Globus Bank officially commences operations
L-R: James Quincey, chairman & CEO, The Coca-Cola Company; Aliko Dangote, president, Dangote Group, and Brian Smith, president & COO, The Coca-Cola Company, during an engagement with Dangote in Lagos, yesterday.
...targets N50bn capital in 12-18 months, 24 branches in 5years OLUWASEGUN OLAKOYENIKAN
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lobus Bank Limited, a newly licensed regional commercial bank in Nigeria, will officially commence operations today at its Lagos office, according to Peter Diejomaoh, head of corporate communications of the bank. “The bank will be commencing operations on November 6, 2019,”
Diejomaoh said in a statement released Tuesday at the bank’s head office after the Catholic Archbishop of the Metropolitan See of Lagos, Most Rev. Alfred Adewale Martins, paid a courtesy visit to commemorate the official opening of the bank to the general public. “The bank is set to bridge the customer experience gap in the
Continues on page 39
news you can trust I **WEDNESDAY 06 NOVEMBER 2019 I vol. 19, no 429
I N300
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L-R: Nixon Iwedi, executive director, Globus Bank; Olayide Abel, non-executive director; Isioma Ezi-Ashi, non-executive director; Charles Osezua, chairman, board of directors; Alfred Adewale Martins, Catholic Archbishop of the Metropolitan See of Lagos; Elias Igbinakenzua, MD/CEO, Globus Bank; Augustine Okere, non-executive director, and Vincent Okeke, non-executive director, during a courtesy visit of the Archbishop to commemorate the launch of Globus Bank in Lagos, yesterday. Pic by Olawale Amoo.
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Foreign Reserve - $40.53bn Cross Rates - GBP-$:1.29 YUANY-N 51.71 Commodities Cocoa
Gold
US$2,509.00
$1,485.40 $62.91
Crude Oil
Nigeria’s $683m lubricant market promises investors high returns
Poor crude oil metering means N billion-dollar losses for Nigeria
…as emission control, improved technology, fuel efficiency take front seat STEPHEN ONYEKWELU
igeria’s lubricant market is poised to become a profit spinning centre for investors taking early strategic position at the different levels of the value
Continues on page 39
DIPO OLADEHINDE
T
h e Fe d e ra l G ov e r n ment’s reliance on the International Oil Companies (IOCs) or indigenous operators to determine the
quantity of oil it produces and exports is negatively affecting the country’s crude earnings. Oil metering is one of the critical elements in the hydrocarbon value chain considering that it provides the
production data upon which federally collected revenues such as royalty and Petroleum Profit Tax (PPT) are calculated. Accurate metering of hydrocarbon streams has direct bearing on the revenue of both the operators
and the government. However, despite its importance, hydrocarbon metering has been a problem in Nigeria’s petroleum industry. Nigeria Extractive Industries
Continues on page 39
Inside
Fertiliser suppliers mull expansion of insurance cover to 3.9m farmers P. 38
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Reinventing microfinance Small Business handbook
Emeka Osuji
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icrofinance has its rules, traditions and norms. If you follow the rules, the results pop out nicely by way of improved social welfare for the very poor. Doing otherwise takes you off the planned trajectory. At that time, the need for a change of course becomes even more urgent than the problem intended to be solved. The Nigerian microfinance industry is struggling to find the best way to serve the financially underserved population. The sleepless nights that gave birth to the Microfinance policy of 2005 have not quite abated. Both operators and regulators are all battling to see significant achievement in the sector. One of the reasons for the struggle is the way the operators have conducted their business. Some have tended to focus on issues other than their calling: making small loans to the active poor and helping them with capacity building. A review of the state of things in the sector suggests, fairly eloquently, that there is need for a refocusing of these institutions. They need to return them to the golden principles that made microfinancing the great success it is elsewhere. Access to financial services is an accepted channel for promoting financial inclusion, which itself is a strategy for poverty reduction. Available statistics show that over 50 percent of Nigerians are still financially excluded. This implies that most of our people do not use any financial products to deal with their daily affairs, in a technology age. The situation is even worse in the
rural areas where, according to EFInA, a research-based organisation, over 80 percent of the population of Nigeria is unbanked. This is not unexpected, for an economy that is predominantly agricultural with significant infrastructure deficit. Access to financial services would naturally demand greater commitment and focus on the part of service providers in such an environment; and even much more from the authorities. Although we now have about 1,000 microfinance banks operating in different parts of the country, the impact they will make on this mass of unbaked population depends on their understanding of their role and their capacity to perform it, their commitment to the principles of their trade and the resources available to them. However, no amount of resources will help the cause of service delivery if the foundations, evidenced by business models and lending technology is false. There are evidently, some fundamental challenges, and indeed, failings bedevilling the operation of most MFBs, that may prevent them from realizing even their own internal objectives, to say nothing of the objectives of the policy framework, if not rectified. The first of these challenges, is the nature of Nigerian microfinance banks as presently structured. According to the definition given to it by experts, microfinancing is the provision of financial services to the active poor. Of course, this has been elaborated to include capacity building support and advisory services. Since poverty is a relative term, we need to emphasise that the term poor in this context refers to the active poor. Perhaps, we may safely state that the focus is on that category of the poor that are willing and able to work, and indeed already engaged in some economic activity but are too weak to defend themselves against the negative wind and weather of the economy. Financial services here include microcredit, microinsurance and micro savings opportunity offered to the economically active poor. I believe our MFBs, going by their focus and general
demeanour, have altered this definition, either deliberately or by error. This is very evident by their look and feel, and spatial distribution, which shows high concentration in the urban areas, where undoubtedly poverty exists but certainly not comparable to what goes on in the rural areas. By definition the economically active poor in a predominantly agricultural economy, like ours, should be found in the rural areas. That being the case, we ought to have more microfinance banks in the suburbs and local communities than in our major cities. We often hold brief for the MFBs by rationalising their preponderance in the cities but we know deep down that it is a problem that can reduce their effectiveness to deal with the poverty scourge. The result is that even the services provided by MFBs are being redefined or substantially modified, tending to regular banking services. They are now a mirror images of commercial banking services. Thus, an innocent observer may not see any difference between them and the commercial banks, except that they are smaller in size and capital base. There is nothing wrong in wearing the toga of a king, provided one can actually do what kings do. MFBs must therefore not seek to replicate the banking services that have failed to give succour to the active poor. Many MFBs are doing commercial banking in the name of microfinance. They are focusing on traders, importers, exporters, suppliers and even consultants. These people may well be poor, since poverty is relative, however, they are not the poor contemplated in the National Microfinance Policy. The result is that people for whom microfinance was introduced are again being sidelined, just the way the deposit money banks did. Naturally, these not-so-poor customers are able to pay high interest rates thereby helping raise costs for other borrowers. The result is that interest rate in the MFB sector has become very high. As Professor Yunus, founder of Grameen Bank once said, what we have in many
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The result is that people for whom microfinance was introduced are again being side-lined, just the way the deposit money banks did. Naturally, these not-sopoor customers are able to pay high interest rates thereby helping raise costs for other borrowers
This is piece is largely excerpted from my book “Leading Essays on Microfinance” due to be presented on Friday, Nov. 8, 2019 at the NIIA, Lagos. Dr Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@ pau.edu.ng @Emekaosujii
A successful life (3)
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od’s vision cannot be snuffed out by mere mortals. It must be accomplished because He is the almighty. Believe me when I say I’m not preaching or evangelising so I ask you to please hold on; I’m going somewhere with this. Our parish holds its own proverbial “feeding of the five thousand” on a quarterly basis. Admittedly our “five loaves of bread and two fishes” haven’t yet miraculously multiplied to feed the multitude that come but just how we come by the resources in these trying times to fulfil this noble assignment is nothing short of a miracle in itself. Although we are yet to witness an instant doubling of parish members after each programme but the visible delight written over the faces of those who come makes it all worthwhile. Not unexpectedly, a few members have grumbled in the past that the resources expended could be put to “better” use especially as we’re still endeavouring to complete our church building project. Pastor’s response to such remarks was quite typical of him: “The fact that people come in such large numbers, some even arriving as early as 5am, knowing very well our first Sunday service doesn’t start until 7am; nothing is given out until the second service ends around 11.30am, yet they wait ever so patiently, only goes to show that it’s much needed and a significant material need is being met.”(Neighbourly love). At the last program, over nine hundred people received a pack enough to feed a family containing raw chicken, uncooked rice, vegetable oil and one toilet roll. Prosperity of the soul, by doing the will of
God beats all other forms of prosperity because that is the only one that actually matters to Him. This, without doubt is “Good Success”. Success in life should never be judged solely by what you have accomplished for yourself. Personal success should not be taken in isolation but should be seen as just one small piece in the gigantic jigsaw puzzle called “Life”. No matter what you own or achieve in life, if you don’t leave this world better than you met it, can that be deemed true success? Speaking to this Shannon L. Adler once said: “Carve your name on hearts, not on tombstones. A legacy is etched into the minds of others and the stories they share about you.” True success touches lives and it does so positively. Our aim and obligation, should be to use our God given gifts, ordained positions in life and the resources God has given us the power to create, to better the lot of our society, with the understanding that when our society prospers, so do we (Neighbourly love). Such an outlook would bode well for us as a nation. I have a recommendation which you would be hard pressed to find anyone more guilty of not doing than myself and it’s this; I strongly believe it would do us the world of good if we could all focus more of our attention when in prayer both in private and in our places of worship towards the elevation of our society rather than just ourselves (Neighbourly love). The direction in which you channel most of your prayers is likely to be the direction in which you think much of the time so it stands to reason that if ninety percent of your prayers are centred around you, so will most of your thoughts and
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your actions will naturally follow suit. Unfortunately, our leaders in just about all the different spheres of society, religion included, have set us terrible examples to follow. I’ve dedicated a great deal of time trying to ascertain what the primary problem of our society is; that one thing which if universally identified and corrected would reverse our nation’s gradual descent to the abyss; that one thing which if taken out of the equation, other salient issues would whip into line and conclusively arrived at this, self-centeredness. I know this can by no means serve as a panacea to all our problems as a society but I do wish our schools, starting from Primary through Secondary could just experiment with a suggestion I made in an earlier article which is to introduce team sports as an integral part of school life. Please don’t look at me like that. After all, I was honest enough to admit in a previous article that the solutions I proffer are always simple because I’m really not clever enough to think of super grandiose solutions. But sometimes, the simple ones can do just fine. If this was done, I strongly believe we would see a significant difference in the mindset of our children, being our future leaders. And this is sure to positively reflect in their behaviour and the way they treat others as they grow up (neighbourly love and discipline). Team sports compel you to subsume your selfish interest while putting that of the team, which is the greater good, first. They will learn that the team can only succeed when all work together (Discipline) and you can only truly succeed as an individual when your team succeeds. So too a society. You scoring a spectacular goal
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places including Nigeria is micro commercial banks and not microfinance banks. This mimicry of commercial banking has combined with other factors to impose high operating costs on the MFBs. For example, operating in the urban centres implies high cost of office space, high wage bills and diminished capacity to create loans. This capacity diminution arises because much of the capital has gone to service overheads thereby impairing lending capacity. Furthermore, with their capital diminished by high operating costs, many MFBs are struggling with deposit mobilisation, an activity for which they are not particularly famous. The end result is a shallow loan book and low returns from their core business of risk asset creation. Acting as a micro commercial bank also has implications for the kind of fixed assets an MFB acquires – cars, furniture and other gadgets that attract the urban worker. These factors tend to negate the original intention of the microfinance policy introduced in 2005. This wrong trajectory has hindered growth in the sector and deprived both operators and other stakeholders of the benefits of the policy. The way forward is for MFBs to return to the basic principles of their calling – focusing on services to the poor, and indeed, the very poor but active enterprising people, particularly in the rural areas. There is no suggestion here that the rich commercial entities, including importers and suppliers who seem to preoccupy many MFB, do not need banking services. They certainly do, but they have other kinds of banks meant for them. It should not be in the menu of MFBs to focus on this group as it would diminish their capacity to deliver on their primary mandate.
Character Matters with Daps
Dapo Akande when your team loses 5-1 doesn’t by the stretch of even the wildest imagination make you a success. The values we teach our children will not only determine who they’ll become but just as importantly, they will also determine the sort of society they’ll eventually create. At the risk of sounding like a broken record, as I’ve quoted Professor Anigbogu on this before: “What determines whether a nation will develop or not is the value system by which it abides or refuses to abide by?” What is required is to develop further strategies in addition to this embarrassingly simple one of mine, that will help the younger generation develop a more society focused mindset. One that teaches them from a tender age the importance of being responsible for themselves and to each other. Strategies potent enough to combat and change the current extremely defective collective mindset. Changing the nation...one mind at a time. Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com
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Can solar electricity really serve the poor? VINCENT NWANI
N
o doubt, electricity from solar energy has received widespread popularity and global adoption with cost of production dropped by almost a half over the last three decades. It is projected that the price of solar power systems will drop progressively in the coming years as a result of the increasing quest for environmentally friendly energy source, “power for all initiatives” across countries and innovative energy sector research enabled largely by massive government subsidies. Consequently, this article attempts to provide analytical perspectives on the ongoing debate about solar electricity becoming the springboard for bridging the gap of energy need for the poor especially in developing countries. According to Economic Trends in its October 2019 publication, solar electricity production in the US was subsidised to $43.75 per billion
kilowatt hours (BKWH) compared to $1.04 per BKWH for coal, and $0.46 per BKWH for nuclear energy over the past three decades. Even with these massive subsidies, the levelized Cost of Electricity (LCOE) produced by photo voltaic solar remain far lower than outputs from coal sources, while electricity produced by thermal sources is put at 239 percent greater than that of coal. The US is not alone in the metrics for energy sources because in reality, the picture painted above is consistent with experiences in other developed economies. Despite huge subsidies in solar across countries, solar power accounted for less than 1% of world’s electric energy source in 2018. It is estimated that replacing half of coal production with solar in the US alone would cost consumers approximately $2.9 billion in generation costs annually. This translates to approximately five years cumulative power sector budget in Nigeria which suggest that we are still far from harnessing the potentials of our luminous weather conditions. In addition, with a total debt profile currently at over N25 trillion ($80 billion) with debt servicing accounting for about 45 percent of total annual federal government revenue, it is
increasingly difficult to channel new sovereign loans that targets solar energy development. Moreover, it is widely believed that subsidy schemes in Nigeria from fertilizers to refined petroleum products and public education over the years are marred by inefficiencies and poor outcomes. Available data shows that, as a share of income, the lowest segment of income earners in Nigeria currently spends about 140 times more than that of the highest quartile of income earners on utilities. It is noted that middle to upper level households currently operate 3-4 independent sources of electricity (discos, generator plants, inverter systems and batteries, solar panels and other chargeable peripherals) in the country. This reality is a metaphor of the deepening spate of inequality and poverty crises in the country. To illustrate, one of the recent and arguably the most popular market driven attempts at addressing electricity for the poor through solar source in Nigeria is the MTN Mobile Electricity (a.k.a Yellow Box) launched about three years ago. Feedbacks from consumers show an extraordinary drop in users’ motivation for the device and general lack of capacity to sustain the minimum
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It is widely believed that subsidy schemes in Nigeria from fertilizers to refined petroleum products and public education over the years are marred by inefficiencies and poor outcomes
monthly recharge fees of N4,840 (N46,720 per year). Apart from the approximately N30,000 cost of buying the system, users are required to pay daily recharge fees of N162 over a period of 5 years (1,800 days) before the device will unlock and allow free access without further payment. Our survey feedback confirms that the “Yellow Box” model is yet another less than optimal approach to serve the poorer segment in Nigeria with the much-needed electricity power. As host of experts continues to converse for replacing fossil/coal with solar in poor nations, available data and compelling realities seem to suggest otherwise. We believe that our quests to join the countries already advocating for clean energy (i.e., stopping the production/use of cars with carbon emissions by 2030 and production of electricity that has carbon emissions by 2035) is legitimate. However, our efforts for now should primarily focus on effective measures and home-grown approaches to lift over 100 million people in Nigeria out of extreme poverty and reduce the rising income inequality. Dr. Nwani is the Managing Consultant/CEO at RTC Advisory Ltd Feedback: vincentnwani@rtcadvsory.com
SoftBank: blind spots impair Masayoshi Son’s $100bn Vision
Masayoshi Son’s investment strategy has been questioned by the falling valuations of several companies
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s the global business elite deserted a Saudi Arabian investment summit a year ago, after the killing of journalist Jamal Khashoggi by Saudi agents, the founder of Japan’s SoftBank slipped into Riyadh for a discreet meeting. Masayoshi Son and his chief lieutenant, Rajeev Misra, were there to see Mohammed bin Salman, the crown prince who had helped to make them the world’s most influential technology investors. Nearly half of SoftBank’s $97bn technology-focused Vision Fund — the biggest pool of private money ever raised — came from the young royal’s sovereign wealth fund. Their message for Prince Mohammed was clear: SoftBank, they said, would not abandon him, people briefed on the conversation told the Financial Times. The crown prince pledged never to forget their loyalty. One year later the strength of those bonds is being tested and plans for a longawaited sequel to the Vision Fund are in serious doubt. Armed with Gulf capital, SoftBank poured into every corner of the digital economy and fuelled some of the world’s most richly valued private companies. Following Mr Son’s advice, many burnt cash in feverish pursuit of scale and market share above all else. But the near-collapse of SoftBank’s biggest gamble, co-working group WeWork, and the plummeting valuation of its other holdings have dramatically shaken faith in Mr Son’s investment genius and his bets on disruptive technology. If the troubles at SoftBank and its Vision Fund escalate into a crisis, as some fear, it
would resonate from Silicon Valley, Mumbai and Beijing to the financial centres of the City of London, Wall Street and Tokyo. Returning to Riyadh last week for the latest Future Investment Initiative, known as “Davos in the Desert”, Mr Son was met by an almost-empty room for his panel discussion. The weary-looking billionaire, who at one point appeared to fall asleep, insisted he would keep offering capital to start-ups so they could “grow much bigger and quicker”. “We identify the entrepreneurs who have the greatest vision to solve the unsolvable,” he said. “They need to have the strongest passion. And then we provide the cash to fight.” The downfall of WeWork has been a humbling experience. “It’s been embarrassing for him,” says a person who works closely with Mr Son. “He has to rethink his approach.” SoftBank shares have plummeted 26 per cent in the past three months. This week, Mr Son is expected to reveal multibilliondollar writedowns, along with efforts to strengthen governance standards across its holdings. SoftBank declined to comment. The struggles have laid bare a sharpelbowed culture within the Vision Fund, which is led by Mr Misra and seen as rife with mistrust, managerial disorganisation and clashes between executives. Despite efforts at scaling and maturing its investment arm, SoftBank has been unable to shake off a “wild west” culture at the London-based fund, where power struggles have contributed to high-level departures, including Mark Schwartz, the company’s longtime independent director. All eyes were on the floor of the New
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York Stock Exchange. It was May 10 and Uber, the ride-hailing company, was about to begin life as a public company and mark a triumph for SoftBank, which had bought a 13 per cent stake and helped replace Uber’s reckless founder. There was one problem. Even before its shares started trading formally, they were falling. By day’s end, Uber had suffered one of the worst opening day drops for a US company raising over $1bn from an initial public offering. A coming-of-age moment for a Silicon Valley “unicorn” turned into a rude awakening about the public market’s attitude to lossmaking start-ups, which the Vision Fund had loaded up on. Uber is now down 31 per cent from its listing price, with SoftBank sitting on more than $2bn in paper losses since its investment. Other investments have suffered too: office messaging group Slack has dropped nearly 45 per cent since its first day of trading in June, while Vir Biotechnology has fallen 30 per cent since its mid-October listing. Only two Vision Fund-backed companies, Guardant Health and 10X Genomics, are trading above their IPO price. “If SoftBank says this is the value, how much of that should you believe?” says Kirk Boodry, a tech analyst at Redex Holdings who publishes on research platform Smartkarma. One hedge fund investor says backing from the Vision Fund is “an immediate cue to sell”. The steady procession of IPOs was intended to validate the Vision Fund’s latestage bets and lay the groundwork for juicy returns that would make big-money investors clamour to pour money into its next Vision Fund. The group would look to list
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Arash Massoudi, Kana Inagaki and Leo Lewis at least two portfolio companies per month by 2020, Mr Misra said earlier this year. Suddenly, with the wisdom of that model in question, support from the rest of the market is not a given. The biggest blow, however, came from a company whose founder Mr Son has praised and lavished with billions of dollars since 2017, saying it would be worth a few hundred billion one day. The close bond between Mr Son and WeWork founder Adam Neumann had begun to sour long before its disastrous attempt to list in September. The turning point came late last year. Teams from SoftBank and WeWork had been toiling in secret since Thanksgiving on an audacious plan they called Project Fortitude, which would have seen SoftBank and the fund buying out every WeWork shareholder bar Mr Neumann for $10bn and injecting a total of $10bn into the company. As the negotiators broke up for the Christmas holidays, however, Mr Son called Mr Neumann to say they would have to rethink: the Vision Fund had backed out, and with SoftBank’s own shares falling he would ultimately only commit $2bn of additional capital in January. In theory, the new deal pumped WeWork’s valuation up to $47bn. But the company’s rapid cash burn meant it would need to hasten plans for an IPO. FT
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Wednesday 06 November 2019
BUSINESS DAY
Editorial Publisher/CEO
Frank Aigbogun editor Patrick Atuanya DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)
Bashir Ibrahim Hassan
GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu
Lessons from Saudi’s $2bn deal
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ederal Government officials led by President Muhammadu Buhari continued last week the search for foreign investors as they attended the Future of Investment Initiative summit in Riyadh, Saudi Arabia. The host country attracted over $2 billion in deals, investments and pledges. Nigeria got promissory notes. Success with reforms underlined the success in attracting investments for the Saudis. The country read the tea leaves as oil prices gyrated and took the hard decisions that our country has refused to take regime after regime. The Saudis are reforming every aspect of their polity, with emphasis on the economic conditions that underpin and determine every other state. On Sunday 3 November the Saudis announced the flotation of Saudi Aramco, the stateowned oil firm reputed to be the most profitable company in the world. The Saudi Arabian Oil Company, Saudi Aramco, is the national petroleum and natural gas company with a base in Dhahran. It is by revenue the sixth largest company in the
world. It earned 2018 revenues of $355.9 billion. The Saudis are turning Aramco into a publicly quoted company to improve corporate governance and reporting. More significantly it is part of the plans of Crown Prince Mohammed bin Salman to wean the country off oil and gas. They are seeking alternatives to oil while still driving investments on the back of oil and gas. The Saudis benefitted immensely from the Future of Investment Summit. Saudi Aramco signed a $1 billion deal with Tubacex Group to invest in CRA pipe threading and weld overlay and cladding manufacturing facilities soon after, according to a government statement. Saudi Aramco also agreed a $230 million deal with Baker Hughes on the investment and development of artificial intelligence and digital transformation. Then there is an MOU for a joint venture with APO valued at $600 million and a $200 million deal with Dassault Systems aimed at collaboration in data analytics, project management and smart cities. Saudi Arabia is pushing reforms. It had subsidies for fuel, electricity, port services, passport fees and license fees for drivers.
There were also subsidies up to 50 percent for car transfer fees, traffic fines and renewal of residence permits for domestics. Once oil prices went down again in 2016, the Saudis took the bold decision to phase out all the subsidies. In contrast, Nigeria continues to dither on the decision about subsidies. Government after government lacks the courage to take the decision. It has also transpired that there is more than lack of courage as the subsidy scheme has become the avenue for sleaze. The decision of the Saudis to prioritise reforms has won it plaudits with the World Bank and the investment community. Foreign Direct Investment has averaged $4 billion per annum over the last two years as against Nigeria’s $2.2 billion. According to the World Bank, political stability, security and a welcoming regulatory environment drive investment in developing countries. Market size is another consideration. A vast market guarantees economies of scale but other factors such as the efficiency of government processes come into play. So, while the world’s largest producer of petrol has removed subsidies and is now offering
stocks of its oil corporation in the global market, Nigeria last year subsidised petrol to the tune of $3.9 billion. Government has stubbornly kept tariffs for electricity low despite the protests of investors who run the privatised firms. Nigeria has paid out over $5 billion in bailouts for electricity since 2014, according to calculations by BusinessDay. Rather than reform and open up the economy, Nigeria’s response to the dynamics of the oil market has been a recourse to protectionism. These include border closure, currency controls and multiple taxations. In contrast, Saudi Arabia pegs its Riyal to the US dollar thus assuaging investor concerns. Experts in these matters assert that “A country’s investment competitiveness goes beyond attracting FDI. It is determined by the country’s ability to bring in, retain, and leverage private investment for inclusive and sustainable economic growth,” according to the Foreword to the Global Investment Competitiveness Report 2017/2018. Nigeria needs to study and adopt the excellent example of the Saudis, a country that is fast moving away from dependence on oil and gas.
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Travelling by road in Nigeria: A sad experience of government failure
Franklin Ngwu
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ith the closure of Enugu airport and unavailability of a suitable flight to Owerri, I decided to travel to Enugu last Friday by road with one of the popular transport companies. It was a most regrettable but revealing journey. Nigeria is really under siege, and we can’t continue like this. It took us about 14 hours to get to Enugu as we left Lagos at about 7.00am and got to Enugu at 9.15pm. In 1998 when I first drove myself from Lagos to Enugu, it took me about 6 hours! The question we should ask is: Are we progressing or retrogressing in Nigeria? Twenty years after and with expected improvements in technology and infrastructure, should the journey time not be shorter? Alas, this is Nigeria where the more you look, the less you see and where we seem to prefer retrogression rather than progressive development. While some people might argue that the Lagos-Enugu is an outlier or a special case, the truth is that it is the same experience in most parts of Nigeria. During the last Nigeria Economic Summit Group (NESG) conference in Abuja, Governor Godwin Obaseki shared his terrible experience of going to Abuja from Benin by road. It is the
same terrible experience from Port Harcourt to Lagos or Kaduna to Onitsha and in other parts of Nigeria Most lamentably, two basic things are mainly responsible for the horrifying experience Nigerians and the economy are exposed to. First is the unbelievable but unneeded number of security checkpoints on the road, possibly because of the pervasive insecurity situation. Second is the dilapidated situation of majority of our roads. Of these two causes, the first is the main cause of delay on our roads. While there is no question of the high insecurity situation in the country, the question is if our approach in addressing the problem is the best. When a critical assessment of some government’s decisions is done, one normally wonders if we are bereft of innovative and good ideas in Nigeria or is it that we deliberately prefer to exploit a situation or do the wrong things. While there is no doubt of the need for security on the highways, a situation where you have a security checkpoint almost every kilometre cannot be said to be the most effective way of addressing the insecurity challenge. And most disturbing is the way the security checkpoints are structured and the operations of the security agencies. With the three main security agencies ( The Police, Army and Customs) and the Federal Road Safety operating in silos like ‘to your tents O Israel’ (every agency on your own), a closer observation of the way they carry out their tasks reveals that they are more interested in what they can get from commuters than the security of the commuters. Frustrated with the disappointing approach of the security agencies, a commuter lamented that it is like the federal government has formally approved the exploitation of passengers on our high
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To assess if the policy of having numerous security checkpoints is working, I think that it might be important for key ministers of the government to take a disguised trip around the country like from Lagos to Enugu
ways with the guise of securing the roads. If we truly want to secure our roads, should we have the number of checkpoints we have, and should they be stationary or patrolling? Moreover, what is customs doing on our highways when the borders are closed, and everything is supposed to come in either through the sea or air. Things are just upside down in this country, and there seems to be no hope, another commuter bemoaned. As many elites and top government functionaries hardly travel by road these days, it will be difficult to understand what Nigerians are passing through on roads. To assess if the policy of having numerous security checkpoints is working, I think that it might be important for key ministers of the government to take a disguised trip around the country like from Lagos to Enugu. The trip should include the Ministers of Transportation, Internal Affairs, Works and Housing, Defence, Labour and Productivity and Health, Inspector General of Police, Director of State Security Services and Comptroller General of Customs. This will help them to understand what Nigerians are going through as a result of wrong policies. If we truly want better security on highways, there are few innovative things that we can do. As every part of the highway is owned by a state and local government, the question is: What states and particularly local governments can contribute to the security of our highways? A key reason why kidnappers and armed gangs succeed in their operations is the bushy nature of our highways. For instance, is it not possible to mandate all local governments to ensure that all side bushes along our highways are cleared at least 500 meters from the
Russian-African relationship: To what end?
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he past weeks have seen a “revival” of the Russian-African as the kremlin openly pitched Moscow to African leaders. It is no secret that the global powers see Africa as strategic to titling the scale of balance in global politics to their favour; after all, the continent holds vast natural and human resources that can offer both industrial and political advantages. After its ties with African weakened with the fall of the Soviet Union, Russia is trying to stage a comeback on the global political scene with its eyes on Africa as a quick win to weakening the influence of the west. The kremlin is not taking any chances and has his ace up his sleeves. For many African leaders, the Sochi 2019 Summit which held from October 22-24 was only an opportunity for Russian to discuss possible ways to build its relationship with Africa, but something more sinister could have been set in motion, through the invitation to the summit, that could help Russia have its way on the continent. African leaders selected to the Russia-Africa Sochi Summit were required to submit their personal data and login in to a web portal from their personal computer by a nation said to have manipulated the United States’ presidential election and whose intelligence is known for hacking highly secured servers to push Moscow’s agenda. The invitation sent to African leaders and entrepreneurs require both those attending the summit and invitees that would not make it to visit a “personal web office” through a link
on the Sochi 2019 website. According to Russia, the “personal web office” is a personal workspace in the secure section of the Forum website that is developed to store personal data and information or requested services. It is known fact that a malicious spyware can be installed on a computer by tricking a user to click on a link that will execute a series of predetermined instructions such as stealing emails, contacts, browser history or simply eavesdrop through the microphone, web camera or tracking keypad strokes. When all fails, could Russia resort to threats, blackmail and espionage to twist the hands of the Africans leaders into submission? The possibility of the African leaders being hacked and having sensitive personal and national information being harnessed for exploitative ends becomes more likely given the organisation recruited by Russia for the summit. The kremlin subcontracted the organisation of the Sochi Summit to Roscongress Company which organised the Saint Petersburg Economic Forum, and is known for its close relationship with the Russian State’s services. The invitees have to create a personal account, with login details provided by Rescongress and afterwards provide information including personal data and phone numbers which becomes dataset accessible to the Russian firm. At the 2019 Sochi conference the Russian surveillance system and a technology called SORM were installed. The technology allowed the country spy on attendees during the 2014
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Olympics games, another red flag that suggests African political and business leaders could now be at jeopardy. In 2015 Russia CNN reported that Russian hackers were behind the damaging cyber intrusion of the State Department which were used to penetrate sensitive parts of the White House computer system. The hackers according to the report had access to sensitive information such as real-time non-public details of the president’s schedule, information not classified, but still highly sensitive and prized by foreign intelligence agencies, U.S. officials said One does not have to be an expert at international politics to know that such cynical moves are justified by actors who believe the means justifies the end when their nation’s interest is concerned. For Russia the information that could have been tapped into at the 2019 Sochi summit would be more precious that all the oil in Libya and Nigeria, the gold in Egypt or the conflict it exploits in central Africa. Many African leaders already have enough dirt on their hands and it is known fact that most of the most influential people on the continent are infamous for one corrupt practice or the other. The decadence extends to the highest echelon of power and continental institutions have records of gross misuse of power, sexual harassment, gender discrimination and nepotism. There are documents suggesting the AU is covering up for some of its top diplomats involved in these kinds of corrupt practices that can potentially see the highest union on the
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highway and used for vegetable farming? Not only will this reduce the violent crimes on the roads, it will also help in creating visibility for the commuters and security patrol vehicles to see far along the highways and expectedly better prepared to avoid or tackle the insecurity challenges. Is it also not possible to say that the many security checkpoints should be a patrol rather than stationary? Imagine the productivity lost every day from the time wasted at the numerous check points? Just as the first cause of the terrible experience can be better managed, so is the second one. It is so difficult to understand, even with other many governance challenges, why the federal government is still insisting on being responsible for construction and repair of roads. With the rapid growth of Nigeria, repair of roads should be completely left for the states. As the federal roads in most parts of Nigeria are mainly used by indigenes of the bordering states, it will serve Nigeria better to relinquish the repair of the roads to states. This will help remove the excuse of non-repair of our roads and the excuse that the roads in question are federal roads. Very good examples are the Epe-Ijebu- ode Road and the Akwa-Enugu Road. With the increasing vehicular movements along these roads, there is no reason why Governors Dapo Abiodun of Ogun State and Ifeanyi Ugwuanyi of Enugu State should not fix the above roads. If we want Nigeria to develop and grow, we cannot continue to do the same thing that has failed over many years and expect a different result! Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum.
TEMISAN ADIO continent become puppet to Moscow. An inquiry led by Bineta Diop, the AU’s special envoy on women, peace and security which was set up to look at cases of gender discrimination and sexually harassment within the AU based on 88 interviews with AU staffers, has outlined 40 cases of sexual harassment, gender discrimination, nepotism and corruption. The inquiry was prompted by a petition signed in 2018 by 37 women that alleged “professional apartheid” against women in the commission, and an accompanying Mail & Guardian investigation. According to the inquiry, sexual harassment is pervasive in the institution with “gatekeepers” demanding sex in exchange for jobs. The damning evidences also exposes widespread systemic and entrenched corruption which includes bullying, suppression of women, and rampant abuse of authority. The full report is reported to have been submitted to chairperson Moussa Faki Mahamat in November last year but no action has been taken against the perpetrators yet while the whole episode is still kept from the public. “The commission promised to implement the recommendations of the report, but we have been side-lined and ignored,” a staff of the commission said on conditions of anonymity. “Meanwhile the culprits get to keep their job. It feels like they are trying to cover it up.” Temisan Adio is a social commentator who writes from Lagos
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Wednesday 06 November 2019
BUSINESS DAY
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Rising demand spotlights opportunity in Nigeria’s N777bn seed industry Josephine Okojie
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here is a growing b u s i n e s s opportunity for suppliers in Nigeria’s seed industry currently estimated at N777.4 billion as Nigeria attempt to feed its 200 million people. Nigeria’s seed demand has been estimated to be above 350, 000 metric tons yearly by the National Agricultural Seed Council (NASC,) with current production less than a quarter of the national demand. To this end, millions of smallholder farmers in the country do not have access to quality seeds and seedlings of most grains, legumes and tree crops grown in the country – a situation experts say has made Nigeria’s average farm yield far below the global standard. “Inadequate access to quality seeds is the major problem facing Nigeria’s agriculture today. Most of the seeds in the market are imported because we do not produce enough of the seeds farmers need for farming,” AfricanFarmer Mogaji, chief executive officer of X-Ray
Consulting Limited said. “O u r p o p u l a t i o n i s growing fast and farming population is increasing daily but the seeds farmers need to feed Nigerians are insufficient because the level of investment in the seed industry is still low despite the huge demand,” Mogaji said. “We need to bridge the seed gap to achieve food security.”
In 2015, the Federal Ministry of Agriculture estimated Nigeria’s seed industry to potentially stand at N777.4billion and local production at N252.3 billion, thereby leaving a N525 billion seed gap. Experts suggest that the figure may have risen by 15 percent or more given the numbers of new entrances of farmers and population growth rate.
Nigeria is populated by 190 million people who must be fed with staple foods ranging from yams, rice, cassava to beans, bananas, and tomatoes and the seeds to do this should be made available, experts say. The total national requirement of seed need for eight major crops including maize, rice, and cowpea in Africa’s most populous nation stood at 388, 690.64
Ani Charles Bassey -Eyo, co-founder, Axiom Learning Solutions Limited; Theoneste Ntalindwa, e-learning officer and researcher, University of Rwanda; Charles Senkondo, executive director, Tanzanzia Global Learning Agency (TaGLA); Richard Kajumbula of Makerere University and Aziz El Hajir, program specialist on education technologies, ISESCO during the 14th International Conference on ICT for Education, Training and Skills Development held recently in Abidjan, Ivory Coast.
Experts advocate measures to tackle Nigeria’s malnutrition Josephine Okojie
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takeholders in the agricultural sector have been called on the government on all levels to explore fresh approaches in addressing issues of malnutrition in the country. The experts who spoke with journalists ahead of the forthcoming 2019 Nutritious Food Fair (NFF) scheduled to hold 13th -16th November at the Institute of Tropical Agriculture (IITA) in Ibadan Oyo state, say that Nigeria must continue to look for new ways to solve its malnutrition problem. Kenton Dashell, deputy director, IITA, described malnutrition as a global problem that could cause severe, physical and mental challenges for children. He stressed that micronutrient deficiency in food limits the development of children. “We must look for ways to solve these problems because malnutrition limits
the potential and abilities of children and will not allow them to reach full potential,” Dashell said. Corroborating him was Paul Ilona, country manager of HarvestPlus, Nigeria also stressed the need for all to work together to tackle the issue of malnutrition ravaging the country. Speaking about the fair, Ilona said that the threeday event with the theme; ‘Nutrition is Ever yone’s Business’ the fifth of its kind is expected to bring together stakeholders across the food sector, policymakers, and donor agencies to find solutions to the country’s malnutrition problem. He noted that the food fair
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was a commercial platform for promoting the breeding, production, marketing, and consumption of nutritious foods in Nigeria, stressing that it is aimed at tackling malnutrition in the country and that its mission was to develop and scale up the delivery of nutritious crops around the world. Speaking further, he said that over 10,000 participants from eight countries, but mostly from across Nigeria are expected to take part in the fair and that it will feature panel discussions, scientific presentations, and exhibition of business opportunities to increase investments in the nutritious food sector. According to him,
the event will provide a platform that would enable participants to share updates and discuss topical issues emerging in the nutritious food sector. Ilona said that HarvestPlus is known for improving nutrition and public health by developing and promoting bio-fortified food crops that are rich in vitamins and minerals. Mo ha m m e d Na n o n o, Minister of Agriculture, while speaking said addressing malnutrition and meeting nutrition targets of the Sustainable Development Goal (SDG) would inject an additional $29 billion into Nigeria’s national income. Nanono, who was represented by Frank Satumari, director of Agriculture said one of the major objectives of the Federal Government was to reduce malnutrition to the barest minimum in the country. He urged government at all levels to intensify efforts in combating malnutrition in the country and called on the private sectors and other stakeholders to join hands in
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metric tons (MT) in 2015, while the quantity available was 126,173 MT, leaving a yawning gap of 262,517MT. Femi Oke, chairman, All Farmers Association of Nigeria (AFAN), Lagos chapter called on the private sector to drive investments in the country’s seed industry to prevent the demand-supply gap from further widening and creating a fertile ground for the proliferation of unregistered operators to flood the markets with fake and poor quality seeds. “We have a shortage of seeds in virtually all crops today and this is why most of our markets are flooded with fake and adulterated seeds,” Oke said. He stated that the huge demand for seeds in the country is an opportunity for seed firms to invest in hybrid seeds. Since 2012, the number of private seed companies in the country has increased and experts say it is an attestation of the enormous potential and vat business opportunities yet unexplored. Some of the seed companies in Nigeria today are Premier Seeds Nigeria Limited, Maslaha Seeds Niger ia L imited, West
African Cotton Company Limited (WACOT), Notore Seeds Limited, Candel Seeds Limited an Alheri Seeds Limited. However, most of the seeds found in the Nigerian markets are adulterated, as the federal and state governments show no interest in investing in the seed industry. Despite the country’s large size of agriculture in relation to other African nations, Nigeria lags behind its peers in the sector in terms of agricultural research funding. As a result, farm yields have remained low, making experts attribute it to the scarcity of quality seeds and seedlings in the country, which they stated has forced farmers to buy cheap and adulterated varieties that produce lower crop yields. We need to prevent the gap from widening further to prevent the fertile ground for the proliferation of unregistered and incompetent operators who flood the market with fake and poor quality seeds. Nigeria produces nearly 70 percent of seeds used in West Africa but still faces a huge seed gap.
FACCO West Africa to join other agribusinesses showcase products at Lagos Trade Fair Josephine Okojie
F
ACCO West Africa, a leading poultry equipment and chicken feed producer in the country, is among the top agribusinesses that will be participating in the 2019 Lagos International Trade Fair. Du r i n g t h e 1 0 - d ay s business exhibition which began last Friday at the Tafawa Balewa Square, Lagos, FACCO West Africa, will be showcasing a range of highly sophisticated p o u l t r y e q u i p m e nt a s well as quality chicken feeds for new and existing customers. “ We have b e e n a regular caller at the Lagos International Trade Fair, but this time around our existing customers and those that will be patronising us for the first time will have a lot of @Businessdayng
varieties to choose from our numerous products which will be on display throughout the duration o f t h e f a i r,” Ab i mb o l a Layo-Ogunyale, assistant executive director, FACCO We s t A f r i c a s a i d i n a statement made available to BusinessDay. “Our major goal is to ensure that we promote agriculture to a level that Nig e r i a n s w i l l b e n e f i t through our various innovations when it comes to poultry equipment and chicken feeds,” she further said. “Let me also use this opportunity to state categorically that at FACCO West Africa, we do not compromise standards, that is what we are renowned for in the last four decades of our business and we are not relenting in our efforts to maintain that status and even improve on it,” she added.
Wednesday 06 November 2019
BUSINESS DAY
15
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‘Income opportunities abound in cashew processing for investors’ DEBO THOMAS is the founder of Hastom Nigeria – an agro allied firm that is into the cultivation of cashew and livestock, based in Ogbomosho, Oyo state. Debo in this interview tells JOSEPHINE OKOJIE that the country can only reap the full benefits in cashew production when it starts adding value to the crop. What inspired the establishment of Hastom Farms? n 2010, I was into sales of computers and phones in a school environment and anytime the students are on strike, I do not get to make any sales because they were my major customers. In the search for a business that is not LATECH determined, I went into poultry business but the investment failed because I went into the business without an adequate understanding of the sector. I noticed that lots of people w h o w e re i nte re ste d i n agriculture are mostly from the city and their major problem is farmland and in Ogbomosho w e have abundant land. So, I started by helping people to purchase land. Our first client then was a Nigerian based in South Africa who wanted to venture into agriculture. We acquired about 100 hectares and in less than 2months we sold
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the entire land and from then I was convinced that land sales for agriculture was the right business for me at that point. In 2015, I had a customer who contacted me through Nairaland -a popular online platform in Nigeria, where I usually advertise the farmlands we sell. He contacted me because I stay in Ogbomosho and he wanted to buy cashew from here since Oyo state has good quality cashew nuts. I took him around the major warehouses and we could not get enough cashews to buy. Going around the town with him in search of the crop made me realise that there is a huge demand-supply gap, this prompted me to further research on the crop and I realise that demand far out weights supply. I started investigating to know why Nigerians are not investing in cashew production. I found out that people do not want to tie down their investment for a long time since cashew is a long term crop. In 2015,
enabling infrastructures to aid production are lacking. Banks are still not willing to lend to the sector especially for crops which are long term. Also, adequate attention is not being given to the cultivation of the crop like other crops. The government needs to give cashew cultivation the kind of attention it is giving to other crops.
Debo Thomas
I decided to venture into cashew cultivation to bridge the gap. Today, we have cultivated cashew trees on 550 acres and we have 430 herds of cattle. Also, we have sold about 3,000 farmlands.
Why are Nig erians n ot investing in cashew processing? Nigerians are not investing in cashew processing because it is capital intensive and the
How can Nigeria reap its full benefits in cashew production? Value addition is the only way we can reap the full benefit in the cultivation of cashew in the country. We need to start processing raw cashew nuts because that is where the real benefit is. This is why Hastom is planning to start processing its cashew nuts for export. We have been growing our production to have enough to feed our processing plant when it comes on stream next year. To expand our production we launched an online platform where people can also invest in cashew
plantations and trees. Why are youths not finding agriculture attractive and what can the government do to ensure youths take up agric as a profession? Farmers in the rural areas engaged in agriculture are very poor because most of them do not get any value addition since the whole primary production is still entangled in poverty with the issue of low productivity and high time spent on farmlands. This makes youth not take agriculture as a profession even those that study courses on agriculture. The crude way of farming in the country is another reason why youths d o n o t f i n d ag r i cu l tu re attractive. The government must develop mechanisation and give the youths access to lands with this agriculture becomes attractive for youths. We need innovation to do farming differently from the older generation of farmers who were mostly entangled in poverty.
Sannikayz Kitchen feeds 1,000 Osinbajo appeals for help on behalf of poor Nigerians children to tackle hidden hunger …as foundation seeks support to feed IDPs Josephine Okojie
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n commemoration of the 2019 World Food Day, Sannikayz Kitchen ha s f e d ove r 1 , 0 0 0 children in Lagos and Abuja through its ‘Feed the Kids Initiative’. The Feed the kids’ initiative develops and e m p o w e r s c h i l d re n b y providing nutritional meals, snacks, liquids and values enabling them to dream thereby restoring their reason for life and a sustainable future. Sanni Sheriff, founder of Sannikayz Kitchen said the annual celebration is spearheaded by the Food and Agriculture Organisation ( FAO ) i s a b o u t ra i s i n g awareness on issues related to food such as poverty and hunger. Sheriff stressed the need for collective efforts in not only increasing food
p ro d u c t i o n b u t p ay i n g adequate attention to the quality of food being produced. Similarly, he added that there must be collaboration between the public and private sectors to tackle issues of malnutrition and hunger in the country, especially among children. “ Fe e d t h e K i d s a l s o decided to take part in this global event in 2 major cities- Lagos and Abuja. We were able to touch lives of over a thousand children by sharing food, water, fruits, vegetable salad, and snacks,” he said. “Special thanks to all our sponsors, donors and our formidable team of volunteers,” Sheriff said. “In 10 months we have done over 8,000 distributions of food and we hope to reach our annual goal of 10,000 distributions of food at the end of the year,” he added. www.businessday.ng
Desmond Okon
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olapo Osinbajo, wife of the vice president of Nigeria, has urged influential and privileged Nigerians to show love and compassion to the poor within their respective communities. Osinbajo appealed at the launch of the Morpepe Project 250k-aimed at providing food for vulnerable children, held in Lagos recently. “My appeal is to encourage us to find someone in need just within your vicinity, and choose, perhaps, monthly, weekly, to touch their lives as well because each of us can do so much,” Osinbajo said. The vice president’s wife, who was the guest speaker, also said it was important to encourage people who are doing something significant to better the society. “When you serve the poor, the needy, it’s not attractive at all, I’ll like to make an appeal that each time you see someone who is doing the right thing, you should encourage them, just as we’ve all come
here to encourage the convener of this event,” she said. Morpepe is a product developed by, Labisi Sofolahan, founder of Women Wellness Foundation to enable the foundation feed school children and children in IDP camps in three selected states in Nigeria –Lagos, Borno, and Abuja. “ The pr imar y goal of Morpepe is to be able to feed these children. We just don’t want to be asking people for money. We don’t want to be looking for grants. So we just decided on what do to be able to sustain this feeding program
that we’re doing for our children and the idea of Morpepe came in,” Sofolahan said. She explained that for every carton of Morpepe that is being purchased the foundation will be able to feed two children. This means that when more cartons are sold, more children the foundation will be able to feed. “The whole idea is to be able to take on more schools and to be able to send cartons of Morpepe to IDP camps. Right now, we understand that in each of the IDP, we have over 6,000, children. I am not counting the adults, so the idea is for us to be
L-R, Dolapo Osinbajo,wife of vice president; Labisi Sofolahan, founder, Women Wellness Foundation and Madien Ibru, the Publisher, Guardian newspapers during the official launch of the Morpepe Project 250k recently in Lagos
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able to send as much as we can to be able to feed those children and also take more schools. While stating her readiness to receive support from the government, she, however, encouraged the government to continue to do what they already promised to do when they were coming into office, “and if they want to support us, they are more than welcome,” she said. Also present at the event, Folashade Adefisayo, commissioner for education, Lagos State, acknowledge that the initiative would have a huge impact across the state and the country, adding that it was in line with the state government’s intentions to roll out the Federal Government’s school feeding programme in the state as well. “She is feeding children in some primary schools in Lagos State. When you feed children, you are feeding them at a very formative stage in their lives. So, apart from the fact that you are reducing hunger, you are going to ensure that their brains are alert and sharp and they can learn and you also make school attractive to them,” Adefisayo said.
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Wednesday 06 November 2019
BUSINESS DAY
COMPANIES & MARKETS
COMPANY NEWS ANALYSIS INSIGHT
Conglomerates
UACN grows 9M profit from continuing operations for first time since 2016 SEGUN ADAMS
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ACN, Nigeria’s oldest conglomerate grew its nine-month profit from its continuing operations for the first time since 2016, sustaining a profitability trajectory seen in its halfyear performance. The conglomerate, which recently announced plans to unbundle its loss-making real estate business, however, reported a net loss of N12.8 bn in the period taking into account a huge loss arising from its discontinued operations. The N17.5 billion loss from discontinued operations was recognised in the nine-month income statement, primarily due to fair value impairment of UACN Property Development Company Plc’s investment in UPDC REIT (N12.5 billion) and UACN’s investment in UPDC (N3 billion) in line with IFRS 5, the company said. Profit from continuing operations rose by 30.2 per-
cent to N4.7bn, reflecting ongoing efforts to drive sustainable growth and profitability. Revenue in the first nine months rose by 12.6 percent to N60.55bn, after sales in the third quarter jumped by 13.9 percent, resulting in a gross profit of N12.22bn, 16.1 percent increase from the previous year. “Revenue growth was largely on account of positive results from our Animal Feeds & Other Edibles and Packaged Food & Beverages segments,” said Folasope Aiyesimoju, UACN’s Group Managing Director. “Efforts at driving production and supply chain efficiencies resulted in margin improvements. In addition, we benefited from profits on the sale of non-core real estate.” As sales outpaced direct cost of production, UACN was able to retain N20.2 from every N100 sales in the nine months compared to N19.6 in the corresponding period of 2018. Operating expenses for UACN grew 28.8 percent year on year in the three quarters of 2019 but operat-
ing income surged buoying operating profit to N4.63bn from N3.17bn. Finance income rose 8.7 percent in the period to N2.21bn while finance cost rose by 52 percent to N292 million. This resulted in a 4 percent growth in net finance income to N1.92bn in the nine months of 2019. Profit before tax jumped to N6.55bn, up 30.7 percent from N5bn posted in 2018, while tax expenses rose by 31.9 percent to N1.85bn. Consequently, profit for UACN rose by 30.2 percent to N4.7bn, the first profit growth seen in the nine months since four years ago. Earnings Per Share (EPS) from continuing operations was 124 kobo in the nine months of 2019, up 58.3 percent from 78 kobo in the same period of 2018. UACN is a listed conglomerate on the Nigerian Stock Exchange (NSE) and parent of a number of companies including UAC Property Development Company PLC (UPDC), the first company in the real estate sector to be listed on the NSE; and UAC Foods
Limited, manufacturers of Gala Sausage Roll, Supreme Ice Cream and Swan Natural Spring Water. The company’s other business portfolio includes MDS Logistics Limited, a foremost integrated logistics company with investments in pharmaceutical distribution hubs in key locations
across the country; UAC Restaurants Limited with its chain of Mr. Bigg’s and Debonairs Pizza outlets. In addition to these are Grand Cereals Limited, manufacturers of Vital Poultry and Fish Feeds, Binggo Dog Food, Grand Maize Flour, Grand Cornflakes and Grand Soya Oil; Chemical
and Allied Products Plc, leading its industry segment with Dulux Paint ; and UNICO CPFA Limited, a Closed Pension Fund Administrator. In the three quarters of 2019, figures from the third quarter of 2018 and nine months of 2018 were restated with UPDC classified as a discontinued operation.
L-R: Kareem Jinadu Awoyemi, baale, Surulere; Tajudeen Ajide, chairman, Surulere Local Government; Islamiat Animashaun, Iyaloja General, Ministry of Women Affairs and Poverty Alleviation (WAPA) Surulere; Teju Abisoye, acting executive secretary, Lagos State Employment Trust Fund (LSETF), and Popoola Ajayi, member, board of trustees, Lagos State Employment Trust Fund (LSETF), during the LSETF W-Initiative Grassroot Stakeholder’s Engagement in Surulere Local Government recently.
Markets
NIG to provide investment opportunities through Nigeria’s largest exhibition IFEOMA OKEKE
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n a bid to provide investment opportunities for stakeholders in the industry, Nigeria Investment Gateway (NIG)— a company registered both in the United Kingdom and Nigeria with offices currently in London, Abuja and Lagos and co-hosts, CODUB Group of Companies has invited sponsors, investors and exhibitors to this year’s ‘Best of Nigeria Investment Exhibition (BONIE2019)’. The exhibition will focus on wide range of investment opportunities and highlevel engagement meetings among investors, policymakers and entrepreneurs. Proudly supported by the British International Institute for Leadership and Management (BIILM) , an organisation experienced in organising large international events since 2009 in the UK and Nigeria, BONIE2019 will bring together potential business oriented speakers to advise you on how to gain insight on business opportunities. It will also give you a unique chance to meet genuine investors in an international environment vis-a-vis in-
vestment or funding for a project or business idea. In a statement issued by the organisers, it stated that “For investors, it will be an impressive showcase of the virtually untapped opportunities available across many sectors in Nigeria. It is an avenue that will expose your brand to the largest market in Africa as well as introduce you to millions of Nigerians in Diaspora including business development and partnerships opportunities. “There are exhibition stands and sponsorship packages with preferential access to meet with investors in special ‘Deal Rooms’.” The sponsors, exhibitors and strategic partners includes the Nigeria Investment Promotion Commission (NIPC), Nigeria High Commission UK, Vivacity PR, , Immigration Advisory Service UK, British Expertise International, London Chamber of Commerce, Varitas Homes, Middlechase Property Limited, Nigeria British Chamber of Commerce (NBCC), El-Rehob Corporate Business, Kanu Heart Foundation, AFFORD UK, British Africa Business Alliance (BABA), Kano State Chamber of Commerce
Industry Mines and Agriculture, Kano State Government, Federal Ministry of Trade and Investment. Elegbe said it also represents an opportunity to introduce a number of Interswitch’s products, such as Verve Health cards, and payment collection and disbursement solutions (Quickteller for business), that will drive much-needed efficiency in payments for health services across the value chain. Wallace Ogufere, cof ou n d e r / C E O o f e C lat Healthcare Limited, said the growing adoption of valuebased care, combined with the increasing level of usage of patient portals across the industry, has made it critical to take a new approach to patient engagement solution design in Nigeria. “We expect to tightly integrate the eClat capabilities into the Interswitch platform, adding functionality that would enable providers to reach their entire patient populations by leveraging existing patient contact information,” Ogufere said. This new acquisition by Interswitch represents the latest of several strategic investments executed by the company to enhance
Interswitch’s product and service offering and expand its reach into new markets as the payments technology sector in Africa expands rapidly. In 2016, Interswitch acquired the mobile financial services player, VANSO. Interswitch had earlier closed the acquisition of Paynet
Group in February 2015 in a deal that resulted in the creation of a combined network of over 100 financial institutions, deepening Interswitch’s footprint in East Africa. Interswitch intends to continue with its expansion strategy whilst refining its offering, creating innovative payments
solutions that are tailored to the demands of the African market. The acquisition of eClat Healthcare Limited is expected to further enhance Interswitch’s capability to provide comprehensive solutions that involve making payments a seamless part of everyday life across critical social sectors in Africa.
L-R: Buddy Agedah, CEO, Dance and Art Alive And Organizer Of The Nigeria Afro Latin Congress, Ita Hozaife, Drama Facilitator Film Booth Camp, (Span Theater & Film Academy), Sarah Boulos, Founder, The Society For The Performing Arts In Nigeria( SPAN ), Achalugo Ezekobe, Drama Facilitator Film Booth Camp ( Span Theater & Film Academy ), Ice Nweke, Director, I.C.E Production And Deok Gimbiya, Coordinator, Span Theater & Film Academy, at the society for the performing Arts in Nigeria 2019/2020 Season lunch press conference in Lagos.
Wednesday 06 November 2019
BUSINESS DAY
COMPANIES&MARKETS
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Business Event
TECHNOLOGY
Interswitch expands presence in health-tech space through acquisition of eClat OLUWASEGUN OLAKOYENIKAN
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nterswitch Limited, a leading technologydriven company focused on the digitisation of payments in Nigeria and other African countries, has announced the acquisition of eClat Healthcare Limited, a Nigeria-based health technology company that aims to improve healthcare delivery in Africa. The deal was completed on September 30, 2019, and it involves Interswitch acquiring a 60 percent stake in eClat through the purchase of shares from current shareholders and subscription to new shares issued by the company. Founded in 2012, eClat Healthcare Limited specialises in assisting healthcare service providers in planning, designing and operating their unique practices through the deployment of its bespoke healthcare technology platform, designed specifically for the healthcare environment in Africa. eClat’s healthcare technology platform,
consists of a core e-Clinic software (including electronic billing, immunisation, antenatal and care pathway functions), as well as a variety of additional specialist modules. Prior to the acquisition, eClat’s platform had become a leading Electronic Health Record (EHR) platform used in over 250 public and private healthcare facilities in Nigeria. Nig e r i a’s h e a l t h ca re system currently lacks adequate funding and a national framework, leading to operational inefficiencies. Interswitch’s strategic investment in healthcare technology aims to address these challenges by modernising the healthcare sector in Nigeria and eventually in Africa through its innovative products and services. The combined product offerings of Interswitch and eClat are expected to, amongst other things, enable operators in the healthcare sector develop new capabilities, improve the efficiency of their core operations and facilitate seamless payments.
Due to the growing adoption of Interswitch’s healthcare product offerings by the operators, Interswitch’s healthcare technology platform aims to be one of the top industry platforms in Nigeria, which can be utilised as a major data source by healthcare policy makers for planning and efficiency improvements in the sector. As a result of this acquisition, the combined healthcare technology solutions are expected to position the Interswitch group as a health-tech solution and payments provider of choice to the healthcare industry going forward. “We are a technology company that is innovating to deliver value across sectors that are critical to Africa’s social and economic development, our acquisition of eClat demonstrates strong progress along this strategy and alignment with our corporate vision,” Mitchell Elegbe, founder and group managing director/chief executive officer of Interswitch, said on the transaction.
L-R: Wallace Ogufere, co-founder / CEO, eClat Healthcare, with Mitchell Elegbe, Founder / Group CEO, Interswitch at the deal signing ceremony for Interswitch’s 60% shareholding acquisition of eClat Healthcare in Lagos recently
L-R: Uche Onyemobi, head, corporate business, Adebayo Adedeji, chief executive officer, Oyedeji Ojo, chief technology officer, Odunayo Odunlami, chief financial officer and Olajumoke Bolu-Kujero, head, marketing, all of Wakanow.com Limited, at a media interactive session to unveil the new CEO at the corporate head office of the company on Monday in Lagos.
BANKING
Standard Bank to connect over 90 African clients with business opportunities at world’s largest trade expo in Shanghai MICHAEL ANI
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tandard Bank will host over 90 clients from six African countries at its networking activities, in partnership with the Industrial and Commercial Bank of China (ICBC), at the upcoming China International Import Expo (CIIE) from November 5 to 10, 2019 in Shanghai. The CIIE, now in its second year, is the world’s most dominant import trade show and provides opportunities for global exporters to expand their business to China and develop beneficial trade relations with Chinese importers. Three thousand enterprises representing 150 countries are confirmed to participate in the expo, and more than 1 million visitors are expected to visit over its duration. As the global market becomes increasingly complex with trade protectionism threatening the free trade system, China is seeking to widen market access to the rest of the world to realize the potential of its economy and support the multilateral trade system. In recognition of China’s intent to open its economy to imports of goods and services from other countries, Standard Bank, Africa’s biggest lender and operator of
the Africa-China trade corridor, is exposing export-ready clients to trade opportunities at the CIIE this year. This is the second time in which Standard Bank has hosted a large delegation at the CIIE, and the 2019 delegation includes clients from South Africa, Uganda, Nigeria, Mozambique, Angola and Ghana spanning a range of sectors including retail, pharmaceuticals, logistics and, most predominantly, agriculture. “The significant weighting of African clients within the food and agriculture sector is a good match for Chinese importers, who are looking to satisfy demand for quality African products such as wines, fresh produce, nuts, maize, seeds and oils,” says Leon Barnard, Chief Executive, Personal and Business Banking, Africa Regions. Standard Bank, together with the ICBC, will host bespoke match-making sessions that run concurrently to the CIIE, where the invited African clients will be “matched” for discussion on opportunities with over 500 Chinese clients of the ICBC who are interested in importing African products. To further support its intent to expand Africa China trade, Standard Bank has
two large stands at CIIE for the duration of the expo. The first is situated at the Trade in Service Exhibition Hall (stand 1.1B4-03), while the other features prominently in the Food and Agriculture Exhibition Hall (stand 8.2B3-01). “Our clients will get the opportunity to introduce their products to a multitude of Chinese buyers, importers and investors who plan to attend the CIIE. It is a practical and tangible step in rapidly growing trade and investment relationships between Africa regions and China,” says Barnard. China has ramped up efforts to support trade with Africa over the past two decades to become the continent’s largest trading partner. This is a result of its embrace of Africa as framed by the Forum on China-Africa Co-operation (FOCAC), which has ushered in exponential growth in ChinaAfrica commercial ties. These efforts are bolstered by the cooperation between Standard Bank and the ICBC, who together understand the vast potential of China-Africa trade better than any organization owing to their strategic partnership aimed at expanding the import and export value chains between Africa and China.
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L-R: Akin Oni, head, Trust Services/Legal, STL Trustees Ltd; Yewande Kukoyi, representative of Stanbic Nominees; Bolajoko Adesanya, consultant, Moore Rosewater; Wale Agbeyangi, GMD, Cordros Capital; Mbanugo Udenze, company secretary, Cordros Asset Management Limited; Morenike Da-Silva, MD, Cordros Asset Management Limited; Femi Ademola, executive director, Cordros Capital, and Modupeola Ajigbotafe, head marketing and relationship management, First Registrars, at the signing ceremony of the Cordros Dollar Fund, held in Lagos recently.
L-R: Nasirudeen Muhammed, Chelsea London Dry Gin raffle draw winner; Celestine Anyawu, assistant brand manager, Chelsea London Dry Gin; Elizabeth Alabi, Chelsea London Dry Gun FELABRATION ambassador, and Omo Baba, Nigerian comedian/MC of FELABRATION, at the FELABRATION 2019 in Lagos.
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Wednesday 06 November
BUSINESS DAY
COMPANIES&MARKETS
18
INTERVIEW
Eyowo is a bank that does not require a bank account – Amao (2) In this interview with BusinessDay’s Companies & Markets Editor, LOLADE AKINMURELE and editorial analyst, SEGUN ADAMS, co-founder, and CEO of Eyowo, TOMI AMAO, talks about a revolutionary bank that seeks to change the face of financial services in Nigeria.
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So if you put all of that into perspective, I think it stands us out and separates us from what everybody else is doing.
hat about for nonsmartphone u s e r s that want to fund their Eyowo account from the comfort of their home? For those set of customers we have a USSD service or they can place a call to our dedicated number to perform the transaction. We also have this voucher system where you can buy Eyowo vouchers from our agents, scratch the voucher, load the pin and your account gets funded. What are the various licenses under which Eyowo operates? We own a Microfinance Bank and that allows us to hold deposits. So we have a Microfinance Bank license and that means we are regulated by the Central Bank of Nigeria (CBN). We have our Agreement in Principle (AIP) for the Payment Solution Service Provider (PSSP). So those are licenses that allow us to operate and do the things we do. How do you get customers to embrace digital banking considering that some people might not feel comfortable with branchless banking? Some people are not used to digital banking but there are also others who love it, once they see you on the internet they are fine and trust you. However, the class of people who are not very open to digital banking is beginning to fade. We are not 100 percent digital, we do have physical presence. As an example, we have presence in Marina. But one of the things we’re doing is having our presence in very densely populated areas, especially with users who do not have smartphones. We are setting up in Abia and we are almost done there, and we are currently moving to Port Harcourt to have a location there. The reason we are doing this is that our research around the country has shown us many of these users need some form of assistance. So we are setting up in those places so users can just walk into any of our locations and access financial services.
Tomi Amao
How has the reception of Eyowo been so far. Can you share numbers? We just recently launched and it is still early days but we are impressed by the numbers because there is room for much more. Right now we have over 3.2 million unique accounts created on the platform and we have processed over $50 million. We have over 200 active retailers on the platform and we are still signing more. In terms of perception, feedback has been great. Because we are a company who love to take feedback, we also have a virtual account management team that actively calls people to find out what their experience is like, how people are using it, what is their take. We are using the feedback to keep ensuring that we constantly improve our services. Overall, we are impressed with the progress so far made. How do you guarantee loan at zero percent interest and what measures are in place to ensure it is paid back? Eyowo has a credit scoring system which is based on the transactions users perform on the platform, how they pay, and their inflow. The system monitors all of that and creates a credit score. Now, we offer loan to people who have a very high credit score. What high credit score www.businessday.ng
means for us is a customer’s ability to pay back. One of the biggest reasons POS transactions fail is insufficient fund and so for us, we can offer our users real-time credit at zero percent for a whole month, and obviously, we expect that the customer pays back and if they do not then interest kicks in. We only allow this facility for people with a high credit rating. We are more in the financial inclusion space and from what we have seen, the bad debt in this space is not that much. I mean if you look at Telco data in terms of people who borrow airtime, there is trust that many people will payback. However, we have put measures in place to guarantee that our customers pay back. The fintech space is a very competitive one and recently we have seen several players including the banks join. What is your competitive advantage at Eyowo? I believe we stand out because of our approach which fundamentally differentiates us from everybody else. From our telephony system, to our USSD system, app service, and internet service, I believe we are trying to make the process extremely simple. Importantly we are not a closed system but a very open system that allows other people to integrate seamlessly into the fabric and internal infrastructure we have built.
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The issue of cybersecurity is one of the biggest concerns in today’s digital world. How do you ensure that your system is topnotch in terms of security? There are two sides to the story. There is the system side and there is the user side. From the system side, where we operate 100 percent, we have put a lot in place to ensure that we guarantee the security of using our platform. Every time a user interacts with our platform, the communication from the user up to our server is encrypted a hundred percent to ensure that nobody in the middle can see what is going on. When the data gets to our systems, we ensure that data is also encrypted and hashed so nobody on our side can see what our users are doing. So it is a hundred percent secure. We have also ensured that we comply with a lot of international standards that guide how things work. For example, we are Payment Card Industry Data Security Standard (PCI-DSS) certified. That means we comply with how to handle credit information. More importantly, if you look at all the attacks that have happened recently, not just in Nigeria but globally, there is something very similar across all of them; it is the fact that it was the user who was compromised not necessarily the system. So one of the things we are doing actively is educating our users on how to stay safe on the platform. We are teaching our users things to disclose and things not to disclose. Education is a big part of how we ensure that our users stay safe. How widespread is the presence of your agents across the country? There are two aspects to our agency network. The first part is controlled by us directly with the centers we set up. However, we also have people who subscribe to being our agents which means they own the shop but leverage our systems to deliver banking and financial services. In terms of our reach, there is still a lot of work to be done @Businessdayng
but we are also riding on other agency platforms because there are many companies that have set up agency networks. So we ride on their system to ensure we have wide coverage across the country. What are the challenges players in your industry face and what policies do you think can help? One of the major issues we have, which has been improving in the last couple of years, is around identity. The cleanest identity system that we have in the country is the BVN and the last report that came out shows Nigeria only has 40 million records. Comparing our population to the 40 million unique identity records shows we are still far off. So, I mean the issue is that as a financial services platform you need to be able to identify people. That is an area Nigeria needs to work on because we cannot run a very effective credit system if we cannot identify people. Eyowo is also playing in that space trying to work with the government and its agencies to improve the identity system in the country because I think it is long overdue. A second area which I have seen a lot of improvements is in collaboration amongst all the players. I mean the banks, government, and other stakeholders. If those two things can be improved significantly, then we will make progress. Do you have any partnership agreement with other organizations on Eyowo? Yes we do. We could not have delivered Eyowo without partnering with a lot of players in the space. We are currently seeking to have some form of integration with every commercial bank in Nigeria. We have started with a number of them and we are targeting a lot more. We also, have an existing relationship and partnership with a lot of financial institutions which are not necessarily banks. In the next half-decade, where do you see Eyowo? We think technology is evolving fast. So I will not speak as far as half a decade but I can talk about the next one or two years.
Wednesday 06 November 2019
BUSINESS DAY
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BANKING How microfinance banks are shoring up capital to meet CBN’s deadline Stories by HOPE MOSES-ASHIKE
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fforts are on-going among Microfinance Banks (MFBs) in the country to shore up their capital following the directive from the Central Bank of Nigeria (CBN). The CBN on March 18, 2018, reviewed the minimum capital requirements for microfinance banks, allowing for instalment payment and categorisation of Unit Microfinance into two of Tier 1 and Tier 2 capitals. Consequently, tier 1 MFBs are to pay N200 million as minimum capital requirement, while tier 2 are expected to pay N50 million. In compliance with the directive, some of the microfinance banks are partnering with foreign investors in this regard as seen with Lagos based Fina Trust Microfinance Bank Limited, a State licenced MFB, which last week announced completion of equity investment worth of N2 billion in the Bank by the LOLC GROUP from Sri Lanka. By this investment, Fina Trust Microfinance Bank is adequately capitalised to meet the new capital requirement regulation of the Central Bank ahead of the April 2020 deadline. In a circular signed by
Kevin Amugo, director, financial policy and regulation department, the CBN explained that Unit Microfinance Banks shall operate in the urban and high-density banked areas of the society; and tier 2 Unit Microfinance Banks shall operate only in the rural, unbanked or underbanked areas. To aid the process of recapitalization, the CBN had directed that all Tier 1 unit microfinance banks shall meet a N100 million capital threshold by April 2020 and N 200 million by April 2021; Tier 2 unit microfinance banks shall meet a N 35 million capital threshold by April 2020 and N 50 million by April 2021; A
state microfinance bank shall increase its capital to N500 million by April 2020 and N1 billion by April 2021; and A national microfinance bank shall hold a capital of 3.5 billion by April 2020 and N5 billion by April 2021. Ashan Nissanka, country director of LOLC Group; a foremost Asian micro finance and leasing trailblazer, said that the Group is excited to invest in Nigeria as the investment is an access into sub Saharan Africa through the largest market in the region. LOLC Group has presence in more than 15 countries across Asia, MENA region. As part of the investment, LOLC Group
R-L: Deji Popoola, MD, Fina Trust Microfinance Bank Ltd; Pastor Ituah Ighodalo, chairman of the bank; Ishara Nanayakkara, deputy chairman, LOLC Holdings Plc; and Ashan Nissanka, country director, LOLC Group, , during the exchange of agreement documents at the foreign investment / equity closing ceremony between Fina Trust Microfinance Bank and LOLC Group of Sri Lanka, in Lagos...recently
Bankers must work together to support economic growth - Ayeyemi
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he Chief Executive Officer of Ecobank Transnational Incorporated (ETI), Ade Ayeyemi says it is important for Nigerian bankers to work together to ensure that the banking industry does its bit to support the development of the Nigeria economy. Ayeyemi who was responding to media questions during the conferment of honorary fellow on himself and some astute bankers by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos noted that there is also need to build capacity of people within the banking industry to be able to understand what needs to be done and to support the Nigerian government in doing the right things. Ade Ayeyemi noted that the Nigeria economy is not growing as much as it should and banks need to be able to participate by lending to the economy to grow and also to support the governor of the Central Bank
is supporting the bank with strong micro finance skills and expertise that have been tested in the Asian market. According to Deji Popoola, managing director/CEO of Fina Trust Microfinance Bank, this investment comes with a competitive edge for the bank through a funding costs efficiency, competitive process, system and technology, as well as innovative microfinance product offering. Deji is particularly appreciative of the LOLC family and the advisers who birthed the transaction. The advisers to the transaction include Nolton Bravos/ Sthenic Finance, Suits & Advisors, Banwo & Ighodalo and G.
of Nigeria to succeed in driving monetary policies for economic growth . He said “people that borrow need to pay back, because when they don’t pay back, they make it difficult for the bank to continue to lend in the future; they are taking away those opportunities of young people who are entitled to financial institutions to lend to them. Those people who have borrowed need to pay back, so that people who are coming behind them will have the same opportunity”. He stated Speaking further, Ayeyemi noted that the prospects and opportunity for the Nigerian economy to get to the peak is very bright. The country “has the large population, they have large market, we have people that are intelligent, we need to be able to convert those opportunities to real outcomes and that is why I said, the banking industry is important, but the people who are borrowing need to be diligent in paying www.businessday.ng
back, not paying back is not a good business”. He stated. He contended that any “money that is denied or not payed back on time, is money denied permanently, just like justice delayed is justice denied. Money delayed in paying back is money denied as well. The CIBN had conferred honorary fellow on successful Nigerians in the banking industry both locally and internationally; these include Benedict Oramah, president, Africa Export-Import Bank (AFREXIM); Ibukun Awosika, Chairman of First Bank Nigeria Limited; Mahmoud Isa-Dutse, Permanent Secretary, Federal Ministry of Finance; Osaretin Demuren, Chairman of Guaranty Trust Bank Plc; Ade Ayeyemi, CEO Ecobank Transnational Incorporated (ETI); Abba Bello, managing director Nigeria Export - Import Bank (NEXIM) and Bakary Jammeh, governor of the Central Bank of the Gambia amongst others.
Elias & Co. Ituah Ighodalo, Chairman of Fina Trust Microfinance Bank said, “Fina Trust Microfinance bank has been in business for the past 10 years. The Nigerian market is very big, very wide and we have reached a little bit of the capital that we have invested in the company and we needed to look for partners to do three things for us”. One of such things he said is to bring in a bit more money to grow the business and expand it into a national business, which was the bank’s vision from the beginning. Other things are to bring in technology and a bit of expertise into the business and to share with us the experiences they have had with other countries. “In looking for a partner, those were critical points for us,”Ighodalo said. The chairman told BusinessDay that “LOLC thick these boxes. They brought in a considerable amount of investment into the company, a little bit of which we will use to buy off shareholders but most of it will be used to grow the business into a national business and a business that will also have footprint across Africa especially West Africa and that is what we are doing”. Speaking further, he said, “I see us traversing the length and breadth of Nigeria, working together to infiltrate other parts of Africa and I see a big
conglomerate being born. I am very excited. I am very optimistic. I have always been a believer that what Nigeria needs is technology and money. The market is there but what we lack is enough investible money in Nigeria because the economy has been stifled by inadequate government policies in the past. But now if money, technology comes in then the economy is ready to explode especially in the areas of agric, and small businesses”. In July 2019, NPF Microfinance Bank Plc announced plans to do a public offer with a view to raising more funds from the Nigerian Stock Exchange (NSE) to shore up its working capital. The regulator carried out examination of 490 microfinance banks in the last six months of 2018, which included the routine examination of 258 MFBs, special examination of 224 MFBs and income audit of eight MFBs designated as Systemically Important Financial Institutions (SIFIs). The examination according to the Financial Stability Report (FSR) for December 2018, revealed some shortcomings such as high incidence of nonperforming credits (above PAR of 5%); inadequate capitalization; absence of Capital Management Plans and weak strategic objectives; high operating costs; weak risk management practices; and poor corporate governance.
Fidelity Bank aligns with 2019 compliance, ethics week
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s part of sustained efforts to promote ethical values and professionalism within the bank, Fidelity Bank Plc, weekend disclosed plans to participate in this year edition of the Corporate Compliance and Ethics Week. Commencing on November 3 and running up until Friday, November 08, the bank has organised series engagement initiatives that are part of the annual activities around the celebration. Corporate Compliance and Ethics Week, organised annually by the Society of Corporate Compliance and Ethics (SCCE) provides organisations with the ideal occasion to demonstrate their extensive and comprehensive compliance and ethics programmes in a manner that strengthens its ideals while educating em-
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ployees. Commenting on the celebration, Fidelity Bank’s Nnamdi Okonkwo, managing director/CEO, pointed out that the bank remains committed to the highest standards of ethical and professional conduct in its dealings with customers. “Guided by the Fidelity Code of Business Conduct and Ethical Policy, we expect our employees to uphold its tenets always, and act in a way that reflects the bank’s principles. We have instituted an Ethics Committee to drive this agenda and intervene in guiding staff when necessary”, he stated. Okonkwo also promised to put the best interest of its teeming customers first, adding that strict adherence to proper ethical values has helped sustain the bank’s standing as a socially responsible organisation and good @Businessdayng
corporate citizen. As part of the Compliance and Ethics Week, the bank will conduct a host of engaging staff activities including trivia contest, quiz and lectures. “The focus is to remind ourselves of the need to imbibe ethical values within the organisation even as we strive to build an enduring institution”, Okonkwo said. Fidelity Bank is a fullfledged commercial bank operating in Nigeria with over 5 million customers who are serviced across its 250 business offices and various digital banking channels. The bank remains focused on select niche corporate banking sectors as well as Micro Small and Medium Enterprises (MSMEs) and its currently driving its retail banking businesses through its robust digital banking channels.
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BUSINESS DAY
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Wednesday 06 November 2019
BUSINESS DAY
MARITIMEBUSINESS Shipping
Logistics
Maritime e-Commerce
Customs claims on 25 containers of expired rice: Facts verses lies amaka Anagor-Ewuzie
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n Tu e s d a y October 2019, Hameed Ali, the comptroller-general of the Nigeria Customs Service (NCS), paraded among other contraband containers, the 25 by 20-foot containers of expired foreign parboiled rice, which he said was brought into the country through the Tin-Can Island Port Command (TCIPC) by Masters Energy Commodities Trading Limited. Customs claimed the seizure was part of the gains of the recent closure of the nation’s land borders by the federal government. By attributing the seizure to the gains of recent border closure, Customs automatically wanted the public to believe that the seizure was recently made. The Customs CG however failed to tell Nigerians that the rice, which was produced in 2016, was also imported into the country in 2016 by Master’s Energy Group. In what seems like a twist, Masters Energy Commodities Trading Limited, on last Wednesday confirmed that the containers of rice belonged to it but were not imported as expired products as it was seized in 2016, and not in 2019, as claimed by Ali.
Monday Ubani, Master’s Energy’s lawyer, said the containers of rice were impounded in 2016 due to the inability of the company’s Customs’ licensed agent to pay the correct duty on the commodity. “It was even reported that Masters Energy then petitioned the House Committee on Customs, Excise and Tariff that its agent, Messrs Destiny Impex Limited, a clearing company, made false declaration in order to cut tariffs for the 30 containers of rice,” he said. According to him, the firm was willing to pay the
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correct tariff as the agent was paid in full, but he decided to cut corners. Ubani, who said that Master’s Energy imported 60 containers in all, stated that the first 30 containers were seized due to underdeclaration by the agent while the remaining 30 containers arrived later at the port when the Federal Government had put rice as one of the 41 Items that would not enjoy foreign exchange from the Central Bank of Nigeria (CBN). He said the last 30 containers were among the 25 containers of the expired
rice that were showcased three years after, and that they have remained uncleared and abandoned since 2019. “We have a letter from Customs asking Masters Energy to seek the approval of CBN before they can clear this last set of 30 containers of rice. All these events took place in 2016,” he said. Reacting to Master’s Energy, Joseph Attah, national public relations officer of Customs, who described Master’s Energy statement as false narrative, said it was desperation to save face. Yes, indeed 30 containers
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imported by Masters Energy and falsely declared as yeast were seized in 2016/2017, said Attah. “For clarity, NCS wishes to state that after judicial process, the rice was forfeited to the Federal Government. The 30 containers of rice were given to the victims of the insurgency in the north-east in line with Presidential directive. On the 25 containers of expired rice, Attach said, they were discovered in the terminal as a result of profiling of un-utilised Bill of Lading and unclosed manifests.
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He said that when goods are imported but not declared, they are not yet brought to Customs attention and cannot exit the port. It was therefore the recent steeped up surveillance at all entry and exit points that led to the holistic audit of all manifests and profiling of all un-utilised Bill of Lading that led to this interception. “It is obvious that their desperation to save face is hindering understanding of the fact that until an undeclared container is identified, it cannot be intercepted therefore cannot be talked about. Why should it bother the company that NCS is informing the public about the interception of containers they did not declare? Could it be for the fear of the legal action that will follow the press briefing?” he questioned. Recall that during the media briefing that Ali claimed that majority of rice imported into Nigeria is expired. Based on this, pundits believed that Customs claim was a bit exaggerated. According to them, in as much as Customs was doing their job of tackling smuggling through the protectionist economist approach, it was however wrong to use Master Energy as ‘scapegoat’ to justify border closure as well as the claim that Nigerians feed on foreign rice expired.
Wednesday 06 November 2019
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Maritime e-Commerce
Lome, Cotonou Ports have grown larger than Nigerian ports due to unfavourble policies – Umar Aminu Umar is an indigenous ship owner, who doubles as the president of the Nigerian Shipowners Association (NISA). In this interview with select journalist, he said unfavorable government policies have ceded over 90 percent of Nigerian destined petroleum cargoes to Ports in Lome and Cotonou. He speaks on other issues on shipping development in Nigeria. AMAKA ANAGOR-EWUZIE was there to capture his views. What is your take on the operations of Secure Anchorage Area (SAA)? ears back, when Secure Anchorage approval was given, Nigerian ship owners said it was not supposed to be. For us, securing our waters is the sole responsibility of the Nigerian Ports Authority (NPA), the Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigerian Navy. There is nowhere in the world, where a secure anchorage is operated by a private sector company. I don’t think any Nigerian ship owner utilised the SAA. However, foreign ship owners that are coming to Lagos Ports assume that our waters are not safe. So, they prefer to have a special anchorage that makes them feel more secured, where they see patrols being done due to the frequency of attacks on Nigerian waters. We have noticed the recent issues between NPA, Navy and the operator of the SAA. The Nigerian Navy said the approval was given by the NPA not them. For us, we want our anchorages to be secured. This should be part of the benefits of the monies that we pay to NIMASA and NPA. That is what is obtainable globally. In other West African ports like Lome and Benin, anchorages are owned by their ports authorities. But, we don’t want to question why government gave the private sector the right to operate the SAA.
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Given the recent abolishment of SAA by NPA, how secured is Nigerian waters?
There has been a drop in frequency of attacks and incidences of sea robbery, if we compare the present situation with what it was five years back. We have Lagos, Bonny, Warri and Calabar anchorages. We have two anchorages that include the secure anchorage position and the Lagos anchorage. There is significant drop in the number of attacks in Lagos anchorages. However, the frequency of patrolling the waters in other neigbouring ports is more than what we have in Nigeria. In Bonny anchorage, nobody drops anchor there because it is not secure at all. The ship can only reach there in the daylight and must leave before nightfall. There, we have two anchorages that comprise of the Bonny outer and Bonny inner anchorages. The inner anchorage is where the Nigeria LNG is, and is secured. An anchorage is where a vessel can go and drop anchor pending when the pilot comes to take the vessel into the port. Bonny inner anchorage is inside the pilot district, meaning that you are already in the port, but the outside is not safe. The NLNG vessels do not have to wait outside the anchorage when they arrive. We have seen a significant improvement in the Calabar anchorage, while Warri anchorage has been very okay as well. So far, there is an improvement but we want to see more patrols and security on the waters. What are the challenges hindering shipping development in Nigeria? For ship owning, our major challenge is financing. Two, is
Aminu Umar
fiscal and monetary policies that put Nigerian ship owner at a disadvantage position. Three, is inefficiencies that create losses and also make the business almost impossible to operate. One of the factors of inefficiency is insecurity. Because of the insecurity, the movement of the vessels is restricted. For instance, Nigerian ship owner is forced to ensure that his vessel reaches certain places at day time, thereby leading to numerous stoppages at a particular anchorage during nightfall to avoid attack and this results in delay. It also creates losses in time because time amounts to cost that must be catered for by either the cargo
or ship owner. Policy particularly in the tanker business is why the ports like Lome and Cotonou have grown larger than Nigerian ports. This is because 90 percent of the cargoes that go there is Nigeria-destined. Government policy has made it mandatory for mother vessels to go to those ports and for Nigerians to go there to transship the cargo. Here, Nigerians end up developing other countries against ours. We have the policy of opening Form M. For an importer to bring any product into Nigeria, the person must open a Letter of Credit. If a vessel is coming from Europe and reaches Nigeria direct,
such cargo is not eligible to obtain Form M because the cargo is already in Nigeria. So, the cargo must stay outside the country and the only port that is close to Nigeria is Lome or Cotonou. This automatically makes Lome a hub for shipping in West Africa. Another one is the issue of duty and taxes imposed on vessels brought in by Nigerian ship owners. Ship owners pay as much as 14 percent as duty on imported vessels and spare parts when airlines pay zero duty. This places Nigerians at disadvantage against foreign ship owners, who do business in Nigeria at a subsidised rate and is why the industry is not developing. Shipping is a capital-intensive business and its asset is very expensive, meaning that it requires long-time investment. Unfortunately, in Nigeria, commercial banks find it difficult to give longterm funding. Very few banks have the balance sheet to fund shipping business. Despite the cargoes coming to Nigeria, we have zero number of Nigerians participating and Nigeria is one of the biggest destinations for import and export cargo. What is the way out of this? The banks have to be able to provide long-term finance for ship acquisition. They should not invest in shipping and expect to get returns in three years. It has to take between 10 to 12 years to mature. The big shipping companies in the world are being financed to payback in 10 or 12 years. The interest rate for borrowing in Nigeria is extremely high and the most expensive in the world. This makes it impossible for Nigerians to
be able to compete with those that get loan at 1 percent. A loan of 25 percent means that in four years, you must have paid twice of the loan. It is not only the shipping industry that is affected because the manufacturers are also facing the same fate. Banks are financing shipping in Nigeria but in shortterm with high interest rates. The collateral required to get this facilities is too difficult. The equity contribution required to be able to meet the conditions for the loans is also difficult to achieve. This is shrinking the industry rather than grow the number of ship owners. Why are Nigerians not registering their vessels in Nigerian Registry to fly Nigerian flags? One, the moment you fly Nigerian flag, you pay duty of 14 percent. Two, is the bureaucracy that slows the pace of registering ships in our register. This is costing ship owners a lot. Number three is the issue of standardisation. Shipping is international, and if one registers a vessel in Nigeria and embarks on an international trade, the vessel would go under serious scrutiny because they believe that Nigerian flag means issues. Due to this, many ship owners prefer a flag and register that would not put them through such stress. However, there is a committee set up to resolve all the problems. They have made recommendations and the implementation committee has also been set up. We believe that by the time they complete the process Nigerian Ship Register would be better off.
WACT donates Hilux vehicle to truckers’ association in Onne
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he management of West Africa Container Terminal (WACT), Onne Port Complex, Rivers State, has donated a Hilux vehicle to the Flat and Cargo Trailer Drivers Association. Aamir Mirza, managing director of WACT, who handed over the vehicle to the association on Thursday, said the gesture was aimed at facilitating the operations of truckers at the Onne Port. “Earlier in January and February this year, we experienced increase in volumes and stakeholders like you
supported us. You understood that some of the challenges we faced were genuine and this was in recognition of the support so that you can better manage traffic inside Onne Port,” he said. So far, Mirza said, the company has acquired several modern cargo-handling equipment, including two new Mobile Harbour Cranes worth $10 million, three new reach stackers, two empty handlers and 14 new specialised terminal trucks to enhance discharge of ships and delivery of containers to their owners. www.businessday.ng
L-R: Aamir Mirza, managing director, West Africa Container Terminal (WACT), Onne Port and Adolphus Ugwu, chairman, Flat and Cargo Truckers’ Association, in front of the Hilux vehicle donated by WACT to the association at Onne Port, Rivers State, on Thursday. https://www.facebook.com/businessdayng
He said the huge investment has made WACT the most efficient container terminal outside Lagos and brought it at par with its peers in Apapa, and Tin Can Island Ports, in terms of operational efficiency. “Our aim is to be the best container terminal not just in Nigeria, but in the whole of West Africa. We have grown our annual capacity to more than 300,000 TEUs and we solicit more support from you to continue to expand this capacity,” he said. Speaking after receiving the keys and documents of @Businessdayng
the Hilux vehicle, Adolphus Ugwu, chairman of the association, commended WACT for the donation and for its investments aimed at enhancing operations at the Onne Port. He pledged that Flat and Cargo would continue to support WACT to realise its aims and objectives by using the equipment to further port business. WACT is one of the first Greenfield container terminals built in Nigeria under a public-private partnership. The terminal is capable of receiving large vessels with capacity of up to 4,500 TEUs.
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Wednesday 06 November 2019
BUSINESS DAY
Corporate governance
Taking transparency and disclosures beyond rhetoric Olayimika Phillips
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n today’s business world, sound corporate governance system has become a strong determinant of companies’ economic fortune, operational sustainability and longevity. Globally, corporate governance has acquired a defining role in raising capital especially listed entities and in the pricing of shares of companies. This stems from the fact that companies with high standard of corporate governance are more attractive to investors than those with struggling corporate governance. Intrinsic to a well-functioning corporate governance system is transparency. The causes of most corporate failures and scandals have, amongst others, been traced to lack of or poor transparency in the operations of these corporates. The focus of transparency, as an essential element of governance, includes disclosures and communication to stakeholders. The importance of transparency in governance has been aptly illustrated in the Cadbury Report, 1992 that: “The lifeblood of markets is information and barriers to the flow of relevant information represent imperfections in the market… The more the activities are transparent, the more accurately will their securities be valued”. Typically, shareholders are entitled to minimum mandated disclosures, such as financial information in the profit and loss account, balance sheet, auditor’s report and other mandatory disclosures. A gold-standard corporate governance system however transcends the disclosure of the minimum mandated information. It includes also voluntary disclosure of information that is not mandated by the law to shareholders and other stakeholders. Such voluntary disclosures include environmental and social initiatives, management forecasts and those placed on companies’ websites for wide accessibility by the public. The reason why companies need to engage in voluntary disclosure of information is not far-fetched. In recent times, other stakeholders comprising the creditor groups, employ-
ee groups, consumers/clients group, supplier groups, government and the public with no direct financial investments in companies have become keenly interested in the management and operations of companies. They are increasingly interested in the company’s financial, social, environmental and ethical information in order to be fully informed and make critical decisions along their interests in the company. For instance, the investor requires the information, especially those on finance, social and environment to make investment decisions. The employee sees himself/herself as an integral structure of the company and requires the information for his or her job satisfaction and fulfilment whilst the consumer wants necessary information to allocate his/her spending wisely, to know where and how products are made so they are satisfied their resources are not funding child labour or modernday slavery. Needless to emphasise, directors must therefore ensure that their company is transparent in its operations by disclosing information that are material to all stakeholders. Directors must put in place a system that allows for a high level of financial transparency which would facilitate disclosure and reporting of financial information to all stakeholders. Financial transpar-
ency in governance eliminates or reduces the chances of the board pursuing their self-interest at the expense of the company and other stakeholders. Rather, it helps the directors and management to dedicate attention to increasing shareholder’s value and attracting investments into the company. In ensuring financial transparency, directors should ascertain that the financial statements disclose and report the financial, operational, political and economic risks a company faces. This would give stakeholders interested in the company a full view of the financial position of the company and its ability to meet its future obligations. Disclosing and reporting information on the appointment of directors, competence of directors, frequency of board meetings, remuneration packages, decision making processes and procedures to stakeholders are crucial to governance transparency. This helps to increase investors’ confidence in a company and the overall value of a company. The burden is on the directors to ensure that all disclosures, communication and reporting are accurate. Most corporate scandals were caused or aggravated by transparency related issues especially inaccurate disclosures in the financial position of the company. Sound corporate transparency also requires
that the disclosures must also be easily understood, clear and unambiguous to stakeholders, especially equity owners. The various Codes of Corporate Governance in Nigeria, especially that of the Financial Reporting Council of Nigeria (FRCN), Securities and Exchange Commission (SEC), Nigerian Communication Commission, Central Bank of Nigeria (CBN) and the National Insurance Commission all emphasise the importance of corporate transparency. The FRCN Code encourages companies to communicate and interact with stakeholders so as to keep them conversant with the activities of the company and further assist them in making informed decisions. Communication with stakeholders should be timely, accurate, clear, easily understood and posted on the Company’s website. The Codes, particularly, those released by SEC and CBN encourage companies to engage in increased disclosure beyond statutory requirements. The Codes require full and comprehensive disclosure of all matters material to stakeholders. These include a requirement that the Annual Report of the applicable company must include a corporate governance report that provides clear information on the company’s governance structures, policies and practices, related party relationships and transactions, environmental, so-
cial and governance initiatives. Whilst directors are likely to be sceptical about being excessively transparent by disclosing and communicating information, good and bad, beyond those mandated by law because of the possible criticisms that may attend such disclosure, such scepticism should be discounted given the huge cumulative benefits transparent behaviours confer on the company. Finally, in this age of disruptive technology where a leak of information could have devastating effect on a company, directors have no choice but to ensure that their companies are transparent.
Olayimika is a Partner in the law firm of Olaniwun Ajayi LP and has over 34 years of professional experience. She specializes in corporate governance, providing pragmatic solutions to the diverse challenges which confront corporates at different growth stages and serves on the board of several companies (listed and privately held).”
Wednesday 06 November 2019
BUSINESS DAY
PENSION today
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In Association With
PFAs mull on how to sustain pension assets growth in next 15 years …as assets hover around N10 trillion …amidst slowing growth
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he last fifteen years from 2004 to date, has seen the pension industry grow from negative position to about N10 trillion in assets as the end of October, a significant landmark that makes it’s the highest in accumulation of investible funds in the entire financial services industry. Now, the biggest challenge confronting the pension industry operators is how to sustain this growth, and perhaps double it in the next fifteen years to N20 trillion, amidst dropping growth in economy, other factors. Wale Odutola, head, Brand Committee of the Pension Fund Operators of Nigeria (PenOp) and managing director/CEO, ARM Pensions Limited reviewing the state of the industry at the groups 2019 Media Retreat in Lagos said “We have had fifteen decent years within the pension space, which has enabled us pull assets now to almost N10 trillion”. Odutola noted that the industry was growing at 20 percent in the first 10 years of the operation of the Contributory Pensions Scheme (CPS), nothing that this has continued to drop over a while now. He raised concern over sustainability of the growth to be able to double the value of assets in the next 15 years. According to him, the concern is the fact that the micro pensions scheme which should drive uptake is not compulsory, but voluntary in a environment where saving culture is poor, which means a lot needs to be done. Another concern Odutola raised was the issue of falling spending power of Nigerian’s, drop in employment among others factors. Ronke Adedeji, president of PenOp and managing director/CEO, Leadway Pensure Limited in her own comment said that the CPS so far has been successful to the extent that it has been able to accumulate savings, invested them successfully, such that people who retired are able to get their pensions as and when due. Adedeji stated further that the challenge is the slowing growth of the scheme, which peaked earlier but now dropping. She lamented that there are no new institutions coming up which grow enrollees, no new employments happening, instead unemployment is growing; and no new em-
L-R: Susan Oranye, executive secretary, Pension Fund Operators Association of Nigeria(PenOp); Peter Aghaghowa, head, Corporate Communication, National Pension Commission (PenCom); Ronke Adedeji, president, PenOp and MD/CEO, Leadway Pensure; Bayo Yusuf, treasurer of PenOp and MD/CEO, UBA Pensions Custodian and Wale Odutola, head of Brand Committee, PenOp and MD/CEO, ARM Pensions Limited, during the 2019 Annual Media Retreat for Journalists held in Lagos.
ployees registering into the scheme as it has always been. According to her, a lot of work needs to be done. “We are embarking on data clean-up, and that is major step towards going beyond where we are now to where we want to go”. Adedeji however expressed optimism that industry will continue to move forward with the micro pension scheme, and transfer window at the end of the data clean-up. The total value of pension fund assets based on unaudited valuation reports grew from to N9.03 trillion as at the end of March, 2019, to N9.33 trillion as at June, 2019, representing a growth of 3.27 percent (N 294.91billion). And this figure is about N10 trillion as at the end of October, according to industry. The growth indicates a decrease in the quarterly growth rate compared to the 4.55 percent for the previous quarter; this was mainly due to market valuation of quoted equities. A breakdown of the pension industry portfolio indicates that the pension fund assets were mainly invested in Federal Government Securities, with an allocation of about 70 percent of the total pension assets (FGN Bonds: 48 percent, Treasury Bills: 21 percent, Sukuk
Bonds 1 percent while Agency Bonds and Green Bonds: less than 1 percent). The report further indicates that the value of investments in domestic ordinary shares was N536.97 billion (5.76 percent of industry portfolio value) as at 30 June, 2019, indicating a decrease of N53.64 billion compared to the value of N590.61 billion as at 31 March, 2019. The decrease in the value of investments in domestic ordinary shares was primarily due to the market price depreciation of some stocks during the period, as the Nigerian Stock Exchange All Share Index (NSE-ASI), depreciated by 2.89 percent, from 30,833.56 basis points as at 31 March, 2019 to 29,966.87 basis points as at 30 June 2019. The Market Capitalization however appreciated by 13.98 percent, from N11.59 trillion as at 31 March 2019 to N13.21 trillion as at 30 June 2019, following the listing of MTN Nigeria. The value of investments in Treasury bills and FGN Green Bond increased by N1.06 billion (0.36 percent) and N3.62 billion (1.23 percent) respectively while investments in FGN Bonds, FGN SUKUK and Agency Bonds decreased by N19.93 billion (6.76 percent); N8.01 billion (2.72 percent) and N140 million
(0.05 percent) respectively. The reduction in the value of the bond was due to coupon payments and reallocation to other asset classes. The objectives of CPS is to ensure that every person who worked in either the public Service of the Federation, Federal Capital Territory, States and Local government or the Private Sector receives his retirement benefits as and when due ; and to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age. The provisions of this Act shall apply to any employment in the public service of the Federation, the public Service of the Federal Capital Territory, the Public Service of the state, the public service of the local governments and the private sector. In the case of the Private Sector, the Scheme shall apply to employees who are in the employment of an organization in which there are 3 or more employees. Notwithstanding the provision of subsection (2) of this section, employee of organization with less than three employees as well as self-employed persons shall be entitled to participate under the micro pension scheme.
IS NOW RC634453
Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State. Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@accesspfc.com Website: www.accesspfc.com
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https://www.facebook.com/businessdayng
@Businessdayng
This section is created to increase awareness and deepen knowledge about the Contributory Pension Scheme. If you have enquiries or contributions, send to this e-mail: accesspfcbusday@yahoo.com
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Wednesday 06 November 2019
BUSINESS DAY
insurance today
E-mail: insurancetoday@businessdayonline.com
NAICOM, Insurers engage consumers to enhance claims settlement process Modestus Anaesoronye
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ssues around settlement of claims seems to be the biggest challenge facing the insurance industry today, which also has continued to cast shadow on the relevance and contributions of the industry to business survival and growth. While customers get discouraged most times as a result of delay, or rejection of claims by the insurers, its effect kills consumer confidence and trust, and eventually goes to affect premium growth in the industry. However, at the second interactive session with consumers of insurance products and services organised by the National Insurance Commission (NIACOM) held in Lagos, it was clear that lack of adequate knowledge of the operations and ‘modus operandi’ of the contract of insurance has lead to most of the lingering issues on claims. The event was attended by the National Insurance Commission, the Chartered Insurance Institute of Nigeria; the Nigerian Insurers Association, corporate consumer of insurance including Airline Operators Association of Nigeria, police, military, Federal Road Safety, Customs; Brokerage fraternity and the Agents. While insurers defended their actions based on the terms of the contract, most of the consumers hold on the fact that having paid premiums what they want is payment of their claims. But these opened the eyes of the stakeholders on the need to continue to engage with each other for knowledge sharing, need to engage the services of brokers as intermediary, and not just brokers, but those with experience and skills on the particular area of the business that is to be insured. On sectors like aviation risks, the meeting brought to the fore of a better collaboration that requires the consumer to engage the services of brokers and reinsurers based on their professional competence and expertise rather than by sentiment of friendship or family. While the underwriter on the other also should be allowed to select co-insurers on the risk without the consumer influencing it, so that when claims arise, underwriter could take responsibility and make sure payment is made to the insured without much delay. For the police and military group life insur-
Regulator, players and consumers at the ‘Second Interactive Session With Consumers Of Insurance Products And Services’ organised by the National Insurance Commission (NIACOM) in Lagos.
ances, NAICOM representative was on hand to explain that the initial challenge with that scheme was lack of data for covered personnel’s, which lead to a lot of un-reconciled claims, except the case of 2014 that was as result of the liquidity issue with the lead underwriter. But he noted however that with data now in place, claims are now resolved faster than before. Eddie Efekoha, president of CIIN, and major player in the aviation insurance provided insights on some of the issues raised, while Ibrahim Adamu of NAICOM promised further engagements to look at the issues raised by the consumers. Sunday Thomas, acting commissioner for Insurance in his welcome speech earlier said that customers’ satisfaction is central to the sustainability and success of every business, insurance inclusive. “We are aware of some of the obvious challenges bedeviling the sector either on the side of operators, consumers, investors or regulator. These challenges could be very overwhelming, however we must not relent in looking for better ways to effectively and efficiently ensure delivery of quality services to policyholders.” Thomas who was represented by Adamu
Balanti, a director in the commission noted that from the regulatory perspective, policyholders remains a key component of the commission’s primary constituency and therefore must ensure they are treated fairly and protected as enshrine in the relevant laws; while at the same time balancing the supervisory role of ensuring financial soundness and reliability of insurance institutions in the country. He said that the Commission took the step in 2018 to incept this platform that will provide the most critical stakeholder in the sector which is the consumer, the opportunity to be heard and be informed first-hand on the workings of the sector. “It is imperative to note that NAICOM is well positioned to ensure adequate protection of policyholders at all times. As you may all be aware, the topic on consumer protection has become central to regulators around the globe and the insurance sector is not an exception. Continuing efforts and new reforms are being put in place by NAICOM to ensure prompt payment of genuine claims by insurers, Thomas said. According to him, the Complaints Bureau Unit of the Commission has also been working assiduously to resolve policyholders’
issues relating to non-settlement of claims, contract agreement violation etc. “It is pertinent to inform you that the Unit has been further enhanced with the deployment of more staff at very senior level to effectively discharge assigned responsibilities. Its doors are widely open to receive and resolve, as much as it can, issues on non-settlement of genuine claims from the public.” “The Commission has strong passion that insurance consumers are served right and feeling your pulse on the services offered you by your insurers will feed us with ingredients needed to strategise on repositioning the industry for better services.” There is no doubt that we all desire a paradigm shift from the current state of our industry to a better state where we will not be grumbling on issues of prompt claims settlement, pricing of insurance products, value for money, innovative products etc, he said. “Henceforth, insurance companies will be assessed and ranked on the quality of their service delivery to customers and the ranking of companies in this regard will be made public in order to provoke healthy competition among insurers. This we believe will boost consumers’ choice and confidence in insurance.”
Universal Insurance bolsters performance in Q3 Modestus Anaesoronye
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nderwriting firm, Universal Insurance has recorded improvement in its third quarter 2019 performance, as against analysts speculation that the company would not be able to turn around its fortunes based on the half year results released at the end of June. According to the financial statement filed with the Nigerian Stock Exchange (NSE) and made available to the media, the Company’s result shows that an increase in gross premium income by 91 percent to N1.541billion
as the end of September 2019 from N808.698 million within the same period in 2018. Also net premium income witnessed a leap to N1.095 billion from N620.198 million representing 77per cent increase in the period under review. Given the technical capabilities of the underwriting house in the period of consideration, gross claims paid out dropped to N211 million from N255.424 million, representing a 17per cent drop. Ben Ujoatuonu, managing director of the company noted that the reduction in claims payout was achieved due to the company’s ability to assess risks accepted effectively www.businessday.ng
and efficiently. He added that the company holds prompt claims settlement as priority and with delight attends to issues of genuine claims with dispatch. The underwriting profit rose by 71per cent to N626.506 million in the third quarter of 2019 while investment income also marked up an increase of 38 per cent to N106.668 in the review period compared to N77.423 million the previous year. Other growth indicators shown on the table are total assets of the Company which increased to N13.154billion in the third quarter results from N12.891billion and sharehold-
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ers’ fund which also recorded a slight increase of 1 percent and stood at N9.541billion within the period under review. “It is noteworthy to mention that Universal Insurance is one of the 44 underwriting firms given the ‘No Objection’ status by the National Insurance Commission to carry out its recapitalization plans”, Ujoatuonu added. “The Company’s paid up share capital currently stands at about N8 billion as a General Business underwriter and plans are ongoing to ensure that the company beats the June 30, 2020 deadline to capitalize to the prescribed N10 billion in the post recapitalization regime.
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Wednesday 06 November 2019
BUSINESS DAY
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insurance today E-mail: insurancetoday@businessdayonline.com
PenCom, PenOp confirm new effort to open transfer window June next year Modestus Anaesoronye
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he National Pension Commission (PenCom) and the leadership of the Pension Fund Operators Association of Nigeria (PenOp) have confirmed an ongoing effort by both bodies to ensure that transfer window is opened by June 2020. They noted that having gotten a tentative date is an indication that works was ongoing to ensure that the transfer window is open. The transfer window is a platform created by PenCom to enable pension contributors who are dissatisfied with the services of their current Pension Fund Administrators (PFAs) to transfer their retirement savings account (RSA) to any Pension Fund Administrator of their choice The transfer window promises to be an exciting happening within the industry as PFAs are set to slug it out with each other in a competitive market to retain old contributors and as much as possible win new ones. A lot of experts in the industry have made predictions with dates, however these predictions have proved wrong, and now the new one.
L-R: Paddy Ezeala, communication adviser, Nigerian Conservation Foundation (NCF); Joseph Onoja, director of Technical Programmes (NCF); Uche Onyeagucha, Secretary to the Government of Imo State; and Solomon Adefolu, lead, Climate Change, (NCF) during a partnership development meeting in the SSG’s Office in Owerri.
Bayo Yusuf, treasurer PenOp and managing director/CEO, UBA Pension Custodians said both bodies were working together to achieve the June 2020 date. I am happy to inform you the much awaited transfer window will be opened by that, having been agreed by both us. Peter Aghaghowa, head, Corporate Communication, PenCom said the fact that a date had been tentatively fixed is an indication that work was in progress to actualize the mandate.
He said that the pension operators and PenCom had been meeting and work had reached an advanced stage towards achieving the ideal. “One thing that is critical towards this is the Enhanced Contributor Registration System (ECRS) that was recently launched. “That is what is making our data integrity better, coupled with the fact that we are also linked with the National Identification Management Commission (NIMC) on the issue of National Identification Number (NIN).
“You can be sure that in a couple of months, the data we have will be integral because it is a prerequisite for the transfer window and that is why we say we are getting closer and optimistic that we will reach the milestone,” he said. Earlier at the retreat, Aghaghowa hinted that 19 PFAs had registered over 28,000 participants for the newly launched Micro Pension Plan (MPP) for the self-employed as of October 2019. He said the plan was introduced to have the
self-employed inculcated into the pension arrangement in order to capture a large chunk of the working population in Nigeria. According to him, the MPP has a peculiarity in terms of contribution, registration and investment and the guidelines provided for the management of funds are in line with the multi-fund structure. He said that the scheme, among other things, was designed to improve the standard of living of the self-employed on retirement, among other benefits.
“The requirement of NIN as a prerequisite to register for the scheme has slowed down the process of the MPP,” Aghaghowa said. He, however, disclosed that dialogue was ongoing between the commission and NIMC to collaborate and enable PenCom to generate PIN for its clients to register seamlessly for the scheme. The PenCom official said that the challenges confronting the MPP included low financial literacy, low NIN registration, low awareness about MPP and inadequate technology platform to support the scheme. Ronke Adedeji, president of PenOp, also said that while the pension scheme was so far a success story, a lot of work still needed to be done to make it better. Adedeji said the ongoing data verification was to ensure that the database of contributors was clean and in a state suitable for the transfer window. She said that the requirement of NIN was one of the major challenges that had marred the process of the data clean up. “But we are making progress, and now with the collaboration with NIMC, we expect that the transfer window will evolve after the data clean up”, she said.
Onigbogi, new NCRIB president to focus on building image, sustaining legacies Modestus Anaesoronye
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aving been invested as the new president of the Nigerian Council of Registered Insurance Brokers (NCRIB) Bola Onigbogi said the focus of her administration will be building image of the brokers and sustaining its legacies. Onigbogi in her acceptance speech said there is no better time to improve the image and perception of Insurance Brokers than now. “We shall face the daunting task of improving the perception of the Insurance Broker in the eyes of
all members of the public through strategic actions that would involve the engagement of all stakeholders that Insurance Brokers relate with.” According to her, the image of the Council and its members would be enhanced through the various indices of friendly, speedy, honest, and ethical considerations. “We would be more strategic in first identifying those factors that attracts bad reputation to the Insurance Broker (within and without), and start to attend to them one by one through deliberate and strategic communication with relevant stakeholders within and outside the www.businessday.ng
Bola Onigbogi, new NCRIB president https://www.facebook.com/businessdayng
industry.” “Insurance Brokers are not contractors but professional service providers like Lawyers, Doctors, etc who only offer services, and asking them to pay huge bidding fees is inappropriate, if at all, the fees could be marginal.” Also of concern she said is government agencies charging fees to re-certify documents issued by them to Brokers such as licences, approved audited accounts, certificates of incorporation, tax clearances etc, which were issued to them by relevant government institutions. “This is purely inimical and at cross roads with the Ease of Doing Business @Businessdayng
intentions of the President Buhari led administration.” “We also appeal to government, being the biggest spender and buyer of insurance to always release payments for premiums already budgeted for insurances as a way of motivating and growing the industry and by extension, national economy.” According to her, the thrusts of her office shall be professionalism; enhancement of broking fraternity; manpower development for members; strong institution building &financial solvency, mentorship; trust and industry collaboration; government relations, relations with NAICOM; and international relations.
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Wednesday 06 November 2019
BUSINESS DAY
Harvard Business Review
MANAGEMENTDIGEST
How to get more women to run for office — and win
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ast December, the Republican Conference of the 116th Congress gathered for our internal party leadership elections. As is tradition, we invited each of the incoming freshman members to the front of the room to welcome them to Congress as a class. The image was stark: In the line of the 29 newly elected Republicans, only one woman appeared — Carol Miller, from West Virginia. Although the elections in 2018 ushered in a historic number of women elected to Congress — of the 88 newly elected members of the House of Representatives, 34 were women — the partisan breakdown of this new era of women leaders was remarkably lopsided. My Republican colleagues need to hear the obvious: We can and must do better, not just at recruiting women candidates, but at successfully electing them. Electing more women is important not just for the Republican Party, but for every American. The United States is better off as a nation when more women are making decisions, leading conversations and crafting policy. Women legislators have more bipartisan legislative records than our male counterparts. We bring
valuable and differing perspectives to policy debates. For example, women legislators understand that we need legislation to create environments conducive to working women. We know that the burden of child and home care often falls on women, even as we attempt to give our all to our careers. We know we need laws to combat issues like high maternal mortality rates and human trafficking — and my female colleagues are leading the way on these problems. Republican Representative Jaime Herrera Beutler from Washington successfully passed legislation to provide funding to research the
reason for high maternal mortality rates in the United States. Democratic Representative Joyce Beatty from Ohio authored two pieces of legislation with Republican Representative Ann Wagner from Missouri to combat human trafficking. But we’ve got a long way to go to seeing as many women as men in U.S. politics. Out of the 435 members of the House of Representatives, only 106 are women. Out of the 50 governors, only nine are women. Women make up just 28.9% of state legislatures nationwide. How do we fix this problem? We must expand the pipeline
of female candidates, get them the resources they need to run a successful campaign, and help them share their unique stories to win over voters. To that end, I launched E-PAC after the 2018 midterms, to engage, empower, elevate and elect more Republican women. But bringing more women into politics is not simply a recruitment challenge; in fact, we’ve seen a surge of women wanting to run for office on both sides of the aisle. Working closely with Susan Brooks at the helm of the National Republican Congressional Committee’s recruitment arm, we have had conversations with more than 300 women interested in running for federal office as Republicans. By September 2019, 105 women had filed to run for Congress on the GOP ticket. For the first time in the history of the NRCC, more than half of the top-tier Republican candidates considered “on the radar” are women. I believe this is due to the successful recruitment and early promotion and funding of these women candidates. The real challenge is in ensuring that women have the same resources men have to tell their stories and promote their candidacy. E-PAC focuses on infusing campaigns with early donations
to help propel candidates sooner, so they have adequate time and resources to speak to voters and create coalitions within their communities. (Historically, male candidates have benefited from fundraising advantages, because they’re more likely to have already served in state and local government, giving them name recognition in their communities and a pipeline into federal office.) We are also working with women candidates — particularly firsttime candidates — to more effectively structure the nuts and bolts of their campaigns, so they can go from winning the primary to winning the general election. This often means facilitating tough mentorship conversations with candidates about campaign budgets, the most important issues, the use of their time, fundraising goals, congressional district data, and digital and advertisement strategies. I believe our work is starting to pay off. Some of our strongest Republican candidates in the 2020 cycle are women, including Nicole Malliotakis in New York and Ashley Hinson in Iowa. But if we want to see more Republican women, and more women in general, get elected, we need to continue to build on these efforts.
Every employee should have access to paid parental leave
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lexis Ohanian is a co-founder of Reddit and now leads the investment firm Initialized Capital as a co-founder and managing partner. But he says that his most important roles in life are husband, to tennis champion Serena Williams, and father, to their daughter, Olympia, now age 2. After taking his own paternity leave and learning how to operate as a working dad, he has become an advocate for mandatory paid family leave in the United States. This is an edited version of our conversation in mid-August. Q: Why did you decide to make paid parental leave your cause? A: I honestly hadn’t thought much about it until my daughter was born. At Reddit, we offered 16 weeks of leave, and, in using all of it, I saw firsthand how important it was. My wife and I have tons of advantages — help at home, supportive families and other resources. But after the life-threatening complications she faced following childbirth, I couldn’t imagine having to leave my family for my job or being told to decide between the two. It really hit home. I saw that this shouldn’t be a privilege afforded only to folks lucky enough to work at companies with good policies. It should be required. Q: Why had you already decided to offer a relatively generous policy at Reddit? A: When I came back to the company in 2014, after stepping back from a full-time executive role for several years, we had no HR. Katelin Holloway was willing to come on as head of people and
culture, and she brought with her a plan, including paid leave, and I thought it seemed reasonable. Within the tech industry, 16 weeks of leave is table stakes. But that speaks to an important issue. Tech companies have these benefits because we’re in a war for talent. The reason tech companies are able to grow hundreds of millions of dollars in revenue and billion-dollar valuations is because they’re attracting and retaining people who are high performers. I’m proud that tech is on the front line of supporting paid leave. And it should be a bellwether for other industries that want top talent, especially with technology skills. You’re going to have to attract them by offering as much or better. Q: How do you demonstrate the return on investment? A: Well, we know that when Google expanded its paid leave [from 12 to 18 weeks], attrition decreased by 50%. Of course, that’s correlation, not causation, but it’s a material change. And when you consider the expense of recruitment and training new workers, it would amount to a fantastic cost www.businessday.ng
savings. We saw in one survey from the advocacy organization Paid Leave for the United States that 77% of respondents said that the amount of paid leave employers offer would affect their decision to pick one company over another. Again, it’s something that will help you win talent. But we should also realize that it creates value that won’t always be reflected in the short-term numbers. Q: What would you say to leaders of startups or small businesses or non-tech companies who argue that they just can’t afford to keep paying people to be away from work for several months? A: I would point to a company like Sweetgreen, the fast-casual salad chain. The salad business is definitely not the software business, and they made the math work on five months of fully paid parental leave — even longer than ours at Initialized Capital. And I think that’s because they, and other employers like myself, realize that they will get more loyalty and productivity out of employees as a result. Humans, whether software engineers or people preparing food, can only do their best work if they have peace of mind that their home and family are secure. If they are instead distracted or stressed or frustrated, there will be costs to that. I work with many entrepreneurs now, and I have yet to have one of them come back to me and say that a paid leave policy was a bad idea. Q: Apart from offering several months or more of time off after the birth or adoption of a child, what makes for a good corporate
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paid leave policy? A: Flexible scheduling. I didn’t realize Reddit had this until Katelin Holloway explained to me that you can allocate those 16 weeks in the way your family needs. So, as a dad for the first month, it’s great to be home and fully supportive. But then maybe you arrange to be in the office Monday through Wednesday and home Thursday and Friday to stretch out the rest of those days and give you and your family time to adjust. Also: equal treatment for mothers and fathers. It can be longer for women if there are health complications related to the pregnancy or labor and delivery. But we’re deliberate about calling it “family leave” because I and lots of dads believe we have an equal responsibility in parenting. And this sets us up for more equality in the workplace because there’s less worrying — which, unfortunately, you do see — that female hires will get pregnant. If we just assume that any man or woman we bring on might one day have a kid and take time off for that kid, we’re in a nicer place. I want to be clear, though, that none of this means prescribing specific roles and responsibilities for any parent. It is more about the freedom to decide. The biggest criticism I see is tweets from people who say, “I don’t need more than a week off after having a kid.” That’s fine. It’s your choice. But the opportunity should be extended to every single expecting parent. Q: In fast-paced, high-pressure, @Businessdayng
highly competitive industries or companies, how do you persuade people — both women and men — that it’s OK to use all the time made available to them? A: A big push for me is not just encouraging more private-sector leaders to adopt these policies, but also to urge fellow business dads, especially those in executive positions, to take advantage of them. This gives air cover to people in the rest of the organization, so they can take time off without thinking it will hurt their careers. Instead, it lets them know it will be the best decision they’ll ever make. I think social media has helped to normalize this. Men being proud to be dads is as old as time, but historically it’s a thing we didn’t always talk about. That’s changing. This generation is more able to be vocal and open. A good example is the “Dad Reflexes” subreddit, which hundreds of thousands of people are on every day, sharing and watching videos of things like a kid almost falling off a sofa and the father catching him without his partner even realizing it happened. We now have ways to share these little vignettes of dads protecting, playing with, feeding, spending time with our children. So I hope the surprise starts to go away. I want to see men taking their responsibilities as fathers seriously in my companies. I want us all to have the confidence to say, “I’m leaving early today to pick up my kid.” No one could look at my history and accuse me of not being a hard-charging and career-driven entrepreneur. But I really, really believe that these things are not mutually exclusive. And I think this shift is good for society.
Wednesday 06 November
Harvard Business Review
BUSINESS DAY
29
MANAGEMENTDIGEST
Your employees have all the creativity you need: Let them prove it. NILOFER MERCHANT
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CONNECTING enerating creativity is, in itself, a creative act. Yet most leaders try to oversee creativity by defining the path — who should contribute and how — rather than defining the goal and asking everyone to contribute. At one company I worked with, executives told me they thought opening the door to companywide creative potential could prove chaotic. Here’s how we overcame that concern: The company had an unexpected windfall of $2 million, which executives wanted to allocate proportionately to existing budgets, or preferentially to projects already deemed key to the company’s future. As the firm’s innovation consultant, I proposed an alternative: a “hackathon” for creative ideas. We would ask anyone — and quite possibly everyone — in the organization to unearth a new
idea and tell management how it could work. We asked for three things, within three weeks. First, for people to form teams. Collaboration enhances innovation, so we asked employees to band together to submit ideas. Next, we told them to map out a plan. Ideas could be revenue-generating, market-growing or cost-saving, but it was up to the team to decide how to implement them. Finally, teams had to tell us why
their ideas mattered to the business. Employees gave their presentations. Chaos did not ensue. One buttoned-up employee in market research suggested reinventing the cafeteria service. Many colleagues didn’t think of her as a creative type, but unbeknown to them she was a devoted foodie. She found others at work with the same interest, and together they went to the on-site food-services team to ask if they
could conduct an experiment or two. The group’s first suggestion was to flip the cafeteria design so that healthy foods were presented before less-healthy ones. At first, the food-services team was worried about margins — pasta is cheap and long-lasting, while fresh fruit is more expensive and perishable — but they soon saw that the changes were an improvement. The company’s senior executives were genuinely surprised. Most leaders have been taught to focus rather than be inclusive. To shift from one mindset to another requires reassessing three myths about creativity: — NOT EVERYONE CAN BE CREATIVE: Break the barriers created by roles, credentials and qualifications by asking everyone what they would like to change for the better. — PROCESS KILLS CREATIVITY: This is only true if your process is broken. A good one can help to clarify goals yet leave the “how” open. The capacity to direct one’s own work enables
teams to share responsibility, self-organize, generate ideas and collaborate. — PAY DRIVES CREATIVITY: Many leaders think we need to financially reward creativity to get more of it. But finding and fulfilling a purpose is a fundamental human need. Think of that buttoned-up analyst. Being able to draw on her passion was reward enough for her. Leaders need to abandon and dispel these myths, and break down the barriers to creativity by instead believing in the core capacity of their people. Invite employees to bring their full selves to work, knowing that every quirky passion or hobby can serve to inspire new ideas.
Nilofer Merchant has personally launched 100 products amounting to $18 billion in revenue, and has served on both public and private boards.
As jobs are automated, will men and women be affected equally? EMMA MARTINHO-TRUSWELL
CONNECTING hat will the future of work look like for today’s young women as more tasks are automated — or even replaced — by artificial intelligence? How can leaders ensure that AI doesn’t lead to gender bias in their organizations? Recent research is beginning to answer these questions, and the outlook is mixed. First, the impact of AI on work will be influenced by the distribution of women and men in particular jobs. While an AI tool may not be designed to replace the tasks of women or men in particular, many occupations are so skewed in their current distribution that waves of automation may be felt more by women, or by men, at particular times. Because AI tools tend to automate tasks rather than whole jobs, many occupations will be affected unequally. While the gender distribution of occupations may shift over time, PwC has estimated that more wom-
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en than men will be affected by job changes between now and the late 2020s. This disproportionate impact on women is based largely on the high number of women employed in clerical occupations. These kinds of roles are being disproportionally affected by technological developments like automated assistants. This picture changes over the medium term, however. As new AI capabilities develop, such as self-driving technologies, more men than women will be affected by job changes between the late 2020s and the mid-2030s. During those years, automation is predicted to lead to job losses www.businessday.ng
in what are currently maleheavy industries, such as construction and transportation. Second, consider that women’s current representation in jobs related to AI is unequivocally poor. According to 2018 data from the World Economic Forum and LinkedIn, only 22% of jobs in artificial intelligence are held by women. This is an important disparity, because those who learn about, experiment with and implement AI technologies will be creating the tools that organizations use on a daily basis — and any unconscious biases baked into their decisions could have serious consequences.
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Leaders of organizations using AI can help prevent the use of gender-biased tools by encouraging diverse technical teams wherever possible. Having more women developing tools may help teams spot unintentional gender biases, like training an algorithm on historical data that reflects gender inequality in who is hired or promoted. There are substantial risks to navigate in the coming years, especially when women are judged using tools built on data from the world as it is, rather than the world as it should be. Leaders need to ensure that their organizations’ AI tools are helping to reveal female talent rather than accidentally overlook it. At the same time, the underrepresentation of women in science and technology roles is occurring alongside an overrepresentation of women in roles that require emotional intelligence and advanced communication skills, such as speech pathologists and preschool teachers. Since skills like empathy and collaboration are among those that are hardest @Businessdayng
to recreate in AI tools, many of these occupations are likely to be safer from technological disruption. Looking ahead, one happy possibility from the rise of AI is that people’s abilities to understand one another and work together may become more valued as technological tools overtake us in other areas.
Emma Martinho-Truswell is the co-founder and chief operating officer of Oxford Insights.
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Wednesday 06 November 2019
BUSINESS DAY
TRANSPORTATION Motoring
RailBusiness
ModernTravel
Roads
Bespoke Black Badge embodies Viktoria Modesta’s attributes
Pirelli Tyre projects 2019 revenue to Euro 5.3b
...An exciting story of super-luxury for the privileged few
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or the 2019 financial year, Pireli Tyre has projected that its revenue would grow to Euros 5.3 billion representing 2.5 per cent higher than a previous guidance of between 1.5 per cent and 2.5 percent. The tyre manufacturer said it would present its 2020 industrial plan, earlier scheduled for December 11 this year in the first quarter of next year, even as it expects a full-year cash flow of between Euros 330 million and Euros 350 million, against a previous forecast. Marco Tronchetti Porvera, Pirelli chief executive officer explained that, the move followed an “effective” deterioration of market conditions. “In this context, to protect our profitability we have to act deeper to reduce the cost of our products,” he said. Meanwhile, the company has cut its guidance on operating profit margin and cash flow, and said it would delay the presentation of its new business plan as it needed to work out stronger measures in a worsening market scenario. In nine-month results, Pirelli said adjusted earnings before interest and taxes (EBIT) slightly fell to Euros 685 million, in line with a market consensus provided by the company. That equates to a margin of 17 percent. Adding to a string of auto parts suppliers hit by prolonged industry weakness, Pirelli said it forecast a full-year margin on its adjusted earnings before interest and taxes (EBIT) between 17 percent and 17.5 percent versus an already lowered previous target of 18-19 percent. Pirelli, which makes tyres for F1 racing teams and premium automakers such as BMW and Audi, said in a statement it cut its guidance after facing greater fixed costs as it lowered production to reduce inventories.
MIKE OCHONMA Transport Editor
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istory was made in March 2016 when Rolls-Royce Motor Cars presented Black Badge; a permanent bespoke family of motor cars that respond to the taste patterns of the marque’s most daring and disruptive clients.In Nigeria, only very few belong to distinguished club of Rolls Royce owners. And for the few super rich that has the precious limousine in their garages across the globe that, since its introduction, the Black Badge has become the most commanding presence on the super-luxury landscape and has done much to attract a new generation of RollsRoyce customers in the nouvre rich club. The time is now right to delve further into its extraordinary allure. “Black Badge began as an alterego of Rolls-Royce Motor Cars but has grown to define an attitude that exists among a new breed of entrepreneurs. These remarkable people are confident, assertive and willfully disruptive. The film is a tribute to their philosophy and the ongoing success of this truly transformative expression of luxury.” Said Torsten Müller-Ötvös, chief executive officer, Rolls-Royce Motor Cars. In this spirit, the marque called upon a collective of globally recognized creatives to express the soul of Black Badge. At the centre of the work is bionic performance artist and art director Viktoria Modesta, celebrated for her innovative and futuristic approach and famed for her fearless performances at the paralympic games closing
ceremony, Art Basel, and fashion weeks worldwide. Modesta says, “There are many parallels between the Black Badge philosophy and my work, chiefly maximizing your potential and becoming a hyper version of yourself. I really wanted to capture the Black Badge attitude and fierce spirit, by embodying that through body art, it felt totally wild. Pushing the boundaries to the extreme we explored the allure of a darker, bolder expression, a place where your senses are heightened, where you are the bravest and most free’’. Key to expressing Modesta’s character through the prism of Black Badge was an international team of tech and fashion designers. Anouk Wipprecht, the ‘FashionTech’ pioneer collaborated with Rolls-Royce to build items that ap-
ply Wipprecht’s hallmark aesthetic of fashion design, engineering, science and user experience to the pieces. Among the extraordinary items created for this performance art piece was a prosthetic limb wrought from Black Badge carbon fibre that the designer created in collaboration with Joe DiPrima at ArcAttack, the Alternative Limb Project and the Rolls-Royce Bespoke Collective of craftspeople, designers and engineers. A Tesla coil is incorporated into the heel and activates under pressure to create a ‘Jacob’s Ladder’ effect, illuminating the glass area of the limb with a continuous train of large sparks on demand. It is the first wearable ‘Jacob’s Ladder’ of its kind. The coloured area of the prosthetic is finished in
the marque’s hallmark Black paint and detailed with a 3D printed and electroplated Rolls-Royce grille motif. Wipprecht says, “Like the Black Badge motor cars we are expressing, Viktoria is not scared of anything. Creating my aesthetic overlay in collaboration with the Rolls-Royce Bespoke Collective merged technology and fashion in a way that truly captured the spirit of Black Badge’’. According to a statement from Rolls Royce, “Viktoria as an embodiment of power symbolised through the electricity of the prosthetic. She can shift time and space, shape worlds and push them in any direction she deems fit. Modesta’s subversive style worked so well with Rolls-Royce Black Badge. I’m pleased to say that we’ve created something really unique’’.
Only 2.5m vehicles in Nigeria have genuine insurance cover ... As Cornerstone takes 3rd Party campaign to parks MIKE OCHONMA
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s a way of breaking the ignorance among motorists on the necessity of obtaining genuine third party insurance policy as well as access its numerous benefits, Cornerstone Insurance Plc has taken campaign to garages in Lagos to sensitise the drivers on the need to acquire third party insurance policy as well as expose its benefits to them. In a chat with the motoring journalists in his office recently, Pelumi Akindumusire, the Ikeja branch manager of Cornerstone Insurance plc, Ikeja Lagos said that, out of the 12 million registered vehicles in the Nigeria, only 2.5 million have genuine insurance cover. Akindumusire pointed out that, it is not as if those motorists do not possess insurance certificate, but that, the policy they have is fake and that is why the Insurance industry has looked for a way to use the Nigeria Insurance Industry Database (NIID) to address the
challenge. He added that the industry also partners with the men of the Vehicle Inspection Services (VIS) and Federal Road Safety Commission (FRSC) to monitor fake insurance policy holders. “On the NIID platform, when a motorist inputs his policy number or the vehicle’s registration numwww.businessday.ng
ber on the app, it will bring out the insurance details of the vehicle, this signifies that, the policy is genuine and if it did not appear, it will say record not found implying that the policy is a fake one,” he explained. However, to improve on the effort the industry is making, he said Cornerstone Insurance Plc on
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its own has taken further steps to educate public drivers on the need for genuine motor insurance cover starting with third party motor insurance policy for commercial drivers. In view of this, a team from the Cornerstone Insurance Plc will be going to the motor garages in Lagos to sensitise the drivers on the need for insurance cover with the aim of selling the third party cover to them eventually. He said various efforts are being made in this regard. ‘’My team and I intend to cover majority of the garages in Lagos state to sensitise the motorists on the need for insurance because of its numerous benefits. Many of them do not know the importance, but just see it as ‘Police let me pass’ whereas there are many benefits attached to it. We have already done a pilot job on this. We want to do this on a monthly or at least quarterly basis; visiting different garages each month – Ojota, Surulere, Ikeja, Ogba and other garages in Lagos’’. @Businessdayng
Cornerstone Insurance is also planning to engage the tricycle riders popularly called Keke Napep to sell a personal accident policy to the riders only. The insurance company has held meetings with officials of the riders from the local government level at Ogba/ Ikeja axis and will be meeting soon with the state officials for final approval. ‘’We may extend to cover their third party liability in future but what we are concentrating on now is their personal accident liabilities. For example; if they are riding the tricycle and they have an accident and sustain injury, Cornerstone will pay for the medical expenses, permanent disability and even death on an agreed sum insured with an affordable premium,” he said. There will also be jingles to educate and sensitise the drivers and riders before the company goes into travel insurance for local travelers+ in case of luggage loss and the like.
Wednesday 06 November 2019
BUSINESS DAY
31
TRANSPORTATION Motoring
RailBusiness
ModernTravel
Roads
CCECC speeds up project on Iju-Lagos rail segment
ABC repositions Jibowu, Onitsha, Owerri Coach operations
Stories by MIKE OCHONMA
n a bid to reinvigorate its operations, the management of ABC Transport plc has launched additional brand new Asiastar Generation 9 coaches on its domestic routes. The injection of the buses into the existing fleet is expected to provide passengers with an enhanced travelling experience. The first batch of coaches were acquired earlier in the year and were deployed on the Coach West Africa, ABC Transport’s international route, which runs covers from Lagos to Cotonou (Benin Republic),
safety equipments, lush and luxury interiors, with more leg room, reduction in noise levels and ultimate comfort due to its unique and advanced suspension systems. The coaches are equipped with 3 positions LCD TV monitors for comfortable viewing and CCTV cameras for surveillance and security. USB chargers are available on all seats for improved convenience and entertainment. It also boasts of an improved on-board toilet system. According to the manufacturers, the concept
Lome(Togo) and Accra (Ghana).This latest batch of coaches are now available to passengers travelling on the Jibowu to Onitsha and Owerri route. Spurred by the recent initiatives and efforts by the government to rehabilitate the dilapidated road infrastructure nationwide as the dry season fast approaches, the acquisition of these new coaches reaffirms ABC Transport’s unflinching commitment to improve on its entire service delivery to its customers irrespective of the route. It is widely perceived that with better road conditions, coaches for long distance travel will return to our highways. The G eneration 9 coaches from Asiastar Wertstar long distance passenger coach range model brings together security among the occupants with the aid of the inbuilt CCTV, comfort and smooth movement, beauty and sophistication. C o m p a n y s o u rc e s say ABC customers are bound to enjoy travelling on board this world class bus as the Generation 9 coaches are fully air-conditioned and features state of the art
of The Asiastar Generation 9 coach is mostly focused on the comfort, safety and security of passengers and is guaranteed to give them the most comfortable ride experience, while giving the driver great comfort and confidence to ensure safe driving. ABC Transport customers are assured that, there will be more adherence to scheduled departures, prompt and seamless trans-loading of passengers and cargo where necessary and early arrivals at terminals. Moreover, an additional set of Generation 9 coaches is expected to be added to the present ones before the end of the year as part of its preparations for ensured optimal service delivery during the ember months and the Yuletide festive period. For over 25 years, ABC Transport has been providing services in passenger operations, cargo, to over 100 destinations daily from 31 locations including Accra, Ghana. It is quoted on theNigerian Stock Exchange and also offers hospitality services through its City Transit Inn, a 114 room budget hotel in Utako, Abuja.
I
E
ngineering solutions have been deployed to the many impediments stalling the pace of work on the Iju to Lagos section of the $2.1bn Lagos-Ibadan standard gauge rail by the Chinese Civil Engineering Construction Corporation (CCECC); the contractor handling the Lagos-Ibadan standard gauge rail project. As at the time of filing this report, CCECC has commenced excavation, formation and re-protection of gas and water pipelines along the Lagos corridor of the project. Before now, the pipelines were some of the impediments that have slowed down the pace of work on section one of the project covering Ebute-Metta and Iju in Lagos. But from Kilometer 23 in Iju to Ebute-Metta, the work has witnessed some challenges owing to many encumbrances including water and gas pipelines. The contractor had completed track laying from Iju in Lagos to kilometer 157 which is the final destination of the project in Ibadan. Some of the pipelines belonging to the Nigeria National Petroleum Corporation (NNPC) and the Lagos State Water Corporation (LSWC) are being excavated to lay the formation while the pipelines
would be protected. Our correspondent reports that with the impediments on Lagos axis being removed, there are indications that track laying from Iju to Ebute-Metta would commence anytime soon as the contractor has gone far in securing the right of way. The right of way from Ebute-Metta, Tejuosho, Mushin, Oshodi, Ikeja and Agege where several bridges and culvert were being constructed is being secured. Also, the contractor has also shifted the narrow gauge tracks in some sections while a new one would be constructed to ensure both the narrow gauge and the standard gauge run simultaneously. It would be recalled that the Nigerian Railway Corporation (NRC) had suspended the operation of the narrow gauge which plies Lagos-
Ogun; Lagos-Apapa as well as the Lagos-Kano train services because of the ongoing standard gauge construction. A spokesperson of CCECC, Prince Abdulraouf Akinwoye said the contractor had taken full control of the many encumbrances through the application of its technical expertise and technological know-how. He however pleaded with communities around the railway line to bear with the CCECC for the temporary inconveniences being witnessed. More so, personnel had been moved from areas where most civil works have been completed to the Lagos area in order to meet the deadline set by the Federal Government. “We now work day and night to meet the target set by the Minister of Transportation, Rotimi Amaechi. We all know that Lagos axis has
a lot of impediments. But I am happy to tell you that CCECC has highly competent technocrats. And we have come up with an uncommon engineering solution’’. Akinwoye said CCECC have a mindset which is in line with the best practices all over the world, even as he said that, as far as the company is concerned, from Ebute-Metta to Iju axis with an extension to Apapa port, it is determined to give a first class standard gauge double track to Nigerians in line with the commitment of the federal government to link Apapa port by rail. “We are going to deploy our first class engineering technology to ensure that Nigeria achieves economic buoyancy and ensure the economic status of Nigeria grows. This can only be achieved through rail’’. Akinwoye assured.
Revamped Edge truly defined by modern sophistication
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ne of the leading automotive group and exclusive dealer of the Ford brand in Nigeria last week at the just concluded 20th Abuja Motorfair launched the new Ford Edge into the local market amidst pump and pageantry with individual, corporate fleet customers in attendance. Described by the Ford dealership as an upscale sport utility vehicle (SUV) defined by modern sophistication, with the launch of the vehicle, Coscharis has once again enlarged the coast for SUV vehicles and increased the options for its customers to choose from a wide range of Ford SUVs that includes the Expedition, Explorer, Escape, EcoSport and now, the new Edge. There are plenty of smart new features which stand it out in its class. The Edge maximizes space and never compromises on comfort. With its rear 60:40 split seats folded flat, it converts to a cargo hauler with ease. A convenient easy foldable seat release for the rear seat lets
the occupants maximize cargo space with the touch of a button. Fold both sides of the seat back down for large objects. Or leave one side up to carry cargo and passengers side by side. And if your hands are full as you approach the rear liftgate, only you need to do is just to kick your foot under the rear bumper, the hands-free foot-activated liftgate will rise on its own. At the retooled Edge launch, Abiona Babarinde, general manager in charge of marketing and corporate communications at Coswww.businessday.ng
charis Group said, “Ford has continued to thrill the world with enhanced new products born out of deep rooted research into the desires of automobile consumers around the globe. We at Coscharis will always see to it that our market never misses the opportunity to get its fair share of such highly innovative products”. The launched model is equipped with quickshifting 8-speed automatic transmission and standard auto-start/stop technology. It reduces fuel consump-
tion during stop-and-go city driving. These drive enhancement features in both of the EcoBoost engines are available in the new 2019 Edge. Ford’s select-shift capability enhances your driving experience on all-wheel drive (AWD) new derivatives with racing-inspired paddle shifters. All it takes is a few seconds to lose focus because according the National Highway Traffic Safety Administration (NHTSA), 94 percent of serious crashes are due to human error. To help you drive with confidence, the new variant comes with Ford Co-Pilot360. This suite of 5 standard features including rearview camera with washer referred to as blind spot information system with cross-traffic alert ; precollision assist with automatic emergency braking; lane-keeping system; auto high-beam headlamps start helping the moment you begin backing out of your driveway.
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@Businessdayng
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Wednesday 06 November 2019
BUSINESS DAY
FINANCIAL INCLUSION
& INNOVATION
Nigeria records biggest drop in conducive environment for financial inclusion - report
…falls 23% in 1 year Stories by Endurance Okafor
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igeria is placed among the top nations with the least conducive environment for financial inclusion, the Economist Intelligence Unit’s (EUI) 2019 Global Microscope revealed. This is coming seven years after adoption of the National Financial Inclusion Strategy (NFIS). Africa’s most populous nation performed poorly in the survey even though the overall enabling environment for financial inclusion improved globally, according to the financial inclusion report released Thursday. The largest economy in Africa scored lower than the war-torn Parkistan (55). Out of 100 points, Nigeria scored 43 points; this is 23.21 percent lower than the 56 points it reported in 2018. “Nigeria experienced the largest score decrease in the 2019 Microscope, in the Government and Policy Support domain. Its scores also decreased in the Consumer Protection domain and the Products and Outlets domain,” the report read. BusinessDay analysis of the EUI report revealed that the 43 points score reported
by Africa’s most populous nation was also lower than the 48.2 points it recorded in 2013, almost the same time the NFIS was adopted. After seven years of policy drive by the Central Bank of Nigeria (CBN), the 2019 EUI report hinted that the regulator may not have achieved as much as it expected. The Central Bank adopted the NFIS in 2012. The strategy was launched to reduce the percentage of adult Nigerians who do not have access to financial services from 46.3 percent in 2010 to 20 percent in 2020. Also, the strategy
stipulates that 70 percent of those to be included in the financial system by 2020 should be in the formal sector. “Though financial inclusion numbers improved in 2018, effective implementation of the strategy (NFIS) was constrained as it did not give room for innovation and changes in the financial services landscape,” the apex bank said in the 2019 NFIS annual report. The latest figures by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning as much as 36.8 per-
L-R: Oko U. Mba, chief financial officer, Stl Trustees; Sade Ademokunwa, head, business development, Stl Trustees; Funmi Ekundayo, MD/CEO, Stl Trustees, receiving the Trustees of the year award from UK EKE, GMD, FBN holdings while Akin Oni, head of trust services and legal, Stl Trustees, look on during the 7th Businessday Banks and other Financial Institutions (BAFI) awards held recently in Lagos.
Fintech Company acquires 60% stake in eClat to deepen healthcare system
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nterswitch Limited, Africa-focused digital payments company, has announced the acquisition of eClat Healthcare Limited, a Nigeria-based health technology company that aims to improve healthcare delivery in Africa. According to a statement by the Lagos-based company, it acquired a 60percent stake in eClat through the purchase of shares from current shareholders and subscription to new shares issued by the company. eClat Healthcare Limited specializes in assisting healthcare service providers in planning, designing and operating their unique practices through the deployment of its bespoke healthcare technology platform, designed specifically for the healthcare environment in Africa. On the motive for the acquisition, the company stated that the combined product offerings of Interswitch and eClat are expected to, among
cent of adults still lack access. According to the EUI report, some of the reasons why Nigeria did record a high score in the 2019 global microscope include the fact that “Nigeria does not incorporate a gender approach in its financial inclusion or financial literacy strategies, does not collect data on financial services for low-income populations and does not have a digital literacy strategy.” The World Bank’s 2017 global Findex database put Nigeria’s financial inclusion gender gap at 24 percentage points. Also, the latest figures
other things, enable operators in the healthcare sector to develop new capabilities, improve the efficiency of their core operations and facilitate seamless payments. “Nigeria’s healthcare system currently lacks adequate funding and a national framework, leading to operational inefficiencies. Interswitch’s strategic investment in healthcare technology aims to address these challenges by modernising the healthcare sector in Nigeria and eventually in Africa through its innovative products and services,” the statement read. According to Wallace Ogufere, co-founder/CEO of eClat Healthcare Limited the growing adoption of valuebased care, combined with the increasing level of usage of patient portals across the industry, has made it critical to take a new approach to patient engagement solution design in Nigeria. “We expect to tightly inte-
grate the eClat capabilities into the Interswitch platform, adding functionality that would enable providers to reach their entire patient populations by leveraging existing patient contact information,” Ogufere said. This new acquisition by Interswitch represents the latest of several strategic investments executed by the company to enhance Interswitch’s product and service offering and expand its reach into new markets as the payments technology sector in Africa expands rapidly. Commenting on the transaction, Mitchell Elegbe, Founder and Group Managing Director/Chief Executive Officer of Interswitch, said: “We are a technology company that is innovating to deliver value across sectors that are critical to Africa’s social and economic development, our acquisition of eClat demonstrates strong progress along this strategy and alignment with our corporate vision.”
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by EFInA revealed that 55.9 percent of the financially excluded 36.6 million adults are women; this is 11.8 percentage points higher than the male population at 44.1 percent. “As financial inclusion policy shifts its focus towards the promotion of digital financial services, regulators and policymakers must address this digital gender gap or risk contributing to even greater disparities in access to financial services between women and men,” the EIU said. Further analysis of the EUI report revealed that Nigeria lagged its Africa peers in the scored recorded in 2019. South Africa attracted 63, followed by Kenya at 54. Ghana also made the list of top countries in Africa with conducive environment for financial inclusion as it reported 48, 5 points higher than Nigeria’s score of 43. Nigeria’s central bank is optimistic that it will achieve the 80 percent inclusion target by next year. In the quest to achieve the 20 percent exclusion target, the apex bank on the 5th of October 2018 released an exposure draft guideline in which it proposed Payment Service Banks (PSB) aimed at deepening financial inclusion. Since inviting Telcos and
other industry players to apply for the mobile money licence over a year ago, the industry regulator has only granted Approval-In-Principle (AIP) to Hope, Money Master, and 9PSB to operate as payment service banks. According to EUI, four basic enablers are required in promoting digital financial inclusion. The report identified – “allowing non-banks to issue e-money, presence of financial service agents, proportionate customer due diligence and effective financial consumer protection.” In the 2019 report, only four countries - Colombia, India, Jamaica, and Uruguay - scored perfectly across all four parameters. Latin America remained the region with the most conducive regulatory and policy environment for financial inclusion. The 2019 Global Microscope analysed the policies used by governments and regulators around the world to increase financial inclusion among their populations. Informed by the vision of the Centre for Financial Inclusion at Accion (CFI), the Microscope defines financial inclusion as access to a full suite of quality financial services for customers who possess financial capability, provided via a diverse and competitive marketplace.
Ecobank encourages banks, Telcos to offer charges free USSD service
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cobank Nigeria has announced that access to it’s Unstructured Supplementary Service Data (USSD) is at zero cost to the consumer. The lender, therefore, challenged banks and Telcos to follow suit in order to give affordable financial services to Nigerian and thus deepen financial inclusion. Going by the recent announcement by the deposit money bank (DMB), customers of Ecobank who transact using the bank’s USSD platform will no longer be charged for using the platform. According to Patrick Akinwuntan, the Managing Director of Ecobank Nigeria all stakeholders must come together to make USSD short code services free to all users, as a key initiative to drive financial inclusion in Nigeria. The MD said this at 2019 Nigeria Fintech Week which held recently in Lagos. “It is about an ecosystem
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to bring financial services to every Nigerian in an affordable, sustainable and convenient manner. It means that some of us have to take the first step but I am counting on the goodwill of my colleagues in the financial services industry to also do the same,” Akinwuntan said. To maintain a basic bank account in Nigeria, the account holder spends an estimate of N500 per month as Account maintenance fees, ATM card maintenance charge, USSD charges, SMS notification fee, stamp duty, and fees charged on transactions with other banks. “For the industry to grow, all stakeholders should allow consumers to access banking and financial services such as the USSD shortcodes at zero use cost, as this will deepen financial inclusion in Nigeria and will further drive economic development,” he said. Most recent data by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, @Businessdayng
meaning that as much 36.8 percent of adults still lack access to financial services. Commenting on how to deepen financial inclusion in a country like Nigeria where millions live on less than $2 a day, Akinwuntan said: “one of the most important gargets that can be used to spur inclusive financial inclusion is mobile phone and so if there are charges attached to the use, it will affect inclusion.” According to Oghogho Osula, financial expert and former MD/CEO of Coronation Trustees Limited, Nigeria has a large mobile market, and the huge number provides an opportunity to use it in deploying easy-to-use technology that can improve access to financial services. Data by Nigerian Communications Commission (NCC) analysed by BusinessDay revealed that the total number of subscribers per individual telecoms operator as of August 2019 stood at 176.89million.
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cityfile World Bank, Oyo partner on community projects
Cross section of Nigeria Army during an enlightenment campaign by the SEC at Nigerian Army Ordinance School Ojo in Lagos.
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Illegal parking slowing work on Lagos-Ibadan road- Official
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unso Adebiyi, the director, Federal Highways, Southwest, says illegal parking by articulated truck drivers is slowing the pace of ongoing construction on the LagosIbadan Expressway. Adebiyi stated this during a stakeholders’ meeting held Monday, at the Reynolds Construction Company (RCC) project yard, and therefore appealed to them to vacate the expressway. Stakeholders at the meeting included transport unions, truck owners, drivers’ associations, law enforcement agencies, traffic regulatory agencies, traditional rulers and community residents’ association leaders, among others. Explaining the reason for the gathering, Adebiyi said that the RCC contractor on section 2 of the project had suspended work around Ogere because articulated
vehicles blocked the highway, making it impossible for the contractor to access the site. He said that reconstruction, rehabilitation and repair works were ongoing on Trunk A One to Trunk A Nine roads simultaneously across the southwest and the entire nation ahead of yuletide. “We called this meeting in order for us to complete this important road. We started work from Ibadan and got to Ogere and your trucks are parked there. We had to suspend work and the truck drivers are there illegally. “If we do not have access to the site to do this work, the southwest loses out,’’ he said. Highlighting the importance of Trunk A One to A Nine roads, Adebiyi listed various ongoing projects starting from Apapa Port in Lagos through other crucial
highways in Ogun and Oyo States beneficial to the nation’s economy. The director listed the challenges of constructing the Lagos-Ibadan Expressway through Lagos, Ogun and Oyo to include accidents by reckless driving that recently killed two site engineers. He appealed for the cooperation of all the stakeholders to speed up construction works, while also appealing to communities to shun hostilities with construction workers. He assured that modalities for paying compensation on property on the right of way of the project had been completed, saying that payments would commence soon. Adebiyi appealed to truck drivers to vacate the highway by a minimum of 50 meters from the road setback for ease of construction.
He also noted that diversion signs would be appropriately mounted and supervised. He directed that the debris from excavation of the highway should be used to stabilise some bad roads and also directed the reconstruction of some sections for accessibility of trucks to their parks. He explained that contractors had been mobilised to carry out rehabilitation works on all the roads in the southwest apart from ongoing contracts to ensure smooth rides. He said that all construction zones would be opened to traffic on December 15. “We have mapped out strategies to ensure that we carry out diversion on short stretches of two to three kilometers to reduce stress. “We are not insensitive to your plight. We just want you to move 50 metres away to allow for reconstruction,’’ he said.
Breast cancer: NB Plc to build emergency unit in Kaduna ABDULWAHEED OLAYINKA ADUBI
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s part of meas u re s t o t a c kle increasing cases of breast cancer among women, Nigerian Breweries (NB) Plc, is partnering Gwamna Awan Hospital in Kaduna to build an emergency unit for the treatment of the disease. Abbey Ajayi, the brewer y manager, represented by the public affairs manager, North, Danjuma John-Ekele, stated this, Monday, during an awareness campaign on the scourge of breast cancer and
need for early detection, in Kaduna. “We have been in Kaduna for over 54 years with a rich partnership history, especially in our host communities and we feel the pains of what the women go through as a result of breast cancer. “Information and knowledge of the basic elements of the ailment effectively increases the possibility to manage its impact on our women folks. “ To further improve services in the hospital, we have also concluded ar rangements to build an emergency unit at the Gwamna Awan Hospital www.businessday.ng
for prompt medical attention” Ekele said. He st re ss e d t h e i m portance of sufficient knowledge on the causes and treatment of breast cancer, as well as early detection of the ailment to check its spread. In his remarks, Moroof Suleiman, head, O&G Hospital, said there were about 1.38 million new cases and 458, 00 deaths worldwide from breast cancer each year, with Nigeria accounting for about 50,000 of such deaths. “Breast cancer is by far the most common
cancer in women worldwide, both in the developed and developing countries”, he said. Also speaking, the acting Medical Director, Gwamna Awan General Hospital, Maryam Dangaru, appreciated Nigerian Breweries Plc for the opportunity to partner in this year’s breast cancer awareness programme. A team of over 20 medical personnel were on ground to attend to ov e r 3 0 0 w o m e n f ro m Makera, Kakuri, Nasarawa, Trikania, Barnawa, Sabo and Kudendan areas.
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esidents of Igbeti, Ajaawa and O y o t ow n hav e commended the Oyo State Community Social Development Agency (CSDA) and World Bank for ‘’life changing projects’’ executed in the communities. Over 687 projects have been executed across the state since 2016 through the World Bank- C SDA partnership. Residents of the benefiting communities, who spoke during the impact assessment and evaluation tour of some of the projects sited in Olorunsogo, Ogo-Oluwa and Oyo East local government councils respectively, on Monday, described the projects as people-oriented. In Igbeti, a group of physically challenged and widows, expressed happiness over the purchase of four tricycles and provision of a motorised borehole for the community. A physically challenged middle-aged man, Taiwo Abolade, who expressed joy over the projects, said members of the group had to trek for miles to get water before the borehole was dug. “As a group of physically challenged and widows, we wrote the CSDA and followed all the process, and when our requests were granted, they provided the funds while we executed the projects. “They asked us to show evidence of our five per
cent contribution either in cash or kind, after that we awarded the project to our preferred service providers and also bought the tricycle. “We used the knowledge of the training given to us at the CSDA seminar in choosing service providers and in managing and supervision of the projects. In another community also in Igbeti, Olorunsogo council area, residents applauded the construction of a health centre facility, saying it has helped in saving lives and reduced child mortality. Chairman of the Community Project Management Committee (CPMC), Muibdeen Ibrahim, said that N5 million was spent on the project. “The health centre has been of tremendous assistance to the community and to the whole of Igbeti, this area is just developing and most people don’t have cars or motorbikes. “So it was always difficult when our wives are in labour or our children require emergency. Now, we have a health centre facility that caters for our health need to a very large extent and we are grateful to Oyo State government and the World Bank over this gesture,” he said. Another resident, Wasiu Arikeusola, disclosed that t h e c o m mu n i t y u na n i mously agreed to request for the construction of health centre as the need was really dire.
Police investigate killing of man by business associate in Enugu
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he police in Enugu State have commenced investigation into the alleged killing of a man, Friday Okafor, by his business associate, over a failed transaction. Ebere Amaraizu, spokesperson of the Enugu police command, who confirmed this on Monday, said that the incident happened Sunday morning in Onuogba Nike community of Enugu East local government area of the state. “It was gathered that the unfortunate incident occurred in the house of one Sunday Nwangwu of Onuogba Nike as he tried to broker peace between both parties. @Businessdayng
“Ogbonna Agboya, the prime suspect, allegedly used the gun kept by the said Sunday Nwangwu in his house and shot the victim who was rushed to the hospital but confirmed dead later,’’ said Amaraizu. He further stated that the state Commissioner of Police, Ahmad Abdurrahnan, had directed full scale investigation into the unfortunate incident. “Nwangwu has been arrested and he is helping in the investigation while manhunt on the fleeing assailant Ogbonna Agboya is still on. “The body of the deceased has been deposited at the Annunciation Hospital mortuary in Emene,’’ he added.
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PanAfrican Capital Holdings promotes intra-Africa trade … opens investment opportunities between Uganda, Nigeria
ENDURANCE OKAFOR
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anAfrican Capital Holdings (PAC Holdings) in Lagos held a business lunch to host members of both Uganda and Nigeria to explore and engage in conversations on economic opportunities between the two countries. The business lunch, attended by over 60 Nigerian CEOs cutting across different sectors including oil and gas, infrastructure, finance, tourism and hospitality, ICT and Media, telecoms, government and more, also had in attendance the High Commissioner, Ugandan High Commission to Nigeria, Ambassador Nelson Ocheger, as well as members of executive management, DMA Group. Speaking by way of opening remark, CEO of PAC Holdings commentes that while it appears that Nigeria and Uganda share a lot in common, from similar history, characteristics and experience, both countries may not have deeply harnessed strengths on the business front in the areas of trade and investments.
According to the 2017 World Bank report, Uganda’s export to Nigeria stood at $929,000, with majorly food products accounting for 83.54 percent. “Today’s meeting is particularly exciting because it reflects our commitment to engage the Ugandan and Nigerian business communities and the aspiration to tackle some of the bottlenecks that may have abetted trade relationship,” he told the audience as he pledged the support and preparedness of PAC Holdings to ensure its success. Also speaking, Ambassador Nelson Ocheger thanked the management of PAC Holdings for taking the initiative through the Business Lunch, as he affirmed that both countries stood to reap a number of benefits including increased export and import trade and enhanced access to human capital. He further said that, ‘Uganda has proven itself to be a highly stable country over the past 2 decades, standing as the second fore runner at attracting foreign direct investment (FDI) inflows within the EAC.”
CFA Society welcomes new charterholders to industry
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FA Society Nigeria, the local member society of CFA Institute, hosted a charter award ceremony for 64 new investment professionals who earned the prestigious CFA (Chartered Financial Analyst) designation. CFA is the global association of investment professionals that sets the highest standards of ethics, education and professional excellence in the investment finance industry. The award ceremony, held in Lagos, was well-attended by CFA charterholders and other investment industry executives who with the board welcomed the awardees as they joined the CFA Institute and CFA Society Nigeria’s global effort to create an environment where investors’ interests come first, markets function at their best, and economies grow. “The CFA Charter is so much more than a designation. It is the highest standard for all investment professionals globally,” said Banji Fehintola, president, CFA. Fehintola said the new charter awardees were joining a
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dmund Asamoah, a pioneer student of the MultiChoice Talent Factory (MTF) Class of 2019 who won an internship programme in Bollywood at the inaugural MTF graduation, is off to a two-week allexpense paid trip to India this November 2019. The internship, which was made possible by MTF’s partnership with global consulting and solutions integration company - Nihilent Limited, will give the 27-year-old Asamoah an insight into Bollywood production and movie production in general. Speaking about the internship programme, MTF
Nigeria refining capacity to hit over one million in five years OLUSOLA BELLO
global community of 155,000 CFA Charterholders worldwide, respected by employers for unrivalled investment expertise and professionalism as well as adherence to the highest ethical standards. He charged the awardees to go beyond earning the CFA designation and use their new found status to be active players in the collective journey of advocating for better capital markets and developing future professionals. To earn the CFA charter, candidates sequentially pass three six-hour exams that are widely considered to be the most rigorous in the investment profession. The CFA curriculum includes Ethical and Professional Standards; Financial Reporting and Analysis; Corporate Finance; Economics; Quantitative Methods; Equity, Fixed Income, Alternative Investments; Derivatives; Portfolio Management; and Wealth Planning. Currently, more than 155,000 investment professionals in 160 nations and territories hold the CFA charter.
MTF graduate Asamoah travels to India for internship SEGUN ADAMS
Olajumoke Simplice (l), president, Chartered Institute of Taxation of Nigeria (CITN), presenting a plaque to Babajide Sanwo-Olu, governor, Lagos State, during a courtesy visit to the governor by the executive members of the Institute at Lagos House, Alausa, yesterday.
director, West Africa, Femi Odugbemi, explained that the internship programme would broaden the film production skills of these young talent. “MultiChoice Talent Factory is about giving upcoming talent the chance to hone their abilities thereby increasing the pool of available talent and world class professionals in the industry,” he said. Besides Asamoah, 26-yearold Nigerian - Gilbert Bassey, who emerged Best overall student in the class due to the display of his multidisciplinary abilities during the programme also won a prize to visit the New York Film Academy College of Visual and Performing Arts (NYFA) in the United States of America. www.businessday.ng
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igeria’s refining capacity could hit over one million barrels per day when current efforts at becoming self-sufficient in the downstream oil sector crystallises five years from now in 2024. This is when the Nigeria National Petroleum Corporation’s (NNPC) 450,000 capacity refineries would have come on stream while the Dangote’s 650,000 barrels refinery would also have been up and running. Additional 200,000 from what the NNPC described as condensate projects are going to be injected into the system. All these, when put togeth-
er would push the country’s production capacity for refining products to be around 1.3 million barrels per day. Mele Kyari, group managing director of NNPC, gave an indication in this direction while answering questions when he visited Dangote Refinery and Petrochemical plant weekend. The NNPC boss, who was asked about the current situation with the four refineries, said the NNPC would complement Dangote Refinery to make Nigeria net exporter of petroleum products to the West African market. This, he said, cannot be achieved unless all the stakeholders in both the public and private sectors complement each other.
According to Kyari, NNPC is in the process of establishing two new 200,000bpd Condensate Refineries to boost in-country refining capacity. He s t at e d t hat u p o n completion, the Condensate Refineries, coupled with the 445,000bpd capacity of the existing refineries, being refurbished, and the 650,000bpd Dangote Refinery, would transform Nigeria into a net exporter of petroleum products. The NNPC boss had said that the nation’s refineries, located in Port Harcourt, Warri and Kaduna, Would roar to live to refine crude oil at optimum capacity come 2022. He stated this while visiting the refineries in September this year, saying, “Making
the refineries to operate at optimal capacities was a mandate that NNPC as a corporation would leave no stone unturned to actualise. A timely delivery of the asset was a priority. “We will stick to time; we will deliver this project by 2022. We will commence actual rehabilitation work in January. We will do everything possible between October and December to close out all the necessary conditions for us to deliver on that project. I believe that with the support that we have from the shareholders - government of this country, the entire staff of this company and the contractors, I believe it is doable and we will deliver the project.”
Savings culture is an important aspect of WISCAR holds 2019 leadership child development – Wigwe conference November 24
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roup managing director, Access Bank, Herbert Wigwe, has emphasised the significance of promoting a savings culture among children as an essential factor for child development, as the continent’s largest retail bank joined the global community to commemorate the World Savings Day. Building on its intensive effort to promote financial literacy and inclusion, the Central Bank of Nigeria (CBN) assigned 31 schools to Access Bank, across six geo-political zones in the country, to sensitise them on the importance of building a savings habit. The bank visited schools in Lagos, Taraba, Nassarawa, Jigawa, Akwa Ibom, Enugu and Ebonyi, where the GMD, represented by the zonalhead,commercialbankingEast, Fidel Ibeabuchi, marked the day with students in the Ebonyi State University Staff School. Speaking on the significance of being avid savers, the CEO’s representative said: “Imbibing a savings culture is an important aspect of child development, and as parents, guardians and teachers, it is our responsibility to instil in them this mentality. Apart from equipping them with financial freedom, it encourages a sense of discipline and planning, applicable to
other spheres of life and important for them as they grow”. He also urged the students to explore opportunities provided through saving, especially focusing on possible investments, starting a business, or planning for emergencies that can be handled independently without involving their parents or guardians. Access Bank presented gift items, includingwaterbottles,booksandother school accessories to the students. As part of the Bank’s promise to be ‘More than Banking’, the celebration of the World Savings Day aligns with its mission to enhance customer experience and drive financial inclusion through innovative methods and international best practices. Other laudable initiatives around financial inclusion and literacy for children embarked on by the bank include its recent partnership with MTN at the mPulse planet. This initiative served to educate pre-teens and teenagers on the importance of practicing good savings culture through new and interesting ideas, where the bank introduced Dreamville.ng – a community where children can learn about managing money and other financial instruments, including other attractions to enhance early savings culture.
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OLUWASEGUN OLAKOYENIKAN
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eputy Secretary-General of the United Nations, Amina Mohammed, will be the keynote speaker at the Women in Successful Careers in Nigeria (WISCAR) 2019 annual leadership and mentorship conference. WISCAR is a non-profit 12-month structured mentoring programme focused on empowering and developing professional women in diverse careers in the formal and informal economy to contribute to nation-building in Nigeria. The conference themed “I do not walk alone” is scheduled to hold on Saturday, November 24, 2019, at the Muson Centre, Onikan, Lagos, and it’s based on WISCAR’s mission of developing women to build a better nation. This is to follow up on more than 8,000 women and men WISCAR has so far impacted through its various structured and open series programmes. Commenting on the theme of the conference, the founder of WISCAR, Amina Oyagbola, says the conference theme is a @Businessdayng
perfect summation of the essence of WISCAR. “In our various mentorship programs and advocacy for equity and parity, we harness the power of togetherness, community and networks to achieve critical impact,” she said. “We believe firmly in the timeless African proverb that says ‘if you want to go fast, go alone, if you want to go far, go together’.” She further said it was important to pay more attention to the issue of solidarity, partnership and collaboration. On her part, the executive secretary of WISCAR, Fabia Ogunmekan, pointed out that the theme of the event aligns with what WISCAR promotes. As part of activities leading up to the conference, a mentorship walk has been scheduled to hold on Saturday, November 9, between 8 am and 10 am. The walk which will begin at the Light House Grill Bar, Lekki, will continue down the bridge to Ikoyi and back. The walk is aimed at promoting the power and possibilities of mentorship and role modelling in developing the next generation of women for leadership.
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CIAN makes case for indigenous auctioneers … moves to stop EFCC from using foreign auctioneers to sell recovered items Jumoke Akiyode-Lawanson
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he Certified Institute of Auctioneers of Nigeria (CIAN) says that the body has capable and well-trained certified auctioneers who can handle the auctioneering industry both online and traditionally in the line with the best international practice comparable to anywhere in the world. Speaking to journalists in Lagos, Hassan Adeleke, registrar of Certified Institute of Auctioneers, Nigeria, said that the Economic and Financial
Crime Commission (EFCC’s) effort to auction some items recovered under the fight against corruption, deserves commendation, however, the body of local auctioneers does not want to believe reports that the Ibrahim Magu led commission will be inviting foreign certified auctioneers to carry out an assignment, which local certified auctioneers can do very well. When asked about the reports credited to Magu, who disclosed EFCC’s decision to invite non-Nigerian to assist the agency to sell off recovered
assets, the registrar said he believes that EFCC chairman was misquoted. “The Certified Institute of Auctioneers of Nigeria wishes to place on record the appreciation of our institute about the effort of the acting chairman of Economic and Financial Crimes Commission, Ibrahim Magu and his team in the fight against corruption and economic crimes in Nigeria. “We are however surprised about the statement credited to him in the nation newspaper of 1st November 2019
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and some online newspapers that foreign auctioneers will be engaged to auction the pieces of jewellery and luxurious houses forfeited to the federal government as a result of court order made absolute against the former minister of petroleum resources as well as sales of other recovered assets within the purview of the commission, Adeleke said. Adeleke said that to sell these assets particularly the houses located in different countries abroad, they believe that Valuers were engaged to determine their reserve prices.
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Wednesday 06 November 2019
BUSINESS DAY
news Apapa suffocates again, businesses, residents lament
…as task team, NPA differ on cause CHUKA UROKO & JOSHUA BASSEY
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L-R: Humphrey Oriakhi, head, specialised finance, PAC Capital Ltd; Eric Okoruwa, MD, PAC Capital Ltd; Nelson Ocheger, Ugandan High Commissioner to Nigeria; Chris Oshiafi, group CEO, PAC Holdings Ltd, and Sina Alimi, deputy group managing director, PAC Holdings Ltd, at the Uganda-Nigeria business lunch in Lagos.
CBN data contradict Customs’ claim of N5.8bn daily revenue since border closure MICHAEL ANI
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he claim by Hameed Ali, comptroller general of the Nigerian Customs Service, that border closure has increased the agency’s revenue appears to be a far-cry from available data, a fact check by BusinessDay has revealed. Nigeria had on August 20 shut its borders with Benin Republic in order, the government said, to check the effect of smuggling, particularly rice and petrol, which it said is hurting the economy. The directive given by President Muhammadu Buhari was initially supposed to last for about 28 days but was later extended indefinitely. The claim Hameed Ali, while re-
cently analysing the impact the closure has had on the economy, highlighted several benefits, including increased production for local rice millers and a drastic reduction in Nigeria’s consumption of petrol, which was hitherto smuggled out to Benin where the price is higher. However, more striking was his statement that the closure has supported the agency with increased revenue as goods coming into the country now pass through the country’s busiest ports. According to Ali, since the closure of the border, the agency has seen increased revenues. This, he explained, was contrary to his fears that the closure would lead to a fall in rev-
enue for the agency. “Since we closed the border, we have maintained an average of about N4.7 billion to N5.8 billion daily which is far more than we used to collect,” he said. According to him, most of the cargoes that were hitherto shipped from other countries to the Benin Republic, discharged and then smuggled into Nigeria, are now being forced to go through Apapa or Tin Can Island Port where the agency can collect duty on them. “If the closure can continue, for us it is a welcome situation because as a matter of fact, we are seeing increasing revenues as a result of the closure,” Ali told the joint National Assembly Committee on Finance
working on the 2020-2022 Medium-Term Expenditure Framework and Fiscal Strategy Paper. The fact To verify the authenticity of this statement, BusinessDay fact-checked Ali’s claim using available data obtained from the Central Bank of Nigeria’s economic report for the third quarter. The data show that revenue generated by Customs declined by 1.94 percent to N210.77 billion from N214.93 billion generated in the previous quarter. A 1.9 percent fall is contrary to claims by Customs blowing the trumpet of an increase in revenue owing to the border closure.
•Continues online at www.businessday.ng
What FG’s 50% cut on priority cancer drugs means for Nigerians Temitayo Ayetoto
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f the Federal Government follows through on its fresh plans to slash the cost of 16 priority cancer drugs and chemotherapy treatment by 50 percent, accessing care for the top five cancers of greatest burden to Nigeria might become easier. The Federal Ministry of Health under its new programme labelled ‘Chemotherapy Access Partnership’ (CAP) has promised to make low-cost and high-quality treatment available in seven teaching hospitals across the country. In effect, the out-of-pocket burden of treating breast cancer, cervix uteri, prostate, liver
each cycle and N1.8 million under the government’s partnership with the Clinton Health Access Initiative, Inc. (CHAI), the American Center Society (ACS), Pfizer Incorporation, Worldwide Healthcare and EMGE Resources Limited. The programme will run in six African countries which account for 42 percent of the cancer burden in subSaharan Africa. The structure of the partnership is such that immediate payment will be made to participating pharmaceutical companies and drug distributors for sustenance and regular stock replenishment.
another media jamboree to promise what the government won’t do. Depending on the cancer type, drug prices vary from N10,000 to N3 million for each cycle of chemotherapy, health analysts say. Chemotherapy deploys drugs to kill cancer cells, by targeting cells that grow and divide quickly, as cancer cells do. The treatment can destroy cancer cells to the point that they would no longer be detected or grow back. Women battling with cancer, for instance, usually need about 12 to 18 cycles of Herceptin, a prescription for breast cancer which costs at least N300,000, Joseph said. But breast cancer patients will now need N150,000 for
and colorectal cancer which have the highest prevalence in both male and female Nigerians will reduce significantly. These types of cancer account for approximately 50.3 percent of identified cancer cases in Nigeria. Breast cancer has accounted for 34.2 percent of the total of 38,000 deaths in women, with prostate cancer responsible for 31.7 percent of 30,400 deaths in men. Generally, Nigeria could lower over N72,000 deaths arising from cancer and effectively tackle 102,000 new cases estimated by the World Health Organisation if the announcement by Adeleke Mamora, minister of state for health, does not result in
•Continues online at www.businessday.ng
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nce again, trailers and tankers have overrun Apapa, thereby re-enacting the ugly scenes and suffocating experiences that existed before the coming of the subsisting presidential task team set up to clear the gridlock that defines Apapa, Nigeria’s premier port city. As at Monday and Tuesday, road users had it pretty difficult accessing the port city through any of the routes. At the moment, the hapless residents, business owners and other road users are confused as to the cause of the present situation after what has turned out now as a momentary relief occasioned by the activities of the task team which forced the rampaging trucks into public and private holding bays. As at Wednesday last week, the major task of the team was the trailers who were pushed to the roads and bridges following the closure of the Lilypond Transit Park by the authorities of Nigerian Ports Authority (NPA), citing destruction of the facility by hoodlums a couple of weeks ago. How the tankers came
to join the fray, occupying every available space in and around the port city, remains a mystery. Both NPA and the task team say they cannot explain and therefore not responsible. But close watchers of events in Apapa as they pertain to traffic control know that the NPA and the task team are merely playing the ostrich as they differ on approach to truck movement to the ports. The task team is, however, less economical with the truth. “There are issues, no doubt about that; we should be telling ourselves the honest truth,” Kayode Opeifa, executive vice chairman of the presidential task team, said last week. Some truck owners who spoke to BusinessDay blamed the NPA for creating the chaos on the road, citing inefficient operations for the presence of many trucks parked on the roads and bridges. But Adams Jatto, NPA spokesman, told BusinessDay on phone that the authority would not trade blames with the task team over the return of traffic congestion in Apapa.
•Continues online at www.businessday.ng
Fertiliser suppliers mull expansion of insurance cover to 3.9m farmers HARRISON EDEH & CYNTHIA EGBOBOH,
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ertiliser Suppliers Association of Nigeria (FEPSAN) has commenced the insurance of farmers, targeting over 3 million farmers across Nigeria under the programme geared towards a sustainable agribusiness venture. The potential partnership, which would package insurance bundle with up to 14 million bags of fertiliser, could see as many as 3.9 million farmers benefitting from climate insurance in 2020 and up to 19 million by 2025, the organisers say. The insurance products have been deployed to over 1 million smallholder farmers in 2019 alone. T h e i n s u ra n c e p ro gramme has become important considering huge risks farmers across Nigeria currently face, including climate-induced drought, excessive rainfall, pests and disease, among other challenges that undermine their ability to acquire good yield and incomes. Thomas Etuh, chairman, FEPSAN, speaking at the fertiliser stakeholders workshop held in Abuja on Tuesday, said the yield index insurance could be a lever
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for helping farmers cope with weather and other peculiar risks, while scaling adoption of fertilisers among smallholder farmers in Nigeria. The workshop was supported by leading development agencies and foundations including AGRA, the Gates and Rockefeller Foundations, UKAid, and USAID and convened by Pula. Etuh said the proposed yield insurance would ensure compensation for farmers in the event of climate or any catastrophe, adding that it was an important intervention that would shield the farmers from risks and build a sustainable farming enterprise that could withstand shocks. “This insurance also provides financial security that gives farmers confidence to invest in additional inputs like fertilisers knowing that their investment will be protected by insurance in the event of crop failure,” Etuh said. “The partnership which would bundle insurance with up to 14 million bags of fertilizer could see as many as 3.9 million farmers benefitting from the climate insurance in 2020 and up to 19 million 2025,” he said.
•Continues online at www.businessday.ng
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news Nigeria’s $683m lubricant market promises ... Continued from page 1
chain needed to make the product available to customers. Nigeria has an installed lubricant capacity of 600,000 metric tonnes but there is no independent reference laboratory in the country, people familiar with the matter say. This presents investment opportunities. “Nigeria’s lubricant market offers enormous opportunities for investors looking for high returns,” Emeka Obidike, executive secretary, Lubricants Producers Association of Nigeria (LUPAN), said. “ We a re d r i v i n g a d vocacy that will see import duty of 50 percent slammed on imported finished lubes. Early investors can also enjoy pioneer status and a five-year tax holiday should we pull th rough,” O b id ike sai d at the recent Oil Trading and Logistics (OTL) Africa Downstream Week, 2019 in Lagos. With the recent increase of import duty on base oil and additives (10 percent duty and 5 percent valueadded tax) and 30 percent duty, 5 percent VAT on finished lubes, investors have a chance to take advantage of investment opportunities in the sector. Nigeria currently accounts for 700 million litres (1 percent) of global demand. Nigeria’s automotive lubricants market is projected to reach $683 million by 2023, according to a report by TechSci Research, a research-based management consulting firm. The demand for lubricants in the domestic market is met by supermajor international oil companies (IOCs), as well as independent marketers in Nigeria. The IOCs operating in the country have a major share in the market in terms of sales volume as compared to the independent marketers. Other areas in the industry where investors can put money and expect high returns include blending plants, additives plants, reference laboratory, recycling plants and base oil plants. The lubricants market in Nigeria has grown over the years from 2012 to 2017 with the growth in the number of second-hand and new passenger and commercial vehicles in the country. Penetration of used cars and the requirement of more frequent lubricant changes in older vehicles as compared to newer models have contributed to the volume demand of automotive lubricants in Nigeria. But the slowdown in economic growth in Nigeria impacted this industry negatively. The slowdown
arose from the 2016 recession occasioned by the significant drop in oil prices globally. The year 2016 opened with $36.76 per barrel of oil, reaching a year high of $54.06. Given that many players in the industry imported, at the time, large volumes of base oil and other raw materials needed to blend lubricants, the shortage of foreign exchange had a serious adverse impact on various lubricants manufacturing companies’ ability to do business and imposed severe costs on key sectors of the country which further cascaded into all areas of the economy. The investment landscape is changing with major oil marketers taking advantage of the fact that the lubricants market is deregulated and with little government interference. Most major oil companies have invested heavily in upgrading synthetic lubricants facilities and have embarked on nationwide awareness campaigns and promotion to make sure that this area of their business, where government does not have as much involvement or control and where there are no issues of subsidy, yields optimum profits. “We are able to produce world quality lubricants and can price them appropriately. Based on the quality we deliver, our customers are able to reward and pay us slightly more than they may pay some of our competitors because of the quality that we deliver,” Tunji Oyebanji, managing director, 11 plc, told BusinessDay in an exclusive interview. Total Nigeria plc is the market leader with the highest market share in terms of sales volume in the Nigerian lubricants market, followed by Ammasco International Limited, 11 plc, Oando plc, Tonimas Nigeria Ltd, Forte Oil plc, Conoil plc, Lubcon, MRS Oil Nigeria plc, A-Z Petroleum Products Ltd, Dozzy Oil and Gas, Eterna plc, Techno Oil Ltd and Ascon Oil Company Ltd. With progress and upgrading of technology, lubricants producers and retailers in Nigeria are tagging alongside global trends. There have been improvements in marketing and branding of lubricants, the introduction of base oil refining and used oil processing. Experts say increasing favourable regulations in Nigeria’s lubricants market, collaboration with transportation companies, increasing knowledge of consumers and providing better quality lubricants at lower costs will aid the manufacturers of lubricants in the country to grow and achieve higher profits. www.businessday.ng
L-R: Nike Akande, former president, Lagos Chamber of Commerce and Industry (LCCI); Toki Mabogunje, deputy president, LCCI; Babatunde Ruwase, president, LCCI; Halima Aliko Dangote, group managing director, group commercial operations, Dangote Industries Limited, and Knut Ulvmoen, supply chain director, Dangote Cement plc/deputy president, LCCI, during Dangote special day at the Lagos International Trade Fair 2019 in Lagos, yesterday.
Poor crude oil metering means billion-dollar... Continued from page 1
Transparency Initiative (NEITI) in its audit reports 2012-2015 said Nigeria lost over $9 .89 billion worth of
crude oil due to poor metering infrastructure. Within this period, over 107 million barrels of oil were not properly accounted for. The latest figures show that Nigeria loses over 250,000 barrels of crude oil per day to oil thieves, which translates to over $25 million daily in revenue. The oil and gas industry watchdog says that unless government takes appropriate measures, limitations in the metering of crude oil production will continue to pose a serious threat to the nation’s revenue target. Findings by BusinessDay show that the government has no multi-phased, calibrated meters at oil wellheads, flow stations and export terminals to determine the quantity of crude oil produced and exported by the International Oil Companies (IOCs). What this means is that the machines that monitor loading into the vessels are owned, calibrated and operated by the IOCs without any form of supervision or participation by any government agency. According to NEITI, Nigeria is the only oil-producing country without adequate metering to ascertain the accurate quantity of crude oil produced at any given time. This has raised serious concern over issues of transparency and accountability in the oil industry
regarding the quantity of crude oil production in Nigeria. Nigeria lacks comprehensive and independently verifiable metering infrastructure, thereby relying only on the information provided by the IOCs or indigenous operators for production figures, even though the Department of Petroleum Resources (DPR) has always insisted it has the situation under control. “In our Lagos office we have a track record of all the oil vessels leaving Nigeria,” Wole Akinyosoye, DPR’s Lagos zonal operations controller, said at the zone’s 2019 Annual General Meeting in Lagos recently. Ibe Kachikwu, immediate past minister of state for petroleum resources, had said the DPR and the Economic and Financial Crimes Commission (EFCC) were gathering data to track specific vessels lifting crude oil from Nigeria. “It’s a collusion thing between DPR and IOCs; the crude oil losses through poor metering is always through the backdoor,” Niyi Awodeyi, CEO at Subterra Energy Resources Limited, said. Awodeyi said the amount of crude oil Nigeria loses through poor metering is always discovered at the offload points in other countries that receive the crude because those countries use technology, unlike Nigeria where it’s still being done manually. “The DPR will always insist they are metering. However, until we start using 100 percent technological metering which will definitely cost us more
Globus Bank officially commences operations... Continued from page 1
industry by offering innovative products tailored to its customers’ needs and by offering exceptional customer service,” Diejomaoh said in the statement. The Archbishop was welcomed by the staff, management and board of directors of Globus Bank, including Charles Osezua, chairman, board of directors; Augustine Okere, Olayide Abel, Vincent Okeke, and Isioma Ezi-Ashi, who are
non-executive directors of the bank, and Nixon Iwedi, executive director of the bank. Globus Bank said it would leverage its visionary board and savvy business model to distinguish itself in the Nigerian banking industry through innovation and the delivery of exceptional service to its customers. While Globus Bank continues with its regional operations, plans are underway to raise about N50 billion capital
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money to implement, we will never solve the problem of crude oil theft,” Awodeyi said. Experts, who believe that Nigeria is being short-changed, have questioned the production figures from the operators, which the country has relied on since crude oil production began in the country. “The fact that government could realise only 58 percent of its projected revenues from January to June 2019 is a confirmation of how inadequate oil production can cause huge losses in revenue,” Charles Akinbobola, an energy analyst at a Lagos-based energy firm Sofidam Capital, said. In order to discover the level of rot in the system, a team of researchers from NEITI visited four export terminals and Port Harcourt Refinery Company as part of a fact-finding mission to cover the upstream and the downstream sector. The terminals visited were Quo Iboe (QIT), Brass, Escravos and Forcados which were selected with the consideration that their combined crude oil export is more than a third of total national export. “We gathered that the meters were operated and maintained in compliance with the DPR guidelines. However, quantification of measurement uncertainty which is common practice globally is not practised by the operators. The implication of this is that the confidence in the measurement infrastructure cannot be ascertained,” researchers at NEITI said. NEITI researchers recommended that multiphase flow meter be used for measurement
of field production instead of relying on periodic well-testing for allocation of production to the fields. “In this case, the multiphase meter should be installed between the production platform/ flow-station and the export terminal for continuous measurement of production from the field. This also has the advantage of improving production management and control, leading to higher production and resulting in higher revenue to both the government and operators,” NEITI said. The researchers from NEITI, the industry watchdog, acknowledged that although the Petroleum Act of 1969 says royalty is a field-by-field basis, it’s not clear if the allocation of production to the contributing oil and gas fields is properly performed suggesting an apparent lack of proper production accountability per field. “Allocation of production by terminal operators to the third-party (the producing companies who export through their export terminals) need to be addressed. Allocation of crude oil and natural gas to the contributing fields form the basis for royalty calculation and should be determined on a continuous basis using a flow meter with low measurement uncertainty,” NEITI said. “Multiphase flow meters are used in some offshore installations in Nigeria; DPR should incorporate guidelines for multiphase flow measurement. Perhaps, a study of their performance should be commissioned by DPR, and the findings could then be used in developing guidelines for their use,” NEITI recommended.
in the next 12 to 18 months as the lender aspires to extend its operations with 24 branches across the country within the next five years. “Obtaining a national banking licence was always the play and while we have enough capital to obtain one now, we still plan to raise an additional N50 billion in 12-18 months,” Elias Igbinakenzua, managing director/CEO of the bank, had told BusinessDay in an exclusive interview. Globus will target the underserved and unbanked with its innovative products in a
bid to bridge a yawning gap in financial inclusion. “In a market where about 40 million people are financially excluded, there is an opportunity for us to go where the big banks are afraid to tread,” said Igbinakenzua, who has more than 24 years’ experience in the banking industry including as executive director in both Zenith Bank and Access Bank. “The fintech companies have shown that there is a massive loan deficit in Nigeria and that’s going to be our focus,” he said.
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NDIC assures on zero tolerance for corruption, malpractices in operations Cynthia Egboboh, Abuja
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igeria Deposit Insura n ce Co r p o rat i o n (NDIC) has assured it would sustain its stance on zero tolerance for corruption and all forms of malpractices within the Corporation as well as in the implementation of its mandate and activities as a key component of the Nigerian financial safety-net arrangement. The Corporation has established a culture of zero tolerance for corruption by implementing strict operational procedures and guidelines that are geared towards instilling transparency and accountability in the work place, according to Umaru Ibrahim, managing director/ chief executive. Represented by Omolola Abiola-Edewor, executive director, corporate services, Ibrahim spoke at the inauguration of four new members to the Corporation’s Anti-Corruption and Transparency Unit (ACTU) by the Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC) at the Corporation’s Head Office in Abuja. ACTU was established in the Corporation in 2006 and was reconstituted in 2018. The new members were therefore appointed into the Unit to replace the former members. Ibrahim described the inauguration of the new members to
the Corporation’s ACTU as an extension of the NDIC’s commitment towards maintaining high anti-corruption standards which has been imbibed by the Corporation’s employees and strengthened by the core values of honesty, respect and fairness, discipline, professionalism, teamwork and passion. He added that ACTU of the NDIC had been involved in the preliminary investigation and collaboration with ICPC, sensitization of the Corporation’s members of staff, identification and improvement of internal controls to avert fraudulent practices through the thorough analysis of its systems, as well as by ensuring maximum compliance with its policies and procedures. According to him, the inauguration of the new members further strengthened the Corporation’s partnership with the ICPC and other government agencies involved in the anti-corruption fight towards promoting credible and effective service delivery in the public sector. The Chairman of ICPC, who was represented by Justin Kuatsea, an Assistant Director and Head of ICPC Anti-Corruption Unit, said ACTU was created in ICPC in 2001 and established in other Government Agencies to curb corrupt practices as well as to implement transparent processes and procedures in the public sector.
Edo assures residents, investors of peace, promises 30-year development plan Francis Sadhere, Warri
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do State governor, Godwin Obaseki, has assured investors and residents in the state that his government will continue to pursue peace, adding that his administration will leave a 30-year development plan, which subsequent administrations would key into for speedy growth and development of the state. Obaseki said this when he delivered his speech at the 2019 plenary session of Christian Association of Nigeria (CAN) Edo State chapter held in Benin City. The governor, who noted the need for continuity of projects and plans of government, said in terms of development, there was much to be done in Edo State. He said, “I didn’t meet any developmental plan for Edo State. When Samuel Ogbemudia was the governor of the state, he developed a 20-year plan for the state. The plan helps to look into the future of the state in terms of development and growth. “By the grace of God, I will leave a 30-year plan for Edo State. This will enable citizens know what to expect in the state in terms of development and growth at the emergence of any administration and subsequently know how to demand for it.” The governor further commended the programme with the theme, ‘Prayer for Peace in Nigeria, Now More Than Ever,’ noting that it was apt at a time when the state needs peace to develop. “We need peace to grow our
economy. When there is peace in the state, people would have confidence to invest. My administration is working to ensure there is peace in Edo State but few people have promised to make the state ungovernable, we will maintain peace, but we need prayers too.” He applauded CAN for their support and prayers for his administration, which has contributed positively to the development of the state, stressing that his emergence as Governor of Edo State was through God’s intervention. The governor attributed the peace and development in the state to the good working relationship between his administration and the Palace of the Oba of Benin, His Royal Majesty, Omo N’Oba N’Edo Uku Akpolokpolo, Oba Ewuare II. “Three weeks to my inauguration, the Oba of Benin was crowned; working with the traditional institution, we were able to bring development to the state through the disbandment of CDAs and the introduction of government actors in revenue collection. “We pay salaries as at 26th of every month. I have instructed Chairmen of LGAs to ensure from 1st of January 2020, Local Government workersalso receive their salaries on the 26th of every month. Pensioners receive their pension as and when due and they don’t protest again. We have fought the scourge of human trafficking and have now brought dignity to the citizens of the state. I am governor today to give hope to Edo people,” he said.
L-R: Dele Oye, 2nd deputy president, NACCIMA; Yemi Akisanya, trustee and member, Organisation of Expert Conflict Resolvers (OECR); Babatunde Fagbohunlu, chairman, Lagos Chamber of Commerce and Industry Arbitration Council (LACCIAC); Kenneth Onyema, trustee and member, OECR, and Wale Adediran, national president, Chartered Institute of Personnel Management (CIPM), at the inaugural breakfast business meeting held at the MUSON Centre, Onikan, Lagos.
Favourable interests will shut borders on imported poultry products - farmers ... as NAFDAC says usage of growth promoter is injurious to healthy living RAZAQ AYINLA, Abeokuta
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undreds of poultry farmers under the aegis of Poultry Association of Nigeria (PAN) have said the country’s borders will be automatically shut on either smuggled or legalised imports of poultry products if enough fund is made available to farmers at a cheap interest rate. Recall that the National Agency for Food and Drug Administration and Control (NAFDAC) has been warning against the consumption of the formalin-preserved poultry products imported into the country even before the land border closure done against unchecked imports of various products into the country, saying the consumption of such products is unhealthy and injurious to human. But, the poultry farmers have now asked the Federal
Government to come up with a controlled interest rate payable on loan invested in the production, processing and distribution of poultry products. This is as the current double-digit interests on loan being granted by commercial banks and other financial institutions are making the market less competitive and prices much more expensive than the imported ones. Speaking at the Nigeria Poultry Show 2019 tagged, “Nigeria Poultry Industry: Managing the Value Chain for National Development” held in Abeokuta on Tuesday, Ezekiel Ibrahim, president of PAN, says the poultry farmers have potentials and capacity to produce enough poultry products, but lack of fund and expensive interests payable on loan make locally- produced poultry products less competitive and attractive. The president, who was represented by Joseph Alade-
suyi, general secretary at the Poultry Show organised by PAN, noted that market forces were enough to shut border on the imported poultry products if the prices were right and competitive internationally, just as he assured Nigerians that poultry farmers were capable of controlling prices of products effectively if right economic climate was provided for them. He said, “We are suffering from high interest rate from banks, though Federal Government gives some of our members from Anchor Borrower Loan, not all of us benefitted. That is why government must help us on banks’ interests and grants. “We need to reach a consensus on how to reduce prices of chicken from hatchery level, our hatchery operators must do something about the cost. Yes, it is good that Federal Government policy is favourable to us on border closure, we must
also consider the cost of our products so as not to discourage people from buying and consuming the locally-made poultry products.” Meanwhile, NAFDAC has warned poultry farmers not to capitalise on border closure and use growth promoter which enhances undue growth of chicken at the detriment of human healthy living, saying the use of antibiotics to hasten the growth and production of poultry products should be discouraged among the farmers. Moji Adeyeye, NAFDAX director-general, who was represented by Akin Fagoroye, said, “Now that the border has been shut, I want to plead with farmers to please, let us stop sharp practices, let us stop the use of antibiotics as growth promoter, we want Nigeria to be food secure, if we have food security and we don’t have the food safety, then it will affect sound and healthy living and our population.”
Presidency decries poor information sharing, collaboration among anti-graft agencies Godsgift Onyedinefu, Abuja
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residential Advisory Committee Against Corruption (PACAC) has decried poor collaboration, especially in the area of information sharing among anti-corruption and security agencies, saying it was weakening the fight against corruption in Nigeria. Itsay Sagay, chairman PACAC, said the platform for information and intelligence sharing needs to be built on as it had been observed that information at the disposal of various intelligence units in the country are not shared in a systematic and pragmatic manner to assist the fight against corruption and other related security threats. Sagay said this on Tuesday at a one-day workshop on
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strengthening anti-corruption agenda by PACAC in collaboration with Centre for Democracy and Development (CDD) and supported by the MacArthur foundation in Abuja. According to Sagay, corruption is the reason for the massive unemployment, unequipped clinics, wretches schools, bad roads and consequently the cause of deaths on roads, hospitals, kidnapping, robbery, among others. The PACAC chairman recalled the 2007 and 2013 looting by public officials and business men which came to N1.35 trillion. “One-third of the stolen funds could have provided 635.18kilometre of roads, 36 ultra-modern hospitals per state, 183 schools, educated 3,974 children from primary to tertiary level at 25.24 million per child and built 20,062 units
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of 2-bedroom houses,” he said. He reiterated the call on the National Assembly to pass an intelligence reform bill into law to provide an Inter-Agency Coordinating Group (IACG) platform for the sharing of corruption, terrorism and other serious crimes intelligence. “This platform will engender partnerships among all levels of government involved in the fight against corruption and other related offences,” he said. Sagay also recommended that whistle blowing be strengthened. He said there should be a graduated scale of reward for maximum of 5 percent for relatively small recoveries to 0.5 percent for very large recoveries. He however harped on the fact that the fight against corruption is a collaborative effort that involves the participation of every Nigerian down to the @Businessdayng
grassroots level and should not be left for ant-graft agencies alone. Boss Mustapha, Secretary to the Government of the Federation, also speaking, said that despite successes recorded in the anti-corruption war there was still much to be done. He said lingering corrupt acts are coordinated with complicity from public officials. The SGF who was represented by the permanent secretary, OSGF, Amina Bello, therefore tasked participants at the session to analyse the role of the Audit Departments and Units in aiding and abetting corruption in MDAs. He tasked the Office of the Auditor-General to come up with policies to empower auditors to halt payment that are in breach of procurement Act, financial regulations, and other laws.
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AIB investigates serious incident involving Air Peace B737-500 IFEOMA OKEKE he Accident Investigation Bureau (AIB) has commenced investigation into a serious incident involving a Boeing 737-500 aircraft operated by Air Peace, with registration marks, 5N-BUJ. From information provided by the Air Traffic Control (ATC), the flight crew declared engine failure at 07:47am local time on Tuesday and subsequently made an air return to Lagos. AccordingtoastatementbyAIB, theaircraft,whichdepartedMurtala Muhammad Airport at 0735am local time, was en route Owerri from Lagos with 90 passengers and six crewmembersonboard. “The aircraft landed safely at 08:06 local time. All the occupants disembarked with no injury. The AIB team of safety investigators has commenced investigation. “As the sole Agency mandated to undertake the investi-
gation of aircraft accidents and serious incidents, the Bureau wants the public to know that it would be open to receiving any video clip, relevant evidence or information that may assist in this investigation,” AIB stated. Meanwhile, Stanley Olisa, corporate communications executive, Air Peace, confirmed the development, saying its Lagos to Owerri flight, which was already airborne, was aborted when the pilot in command noticed a change in the parameter of one of engines. “The pilot reported the incident, took precautionary measure and returned to base in line with Air Peace safety operational procedures.Thepilothasreportedthe incidenttoappropriateauthorities. “Air Peace apologises for the incident and assures its customers and other Nigerians that it continues to maintain high safety standard in its operations,” Olisa said.
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increased. Byabout6pm,fireservicemen from Lagos State Fire Service and security agents, including the police were still battling to put out the fire. Some residents in the area said the inferno was not new to them as it had become an annual occurrence between November and December, except last year when it was only armed robbers that invaded the building and chartered away undisclosed cash and fabric materials. The affected building is the next to the former Radio Nigeria building at Martins Street and has its back on Sanni Adewale Street. Meanwhile, it was also gathered that a building at Oke-Arin and Dosumo areas were on fire but have been put out with the efforts of some youths.
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L-R: Adetoun Dosunmu, head, fixed income, currencies and treasury, FBNQuest Merchant Bank; Kayode Akinkugbe, MD/CEO; Ebun Bamgboye, consultant nephrologist, St. Nicholas Hospital, and Debbie Irabor, head, wealth management, FBNQuest Merchant Bank, at the FBNQuest Merchant Bank wealth management customer forum in Lagos, Pic by Olawale Amoo yesterday.
Off-grid generation, DisCo franchising key themes in Future Energy Nigeria conference ISAAC ANYAOGU
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his year’s edition of the Future Energy Nigeria conference and exhibition, which will take place November 12 - 13 at the Eko Hotel & Suites, VictoriaIsland,Lagos,willfocuson bridgingtheNigeria’senergyaccess gap through off-grid generation projects as well as the regulator’s plan to franchise the Electricity DistributionCompanies(DisCos), the organisers say. At a press conference announcing the event, Ade Yusufu, head of sales, East and West Africa at Clarion Energy, organiser of the event, says this year’s event will bring together high-level officials
fromtheDisCos,powergeneration companies,theregulatorinaroom to find solutions to the challenges facing the sector. “Our focus is on finding solutions to these problems rather than just talking about problems,” said Yusufu, noting, “How do we make the sector more profitable to attract investments and what kind of reforms are needed are our key focus.” The session around the offgrid market is themed “Bridging Nigeria’s energy access gap” and willshinealightonoff-gridprojects of the Rural Electrification Agency (REA), from increasing access rates to their positive impact in the communities. Citing International Energy
Trade fair: LCCI commends Dangote investment drive, economic development
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mid excitement at the newsofimminentcompletion of the Dangote Fertilizer plant, management of the company has assured farmers cooperatives associations of the company’s readiness to do business with them. In the same vein, the Lagos Chamber of Commerce and Industry (LCCI) has commended the contributions of Dangote Industries to the growth and development of the Nigerianeconomy. These were the highlights at the Dangote Day at the ongoing Lagos International Trade Fair in Lagos yesterday where top management members of the pan-African Conglomerate, Dangote Group reeled out efforts being made to get the much touted Dangote Refinery and Dangote Fertilizer completed in record time. President of the LCCI, Babatunde Paul Ruwase, said the Dangote Group had added a lot of value to the growth of the Nigerian economy pointing out that if Nigeria would have fared better if the country could have two Dangote group. He specifically commended the company’s investment in Refinery, Fertilizer, Cement, Flour and every sector and still expanding and going strong. He described the Dangote
brand as a critical enabler to provide locally made goods for Nigerians and the African Continent. “The Dangote Group is a Nigerian company managed by Aliko Dangote. We are very proud of this company, which is people oriented.” Ruwase said that the activities of the Dangote Group show high degree of vision, creative thinking, research, innovation, hard work and industry, which he added, have culminated into what one can describe as the Dangote business and industrial empire today. Giving his remarks at the event, the Group Managing Director, Olakunle Alake, who spoke through the company’s Director, Supply Chain, Dangote Cement, KnutUlvmoen,saidthatthegroup would continue to invest in the Nigeria’s economy. Alake, said that the company’s investment drive is being made manifestbytheconstructionofthe 650,000 barrels per day Dangote refinery, a fertilizer plant, rice, and cement noting that the refinery would be Africa’s biggest and the world’sbiggestsingle-trainfacility, upon completion. He said the refinery has been designed to process a variety of light and medium grades of crude to produce Euro-V quality clean fuels including gasoline and diesel as well as jet fuel and polypropylene. www.businessday.ng
Agency (IEA), Damilola Ogunbiyi, managing director/CEO, REA in Nigeria, predicts that mini-grids could account for up to $300 billionofinvestmentbytheyear2030, hence the Nigerian off-grid energy marketopportunityismassiveand mini-grids could account for up to $10 billion annually. “This translates to huge economic opportunities for private sector developers and a larger vehicle for electrifying community clusters across rural and urban Nigeria. Mini-grids, indeed, are the future for reaching unserved and underserved communities with safe, reliable and clean energy,” says Ogunbiyi. The High Commissioner of IndiatoNigeria,AbhayThakur,will
give a keynote address on ‘India’s interest in working with the Nigerianpowerandenergyecosystem.’ The Indian Chamber of Commerce (ICC) returns to Future Energy Nigeria as the featured country partner for the third year in a row, hosting a pavilion of almost 50 suppliers of specialized technologyandservicesfortheenergy sector. Expected at the event are James Momoh, chairman, Nigerian Electricity Regulatory Commission, Ebipere Clark, Ag. Special Assistant (Energy) to the governor, Central Bank of Nigeria, Nigeria, Chiedu Ugbo, managing director/CEO Niger Delta Power Holding Company (NDPHC), among others.
Phillips Consulting sees strategic alliance as model to drive transformation, change in Nigeria Daniel Obi
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hillips Consulting, an indigenous management and digital technology firm, has tasked states across the country to enter into strategic alliances in order to support initiatives that tackle unemployment and create jobs. Speaking at the monthly meeting of Nigerian-South African Chamber and Commerce (NSACC) in Lagos at the weekend, which had Lagos and Ogun states, formed a strategic partnership, managing director of Phillips Consulting, Robert Taiwo said the current challenges in the business community and the lack of fund accruing to states has created the imperative for collaboration between states and private sector. He regretted that in Nigeria, there had not been many such strategic partnerships both in the private and public sectors. In the quest to kick start such strategic collaborative partnership between key states in Nigeria, Phillips Consulting uses the monthly breakfast meeting of the NSACC as a platform to announce the birth of a strong alliance/partnership
between Lagos and Ogun states’ government. Taiwo said, “In 2020, to support the Federal and State governments initiative of addressing unemployment and creating jobs, Phillips Consulting will work in collaboration with its content partners to deliver free online training on specialised IT Certifications to 500 Nigerian youths across the country.” During this event, the governors of both states participated in a panel session moderated by Foluso Phillips, chairman of the consulting firm. This Lagos/Ogun Partnership Alliance (LOPA) model is the first of its kind in Nigeria and it is targeted at addressing; decongestion of Lagos State, development of a Land Port, rail and water transportation between both states, Private Public Partnership (PPP) funding for infrastructural development, a grand master-plan for the integration of both states and extension of their vision by working closely with the development agenda for Western Nigeria (DAWN) Commission; a ‘Lagos/Ogun Integration Summit’ organised in collaboration with DAWN will be a good start.
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Fire razes property on Lagos Island
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roperty estimated at billions of naira was on Tuesday burnt to ashes when a mysteriousfireengulfedan-oldsevenstorey building on Lagos Island. According to a private security guard at a nearby plaza, the fire started around 7am on the 2nd floor of the building like generator smoke and soon spread into a big infernoatabout9am.Theaffected big plaza named Brassas Fabrics is said to be owned by Fausat Fusijoye (FF). The Redeemed Christian Church of God occupies the ground floor of the building situated at Martins Street on Lagos Island. Youths within the neighbourhood and traders were said to havemadefranticeffortstoputout the fire, but the more the inferno
CIAPS e-Platform to tackle all forms of sexual, workplace harassment KELECHI EWUZIE
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eterminedtotackleheadon the prevalent issues around sexual harassment in universities, places of work across the country, Centre for International Advanced and Professional Studies (CIAPS), the first paperless academic institution in Africa, has launched an e-platform called ngrcampus. com/help desk in Lagos. The informative e-platform, according to CIAPS, will provide solutions to any form of harassment melted out to undergraduates, postgraduate students in universities and employees in Nigeria. Anthony Kila, CIAPS centre director, says the vision behind setting up this help desk is driven by the need to urgently eradicate the sense of impunity of the perpetrators of sexual harassment and the sense of hopelessness of victims. Kila, while speaking at the launch of the platform in Lagos, points out that move to address incidents of harassment in Nigeria today should be of great national interest to both the government and private sector that are in a position to help. @Businessdayng
Kila says the concept of the help desk is fashioned to put an end to any form of harassment as a middleman channel between the victims and the other experts. “Help desk is a middleman channel between the victim and the other experts, and it is ready to carry out its duties having qualified and professional experts on ground to meet the need and help to proffer solutions to these problems,” he states. He further says that while the pioneers of this e-platform are passionate about the initiative, they are also eager to see that justice is melted out to perpetrators, as “each case will be dealt with individually within 48 hours.” He calls on well-meaning Nigerians to join this initiative to offer ideas and financial help, adding that confidentiality is the sole core of this initiative, keeping anonymous and security. Tola Adeniyi, former chairman of Daily Times Nigeria, while speaking at the unveiling of the informative platform, states that the help desk is not only restricted to schools or students, graduate, but workplaces, employees, etc, are also encouraged to be a part of the initiative.
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Thursday 07 November 2019
BUSINESS DAY
POLITICS & POLICY Kogi guber: Court adjoins Wada, Idris case till November 27
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high court sitting in Lokoja on Tuesday adjoined a case seeking to dis qualify the candidate of the People’s Democratic Party (PDP), Musa Wada, from contesting the November 16 governorship election to November 27 for defence. The son of former governor of the state, Abubakar Idris who dragged Musa Wada his brother in-law to court on the ground that he was not properly elected at the party’s primary as the standard bearer of the party, has urged the court to disqualify him and declare him (Abubakar) as the winner of the party’s primary. The court had adjoined the case last Friday till Tuesday after all the witnesses of the claimant testified and were cross examined by the counsels. However, when the case came up for defence, counsel to the first defendant (PDP), Kola Olowookere told the
court that the former counsel handling the case was indisposed and has therefore, handed the case over to him and that he needed time to obtain record of proceedings from the registry of the court in order to study it. He equally said the case file handed over to him was less than 24 hours and that he needed time to study the file whether to continue with the case as at the stage it reached or to modify it by calling more witnesses. Olowookere, therefore, requested that the court should adjoin the case requesting for five working weeks so that he would be able to study the case properly and continue ( if necessary) at the stage it has reached. He stressed that for Justice and fair hearing to be dispensed to all parties, enough time must be given for the trial judge to “hear all the hearable and see all the seeable.” But counsel to Abubakar Idris, Rowland Otaru (SAN),
Musa Wada
stoutly objected to the plea for adjournment, saying the counsel to the first defendant (PDP) does not need any extra time to study a case which has reached a defence level and that the court must be mindful that the issue
at contention which is the governorship election is just 11days away and of public interest. He said the defendant was only using a delay tactic to prolong the case and reminded the trial judge that
Kogi polls: Group, Kogi NUJ urge INEC, security agencies to embrace peace VICTORIA NNAKAIKE, Lokoja
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matter of days to Kogi State gubernatorial election, Nigeria Union of Journalists (NUJ) in collaboration with Search for Common Ground, an international non-profit organisation that promotes peaceful resolution of conflict, has continued to preach peace. Speaking, at the police headquarters on Tuesday, Hakeem Busari, Kogi State police commissioner told Kogi electorates not to be afraid of coming out enmasse to exercise their franchise as police
are ready to provide adequate security, saying that with the kind of security arrangement being put in place by the police, there would be no reason to entertain any fear. Busari also assured politicians and their supporters of adequate security, saying that everyone has been given level playing ground for campaign. “We have enough personnel, at least, eight policemen and other security agencies ready to collaborate with us on that day to give necessary assurance to the people. “The inspector-general of police have provided us with additional police to man the
polling stations so that everybody will be able to come out and exercise their franchise without any fear of molestation,” Busari said. Also, the state resident Electoral Commissioner, Prof. James Apam assured of the commissions readiness to conduct a clean election that would be acceptable to all. “We are committed to conducting free and clean election. However, this can only be achieved in an atmosphere of peace, so the youth should not allow themselves to be tools for violence during the election and even after that,” Apam said. Earlier, Anne Olurinde, the
state chairman of National Association of Women Journalists (NAWOJ), had on behalf of Kogi journalists, presented a position letter calling on both the police and INEC to ensure that the elections take place free of violence. Among other demands, Kogi media asked that all officials “be fair to all political parties without any form of bias in the discharge of their responsibilities.” Kogi NUJ equally called for prompt arrest and prosecution of all electoral offenders including political actors and elected officials without immunity.
… Laments politicisation of project
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he Action Democratic Party (ADP) has called on the Federal Government to complete the Ajaokuta Steel Company in Kogi State, saying that the current blame game over the completion of the project should end. The party stated this in a statement signed by its national chairman, Sanni Yabagi, a copy of which was made available to BusinessDay, Tuesday, noting that its position was in reaction to a visit to the company by the Minister for Mines and Steel development, Olamilekan
Adegbite. Yabagi lamented that despite exorbitant amount of money spent on the project since 1976, it has not been able to produce a single steel rod for local consumption not to talk of export. The party said that the Ajaokuta Steel Company, as a public asset, was capable of generating about a million jobs for the nation’s teeming unemployed youths in the host state and across the country, if developed to a stage of real production. According to him, “It is rather too shameful that an asset which has been in existence since 1976, which was aimed at establishing a metallurgical www.businessday.ng
process plant and engineering complex with other production equipment, seating on an expanse of land of over 24 hectares in Ajaokuta, with several billions appropriated in our yearly budget, has not been able to produce a single steel rod for local consumption, not to talk of export. “Apart from generating employments for the citizens, the cost of iron rod for building, construction, and others will be reduced, which will in addition, increase our revenue, which the government has been working hard to increase since the cost of crude oil is falling.” ADP said while it is good to collaborate with continental
he has read in social media how some insinuations were made against him and that he remains undaunted because he has made a covenant with God not take bribe from anyone. “None of you can buy me over, whether it is APC or PDP or anybody. I have made a covenant with my God precisely on May 18, 1999 that if I up turn justice for any monetary gain or favour that God should remove me from where I am because my being a judge is by his mercy,” Olorunfemi. Meanwhile, the trial judge while accepting the plea for adjournment said the court must not be made to embark on ‘neck breaking speed’ when there is still much time to hear all sides of the case and added that for the principle of fair hearing and justice to be given to all parties, no one should be deprived from being adequately heard. He therefore, adjourned the case to November 27 for defence.
Lagos Assembly seeks protection of local traders
ADP urges Buhari to complete Ajaokuta Steel Company Iniobong Iwok
he promised to give the case an expeditious hearing and therefore, urged the court to overrule the plea. Counsel to the second defendant (Wada), Prof Joas Amupitan (SAN), while supporting the plea for adjournment, told the trial court not to allow anybody to stampede the court into arriving at a decision that is not fair to all the parties, saying the principle of justice and fair hearing is a tripod issue that affects not only the claimant but both the defendant and even the court. He said since the case was a pre-election matter, the court is constitutionally allowed to adjudicate in the matter within 180 days and that the court still has many days and should therefore, not allowed it to be rushed in a way that justice will be miscarried. After hearing all the parties, the trial judge, Richard Olorunfemi in his ruling said nobody can pressure or stampede him to do anything outside the law, saying
and foreign firms such as African Export-Import Bank and the Russia Export Centre, the overall interest of Nigerians must be put into consideration for any deal or agreement signed. The party further urged President Muhammadu Buhari to give all the deserved attention to the economic development of Nigeria because it was his primary responsibility to all Nigerians. “Ajaokuta in particular has been at about 90percent of completion for several years, with no one making effort to get it to start production of iron and liquid steel for local consumption and export.
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Iniobong Iwok
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he Lagos State House of Assembly Tuesday called on the State Governor, Babajide Sanwo-Olu to direct the Commissioner for Commerce, Industry and Commerce, Lola Akande to initiate strategies to protect the local traders in the state. The House also called for the enforcement of the Lagos State Market Advisory Council Law. The Assembly also decided to review the Lagos State Market Advisory Council Law with a view to upgrading it and make the law conform to current realities. The resolution followed a motion moved by the Majority Leader of the House, Sanai Agunbiade on the need to protect local market men and women against foreign nationals. In his argument, Agunbiade noted that the activities of foreign nationals in the market threaten trading which is capable of forcing local traders out of business. He added that some indigenous market men and women were being sidelined, saying that foreigners were selling directly to end users after manufacturing instead of passing the products through local traders. The Deputy Speaker of the House, Wasiu Sanni@Businessdayng
Eshinlokun, who presided over plenary said, though a market must be competitive; there should be free entry, stressing that the non-organised traders must be protected. “It is generic; it is not to protect a section,” he said. Earlier in his argument, Tunde Braimoh demanded explanation on why the House should review the Market Advisory Council Law and at the same time called on the executive to enforce the same law. Speaking in the same vein, the Chief Whip of the House, Rotimi Abiru said, stated that there was no law that prohibits the manufactures from selling directly to the end users, adding that everything depends on strategies adopted by the House. “We have been craving for Foreign Direct Investment (FDI), so we should not send wrong signal, there is need for caution,” he said. In his contribution, Adedamola Kasunmu advised that there is need to have a stakeholders meeting with the House and the local market men and women. Another member, Abiodun Tobun argued that though foreign nationals were welcomed to invest in the country, not to take away petty trading and opportunities of people of the state.
Wednesday 06 November 2019
FT
BUSINESS DAY
47
FINANCIAL TIMES
World Business Newspaper NAJMEH BOZORGMEHR AND MICHAEL PEEL
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ran’s president Hassan Rouhani has announced that the Islamic republic is to inject gas into centrifuges, a significant step away from the nuclear deal agreed with world powers and in defiance of European calls for restraint. Last year, US president Donald Trump withdrew the US from the nuclear deal and since May Iran has started rolling back its commitments to the 2015 accord in protest at what it calls the failure of the European signatories to help an economy crippled by US sanctions. While previous moves were more focused on research and development, western diplomats in Tehran fear the injection of gas into centrifuges, which had previously spun empty, is an escalation by the authorities in the Islamic republic and threatens the nuclear deal. “Our next step is going to be in Fordow [an underground enrichment facility] where we have 1,044 centrifuges . . . and will inject gas into centrifuges,” Mr Rouhani said on state television on Tuesday. “This step might discourage them [Europeans] . . . I understand their sensitivities toward Fordow and its centrifuges. But whenever they meet their promises we will cut back gas injection.” Fordow is Iran’s second-biggest enrichment facility and, under the terms of the nuclear deal, is monitored by the International Atomic Energy Agency. Mr Rouhani said that the IAEA could continue its supervision of the facility. One EU diplomat
Iran steps up pressure on Europe with new breach of nuclear pact President Hassan Rouhani says country will begin injecting gas into centrifuges
Hassan Rouhani said Iran’s retaliatory moves could be reversed if other signatories to the nuclear deal met their commitments
described the move as “very bad” news for the deal. The diplomat added: “Fordow is particularly sensitive due to its past history as an originally undeclared facility.” In public, EU countries led by France, which has been trying to save the deal, adopted a more measured tone. The French foreign ministry said Iran’s intention to increase its enrichment capacity broke the terms of the nuclear deal, adding that it was awaiting a report on the development from the IAEA.
Renminbi rallies as officials debate rolling back levies on $112bn of goods to secure broader ceasefire deal
The country is not immune to the disease of mendacious Euroscepticism
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campaign for decades with no pushback from those who knew better, giving room for antiEuropean forces such as the UK Independence party to grow. In Germany, too, lowbrow and highbrow media give free rein to criticism of the ECB based on caricature or ignorance, with the common thread that Germany is being taken advantage of. Alternative for Germany began as an anti-euro party — Mr Schäuble blamed its rise on the ECB — and quickly took on an illiberal and xenophobic hue. It occupies a similar part of the political spectrum as Nigel Farage’s successive electoral outfits in Britain. For too long, UK leaders humoured the vilification of the EU by ignoring it or by finding use for some Europe-bashing of their own. By the time the UK referendum came around — itself a reaction by then-prime minister David Cameron to Ukip making inroads into his electoral base — it was too late to convince enough people of the true benefits of EU membership. German politicians and commentators should beware of making the same mistake. www.businessday.ng
sanctions. Tehran had previously announced it had increased its stockpile of uranium above the agreed 300kg limit under the nuclear deal and enriched uranium to 4.5 per cent purity while warning it could raise it to 20 per cent. Mr Rouhani said on Tuesday that negotiations with European powers would continue and Iran’s retaliatory moves could be reversed as soon as other signatories to the deal met their commitments. Tehran’s main concern is the
US considers dropping some tariffs on China
Brexit is a warning to Germany’s ECB-bashers t is fitting that Christine Lagarde’s first official outing as European Central Bank president was to visit Berlin to honour Wolfgang Schäuble, the infamously disciplinarian former German finance minister. It underlines her biggest immediate challenge: to salvage and rebuild the fraying acceptance of ECB policies, above all in Germany. She cannot do that on their own; German leaders need to show more support for the ECB’s legitimacy. G er mans have long seen themselves as the good citizens of the EU, a people that for historical reasons is unwaveringly committed to the European project. But Germany should not think itself immune to the British disease of mendacious Euroscepticism. Long-running but misguided grumbles about the ECB — from ill-informed fears about its Target2 cross-border settlement system or the notion of “punishment rates” on German savers — bear worrying similarities to the antecedents of Brexit in the UK. There, the press peddled a Eurosceptic misinformation
“We remain committed to the JCPOA [nuclear deal] and we urge Iran to reverse its decisions that breach the accord, wholly comply with its obligations and co-operate fully with the IAEA,” the foreign ministry said in a statement. Iran, which has been plunged into a deep recession, has said it does not want nuclear weapons and has no intention of pulling out of the nuclear agreement but that it will decrease its commitments in response to the US
restrictions on its oil exports, which have plummeted from 2.8m barrels a day in May last year to under 500,000 b/d. But even though US sanctions have deprived Iran of large amounts of petrodollars, authorities in Tehran have praised the underlying resilience of the Iranian economy. Iran’s leaders have stuck to their controversial regional and military policies. Iran shot down a US drone in June for allegedly violating the country’s airspace and seized a British-flagged tanker in response to British troops’ seizure of an Iranian tanker. The US has also accused Iran of staging attacks through proxies on other oil tankers and on Saudi Arabia’s biggest oil installation. Ayatollah Ali Khamenei, Iran’s supreme leader, on Sunday reiterated that there could be no negotiations with the US unless all sanctions were lifted and Washington joined other signatories of the nuclear deal for talks with Iran. He said the 1979 Islamic revolution was “basically against the US” for interfering in the country and that Iran “will not sit at the political negotiating table with the US” in order “not to kneel down” to the US. He downplayed efforts by French president Emmanuel Macron to negotiate a way out of the impasse and said that he was either “naive” or an “accomplice” to the US.
JAMES POLITI
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rump administration officials are debating whether to remove some tariffs on Chinese goods as a concession to seal a partial deal that would pause the trade war as early as this month. According to five people briefed on the discussions, the White House is considering rolling back levies on $112bn of Chinese imports — including clothing, appliances, and flatscreen monitors — that were introduced at a 15 per cent rate on September 1. The US move would meet a core demand from Beijing as negotiators from the world’s two largest economies work out the terms of a ceasefire to be signed in the coming weeks by Donald Trump and Xi Jinping. But Washington would probably expect something in return, including beefed up provisions on the protection of intellectual property for US companies, greater certainty on the scale of Chinese purchases of US farm
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products, and a signing ceremony for the agreement on American soil. C h i na’s c u r re n c y b r i e f l y strengthened past the seven per dollar mark on Tuesday in reaction to the news of the shift in the Trump administration. Progress in the US-China trade negotiations would take pressure off Beijing to let the renminbi weaken to better cushion the impact of the trade war. The onshore-traded renminbi firmed to Rmb6.9996 per dollar in early European trading, passing the seven threshold it had previously breached on August 5. At the time, the move sent a wave of jitters through global markets as US-China trade negotiations worsened. Washington has already suspended a planned increase in tariffs on $250bn of goods from 25 per cent to 30 per cent that was due to take effect on October 15, after a visit from Chinese negotiators to the US capital in early October. US officials have also suggested that Beijing could avoid the planned imposition of tariffs @Businessdayng
on $156bn of mostly consumer goods due to hit during the holiday season on December 15, if it struck a deal with Washington. Officials in Beijing have demanded that Washington take a further step and retract some existing levies on Chinese goods for the first time since the beginning of the trade war in early 2018, as the limited agreement draws closer. It is a step that has been resisted by Trump officials. One person familiar with the matter cautioned that although there was a growing consensus within the Trump administration that they had to make a concession on existing levies, it was unclear whether the US president himself would agree. Plans for Mr Trump and Mr Xi to sign what the US president has dubbed a “phase one” agreement at the Asia-Pacific Economic Cooperation summit in Chile on November 17 were thrown off course by the cancellation of the event because of civil unrest there. Officials have been trying to find alternative venues ever since, with Brazil and the US considered the most likely options.
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Wednesday 06 November 2019
BUSINESS DAY
NATIONAL NEWS US navy secretary warns of ‘fragile’ supply chain The 19-year-olds who will shape Africa’s future
FT
Richard Spencer says America is at risk of relying on China and Russia for warship parts PETER SPIEGEL AND ANDREW EDGECLIFFE-JOHNSON
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he US navy secretary has warned that the “fragile” American supply chain for military warships means the Pentagon is at risk of having to rely on adversaries such as Russia and China for critical components. Richard Spencer, the US navy’s top civilian, told the Financial Times he had ordered a review this year that found many contractors were reliant on single suppliers for certain high-tech and high-precision parts, increasing the likelihood they would have to be procured from geostrategic rivals. Mr Spencer said the US was engaged in “great power competition” with other global rivals and that several of them — “primarily Russia and China” — were “all of a sudden in your supply chain, [which is] not to the best interests of what you’re doing” through military procurement. He said he was particularly concerned about China, saying he believed Beijing was trying to “weaponise capital” through its Belt and Road Initiative. He accused Beijing of offering developing countries “loan to own” debt that they could not pay back in order to gain leverage over critical assets. “You go to a country in need, you fill that need which they are grateful for, but at some point do they turn around and go: ‘You know what, everybody out, we’re going to use
this now . . . the keys are mine’?” Mr Spencer said. “There’s nothing that prevents that.” Mr Spencer became so concerned about China’s efforts to secure control of sensitive maritime assets that he confronted Italian shipbuilder Fincantieri, a finalist to build the US navy’s new frigate, after Rome decided to sign up to Belt and Road this year. “We did have a very open conversation with the executive management of Fincantieri saying: ‘Show me the firewalls’,” he said. “Fincantieri is not a government-controlled entity . . . but if it’s sitting in a country that has just signed up to Belt and Road, we had to go out and ask and we had to go out and see.” Mr Spencer said he was ultimately satisfied by the controls Fincantieri had in place, and the Italian shipbuilder remained a candidate to build the frigate. Mr Spencer’s efforts to improve the domestic supply chain have been hampered by repeated government shutdowns and haphazard federal budgeting in recent years. This has undermined his ability to convince domestic suppliers that there will be a steady stream of business for them if they invest in building out their manufacturing capabilities. “Right now, we’re sliding back into a [temporary budget extension], which is a bloody shame. A lot of the progress we made we’ll try to hold but it will not be without really concentrated effort,” he said.
US price-fixing prosecutions at historic low for third straight year Trump administration brings fewer criminal antitrust cases than any government in 50 years KADHIM SHUBBER
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riminal prosecutions for pricefixing under Donald Trump have remained at historic lows for a third consecutive year, a drop-off in enforcement against big business cartels not seen since the 1970s. The Department of Justice announced 25 new cases alleging criminal violations of US antitrust laws in fiscal year 2019, according to a tally of public filings by the Financial Times. The figure, an improvement on 2018, meant the Trump administration has brought fewer criminal antitrust prosecutions than any US government for almost half a century. The persistent slowdown has come despite assurances from Makan Delrahim, chief of the antitrust division since 2017, that he is committed to criminally prosecuting price-fixing and cartels, a realm of competition law that has historically had bipartisan support. “Criminal enforcement can be resource intensive, but it is one of our most powerful deterrents,” he told the Senate in September, noting that crimes like price-fixing “reduce faith in the free-market system”. Criminal fines for antitrust violations have also dropped off dramatically over the past three years. In 2019, the division levied penalties of $300m, according to the FT’s analysis, an improvement on its previous figures but otherwise the lowest total since 2004. A justice department spokesman declined to comment on the enforcement figures.
“At a time of almost unprecedented corporate consolidation, it’s troubling that the number of antitrust prosecutions pursued by the justice department remain at record low levels,” said David Cicilline, the Democratic chair of the House antitrust subcommittee. “Working people should have confidence that the federal government is fighting for them,” he added. The division’s prosecutions in 2019 included some cases of largescale price-fixing involving products such as seafood, computer hard disc drives, and fuel for US military bases in South Korea. They also included smaller investigations. Six of the cases identified by the FT related to items such as insulated sleeves for beer cans and temporary tattoos. The decline has accompanied a significant reduction in the number of attorneys and other staff in the units of the antitrust division responsible for criminal enforcement. At the end of July, staffing in the five criminal enforcement units had fallen a fifth since Mr Trump took office, with attrition in two DC-based units more severe, according to figures released in response to a public records request. The drop was the result of a hiring freeze that lifted earlier this year, which had resulted in total staff numbers falling to under 600 from over 700 at the start of the administration. “They’ve been able to hire a little bit but they’re still way below the numbers a few years back,” said one former official. www.businessday.ng
In a continent with a median age half that of Europe, tech is opening up new vistas for the young DAVID PILLING
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s a 12-year-old boy growing up in the slums of Kampala, to get money for internet time Stanley Ollo used to sell scrap metal or break stones in the local quarry. “I used to go to the internet café, I listened to Eminem, I googled who is this Eminem. The next day I had information,” he says of his hunt for digital street cred. Armed with knowledge — in this case that the American rapper had recorded a song with someone called Rihanna — he felt ready to face his peers. “So, once they started talking about Eminem, I had data,” he says, talking at breakneck speed during a gap in the radio programme he now hosts. “That’s how I kept on progressing. That’s how I became the cool guy around here who was hustling.” The day I meet Ollo, in a park in Kampala, Uganda’s lush green, fumeenveloped capital, he is dressed in a silent disco T-shirt with tight canary yellow trousers. Now a 19-year-old television and radio presenter brimming with self-confidence, these days he uses the internet for more serious research. Styling himself a youth motivator and social activist — he runs a programme called “Ollo Experience Uganda” with campaigns such as the “Ollo Green Teen Experience” — he scours the web for the latest information on reusable sanitary pads, entrepreneurship and climate change. “I am too much on the internet,” he says with a wide grin, clutching his iPhone 6-plus. “And I see a lot of things.” The median age in Africa, the world’s most rapidly urbanising continent, is 19.4. That is about half the equivalent in Europe. The generation born at the turn of the century has approached adulthood in a world transformed by technology and in a continent that, for all its deep-rooted problems and daily tragedies, is not predominantly the Africa of wars and famines that has such a hold on the western imagination. These days coups are almost as rare as the Nubian giraffe (sadly near extinction) and you can criss-cross the continent — immigration officials permitting — without ever leaving a Chinese road. Most African economies are not growing nearly fast enough to lift their majorities out of poverty. But a few have mustered almost Asianmiracle speeds of economic lift-off. Villages are dotted with solar panels, meaning most people live within reasonable access of a mobile-charging station. Internet access, though expensive, is increasingly the norm — especially in cities, where more than four in 10 Africans live. Smartphones, some assembled in Africa, are suddenly ubiquitous. A graphic with no description Connectivity and the sniff of progress collides with the reality, for many, of grinding poverty and chronic unemployment. While previous generations looked back nostalgically to the liberation heroes who freed them from colonialism, today’s young people are discontent with their crop of mostly geriatric leaders. This year, youth and professionals — particularly women — led a revolution in Sudan, ousting 75-year-old Omar al-Bashir, who for 30 years had run a nasty dictatorship held together by a joyless form of Islam. In Kampala, where I interviewed
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© Martin Kharumwa | Stanley Ollo at his show
three 19-year-olds for this piece, the politician of choice is no longer the septuagenarian Yoweri Museveni. Rather, it is Bobi Wine, a 37-year-old red-beret-wearing, fist-pumping reggae star who is gearing up for a challenge on the presidency. The cities of this new generation are expanding ever outwards, like water on blotting paper. Most are chaotic, thick with building-site dust and thin on public services. Though they contain increasing numbers of what management consultants call a “consuming middle class”, in reality many urbanites scrape a living in slums or on the city periphery. There — fetching water and even tending animals — life may not be so different from that in the villages their parents and grandparents left behind. Daphine Atugonza, a fashion-conscious kindergarten teacher from what she calls a Kampala “ghetto”, is a case in point. She lives with her family in a couple of cramped rooms partitioned with hanging blankets, down a muddy alleyway strewn with litter. There are buckets of washing outside and toddlers scampering around in plastic flip flops. The house has sporadic electricity but no running water. “We have to go out and fetch water in a jerry can,” she says. Her family shares an outside toilet and shower with numerous neighbours, a reality she acknowledges with a shrug. Like many her age, Atugonza is caught between the receding village life of older generations and the promise of a more prosperous urban existence that has not yet materialised. An amateur rap singer and one-time Miss Teen with so-far thwarted ambitions to study hotel management, her attitudes reflect this transition. While she thinks it is appropriate to kneel before her elders — and even her boyfriend — as a sign of respect, she is unhappy with the current state of male-female relations. “I don’t want to depend on a man all my life,” she says, adding that she wants a proper job — unlike her mother who used to work as a seamstress but now, in her phrase, “sits down and cooks”. “I don’t want to depend on a man because most guys here in Uganda don’t value their ladies,” she says, sat on one of the small benches designed for her kindergarten-sized charges. “Women are taken as nothing in my country. You can see a woman struggle. She has four kids. The man runs away. @Businessdayng
She puts food on the table and then he comes back after five years and wants to take over the household. “I want to be independent. I want to have my money. So, if I want to bleach my hair,” she says, “I can simply reach into my own wallet.” Nor does she approve of her father’s having two wives, the second of whom is not much older than Atugonza herself. “It kind of tortured me mentally. I was like, why are African guys so polygamous,” she says, acknowledging that at least hers always ensured his children could attend school. When Atugonza finds a reliable man — she briefly used the Afrointroductions dating app with this in mind — she would like four or five children. That is fewer than her parents, but still high by international standards. In some cities, such as Addis Ababa, Ethiopia’s capital, women have on average fewer than two children, but in others the birth rate has confounded demographers by remaining high. As a result, Africa’s population will double to more than 2bn by 2050 as today’s 19-year-olds have families of their own. In some countries, two-thirds of the population is under 25. Atugonza is not blasé about the resulting economic challenges. “There are so many unemployed people. There are very few industries. Kampala is really a very small city. It’s a few buildings surrounded by ghettos,” she says dismissively. “It’s not going so well. I think it’s trying. It’s 50-50.” Yet like many of her generation, she is far from despair. In much of the continent, there is an energy and can-do-inventiveness that shades into optimism. “I’m filled with hope. The last thing I should be doing is losing hope right now in my own country,” she says. “I still hope that Uganda will reach somewhere technologically, politically, socially. I don’t know why, but I’m optimistic.” Janapher Nahalamba, a shy 19-year-old economics student at Kampala’s well-respected Makerere University, also looks on the bright side. “I think we have more opportunity than our parents,” she says, talking in the student canteen where she has brought her boyfriend as chaperone. When she graduates, she hopes to get a job in a bank, or perhaps open a cake shop or perhaps export food from a patch of land her mother owns on the outskirts of Kampala. She’s not quite sure.
Wednesday 06 November 2019
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FINANCIAL TIMES
COMPANIES & MARKETS
@ FINANCIAL TIMES LIMITED
Wall Street set for more gains and yuan strengthens on trade hopes PHILIP GEORGIADIS AND ALICE WOODHOUSE
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S stocks were primed for more gains, government bonds sold off and China’s currency strengthened past a key threshold amid signs the trade war between the world’s two largest economies is easing. The FT reported overnight that US officials are debating whether to remove some tariffs on Chinese goods as a concession to seal a partial deal as early as this month. Risk-on sentiment filtered into the government bond market, where US 10-year Treasury yields rose three basis points to 1.814 per cent as the bonds fell, while German and French yields also gained amid a broad sell-off in sovereign debt. China’s currency strengthened past the seven per dollar mark, three months after initially weakening past the key level for the first time since the global financial crisis. The renminbi had weakened to as much as Rmb7.1876 to the dollar in early September amid worsening trade tensions, but began to firm as negotiations moved forward. “Asian and emerging market currencies have continued to strengthen overnight driven by the ongoing improvement in global investor risk sentiment,” said Lee Hardman, currency analyst at Japanese bank MUFG. Wall Street’s three main equities gauges simultaneously closed at record highs on Mon-
day, and futures pointed to moderate rises at the open on Wall Street. Markets have been boosted by the positive outlook for trade talks and fresh central bank easing across the world, factors which have helped investors overcome concerns over the state of the global economy. The moves in European stocks were more measured. The Stoxx Europe 600 hit its highest level since January 2018 on Monday but could not maintain the gains, and edged just above the flatline by late morning. “Equities are back to believing that all is for the best in this best of all possible worlds,” said UBS strategist Paul Donovan. “A tax on trade is a tax on equities. Removing trade tax risks will benefit listed companies relative to the wider economy.” The CSI 300, comprised of Shanghai- and Shenzhen-listed stocks, rose 0.6 per cent after the central bank lowered the interest rate for the one-year mediumterm lending facility in the first cut in three years in a bid to shore up growth. “With economic activity likely to come under further pressure in the months ahead, we think more easing will be needed to prevent growth from slowing too sharply,” said Julian EvansPritchard, senior China economist at Capital Economics. Elsewhere in Asia, Japan’s Topix was up 1.7 per cent as it came back online following a three-day weekend and the Nikkei 225 climbed 1.8 per cent to a 13-month high.
Indonesia’s biodiesel plan fires up ‘red hot’ palm oil prices Demand jumps for fuel made with the commodity as dry weather restrains output MARTIN SANDBU
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alm oil prices have soared as Indonesia, the world’s largest producer, prepares to increase the use of biodiesel made from the commodity, while output growth has been sluggish because of dry weather. Benchmark palm oil prices in Malaysia are up almost a fifth from the start of the year at RM2,513 ($608) a tonne. They have risen nearly a third since this year’s low in July. Palm oil has long been a key ingredient in food and cosmetics, including ice cream, chocolate, toothpaste and lipstick. However, it has lesser-known uses in biodiesel for cars and trucks and for heating and electricity. The governments of Indonesia and Malaysia are pushing ahead with policies raising palm-oil content in biodiesel despite heightening concern in the west over the commodity’s environmental impact. Last year, Jakarta mandated the increase of palm-based biodiesel in conventional diesel fuel from 20 per cent to 30 per cent, and this year Indonesian president Joko Widodo indicated he wanted B30 — fuel with 30 per cent biodiesel — to be in use by January next year, and B50 by the end of 2020. Dorab Mistry, veteran oilseeds analyst and director at Indian chemicals manufacturer Godrej Industries, told an industry conference last week that sentiment in the palm-oil market was “red hot”. “Biodiesel usage has become the spark to ignite the rally,” he said, adding that Mr Widodo’s support for B30 had been “a game
The governments of Indonesia and Malaysia are pushing ahead with policies raising palm-oil content in biodiesel despite heightening concern in the west over the commodity’s environmental impact © Reuters
changer”. Indonesia accounts for more than half of global palm oil output, with Malaysia the second-largest. The two countries are behind about 84 per cent of world production, according to US Department of Agriculture data. Using palm-based biodiesel increases Indonesia’s demand for the commodity as well as reducing the country’s import bill for fuel, said Edward Hugo, analyst at brokers VSA Capital. “These are ambitious goals and would have a significant impact on global [palm oil] prices if enacted,” he said. The increased demand from biodiesel producers has coincided with expectations of low growth in Indonesian and Malaysian output in 2019 and 2020 because of dry weather and low or no fertiliser application following weak prices. Western companies and governments have become more cautious about the use of palm oil because of concerns about
environmental damage. With the increasing focus on deforestation caused by palm oil cultivation, the EU has ruled that the use of the oil for energy is unsustainable, although the phase-out is only starting in 2023, with a ban set to take effect in 2030. The move has led to tensions between the EU and countries that produce palm oil. Earlier this year, Malaysia’s prime minister Mahathir Mohamad offered to strike a trade deal with post-Brexit UK provided it relaxed restrictions on imports of palm oil imposed by the EU Environmentalists are concerned that rising demand for palm-based biodiesel will lead to further deforestation. With Mr Widodo even suggesting the mandatory use of 100 per cent biodiesel fuel, US think-tank World Resources Institute believes that a B100 mandate could encourage 7.2m hectares of land clearing — an area just smaller than the Czech Republic — if plantations do not increase productivity.
Investment Association has written to the chairs of pay committees at FTSE 350 companies
UK regulator warns insurers over corporate culture
OWEN WALKER
PRA raises ‘deep concern’ over revelations on harassment and bullying
Shareholders warn over UK plc opaque executive pay deals
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ritain’s most influential investor group has warned the country’s biggest companies to address excessive and opaque executive pay deals or face shareholder scrutiny during next year’s AGM season. The Investment Association, the lobby group representing 250 fund managers with £7.7tn of assets, has written to the chairs of pay committees at FTSE 350 companies setting out issues that the shareholders would like to see addressed. “The 2020 AGM season will be a key year for many companies, with investors looking out for greater alignment on pay with long-term company strategy,” said Andrew Ninian, director of stewardship and corporate governance at the IA, who added that some companies had already taken investors’ views into account and made changes to their pay structures in recent years. “However, with the majority of remuneration policies up for renewal next year, investors will be looking for signs that companies
continue to listen to key concerns and ensure the pay structures of their top team align with company performance.” The letter from the IA, whose members own 34 per cent of large listed companies, sets out four areas where it was asking businesses to focus on: simplifying pay structures, justifying the level of executives’ pay, strengthening policies for departing directors and broadening clawback provisions to recover bonuses from departed executives. The IA has also updated its influential proxy voting information services, known as IVIS, which provides guidance to shareholders on how to vote at company AGMs. Last year the IA wrote a similar letter to FTSE 350 chairs, warning them that unless they aligned executive pensions with benefits for all staff they faced a shareholder backlash. Executive pensions became the most volatile issue during this spring’s AGM season, with several chief executives — including Bill Winters of Standard Chartered — coming under fire. www.businessday.ng
CAROLINE BINHAM AND OLIVER RALPH
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he Bank of England has fired a shot across the bows of insurers, warning chief executives across the sector to improve their culture in the wake of revelations about sexual harassment and bullying. Dubbing instances of reported abuse of “deep concern”, the BoE’s Prudential Regulation Authority on Tuesday made some of its most hard-hitting public comments about the cultural shortcomings of some parts of the industry to date in a letter to all chief executives of general insurance companies. It warned that under personal accountability rules, such episodes could trigger a fine and even a ban on senior managers if there were failings on their watch, including in instances of wider misconduct beyond the breaking of pure financial regulations. The BoE’s warning is detailed within a wider catalogue of concern about risk-taking and inadequate provisioning by insurers that may be overly “optimistic”, and where “notable large losses have occurred”
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since last year. The letter also put insurance chief executives on notice that their assumptions around how they build up their reserves will be put under greater scrutiny over the coming months. The PRA, which oversees the largest lenders and insurers in the UK, is concerned that a workplace where harassment and bullying is rife may also be one where employees feel they cannot come forward with concerns about general risks at their companies. It did not identify any particular companies. The move comes after revelations that 500 people at Lloyd’s of London reported that they have witnessed sexual harassment at the London market, with just 45 per cent of respondents saying they were comfortable raising wider concerns. Lloyd’s is not an insurance company itself, but a market where brokers and underwriters meet to arrange cover for everything from natural catastrophes to cyber attacks. “These issues also raise broader questions about whether firms are promoting a culture where staff feel able to speak up about poor practices or unidentified risks within their organisations,” reads the letter, written @Businessdayng
by Gareth Truran, the PRA’s acting director of insurance supervision. “Senior management should be careful to ensure that commercial pressure to deliver results does not translate into inappropriate pressure on individuals within control functions to weaken assumptions.” The PRA’s sister regulator, the Financial Conduct Authority, already has ongoing investigations into instances of alleged sexual misconduct at City companies, and the PRA said it would work with the FCA on such matters. Lloyd’s, which has launched a remedial programme to try to overhaul its culture, did not immediately respond to requests seeking comment. Mr Truran also warned insurers that he would take a much closer look at the quality of their underwriting and reserving decisions, and the way they are reacting to rising claims in some parts of the speciality insurance market. In particular, he highlighted the US liability insurance market, where areas such as medical malpractice and professional insurance have seen rising claims in recent months because of growing payouts to claimants.
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Japan’s foreign minister sees progress on end to US car tariffs Trade deal with Washington a ‘major feat’ despite criticism it favours America ROBIN HARDING AND LIONEL BARBER
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he new US-Japan trade deal is a triumph for Japanese industry and offers a route to the elimination of US car tariffs, Tokyo’s chief negotiator has said in an interview with the Financial Times. Toshimitsu Motegi, who became foreign minister in September after sealing the trade agreement with Washington, hailed it as a “major feat” and said the two countries will now consult on which sectors to tackle in a second round deal. Mr Motegi’s comments show how he plans to secure parliamentary ratification for a deal that has attracted some criticism in Japan because it reduces Japanese tariffs on beef and other agricultural imports from the US without cutting US tariffs on Japanese cars or automotive parts. The foreign minister, who is a close ally of Prime Minister Shinzo Abe and regarded as a possible future candidate for the premiership, said the US had given “unusually clear” assurances it will not impose Section 232 national security tariffs or seek quotas on Japanese car imports. Such tariffs would have been a devastating blow to some of Japan’s biggest companies. Mr Motegi said it was still possible to achieve the longstanding goal of cutting US tariffs on cars. “For automobiles and parts, it’s clearly written
into the agreement that we won’t just continue negotiations, but conduct a further negotiation to eliminate tariffs,” he said. US tariffs would have fallen in the proposed 12-member Trans-Pacific Partnership trade deal, which was negotiated under former US president Barack Obama, but President Donald Trump quit that deal as one of his first acts in office. The remaining 11 countries then put TPP into effect, leaving US farmers at a disadvantage when selling to the Japanese market. Under pressure from Mr Trump, Japan agreed to negotiate a smaller bilateral deal, eventually swapping a reduction in agricultural tariffs for more modest US concessions in sectors such as machine tools and musical instruments. “On agriculture, this is within the level of our past trade agreements, and with the TPP11 already in force, it means the US is no longer in a subordinate position to other countries,” said Mr Motegi. One of the biggest issues the new foreign minister will confront is the dispute with Seoul that arose over South Korean court rulings awarding damages for forced labour during the second world war. Mr Motegi warned South Korea not to liquidate the assets of Japanese companies in order to pay compensation. He hinted at the possibility of retaliation if Seoul went ahead, saying Tokyo would consider all its options.
Decline of motor industry drives global economic slowdown Car production shrank for first time in decade, accounting for a quarter of GDP fall DELPHINE STRAUSS
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s the global economy faces its sharpest slowdown since the financial crisis, one industry is both culprit and victim. The motor industry affects the health of the global economy far more than its share of total output would suggest : carmakers have long supply chains to source parts; they are also big consumers of raw materials and chemicals, textiles and electronics; and their fortunes affect millions of service sector jobs in sales, repairs and maintenance. Last year the sector shrank for the first time since the global crisis. The IMF believes this fall in output accounted for more than a quarter of the slowdown in the global economy between 2017 and 2018. The sector may also be responsible for up to a third of the slowdown in global trade growth between 2017 and 2018, the fund said last month, after factoring in the spillover effects on trade in car parts and other intermediate goods. “The car sector has been weighing heavily on manufacturing activity and growth,” Gian Maria Milesi-Ferretti, deputy director of the IMF’s research department, said last month. The IMF’s forecast of a modest pick-up in global trade in 2020 hinges on a recovery in the sector. But its analysis also underscored the potential for further damage if the sector becomes the next casualty of the escalating trade spat between the US and EU; the White House is due to decide by November 13 whether to impose a 25 per cent tariff on auto imports.
A graphic with no description Some motor industry executives already blame US trade policy for much of the sector’s misfortune, in particular for a sharp downturn in the Chinese market that had driven global sales growth. “This trade war is really influencing the mood of the customers, and it has the chance to really disrupt the world economy,” Herbert Diess, Volkswagen’s chief executive, said at the Frankfurt motor show in September, adding: “Because of the trade war, the car market [in China] is basically in a recession . . . That’s scary for us.” But while carmakers are suffering like other manufacturers from the broader uncertainty over trade policy, they have not yet become a direct target of US trade policy. Instead, the IMF said the industry downturn was mainly due to policy changes in China — including the withdrawal of tax breaks encouraging car ownership and a clampdown on peer-to-peer lending — and the disruption caused by the rollout of new emissions tests in Europe. The IMF noted that in many countries, consumers were holding off on purchases because standards were changing rapidly, while the options for car-sharing were evolving. Meanwhile Indian car sales have slumped because of problems in the shadow banking sector that provides around half of new car finance; while recession in Turkey and Brexitrelated uncertainty in the UK have held back sales in other big markets. Overall, car sales fell by about 3 per cent in 2018 and car production by around 2.4 per cent, after correcting for differences in the average price of cars between countries, the IMF said. www.businessday.ng
Chesapeake had $9.1bn of net debt in September, almost four times its equity market value © Bloomberg
Chesapeake Energy raises doubt over its ability to survive Shale gas pioneer sends shares and bonds lower with going-concern warning GREGORY MEYER
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hesapeake Energy, a highly indebted prime mover of the US shale gas boom, has warned that it may not survive if low commodity prices persist into 2020. The acknowledgment pummeled the company’s shares and bonds on Tuesday and underlined the straitened circumstances of US shale drillers, which despite soaring output have lost much of their access to financing to sustain operations. Under late co-founder Aubrey McClendon, Chesapeake rose from obscurity to become for a time the second-largest gas producer in the US, after ExxonMobil. The company expanded by using money from banks and investors while it outspent its cash flow. Doug Lawler, chief executive since 2013, has aimed to improve financial discipline. Yet record oil and gas production in the US has helped to drive down prices for the commodities, with the US crude benchmark at $57 a barrel and natural gas prices depressed below $3 per million British ther-
mal units, making it more difficult for Chesapeake to repay lingering debt. Chesapeake had $9.1bn of net debt on the books in September, almost four times its equity market value. The company warned in a securities filing that if current oil and gas prices “persist or decline throughout 2020”, it would put the company at risk of breaking a covenant to a revolving loan “and may cause doubt about our ability to continue as a going concern”. A graphic with no description The disclosure comes as bankruptcies tick up in the US oil patch, with 33 in the year to September 30, according to Haynes and Boone, a law firm. Chesapeake, with oil and gas acreage in states as diverse as Pennsylvania, Texas and Wyoming, reported a thirdquarter adjusted net loss of $188m, or 11 cents a share. Total production fell 11 per cent year on year to 478,000 barrels a day on an oil-equivalent basis. Shares of Chesapeake fell 15 per cent to $1.32 in early afternoon trading on Tuesday. The company’s bonds issued at the start of 2018 and maturing in 2027 fell roughly 8 cents to a new low of 59.3 cents on the dollar. Another
bond, issued at the same time but maturing in 2025, fell 7 cents to 63.4 cents on the dollar. “This is what makes markets nervous,” said David Norris, head of US credit at TwentyFour Asset Management, “particularly in the energy space, where the majority of defaults this year have been.” Chesapeake said it would cut capital spending by 30 per cent in 2020 to about $1.3bn-$1.6bn in an effort to reduce debt and avoid triggering the covenant. “We’ve been keenly focused on absolute debt reduction, and we’ve made great strides,” Domenic Dell’Osso, chief financial officer, told analysts. “We expect to continue to make strides using all the same levers that we have: cost discipline in all aspects of our business, asset sales, hedging prices as they rise, capital markets transactions and, of course, working very closely with our bank group, which we do on a regular basis.” He added that Chesapeake “could go out and seek a waiver at any time from our bank group. But at the moment, we continue to be focused on the strategic levers that result in permanent debt reduction.”
Shake Shack tumbles after cutting same store sales forecast Fast casual restaurant chain lifts full-year sales outlook after strong third quarter
PETER WELLS
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hake Shack was on track for its largest one-day drop on record, as shares fell more than 19 per cent following a sales outlook that fell short of Wall Street forecasts. That wiped the gloss off a third quarter result that topped analysts’ expectations and actually prompted the company to raise its full-year guidance, just not by as much as the market hoped for some important metrics. Revenue at the fast casual restaurant rose 31.9 per cent from a year ago to $157.8m in the three months ended September 25, the company revealed after closing bell on Monday. That was ahead of the median forecast for $149.8m according to a
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Refinitiv survey of analysts. Earnings rose to 31 cents a diluted share from 17 cents a year ago, and higher than forecasts for 24 cents. That performance prompted the company to raise its outlook for 2019, tipping total revenue of between $592m and $597m, an increase of $7m at both ends of the previous range. The high end still comes in slightly under analysts’ forecast for total revenue of $600m. Disappointingly, the company downgraded its own forecast for same-store sales growth, a closely watched industry metric, to approximately 1.5 per cent from approximately 2 per cent previously. It also said operating profit margin at its stores would be between 22 per cent and 22.5 per cent, down from approximately 23 per cent previously, @Businessdayng
owing to the negative impact from a new lease accounting standard. Shares were down 19.1 per cent at a four-month low of $68.18 on Tuesday morning and on track for their largest one-day drop since the company listed in 2015. Randy Garutti, chief executive, said in a statement he was “pleased” with the company’s revenue performance during the third quarter and its same-store sales growth of 2 per cent. “This has been the biggest development year in Shack history as we’ve grown our presence around the country and internationally in the new markets of Mainland China, Singapore, the Philippines and Mexico. In 2020, we will continue to expand even further within key domestic and international markets,” he added.
Wednesday 06 November 2019
BUSINESS DAY
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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 295,025.37 8.30 2.47 249 18,323,763 UNITED BANK FOR AFRICA PLC 220,586.27 6.45 2.38 281 51,830,406 ZENITH BANK PLC 544,729.17 17.35 1.17 519 50,428,941 1,049 120,583,110 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 197,424.11 5.50 3.77 175 4,893,979 175 4,893,979 1,224 125,477,089 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,523,959.62 124.00 -1.23 101 7,144,036 101 7,144,036 101 7,144,036 BUILDING MATERIALS DANGOTE CEMENT PLC 2,547,555.86 149.50 - 24 42,154 LAFARGE AFRICA PLC. 225,509.14 14.00 -0.36 54 12,671,062 78 12,713,216 78 12,713,216 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 332,471.18 565.00 - 2 19,220 2 19,220 2 19,220 1,405 145,353,561 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 11,873.80 4.45 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 2 293 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 2 293 2 293 2 293 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 50,509.53 52.95 - 8 11,712 PRESCO PLC 38,400.00 38.40 - 3 1,000 11 12,712 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,380.00 0.46 - 7 134,236 7 134,236 18 146,948 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 741.24 0.28 - 0 0 JOHN HOLT PLC. 214.03 0.55 - 1 2,776 S C O A NIG. PLC. 1,903.99 2.93 - 1 2,720 TRANSNATIONAL CORPORATION OF NIGERIA PLC 40,241.51 0.99 -1.00 49 5,336,729 U A C N PLC. 17,864.04 6.20 - 78 1,374,769 129 6,716,994 129 6,716,994 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 18 84,163 ROADS NIG PLC. 165.00 6.60 - 0 0 18 84,163 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,520.44 0.97 -9.35 15 219,800 15 219,800 33 303,963 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,751.20 0.99 - 9 66,950 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 51,035.92 23.30 -2.31 71 18,823,653 INTERNATIONAL BREWERIES PLC. 97,563.03 11.35 - 13 20,773 NIGERIAN BREW. PLC. 371,855.95 46.50 - 49 306,819 142 19,218,195 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 111,250.00 22.25 - 0 0 DANGOTE SUGAR REFINERY PLC 124,200.00 10.35 - 47 294,058 FLOUR MILLS NIG. PLC. 62,120.75 15.15 - 32 176,182 HONEYWELL FLOUR MILL PLC 7,771.59 0.98 -5.77 16 820,400 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,344.16 14.85 - 3 1,165 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 98 1,291,805 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,030.74 9.60 - 16 115,020 NESTLE NIGERIA PLC. 911,554.69 1,150.00 -4.16 46 160,160 62 275,180 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,377.95 3.50 - 10 145,059 10 145,059 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 22,036.15 5.55 - 16 116,019 UNILEVER NIGERIA PLC. 138,167.38 24.05 - 39 264,006 55 380,025 367 21,310,264 BANKING ECOBANK TRANSNATIONAL INCORPORATED 128,446.86 7.00 7.69 58 1,785,518 FIDELITY BANK PLC 54,762.37 1.89 1.07 100 6,714,999 GUARANTY TRUST BANK PLC. 766,682.22 26.05 -0.19 280 26,018,921 JAIZ BANK PLC 15,616.05 0.53 6.00 13 3,101,924 STERLING BANK PLC. 63,338.92 2.20 1.38 10 484,024 UNION BANK NIG.PLC. 203,845.27 7.00 - 13 110,483 UNITY BANK PLC 6,779.82 0.58 9.43 14 354,604 23,144.68 0.60 1.69 15 990,336 WEMA BANK PLC. 503 39,560,809 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,712.54 0.68 -2.86 30 3,608,157 17,325.00 1.65 - 1 3,200 AXAMANSARD INSURANCE PLC CONSOLIDATED HALLMARK INSURANCE PLC 3,333.30 0.41 7.89 8 580,000 CONTINENTAL REINSURANCE PLC 24,272.22 2.34 - 8 132,033 CORNERSTONE INSURANCE PLC 6,628.28 0.45 - 3 23,000 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 1,228.00 0.20 - 0 0 GUINEA INSURANCE PLC. INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,904.09 0.26 - 1 100 LAW UNION AND ROCK INS. PLC. 1,976.31 0.46 9.52 4 70,397,734 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 2 2,458 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 3 1,694,736 NEM INSURANCE PLC 10,561.01 2.00 - 13 86,700 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 50,000 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 5 63,500 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 3 1,170,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 2 1,020 WAPIC INSURANCE PLC 4,550.13 0.34 - 14 37,184 98 77,849,822
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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,721.10 1.19 - 25 574,041 25 574,041 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,900.00 3.95 3.95 31 704,962 29,409.32 5.00 - 12 56,053 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 33,862.64 1.71 6.87 55 2,185,419 FCMB GROUP PLC. ROYAL EXCHANGE PLC. 1,080.53 0.21 - 1 1,257 STANBIC IBTC HOLDINGS PLC 408,464.63 39.00 5.41 35 2,212,291 12,900.00 2.15 4.37 55 1,483,365 UNITED CAPITAL PLC 189 6,643,347 815 124,628,019 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 852.75 0.24 - 2 101,000 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 2 101,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 2 406 2 406 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 7,510.90 3.60 - 14 188,725 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,534.02 6.30 - 12 28,203 MAY & BAKER NIGERIA PLC. 3,381.46 1.96 -2.00 7 1,406,620 740.67 0.39 - 8 157,898 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 41 1,781,446 45 1,882,852 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 816.96 0.23 - 3 153,000 3 153,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 486.00 4.50 - 0 0 TRIPPLE GEE AND COMPANY PLC. 316.77 0.64 - 0 0 0 0 PROCESSING SYSTEMS CHAMS PLC 1,127.05 0.24 - 12 446,000 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 12 446,000 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 6 117 6 117 21 599,117 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 4 50,500 CAP PLC 17,885.00 25.55 - 8 1,687 215,553.42 16.40 - 29 134,735 CEMENT CO. OF NORTH.NIG. PLC MEYER PLC. 313.43 0.59 - 1 50 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 1,156.20 9.40 - 0 0 PREMIER PAINTS PLC. 42 186,972 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,465.85 1.40 - 19 310,950 19 310,950 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 4 12,300 GREIF NIGERIA PLC 388.02 9.10 - 0 0 4 12,300 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 65 510,222 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 150,000 1 150,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 1 150,000 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 1 140,000 1 140,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 41,893.86 3.37 - 39 458,107 39 458,107 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 23 28,903 CONOIL PLC 10,686.86 15.40 - 29 83,370 ETERNA PLC. 3,716.81 2.85 - 11 100,264 FORTE OIL PLC. 20,709.45 15.90 - 33 156,230 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 4 1,650 TOTAL NIGERIA PLC. 41,829.09 123.20 - 9 3,742 109 374,159 149 972,266 ADVERTISING AFROMEDIA PLC 1,642.45 0.37 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 270.56 0.23 - 2 5,892 2 5,892 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 398.52 0.85 - 2 104,000 2 104,000 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,224.31 1.07 - 2 10,000 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 2 10,000 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 0 0 LEARN AFRICA PLC 902.60 1.17 - 0 0 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 616.92 1.43 - 6 50,260 6 50,260 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 729.39 0.44 - 3 661,000
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BUSINESS DAY Wednesday 06 November 2019 www.businessday.ng
London Underground: The dirtiest place in the city An FT Investigation shows that air pollution on the Tube is as much as 10 times above health guidelines Camilla Hodgson and Steven Bernard
I
f you are one of the 4.8m passengers who uses the London Underground every day, you might think you are escaping the pollution dangers from road travel, with its exhaust fumes and soot. The reality is very different. Although its health risks have been little studied and little publicised, other than a handful of recent scientific papers, the Tube is by far the most polluted part of the city. Fine particles of dust, metal, skin and clothing fibre have built up in the tunnels over a century of use, leaving a toxic miasma that is stirred up by passing trains and inhaled by passengers. A Financial Times investigation has mapped the air quality in the carriages of the London Underground. Using hundreds of measurements covering 75 tunnel segments inside Zone 1 in central London, the investigation found that levels of pollution on the Underground are dangerously high — as much as 10 times above the guidelines set by the World Health Organization in some parts of the network. Commuters travelling on the Central, Victoria and Northern lines are most at risk, according to the analysis by the Financial Times. Chart showing average PM2.5 pollution levels across 10 lines on the London Underground inside Zone 1. The Central line is the worse performer at over 8 times the WHO limit of 10 micrograms per cubic metre. “These are shocking, worrying findings. We know particulates are the most dangerous of the air pollutants,” says Jenny Bates, an air pollution campaigner at Friends of the Earth. “We must sort out this terrible level of bad air. It’s absolutely essential for the health of anybody using the Tube.” The FT research measured fine particles known as PM2.5, which are about one-thirtieth the width of a human hair and can penetrate deep into the lungs. Inhaling the invisible particles is linked to heart disease, stroke, lung cancer, respiratory infection and a range of other harmful conditions, including infertility and infant mortality. In London, more than 9,000 premature deaths each year are caused by long term exposure to air pollution, according to a study by King’s College. Worldwide, that figure rises to about 7m, the WHO says. “One of the legacies of having the oldest Tube system in the world is having a lot of particulate matter down there,” says Sadiq Khan, the mayor of London. Transport for London, the body that governs the network, is piloting new cleaning regimes and designing new trains to be less polluting, adds Mr Khan. However, the evidence shows that the air underground is highly
FT reporter Camilla Hodgson with some of the equipment used to measure pollution on the Tube network. The survey covered 75 sections of track and used at least four readings for each section © Anna Gordon/FT
polluted. A scientific paper published this week found that the air in Tube carriages was up to 18 times worse than the city’s roadside air. Like the FT’s investigation, its data showed that the Central line — one of the busiest and deepest routes, through the likes of Marble Arch, Oxford Street and St Paul’s stations — was the most polluted, and that air quality became worse the further into the tunnels the trains moved. The FT found that the stretch of Central line track between Bond Street and Notting Hill Gate was the most polluted, and peaked at more than eight times the London-wide roadside average for PM2.5, which was 12.6 micrograms (ug) per cubic metre over the past 12 months. “It’s very concerning,” says Brynmor Saunders, the lead author of the King’s College paper. “I take the Central line every day, but I would personally avoid it if I were asthmatic.” If the particles in the Underground are as harmful as those outside, then a person who commutes on the Tube for one hour a day would face an increased chance of death as a result of air pollution-linked causes, he adds. For an average Londoner, taking the Tube for one hour a day in effect doubles their exposure to PM2.5 particles. The Committee on the Medical Effects of Air Pollutants, the government advisory body, released a report in January that also raised
concerns on the issue. TfL insists that the air in the Tube is “absolutely safe”. It has commissioned two large scientific studies — from King’s College and Imperial College — to investigate the issue. However, TfL has never published a full account of the air quality underground, one that includes detailed data about the pollution levels at every station and on each line. “There is clearly a big problem. How big it is we don’t quite know, and how to fix it we’re not quite sure,” says Simon Birkett, head of the campaign group Clean Air London. To find solutions and warn people about the risks, TfL “ought to be moving heaven and earth”, he adds. After the last train of the day has left, in the quiet hours of the morning, gangs of cleaners descend to scrub the tunnels of the Underground, working on tight schedules to ensure the morning services run on time. “The juice [power] is off, so it’s safe to go on the track,” says team leader Krasimir Stefanov, standing on the northbound platform at Warwick Avenue on the Bakerloo line just after 1am. “The watershed time is 5am, that’s when we need to be finished.” In groups of about 10, cleaners wearing face masks, headlamps and reflective orange jackets scrape, spray and hoover the floors, walls and rails in the darkness
between stations. On the dirtiest sections, they might only clean 50m of tunnel a night. More than 1,000 people work in the warren beneath London’s streets, but it takes years to get round the entire 400km network. “A lot of the dust in this environment is coming from the passengers themselves,” says Alno Lesch, operational manager for track cleaning. He pulls out a clump of black fluff from underneath the platform at Warwick Avenue. “That’s hair, all of it,” he says. Iron is the other big ingredient in the underground haze, caused by the friction of brakes on wheels and wheels on rails. Mr Lesch is supervising the trial of a new cleaning technique. All around him, cleaners use brushes and hoovers, which they wear with backpacks, to remove dust from the tunnel. The hoovers are fitted with special air filters that can capture fine particles, and, once a section has been done, the workers apply a finishing sealant spray that fixes any remaining dust in place. Cleaning the Tube did not become a priority until after the King’s Cross fire, which killed 31 people in 1987. Before that, piles of fluff, hair, newspapers and rubbish frequently caught alight under escalators and on the tracks. Fire prevention was the focus of most of the cleaning. It was only when Mr Khan, who recently developed asthma, became mayor in 2016 that
the Underground started to take air pollution more seriously. “Air quality is now part of our thinking, whereas it wasn’t before,” admits Duncan Weir, TfL’s head of track. Tests conducted by London Underground — which spends £60m a year on cleaning — show that washing the tunnels has a big impact on the air quality at some platforms. But precisely how that cleaning happens makes a big difference. Sometimes, in tunnels that are very dirty and very old, it can actually make the air quality worse, because the cleaning stirs up small particles. “When we cleaned the Bakerloo line a few years ago, we took out 6.4 tonnes of hair, skin, fluff from people’s clothes and iron particulates,” says Mr Weir. But afterwards, the amount of PM2.5 particles in the air at nine of the 15 stations was found to have risen. TfL measures the air quality around the network about once a year — the most recent test found that the Bakerloo line was again the most polluted. But a spokesperson says it was impossible to tell whether the air across the whole network had improved or deteriorated over the past few years. The presence of asbestos in some tunnel walls can further complicate matters: TfL trialled a special cleaning train, but this was shelved after concerns that a strong vacuum might accidentally pull asbestos from the walls. “You’d love to get a train down here just like a proper car wash, but it had shortcomings,” Mr Weir says. Given the complexity of the job, and the tiny grooves underneath rails and between track that need cleaning, it is best done by hand. When the system first opened in 1863, Underground trains were powered by coal-fired steam engines. The earliest sections — the Circle, District and Metropolitan lines — were built close to the surface, which allowed the smoke from the trains to be expelled through “blowholes” in the streets above. The air inside was still contaminated with smoke and soot from the coal engine, though today these lines are on average 2.5 times less polluted than the deeper lines, according to the FT’s findings. The air improved considerably with the arrival of the first electric trains in 1890. Around the same time, advances in engineering allowed for the construction of deep “tube” railways, which were built by boring tunnels underground. Rather than build ventilation shafts along tunnels and at platforms, the engineers who designed the deep tubes planned to use the movement of the trains to circulate the air. Because the trains are nearly as big as the tunnels, they create a piston-like effect as they travel, which engineers believed would be sufficient to keep fresh air in the system.
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