issuers. The launch of the Programme therefore formally kick-started the long-awaited dialogue on this topical issue, covering engagements/sessions with government agencies, regulators, investors, intermediaries and issuers, as well as setting the tone for the realisation of a viable non-sovereign green bond market in the Nigeria. In the coming months, we shall see more activities with respect to capacity building and market education, both of which are on the front burner, if we, as a nation are to realise the objectives of the Programme.

Indeed, with the realisation of the objectives of the partnership between FMDQ, FSD Africa and CBI, which combines financial assistance, technical expertise and the provision of the requisite market architecture, I would say that the market has “all its ducks in a row” to encourage issuers to successfully access and invariably build, along with other market participants, the Nigerian green bond market.

With the move to launch a derivatives market in Nigeria, what else is

FMDQ thinking of?

One of FMDQ’s aspirations as a securities exchange is to fully integrate its activities, providing a robust platform alongside the requisite market architecture for capital access, investment opportunities, value transfer and undoubtedly, risk management. For us, this aspiration is central to, and ultimately drives our strategic initiatives towards transforming the Nigerian financial markets. In the world today, challenging status quo, driving efficiency and expanding existing boundaries have become closely associated with innovators, and for FMDQ, this keeps us on our toes and challenges us to strive for opportunities to create and deliver value to our world of stakeholders – local and international.

FMDQ’s overarching goal is essentially to deploy market strategies to encourage capital formation and value addition to the varied stakeholders, so looking at other markets to make the Nigerian financial markets globally competitive may not be far-fetched, as our mandate is geared towards sustainable development for the wider financial markets, most especially in areas where we find are untapped and in which we, along with the relevant stakeholders, can develop for the ultimate benefit of the economy. We will like to build a DCM that is in multiples of the Nigerian GDP. The financial market is an exceptionally wide space and there are, arguably, areas within same that are yet to be explored. It is in this regard that, for instance, FMDQ, through the requisite touchpoint with the SEC, activated the Private Companies’ Bonds Noting Service to further expand and facilitate access to debt capital for private companies and indeed, small and medium-scale enterprises; ensuring these are nurtured and exposed accordingly to the due diligence required for disclosures in the financial markets, in line with best practices. These companies are essentially being provided the edge they require for when they are set to go public; an initiative FMDQ has availed its platform to and in our usual commitment, will work with this category of stakeholders to actualise same.

Through product innovation and market development initiatives, FMDQ has continued to transform and position the Nigerian fixed income, currency and derivatives markets in the global financial landscape, and per FMDQ’s mandate to make the Nigerian financial market “GOLD”, our stakeholders now look to us to expand these boundaries and by extension, cascade these initiatives to other markets.

Talk about the FMDQ markets will not be complete without mention of the foreign exchange market as it is an important seg-

ment of the financial markets.

What are your thoughts on this market and what are your expectations for same in the run up to the end of the year?

You are absolutely correct; the FX market is the nerve centre of commerce, which is the life blood of any economy.

The FX market, throughout the course of the year so far, has experienced some stability, no doubt aided by the establishment of the I&E FX Window last year and the rise in the price of crude oil. This stability has been somewhat encouraging and is likely expected to be largely maintained for the remainder of the year. In 2019 and beyond, the CBN, as the single largest player and regulator of the FX market may drive further improvements to position the market structure to be more globally competitive.

Congratulations on the launch of the new FMDQ headquarters in Lagos. There was also the launch of FMDQ Next Generation Empowerment Programme (FMDQ-Next) to provide financial markets education. How does this differ, or not, with the previously launched FMDQ Academy? Thank you. Being in a fastpaced environment and resolute in delivering on our initiatives for the Nigerian financial market and economy, expansion and indeed, relocation of FMDQ to its new complex, “Exchange Place” was very imminent, and muchawaited. As you no doubt are aware, FMDQ was honoured to play host to the British Prime Minister, Ms. Theresa May, on her first official visit to Lagos, at Exchange Place in August, barely a month after we had relocated.

Beyond promoting financial markets literacy for FMDQ Members and other market participants, FMDQ as a technology-driven OTC Exchange has extended and is indeed, going over and beyond this noble cause which has seen the provision of pro-bono financial markets training in the fixed income, currency and derivatives markets via the “FMDQ Academy” (with its website hosted at www.fmdqacademy. com ) to providing financial markets education for the younger generation, in this case, students, in a bid to empower the next generation.

The FMDQ Next Generation Financial Market Empowerment Programme (FMDQ-Next), our flagship corporate social responsibility programme, is a learning and development initiative aimed at promoting financial market awareness and literacy among students across all levels (primary, secondary and tertiary), as well as fresh graduates, within the country, making financial market education accessible to students from different backgrounds, and empowering

the next generation of Nigerian youth to be financially astute. FMDQ-Next activities take place in a bespoke simulated trading environment, the FMDQ Q-Hub in Exchange Place, where students are exposed to the workings of the financial markets and gain an understanding of the value of money and strategies to create and manage wealth at an early age. The students are given the opportunity to trade the different financial market securities in the simulated trading environment and can learn directly from and in some cases, interact with relevant financial market stakeholders.

Promoting financial markets education amongst children and the youth particularly is a cause which we have been passionate about at FMDQ. Indeed, from the inception of the OTC Exchange, this was one the commitments made to the market and has remained a high point which we looked forward to actualising at FMDQ. Our goal really is to improve the financial markets savviness of the next generation such that they are able to, when the time is right, exploit the opportunities the financial markets offer, for their benefit, the benefit of the markets and ultimately, the good of the Nigerian economy. As we know, a well-functional financial market is the collective effort of all stakeholders and the need to continually expand and include more participants in this market cannot be overemphasised.

The FMDQ Academy, on the other hand, remains targeted at addressing the observed knowledge and skills gaps in the Nigerian financial markets of its participants and ensuring that capacities are aligned with the structural transformations and product innovations that are rapidly revolutionising the markets. This FMDQ wholly-sponsored initiative offers e-learning course modules in fixed income, foreign exchange and derivatives, with expansions in the mediumto-long-term to face-to-face, tailored and blended learning programs for optimum market impact.

FMDQ turns five next week.

More congratulations are certainly in order considering all your institution has achieved during this period. What has FMDQ got planned to commemorate this worthy achievement?

Thank you very much. It is quite exciting for us as an organisation to be celebrating our 5th year anniversary and we are planning to celebrate this achievement in a modest way throughout this week. The OTC Exchange turns 5 on November 7, 2018, and for us at FMDQ, we recognise, in no uncertain terms, that our achievements have been realised only because of FMDQ’s champions, architects and the regula-

tory visionaries, such as the Securities and Exchange Commission, Central Bank of Nigeria, Debt Management Office, and National Pension Commission. So throughout this week, our anniversary celebrations will be mostly about recognising those stakeholders who have painstakingly supported FMDQ and contributed in no small measure, to the institution’s success story. The staunch support of our Board of Directors, and the selfless sacrifices made by our staff can be in no way overlooked as we mark this milestone, as these have contributed significantly towards the achievements of the OTC Exchange over the years.

FMDQ, in the last 5 years, has evolved from a market organiser, driving market development and promoting transparency in the fixed income and currency markets, to an OTC securities exchange, pursuing strategic goals of being an adviser to financial services regulators, the Nigerian financial markets diplomat and very importantly, the catalyst for unlocking infrastructure capital in Nigeria. In collaboration with all its stakeholders, FMDQ has stayed true to its commitment to make the Nigerian financial markets globally competitive, operationally excellent, liquid and diverse. To conclude the week-long modest celebration, FMDQ will be hosting the maiden FMDQ GOLD Awards, an event FMDQ had committed to deliver to recognise the outstanding and indispensable contributions of the market participants in the Nigerian financial markets. What better way is there to say “thank you”?

Congratulations again to you and the entire team at FMDQ. Finally, taking you away from FMDQ and the financial markets for just a moment, if you have the opportunity to spend 2 minutes with the President of Nigeria, what will you say to him?

Thank you for this unique opportunity to meet with you Mr. President. We do not have much time, so I will get right to it. Launch a 5-point Big Bang Prosperity Agenda for Nigerians as follows: Make the State governments economically viable by allowing them control their natural assets.

Galvanise an urgent private sectorled economic revolution on the back of market-friendly legal and regulatory frameworks. We need Jobs! Jobs!! Jobs!!!

Champion the programme for massive private and public investments in education. This is the future of Nigeria.

Drive high healthcare standards galvanised through insurance and pensions.

Signal private sector investments in housing supply and drive demand with single-digit mortgages.

A6

BUSINESS DAY

FT

C002D5556

Tuesday 06 November 2018

FINANCIAL TIMES

World Business Newspaper

China’s Xi Jinping hits out at ‘law of the jungle’ trade policies President’s remarks seen as broadside against Trump ahead of talks at G20 summit Gabriel Wildau

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i Jinping has launched an attack on a “law of the jungle” approach to trade, remarks that will be seen as a broadside against Donald Trump ahead of a G20 summit this month where the two are due to discuss their tariff brinkmanship.

The Chinese president’s tough rhetoric to open an international business fair in Shanghai may dent hopes the G20 summit in Argentina could produce a deal to end the USChina dispute that has seen the two countries impose tariffs on billions of dollars worth of bilateral trade and rattled Asian markets.

Mr Trump raised hopes of an agreement last week when he lauded a “ very good” phone conversation with Mr Xi that included a “heavy emphasis” on trade. But the Chinese leader showed no signs of a trade thaw, taking aim at unilateralism — a clear reference to recent hardline White House actions.

“As globalisation deepens, the practices of ‘law of the jungle’ and ‘winner-take-all’ are a narrowing road that leads to a dead end,” Mr Xi said at the opening ceremony of the China International Import Expo. “Inclusion and reciprocity, win-win and mutual benefits is the widening and correct path.”

Asian markets renewed their sell-off on Monday, with Hong Kong’s Hang Seng index closing down 2.1 per cent and mainland China’s CSI 300 index of large Shanghai and Shenzhen-listed stocks falling 0.8 per cent.

Mr Xi has repeatedly sought to cast himself as a champion of mul-

tilateral agreements and lowering of trade barriers, repeating pledges he made at the Bo’ao Forum in April and the World Economic Forum in Davos in January 2017 that he would move to open up the Chinese economy to foreign investors.

But the address was light on specifics and new commitments, and foreign executives and diplomats said they have grown wary of Mr Xi’s promises, arguing they remain vague and have been followed with few specific reforms on market access and intellectual property.

“When you say: ‘We open our market and the door is open’, that is very good,” Kris Peeters, Belgium’s trade minister told the Financial Times following Mr Xi’s speech.

“It’s very important that China puts action where the words are”.

Despite the mounting scepticism, Mr Xi repeated promises to reduce tariffs and relax investment barriers, and pledged further opening measures in telecoms, medical care, education and culture.

He added that China would support “necessary” reforms to the World Trade Organization to protect the multilateral trading system.

In a nod to concerns about technological competition, Mr Xi also committed to stronger protection for intellectual property, including tougher punishment for violators.

“Each country should work hard to improve its own business environment. One cannot always beautify oneself while criticising others, and one can’t shine a flashlight on other people without looking at oneself,” Mr Xi added.

The Chinese president was not alone in veiled criticism of US trade policy, with Jack Ma, founder and

Eurogroup calls on Italian government to redraft budget Finance ministers back European Commission after unprecedented veto of spending plan

Jim Brunsden

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U finance ministers have urged Italy to bow to calls from Brussels to revise draft budget plans that breach European spending rules, with a deadline looming next week for Rome to either back down or escalate a stand-off with EU officials.

Bruno Le Maire, France’s economy minister, said at a meeting of the eurozone’s finance ministers that he hoped Italy would “seize the hand offered by the [European] commission” to hold talks on how to adjust the 2019 spending plans, which Italy estimates would see its budget deficit increase next year to 2.4 per cent of GDP. Rome has until November 13 to send a revised plan after Brussels last month took the unprecedented step of rejecting the draft budget on the grounds that it violated previous commitments by Rome to bring down the country’s high level of public debt.

“France shares the assessment put on the table by the commission, but there is also a hand offered by the commission to the Italian gov-

ernment, and I think it would be wise to seize [it]”, Mr Le Maire told reporters as he arrived at a meeting of EU finance ministers in Brussels.

“What is at stake now is our common currency,” he said.

His call was echoed by Mário Centeno, eurogroup president, who said he remained hopeful that Italy will agree to amend its spending plans despite Rome’s populist government having insisted up to now that it will not do so.

“Hopefully we will get a new draft budget plan”, Mr Centeno said, adding that Italian finance minister Giovanni Tria would set out his thinking to ministers at today’s meeting.

The commission has warned that unless Italy alters its plan it could face the opening of an “excessive deficit procedure” under the EU’s budget rules, with the risk that this process ends in sanctions.

Pierre Moscovici, the EU’s economy commissioner, said that ministers “are completely in sync with the commission.”

“We are always discussing, talking with the Italian government”, he said.

China’s president Xi Jinping told an international import fair that his country would cut tariffs and investment barriers, but also hit out at critics of China’s trade policies © AP

chairman of technology group Alibaba, calling the trade war “the most stupid thing in this world” during a panel session. The entrepreneur’s latest comments come after he had previously warned that the US-China trade war could last 20 years, calling it “a mess”.

Mr Xi forecast that China would import $30tn in goods and $10tn in services over the next 15 years — a figure that does not suggest a significant acceleration from China’s current import trajectory.

But Mr Peeters said European companies remain concerned about China’s rules requiring joint ventures in certain sectors, protection of intellectual property and unequal treatment of foreign companies by China’s bureaucracy.

“What matters is that concrete actions are forthcoming and that reforms are clearly timetabled,” said Carlo D’Andrea, vice-president of the European Union Chamber of Commerce in China. “If China really will continue to open up, we would have expected additional and specific commitments to have been announced by President Xi today.”

Beijing wants to use the weeklong event — which will be attended by government officials and corporate executives from 172 countries — to demonstrate China’s commitment to expand imports.

The US and western European countries chose not to send highlevel delegations to the event,

shifting the focus to developing countries, where China has sought to position itself as the leader of a unified block. Mr Xi’s attempt to build support among smaller and low-income economies comes as the White House has sought to build a united front with Europe and Japan against what the US views as abusive Chinese business practices.

Some 450 Japanese companies were scheduled to attend, however, amid warming relations between Beijing and Tokyo.

Mr Xi’s speech came as new data highlighted a slowdown in China’s services sector in October, with the Caixin-Markit services purchasing managers’ index coming in at a 13-month low.

Citigroup appoints Washington insider as its next chairman John Dugan, former comptroller of the currency, will lead the US bank’s board Robert Armstrong

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itigroup has appointed John Dugan, a former comptroller of the currency, as its new chairman, making the group the second big US bank to choose a former regulator to lead its board.

Mr Dugan, 63, will replace Michael O’Neill, 71, who will retire at the end of 2018 after more than six years as the bank’s chairman.

Mr Dugan will join Elizabeth Duke of Wells Fargo as one of only two chairman at the “big six” US banks that do not also serve as chief executive. JPMorgan Chase, Bank of America, Goldman Sachs and Morgan Stanley have a single leader in both roles (David Solomon, recently appointed chief of Goldman, will officially become chairman at the end of this year).

Ms Duke served as a member of the Federal Reserve Board from 2008 to 2013.

The appointment of a government insider and non-banker as Citi’s chairman marks a historical turnabout for the financial conglomerate built by a banker’s

banker, Sandy Weill, in the 1990s.

Citi only split the roles of chairman and CEO after Mr Weill’s successor Charles Prince was forced out as chief executive in 2007, as the financial crisis began to bite.

Citi was one of the worst-performing banks during the crisis, taking a $20bn capital injection and an asset guarantee from the government in 2008, before returning to profitability in 2010.

“Citi is deeply committed to maintaining strong corporate governance standards, and Citi and our shareholders have been well served by having an independent chairman,” said Mike Corbat, the bank’s chief.

Mr Dugan is a lawyer who has been on Citi’s board for just over a year. Most recently, he was chairman of the financial institutions group at Covington & Burling, a law firm. He was comptroller of the currency from 2005 to 2010, putting him in a key supervisory role for US banks as the financial crisis unfolded under presidents George W Bush and Barack Obama. From 1985

to 1993, he served as counsel to the Senate banking committee and as an official at the Treasury department.

He also served on the Basel Committee on Banking Supervision from 2007 to 2009, while the committee was finalising the “Basel III” regulatory framework.

Like other major US banks, Citi has worked in recent years to resolve regulatory and compliance issues left over from the crisis. In January, it paid a $70m civil penalty handed down by the Office of the Comptroller of the Currency for failure to comply with a 2012 consent order relating to the Bank Secrecy Act and anti-money laundering controls.

The deregulatory agenda under Donald Trump’s administration has to date extended only to smaller banks, which are set to receive some softening of capital requirements and less stringent stress testing. The post-crisis regulatory regime for so-called “systemically important banks” such as Citi is almost entirely unchanged.

Tuesday 06 November 2018

C002D5556

BUSINESS DAY

NATIONAL NEWS

FT US hits 700 Iranian targets with reimposed sanctions

Delta says price rises will help cover higher fuel costs

Trump administration fulfils president’s pledge to take harder line against Tehran

Chief executive Ed Bastian reports solid demand despite US-China trade war

Katrina Manson , Michael Peel and Najmeh Bozorgmehr

Patti Waldmeir

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he US has imposed sanctions on 700 Iranian targets as part of its “largest ever single day” of economic penalties against Tehran, fulfilling Donald Trump’s campaign pledge to take a harder line against the Islamic republic.

Steven Mnuchin, US Treasury secretary, told reporters on Monday: “Today the US is executing on the final actions to withdraw [from] the Obama administration’s fatally flawed Iran deal.”

“This is part of a maximum unprecedented economic pressure campaign the United States is waging against the world’s largest state sponsor of terror.”

The latest sanctions target the Iranian oil and financial sectors as the US seeks to force Tehran to rein in its regional activities, which the Trump administration says are destabilising the Middle East.

Mr Trump’s decision in May to pull out of a landmark nuclear deal with Tehran and reimpose sanctions has pitted the US against European powers, China and Russia, cosignatories to the 2015 accord.

Mr Mnuchin said the imposition of sanctions on individuals, organisations, ships and aircraft on Monday was part of Treasury’s “largest ever single day action targeting Iran”, adding that 300 of those sanctioned were new targets.

Mike Pompeo, US secretary of state, said the US’s goal was to abandon its current course “or see [Iran’s] economy crumble”.

In a fillip to Tehran, the US named the eight countries to which it has granted six-month waivers to allow them to continue buying some Iranian crude: China, India, Japan, South Korea, Taiwan, Italy, Greece and Turkey.

But the US has not, crucially, revealed how much crude each buyer will be allowed to take.

Iran’s exports averaged about 2.5m barrels a day before the US decision to reimpose sanctions. Exports rose to almost 2.9m barrels a day in April but since then have fallen by about 1m b/d, as buyers — especially in Europe — have turned away.

Swift, the international financial messaging system, said on Monday it would comply with the restored US sanctions on Iran in a blow to EU efforts to defy Washington’s action.

The Belgian-based company said it would suspend “certain Iranian banks’” access to its cross border-payment network.

Swift’s decision further undermines EU efforts to maintain trade with Iran and save a landmark international deal with Tehran.

Iran has been emboldened by European governments’ continued support for the nuclear deal and an EU effort — as yet unfinished — to set up a payments channel, or “special purpose vehicle”, to facilitate the non-US trade with Iran.

European governments remain locked in negotiations over establishing the payments channel having failed to get it ready for the November 5 deadline.

Iran’s president Hassan Rouhani claimed a diplomatic victory against Washington as US sanctions came into effect because European governments have joined Tehran in opposing the measures.

A7

E Mr Trump has been campaigning in states with tight Senate races, such as Tennessee © AFP

Americans turn out in big numbers for referendum on Trump Last-minute presidential campaign dash to shore up vulnerable Senate majority Demetri Sevastopulo and Courtney Weaver

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onald Trump is making a final furious dash to battleground states in a bid to protect the Republican majority in the Senate, as record early voting suggests that Tuesday’s midterm elections will be a consequential referendum on the president.

In the final two days before the election, Mr Trump was scheduled to hold three rallies in states with key Senate races — Tennessee, Indiana and Missouri — and two in states with important races for governor — Georgia and Ohio — as he completes the most intense political campaigning by a president for a midterm election.

While midterms are always seen as a referendum on the president, huge early voting numbers in the US have underscored the political divisions sparked by Mr Trump. In at least 28 states, early voters have outpaced levels from the last midterms in 2014, according to Michael McDonald, an elections expert at the University of Florida.

With Republicans pessimistic about keeping the House, Mr Trump has focused on states with tight Senate races, as he tries to help the party maintain, or increase, its 51-49 majority. Mr Trump rarely concedes the odds of losing. But speaking about the possibility of the Democrats win-

ning the House — which could lead to impeachment proceedings against him — on Friday in West Virginia, he said: “It could happen.”

“I need you to vote for a Republican House and a Republican Senate so we can continue this incredible movement,” Mr Trump said later on Friday in Indiana.

In recent weeks, Mr Trump has rallied his base with fear-mongering about law and order— including stoking concerns about the migrant caravan in Mexico — as he reprises the theme of immigration that helped him win the White House.

Democrats have rallied their base with appearances by former president Barack Obama and Oprah Winfrey. The television star and possible 2020 presidential contender has been campaigning for Stacey Abrams, the Democratic gubernatorial candidate in Georgia who is aiming to become the first female African-American governor.

Mr Obama also campaigned for Ms Abrams, urging Democrats to express their opposition to Mr Trump by voting. “Don’t boo. Vote,” he said.

“They don’t care about your boos.

They care about your vote.”

Compared to several months ago, political experts are talking less about a huge Democratic “blue wave”. In generic polls that ask voters which party they prefer, Democrats have roughly a seven-point advantage. But the latest NBC/Wall Street Journal

poll found that the gap had shrunk from 9 points last month, suggesting that while the Democrats are still favourites to win the House, Mr Trump’s intense campaigning may have helped the GOP pull closer.

The poll also showed record enthusiasm, with 70 per cent of registered voters saying they were very interested in the election. “When you have voter enthusiasm rates above 80 per cent for both parties, then big early voting and turnout rates are inevitable,” said Larry Sabato, a politics professor at the University of Virginia. “America is going to have a high participation rate for a midterm election — though still well below a presidential level.”

As Mr Trump talks about illegal immigration, Democrats have focused on accusing Republicans of making it harder for Americans with pre-existing medical conditions to obtain affordable health insurance.

Some Republicans have expressed frustration that Mr Trump is not focusing on the economy given that unemployment is at 3.7 per cent.

When Mr Trump said last week he would try to deny US citizenship to children born to illegal immigrants in the US, Ryan Costello, a Philadelphia Republican, accused him of “political malpractice” because of the impact on Republicans facing tight House races in suburban districts with big immigrant communities.

Universal targets Africa for growth in music streaming Sub-Saharan region seen as ripe for digital streaming while music industry seeks new markets Anna Nicolaou

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niversal Music Group has struck a licensing deal to push into Africa, as the world’s largest music company searches the globe to tap into riches from digital streaming.

Through the agreement UMG — home to acts including Lady Gaga, Kendrick Lamar and Elton John — will license its catalogue to Boomplay, a fast-growing African music streaming service, as well as trying to build a stronger global audience for African acts.

The move comes as owner Vivendi is looking to sell up to half of the shares of Universal Music, which analysts say is now worth more than $40bn thanks to a nascent recovery in the music business.

UMG’s global acts such as Drake and local artists like Nigerian singer Tekno will be available to the 36m listeners on Boomplay’s streaming platform in Nigeria, Ghana, Kenya, Tanzania, Rwanda, Uganda and

Zambia. Boomplay’s service currently offers 2m songs, spanning genres like Afrobeat, Afropop and hip-hop.

As distribution has evolved from CDs followed by digital downloads, industry executives say that regions latching on to smartphones and previously ravaged by music piracy are now ripe for streaming. Latin America, for example, has been a standout success for the music industry in the past few years as Spotify became popular in the region.

With growth of services like Spotify set to slow in mature western markets by 2019, “the streaming market will need to look towards emerging markets for growth”, said Mark Mulligan, analyst at Midia Research.

The major record companies see potential in Africa, where a rapidly growing and young population appears receptive to streaming. Across sub-Saharan Africa, 60 per cent of the population is under 25 years old, according to UN data. More than 400m people have mobile phone

subscriptions in sub-Saharan Africa and this is expected to grow to 690m by 2025, according to the GSMA mobile economy report.

While UMG has long had a presence in South Africa, this will be its first major expansion to the rest of the continent. It opened a Nigerian division with a new office in Lagos earlier this year. The company said it is looking to “grow the entire African music ecosystem”.

Mr Mulligan at Midia warned that in sub-Saharan Africa, “weak infrastructure and patchy rights frameworks, coupled with low consumer spending power, have long acted as brakes” on music revenues.

Sub-Saharan Africa represents 15 per cent of the global population, but just 1 per cent of the global recorded music market, Midia calculates, with its streaming market “in its infancy”.

Boomplay is owned by Transsion Holdings, a Chinese manufacturer that overtook Samsung this year to become the number one smartphone company by sales in Africa.

d Bastian, Delta Air Lines chief executive, says the airline expects to recoup $2bn in higher fuel costs this year partly by increasing ticket prices, thanks to continuing passenger demand despite the US-China trade war and concerns about a slowdown in the US economy.

“Demand is strong and when demand is strong it gives you a good opportunity to price and recover,” he told the Financial Times in an interview. “We’re expecting fuel costs up $2bn year on year for us in ’18, but we’re also anticipating our overall profits to be about flat” at around $5bn.

“On that simple premise we recovered almost all the fuel increase within the year which, on that size of increase, hasn’t been done before,” he said, adding “we’re managing the other costs of our business well. In the third quarter our non-fuel costs were flat”.

His comments come at the end of a US third-quarter earnings season during which several US carriers reported stronger than expected profits despite fuel prices up nearly a third from a year ago.

“We are seeing revenue accelerate at a fairly robust clip, with management teams stating this is the best revenue environment in recent memory,” Helane Becker, airline analyst at Cowen, wrote in a recap of third-quarter earnings.

The news has eased investor concerns about a price war, and worries about the impact of fuel costs, which depressed airline shares earlier this year. The NYSE Arca Airline index is down nearly 13 per cent year to date, but it has regained some ground since carriers announced third-quarter results. United Continental said it expects to be able to recoup about 90 per cent of the rise in fuel prices for the full year.

Asked whether he sees any signs that US consumers are cutting travel plans ahead of an expected slowdown, Mr Bastian said: “We don’t see any cracks, the economy continues to be strong, demand is healthy, consumer confidence is still relatively strong . . . when thinking about the economy at large, domestically, we don’t see any material change”.

“Our corporate revenue base is healthy,” he said, adding “that would be the first place we’d start to see some slip in demand from a political issue or economics, but our corporate revenues year to date are up 10 per cent so I feel pretty good”.

The trade dispute between the US and China is “not having an impact on demand as best we can tell or in terms of pricing,” he said, adding that Delta’s Chinese revenues are up by double digits year on year. Transatlantic travel has not so far been impacted by the prospect of Britain leaving the EU, he said, adding that he “finds it hard to believe” that there will not be some kind of deal between the US, UK and Europe to allow air travel to continue to grow.

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BUSINESS DAY

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Tuesday 06 November 2018

BUSINESS DAY

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NEWS YOU CAN TRUST I TUESDAY 06 NOVEMBER 2018

INSIGHT/INNOVATION Gandollar and the complications of 2019 elections

OGHO OKITI Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

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ast week, the Presidency, led by the President rejoiced greatly over the receipt of an attestation certificate of the West African Examination Council (WAEC) that it believes will put an end to the insinuation that the President does not have a higher school certificate.

It was made possible since changes to the law that allows the receipt of attestation certificate in 2015.

Unlike many others that do not support the President for a second term, the evidence that he attended or wrote WAEC has never been an issue for me. I believe, without any shadow of doubt, that his military career and the content of that career, should suffice and qualify the President for the position he seeks. More so, he has been in that position for almost four years and seeks a reelection into the office. So, I will not bother about the certificate or none of it. My grouse with the President is that he has not changed his mindset since when he

PROPHYLAXIS

AYULI JEMIDE Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer.

Email: AJ@ayulijemide.org Twitter: @JemideAyuli

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he health sector in Nigeria is a constant topic and it occurs to you how vulnerable our citizens are each time someone is flown abroad, or someone dies from an otherwise avoidable causes. Let me just throw some random statistic at us.

Nigerians spend an estimated US$200million a year on foreign healthcare. Nigeria does have a national health insurance scheme, but less than 7% of the population is covered by it. Indian High Commission in Lagos issues about 40 medical visas per day. Nigeria has 47 federal medical centers and university teaching hospitals to cater for the healthcare needs of its huge population. There are 700 general hospitals, more than 1,700 maternity units and 4,500 health centers. Privately owned profit-seeking, faith-based and voluntary hospitals accounts for at least 40 percent of all facilities in the country. More statistics: The 2017 national budget of N7.298 trillion presented had 4.17 percent allocated to the

was first head of State, thinks and rationalises Nigeria’s entire problems from the prism of corruption, and he is very narrow minded to oversee a complex and diverse Nigeria. Given this mindset, he fails to see the deep structural problems we face, and his inability to address these problems flows from this.

In all of this, and given the background of poor and weak economic and governance of the last four years, one cannot miss the importance attached to the certificate by the President and his team. The big laugh displayed President rejoicing with the Minister of Education (by the way, what’s happened to that sector in the last four years?), photo op with the head of WAEC, and doing a thread of twitter on the attestation certificate betrays any notion that this is a well orchestrated plan to ensure no hindrance to the President’s second term. And this only signifies one thing – the President is desperate for a second term and nothing is too minute or mediocre for this purpose, and will continue to carry on governance in the mode of “the end justifies the means”.

Let’s translate this to another issue, which also exemplifies the drive and desperation for power – the deaf silence on the unhinged, shameful, astonishing videos of Gandollars making round on social media. The videos show different scenes of the Governor of Kano State Abdullahi Umar Ganduje obviously collecting bribes from contractors. The videos demonstrate a baby like excitement of the governor receiving dollars, or that of an experienced collector of antiques – in this case, dollars, and or the preparedness of a desperate armed robber that had the premonition of how much was involved, and so would ensure that all that is due, is duly collected.

Anyone familiar with the Nigerian envi-

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...the silence of the presidency, just as the initial silence when it was reported that Kemi Adeosun forged her NYSC certificate is a reflection of the dynamics of the 2019 elections, and the desperation of Mr. President to keep power

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ronment will acknowledge that this happens on daily basis in the different parts of the country. The difference is the scale and who is involved. But the silence of the presidency, just as the initial silence when it was reported that Kemi Adeosun forged her NYSC certificate is a reflection of the dynamics of the 2019 elections, and the desperation of Mr. President to keep power.

Prior to the release of the Gandollar videos, the governor had promised that he would deliver 5 million votes in Kano State to the President. In the 2015 elections, the President won the State by a landslide of nearly 2 million votes. Kano is not only important in the Presidential elections, but it is strategically important for whoever wants to become the President come 2019. So, while the presidency has kept quite about the videos, there

is no doubt that the Presidency is weighing the ramifications of such a blatant and clear videos of a rampant governor, who is also its supporter. The discussion in the presidency is made complicated by the fact that it is not sure if all the videos have been released, considering that this video are been released in piecemeal fashion.

In 2015, Kano delivered almost 2 million votes to President Buhari. The presidency will look forward to a similar victory in 2019 if the President is to be reelected.

But the Gandollar is only one of the issues at play. In 2015, the President had virtually all the heavyweights in the State in his corner, including Rabiu Musa Kwankwaso, who recently moved to the People’s Democratic Party in order to fulfill his presidential ambitions, though he lost to Atiku Abubakar in the keenly contested primaries in Port Harcourt.

Nonetheless, there are some defining moments in every election circle, and Gandollar is certainly one of them in this election circle.

It reinforces the tried and tested approach of Mr. President to issues like this, which is to keep mum and feign ignorance until the President or his inner circle realises either it will not go away, or long enough to determine or figure out how the person can be sacrificed.

What makes the Gandollar episode very delicate, however, is that it involves a sitting State governor with immunity, and a State with enormous strategic implications for 2019. The wish of the presidency, therefore, is that this will quickly go away or the people of Kano totally ignore the shenanigan of their governor in relation to 2019 elections. More importantly, no one knows if there are more videos. In the context, time will tell.

I thank you.

About our healthcare conundrum health sector and World Health Organization’s recommendation is 15 percent of budgetary allocation to health. The data obtained from the Medical and Dental Council of Nigeria as of May 30, 2018, revealed that 88,692 doctors are registered in their books. Of these doctors, only 45,000 are currently practicing and that gives us a ratio of one doctor to 4000 citizens(1:4000).World Health Organization recommends 1:600 (one doctor for every 600 persons). Nigeria graduates about 2300 doctors every year. Some little math for us: How many more doctors would be required to bridge the gap? How long will it take to produce that number of doctors?

And some more statistics: Obafemi Awolowo University Teaching Hospital, IleIfe, Nigeria, successfully performed about 20 open and closed heart surgeries in 2016 and 2017 respectively. The University of Nigeria teaching hospital has between 2013 to date carried out over 300 open heart surgeries.

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Medical experts are increasingly coming to the conclusion that improving these “social determinants” often results in better long-term health than does intensive and expensive medical care

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The Association of Nigerian Physicians in the Americas has over 4000 members. About 5000 Nigerian doctors are registered to practice in the UK. The above statistics paints the picture that forms the basis for all the hullaballoo about the Nigerian health care infrastructure and framework. This conversation is going to be with us for as long as the issues are not fixed, and the reality is that this is highly unlikely to be fixed if we keep doing the same thing and expecting different results.

The first thing we need to understand is that the paradigm that government will fix medical care without support from the private sector is in my view a daydream. It is highly unlikely that government will be able to sort out our medical infrastructure to the point where it is first rate. One of the most expensive buildings ever built is the Royal Adelaide Hospital, in Australia. It cost US$2.1 billion apart from the medical equipment which cost $245 million. How was this money raised? It is a public private partnership where government has created the enabling environment for private investment in healthcare. In most countries, both the universities and university hospitals are majorly funded by endowments from the corporates, NGO’s, alumni’s, and individuals. In 2013, the then New York City Mayor Michael Bloomberg committed $350 million to Johns Hopkins University. The commitment lifted his lifetime giving to the Baltimore-based University to more than $1 billion, rendering him the most generous living donor to any single educational institution in the U.S. Today, John Hopkins University School of medicine has an endowment of $1.9 billion and John Hopkins University’s current endowment is $3.844 billion. As far back as the 1950’s the University College Ibadan received financial grants into its endowment fund from notable donors like, Nuffield, Ford Foundations, Rockefeller Foundation, United African Company, Cocoa Marketing Board.

The second thing to note is that social spending is more important than medical spending. What do I mean? Medical experts are increasingly coming to the conclusion that improving these “social determinants” often results in better long-term health than does intensive and expensive medical care.

Some empirical data to support this: The major OECD countries on average spend about $1.70 on social services for each $1 on health services. But the US spends just 56 cents on social services per $1 health dollar. So, unlike most of the other OECD countries, America spends far less on social services like housing assistance, food aid, and child support than it does on medical services. The stats however show that despite spending by far the largest amount on healthcare, the USA was among the 10 OECD countries (out of 34 countries) with the lowest life expectancy. Research also shows that when you look at different states within America, the states with a higher ratio of social to health spending have significantly better health outcomes in many areas, including adult obesity, diabetes, lung cancer, asthma, and heart disease. Another statistic to buttress this theory is from the G7 group of countries where Japan is No 5 on the ranking for per person spend on healthcare but is No 1 in life expectancy and Italy spends the least per person on health care but is second highest in life expectancy.

The third thing to realize is that the medical services sector is one sector where the talent hunt is fierce. Nigeria has to compete favourably with a view to retaining Nigerian doctors and attracting foreigner doctors. In Nigeria today, an entry level doctor earns an average monthly salary of 250,000 naira ($700 per month).Whilst the average doctor monthly salary of a doctor in the US is $11,000.

How can we get our teaching hospitals run majorly on endowments? Can Nigeria improve its life expectancy by improving socio-economic factors? How can we compete favourably for talented doctors?

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