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In search of South - West votes, Buhari declares June 12 Democracy Day ... gives posthumous national awards to MKO Abiola, Gani Fawehinmi Chris Akor

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t appears the South West geopolitical zone has become Nigeria’s equivalent of a swing zone as presidential aspirants jostle, trying to outsmart one another to win

Inside CEOs, investors told to worry about weak economy P.

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over the zone in preparations for the forthcoming election.

In a move that analysts say shows clear desperation, President Muhammadu Buhari, last night, surprisingly replaced the day on which the country celebrates its democracy day from May 29 to June 12, the day the 1993 presidential election, which was won by Chief MKO Abiola, was held but was later annulled by then military president Ibrahim Babangida.

“Dear Nigerians, I am delighted to announce that after Continues on page 34

L-R: Oyinkan Adewale, chief financial officer, Union Bank; Emeka Emuwa, chief executive officer; Cyril Odu, chairman, and Somuyiwa Sonubi, company secretary, at the bank’s 49th annual general meeting in Abuja.

US court issues $8.89bn default judgment against Nigeria As FG pulls a ‘no show’ in DC DIPO OLADEHINDE

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United States District Court on Tuesday issued a default judgement affirming a $6.59 billion arbitral award against the Federal Government (FG), plus $2.3 billion in interest in a dispute that arose over a natural gas supply and processing agreement between

it and a firm called Process and Industrial Developments Limited (P&ID).

The judgement was awarded against Nigeria because the FG failed to even appear in court to mount a defence.

The British Virgin Islands Headquartered P&ID on March 16 filed the petition (Process And Industrial Developments Limited V. Federal Republic Of Nige-

Tinubu’s silence on Ambode’s 2019 ambition creates uncertainty in P&ID filed case over gas Alausa

ria, et al., No. 1:18cv594, D. D.C.), to confirm a $6,597,000,000 English arbitral award that was earlier issued in its favour in London.

According to sources, the inability of Nigeria government to show up in court to defend itself led to the presiding Judge giving a default ruling which is a binding judgment in favour of (P&ID).

“Most often, a default judgment is in favour of a plaintiff when the defendant has not responded to a summons or has failed to appear before a court of law, which is what happened to the federal government and it’s a very sad scenario, ” an oil industry source told BusinessDay. P&ID filed the petition to Continues on page 4

JOSHUA BASSEY

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n atmosphere of ‘waitand-see’ is pervading the Lagos House, Alausa, as Bola Tinubu, the major decider of political direction in Nigeria’s richest sub national, Lagos, is yet to speak on the second term ambition of his ‘political son’ and incumbent governor, Akinwunmi

Continues on page 34

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Thursday 07 June 2018

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Thursday 07 June 2018

Nigeria’s non-oil exports stage strong rebound

... agric exports up 64%, manufacturing exports 684%, solid minerals up 59% JOSEPHINE OKOJIE

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xports of non-oil products rose significantly in the first quarter of 2018, the latest Foreign Trade Statistics report from the National Bureau of Statistics (NBS) have shown. The report shows that the country’s total exports for the first quarter stood at N4.7 trillion, which represented a significant 20.02 percent growth over the exports recorded in the fourth quarter of 2017 but was 56.01 percent higher than the total exports

figures for first quarter of 2017, which stood at N3.01 trillion.

Significant increases were recorded in non-oil exports in the first quarter. The exports of agricultural goods were up 63.84 percent in the first quarter to N73.24 billion when compared to the fourth quarter of 2017. Also manufactured goods exports rose by a significant 684.11 percent to N434.4 billion over the fourth quarter of 2017.

But Crude oil exports still

Continues on page 34

US court issues $8.89bn default judgment...

Continued from page 1

confirm the arbitral award pursuant to the Convention on the Recognition and Enforcement of Arbitral Awards.

The award was earlier issued in London in favour of P&ID and against the Federal Republic of Nigeria, a “foreign state” within the meaning of the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1603(a), and the Ministry of Petroleum Resources of the Federal Republic of Nigeria.

P&ID submits that it entered a gas supply and processing agreement with Nigeria’s Ministry of Petroleum Resources in January 2010. Pursuant to the agreement, P&ID claims that it would build the necessary facilities and then refine natural gas into non associated natural gas for a period of 20 years.

The natural gas would be used

by Nigeria to power its electrical grid. P&ID was to strip away heavy hydrocarbons known as Natural Gas Liquids (NGLs) in which P&ID would retain the NGLs as payment under the agreement.

P&ID said Nigeria was to make sure that all necessary pipelines and related infrastructure were installed and that arrangements were made with agencies and third parties to make sure the supply of gas was met pursuant to the agreement.

P&ID alleges that Nigeria failed to secure the agreed-upon quantity of gas and failed to complete the construction of the infrastructure.

P&ID alleges that as a result of Nigeria’s failure to comply with the agreement, it suffered a loss of 20 years’ worth of profits from the potential sale of NGLs. After series of failed negotiation attempts, P&ID commenced arbitration against Nigeria and the Ministry of Petroleum Resources in London.

On July 3, 2014, the London tribunal found out that it had jurisdiction to decide whether it had jurisdiction over the case, the capacity of the ministry to enter the agreement for Nigeria and the validity of the agreement, considering P&ID’s incorporation in the British Islands, rather than Nigeria.

The tribunal found that it had

jurisdiction under the United Kingdom’s Arbitration Act 1996, that the agreement between the parties was valid and that the petroleum ministry had the authority to enter the agreement.

In July 2015, the tribunal found that Nigeria failed to satisfy its obligations under the agreement and that P&ID was entitled to damages.

In response Nigeria filed an application to set aside the liability awarded in the England and Wales High Court, Commercial Court. The High Court dismissed the application, finding that it was untimely and that its objections to the award lacked merit.

Nigeria then filed an action to set aside the award in the Federal High Court of Nigeria, arguing that the seat of arbitration was Nigeria and that the Nigerian courts had jurisdiction over the dispute.

P&ID requested that the tribunal issue an order on the seat of arbitration. The tribunal found that the parties consented to London as the seat of arbitration. However, the Nigerian High Court granted Nigeria’s request to set aside the award.

On January 31, 2017, the tribunal issued a final award, ordering Nigeria and the ministry of petroleum resources to pay P&ID $6.5 billion plus interest.

As of March 16, 2018, P&ID submits that $2.3 billion in interest has accrued and continues to accrue. P&ID submits that Nigeria has not attempted to appeal the award in the United Kingdom or elsewhere.

P&ID asked the District Court in the United States to enter an order pursuant to 9 U.S. Code Section 207, 9 U.S.C. § 207, confirming the final award and enter a judgment in its favour and against Nigeria and the ministry, including interest.

P&ID sought costs and postjudgment compound interest, which was granted on Tuesday.

P&ID also sought an order that the District Court retain jurisdiction over the case for any future proceedings that could be necessary to enforce the award or judgments that it could obtain in Nigeria.

P&ID was represented by Marcus J. Green, Michael S. Kim and Josef M. Klazen of Kobre & Kim in Washington.

L-R: Effiong Okon, executive operations director; Roger Brown, chief financial officer; ABC Orjiako, chairman; Austin Avuru, chief executive officer; Basil Omiyi, non-executive director, all of Seplat Petroleum, at the company’s 5th annual general meeting in Lagos, yesterday.

CEOs, investors told to worry about weak economy HOPE MOSES-ASHIKE, BUNMI BAILEY & OLALEKAN IPELE

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igeria’s economy is far more fragile today and growth severely constrained leading business managers and investors were told in Lagos yesterday.

Africa’s largest economy exited a devastating economic recession last year but economic data have been unimpressive and with elections approaching, Nigeria’s chief executives should now have a lot to worry about the outlook for their operations.

Nigeria’s Q1 GDP figures released showed growth slowing and brought back memories of the recession but now some of the nation’s leading economists have highlighted emerging symptoms of the fragility of the economy.

At the June monthly breakfast meeting of the Lagos Business School Wednesday, Bismarck Rewane of the Financial Derivatives Company and Doyin Salami who teaches economics at the school both cautioned business leaders to enter into long term contracts with great care.

Rewane said the GDP data show how Nigeria’s is failing to spur growth in key economic sectors with significant potential for creating badly needed jobs for the nation’s idle youth population.

The headline Purchasing Managers’ Index (PMI) reading declined from 51.0 to 49.2 in May, its lowest since January last year, according to latest reading (no 62) of FBNQuest Capital, a subsidiary of FBN Holdings Plc regulated by the Securities and Exchange Commission in Nigeria (SEC).

The PMI reading of the Central Bank of Nigeria (CBN) stood at 56.5 index points in the month of May, from 56.9 index point in April, indicating expansion (sluggish) in the sector for the fourteenth consecutive month.

“The slowing growth of the Nigerian economy and PMI data calls for concern as the delay in the passage

of the 2018 budget may have compounded the situation. As long as the rate at which the economy grows continue to lag behind the population growth rate, the level of poverty would continue to rise”, said Ayodeji Ebo, managing director, Afrinvest Securities limited.

Youth unemployment rate in Nigeria averaged 21.7 percent from 2014 until 2017, reaching an all time high of 33.10 percent in the third quarter of 2017 compared with a record low of 11.70 percent in the fourth quarter of 2014.

While the oil sector is growing on the back of rising oil price and stable production levels, services and real estate sectors are either slowing or actually contracting sharply, reversing any push towards economic inclusiveness.

Salami raised concern about the collapse in productivity in agriculture, saying, “What we are actually seeing is a poverty strengthening growth.”

Nigeria has seen its PMI numbers falling recently and with new excise duty on alcohol, which took effect this week; the beverage sector is expected to face a fresh bout of challenges in the midst of declining disposable incomes.

While inflation could drop below 12 percent for the first time in years, the expected government-spending splurge ahead of the elections may wipe out some of the improvements in inflation.

On the positive side, the Central Bank appears determined to provide the supply the foreign exchange market needs to keep rates stable with data showing the apex bank pumped $1.43bn into the market in May compared to $837m the previous month, a month on month increase of about 70%.

While bank lending continues to be constrained, liquidity in the system is getting fresh impetus from FAAC disbursements, which at N701bn is at a four year high.

Godwin Emefiele, governor of the CBN had noted at the last Monetray Policy Committee (MPC) that growth remains largely fragile and

could benefit from further reforms and stimulus.

“If appropriate measures are not taken quickly, the economy may slip back into recession and this may lead to widespread loss of jobs with associated rising inflation,” said Ayodele Akinwunmi, head of research, FSDH Merchant Bank Limited.

External reserves which have been growing since last year recorded the first marginal decline on May 11, 2018 to $47.84 billion from the peak of $47.865 billion as of May 10, 2018. It stood at $47.62 as of last week May 30, data from the CBN show.

Akinwunmi explained that some foreign investors needed to repatriate their dividends and maturing fixed income investment out of Nigeria on one hand. And on the other hand, FSDH research analysis shows that between August 2017 and May 2018 Nigeria recorded the lowest foreign exchange inflows into the country through the Investors’ and Exporters’ window in May 2018.

One of the reasons attributed to this is the low yields in the fixed income securities market in the face of rising yields in the international market.

Although, it has recovered from losses, naira depreciated to N367 per dollar last week.

“I also expect the yields in the FGN Bond market to increase as the current economic fundamentals in the country may not sustain the current low yield environment,” Akinwunmi added.

Ibrahim Tajudeem, Head of Research, Chapel Hill Denham said: “Recent pressure on the naira is largely due to Foreign Portfolio Investors .I think that is common considering that there is interest rate normalization in the U.S.” “Elections is a factor that will drive positive economic growth because the ruling party would not want us to go back to recession when we are just 6-8 months to elections .They will do everything possible to make sure that the economic growth improves,” Tajudeen added.

Thursday 07 June 2018

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Hope for housing, agriculture as Osinbajo assures on land reform CHUKA UROKO

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ousing and agriculture sectors of the Nigerian economy are to gain from the ongoing discussions on the implementation of the systematic land titling in the country, which Vice President Yemi Osinbajo has assured will be endorsed by the National Council of State, leading to reform of the land system.

As a factor of production, land is very strategic and its value increases exponentially.

Unfortunately in Nigeria, land potential is not fully exploited because both land titling and registration are a huge challenge. At the moment, only 3 percent of the country’s land is documented.

Again, land ownership and use are a huge challenge to such economic activities as housing, agriculture and industrialisation. The growth and development of these sectors have been hampered by the inability of government to reform land tenure system in the country.

Expectation now is that with the land reform that is

underway, there will be easier, cheaper and less stress in accessing land. If this happens, housing and agricultural development is to benefit, leading to more houses to be built and increased food production. These two have the potential of impacting on the people’s well being.

The four-day National Stakeholders Dialogue on Land Reform in Nigeria, which was organised by the Presidential Technical Committee on Land Reform (PTCLP) in Abuja, recently was aimed at addressing these challenges in the land tenure system.

The dialogue with the theme, ‘Land Reform: Creating strategic pathway to National Economic Development and Wealth Creation,’ charged all stakeholders to do more in order to unlock the potential of land in the country.

Peter Adeniyi, chairman of the PTCLR, said, “We owe it as a sacred duty to ourselves and the future generations to define and design our own land governance system,” recalling that PTCLR was inaugurated by the late President Umaru Musa Yar’ Adua in 2009 as a forerunner of the National Land

Commission.

As a purposeful change in the ways or manners in which land is held, administered, managed, used, accessed, exchanged, land reform is very crucial for economic development and the key purpose of land reform is to improve the lot of the majority of the citizenry with a geographically defined political entity.

This is done by government’s direct intervention through change of rules and forms of ownership, administrative and adjudication processes, pattern of relationships in connection with owners, acquiring and trading in land.

Adeniyi revealed that the mandate of the committee, among others, was to collaborate and provide technical assistance to states and local governments to undertake land cadastral nationwide.

He noted that the committee was also to determine individual’s possessory rights using best practices and most appropriate technology and to recommend a mechanism for land valuation in both rural and urban areas in all parts of the federation.

Thursday 07 June 2018

Attacks in Niger Delta still cause disruptions - Shell DIPO OLADEHINDE

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espite increase in oil output, Nigeria’s biggest International Oil Company (IOC) in terms of asset and production, Shell, says persistent attacks in Niger Delta continue to halt its output.

According to Shell’s general manager for external relations, Igo Weli, security in parts of the Niger Delta remains a major concern with persisting incidents of criminality, kidnapping and vandalism occurring both on its onshore and offshore installations.

“Facilities operated by both indigenous and IOCs continue to be vandalised by attacks and other illegal activities such as crude oil theft,” Weli said.

Shell declared force majeure on Bonny Light crude shipments last month following pipeline leaks, while loadings of Forcados exports were also delayed, although Weli didn’t specifically link those incidents to his comments on vandalism.

“We are continuing to monitor the situation to mitigate any exposure and minimise risks faced by our personnel,” Weli told Bloomberg.

Militant assaults on Nigeria’s oil infrastructure in 2016 cut the country’s output to less than 1.4 million barrels a day, the lowest in 27 years. While there hasn’t been a major attack since, the security situation in the oil region remains fluid, according to Weli.

“Recently, exports via the TFS have been shut following leakages. Following our conversations with the firm we expect exports via the TFS to resume within a fortnight.

We understand that these leakages are due to the age of the TFS rather than by vandalism,” he however said.

The Trans-Forcados pipeline, which transports about 200,000 to 240,000 barrels of crude per day, is the major trunk line in the Forcados Pipeline System. It is also the second largest network in the Niger Delta after the Bonny Oil Pipeline System.

Some of the companies affected by the shutdown include the Nigerian Petro-

leum Development Company (NPDC), Seplat Petroleum Development Company plc, Shoreline Natural Resources, among others.

Seplat’s Q1 2018 results were boosted by strong oil revenues, which rose 534 percent y/y to $141 million, underscoring the importance of the pipeline.

According to a review of Seplat’s Q4 2017 and Q1 2018 results done by FBNQuest Capital, sent to BusinessDay, the firm confirms this through conversations with the company.

Nigeria is scheduled to load at least 1.8 million barrels a day next month. That equals the production cap it agreed on with the Organisation of Petroleum Exporting Countries (OPEC), which took effect in January.

Meanwhile, Shell says it is committed to further unlocking Nigeria’s deep-water resources, and along with its co-venture and government partners is evaluating opportunities to further increase production of the Bonga field in an efficient and cost-effective way.

Graduate unemployment: Education minister’s proposal is not the solution KELECHI EWUZIE

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inister of state for education, Anthony Onwuka, on May 8, 2018, in a meeting with the Governing Council of Federal Universities, proposed that Nigerian students might need to spend an extra year at the university to obtain the necessary skills required for the labour market.

This proposal, according to Onwuka, will address the country’s graduate unemployment issue, which last quarter 2017 report from the National Bureau of Statistics (NBS) put at 18.2 percent.

Onwuka observes that many university graduates are not good enough to be employed by industries, the students’ industrial work experience scheme had also failed in providing quality graduates who should be employed in them.

This is a big challenge and it remains a major problem in the Nigerian university system.

This declaration by the minister further highlights a cry of shame that the quality of many of the products of Nigerian universities is rather poor, and employers in some cases elect to employ graduates with foreign degrees.

No doubt this is a development that will hinder national productivity.

Globally, there is the usual sneer when Nigerian universities are mentioned, and a quick link with unstable academic calendar due to frequent industrial actions.

This image robs graduates of Nigerian tertiary institutions of international esteem, even when their worth has not been proven through employment.

Additionally, top-rate universities that are desirous of staff and student exchange will elect to partner universities

with stable academic calendar in other parts of Africa.

The defect in the educational system deepens with the high level of career misplacement suffered by our graduates. It is quite disheartening that in Nigerian institutions, the course selection pattern is usually nomadic. For a lot of Nigerian students, it is not uncommon to crowd certain “big” courses such as law, medicine, and engineering.

Most courses in Nigerian institutions have skeletal schemes.

The path to practicing these courses is warped; this has a way of waning off the passion and zest of the students taking the course and tells off students naturally suited for these courses, leading them to deviate to the ‘loud’ courses.

Industry experts in the education sector observe that the minister’s proposal of additional year is like treating the symptoms rather the sickness. To them, without addressing the fundamental issues of poor funding, capacity development, infrastructure upgrade and defective curricula, the additional year students spend will be a waste.

Ibironke Oluwatobi, an educationist, insists that rather than propose additional year, education managers should work out a pattern that will create an atmosphere of course equality in Nigerian institutions.

This way, according to Oluwatobi, students in the four or so years they spend to acquire their first degree will get the true reflection of the prospect of each course. With this, a better pattern of career choice making can be registered. This will cure the problems of course crowding, since course diversity will translate to more opportunity spacing in the society.

L-R: Anthony Idigbe, senior partner, Punuka Attorneys & Solicitors; Oscar Onyema, CEO, Nigerian Stock Exchange (NSE); Uche Val Obi, managing partner, Alliance Law Firm/author of “Class Actions in Nigeria,” and his wife Ella, at the firm’s maiden lecture series and book presentation in Lagos.

BDCs, NDLEA move to checkmate money-laundering activities HOPE MOSES-ASHIKE

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ureau De Change (BDC) operators and the Nigeria Drug Law Enforcement Agency (NDLEA) plan to work together to tackle the menace of drug trafficking and money laundering.

This follows a courtesy visit

by NDLEA officials to the national secretariat of Association of Bureaux De Change Operators of Nigeria (ABCON), Lagos, at which areas of mutual interest in the fight against drug trafficking and money laundering were discussed.

Speaking during the visit, ABCONpresident,AminuGwadabe, said the Association would work with NDLEA to organise sensitisation workshops for BDCs on the connection between drug

traffickingandmoneylaundering.

“Part of our role is ensuring compliance and one of our challenges is the vulnerability of BDCs thatiswhywekeepontrainingour members on issues like customer identification as required under ‘Know Your Customer’ principle.

“We consider it important that we know our customers. One the reasons why BDCs are vulnerable is because the proceeds of drugs is huge, drug business is in billions of dollars and we deal in dollars, hence we are very vulnerable.

“The perpetrators who have this proceed can run into our offices and that is why our members reallyneedtoprovideinformation that will help the Agency to trace the perpetrators. So we would partner with the NDLEA to train ourmembersonthosethingsthey need to watch out for to identify

suspicious transactions.

“Though we have training programmes with the Nigeria FinancialIntelligenceUnit(NFIU) and Economic and Financial Crimes(EFCC)ontheseissues,we would also partner with NDLEA to organise training. We would request for resource persons from the agencies to participate in our periodic training for BDCs,” Gwadabe said.

He noted that empowering BDCs against activities of drug traffickers and money launderers was imperative given the critical role of the industry in the economy. He noted that in addition to providing retail foreign exchange services to travellers, BDCs help in achievingforeignexchangestability,whiletheindustryprovidejobs for about 16,000 Nigerians.

Leader of the NDLEA del-

egation, Musa Maina, assistant director, said that though BDCs are under the regulation of the Central Bank of Nigeria (CBN), their activities have a bearing on the job of the NDLEA, adding that is the rationale for the visit.

He said that the Agency would work with ABCON to educate BDCs on certain obligations, which have bearing on the war against drug trafficking and money laundering. He said one of these obligations is record keeping.

Hesaiddrugtraffickersintheir efforts to launder the proceeds of their crimes operates in cash, and they usually avoid businesses that keep meticulous records and documents of transactions, while preferring businesses that deals in cash and does not keep record of transactions.

Thursday 07 June 2018

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8 BUSINESS DAY NEWS Education start-ups take Nigeria’s tech space by storm ODINAKA ANUDU

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t was October 19, 2017.

Samuel Ndorogo sat comfortably in his Surulere office surfing the internet. He had been on his computer for six hours.

Ndorogo was not alone in the cubicle. Four other young people were also in the game.

Their business was simple - to connect teachers to students through the internet.

Parents seeking to find suitably qualified teachers for their children only needed to go online, fill out a form and then click a Request button. Ndorogo and the young people sitting down besidehimwouldthenfindsuitablyqualifiedteacherswholived closer for a fee. Parents paid with their credit cards or may even pay directly into a bank account.

This is the new wave of innovationintheeducationsector now,asyoungentrepreneursare takingthesectorbythestormvia technology.

One of such is Tuateria, founded by Godwin Benson, a first-class graduate of Systems EngineeringfromtheUniversity of Lagos. Benson founded TuteriatohelpNigerianstudentsfind teachers near them.

Tuteria manually assesses teachers and also interviews

them to ensure they are suitable for the subjects or courses they claim to teach.

Tuteria does not just connect teachers to students for traditional courses or subjects, but also for areas such as beauty andlifestyle,cooking,musicand instruments, among others.

Next is Prepclass, which provides home tutors to Lagos residents, offering test-taking strategiesandtargetedexamination practice for students.

In a city of over 20 million people, where most parents are busy from morning till evening, Prepclass is filling up the gap of providing tutors to pupils and students at their convenient time.

“AtPrepclass,wehaveaccess to more than 1,000 tutors in different specialities and locations across Lagos alone. This makes it possible for us to match your ward with the very best of the best tutors without any stress to you. We try to work with your budget and make the entire processasstressfreeandflexible as possible,” the firm says on its website.

There is also Tutor.NG, launched in 2014, with a view to providing tools for engaging and tutoring learners in Nigeria.

Tutor.NGisoftenseenasthefirst online education platform in Nigeria, allowing schoolteach-

ers or other individuals willing to share creative works or teach online.

Throughtheplatform,teachers and trainers can sell their courses at a fee, to whoever is interested.

The platform tutors students on English and French languages, public speaking, as well as on entrepreneurship courses such as bead making, cooking and mobile app development, among others.

At the launch of the platform in 2014, Peter Ogedengbe, co-founder of Tutor.NG, said the platform would solve the problem of learning beyond the classrooms and create employment for smart and versatile graduates.

More so, EduRecords is one of the platforms changing the way the business of education is done. It was founded to track the performance of students andteachers.EduRecordskeeps recordsofstudentsandteachers against loss, damage or alteration;monitorschildrenorschool affairsfromanypartoftheworld, andprovidesperformanceanalysis on children.

The platform checks continuous decline in students’ performances as well as decline in enrolment rates, thus enabling parents learn the performances of their children.

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Obaseki plants first tree in N5bn Urhonigbe Rubber Plantation

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do State governor, Godwin Obaseki, says his administration has taken deliberate steps to reposition the state as an agro-based industrial hub in the nation that specialises in rubber, cocoa and oil palm produce.

Obaseki said this while planting the first rubber tree at Urhonigbe Rubber Plantation in OrhionmwonLocalGovernment Area of Edo State, on Wednesday.

Obaseki disclosed that the motion to establish the rubber plantation was moved by his grandfather in 1952, and expressed his excitement in leading the re-development of the plantation.

He thanked the management of Rubber Estate Nigeria Limited for investing about N5.1 billion in Urhonigbe Rubber Plantation as the move would create employment for the youths in the area.

The governor called on the company to partner with the community and enter into an agreement to donate more land for planting of rubber to create more agripreneurs.

“We are set to accelerate the economic growth of Orhionmwon Local Government Area, starting from the base, as Information and Communication Technology (ICT) is introduced in all our primary schools to integrating them into the Edo-Best programme,” he said.

He assured that more resources would be channelled

into improving the healthcare system in the area while efforts will be made to accelerate the construction of roads in the council.

The governor assured the people that his administration will re-construct the old roads and open up the area for more economic activities, adding, “The community people will be involved in the development of the area.”

He said his administration will ensure the security of life and property in the council by establishing a formidable police post soon, and added, “I am consulting with the Inspector General of Police to ensure this plan comes to reality.”

He assured those affected by the last storm in the area that the government will support them as arrangement is already on ground to address their issue and noted that efforts are being made to resolve the boundary dispute between Edo and Delta states.

“Urhonigbe technical school will be equipped and more teachers will be sent to the school,” he promised.

The managing director of Rubber Estates Nigeria Limited, Philippe Carty, expressed his delight at the occasion, and noted that the presence of the governor is a bold demonstration of his support for the development of Urhonigbe Community and his commitment to Agriculture in the state.

Ondo approves N11.3bn for infrastructural development YOMI AYELESO, Akure

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ndoStategovernmenthas approved N11.29 billion for infrastructural projects in all the three senatorial districts of the state.

Femi Agagu, commissioner for education, science and technology, who doubles as chairman of the State Tender Board, flanked

by Yemi Olowolabi, commissionerforinformationandorientation, while briefing newsmen on the outcome of the state executive council meeting, assured that the projects would begin soonest in selected areas.

Agagu explained that the Council approved the renovation of office and construction of a new gate at the Ondo State Oil Producing Areas Development Commission (OSOPADEC) head office in Oba-Ile at the cost of N86.7 million.

The Council, according to Agagu, also approved the upward review of the ongoing dualisation project in Ikare township roads phase 1 from N489 million to N629 million.

He attributed the upward review of the project to the difficult terrainintermsoftherockencountered on the project site that had to beexcavated,soastoenableitalign with the phase 2 dualisation.

“The phase 1 has to be expanded. It was awarded by the immediate past administration as a single-lane road and would be expanded to align with the dualisation going on in Ikare.

“The road has to be dualised and the rock along the project has to be taken account of, hence the need for the upward review of the project from N489 million - N629 million,” he said.

Akinwunmi Ambode, governor, Lagos State (2nd r), presents a souvenir to Zurab Pololikashvili, secretary-general, United Nations World Tourism Organisation (UNWTO) (2nd l); Lai Mohammed, minister of information and culture (r), and Steve Ayorinde, commissioner for tourism, arts and culture (l), during the courtesy visit by the delegates of the 61st meeting of the UNWTO and African Tourism Ministers, at Lagos House, Alausa, Ikeja, Lagos.

Edo SEEFOR concludes orientation for 9,000 new beneficiaries

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do State Employment and Expenditure for Result (Edo SEEFOR) has charged the latest 9,000 beneficiaries of its programme to make the best of the opportunity and work towards becoming selfreliant.

Toju Onaiwu, project coordinator, Edo SEEFOR, said this during the programme organised for beneficiaries at the Bishop Kelly Pastoral Centre in Benin City.

According to Onaiwu, similar orientation programmes have also been held in Ekpoma, Irua and Igueben in Edo Central as well as Auchi, Fuga, Igarra, and Uzebba in Edo North, for youths

who were recently engaged in the state government’s public works programme.

Recall that during the visit of senior director, Governance Global Practice, at the World Bank, Debbie Wentzel, Governor Godwin Obaseki spoke on the achievement recorded in the implementation of the SEEFOR project which falls under Wentzel’s portfolio.

He urged the beneficiaries to use the opportunity offered them to create wealth, adding, “From the monthly stipend, the beneficiaries can set up small scale business ventures and become self-reliant.

“The orientation programme held across the three senatorial districts in the state. It was organised to expose the beneficiaries to opportunities available through the SEEFOR project and how they could benefit from the project.”

Communication officer of the project, Gaius Victor Oveze, explained that the beneficiaries were encouraged to adhere to code of ethics, rules and regulations at the workplace.

“The programme sets out to engage youths and get them contribute to development of their communities. So we want to ensure that they are of good

conduct, know what is expected of them and also for us to have an idea of what their expectations are,” he said.

One of the beneficiaries in Auchi, Jafaru Celifat, said, “We are very happy with the orientation and are now properly informed on the deliverables and impact of the project. I thank the World Bank for the opportunity, and the state government’s sincerity of purpose.”

Joe Majebi, another beneficiary, expressed gratitude to the state government, and other development partners for providing them with employment to improve their livelihood.

Thursday 07 June 2018

Africa’s tourism potentials lie in waste - Ambode JOSHUA BASSEY

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frica’s huge tourism potentials are yet to be fully tapped and harnessed, Lagos State governor, Akinwunmi Ambode, has observed.

Ambode made the assertion when he received a delegation of 101 from 34 countries of United Nations World Tourism Organisation (UNTWO), and eight African tourism ministers, at the State House, Alausa, Wednesday.

The governor decried the fact that Africa remained the least travelled continent in the world by tourists in spite of her several tourism destinations, many of which had never been visited or explored.

“The least travelled tourism continent is Africa, and unfortunately, the next places and destinations are actually in Africa, yet not tapped. As a result of this, anything that has to integrate and bind the continent together, that is where we should go because we are the next story,” he said.

Alluding to the potential of Lagos as a tourism hub, he said: “We believe that with the kind of population and market that Lagos has, you must start to create tourism infrastructure to grow the economy.

“That is why you will see Lagos is now a construction site.

The ultimate goal is that the infrastructure will now drive people to come and spend their weekends and give us some other form of revenue or taxes. There is a cycle of development that tourism drives and that is why we have continually supported anything that has to do with tourism.”

Speaking further, he said: “It is in our own best interest that we partner and collaborate with the Federal Ministry of Information, Tourism and Culture. In this whole tourism industry, we are just an integral part of the whole bonding story that we are trying to build across Africa.

“This is very significant for us because now that we are beginning to see that every destination is an important destination across the continent, it is important that we integrate ourselves and also share whatever possibilities and opportunities that we have together.”

He noted that there was need for some sense of synergy and collaboration in driving projects that promote tourism.

“We are about 24 million people in Lagos. According to the UN 2016 report, 86 people enter into Lagos every hour and most likely not wanting to go back. The next place is Mumbai, 79, and New York, seven, London, nine.

So, why are people coming to Lagos and not wanting to go back?

“It means that at the point where we are not able to provide jobs for them, I need to start looking at the areas of tourism to be able to create that next port of building the GDP; that is create more goods, services and actually tap into the creative knowledge of our people, which is something we have not really been doing in Africa,” he said.

Lai Mohammed, minister of information, culture and tourism, who was part of the delegation, said the UNTWO delegates were in Lagos on technical visit.

Zurab Pololikjashvili, secretary general, UNTWO, said they were in Lagos to promote the state’s tourism potentials and its new tourism sites.

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The middle class or the demented class?

FRANCIS IYOHA Professor Iyoha is of the Department of Accounting, Covenant University and Research Fellow, the Institute of Chartered Accountants of Nigeria (ICAN). He wrote viafoiyoha@ican.org.ng

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he ignoble role the so-called middleclass (the class below those in wealth and above those in poverty) plays in the affairs of Nigeria did not register in my consciousness until I read a piece by Chris Akor titled: “Can we hold our leaders to account?”

He noted in the article that instead of seeking accountability for the resources entrusted, the middle-class is “more preoccupied with establishing contacts and relationships for future contracts, jobs and favours.”

This is unexpected given that the middle-class whose ‘sense of class’ has now been crowded out by greed and inordinate ambition ought to be the toast and the bride of both the wealthy (the ruling class) and the poor in society. Rather than thunder against the malfeasances of the ruling class, the middle-class has lost steam and all sense of value

ADESEGUN OGUNDEJI Ogundeji is Deputy Director, Public Affairs, Lagos State Ministry of Education, Alausa, Ikeja

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bviously, there exists a large army of unemployed youths in our country. According to a latest National Bureau of Statistics report, the country’s unemployment rate is 14.2%.

But this number still did not include about 40million Nigerian youths captured in World Bank statistics in 2009. By implication, it means that if Nigeria’s population is 180 million, then 50% of Nigerians are unemployed, or worse still, at least 71% of Nigerian youths are unemployed.

This is particularly disturbing.

Since Lagos State is home to about 21million Nigerians, it is safe to affirm that the state, which is the fifth largest economy in Africa, feels the brunt of the menace of youth employment the most. That Lagos alone accounts for over 70% of national industrial investments makes it attractive to job seekers from all across the country.

In Lagos, unemployed youths fall into various categories viz employable and unemployable degree holders, medium level education certificate holders, school certificate holders and drop outs and those who never made it beyond primary schools. Stark illiterates also swam on the State on a daily basis, seeking jobs.

In order to frontally address the State’s peculiar unemployment question, the State government has put in place several new initiatives alongside existing ones. For instance, to prepare graduates for life after school, ReadySet-Work was launched. It isan entrepreneurial and employability training

and has become an accomplice in riding Nigeria as a bicycle.

This is why, for instance, you would find some two ‘eminent’ Senior Advocates of Nigeria (SAN) exchanging fists over who is better fit to defend a serial killer or a notorious armed or even ‘political’ robber. It is also the reason you would find some Professors turning theories overboard in their wisdom or lack of it in advising or ill-advising the ruling class. It is also the reason that a portfolio of policemen, military and other para-military men and women and of course many senior civil servants have taken perpetual oath to remain eternally corrupt and demented like the hen that sucks its fines eggs. Rather than be vilified, the actions of the middle-class are garnished by the ‘sharper than two-edged sword’ ready pen of some journalists. Today, the middle-class has left us with a country in a depressed state with little order and no national pride.

The middle-class ignorantly appears to forget that though great wealth may bring temporal happiness, it is, however, not the source of joy. Look at most members in the ruling class- extremely arrogant, amusing and with horrifying past and present credentials. I wonder where lies the joy and prestige in being an accomplice in administering Nigeria with large doses of

Rather than be vilified, the actions of the middle-class are garnished by the ‘sharper than two-edged sword’ ready pen of some journalists. Today, the middle-class has left us with a country in a depressed state with little order and no national pride injustice with a group that soon become afflicted with frailties soon after the source(s) of their ‘wages of unrighteousness’ dry up a year or two after leaving office.

In all of this, it is evident that Nigeria is not ‘divided’ along political, tribal/ethnic or religious lines. The division is simply in the economic domain and thus, three classes of Nigerians exist- the ruining (oh the ruling class), the middle and the poor classes. Poverty has no respect for religion, political or tribal affiliations. Hunger has the same effect on the poor whether or not he/she lives in Kaduna or Port

Harcourt; whether Christian or Muslim or whether a member of the ruling party or the opposition party. One would have expected the middle-class to use its vantage position to turn its passion into purpose in the public interest in order to tackle the danger which the ruling class represents. But this has not been so. You are likely to hear the question: is passion in the law? And I wonder the law we talk about – Is it the one that is obeyed or the one that is often deliberately misinterpreted and disobeyed? It is important to remind the middle-class that there are issues of life against which there is no law-love, joy, peace, patience, kindness, goodness, faith, gentleness and self-control. Which of these does the middle-class exhibit?

None, rather we have the middle- class enmeshed in a portmanteau of cases of stealing, murder, kidnapping, arson and others vices cast in the same mold.

One wonders whether the middle-class was born into corruption, raised in corruption and dwell in corruption and dishonor. The middle-class in Nigeria is simply indescribably horrible- a class destitute of honour and dignity; low minded and acting without consideration of others. The class smells awful. All those in the middleclass with soiled hands seem to

forget that they are finite in all ways. They fearlessly indulge in profane and sordid activities.

They are troubling to many who are poor and only a comfort to a few who are prodigiously and fraudulently wealthy. They have all been disabled by sinful acts in helping the ruling class erect hurting political edifices where they unleash violence of all kinds on the vulnerable who are daily worried about frustration and apprehension of what the future holds for them.

I personally feel constrained to think that President Buhari is the problem of Nigeria. He neither represents the problem nor the solution thereof. He is as much a victim of the monsterized middle- class as any other Nigerian. He is as ‘bad’ or as ‘good’ as the middle-class molds him. The virtues he has been known for and stands for are at risk of being blatantly swept away by some demented elements in the middle-class.

And his sense of reasoning re-ordered to no one’s chagrin but to the delight of the same elements in order to continue to cheer and canonize him in readiness for 2019 in theirs’ and not in the interest of the masses. Truly, it is no longer the middle class but the demented class.

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On Lagos’ fresh employment initiatives programme aimed at ensuring that every student who graduates from any tertiary institution in Lagos has knowledge, skills, and attitude required to gain employment upon graduation.

The 13-week training programme prepares final year students for immediate entry into the workforce as employees and employers of labour by equipping them with market- aligned soft skills, business tools, and a mindset re-orientation to the world of work. Since its inception in 2016, 12,500 students have benefitted from the programme.

Another fresh strategy being deployed to tackle unemployment in the State is the revamp of technical education. Technical education is the form of education that prepares people for specific trades, crafts and careers at various levels. As our country aspires to diversify its economy; it is evident that a vital instrument needed for attaining such height is skilled manpower development and a competent workforce. It is in order to address this need that the State government has been boosting technical education in the State.

The collapse of many industries and the limited capacity of government at various levels to employ the teeming population have made white collar jobs practically nonexistent. However, there exists job opportunities in other areas that our youths need to be sufficiently equipped to exploit. In the construction industry, for instance, there abounds limitless opportunities for youths with relevant skills for gainful employment. Sadly, this is not being

fully exploited because of lack required competence. Thus, to get the needed good hands, property entrepreneurs go to neighbouring Benin Republic, Togo, Ghana and Cameroon.

Presently, the Lagos State government is laying great emphasis on technical education to reverse the trend. Hence, the 5 Technical and Vocational Colleges in the State have been rehabilitated and properly equipped while advocacy campaigns have been stepped up to get more students enroll into the colleges. Steadily, the efforts are paying off as enrolment into the colleges has increased by 120%, a situation that has spurred approval for the establishment of 3 additional Technical Colleges in the State.

The State government is equally partnering with several firms to further develop technical education through the setting up of Academies within the Colleges. Notable among these are Samsung (Engineering Academy), Electrical Power Engineering (Power Academy), Automechatronics (Automotive Academy) and Julius Berger (Construction Academy). The good thing about this development is that some of them provide instant employment for grandaunts of these colleges since they can vouch for their competence. For instance, 26 graduates of the State’s Technical Colleges were recently recruited by Dangote Groups as Technician Trainees at Dangote Academy, Obajana while 115 Graduates in Electrical Installation were recruited by Ikeja Electricity Distribution Company.

To further exploit the current momentum, the Lagos State Technical and Vocational Education Board has collaborated with General Electric for the training of students and Instruc-

tors on 3D Printing Technology and Kansai Plascon on Human Capacity Development for fifteen (15) Instructors in Painting and Decorating. The quality of training has also led to the employment of some graduates of the colleges while many have equally become self- employed.

In order sustain existing progress in terms of enhanced job opportunities, the agriculture and agro business sector, with huge capacity for mass employment, is equally being creatively explored. Thus, the Agric Yes programme is being vigorously pursued to train students, school leavers and graduates in Agro related enterprises at Araga in Epe. Upon completion of training, land, accommodation and other vital tools needed to start off are provided for those who choose to stay back in the Farm Settlement while those willing to practice elsewhere are equally supported to stand on their own.

Also, in order to really catch in on the job creation potentials of ICT, the State government introduced Code Lagos, an initiative aimed at teaching 1 million Lagos residents to code by 2020. In May 2017, the programme launched a successful pilot phase with 67 schools, comprising both public and private schools, which exposed over 5464 students to the Code Lagos Coding Framework.

According to ICT experts, knowledge of coding is important not only to individual students’ future career prospects, but also for their countries’ economic competitiveness as well as the ability of technology industry to unearth qualified personnel. In our technologically enhanced world, people with excellent ICT skills stand

better chance of being self reliant entrepreneurs. Currently, Code Lagos has trained over 31,000 Lagosians to code while 364 Coding Centres have also been set up in 352 primary and secondary schools as well 12 Outof-School Centres located in Yaba, Ikorodu, Meiran, Surulere, Ipaja, Ilupeju, Isolo, Onikan, Ikeja and Fadeyi.

By June, 2018 another set of 1,260 Lagos residents will commence coding classes in the 12 Out-of-School Centres.

Plans are currently underway to expand the programme to run in 1500 primary and secondary schools as well as 50 Out-of-school Centres across the State by the end of this year. The goal is to ensure that 100,000 Lagosians are trained by September 2018 and 150,000 by December 2018.

Once the Code Lagos initiative has been sparked there is no telling where it may end. Founders of Microsoft and Facebook had good technical skill and programming ability as well as many other skills. These and few other well known personalities can be cited in computer coding classes to encourage more youths to take keen interests in ICT. No doubt, with the conception and execution of more strategic plans, it is envisioned that unemployment will considerably reduce in Lagos. It is, however, important to stress that we need to alter the curriculum of our tertiary education to embrace courses that fit into current socio-economic reality. Indeed, more emphasis must now be placed on technical education and skill acquisition.

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The three dysfunctions of your QPR OMAGBITSE BARROW FCA Barrow is an Abuja based Strategy and Innovation Consultant @gbitsebarrow me@omagbitsebarrow.com

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hen sales departments of most commercial enterprises sit together to review their performance, it presents a great opportunity for the organization’s leaders, sales leaders, managers and sales professionals to improve their performance in the next performance period or cycle. It is an excellent practice in leadership, strategy and performance management, and if you have a sales team but do not carry out these periodic reviews, then you absolutely must! However, for many commercial organizations especially those in the highstakes financial services industry (banking, insurance, pensions and capital markets), QPRs or “Quarterly Performance Reviews” are an age-old tradition.

Incidentally, a lot of these institutions actually have these meetings on a monthly basis, but now call them Monthly QPRs – which is inappropriate but confirms how “cultural” the expression has become in most institutions.

Unfortunately, in almost two decades as a finance industry

professional and consultant, I have come to the awful conclusion that most of these QPRs are highly dysfunctional, and do not actually help the organizations to improve their performance in a sustainable way. Most sales professionals and professionals come into the meetings with great fear and trepidation and leave after a day or two intimidated, scared and sometimes reticent, and waiting for the impending loss of job that may be their lot as a result of their under-performance, rather than being “gingered” and equipped to improve their performance – which should be actual goal of these sessions.

Before I venture to describe what I have come to identify as the 3 dysfunctions of your QPR, I will like to share one curious general thought on QPRs – why isn’t only for sales People? Shouldn’t professionals in back and middle office roles like customer service, operations, IT etc. also have the rigour and enjoy the benefits of QPRs? Some organizations do this, but many do not – I think that performance reviews for a team are always a good thing for sales and non-sales teams. I even suspect that a number of non-sales teams try to avoid institutionalizing QPRs just to avoid the “toxic” effect that they have as evidenced by what happens in the sales teams. It’s like saying that you will not give feedback to your team members just because each time you do people get upset and defensive. Clearly, it is because there is something wrong with your approach. Here

We have all collectively fostered very negative cultures around performance management in our sales teams especially with these QPRs, and need to be intentional about doing things properly, so that we can create professional, competent and resultdriven sales teams are the three dysfunctions of your QPRs and my best advice on how to use the QPRs more effectively: 1) “Shredding” Instead of coaching: If QPRs are meant to motivate (ginger) and equip professionals to sustain and improve their performance, then the language and tone of these sessions must be “coaching” rather than the insults, name-calling and threats (collectively known as “shredding”) that many of these sessions have become. When you “shred” underperformers at these sessions you will get some measure of performance improvement, but mostly what you will get and do get is palpable fear, the sustenance of an unprofessional culture, and what seems like the semblance of improvement – which in reality is just a half-hearted attempt to avoid being shredded and disgraced at the next session. QPRs should

be coaching conversations with professional non-prescriptive feedback that engages, inspires and motivates but most of all challenges the team to “think for a change” through powerful questioning, stories and anecdotes that are synonymous with coaching the result – better and more sustained performance, and a better, less toxic culture and organization.

2) Falling for the fallacy of sales numbers: Sales numbers are historical information. They report past performance that cannot be change. Future sales can be changed, and that should be the focus. So, when QPR sessions celebrate the top performers and denigrate the bottom performers without paying attention to the two components that drive sustainable sales results, then you are guilty of the fallacy of sales numbers. Sometimes a lot of sales success may be just a one-hit wonder – my uncle was just appointed the CEO of a government agency…So, you celebrate that top striker who got lucky in this quarter and by the next quarter, the person slides back to under-performance. Praying for a family member to be in a position of influence is not sustainable. What is sustainable as far as sales is concerned are two things – a) setting goals and managing performance along a well-defined sales cycle and b) continuously evaluating and building the sales competencies required to deliver results along the sales cycle. When QPRs focus on these, you create better professionals, build a culture of profes-

sional (not junkyard) selling, and create a sustainable pipeline of sales results.

3) Failing to spark innovation to transform under-performance: This is particularly of interest to the human resources business partners that sit on these sessions, whose most important yet highly under-played role in organizations is that of a performance consultant. Instead of just noting the names of those to be placed on performance improvement plans during the sessions, you should facilitate performance consulting sessions that try to identify the root-causes of the under-performance using the sales cycle as a reference, and then deploying collaborative creative thinking tools (divergence and convergence) to develop and implement concrete solutions that can take the under-performers from so-so to excellent.

We have all collectively fostered very negative cultures around performance management in our sales teams especially with these QPRs, and need to be intentional about doing things properly, so that we can create professional, competent and result-driven sales teams. If we don’t we may still achieve moderate levels of sales performance from one period to another but create toxic cultures and weak leaders. If we do, we will grow our sales results exponentially, create a culture of innovation and better sales leaders for the future.

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Public service and imperatives of strategic planning

AKINTOLA BENSON OKE Dr Oke, is Lagos State Commissioner for Establishments, Training and Pensions, Lagos State

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n anonymous author once affirmed that: “In absence of clearly defined goals, we become strangely loyal to performing daily acts of trivia.”

Similarly, Albert Einstein once said: “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” And, of course, according to popular wisdom, only the unwise embarks on a journey without a map.

The importance and indispensability of strategic planning in management has been proved and validated over the years. Surprisingly, however, organisations are not always readily open to embracing a culture of strategic management.

Ironically, every well meaning organization strives to be the best in their sphere of influence. For the public service especially, the sure way to be the best lies in embracing

a culture of strategic management.

Strategic management model remains, perhaps, the best ever and definite way to ensure an efficient and productive public service that would impact greatly on good governance and quality service delivery.

In an article titled: ‘Introduction to Strategic Management,’ Ryszard Barnat listed the benefits of strategic management for organisation to include provision of a way to anticipate future problems and opportunities, providing personnel with clear objectives and directions for the future of the organisation, more effective and better performance compared to non-strategic management organisations, increased personnel’s satisfaction and motivation, faster and better decision making and cost savings.

In addition to the above, Ryszard Barnat equally stresses that strategic management allows for identification, prioritization, and exploitation of opportunities, provides an objective view of management problems, represents a framework for improved coordination and control of activities, minimizes the effects of adverse conditions and changes, allows major decisions to better support established objectives, allows more effective allocation of time and resources to identified opportunities, allows fewer resources and less time to be

devoted to correcting erroneous or ad hoc decisions, creates a framework for internal communication among personnel, helps to integrate the behaviour of individuals into a total effort, provides a basis for the clarification of individual responsibilities, gives encouragement to forward thinking, provides a cooperative, integrated, and enthusiastic approach to tackling problems and opportunities, encourages a favourable attitude towards change and gives a degree of discipline and formality to the management of an organisation.

At this point, it is important to draw attention to five essential attributes of strategic management, according to the thoughts of a leading management consultant, Mr. Mark Rhodes.

First, an effective strategy should be deeply understood and shared by the organization. Rhodes argued that the ancient Mongols defeated far larger Armies because they were able to make adjustments on the battlefield despite ancient systems of communication that limited the way orders could be delivered to warriors already in action. He then stated that the secret was instilling battle strategy in the hearts and minds of all soldiers so that they could make correct tactical decisions without direct supervision or intervention.

Like the mission statement published in the annual reports or guiding principles framed in the lobbies of organisations, a strategic plan itself

accomplishes nothing. What matters is whether personnel in the organization understand and internalize the strategic direction that have been well articulated and can make tactical choices on their own.

Strategic plans must be articulated in a manner such that operational and tactical decision-making can follow suit.

Furthermore, the leading strategist must count on the employees or members of the organization to make sound tactical and operational decisions that are aligned with the desired strategic direction.

To ensure that these decisions are well made, the articulated strategic direction and strategic plans must be applicable and clearly related to the issues that people face.

It is always helpful to remember that an effective strategy provides a picture of the desired long-term future. In order to make sound dayto-day decisions, all members of the organization must be able to begin with the end in mind. All steps must ultimately keep the organisation on course toward the long-term objective.

In the second place, an effective strategy allows flexibility so that the direction of the organization can be adapted to changing circumstances.

Rhodes explained that rigid strategic direction seldom turns out to have been the best course of action. To assure that your organisation is nim-

ble and able to react to changes, it is essential that your strategy is flexible and adaptable. As a strategist, you will count on timely and accurate information about prevailing relevant conditions. It is essential to build and employ effective mechanisms for observing and listening to what is going on in the environment. Realtime information, in turn, must feed on-going strategic and operational shifts and deployments.

Thirdly, effective strategy results from the varied input of a diverse group of thinkers and participants in strategic decisionmaking must be unafraid to state contrary opinions. Managers of human resources must look carefully in the mirror in order to ensure that their strategic team is ready to make effective decisions.

They must encourage debate, even argument among their strategic team about key decisions. Encouraging blind alignment with the organization’s positions can be counterproductive. Personnel must be allowed to feel free to air contrary views about organizational goals.

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

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

Bashir Ibrahim Hassan

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

Thursday 07 June 2018

Enabling environment and the ban on codeine syrups

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ll it took was one feature on the BBC World Service to make officials of the Federal Ministry of Health react in knee-jerk fashion with a policy directive with consequences on businesses, employees, citizens and a whole sector. The response was without due process as there was no consultation with stakeholders nor provision of recourse of any kind to persons that it would affect. It harked back sadly to the days of “with immediate effect”.

The Federal Government declared on May 1 a ban on the manufacture and marketing of cough syrups containing codeine. This followed an increase in the intensity of the abuse of the syrup by young people. It got to an epidemic proportion in Kano. However, Nigeria requires much more than a ban on one line of opiates to tackle the evolving drug abuse challenge.

Many issues deserve attention on the matter of youth drug abuse in Nigeria. They demand careful consideration, planning and implementation of a plan that enables the country stand a chance of winning.

Groups including Government are already working on the challenge. The Senate did a study of the situation

and is working on a Bill. The Federal Ministry of Health set up the Codeine Control and Other Related Matters Working Group. Given this setting, the knee-jerk response coming soon after a BBC documentary is worrisome.

Youth around Nigeria abuse more than codeine. They abuse prescription and over-thecounter drugs. They drink codeine, Tramadol, Rohypnol and Lexotan. They sniff glue, gum and methylated spirits.

They abuse various local substances, from petrol to faecal matter.

Why is the incidence of youth drug abuse rising? Why more so in particular locales than others? Who are the stakeholders and what roles should they play to tackle this challenge? Who is coordinating?

What, for instance, has the Government of Kano declared as its strategy for tackling this scourge?

Today, the Federal Government has banned cough syrups containing codeine. Would it also ban the other drugs and substances that the young abuse in search of a high? What would be the effect of a ban on these medications for citizens who need them as part of a health regimen and who do not abuse them?

Codeine is an opiate. Opiates are common in medications. Morphine and codeine

are some of the most common opiates. In effect, many painkillers contain opiates in varying proportions. In medicine and pharmacology, these natural opiates have many uses.

Morphine goes beyond pain to application in abnormal or laboured breathing (dyspnea) while codeine is deployed to pain, diarrhoea, and irritable bowel syndrome in addition to use in cough medicines. What happens to codeine for uses other than in cough syrups?

Then there is the matter of the enabling environment for business operations in the country. It does not resonate with planning and due process for government to wake up and just announce a ban that would seriously affect the operations of manufacturing enterprises.

Nations plan these things, and give notice. The cough syrup with codeine is one of the lines of no fewer than 22 pharmaceutical manufacturing companies. The popular Benylin with codeine has been manufactured by a firm that has been in our country for more than 50 years. Government ought to have given a notice of at least one quarter to stop the sale and manufacture of the drugs whose abuse have now brought out their potency as opioids.

The ban also raises a more fundamental question about drug use in Nigeria. Because of the structure of the drug

trade over the years, there is hardly any line between overthe-counter and prescription medicines. The norm across the world is to have a fairly rigid line when it concerns prescription medicines. In Nigeria, people just walk into a pharmacy, chemist shop or medicine store in the market and buy any and all drugs. The Federal Ministry of Health and the Pharmaceutical Council should go to the drawing board to fashion out new modalities and templates for drug distribution and use in the land. Even in neighbouring smaller countries on the West coast of Africa, they uphold the distinction and do not sell or buy drugs the same way as tomatoes.

The call is on the Federal Ministry of Health to collaborate with sector stakeholders to devise preventive measures against drug abuse. One of those measures would be to adopt best practice standards in drug distribution and sale as applies across the world. The Federal Government and state governments should also work with sociologists, psychologists, doctors and therapists as well others in the health eco-system to tackle this growing challenge of drug abuse. We must borrow best practices from other jurisdictions to ensure we save our young from this problem.

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Cyber insurance market sees steady growth as awareness increases Modestus Anaesoronye of people and businesses. The NotPetya attack in particular highlights the growing busi-

ness interruption exposure associated with cyber risks.

Also, in October 2017, Yahoo! updated its 2013 data breach tally from one billion to three billion of its accounts, poten-

L-R: Emeka Ene, CEO, Xenergi ; Dada Thomas,president, Nigerian Gas Association; Osten Olorunsola, chairman, Energy Institute Nigeria; Wendell VC De Landro, high commissioner of Republic of Trinidad and Tobago in Nigeria, and Wale Shonibare, director, African Development Bank Group during the Natural Gas Business Forum 2018 / 19th AGM in Lagos.

PicbyPiusOkeosisi

Union bank’s CAR now 17.8%, grows profit to N15.5bn Onyinye Nwachukwu,

F

ollowing a N50 billion rights issue in 2017 to support its growth strategy, Union bank closed the year with a Capital Adequacy Ratio of 17.8 percent, according to the Chief Executive Officer, Emeka Emuwa who announced on Tuesday plans to increase investments in agriculture, manufacturing and services.

The bank which reported a profit before tax (PBT) of N15.5 billion notwithstanding the operating environment also plans to grow loan book by lending to real sectors and continue to drive retail lending.

Speaking at the bank’s 49th Annual General Meeting which held in Abuja, Emuwa said the rights issue closed at 120 percent subscription, signaling investor confidence and raising the bank’s capacity to position for increased productivity and profitability.

“Strengthening our capital base through the Rights Issue was key for the Bank in 2017.

13

Group seeks establishment of Bajaj Auto plant in Aba

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

yber attacks were once again in the spotlight in 2017, with increasing frequency and severity, offering plenty opportunities for growth of insurance, especially in small and medium-sized companies, according to A.M Best report.

The WannaCry and NotPetya ransomware attacks and the Equifax data breach received significant media attention and affected millions

DAY

Notwithstanding the challenges a tightened economy presented, the rights issue was 20 percent oversubscribed. This overwhelming success is credited to strong shareholder and investor confidence in Union Bank’s immediate and longer-term plans.

With sufficient capital buffers, we are now in pole position to execute our growth agenda from 2018 onwards.

He said operationally, the bank continued to focus on growing retail customer base and optimising customer experience with simpler, smarter banking solutions.

“We launched an upgraded suite of digital channels including UnionMobile, UnionOnline and our unique USSD banking code *826#, driving an increase in active subscribers above 100% on the mobile app and online banking platforms. Union Bank’s alternative banking platform remains the fastest growing in the industry. We continue to attract broad segments of new customers, adding 90% more new-to bank customers in 2017 compared to 2016.”

He said notwithstanding a fiercely competitive environment and reduced consumer purchasing power in the system, the new-to bank customers and deepening share of wallet with existing customers have driven customer deposits up by 22 percent to ₦802 billion.

“For 2018, our focus is on leveraging our capital and investments in talent and technology to accelerate growth across all business segments and improve enterprise value for all our stakeholders,” he stated.

Presenting the Group’s report to shareholders, Chairman of the Bank, Cyril Odu announced gross earnings of N163.8 billion for the financial year ended December 31, 2017.

Other highlights of the bank’s financial performance in 2017 show that interest income grew by 25 percent to N124.5 billion from N99.7 billion in 2016, as a result of the impact of naira devaluation on the foreign currency denominated loan book, government securities yields and loan book re-pricing.

tially making this the largest, most extensive cyber breach ever recorded.

These events highlight the vital need for cyber insurance, but the market is bifurcated.

On the one hand, national accounts and Fortune 500 companies seem to be embracing the need to partner with insurers and brokers as a way to counter cyber risks.

Financial institutions and healthcare companies are acutely aware of their cyber exposures and are increasing their coverage. Average policy limits are rising, with some of the largest companies’ coverage towers above the half billion dollar mark.

On the other hand, the take-up rate for small to medium-sized enterprises (SMEs) remains in the low teens, presenting an area where insurers would like to see growth.

In 2017, cyber packaged policies in force increased 28 percent, some of which was due to the addition of affirmative cyber coverage to packaged policies. This increase is significant, but this is still something of a fledgling busi-

ness, and an increase of this magnitude, while material, does very little to close the protection gap. However, interest from SMEs does seem to be gaining traction, and capacity from insurers is ample.

In the short term, despite the inherent challenges in managing aggregations and pricing, we believe the cyber insurance market presents a positive opportunity for insurers. Demand is expected to grow due to the accelerating adoption of technology and the increasing awareness of cyber risks, especially among SMEs. Given the abundant supply of capital and the cautious growth strategies of insurers, we expect the overall exposure of the property and casualty industry.

However, as insurers expand their cyber offerings, they will need to be prudent in establishing underwriting standards and limits, and exercise appropriate risk management and mitigation measures to ensure that these exposures remain aligned with the company’s risk tolerances and appetites.

The extent to which an insurer grows its cyber business should also lend to a broader understanding of this relatively new risk and a company’s ability to aggregate, monitor, and manage its exposure in various scenarios. Data quality is a key factor when insurers provide information to regulators, other stakeholders.

Overall, cyber insurance take-up remains low, as SMEs remain complacent about these risks, under two assumptions: that hackers target only bigger businesses such as Target or Home Depot or that they already have coverage under another policy when they might not. However, this sentiment and tepid interest in cyber insurance among SMEs may be changing, in light of the near daily reminders of cyber-threats, attacks, and breaches feeding social media.

Pricing is another factor, as more business owners see the cost benefits and also realize their vulnerabilities due to their interconnectivity with vendors, suppliers, and customers.

Law Union & Rock Insurance introduces more retail products to deepen penetration Modestus Anaesoronye

L

aw Union & Rock Insurance Plc has released more retail products to meet the need of its customers. The new products are travel insurance card and Teen Personal Accidents (TPA). This is part of the Company’s ongoing efforts to deepen penetration and reach a larger population of consumers.

Olasupo Sogelola, executive director, Technical/Operations, Law Union & Rock said the introduction of the two products was part of the company’s strategic plans to meet the need of its retail customers.

According to him, the Teen Personal Accident otherwise called (TPA) was the company’s innovation, but has now been repackaged in four variants with premium ranging from as low as five hundred naira. The new variants provide customers with the benefit options depending on the customers’ choice.

The policy provides a cover for children of age between two and twenty-five years. The ben-

efits include medical expenses and permanent disability resulting from accidents sustained by the insured child within and outside their school premises.

NAICOM has also granted the company an approval to underwrite Travel Insurance Card, a retail policy for regular travellers within Nigeria. With as low as seven hundred naira only, a traveller would be covered against accident arising in the course of his/her traveling by road, rail, water or air.

The product comes in four variants - drivers travel card, passengers travel card, students travel card and executives travel card. The policy benefits, which include medical expenses, emergency care, accidental death and permanent disability is expected to provide succour to the accident victims/family and also reduce the level of uninsured economic losses from accident in the country.

In the last three years, the company has released various retail products into the market which include Home Guard, the product that provide cover

for the house contents, I-Care, I-Salute & GPA 4 Schools which provide different personal accident covers and Doctor-onCover, a professional Indemnity policy for Medical Practitioners.

These products are being distributed through state –of –the – art – technology, which simplifies the accessibility and distribution of the policies through the company’s website, scratch card, POS and agents nationwide.

Sogelola disclosed that the company will soon commence the distribution of Worldwide Travel Insurance Policy following the regulator’s approval to underwrite the policy.

He further expressed the company’s readiness to continue to provide cutting-edge services to its loyal customers.

In 2017, the company moved from accumulated loss to a positive retained earning which enabled it to pay dividends to the shareholders. The company also recorded a positive growth in its top line in first quarter 2018 to maintain its consistent growth and performance in the industry.

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BUSINESS DAY

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COMPANIES & MARKETS Group seeks establishment of Bajaj Auto plant in Aba GODFREY OFURUM, Aba

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he Indian Universities Alumni Association, Aba Area Chapter is seeking the support of the Indian High Commission in Nigeria to make to encourage Bajaj Auto, the manufacturer of auto rickshaw (known as Keke) to establish a factory in Aba, the commercial hub of the South-East and SouthSouth regions of Nigeria.

Or alternatively, in Imo State, where Eze Emeka Ogbonna, of Amainyi Autonomous Community, Ihitte Uboma, Imo State has pledged to donate 100 hectares of land for auto rickshaw (Keke) manufacturing plant.

They also suggested that the interaction between the Indian Universities Alumni Association, business community/Industries and the Indian High Commission

be made an annual event and appealed to the Indian High Commission to subsidize yearly tour of India, by registered members.

The Indian Universities Alumni Association, Aba Area Chapter, recently proposed a partnership between the Abia State Government and the Indian High Commission in Nigeria, to establish an Indo/Nigeria Centre for Culture, Business, Education and Languages (CBEL) in Aba. They observed that the centre, would serve as a clearing house and facilitator for cultural integration, business and industrial exchanges and learning of key Indian and Nigeria languages.

The association in a communiqué issued after its maiden Indo/Nigeria symposium and cultural fiesta, held in Aba, also urged the Indian High Commission and Abia State Government, to col-

laboratively equip and train medical personnel in a referral hospital in the State, in order to leverage from the medical cash flow.

The symposium and cultural fiesta with a theme “Consolidating to deepen Indo/Nigeria relationship through education and culture, small and medium scale industries, agriculture, medical tourism and yoga”, was organized by the Aba Area Chapter of the association, to deepen Nigeria/India relationship.

The successful event attracted top government functionaries and professionals, including, Emmanuel Emeruwa, executive chairman, Aba South Local Government Area, who represented Governor Okezie Ikpeazu and Subhash Chand, deputy India High Commissioner to Nigeria, who represented Shri B. N. Reddy, High Commissioner of India to Nigeria.

First Bank collaborates with WorldRemit for digital money transfers HOPE MOSES-ASHIKE

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igeria’s largest lender by assets, FirstBank of Nigeria Limited has collaborate with WorldRemit, leading digital money transfer service to offer instant money transfers to both existing and new customers.

With this partnership, FirstBank has extended its frontiers to WorldRemit in order to leverage the wide eplatform capabilities it offers to further ease the money transfer process for its numerous customers across the globe who seek new and easier payment transaction options regularly.

WorldRemit’s mobilefirst, digital model complements FirstBank’s digital strategy to drive convenient banking transactions from the comfort of homes and offices using the FirstMo-

bile and FirstOnline banking platforms.

“People from some of the 50 countries across the world where WorldRemit operates can now send money directly from their mobile phones into FirstBank accounts in Nigeria without visiting brick and mortar agent locations; and this is the first of its kind in Money transfer business in our country”, said Gbenga Shobo, deputy managing director, First Bank of Nigeria.

Over the years, FirstBank has taken the lead in providing relevant e-payment options for its customers as it pioneered with Western Union Money Transfer in 1996, then Transfast Money Transfer, MoneyGram, Ria, PayPal, Pay Attitude and now, WorldRemit.

Shobo noted that the service is available to senders in 50 countries and over 145 destinations across Europe,

Asia, Africa, Australia and the Americas.

“At FirstBank, we are excited at this partnership. Our brand promise is to always deliver the ultimate ‘gold standard’ of value and excellence; and this collaboration with WorldRemit is one of the many ways we provide value to our customers as we continue to devise innovative ways to provide convenience and ease of banking for them”, he said.

Speaking at the official launch of the partnership, Andrew Stewart, regional head of Middle East & Africa at WorldRemit, said: “We are delighted to be partnering with First Bank, one of Nigeria’s leading banks, to give its 14 million customers access to our best in class money transfer experience. Nigeria remains our largest and fastest growing market in Africa, and WorldRemit’s second biggest market globally.

L-R: Graeme Bride, health & safety director, Lafarge Africa Plc; Latifat Ojikutu, iya oja general, Lagos Island East; Mojisola Dange, vice general iya oja, Lagos Island West; Folashade AmbroseMedebem, communications, public affairs and sustainable development director, Lafarge Africa Plc at the celebration of World Environment Day in Lagos Island recently.

NMRC N11bn series II Bond records 200% over subscription

A

s part of its primary mandate of providing liquidity to the Nigerian mortgage market, Nigeria Mortgage Refinance Company (NMRC) recently completed its N11billion 13.80 percent Series 2 Bond Issuance under its N440 billion Medium Term Note Programme. The net proceeds will be used to refinance eligible mortgage loans originated by the participating mortgage lending banks.

This is coming on the heels of its inaugural N8 billion 14.9 percent Series 1 Bond issue in July 2015 – which was fully deployed towards refinancing legacy mortgage loan portfolios of the participating eligible member-mortgage lending banks.

The Series 2 Bonds are unconditionally and irrevocably guaranteed by the Federal Government of Nigeria (FGN) and thus ascribed an “AAA” rating by both Global Credit Rating Co. and Agusto & Co. The order book was subscribed by over 200 percent.

The bonds were subscribed to by domestic investors with the Pension Fund Administrators (PFAs) representing over 70 percent of the investors. The bonds were priced at a spread of c.74 basis

points above the interpolated 15-year FGN yield of 13.06 percent as at the opening of book building.

According to the current Managing Director of NMRC, Kehinde Ogundimu, “The Bond Issuance reinforces our commitment to encourage and promote homeownership in Nigeria by linking the capital markets with the housing sector and establishing an operating and viable secondary mortgage market to support the primary mortgage market.”

He added that NMRC remains committed to transmitting the full benefit of the pricing efficiency achieved in its funding cost to home borrowers through the participating primary mortgage lenders, thereby lowering costs and driving activities that will deepen the mortgage market.

Sonnie Ayere, chairman of Dunn Loren Merrifield Advisory Partners, stated that the high subscription level for the Series 2 bonds is indicative of the strong investor appetite for the long-tenured asset class and underscores the confidence reposed in the underlying principle and operating model of NMRC. He further noted that the Nigerian mortgage market will witness a significant

boost as the mortgage prefinancing facility, Mortgage Warehouse Funding Limited (MWFL) kicks off its operations. “MWFL is sponsored

by NMRC, Member Mortgage Banks, Mortgage Bankers Association of Nigeria, Lion’s head of Global Partners through the African Local Currency Bond Fund and DLM Group”, he added.

Funso Akere, chief executive of Stanbic IBTC Capital Limited commended the management of NMRC for giving the Issuing Houses a free hand to guide the process. “The success of the bond reaffirms the availability of long-term funding to support NMRC’s drive to promote affordable housing ownership in Nigeria. Stanbic IBTC Capital is delighted to have supported NMRC in achieving this successful bond issuance”.

NMRC is licensed by the CBN to conduct mortgage refinancing business in Nigeria.

The company is a private-sector driven company with the public purpose of developing the primary and secondary mortgage markets by raising long-term funds from the capital markets and thereby encouraging and promoting home ownership in Nigeria.

While lamenting that Nigeria lacks quality leaders because most leadership aspirants lack the requisite skills that would help them succeed and make a positive impact on the lives of the led, Omoaka added that “Toastmasters is more like a humanitarian service. It’s not like the average business school, but you learn skills taught in business schools such as skill

building, critical thinking, negotiation, listening, leadership and communication.”

Philip Obi, incoming president, Lighthouse Prestige Toastmasters, whose vision is to make the club more wideranging and fun, observed that humanitarian services should ordinarily be everybody’s business. “As leaders, it’s important for us to impact society.

Lighthouse Toastmasters donates to orphanage homes

L

ighthouse Toastmasters, non-profit organization focused on public speaking and leadership development as part of activities to mark the last month of their yearly cycle has identified with Living Fountain Orphanage, Victoria Island, where they donated sundry consumables and gift items for the welfare of residents.

This marks the third successive year that the Lighthouse Toastmasters and sister club Lighthouse Prestige Toastmasters will be actively reaching out to orphans as part of their CSR strategy.

Last year, the non-profit organization focused on public speaking and leadership development also visited a home for juvenile kids on the Mainland,

where they selflessly provided life skill education and donated gift items to residents.

Matthew Omoaka, president, Lighthouse Toastmasters, said the gesture was driven by the spirit of giving back to people and developing their innate capacities without expecting anything in return.

He said: “Ours is a platform that gives people the oppor-

tunity to learn leadership and public speaking by doing. However, we have decided that on a yearly basis, we will give back to our society and humanity.

So we decided to take this opportunity to visit the Living Fountain Orphanage and offer some gift items just to reach out to the less privileged and the orphans in this particular orphanage.”

BUSINESS DAY

Thursday 07 June 2018

CityFile

HOFOWEM kits pupils in Lagos schools

Officials of Adamawa Command of the Nigeria Security and Civil Defence Corps (NSCDC) sealing an illegal security firm in Jimeta area of Yola. NAN

JOSHUA BASSEY

H

ope for Women in Nigeria (HOFOWEM), a non-governmental organisation founded by the wife of the Lagos State governor, Bolanle Ambode has donated 50,000 shoes and other items to pupils in Lagos public schools.

Ambode flagged off the distribution of the items at Cherubim and Seraphim Primary School, Lagos Road, Majidun in Ikorodu, to mark the 2018 edition of the “Project Bright Steps,” a pet project of HOFOWEM. The project is aimed at boosting the morale of the children and creating awareness on the welfare of pupils in the state.

In the first edition of ‘Project Bright Steps’ in February last year, 175,000 shoes and HOFOWEM-branded socks, were distributed to primary 1-3 pupils of public primary schools across the state.

Ambode said that getting the best from education began with proper dressing to school, adding that the foundation had observed with some pain, that many pupils were less than properly dressed to school, as some turned up in bathroom slippers while many others went barefooted.

According to her, this sort of daily appearance for school activities certainly could not guarantee them the desired self-esteem, for confidence to excel in their academic work.

Other distribution centres include Agege, Maryland, Yaba, Ojo, Amuwo Odofin, Epe, Lagos Island and Ikorodu which doubles as the flag-off venue. This arrangement is for easier accessibility to the various schools and the benefitting pupils,” she said.

Moyefunke Olayinka, the CEO of HOFOWEM, said since the commencement of operations, the foundation had touched the lives of many and is still putting smiles on the faces of the less-privileged without wavering, adding that through the foundation’s various humanitarian programmes, hundreds of women, children and youths had been reached.

Customs donates food items, others to Edo IDPs

T

he Nigeria Customs Service (NCS) has donated a total of 10,653 (50Kg) bags of rice and other relief materials to the Uhogua Internally Displaced Persons (IDPs) camp in Benin.

Abdulkadir Azarema, chairman, National Logistics Committee (NLC), said this while donating the items to the IDPs in Benin.

“I am happy to announce that we are here for the fifth phase to hand over the following items in line with presidential directive to this effect.

“Rice 10,653 (50Kg) bags, 33 cartoons of ricci tomato paste (400mg), 1,232 cartoons of ricci tomatoes paste (70mg), 210 pieces of 5 litres gallon of vegetable oil and 40 pieces of 2 litres bottle of vegetable oil.

“Others are 5,822 cartoons of small lucozade boost drink, 993 cartoons of Eva soap, 4 cartoons of liquid soap, 11 cartoons of solid soap, 329 bales of second hand clothing and 2,159 pairs of shoes.

“We urge camp officials to ensure judicious use of these relief materials for all the affected people,” Azarema said.

He explained that the committee had as members the army, police, civil defense, federal road safety corps among ohers.

Governor Godwin Obaseki of Edo, lauded for the kind gesture towards victims of insurgency in the country. Obaseki said the state government would ensure that the donated materials were given to the Intended beneficiaries.

15

Offa robbery: Kwarans react to Saraki-police rift SIKIRAT SHEHU, Ilorin with agency report

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esidents of Kwara, including prominent indigenes of the state continue to engage in heated debate over the probe of the allegations made against Senate President Bukola Saraki by suspects arrested over the April 5 Offa bank robbery in which no fewer than 33 persons were killed.

The police had initially invited Saraki for interrogation before soft pedalling to request for only a written explanation within 48 hours.

Also linked to the bloody robbery incident in which nine policemen were killed is Governor Abdulfatah Ahmed of Kwara State following alleged claims by the suspects that they were political thugs working for the duo.

But the senate president and Ahmed had both dismissed the allegations as an attempt to frame them.

Many Kwarans have expressed support for the police in the ongoing investigation and have called on Saraki to respond to the allegations made against him in order to clear his name.

Others, however, dismissed the allegations, saying they were aimed at tarnishing the image of the senate president and the governor of his home state.

Amuda Aluko, an elder statesman, said it would be better for the senate president to respond to the police request in order to clear his name. Aluko, the Tafida of Ilorin, who is of the view that Saraki could never be involved in robbery, however, said it had become expedient for him to clear his name since he was allegedly mentioned by the suspects.

He said his Kwara Liberation Group had spoken out about a week ago urging Nigerians to allow the police carry out their duty on the case of cultists transferred to Abuja from the state.

Suleiman Abubakar, a former minister of

National Planning, was of the view that “if the senate president has no skeleton in his cupboard, he should honour police invitation to clear his name.’’

According to him, the claim by the suspects that they have links with the senate president makes it imperative that Saraki avails himself of the opportunity offered by the police to clear his name.

Abdulwahab Egbewole, a professor in the Department of Law, University of Ilorin, on his part, warned against “the politicisation of the lives of Nigerians.’’

According to him, the police have the right by law to investigate everybody. From the trajectory of the matter, it is not regarded as purely a legal issue. It has some fundamental political undertones,” he said.

The don noted that from the alleged confession of the Offa robbery suspects, it was revealed that Saraki gave a vehicle to a suspect.

“They also alleged that he gave them guns; they, however, stated that he did not tell them to rob,’’ he said. He also argued that this may be seen as being an accessory to a particular crime in law.

Egebwole, however, pointed out that the anti-cultism law in Kwara put in place by the Saraki administration was the most stringent in the country.

He wondered how “a person who puts in place such a law will now go against it,’’ adding that “Saraki after all had said he is ready to comply with the directives of the police during the course of investigation.’’

In his reaction, Rafiu Hotonu, the State Secretary of the National Union of Local Government Employers (NULGE), said there was nothing wrong with the police requesting Saraki to respond to allegations.

“He should honour the request to clear his name. NULGE wholeheartedly supports the police because the suspects

confessed that they work for the senate president, so he needs to clear his name.

“No matter how highly placed you are in the society, once the police invite you, you are bound to honour the invitation,” Hotonu said.

An Ilorin based legal practitioner, Isaac Oladele, said there was no crime in a police invitation, urging Saraki to use the opportunity to respond to the allegations.

Oladele, who noted that the police had even said the senate president needed not appear in person, added: “This is an opportunity for Saraki to clear his name of all the allegations of sponsoring cultists as thugs and having a link to the Offa robbery.

But another lawyer, Tunde Jimoh, appealed the public to stop politicising the matter and allow the police to conduct their investigation.

“Nigerians must allow the police to do a thorough finding. They must stop the different protests and distractions on social media. Enough of interference from the external forces; there is no need to mount pressure on the senate president and the Nigeria Police in order not to complicate the matter.”

For Funsho Aina, another legal practitioner, said: “It is still an allegation for now and he is not yet found guilty. The best for him (Saraki) is to honourably make his statement on the matter available before it turns to another thing.

“If there is the need for him to step down from his post as senate president to clear his name, he can do so for the sake of his integrity and that of the National Assembly,” Aina said.

The Ilorin Emirate Descendants Progressive Union (lEDPU), a soicio-cultural organisation, however, described the police action as “a calculated attempt to tarnish the image of the senate president.’’

Patients besiege Sokoto hospitals as JOHESU resumes work

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atients are trooping to hospitals in Sokoto State following t h e re s u m p t i o n o f w o rk by members of the Joint Health Sector Union (JOHESU).

Normal healthcare ser vices have been restored as the aggrieved unionists resumed normal duties after a protracted industrial action that began on April 17. JOHESU members heeded the directive of their national secretariat to

suspend the strike. Muhammad Gold, the chairman, Senior Staff Association (S SA), Usman Danfodio University Teaching Hospital (UDUTH) branch, said that the state chapter had complied with the resumption order.

Gold explained that the state members resumed work after a congress meeting attended by all the leadership of the association to review developments affecting their members.

“ The congress envisaged victor y over JOHESU agitations and demands were certain.

“A committee that constitutes the Chief Justice of Nigeria, the Attorney General, director of Department of State Service and JOHESU leadership, was initiated to solve the problem, which the JOHESU leadership trust will do justice with the problem on ground,” he said.

Thursday 07 June 2018

BUSINESS DAY

15

16

BUSINESS DAY

Thursday 07 June 2018

C002D5556

Investor

In association with

Helping you to build wealth & make wise decisions NSE All Share Index

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (25 – 05–18)

39,323.62

N14.244 trillion

2,861.24

1,729.39

949.59

Week close (01 – 06–18)

36,816.29

N13.336 trillion

2,688.62

1,613.70

949.59

Percentage change (WoW) Percentage change (YTD)

-6.38 -3.73

-6.03 4.86

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

939.74

349.40

2,637.23

2,059.19

1,475.34

859.45

341.34

2,448.25

1,846.87

1,433.63

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

1,746.68

475.44

139.37

1,775.78 1,663.08

490.66

141.79

468.65

141.63

NSE 30 Index

-6.69

0.00

-6.35

-5.83

-12.67

-4.79

-4.49 -1.43

-0.11 1.62

976.10

-8.54 -11.95

-2.31

-7.17

-10.30

-2.83

3.22

-4.38

-6.52

3.91

Nigeria’s IPO market shows signs of recovery after long drought HEANYI NWACHUKWU

N

igeria’s primary market has started to show signs of recover y, with companies such as Skyway Aviation Handling Company (SAHCOL) and Nigerian Reinsurance Corporation and Singapore-owned Indorama Eleme Petrochemicals Limited planning initial public offer (IPO).

“Primary markets activities on the Nigerian Stock Exchange (NSE) in 2018 have not continued the pace of resurgence we saw in 2017, although the pipeline remains strong. The 2017 primary markets activities were dominated mostly by supplementary offers, listings by introduction, debt issuances, mergers and divestments,” said Oscar Onyema, chief executive officer, Nigerian Stock Exchange.

Public offerings in the Nigerian equity market dried up post-2008 following the market crash that wiped off circa 60 percent of market capitalisation. Though the IPO market has attempted to stage a few come backs but cautious investors have kept the market sentiment weak.

“A resurgent public offering would help deepen equity market, provide more investment options and trigger greater investor participation in the long-run,” said research analysts at Vetiva Capital Management Limited.

“Whilst the All Share Index posted its first positive return in 4 years in 2017– rallying 42percent over the course of the year, the primary market has remained relatively soft, with SEPLAT’s 2014 dual listing in Lagos and London being the most notable public offering in recent years”, Vetiva analysts noted.

In addition, the combined effects of the 2015 national elections, slump in commodity prices, global economic

slowdown, recession and FX market illiquidity resulted in a dearth of Initial Public Offers (IPOs) in the Nigerian capital market. The Nigerian economy exited recession with a marginal growth of 0.83percent in 2017 and is expected to grow by 2.5percent in 2018 based on the World Bank’s projections.

This optimistic outlook is also evident in the NSE’s trading activities with cumulative transactions from January to April increasing by 114.22percent from N509.38 billion recorded in 2017 to N1.091 trillion in 2018; evidently showing that Nigeria remains top of mind on the African continent for investors.

Though Nigerian stocks fell the most in two years in the trading week to June 1 with record N900billion loss as nervous investors shied away from assets they deem too risky, many analysts and

money managers said the declines were not justified and did not reflect positive developments in Africa’s largest oil producer.

The move by SAHCOL, Nigerian Reinsurance Corporation and Indorama Eleme Petrochemicals follows the footsteps of the MTN Group, which is expected to list its Nigerian business in the second half (H2) of the year.

After listing in Ghana last month and recorded higher group profits, MTN aims to list on the NSE in 2018. “This might be a game changer for the NSE,” said Bismarck Rewane, CEO Financial Derivates Company.

He noted that positive investor sentiment trails development MTN listing on the Exchange. “It will deepen transaction volumes and value on the bourse; while improvements in leading

economic indicators will improve investor sentiments”, he added.

These quotable companies are warming up to take advantage of emerging opportunities in the Nigeria’s Capital market to raise cheap funds.

“In line with the drive of operators and regulators to increase product offerings in the market, we could potentially see more issuances of rights, IPOs from large unlisted corporates as well as new products all together in the market. We believe the improved sentiment presents an opportunity for these instruments to be launched”, said Afrinvest West Africa in their 2017 equities market review and outlook for 2018.

Adedapo Adekoje president, Chartered Institute of Stockbrokers (CIS) who recently assured nervous investors of the market’s strong

fundamentals said, “The good news is that we are having good valuations.

Investors should buy on long term basis and not short term”.

While Skyway Aviation Handling Company and Nigerian Reinsurance Corporation are preparing for initial public offerings this year, Indorama Eleme Petrochemicals plans a public float in 2019.

SAHCOL is said to be going through the regulatory process ahead of a planned IPO in August when core investors will sell a stake, while Nigerian Reinsurance aims for an IPO in November in which the government will sell part of its stake.

Over the last few years, Nigeria’s economic landscape has been particularly challenging for the capital market. Between 2014 and 2016, capital raised on the NSE fell by circa 95percent, from N43.95billion to N2.59billion.

However, in 2017 the market saw a significant rebound as listing activity (IPO and Follow on offers) increased 1,622.03percent from N2.59 billion in 2016 to N44.51 billion in 2017. “ The Federal G overnment should intensify efforts in addressing insecurity problems in Nigeria and keep on reassuring of a safe investment environment. Our market is full of opportunities but we need to sustain the momentum of assuring both indigenous and foreign investors that the market is safe,” Patrick Ezeagu, chairman, Association of Stockbroking Houses of Nigeria (ASHON).

He noted that as the Exchange remains a barometer that gauges the mood of the economy, “we should address investors’ fears in order to enable them take advantage of good returns associated with our market. The current bearish trend is temporary as the market would bounced back soon”.

Thursday 07 June 2018

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Investor’s Square

Bears dominate market performance …ASI tumbles 6.4percent week-on-week

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he Nigerian Stock Exchange (NSE) All Share Index (ASI) witnessed the worst week so far in the year, tumbling to a five-month low, after recording a 6.4percent d e c l i n e i n t h e h o l i d ay shortened trading week ended June 1, 2018.

The market was not only broadly bearish throughout the week, the selling momentum grew larger on all four trading days with a 3.4percent decline on Friday alone. Month to date return for May stood at -7.7percent.

Similarly, year-to-date (YtD) return exited the positive region to close the week at -3.7percent while market capitalisation fell below the 14trillion territory to close at N13.3tillion.

Performance across sector indices tracked the bearish theme in the market as all indices declined; led by the Industrial Goods (-8.7percent) and Consumer Goods (-7.5percent) indices on sell offs in Lafarge Africa Plc (16.1percent), Dangote Cement Plc (-8.6percent), Nigerian Breweries Plc (-10.8percent) a n d Ne s t l e Ni g e r i a P l c (-10.6percent). The Agriculture (-3percent), Financial Services (-3percent) and Oil & Gas (-2.8percent) indices also trended southwards consequent on declines in Okomu Oil Palm Plc (-5.6percent), GTBank Plc (-7.9percent), Zenith Bank Plc (-4.3percent) and Forte Oil Plc (-13.6percent).

I n v e s t o r s’ s e n t i m e n t remained disappointing as market breadth closed the week at 0.5x (previously 0.3x); 23 stocks advanced week-onweek (w/w) while 48 declined.

This week we expect investors to hunt for bargains.

Global equities mixed amid political and trade uncertainties Performance of global equities was mixed in the week ended 1st June 2018. A crosscurrent of positive economic data and trade policy in the US and political uncertainties in Europe rattled the market. In the US, consumer confidence index rose near an 18-year high in May, Job numbers came in stronger as 223,000 new jobs were created in May even as unemployment rate declined to 3.8percent. On the other hand, imposition of tariffs on the EU, Mexico, and Canada despite temporary exemptions granted earlier reactivated trade war tensions.

Accordingly, NASDAQ (+1.6percent) and S&P 500 (+0.5percent) appreciated while the DJIA fell 0.5percent in the US market. In Europe, p o l i t i ca l u n c e r t a i nt y i n Italy and Spain pulled equities lower. Spain’s IBEX (-2percent) and Germany’s DAX (-1.7percent) led the

laggards w/w. France’s CAC (-1.4percent), Pan-European STOXX (-1.1percent) and UK’s FTSE (-0.4percent) trailed along.

Emerging markets indices took a cue from the mixed global performance a s I n d i a’s S E N S E X (+0.9percent) and South Africa’s JALSH (+0.6percent) appreciated while Brazil’s IBOV (-2.1percent), China’s SCHOMP (-2.1percent) and Russia (-0.5percent) depreciated w/w.

Money Market : FAAC inflow, OMO, FGN Bonds & Bills boost liquidity Contrar y to the week before, system liquidity in the week to 1st of June 2018 was relatively robust, buoyed by FAAC inflows, OMO (N429.9billion), T- B i l l s ( N 9 9 . 2 b i l l i o n ) and May 2018 FGN Bond (N300billion) maturities which outweighed the total FGN Bond and T-Bills outflow of N90billion and N49.6billion

(11percent versus 10.7percent at the last auction). In terms of liquidity profile, N216billion maturing bills are expected to hit the system this week.

Yields : Average yield trend southward as investors trade the improvement in system liquidity Last week, the sentiment was broadly bullish in the fixed income secondary market as investors traded sentiments around improvement in overall system liquidity. Thus, average T-bill yield declined by 38bps w/w to close the week at 12.9percent (91-day (down 75bps to 12.1percent), 182-day (down 66bps to 12.4percent) and the 364-day (up 26bps to 14.1percent).

In a similar theme, average bonds yield inched lower by 10bps to end the week at 13.3percent, driven by interest in the 3-year, 5-year, 7-year and 10-year maturities, where yields fell by 1bps, 19bps, 19bp and 3bps respectively.

Looking into the new week,

RSA fund price of PFAs as at June 01, 2018 S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

PFAs CrusaderSterling Pensions Premium Pensions ARM Pension Mgrs.

Stanbic-IBTC Pensions Legacy PFA PAL Pensions NLPC PFA First Guarantee Pension Trustfund Pensions Leadway Pensure PFA SigmaVaughn Pensions AIICO Pension Managers APT Pensions Fidelity Pensions AXA Mansard FUG Pensions OAK Pensions Investment One Pension Mgrs.

IEI Anchor Pension Managers Radix Pension NPF Pensions

respectively. However, by Thursday and Friday, the CBN was able to successfully mop-up N561.3billion and N174.9billion via OMO at an average stop rate of 11.6percent respectively, less than N800billion and N100billion offer ings on b oth days.

Accordingly, Open Buy Back (OBB) and Overnight (OVN) rates crashed 13.8percent and 15.3percent w/w to end the week at 3.3percent and 4.4percent respectively.

The Apex bank conducted its bi-monthly Nig er ian Treasury Bill (NTB) auction, wherein it successfully refinanced 50percent of maturing bills (N49.6bn).

Demand was robust with a bid-to-cover ratio of 2.1x.

Notably, interest in the 364day bill was the highest (3.2x over-subscribed vs 1.4x for the 182-day and 1.1x at the 91-day bills). The auction was carried out at the following stop rates: 91-day (10percent versus 10percent at the last auction), 182-day (10.3percent versus . 10.5percent at the last auction) and 364-day

CURRENT PRICE 3.9551 3.9284 3.8770 3.7336 3.5915 3.4341 3.4119 3.2662 3.2340 3.1100 3.1038 3.0169 2.7878 2.7155 2.6855 2.6280 2.5413 2.4523 2.3160 2.0208 1.4560

we expect market activities to be largely determined by the level of liquidity in the system and the stance the CBN takes regarding fiscal paper supply.

Currency Market: Naira appreciates at the I & E FX window In the Foreign exchange market, the Apex bank continued its weekly interventions in the market with the aim of maintaining stability across the different segments of the market as well as sustaining liquidity levels.

Notably, as of Wednesday, FX reserves fell to N47.6bn relative to N47.7billion in the week before. The naira appreciated by 82bps and 20bps at the parallel market and Investors & Exporters FX window, to close the week at N362/$1 and N360.9/$1 respectively. On the other hand, official market rate saw a 3bps depreciation to end the week at N306/$1. Looking ahead, the outlook of the naira is expected to remain tied to the spate of CBN’s intervention in the spot and forward market.

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

Stock Exchange proposes amendments to dealing members’ rules

L–R: Favour Femi-Oyewole, chief information security, The Nigerian Stock Exchange (NSE); Bilikiss Adebiyi Abiola, general manager, Lagos State Parks and Gardens Agency (LASPARK); Tunji Kazeem, head, enterprise risk management, NSE; Desmond Majekodunmi, chairman, Lagos State Urban Forest and Animal Shelter Initiative (LUFASI); Ede Dafinone, chairman, Nigerian Conservation Foundation (NCF); Ukonu, CEO, RecyclePoints; Adewunmu Adetona, chief scientific officer, Cleaner Lagos Initiative, and Pai Gamde, chief human resources officer, NSE, during the celebration World Environment Day to create awareness on the menace of plastic pollution at the Exchange, recently.

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he Nigerian Stock Exchange (NSE) is proposing amendments to the Rulebook of The Exchange (Dealing Members’ Rules), by the addition of rules on securities transactions between dealing members of the Exchange; rules on placing of caution on accounts.

The proposed rules seek to codify the practice in the market, set the conditions upon which an agreement is enforceable, and a Dealing Member will be bound, and penalised for default.

In addition, the rules seek to minimise the risk of exposure to financial and reputational damage, suffered by a Dealing Member as a result of a default, or where a Dealing Member reneges on an agreement for securities transactions.

The proposed rules include definitions of key terms used in the rules, general requirements which are to guide transactions between Dealing Members, provisions on the obligations of parties to the transactions, as well as sanctions in the event of

breach.

“The need to codify and set standards relating to agreements on securities transactions betweenDealingMembersofThe Exchange (Dealing Members) has become necessary owing to the increase in default by parties to these transactions.

“This has not only affected investors’ confidence in the market but also exposed stockbroking firms to significant losses and reputational damage”, the NSE said in a notice to dealing members signed by Tinuade T. Awe, Executive Director, Regulation.

Presently, agreements between Dealing Members are generally governed by law, trade practices established by long usage, norms and trust based on the basic foundation of the stockbroking profession, which dictate that a stockbroker’s word is his bond, with no additional specific set of rules to bind parties to their agreements.

The Rules on Placing of Caution on Accounts will address concerns about dissipation

of investors’ assets while addressing complaints or during investigations, the Exchange seeks to introduce a framework for imposing cautions that will directly protect the investor and/or the Dealing Member, as appropriate.

A caution is a restriction on an account domiciled with the Central Securities Clearing System Plc (CSCS), which account would otherwise be under the control of a Dealing Member without such restriction.

The restriction is placed such that securities can only be purchased into the cautioned account but cannot be sold during the period that the caution is in place.

Under this framework the Exchange can place a caution on an affected Dealing Member’s clients’ accounts, or its proprietary accounts, or both sets of accounts, until any complaints against the Dealing Member are resolved or any investigations are completed, or in both cases even if not resolved or completed, the Exchange is satisfied that a caution is no longer warranted.

Some leeway for the DMO at auction - FBNQuest Capital Research

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t its latest monthly auction of FGN bonds in late May, the Debt Management Office (DMO) offered N70billion, attracted a total bid of N90billion and raised N51billion ($170million) from sales.

The bid and the sales were the lowest since August 2017 and December 2016 respectively. Additionally, the DMO offered the same three debt instruments as the previous month, and the marginal rates were higher in each case by between 65basis points (bps) and 75bps.

However, the auction was not the flop it might appear at first because both the federal finance ministry and the DMO

are in a better place than for many months.

The DMO has some room for manoeuvre in its acceptance of bids because it appears to have comfortably met its domestic funding target of N1.25trillion embedded in the 2017 budget.

We have to be careful because of the fluidity of budget years as a result of the habitual delayed passage of the appropriation bill. Although the 2018 budget has not yet been signed off by the president, the document approved by the National Assembly has set the FGN deficit at N1.96trillion according to local media reports.

Once we allow for the

DMO’s policy of raising the external share of the FGN’s total debt, it would appear that its domestic funding target will be rather less than 2017’s.

Most importantly, along with the ministry it has a story (its strategy of the externalization of debt) and a track record of yield compression over nine months to sell investors. (Admittedly, that compression has been steadier and more marked at the CBN’s auctions of NTBs. The timing of these latest FGN bond auctions coincided with global headwinds that have been visible across the emerging and frontier market universe. Although the impact is greater elsewhere, the headwinds have not abated.

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Thursday 07 June 2018

Investor

Helping you to build wealth & make wise decisions

Transcorp Hotels, Union Bank, others get NSE Investor Education Series Giant strides to green timelines to increase tradable shares the economy, protect the environment IHEANYI NWACHUKWU

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ranscorp Hotels Plc, Union Bank of Nigeria Plc, A.G. Leventis Plc, E-Tranzact International Plc, Great Nigeria Insurance Plc and Infinity Trust Mortgage Plc are among the Nigerian Stock Exchange (NSE) listed companies with tradable shares below the required number available for trading.

These companies and others are identified in the X-Compliance Report, a transparency initiative of the Exchange which is designed to maintain market integrity and protect investors by providing compliance related information on all listed companies.

The aforementioned companies have free float deficiencies and applied for waivers from the Quotations Committee of Management (QCM) at the NSE which specifically provided them compliance plans with tentative timelines to

support their requests, the NSE notes.

Companies listed on the Exchange are required to maintain a minimum “free float” for the set standards under which they are listed in order to ensure that there is an orderly and liquid market for their securities.

Free float is the percentage of outstanding shares that are actually available in hands of investors for trading.

The NSE free float requirement for companies on the Alternative Securities Market (ASEM) B o a rd i s 1 5 p e rc e n t o f market capitalisation, Main Board is 20 percent of market capitalisation while companies on the Premium Board is 20percent of market capitalisation or above N40 billion on the date The Exchange receives the Issuer’s application to list.

Currently, the number of Transcorp Hotels Plc shares that are actually available for trading is just 6percent of its market capitalisation and

this company has been given till May 18, 2020 to meet the 20 percent requirement.

Also, the number of Union Bank of Nigeria Plc shares available for trading is just 14.94 percent of its market capitalization and the company has till May 18, 2020 to achieve the 20 percent requirement.

The number of A .G. Leventis Plc shares available for trading by investors is 11.64percent of its market cap and the NSE has given the company till October 19, 2020 to meet the 20 percent requirement.

“The Quotations Committee of Management considered and approved an extended timeframe for the companies to regain compliance with the listing requirement. The companies are however required to a l s o p rov i d e q u a r te rly disclosure reports to the Exchange detailing their level of implementation of the compliance plans”, the NSE stated in the report.

E-Tranzact International

Plc with 10.06percent of free float has till May 17, 2019 to achieve 20percent minimum requirement; Great Nigeria Insurance Plc which has concluded the first leg of the transaction and NSE management engaged the Company on the next stage has till May 18, 2020 to achieve 20percent free float from current 16percent ; while Infinity Trust Mortgage Plc with just 3.50percent free float has till May 17, 2021 to achieve the 20percent minimum requirement.

Capital Hotel Plc, a company under Regulatory Watchlist has 2.62percent free float and the timeline given to it for compliance with ASeM 15percent minimum re quirement elapsed on October 31, 2017. Others are: Champion Breweries Plc (17.30percent free float). The company has obtained QCN approval and is currently restructuring, and the Tourist Company of Nigeria Plc with 3.58percent free float is under Regulatory Watchlist.

FMDQ Learning

Introduction to Mortgage-Backed Securities

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he April 2018 edition of FMDQ Newsletter explored the fundamentals of assetbacked securities (ABS), which are investible secur ities backed by a specified pool of underlying assets.

The pool of assets is typically a group of illiquid assets which are unable to be sold individually. Examples of such assets include, but are not limited to, bank loans (business, automobile etc.), credit cards and leases.

Loan originators (i.e. basically financial institutions, convert their pools of loan receivables into creditenhanced financial securities which are sold to investors in the debt capital market (DCM), providing investors the opportunity to invest in a wide variety of income-generating assets and enabling these loan originators generate more cash for their businesses.

Th i s e d i t i o n o f F M D Q Learning focuses on the fundamentals of mortgagedbacked securities (MBSs), including its features, credit enhancements and benefits.

Overview An MBS is a type of a s s e t- b a c k e d s e c u r i t y secured by a mortgage or collection of mortgages.

These mortgages are sold by loan originators (majorly financial institutions) to investors in the secondary market to raise cash. MBSs are created when pools of these mortgages are collected and securitized by MBSsissuers (such as federal governments, municipal governments or private financial institutions) which are then sold to investors.

MBSs are grouped into classes with respect to the types of property, interest rates, maturities and risk.

Using an example: Mr. Thomson wants to buy a house and he decides to approach ABC Bank for a mortgage (which implies taking a loan); Mr. Thomson gets a mortgage from ABC Bank, and the bank transfers the money to his account after he has agreed to pay b a ck t h e l o a n a m ou nt according to a set schedule which calculates interest and principal payments over the number of years agreed by both parties. ABC Bank may decide to sell

the mortgage, enabling the bank to generate cash to make more loans, or hold the mortgage in its portfolio (i.e. simply collect the interest and principal payments over the agreed years). ABC Bank decides to sell the mortgage to Company XYZ (which could be a private financial institution). The Company XYZ groups the mortgage with similar purchased mortgages (referred to as pooling) into classes with common characteristics (i.e. type of property, similar interest rate, maturity, etc.)

Company XYZ then sells the securities representing an interest in the pool of mortgages (including Mr. Thomson’s mortgage) to investors in the secondary market. Proceeds from the sale of these securities by Company XYZ would then be used to purchase more mortgages and create more MBSs. When Mr. Th o m s o n ma ke s h i s monthly payments to ABC Bank, the bank keeps a fee and sends the rest of the payments to Company XYZ. Company XYZ in turn takes a fee and transfers what is left of Mr. Thomson’s scheduled payment (and those of the other mortgage holders in the pool) to investors holding the MBS. Continues next week

OLUMIDE OROJIMI

S

ince it began in 1974, The Environment Day (WED) is the UN’s most important day for encouraging worldwide awareness and action for the protection of our environment. This global outreach to individuals and companies is widely celebrated in over 100 countries.

While reach may be commendable, impact is not encouraging. A few statistics will illustrate this position - one million sea birds and 100,000 marine mammals are reported killed annually from plastics in our oceans, plastic constitutes approximately 90 percent of all trash floating on the ocean’s surface, with 46,000 pieces of plastic per square mile, approximately 8 Million Metric Tons of plastic waste is washed off land into the oceans every year which endangers marine life and disrupts the aquatic ecosystem.

According to UNEP, plastics account for 10percent or more of our everyday waste - (UNEP).

Sadly, it takes 500 - 1,000 years for plastic to degrade. It will then seem that virtually every piece of plastic that was ever made still exists in some shape or form (with the exception of the small amount that has been incinerated). To celebrate this year’s WED, an appropriate theme has been found in ‘Beat Plastic Pollution’. It is equally important to state that the tagline, If You Can’t Reuse It, Refuse It is a powerful call to action.

Time to stick together With the grave danger to our lives and oceans, it is therefore important for the world to come together to rid our world of plastics or reduce use to a barest minimum. As experts have warned, that without urgent action, there will be more plastic in the sea than fish by 2050.

The cause has found a worthy voice in the British Prime Minister, Theresa May, who is seeking 52 countries to join her Clean Oceans Alliance committed to cleaning up and protecting our seas. Affirming her country’s walk the talk posture, by committing to provide a £61.4 million package to fund research into recycling and improve waste management in poor countries. Many countries including the UK are looking to introduce a ban on the sale of plastic straws, drink stirrers and cotton buds by the end of the year as she urges Commonwealth leaders to tackle climate change and clean up the world’s oceans.

Over the past 3 years, a major ocean clean up technology has

progressed from feasibility research, to extensive scale model- and prototype testing.

It is expected that the first operational cleanup system to be deployed in the Great Pacific Garbage Patch by mid2018. It is believed that if the world stick together to rid our planet of plastics, by 2050 the ocean clean up would have been a major success.

NSE: Pillars of a sustainable world The Nigerian Stock Exchange is uniquely positioned as a sustainable stock exchange that is championing Africa’s growth.

Aware of its unique position within the Nigerian economy, NSE not only supports economic growth by providing an efficient and sustainable capital market but als o through its robust Corporate Social Responsibility (CSR) philosophy play a significant role in social economic interventions to create a sustainable world. Its four pillars of CSR strategy are: Community: The Exchange i nve st s i t s re s ou rc e s i n enriching the communities where its employees live and work. Some of the activities promoted under this pillar include: NSE Corporate Challenge, an annual 5km race to create awareness for cancer; NSE Essay Competition, annual financial literacy competition for secondary schools and the celebration of annual Global Money week.

Workplace: The Exchange is committed to maintaining a talent pool of resourceful e m p l oy e e s by a d o p t i n g a systematic approach to identifying, developing and training employees to ensure a robust supply of high-calibre individuals with the values, skills and experience required to function effectively. Major initiatives under this pillar include: NSE Graduate Trainee Programme, an 11-month programme design to expose recent graduates to the workings of the capital market; t rain ing fo r employe es ; provision of fitness centre within the head office, to mention but a few.

O ro j i m i i s t h e He a d Corporate Communications, The Nigerian Stock Exchange Continues next week

Thursday 07 June 2018

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IATA forecasts solid profits despite rising costs in global aviation Stories by IFEOMA OKEKE

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he International Air Transport Association (IATA) has announced its expectation for airlines to achieve a collective net profit of $33.8 billion (4.1% net margin) in 2018.

This is a solid performance despite rising costs, primarily fuel and labour, but also the upturn in the interest rate cycle. These rising costs are the main driver behind the downward revision from the previous forecast of $38.4 billion in December 2017.

In 2017 airlines earned a record of $38.0 billion (revised from the previously estimate of $34.5 billion). Comparisons to this, however, are severely distorted by special accounting items such as one-off tax credits which boosted 2017 profits.

Profits at the operating level, though still high by past standards, have been trending slowly downwards since early 2016, as a result of accelerating costs.

“Solid profitability is holding up in 2018, despite rising costs. The industry’s financial foundations are strong with a nine-year run in the black that began in 2010.

And the return on invested capital will exceed the cost of capital for a fourth consecutive year. At long last, normal profits are becoming normal for airlines. This enables airlines to fund growth, expand employment, strengthen balance sheets and reward our investors,” Alexandre de Juniac, IATA’s Director General and CEO said.

In 2018, the return on invested capital is expected to be 8.5% (down from 9% in 2017). This still exceeds the average cost of capital, which has risen to 7.7% on higher bond yields (7.1% in 2017). This is critical for attracting the substantial capital needed by the industry to

expand its fleet and services.

Inflation pressures are starting to emerge at this late stage of the economic cycle and airlines are facing significant pressures from rising fuel and labor costs in particular.

IATA’s Forecasts The association says it expects the full-year average cost of Brent Crude to be $70/barrel. This is up from $54.9/barrel in 2017 (+27.5%) and our previous 2018 expectation of $60/barrel. Jet fuel prices are expected to rise to $84/barrel (+25.9%). Fuel costs will account for 24.2% of total operating costs (up from a revised 21.4% in 2017).

Overall unit costs are forecast to rise 5.2% this year, after a 1.2% increase in 2017; a significant acceleration.

Overall revenues are expected to rise to $834 billion (up 10.7% from $754 billion in 2017).

Unit revenues are expected to rise by 4.2% in 2018, lagging the 5.2% rise in unit costs. This will squeeze profit margins.

Passenger air travel is forecast to expand by 7.0% in 2018. This is slower than the 8.1% growth recorded for 2017 but still faster than the 20-year average (of 5.5%) for the sixth consecutive year.

Demand is getting a boost from stronger economic growth and the stimulus from new city-pair direct services. Capacity is expected to grow by 6.7% (the same pace as in 2017).

The passenger load factor is expected to be 81.7%, up a little on 2017 (81.5%). Total passenger numbers are expected to rise to 4.36 billion (up 6.5% from 4.1 billion in 2017).

Passenger yields are expected to grow by 3.2% in 2018 after a 0.8% decline in 2017. This will be the first year for strengthening yields since 2011, driven upwards by the 5.2% rise in unit costs.

Cargo demand is expected to grow by 4.0%. This is a major drop from the 9.7% growth experienced in 2017, but it remains in line with the 20-year trend growth rate.

Total cargo carried is expected to increase to 63.6 million tonnes (from 61.5 million tonnes in 2017).

Pharmaceuticals, e-commerce and other premium cargo services are expected to lead growth in 2018. Cargo yields are expected to improve by 5.1% (8.1% growth in 2017).

With over 1,900 aircraft expected to be delivered to airlines in 2018

(up from 1,722 in 2017), there will be a boost in capital expenditure.

Since cash from operations will be squeezed by accelerating costs and capital spending is rising, free cash flows are expected to fall to around $4 billion. Key balance sheet ratios, such as net debt adjusted for operating leases/EBITDAR, have improved significantly since 2014. Further debt reduction is expected to be sufficient to stabilize this ratio in 2018.

Growing uncertainty in the direction by which global affairs will evolve could present risks to the industry’s outlook. These include the advancement of political forces pushing a protectionist agenda, uncertainty following the US withdrawal from the Iran nuclear deal, lack of clarity on the impact of Brexit, numerous ongoing trade discussions and continuing geopolitical conflicts.

“Aviation spreads prosperity and enriches the human spirit. That truth lays the foundation for a very important message. The world is better off when borders are open to people and to trade. And our hard work as an industry has primed aviation to be an even stronger catalyst for an ever more inclusive

globalization,” de Juniac said.

African airlines continue their very slow emergence from the 2014 low point ($900 million loss) of financial performance, with losses continuing at the $100 million level.

This is unchanged from 2017 when losses were cut as traffic, particularly cargo to Asia, grew in excess of capacity raising load factors from previously low levels. Net loss per passenger improved to $1.55 ($1.66 in 2017).

“The 4.1 billion passengers who boarded planes in 2017 demonstrated the human desire to explore, connect, learn and collaborate across great distances. And the over 60 million tonnes of cargo delivered by air accounted for a third of the value of goods traded globally. Every day, goods, people, investment and ideas are connected using aviation’s network. That directly supports 63 million jobs and improves the quality of life for all,” de Juniac said.

Some key indicators of the strength of global connectivity include: The 2018 average return airfare (before surcharges and tax) is expected to be $380 (2018 dollars), which is 59% below 1998 levels after adjusting for inflation.

Average air freight rates in 2018 are expected to be $1.80/kg (2018 dollars) which is a 63% fall on 1998 levels.

The number of routes served by aviation is forecast to grow to over 58,000 in 2018, up from 52,000 in 2014.

The global spend on tourism enabled by air transport is expected to grow by 10.4% in 2018 to $794 billion Airlines are expected to take delivery of more than 1,900 new aircraft in 2018, many of which will replace older and less fuel-efficient aircraft. This will expand the global commercial fleet by 4.2% to 29,600 aircraft.

Delta, Los Angeles World Airports prepare for construction of $1.86bn Delta Sky Way

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elta Air Lines and Los Angeles World Airports (LAWA) have formally kicked off the Delta Sky Way at LAX project — Delta’s $1.86 billion plan to modernize, upgrade and connect Terminals 2, 3, and the Tom Bradley International Terminal (Terminal B).

Construction is expected to begin this fall. The project kick-off follows the LAWA Board of Airport Commissioners’ recent approval of the largest tenant improvement award in its history, which cleared the way for the Delta Sky Way at LAX to begin.

Eric Garcetti, Los Angeles Mayor; Ed Bastian, Delta CEO; Mike Bonin, LA City Council member; Sean Burton, LAWA Commissioner and Deborah Flint, LAWA CEO celebrated the milestone at a press conference where they

also shared new renderings of the future facility.​​ “Los Angeles is constantly reaching new heights, and today’s project launch creates jobs and forges global connections,” Eric Garcetti, Los Angeles Mayor said.

“The modernization of Terminals 2 and 3 is an investment in our economy and people, and

Delta’s partnership is helping to accelerate an era of growth and innovation in Los Angeles.

“Nearly 10 years ago, we made a commitment to be LA’s premier, premium airline. Today, LAX is one of the most important hubs in our network where we operate more than 170 daily flights and connect more passengers to our

partner airlines than anywhere else in the U.S.,” Ed Bastian, Delta CEO said.

“The Delta Sky Way at LAX project is a once-in-a-generation opportunity to invest in and transform the airport experience in partnership with LAWA and the City of Los Angeles. Delta is excited and proud to be leading the way not just in LA but in our hubs across the country, with more than $12 billion in airport infrastructure investments in progress over the next few years.

“Our vision is a gold-standard airport, and one of our strategic plan goals is delivering exceptional facilities and experiences at the same time,” said LAWA CEO Deborah Flint. “And even though that is no easy feat, I am confident that with the team at Delta and the partnership we have, that we

can achieve that vision,” Bastian added.

Delta and LAWA also released new renderings of the facility today, which show the interior and exterior of the shared “head house” of Terminals 2 and 3; the interior, secured side of Terminal 3; and the connector between Terminal 3 and Terminal B, among other perspectives.

When completed, the modern facility will offer more security screening capacity with automated security lanes, more gate-area seating, and a world-class concession program in partnership with Westfield Corporation. This includes all the amenities that Delta’s customers have come to expect at LAX, the Delta ONE at LAX check-in space, new Delta Sky Club; and the integrated in-line baggage system.

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Bank IT Security Thursday 07 June 2018

Data localization in Nigeria: The Ayes and Nays FRANK ELEANYA

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m o v e b y Ni geria’s House of Representatives to mandate telecommunication companies in Nigeria to localize their data has experts at loggerheads.

According to reports, the motion originated from Chukwuemeka Ujam, a member of the House representing Enugu. While presenting the motion before his colleagues, Ujam said he was concerned about the security of critical information that originates from the country which is left in the hands of foreigners through data hosting. Ujam’s argument was unanimously adopted by the entire House with the Speaker of the House, Yakubu Dogara requesting the House committee on ICT to ensure compliance of the motion which it identified under the Data municipal laws.

It should be noted that compliance will likely not be effective without the com-

plete buy-in of the Federal Ministry of Communications and the regulator NCC. To be sure, data localization refers to the act of keeping data on any device that is physically present within the borders of a specific country where the data was generated. For instance, data that originates and are stored on any device within the Nigerian border should be kept in Nigeria. Countries like Vietnam, Indonesia, Brazil, China, Brunei, Iran, India, Korea, Australia and Russia have data localization laws in various forms.

Some experts have also argued that the latest European Union General Data Regulation Protection (EU GDPR) is an attempt at data localization. Another school of thought say there is a difference between data localization and data sovereignty which they define as data being hosted in a particular country, whereby the country or state laws applies.

Thus for this school, the EU GDPR falls within the purview of sovereignty and not localization. The lines can

be blurry.

There are various reasons countries enforce data localization. One of them is what Chukwuemeka Ujam alluded to, national security. Data stored outside the border can face risks such as private data hacking in terms of foreign data storage solutions.

Some countries also believe that enforcing data protection regulations cannot be effective without localizing the data within the country (in-country).

Nigeria data protection

landscape is very much in the infant stage. There are only a handful of data centre players within the country. The four main players include MainOne’s MDXI, MTN Cloud, Rack Centre and Vodacom.

For those in support of localization, this is a good reason to enforce compliance.

“You cannot compare countries with 40-50 years technology history and over 100 data centres across multiple locations in the world to Nigerian data centres that 2 to 3 locations,” a source in

T

he Nigerian tech ecosystem which in recent time has recorded significant growth and international attention, could be getting yet another boost with what could be described as a new technology hub in Lagos.

Vibranium Valley as it is called, is expected to replicate successful tech hubs in the country, including the Yabacon valley, located in Yaba area where a number of technology start-ups have pitched their tents.

Both “valleys” derive the appendage from the American Silicon Valley which among several technology companies, hosts tech giants such as Apple, Facebook and Google.

Last week, Venture Garden Group (VGG) hosted Stuart Symington, the US Ambassador and a delegation from the US Consulate at a Pre-Launch event for its new office space - Vibranium Valley - which is housed on the grounds of Concord Printing Press of Nigeria owned by the Late

MKO Abiola. An excited Symington who seemed very impressed with the work which has been done at the facility, described it as a demonstration of how much Nigerians, particularly the youth can achieve, if they work with determination to creatively solve problems confronting the country.

Since inception six years ago, Venture Garden Group, says it has grown six fully owned entities focused on leveraging technology to create African solutions to African problems, covering sectors such as Education,

Power, Aviation. However, while it was repeatedly said at the tour last week, that the company has been ensuring more efficiencies in the different projects it has participated, putting a value to this could not be done. Bunmi Akinyemiju, CEO, Venture Garden Group, citing ‘privacy’ of clients, was unable to estimate just how much leakage has been plugged by supporting different industries to achieve more efficiency; not even for the power sector.

The 3000sqm facility currently available for use is

L-R: Kunmi Demuren, ED, VGG; Stuart Symington, US Ambassador to Nigeria; Bunmi Akinyemiju, CEO, VGG

power instability.

“Nigeria’s power challenges are lastmile/transmission,” a data centre expert told BusinessDay. “Some data centres such as MainOne invested in a dedicated 33kv feeder and line connection to the National grid through the Eko DC, and gets access to multiple power generating plants and guarantees backup in the event that one power plant goes down. This was a capital investment of hundreds of millions in substation equipment and dedicated power lines which bypass all ‘last mile’ challenges encountered in electricity distribution.”

Data centre is a capital intensive business and requires big pocket investors. Opening up the space through competition policies is what will attract investment. In an era where the internet drives economic growth and it is the key enabler for trading across several global industries, it is imperative therefore that policy makers ensure every stakeholder is on board.

Nora Wahby appointed head of Ericsson West Africa

Vibranium valley set for launch, targets increase in tech footprint CALEB OJEWALE

one of the major data centres in Nigeria told BusinessDay. “With more customers, data center business will expand. New players will come in and start differentiators. Quality and cost will eventually differentiate.”

Ndubuisi Ekekwe, a professor of technology does not see any competitive advantage in localizing data.

For him, the House move – should it be enforced by federal government – will only stifle the growth of technology startups.

“Most Nigerian startups host their data outside Nigeria because the local alternatives are largely more expensive,” Ekekwe wrote in a post. He further notes that the enforcement could compel many startups would reincorporate in US, and then pay US taxes even though the customers are Nigerian customers.

He later told BusinessDay that a localization law must consider realities such as lack of power.

However, data centre businesses in Nigeria appear to have found a solution to

according to VGG, the first step into its next chapter as together, the Company works to grow an innovative and collaborative ecosystem that will transform Africa and the lives within it.

The entire facility is however put at over 10,000sqm, as VGG says it plans to accommodate other tech companies in the remaining space. The entire facility can accommodate over 1500 people excluding Venture Garden Group, and up to 20 tech companies.

Just as Silicon Valley hosts Apple and other multibillion dollar companies, this appears to be a shared ambition with the setting up of Vibranium Valley.

Akinyemiju, during the tour, expressed the view that it is expected to host the best of Nigeria’s technology industry, and in a matter of years, boast of having companies with “multi-billion dollar valuations”. While the tech ecosystem is indeed growing rapidly, we will have to keep our fingers crossed and pay close attention as the country’s newest tech hub takes off.

E

r icss on has an nounced the appointment of Nora Wahby as Head, Ericsson West Africa. Wahby according to a statement from the company will oversee Ericsson’s business within the region, holding responsibility for Key Accounts in West Africa and attending to common function resources used to gain efficiencies.

Nora’s career with Ericsson started almost 20 years ago when she joined Ericsson Egypt as a Network and Technology Consultant.

Over the years she garnered valuable experience across several key accounts and positions. In January 2008, Nora joined the Ericsson Vodafone Egypt account as a Program Manager for the Vodafone Egypt Performance improvement project. This role within the Vodafone Egypt account evolved over the years, and in 2010 she was appointed as an Account Manager with the telecommunications provider. Prior to her current appointment, Nora held the title of Key Account Manager for MTN South Africa.

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com

Rafiah Ibrahim, head of Ericsson Middle East and Africa, said of the appointment, that: “Nora’s experience in driving our customers’ transformation and building new capabilities in developing markets will allow us to strengthen our long-term relationship with Ericsson’s customers in the West Africa region. This will be key to build the future of connectivity, drive growth and transformation in these markets” Nora Wahby, who is now head of Ericsson West Africa, also said: “I am proud to assume this challenging new role and I look forward to further strengthening Ericsson’s position in the telecommunications industry while expanding its reach within the countries I’ll be responsible for.”

BUSINESS DAY

Thursday 07 June 2018

Harvard Business Review

21

Global Business Perspectives CONNEC TING

THE

WORLD

ONE

BUSINESS

AT

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TIME

The making of Tunisian foreign policy AMINA EL ABED

N

AFTA, Tunisia — Tunisia, the Arab Spring’s sole success story, is emerging from a long state-building process, trying to balance diametrically opposed political parties and movements. Once hailed for its voice of reason and diplomacy, Tunisia has become timid on the international scene and slow to develop positions on many issues.

While Tunisia should not make waves with powerful neighbors, the country could lose face by aligning with policies that go against the values on which it built its international identity, such as supporting just causes and noninterference. Another challenge for the Tunisian government is message coherence. Tunisia’s internal stakeholders disagree on many world issues. Understanding and building its foreign policy are both crucial; the country’s state debt reached 71% of its gross domestic product at the start of 2018. The country’s timidity is telling of its internal struggles and lack of a foreign policy, which is troublesome especially in the volatile Middle East.

The civil war in Syria is a case in point. Tunisia’s Minister of Foreign Affairs Khemaies Jhinaoui held a news conference in August, reminding political parties that diplomacy was the prerogative of his office and the president’s. The announcement came after a delegation of National Assembly deputies traveled to Damascus, Syria, to express support for President Bashar Assad without notifying the Tunisian government. Five days later, Tunisian President Béji Caïd Essebsi downplayed the gravity of such interference, and the incident garnered little attention.

Such internal struggles may

A handout picture released by the official Syrian Arab News Agey (SANA) shows Syrian President Bashar al-Assad attending a cabinet meeting during which he launched administrative reforms, on June 20, 2017, in the capital Damascus.(CREDIT: SANA).]

be the biggest threat to Tunisian diplomacy. The country is weakened by mismanagement, insecurity, economic threats, public mistrust and political amateurism. Tunisian political forces draw strength from outside sources, and every party has its own external policy. Such partisan diplomacy prevents Tunisia from relaying a coherent message to the world about its policies, confides a senior official with the Ministry of Foreign Affairs. And the government struggles to contain the confusion; parties disregard the national interest to serve their own agendas, the official explains, with party leaders receiving ambassadors and discussing issues without the government’s knowledge.

Tunisia went from one extreme to another. Before the Arab Spring, President Zine El Abidin Ben Ali perceived the opposition’s foreign ties as openings for external forces that might threaten the stability of his reign. Preoccupied with security, Ben Ali seldom traveled outside of the country, reducing Tunisia’s profile on regional or international affairs. Small countries have greater impact when they coordinate on foreign policy messaging. Today, however, Tunisia has a myriad internal actors with divergent ideological tendencies that feed polarization.

Interference in Tunisian affairs is on the rise as political

President Barack Obama, center, during a bilateral meeting with President Beji Caid Essebsi of Tunisia, left, in Washington, May 21, 2015.

Essebsi swept to victory in December in Tunisia’s first free and fair presidential election and has won the trust of many Tunisians with his call for a strong state and a modern secular society. (CREDIT: Stephen Crowley/The New York Times

parties construct their own networks with foreign embassies. Tunisia is also about 150 kilometers from Europe. In the past, meeting with foreign representatives without notifying authorities would have triggered investigations, but they are now a common occurrence. Some party representatives voice their stances on foreign policy before official policies are made public.

In the ongoing Qatar-Gulf Cooperation Council crisis, for example, Tunisia opts for neutrality while the Ennahdha Party voices support for Qatar.

Some confusion is understandable in the aftermath of Tunisia’s 2011 revolution, and the country confronts concerns as they emerge. On paper, the government enumerates diplomacy principles put in place decades ago: positive neutrality, noninterference, respect of international legality and primacy of national interests. Tunisia must also establish a sound foreign policy framework for the long term.

Another diplomat who requested anonymity suggests the country has no plan for five years from now because of fragmentation: “It is too difficult to make such plans.” Molding a coherent narrative ended when Tunisia’s two major political parties formed a coalition in 2014 even though they had paradoxical ideologies: Nidaa Tounes, the liberal party created by the president, feeds on glorification

of the 1956 to 1987 nationalist era and unfulfilled promises to restore the country’s prestige.

Ennahdha, on the other hand, supports new regional order and closer ties with Turkey and Qatar while incorporating religious ideology into politics.

Hafedh Caid Essebsi, the president’s son and leader of Nidaa Tounes, stated in an interview that a coalition with the Islamist party was in Tunisia’s best interest. But the alliance is problematic for development of sound foreign policy. Ennahdha’s external relationships do not necessarily correspond with official positions, and ideological interests among Islamist movements transcend borders.

Libya offers a prime example of the challenges. The Tunisian government works to position itself as a mediator among three factions competing for dominance over its eastern neighbor.

But cultivating ties with Tunisia’s favorite factions undermine efforts to appear neutral. Islamist groups of Libya cultivate ties with Tunisian Islamic groups, mainly Ennahdha. Furthermore, Ennahdha’s ongoing support of parties affiliated with the Muslim Brotherhood clashes with the country’s principles of positive neutrality and noninterference.

The coalition is in the unenviable position of failing to take an explicit position on most issues. The foreign affairs minister

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

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may occasionally express exasperation with Ennahdha, but a source concedes that when determining actual positions, the office must “keep Ennahdha satisfied — not full satisfaction, but we have to take that into consideration.”

In December 2017, the Tunisian diaspora in Germany held an impromptu election for its representative following the resignation of the Nidaa Tounes candidate. As expected, Ennahdha chose not to run, instead supporting Nidaa Tounes’ candidate as representative for both parties. Voters shunned the elections, and the liberal candidate lost to revolutionary activist Yassine Ayari. Nidaa Tounes leadership, alarmed by the erosion of its electoral base, expressed the need to review its alliance with Ennahdha, which rejected any responsibility for the defeat. Signs of trouble for this relationship could usher in a reshaping of Tunisian foreign policy. The divide within Nidaa Tounes and the instability of liberal parties in general make that goal difficult enough without Ennahdha. Amid the quarrels and disorganization, the Islamist party may have opted to let the divide play out and to later reshape foreign policy according to Ennahdha’s ideology.

Tunisia held its first municipal elections since 2011 in early May. Preliminary results suggest that Tunisians sent a strong message to parties they once trusted: With an alarming 35% participation rate, the majority voted for independent lists — a possible sign that a marriage, one which Tunisians never gave their blessing to, is ending.

(Amina El Abed is an expert on public diplomacy, governmental communication and Tunisian foreign affairs. She is currently director of communications at OXCON Frontier Markets and Fragile States Consulting.)

22

Luxury

BUSINESS DAY

Malls

Companies

Deals

C002D5556

Thursday 07 June 2018

Spending Trends

LG restates commitment to service excellence …introduces 70% energy saving air conditioner

L

G Electronics has restated its commitment to providing excellent service to Nigerian consumers with the launch of its 2.5HP capacity all new gencool air-conditioner.

The air-conditioner which was unveiled recently in Lagos recently, is specially designed for the Nigeria market and geared towards meeting the demands of consumers who desire to use small capacity generators to power their air conditioners.

The brand listed affordability, durability, energy efficiency and saving up to 70 percent running cost through the LG advanced inverter V technology as some of the benefits of the newly launched air-conditioner. ‘‘The introduction of this product clearly shows that LG Electronics understands the desires of its esteemed consumers and its determined to offer Nigerians cutting edge technologies especially consumers seeking energy efficient products,’’ said Taeick Son, managing director, LG Electronics West Africa operations. ‘‘The gencool Inverter V air conditioner which allows 2.5HP air-conditioner to run on small capacity generators of 1.3 KVA with gen mode, is now operable with inverter and solar,’’ Son said.

According to Cholyong Park, general manager, air conditioning and energy solutions, LG Electronics West Africa Operations, the revolutionary product offers Nigerian consumers strong and reliable

L-R: Vijay Bakshi, technical manager, Air Solutions, LG Electronics West Africa Operations; Paul Mba, marketing manager, LG Electronics Nigeria Ltd; Cholyong Park, general manager, air conditioning and energy solutions, LG Electronics West Africa Operations; Saheed Adeyemi, sales manager, LG Electronics West Africa Operations; and Jinki Hong, assistant product manager, during the launch of LG Electronics 2.5HP All New Gencool Air Conditioning unit recently in Lagos.

cooling even in the face of extreme heat and power grid failure. ‘‘Clean, fresh air is essential for good health. LG’s all new gencool air-conditioner works efficiently when being powered by a small capacity generator or inverter,’’ he said.

Park said the air-conditioner comes with a feature that ensures a 40 percent torque vibration re-

duction resulting in the quietest operation of outdoor unit. ‘‘The 15 degrees tilted skew fan minimizes the surface friction of the blade when in contact with the air. The all new gencool inverter compressor constantly adjusts a compressor’s speed to maintain desired temperature levels,’’ he said. ‘‘The dual inverter compressor

with power saving operation range frequency saves more energy than conventional compressor,’’ Park said.

Unlike the conventional air conditioner that cannot operate at lower speed due to its constant rotation, Son says the 2.5HP all new gencool air-conditioner is designed to save energy 70 percent by constantly adjusting the com-

Kevin Johnson.

Collaborative approach Tokyo-headquartered convenience store operator FamilyMart Uny has stepped up cooperation with Japan’s largest discounter, Don Quijote Holdings. The two companies opened a joint store in the outskirts of the capital in a bid to rekindle consumer interest. Two more outlets are to follow.

Ambitious goal Miniso Vietnam aims to launch 50 more stores by the end of this year and reach 400 by 2022. The discount retail chain wants to enhance its distribution system in the country with a huge warehouse in Ho Chi Minh City, which will open within a few months, and a planned online operation.

Bleak outlook Australian food franchise Retail Food Group, which controls major brands such as Gloria Jeans, Crust Pizza, Brumbies Bakeries and Donut King, has announced a significant loss this financial year and downgraded its earning. Its shares sank to a record low.

Southern sting in US Lidl has pulled out of plans to open a store in Alabama. It is a move which has some commentators speculating about the German discounter’s ability to compete with nemesis Aldi on American soil.

More money Costco is set to raise the minimum wage to USD 14 for its employees, as it becomes increasingly harder to attract staff. Over 130,000 workers will receive the one dollar per hour rise, in a move that will cost the company up to USD 120 million annually.

Results are in Lululemon is celebrating a better than expected first quarter profit, with revenue soaring by 25%.

Abercrombie has also had a positive start to the year with net sales increasing by 11%. Meanwhile, GameStop, the world’s largest video game retailer, is suffering after a sales drop of 5.3%.

Positive partnership HelloFresh is the latest meal kit company to seek brick and mortar

pressor speed to maintain desired temperature level thereby reducing energy costs.

The air conditioner is also renowned for its ability to save as much as 70 percent on electricity consumption with 40 percent faster cooling, thereby reducing bills. ‘‘The air Conditioner features a dual inverter compressor with 10 Year Warranty that helps users enjoy benefits of LG air conditioner for a longer period of time,’’ Son said.

“Over the years we have consistently introduced Residential Air Conditioners that addresses the peculiar needs of people in subSaharan Africa,’’ he said.

Continuing, Son said, ‘‘Going by the fact that our energy-efficient offerings have local relevance, recent introductions have been hugely successful in this clime.’’

He noted that the gen mode features allows it to minimize start-up electric requirements to power it. ‘‘There is no doubt the beauty and functionality of the AC would go a long way to encourage more and more stronger ties among family members who wish to spend quality time with their family members in a relaxed and cool atmosphere,’’ he said. ‘‘This is all thanks to LG All New Gencool AC with a guaranteed clean, fresh air which is essential for good health.’’

With this innovation, Son believes that Nigerian consumers will enjoy a durable, efficient, cost saving and reliable cooling system.

Global Retail Update Takeover targets in Europe trengthening its position in the UK, Paris-headquartered Nestlé Waters has acquired a majority stake in Welsh bottled water company Princes Gate Spring Water. Meanwhile, Nomad Foods is set to buy British packaged foods maker Aunt Bessie’s from William Jackson & Son for EUR 240 million.

Cross-border expansions Berlin-based online fashion retailer Zalando has entered Ireland and the Czech Republic, adding a potential 15.4 million people to its market. Meanwhile, global e-commerce giant Alibaba has announced that Liege in Belgium and Moscow are among the locations, where it will open new warehouses.

Seeking synergies In a bid to strengthen its business in western Europe, UK-based packaging group DS Smith has offered to buy its Spanish rival Europac for EUR 1.9 billion. The proposed deal would be the biggest ever acquisition for the British company and the latest in a consolidating sector.

Streamlining operations Walmart is selling a majority stake of its Brazilian operations to private equity firm Advent International, which will result in a USD 4.5 billion non-cash net loss in the quarter. It is the retailer’s third ma-

S

jor deal since April and the latest move to reshape its global footprint.

Online boost United Supermarkets has bolstered its online grocery capabilities to drive customer engagement and hone operational efficiencies in fulfilling e-commerce orders.

The Texas-based retailer, part of Albertsons, upgraded its platform solution with enhanced metrics and digital advertising tools.

Stepping down Howard Schultz, the man who has built Starbucks into one of the world’s most powerful global brands, will leave the coffee chain at the end of the month, fuelling speculation about his political ambitions. Last year, Schultz was handing the chief executive job to

support and has aligned with Ahold Delhaize’s Giant Food and Stop & Shop where customers can buy their goods without subscribing.

Job losses in Europe British maternity clothing retailer Mothercare is poised to close 50 stores and possibly lose 800 staff within the year, as part of a rescue package approved by landlords.

Meanwhile, Italian confectionary company Melegatti has been declared bankrupt, with the loss of 350 jobs expected.

Progressive policy Nestlé has thrown its support behind the United Nation’s LGBTI Conduct for Business. The Swiss food heavyweight has said it is committed to an inclusive workplace and will continue to grow its efforts to promote diversity.

New offering O’Key has announced the launch of a new format compact city hypermarket in Moscow. The new hypermarket with a self-scanning system will be the Russian food retailer’s 11th store in the capital city.

Securing sites The Australian grocery sector is in for a shake-up as German supermarket giant Kaufland ploughs ahead with plans to open five new superstores.

Compiled by Chinwe Agbeze

Thursday 07 June 2018

C002D5556

BUSINESS DAY

23

Unilever Nigeria emphasises Eze introduces food website to importance of oral hygiene promote African recipes, chefs …celebrates Children’s Day with students in Makoko CHINWE AGBEZE

U

nilever Nigeria once again demonstrated i t s c o m m i tment to helping to build a bright future for Nigerian children as it organised a special event in Makoko community in Lagos to commemorate the 2018 Children’s Day. The event, held at Ken Ade Private School, Makoko and attended by children from other schools in the community, had over 500 children in attendance and provided a good opportunity for Unilever to emphasise the importance of good health and wellbeing through its message of oral hygiene.

The children were told that oral health impacts significantly on the entire human body. As such, it was important for everyone, especially children, to take proper care of their mouth by brushing twice daily.

In addition to the educative session on oral and

general hygiene, the children were treated to various fun activities like games, cultural dance competition, march past around the neighbourhood, bouncing castle, among others to deepen social interactions among them.

Ayodele Alabi, sustainable business manager, Unilever Ghana and Nigeria, said that as an organisation with a vision to make Sustainable Living Commonplace, it was part of Unilever’s commitment to invest in communities around its operational bases through various social projects.

“Here in Makoko, we believe we can play a part in improving the health and well-being of the people who reside here, reducing environmental impact, and providing enhanced livelihood through our brands and operations,” Alabi said.

“It is in demonstration of this that we dedicated today to spend quality time with children in the community and educate them on the importance of general hygiene, while creating an atmosphere of fun and laughter,” he said.

Also speaking, Nnenna

Ikpeme, perfect city manager, Customer Development, Unilever Nigeria, said the company was pleased to celebrate the day with children in Makoko community.

“Over time, we have contributed to making the school environment a more conducive learning environment through the installation of a water station, construction of toilet facilities and building of a waste collection centre,” Ikpeme said.

Bawo Ayeseminikan, founder of Ken Ade Private School, Makoko, on behalf of principals of the schools in attendance, said Unilever is a friend of the community.

“The unique thing about Unilever support for the children is demonstrated through their bias for action. They have given us facilities like a school fence, water, toilets and a waste station,” Ayeseminikan said. “This is besides their physical presence at every given opportunity to educate the children on hygiene, all in a bid to make the environment safer and healthier for the children.”

K

elvin Eze, an entrepreneur and online brand strategist has introduced African Food Network website: https://afrifoodnetwork.com, to showcase different African recipes and promote local chefs within the continent.

The website, African Food Network, is a food platform where food lovers learn new recipes, watch videos from different food bloggers and submit special recipes to be published. ‘‘As part of our mission to promote our own chefs, we also have a special page dedicated to promote African chefs but we would still stick to our goal of redefining the world view of African cuisines,” said Eze. ‘‘African Food Network is designed to inspire creativity in viewers’ kitchens and selfempowerment in their lives while representing Africa as a continent in a more positive way,’’ he said.

The entrepreneur who said he has been ardent food lover since he was a child told BusinessDay that the creation of the food platform was borne out of the need for proper education in the preparation of African delicacies.

“I also want to promote our local chefs. The world is interested in Africa and we have to

portray Africa in the best way possible” he said.

According to Eze, his curiosity to find out why African dishes are not promoted in restaurants the way they ought to with most people making African dishes inferior to foreign ones, led to his creation of a food blog.

“When I was a boy, I asked my mother why big restaurants promote intercontinental dishes and not our local delicacies but she couldn’t give me a tangible response,’’ he said. ‘‘In 2009, I created a personal food blog to showcase my food journey and most of

the food I posted there were our local delicacies. The food blog gave birth to the African food network idea,’’ Eze said.

Continuing, he said, ‘‘I am working on a project with Nena Ubani, a popular African Vegan Chef in UK and Maryam al-Mansour, a medical doctor with specialization in Nutrition Education, on promoting healthy eating.’’ ‘‘We are currently working on a monetization plan for food bloggers and a mobile app would be launched before the end of the year because we are currently gathering thousands of contents for the directory,’’ he added.

Living under poverty line How Nigerians are struggling to survive

If you want to contact the writer of this story call: +234(0) 803 889 1567, +234(0) 8155184838 chinwe.agbeze@businessdayonline.com

BusinessDay readers donate N230,000 to cancer patient CHINWE AGBEZE

J

oseph Ugbe, a cancer patient in Port Harcourt, has received N230,000 from three BusinessDay readers to foot his hospital bills.

The father of four was featured in this section of Thursday, March 29, 2018 and May 31, 2018 where he said he needed funds to complete his radiotherapy treatment. ‘‘I was working as a distributor before I was diagnosed of cancer which has gulped all my saving leaving me bankrupted,’’ Ugbe told BusinessDay in an earlier interview. ‘‘This sickness has dealt with me but I’m pained that my innocent children had to quit school. I want to send them back to school and get a place for us to stay but I cannot do that if

I’m still in this condition,’’ he said.

Ugbe received N200,000

from an anonymous donor who had assisted three people featured in this section

with funds for their medical bills and business.

He also received N20,000

Odinaka Anudu, editorial analyst, BusinessDay (r) presenting a cheque to Joseph Ugbe, a cancer patient (l) on Monday at BusinessDay corporate headquarters in Lagos.

and N10,000 from two anonymous donors, bringing the entire donation to N230,000.

Presenting the cheque to the beneficiary on Monday, Odinaka Anudu, editorial analyst, BusinessDay, advised Ugbe to use the money for his treatment. ‘‘This money came from benevolent and good spirited individuals who saw your condition and decided to help you. Please, we would like this money to be used for the purpose it was given,’’ advised Anudu.

The father of four, who was moved to tears by the show of love from people he never knew, prayed that God will show his donors and their families more kindness than they have shown him. ‘‘I lack the words to express how grateful I am.

Here am I receiving money from people who I don’t know and who does not know mw as well. I cannot

Analysts: Chinwe Agbeze, Stephen Onyekwelu, David Ibemere, Graphics: Fifen Famous

even see them to thank them for this money,’’ said Ugbe amid tears. ‘‘God who knows them will reward them for their generosity and bless them beyond their imagination.

My family will always pray for them,’’ he said.

On how far the money received would go, Ugbe says it will go a long way. ‘‘I will go back to the hospital tomorrow and pay the N150,000 I owe and do the scan I was asked to do which is about N95,000. I did not have the money to do so when I was told to but I will do so now I have this money,’’ he said. ‘‘If I continue to wait to raise more money, I don’t know how bad this might go.

This money will assist me pay for the CT scan which will enable doctors know if the cancer is still there and know the next step to take,’’ Ugbe said.

24

BUSINESS DAY

C002D5556

Thursday 07 June 2018

Book Review A Story of Heroes and Epics: The Story of Football in Nigeria Author: Publisher: ISBN:

Wiebe Boer Bookcraft, Ibadan, Nigeria, 2018 978-978-8457-96-1 (PB) 978-978-8457-97-8 (HB)

I

n Nigeria, football is everywhere. From dusty fields to grand stadiums, from street corners to boisterous bars, the game is played, discussed, debated and supported with a fervor reserved for little else. But there was a beginning, a time before it became the national sport which has played a vital role in the creation and development of the Nigerian national identity.

A Story of Heroes and Epics is an in-depth examination of this history and a narration of the people, places and events that acted to promote the game to its level of popularity in Nigeria.

A book about the history of football must accomplish two things. The first is the gathering, organization and verification of the historic facts of football history- a daunting task given the appalling lack of documentation of Nigerian history. The second is the telling of these facts in a way that brings the stories to life. These events, when they happened, were moments of excitement and exhilaration.

A book about them then must not be a dry recitation of facts, but narratives brimming with life.

Thankfully, the author achieves both expertly.

The book begins with a look at the origins of football in Calabar, where Presbyterian missionaries introduced the game to secondary school children. The first recorded organized game happened in 1904. From there, football found its way to Lagos, carried by the flux of people who headed to the new capital of the Southern Protectorate. In Lagos, Frederick ‘Baron’ Mulford steps to the fore of the narrative, with his work popularizing and organizing football earning him the names ‘Baba Eko’ and ‘Father of football.’ The book then takes a jaunt to Northern Nigeria where a similar story plays out, and from there, details of the game’s growth in Warri, Enugu, Ijebu Ode, and beyond are revealed.

The history covered, the book then delves beneath the surface to offer a detailed analysis of the effect football has had on shaping the Nigerian nationality. The history itself was an impressive feat, but for the reader, this is where the book becomes a smorgasbord of intriguing revelations.

Football was introduced by British missionaries while sports such as polo and cricket were in-

troduced by the colonial officials and military officers. The British promoted these other sports to Nigerians, but it was football which caught on and spread like wildfire. Polo became a sport reserved for the Nigerian and European elite. Cricket (thankfully- some might say), eventually lost its popularity. Football, more than any other organized sport, was cheap and easy to set up. All you needed was a ball and an open field.

Another gripping insight comes from learning that these sports were introduced and promoted as a means of promoting British values. One must appreciate the irony of the game then being hijacked by Nigerians and pressed into service as both a means of anti-colonial protest and a nation-building mechanism.

The story of the spread of football in Nigeria, how it grew from Calabar to permeate every corner of the country, is told with deft-

ness. Reasons for this rapid dispersion are traced to inter-school and inter-regional matches. Colonial institutions also played a vital role in the prominence of football.

Employees of the Nigerian Police Force, the Public Works Department, the Nigerian Railway and the non-commissioned officers and men of the Nigerian Regiment took the sport with them wherever they were stationed across the country.

Dr. Wiebe Boer then gives attention to the rise of football as an organized sport. By the 1930’s football had already grown to be a national obsession and various leagues and tournaments were being organized. In 1933, the Nigeria Football Association (NFA) was established with the goal of supporting the development of football associations across the country. As an organized sport, football became the most prominent and important sport in Nigeria. A surprising leader of this movement was Nnamdi Azikiwe,

a star player in the Lagos league and at Lincoln University, who established a network of athletic clubs in Lagos and around the country. During World War II, he organized two football goodwill tours across the country to raise money for the war effort – while also giving lectures about democracy and independence.

The roles of other of Nigeria’s founding fathers in the development of the game are also highlighted, including Obafemi Awolowo, Tafawa Balewa, and Ahmadu Bello. The establishment of the Governor’s Cup

by Governor General Arthur Richards in 1945 was the final piece that transformed football into a truly national affair. The cup played a huge role in fostering community spirit and a recognition and acceptance that Nigerians were part of the same nation.

And Nigeria would need this solidarity, as the next step was for the country to join the international football community. Wiebe Boer chronicles how this happened, and the role football played in shaping Nigeria as an emerging nation. Nigerian soldiers stationed in India and Burma during World War II first brought international attention to the potential of Nigerian football through success in the military leagues. This was followed by a tour of England in 1949 during

There is no doubt that anyone who reads this book will benefit immensely from the insights and knowledge set forth so lucidly here, and marvel at the thrilling and exhilarating stories that had heretofore gone untold

which the Nigerian national team enjoyed some success against lower level league and semiprofessional English teams. The team included Captain Etim Henshaw of Marine, Tesilim ‘Thunder’ Balogun who would later play for Peterborough and QPR, and Titus Okere, who returned to England in 1952 and became Nigeria’s first professional player. John Dankaro of Takum (now Taraba State), a tin mining executive and star of the league in Plateau Province, was the only team member from Northern Nigeria.

The book then traces various Nigerian teams as they competed on the international stage and the enormous excitement and interest that followed the teams who were seen to be representing the entire country. The journey, of course, had its ups and downs, climaxing in a particularly nasty clash with the Ghanaian team.

The history of women’s football in Nigeria is not left out as Dr. Wiebe Boer takes a chapter to trace its origins and rise. Nigerian female footballers have come a long way from being treated as side novelty attractions to being successful on the international stage- even more so than the male team!

In Nigeria, football is an important game. And this is an important book.

First, it is history: a thorough examination of the history of this sport in Nigeria and how the game has shaped Nigerian pride and consciousness.

Secondly, it is a reminder that national pride and love for this great country are things that can and should be intentionally cultivated. We are never stronger than when we let ourselves forget the lines of religion, tribe, language and ethnicity that divide us.

Thirdly, this book serves as an inspiration to us all. Extraordinary stories lie in our past, and if we do not seek them out and tell them, they will be lost forever.

Everyone should read this book. Avid footballers, casual fans, public servants, school students...

Everyone. There is no doubt that anyone who reads this book will benefit immensely from the insights and knowledge set forth so lucidly here, and marvel at the thrilling and exhilarating stories that had heretofore gone untold.

A book about football in Nigeria has been written, and it is indeed a story of heroes and epics.

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

INSIDE Making Mortgage Accessible to the Informal Sector (1)

26 26 Over 15 countries set to converge at the 3rd ICC Africa Arbitration conference in Lagos

26 Something BIG is happening to data and you should know it!

27

The Rise of Africa’s Institutional Investors: Making Indigenous Capital Work for Africa ADEKUNLE SOYIBO

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he strong economic performance witnessed across the continent of Africa since the early 2000s, generally called the “Africa Rising” narrative, has been phenomenal for Africa with transformational developments.

Africa’s narrative has changed from a continent in need of foreign aid to that of an attractive investment destination for investors seeking high returns. Today, the continent can boast of indigenous companies that have become business champions in varied sectors particularly banking, telecommunications, manufacturing, oil & gas, agriculture, fashion and tech; these companies are expanding the frontiers of their businesses to other countries on the continent. A good number have attracted rounds of investments from local and international investors with some being listed internationally. Behind these companies are remarkable entrepreneurs who are determined against all odds to tackle problems, provide innovation and help create jobs for the young population.

The progress made on the continent is however not without its challenges which needs to be addressed if Africa’s new narrative is to be sustainable. The challenges include the lack of adequate infrastructure which increases the cost of doing business, reliance on imported inputs with its attendance strain on the local currency, limited skilled manpower, political uncertainties, lack of robust business laws, access to capital and many others. However, it is amazing

that a lot of African businesses have continued to thrive amidst these challenges which speaks to the fact that a lot more can be achieved on the continent if the challenges are addressed. One of the critical challenges on the continent is accessing capital for businesses. It is important to note that a lot of initiatives have been developed on the continent to address the difficulties of accessing capital, although a lot more still needs to be done to be able to harness the opportunities. One of the significant developments in relation to accessing capital on the continent is the increasing number of institutional investors, such as the pension funds and sovereign wealth funds on the continent that are beginning to serve as a steady source of capital as they provide medium to long term capital for business.

These African institutional investors are in the early stages of their operations on the continent. They have a significant role to play in unlocking value in the African business environment as well as taking ownership of deployment of capital on the continent. Africa cannot continue to depend mainly on foreign capital for the growth of its businesses. More indigenous capital is required to drive and chart the course of development on the continent.

Institutional Investors and their Role in Development Institutional investors are a significant segment of the financial sector of many developed countries.

Unfortunately, very little is known globally about institutional investors including in developed countries.

Institutional investors are specialised financial institutions which man-

age savings collectively on behalf of small investors, towards a specific objective in terms of acceptable risks, return maximisation and maturity of claims . This means that institutional investors are able to mobilise huge funds from individual investors and institutions with a view to managing the funds usually over a long period of time by finding suitable investment opportunities that meet certain risk and return profile in order to achieve increased investment value and projected returns.

The growth of institutional investors has been associated with the concept of “institutionalisation of saving” arising from the growth of pension funds, life insurance companies and mutual funds . The concept of “institutionalisation of saving” refers to the increasing move of household savings to professional portfolio managers to manage savings on behalf of households as opposed to being saved in banks, buildings or co-operative societies (or the post office in past times).

The institutional investors are of different types; they include endowments, family offices, insurance companies, pension funds, sovereign wealth funds, mutual funds, hedge funds, private equity and venture capital funds and may be set up as statutory companies, limited liability companies (either listed or unlisted).

Some of the sovereign wealth funds are set up as statutory corporations.

Adekunle Soyibo - Head, Financial Services Sector, Jackson, Etti & Edu. Continues on page 27

NBA-SBL Council, CPC outlines benefits of 2018 conference to the legal industry CHUKS OLUIGBO

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s the June 27, 2018 opening date of the 12th Annual Business Law Conference of the Nigerian Bar Association Section on Business Law (NBASBL) draws close, the organisers are beginning to articulate what lawyers and law firms stand to benefit from the conference as practitioners.

Though the major discussions at the conference will revolve around intra-Africa trade against the backdrop of the Africa Continental Free Trade Agreement (AfCFTA) recently signed by 44 countries, the organisers say it will also be a platform for lawyers and law firms to ruminate on their role in the event of Africa becoming one trading bloc.

AfCFTA is a European Unionlike agreement aimed at paving the way for a liberalised market for goods and services across Africa.

Nigeria is yet to sign the agreement.

NBA-SBL Chairman, Olumide Akpata

Speaking at a press briefing in Lagos to announce the 2018 conference, Okey Egbuchu, chairman, conference planning committee, informed that a special plenary session, with the topic ‘Law Practice in the Time of the African Continental Free Trade Area: Reimagining African Lawyers’, would be devoted to examining the opportunities avail-

able to lawyers when the AfCFTA takes effect.

“This is a law conference, so you will imagine that we must have a session for us as lawyers to examine our position, our prospects and our future under the AfCFTA. How is law practice going to be when this agreement comes into force? What are the barriers that are going to

be left? How will we practice law?

What are the new areas of law that will develop around the AfCFTA? And what tools do we need to be able to be prepared to benefit fully from it? There is a whole plenary session on the 29th of June which will deal with that,” Egbuchu said.

“Professionally speaking, I think this is going to be the most important session of the conference for us lawyers. We have invited many law societies from across Africa; we have invited the Law Society of England and Wales; we have invited many resource persons from across the world to join us in dissecting the issues,” he said.

Egbuchu said David OfosuDorte, senior partner, AB & David, a home-grown international law firm in Africa, would lead the session and would be joined by many other discussants to give perspectives on the issue.

Scheduled for June 27-29 at Transcorp Hilton, Abuja, the conference has the theme ‘Bringing Down the Barriers: The Law as a Vehicle for Intra-Africa Trade’.

Also speaking, Olumide Ak-

pata, chairman, NBA Section on Business Law, said the conference would provide a platform for lawyers to assess their preparedness for the eventuality of Africa as one trading bloc and for law firms to re-imagine their roles in the new dispensation.

“Questions are already being asked, why are our law firms not extending their tentacles across Africa? Why is it easier for me to call a law firm in Portugal if I want to do business or if I have an issue in Mozambique or in Cape Verde or in Equatorial Guinea? That is the reality today, because with the exception of AB & David, which is a home-grown African law firm that has actually made it a deliberate strategy to expand its footprint on the continent, there are not many African law firms that have that kind of reach,” Akpata said.

“I think this agreement will force our hands to rethink our strategy.

Not everybody will be continental, but it will be obvious and indeed Continues on page 28

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MORTGAGE, FINANCE & DEVELOPMENT Making Mortgage Accessible to the Informal Sector (1)

…Basic Requirements

T

he success of the goal to bridge the estimated 17 million units housing gap in Nigeria, through well-structured and inclusive mortgage financing would depend, to a large extent, on the percentage of the informal sector that would be effectively captured in the mortgage net in the medium to long term.

Estimated at 67.54 million of the 81.15 million workforce and accounting for about 60 percent of the country’s Gross Domestic Product (2017 figures), the huge size and potentials of the informal sector hold a significant promise for the delivery of affordable homes to a sizeable share of the Nigerian populace. However, the inadequacy of reliable frameworks for the formalization of activities within the informal economy has, for many years, restricted the sector’s access to major incentives, including mortgage, which are otherwise available and accessible within the structured economy.

Expectedly, the launch in February 2018 of the Uniform Mortgage Underwriting Standards for the Informal Sector (“Underwriting Standards”), as the guideline for providing mortgage financing for operators within the largely unregulated sector, came as a much-awaited panacea for financial exclusion and antidote to the perennial challenge of restricted access to mortgaged-backed home ownership for millions of self-employed Nigerians, low-income households, and the Micro, Small and Medium Enterprises (MSME) in the country. This article reviews the Underwriting Standards and provides a detailed guide to accessing mortgage loans, for the operators in the informal sector of the Nigerian economy ELIGIBILITY AND PURPOSE OF LOAN As prescribed by the Underwriting Standards, only natural persons operating in the informal sector of the economy, who shall either be citizens or legal residents in Nigeria, are eligible borrowers. For nonNigerian residents, a valid visa and evidence of stay in the country for a minimum period of one year prior to application, as well as compliance with necessary/relevant Immigration Regulations, are required to be eligible for mortgage facilities.

This shall also include a proof of immigration approval to reside in Nigeria for a period no less than the term of the mortgage repayment period, or three (3) years, as may be considered most appropriate by the mortgage lender.

Notably, eligible natural persons can either be professionals or non-professionals who are selfemployed. They can also be owner/ managers and employees of micro and small enterprises who keep no formal records. In all cases, eligible borrowers shall not be less than 21 years of age and be no less than 10 years to the legal retirement age (or as may be determined by industry and/or regulatory guidelines) at the start of the mortgage.

When disbursed, the mortgage loan can be used to purchase a Single Family Home or an apartment in

a multi-unit building. The loan can also be used in either financing a new purchase or refinancing an existing mortgage loan. It is important to note, however, that the property acquired through the mortgage loan shall be owner-occupied.

Joint Borrowing is allowed under the Underwriting Standards. In the case of joint borrowers who are also a married couple, the income and expense obligations of both spouses shall be considered jointly in determining eligibility. Essentially, a spouse who does not serve as a joint-borrower is required to execute a separate agreement, waiving any right to block foreclosure, in the event of default on the part of the borrower-spouse to fulfill obligations arising from the transaction participating agreement. Where a borrower has multiple spouses/ partners, or in a recognized civil relationship, every spouse or partner resident in the property shall execute the aforementioned separate agreement for waiver of the right to block foreclosure.

A borrower shall also be creditworthy by having reasonable minimum net-worth to qualify for mortgage loan. Therefore, to ascertain net-worth and credit worthiness, a borrower shall have been on the trade or business for at least a continuous period of 36 months in the same industry, within the informal sector, supported with operational and/or financial statements of account in respect of the business enterprise or activity of the borrower.

DOCUMENTATION AND APPLICABLE FEES The Underwriting Standards prescribe minimum documentation for mortgage lending to informal sector players. This is essentially required to ascertain the credit-worthiness of mortgage applicants, establish good legal title to the connected property, and determine the qualification of certain class of borrowers (such as foreign nationals resident in Nigeria) to take mortgage loan.

Acceptable documents that may be used in proving credit-worthiness, good legal title to property, and qualification of non-Nigerians include the following: Twelve (12) months payment receipts/invoices of at least three (3) utility bills, such as electricity bill; waste disposal bill; water bill; telephone bill; and rent etc.

Letter of Reference – This can be obtained from an applicant’s trade association, suppliers or associates, as applicable.

Notarized statement of adequate net-worth for the loan program Evidence and confirmation of satisfactory payment of dues or

subscription to approved trade associations or cooperatives, as applicable.

Satisfactory school fees payment record for the applicant’s children/ dependents.

Any other informal means that may be acceptable to the mortgage lender for verifying and ascertaining borrower’s credit-worthiness. This may include independent interviews of borrower’s family members, neighbors, colleagues in the office/ enterprise, for proper Know-YourCustomer (KYC) requirement. Information provided with issuing authorities can also be checked for reliability and accuracy. It must however be noted that a mortgage lender is required to obtain written authorization from a borrower, before contacting third parties for any information relating to the borrower.

Acceptable title documents are those free from encumbrances.

The type of acceptable title document for a particular property is determined by the mortgage lender in relation to the standards for the community in which the property is located Liability Surety Coverage is required to be provided by financier-participants, where title is not legally fully perfected.

Title Perfection Duration Insurance Cover may be required by the Secondary Market Refinance Company, where a fully perfected title is not readily available.

Valid immigration documents such as Visa, Resident Permit, and Work Permit etc. are required from borrowers, who are foreigners resident in Nigeria and working in the informal sector.

There are applicable fees for mortgage lending processes payable by the borrowers. These fees include: Origination Fee – This is as specified by the Mortgage Banker’s Tariff. It should be noted that origination fee is separate and different from Principal and Interest, and is to be paid out of pocket by the borrower.

Servicing Fee – This is a fee payable by borrowers to the mortgage lenders on an annual basis and it shall not exceed fifty basis points (0.5%) of the outstanding loan balance.

Late Fees – This are charges payable by borrowers on payments received more than seven (7) days after they are due.

GENERAL TERMS AND CONDITIONS Some of the general terms and conditions guiding mortgage loan in the informal sector of the econ-

omy, as contained in the Underwriting Standards, include the following: Borrowers’ Age – The minimum age of legal contract shall be 21 years and anyone below this mark shall not be qualified for taking mortgage loan. In like manner, the maximum age shall be ten (10) years to the borrower’s legal retirement age, or as may be determined by industry/regulatory guidelines.

Loan Amount – The minimum loan amount shall be determined by the mortgage lender while the maximum loan amount shall be Fifty Million Naira (N50,000,000:00).

Loan Tenor – The tenor of mortgage loan shall be minimum term of five (5) years to maturity and a maximum term of twenty (20) years to maturity.

Loan Denomination – The disbursement of the mortgage loan by lenders and the repayment by borrowers shall both be in Naira.

Minimum Down-payment – The Underwriting Standards prescribes minimum down-payments for different loan amounts. For property of less than N20 million in value, 25% down-payment is required; higher than N20 million but lower than N40 million, 30% down-payment is required; and higher than N40 million but lower than N50 million, 35% down-payment is required. However, the down-payment shall not be fulfilled through a loan from a third party, except under a regulator-approved Special Down Payment Assistance Programs (DPAP). The down-payment is also required to be sourced and seasoned in the bank account for at least thirty (30) days to ensure legal funds.

Payment of Servicing & Late Fees – Applicable servicing fee shall be added to mortgage interest rate and origination fee and shall together be advertised by the mortgage lender as the mortgage

loan APR%. This shall then be payable by the borrower on a monthly frequency. For the Late Fee to be chargeable by the mortgage lender, all information on same shall be made available to the borrower before closing and the borrower’s consent obtained.

Application of Title Perfection Duration Insurance – In cases where Title Perfection Duration Insurance is required, such shall be procured from insurance companies approved by the Secondary Market Refinance Company. Also, the Title Cover shall not exceed eighteen (18) months from closure of the mortgage. Where it exceeds this period, the mortgage lender shall substitute the mortgage loan with an equivalent loan with title or be required to post acceptable collateral.

Tenure of Property – The tenure of the property shall be full ownership, or leasehold with a minimum of forty (40) years from the date the mortgage loan is originated.

There are other basic terms specified in the Underwriting Standards for mortgage financing for the informal sector, relating to PENCOM compliance; permissible housing expense & total-debt ratios; security required; and insurance of property; which will be fully explained to prospective borrowers on request. Essentially, the Underwriting Standards make provisions for “Mortgage Counseling” and “Consumer Protection”, to ensure that borrowers are adequately educated and clearly informed about their duties and responsibilities under the mortgage loan program, during mortgage application process, and that borrowers’ information supplied to mortgage lenders in the process is protected in accordance with applicable CBN regulations.

Mortgage, Finance & Development is an initiative of the Nigeria Mortgage Refinance Company (NMRC).

Over 15 countries set to converge at the 3rd ICC Africa Arbitration conference in Lagos

N

ot less than 500 participants representing about 15 countries will be present at the 3rd International Chambers of Commerce (ICC) Africa Conference on International Arbitration which is

scheduled to hold on Monday June 18th and Tuesday 19th, 2018 at the Civic Centre, Ozumba Mbadiwe Street, Victoria Island, Lagos.

The conference is an annual event at which the African arbiContinues page 28

Thursday 07 June 2018

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THE YOUNGBUSINESS LAWYER Something BIG is happening to data and you should know it!

Continued from last week

R

eiteration of the right to be forgotten: data subjects have a right to have their personal data erased and no longer processed online.

Strict sanctions and penalties for breach: Breach of the provisions of the GDPR could result in penalties grossing up to 4% of the annual global turnover (of a defaulting company) or 20Million Euros, whichever is higher.

What does this mean for the Nigerian business environment?

As with many other regions, Nigeria is unavoidably involved in trade with EU residents and data subjects and ultimately, the duty to comply with the provisions of the GDPR would remain so long as these trade lines with the EU remain open. To the extent that Nigerian companies/ persons engage or trade with EU data subjects, they would be involved in the transmission of personal data and fall within the catchment of the GDPR. Currently, Nigeria is yet to have substantive data protection laws and save for some sector specific conditions on data processing and protection, where the question of data protection/privacy arises, recourse can only be made to the general provisions of Section 37 of the Nigerian Constitution (1999) which guarantees a right to privacy including “the privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is hereby guaranteed and protected.” This right is sacrosanct and enforceable.

While the National Information Technology Development Agency (“NITDA”) previously issued Data Protection Guidelines (“Guidelines”) prescribing rules for processing and handling of personal data, this is yet to be in force as the draft is still under review.

In the absence of substantive local legislation, it is expected that in so far as the commercial relations involve European citizens, data protection clauses in commercial contracts will increasingly be altered to suit the standards laid out by the GDPR. Nigerian lawyers would have to be minded of the extent and scope of the GDPR as it relates to the rights of the EU data subjects and the duties of counterparties who may have to

process or transfer their information. More so, it is foreseeable that counterparties would demand that contractual terms be adapted to EU standards on data protection when drafting or negotiating commercial contracts. Multinationals with European affiliates would have to be more careful with the transfer of data of European data subjects in the course of their communication within and outside Europe.

It is yet to be seen how the EU will enforce extra territorial breaches of the GDPR but it is clear that there would be a significant shift in the law and policy on data protection in the days following on from the advent of the GDPR. OYEYEMI OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association.

Feedback – Oyeyemi.aderibigbe@templars-law.com; yemiimma-

OYEYEMI OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association.

Feedback – Oyeyemi.aderibigbe@ templars-law.com; yemiimmanuel@ yahoo.com.

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Mitigating Private Equity Risks a commercial, legal and regulatory perspective Continued from last Week

The Federal Government (FG)’s efforts (through the Presidential Enabling Business Environment Council (PEBEC)) to champion reduction of business requirements stifling bureaucracies which has improved Nigeria’s ranking in the World Bank’s 2018 Ease of Doing Business (from 169th position to 145th out of 190 countries), is noteworthy.

PE investors in Nigeria can reduce PR exposure by avoiding or properly structuring deals with firms that have high government exposure especially if the firm’s major client is the government or if it is highly regulated or otherwise exceptionally susceptible to control by the government.

Understanding the government’s economic thoughts and political world view that underlies their policy decisions, actions and choices is also critical. This is with a view to being able to fairly anticipate/predict same, and having proactive responsive strategies in place. Having indepth understanding of the legal regulatory framework, the competitive (sectoral) landscape, and identifying the right local partners who are aligned with the firm are critical mitigating factors. Even challenges of infrastructure deficit represents investment opportunities to bridge the infrastructure gaps. An example is the Lagos Megacity initiative of the Lagos State Government (LASG) which provides a ‘continuity backdrop’ to prospective investors, given the erstwhile, current and potential future priority that successive LASGs has given, gives and will give to it.

Role of Legal Counsel Engaging legal and other professional expertise is axiomatic when dimensioning PE risks.

Legal counsel will assist in conducting legal regulatory, tax, and operational due diligence (DD), on the investee company.

For instance, legal expertise is prerequisite for advising on optimal investment structuring.

Should the investor be an SPV in a tax treaty country that also has bilateral investment treaty with Nigeria? What should be the capital structure: optimal mix of

equity and debt? Should debt be foreign with sufficient tenor to enjoy tax benefits by way of withholding tax exemptions? How can the available incentives in the prospective investee company’s sector be best leveraged? The DD report will provide an informed basis for taking the appropriate investment decisions, including valuation because of special circumstances/risks that may be applicable to the prospective target. An example is contingent liability from litigation or whether there is exposure to and quantum of statutory/regulatory fines.

Also, legal expertise is required in deal negotiation (including fundraising), drafting and reviewing transaction documents starting with the confidentiality and non-circumvention agreements, term sheets, and contract documents like the Investment, Loan, Subscription, and Shareholders’ Agreements etc. The eventual language and import of some key clauses – valuation of stake and ratcheting structure, Right of First Offer/Refusal, exit or liquidity options (buy out, initial public offer, secondary sale to larger PE firms or third or third party investor etc.), fund lifecycle, internal rate of returns or the liquidity preference on investments, environment, safety and governance (ESG) considerations and business integrity, will impact rights and obligations. Consequently, it is apposite to have the backing of transactional astute counsel.

Legal expertise will also help with dispute resolution especially ensuring optimal protection vide contractual provisions on choice of law and mode of dispute resolution, pre-action steps etc. It is better to plan as if there will be disputes and have clarity about the process. A recent example was the dispute between Helios and Telkom which frustrated the proposed sale of Multilinks to Visafone; the sale would have prejudiced Helios.

PE Structures Legal counsel assist in identifying legal regulatory gaps that can affect investment structure.

For instance, most PE structures involve engaging general partners (fund manager) and PE limited partnership (LP) (fund investors)

who set up the funds.

In practice, PE fund vehicle must be registered under CAMA either as a business name or private limited company before it is registered as a LP or limited liability partnership (LLP) by submitting all requisite documents - LP name, registered address, partnership deed, limited and general partners’ names designation etc.

- to the Registrar of LPs/LLPs under the Partnership Law of Lagos State Cap. P1, 2003. Partnership laws are within the province of the States, and Lagos State has the most advanced because it has provided for regular, limited and LLPs. This should trigger regulatory competition amongst other States seeking to attract investments. Furthermore, although an LLP is registered in Lagos, it can transact business anywhere in Nigeria because it would also have been registered as a business name under CAMA, a federal legislation.

The Venture Capital (Incentives) Act Cap. V2 LFN 2004 (VCA) provisions–especially section 4 (b) VCA that exempts a venture capital company from capital gains tax (CGT) for disposing its equity interest is redundant due to section 30(1) CGTA provision that exempts sale of shares and stock from CGT. Generally, the VCA needs to be amended in light of, and to meet the current PE risk realities. This will boost PE investors’ confidence.

Conclusion PE business and legal risks can be daunting but are not insurmountable. In this regard, properly planned investment decisions leveraging robust risk management approach that draws from transaction seasoned multidisciplinary team, would help mitigate these risks. PE firms can also more actively influence policy directions as industry lobby (vide narrower PE association platforms and as part of wider private sector/FSI groups) towards achieving enhanced investment friendly policies/reforms to foster increased PE investment.

a voice to shareholders in the management of the companies resulting in shareholder engagement by managements of companies. This engagement has resulted into maintenance of appropriate standards of corporate responsibility, integrity and accountability to shareholders.

The requirements for shareholders “say-on-pay” proposals for executives, support for director elections, succession planning, or corporate social responsibility issues are results of active shareholder engagements.

The Rise of Africa’s Institutional Investors Africa has not only attracted foreign institutional investors to the continent but has also began to establish institutional investors for the continent. This is a very positive development. These institutional investors have helped to deepen the capital market by providing liquidity, growing the bond mar-

ket and have helped to strengthen the financial system. Their asset allocation is expanding to a variety of asset classes that range from stocks, corporate bonds, municipal bonds, money market instruments, open and closed-ended investment funds, real estate investment funds, infrastructure funds, private equity funds. Based on an Africa Development Bank report, assets under management by African institutional investors are expected to rise to $1.8 Trillion by 2020 from $670 Billion in 2012 . Price Waterhouse Coopers estimates pension fund assets under management in 12 African markets to rise to about $1.1 Trillion by 2020 from $293 Billion in 2008 . Assets managed by African sovereign wealth funds grew from $114.27 Billion in 2009 to $159 Billion in 2015 .

Gabriel Fatokunbo is a commercial lawyer and practices with LeLaw Barristers and Solicitors

The Rise of Africa’s Institutional Investors...

Continued from page 25 The investments typically will be made through funds that may be set up as trusts, limited partnerships, investment companies (list or unlisted) and managed by a fund manager with an investment committee supervising the quality of the investments made.

Institutional investors, in carrying out their role in relation to the funds under management, make contributions to development. The role of institutional investors in development has been made possible by the fact they are large investors and can take advantage of the economies of scale in the deployment of their resources.

Some of their roles in development are discussed below: 1.) Provision of Financing One of the main contributions of institutional investors to a market is the provision of large and reliable financial resources . Their ability to mobilise huge amount of resources

enhances their capacity to serve as a stable supply of capital for the economy. According to the European Central Bank, investment funds in the Euro area held stock of debt securities amounting to EUR 2,437 Billion and quoted stocks amounting to EUR 6,593 Billion as at end of September 2016 . These funds are able to provide the market with liquidity as well as financing for expanding businesses.

2.) Provision of Long-term funds The ability to provide financing over a long period of time has the positive effect of financial stability and can also foster economic growth and development . This is particularly useful in financing costly and long-term development projects and allows users of funds adequate time to utilize the funds provided, to create value and wealth for the stakeholders.

3.) Risk Appetite and Management

Institutional investors have been able to take bigger risks that provide commensurate returns. They also have the resources to adopt appropriate risk management framework to ensure effective management of the risks. Consequently, institutional investors are able to reduce risk to individual stakeholders as well as to the financial system. One of the major advantages of institutional investors is seen in the diversification of their investments, competent risk assessment, asset and liability management, reduced information asymmetry and cost efficiency .

4.) Improvement of Corporate Governance Practices Institutional investors have been able to influence shareholder participation, particularly in public companies, which has changed from a passive approach to active and thereafter to activism. The influence of institutional investors has given

To be continued next week

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INDUSTRY FILE

Over 15 countries set to converge at the 3rd ICC Africa Arbitration...

What law firms, lawyers stand to gain...

Continued from page 26

tration community updates itself on developments in the region and is also a great opportunity for participants to network and develop excellent business and professional relationships.

Aelex Partner, Funke Adekoya, SAN who is also the chairperson of the conference said the conference, which is the most important gathering for the African arbitration community will provide invaluable updates on developments in the region, during a series of panel discussions with a faculty of prominent speakers and thought leaders.

According to her, ICC’s annual Africa conference, held in English and French, is the key forum for understanding international commercial arbitration in Africa.

“This conference provides an indispensable update on developments in the region and is becoming the most important gathering for the African arbitration community. Not only does it offer a line-up of top-class speakers, topical discussions and relevant news, but also an excellent opportunity to network,” Adekoya said.

The event will kick off on Monday 18 June 2018, with a session

focusing on, ICC Arbitration: Innovation on the Basis of the Tradition for Quality. This will introduce the latest strive of the ICC International Court of Arbitration for enhancing time and cost efficiency to a fast track arbitration for smaller claims while ensuring fundamental quality features.

Another session will focus on Clause and Effect: Seating your Arbitration in Africa. This session will discuss how African jurisdictions have responded to the requirements of an arbitration friendly environment and its impact upon arbitration on the continent.

In addition to these, there will be an engaging session on International Arbitration Awards: First Bus Stop or Last Station. Panellists will discuss this topic against the backdrop of domestic and international legislation, conventions and proposed initiatives.

Another engaging session focusing on Africa Rising – Stemming the Flight of Arbitral Disputes, will stress on attendant issues resulting in the delocalisation and flight of arbitral disputes from Africa.

Panel Discussions on this session will include identification and

Seni Adio, SAN, Vice Chair, NBA-SBL

Priscilla Ogwemoh, Secretary, NBA-SBL

Chinyere Okorocha

L-R, Endurance Uhumuavbi, Sam Aiboni, Chinyere Okorocha, Seni Adio, SAN, NBA-SBL Vice Chair, Olumide Akpata, NBA-SBL Chair, Okey Egbuchu, CPC Chair, Priscilla Ogwemoh, Secretary, NBA-SBL

Continued from page 25

there will be gaping holes here and there if African law firms do not rise up to the occasion. And as you know, nature abhors a vacuum, and definitely those spaces will be filled by those who have been waiting in the wings who see opportunities where we don’t seem to see. So, especially for law firms, it is a conversation that we must have,” he said.

But beyond this, Akpata said that another key area of interest to lawyers and law firms would be the session on dispute resolution, which will be chaired by Yemi Candide-Johnson, president, Lagos Court of Arbitration.

“Kudos to those who thought of that session because as you know,

if trade or commerce begins to traverse the continent, disputes definitely follow commerce, and so we are trying to understand whether or not we have in place a body of laws or procedure that would regulate the dispute resolution function, and we are trying to understand how it happens in the European Union,” Akpata said.

“We have the ECOWAS Court, we have other courts that deal with non-commercial disputes on the continent, but I am not sure that we have something that will deal with the kind of disputes that will come out of Africa as one trading bloc.

So definitely, that is worth looking at,” he said.

Other topics to be discussed at the sessions include ‘Financing Intra-African Trade and Develop-

ment’, ‘Continental Trade and the Imperative of Unimpeded Movement of Goods, Labour and Services’, ‘Enhancing Transport Connectively in Africa’, ‘Marching in Lockstep – Building Sub-National Competitiveness for Global Investment’, ‘AfCFTA and Transformative Industrialization in Nigeria’, ‘Standardizing Continental Regulations on Consumer Protection and Competition Law’, among others.

The organisers also informed that the conference will also be spiced up with a debate session featuring topics that include ‘Should Nigeria accede to the African Continental Free Trade Area?’; ‘Should Lawyers continue to self-regulate?’; ‘Pupillage in Law: Should it be mandatory?’, and ‘Should there be ‘Ladies’ at the Bar?’.

Winners emerge from 2nd edition of Paul Usoro Pro bono Challenge

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ollowing submission of entries and a rigorous screening exercise, three winners have emerged from the second edition of Paul Usoro Pro bono Challenge. Paul Usoro Challenge is an initiative of the Law Firm of Paul Usoro & Co (“PUC”), which encourages young lawyers to take on pro bono cases, as a way of rendering selfless services to the community and supporting persons who are not able to afford legal fees.

The lucky winners were selected after entries received were evaluated by a panel of independent judges, comprising senior lawyers including a Deputy Director of the Legal Aid Council and a senior counsel in a reputable top tier Nigerian law firm. To ensure transparency, the entire process of collation was conducted and facilitated by DKK Nigeria, an independent and leading Public Relations consultancy agency in

Paul Usoro with a Young supporter

Nigeria.

According to the results, the winner of the first prize for this second edition of the Challenge is Halimat Adeniran of the Uniosun Legal Clinic. She is the team lead of Uniosun Legal Clinic, a group of young lawyers who have handled up to 35 pro bono matters within the South-Western part Nigeria.

Halimat received a cash prize of N100,000 while the first runner up, Olanipekun Nelson received

the sum of N70,000 and second runner up, Tonye Clinton, received the sum of N50,000.

Speaking on the second edition of the Challenge, Paul Usoro, SAN said, “the competition was born out of an overwhelming desire to reward young Nigerian lawyers who render free and selfless legal services to their communities.

Lawyers should show empathy towards the less privileged persons in the society, especially women and children, most of whom are not able to pay for legal services.

It requires a lot of patience and personal sacrifice to take steps to listen, recognize, understand and/or address the complaints of persons from whom one ordinarily expects no pecuniary or other rewards”.

In the same vein, Munirudeen Liadi, Head of Chambers at PUC stated that, “this second edition provided a wider range of opportunities for more lawyers between

1-15 years post call experience to showcase and inspire colleagues with their touching Pro Bono cases, as against the 1-10 years post call eligibility criteria adopted for the first edition. The initiative is intended to reward the selfless and sacrificial efforts of lawyers who go the extra mile to defend the defenseless, ultimately restoring confidence and respect to the rule of Law in Nigeria”.

Commenting on the pro bono initiative, Halimat Adeniran, the first prize winner, expressed her gratitude to the organizers of the challenge for encouraging young lawyers to render professional service at no cost. “I feel happy and excited winning the challenge. It is an amazing experience for me considering that with my few years at the Bar and engagement in pro bono services, I have been able to give back to humanity. It is also very inspiring to know that Paul Usoro, SAN

and the PUC team have taken it upon themselves to reward young lawyers who are engaged in pro bono services”.

She added that being the first female winner, “I feel so proud of this lofty achievement. For me, it is a firm recognition of my advocacy for the less privileged who cannot afford the services of a lawyer. More importantly, it is a collective achievement for all young female Counsel, and in particular our female Law Students in Osun State University, College of Law Ifetedo Campus’’.

She encouraged young lawyers especially the females to take up more pro bono legal services most especially on issues that concern women.

The second edition of the competition mostly featured humanitarian issues, particularly brutality to civilians by law enforcement agents, gender related issues and child abuse.

BUSINESS DAY

Thursday 07 June 2018

CityFile

HOFOWEM kits pupils in Lagos schools

Officials of Adamawa Command of the Nigeria Security and Civil Defence Corps (NSCDC) sealing an illegal security firm in Jimeta area of Yola. NAN

JOSHUA BASSEY

H

ope for Women in Nigeria (HOFOWEM), a non-governmental organisation founded by the wife of the Lagos State governor, Bolanle Ambode has donated 50,000 shoes and other items to pupils in Lagos public schools.

Ambode flagged off the distribution of the items at Cherubim and Seraphim Primary School, Lagos Road, Majidun in Ikorodu, to mark the 2018 edition of the “Project Bright Steps,” a pet project of HOFOWEM. The project is aimed at boosting the morale of the children and creating awareness on the welfare of pupils in the state.

In the first edition of ‘Project Bright Steps’ in February last year, 175,000 shoes and HOFOWEM-branded socks, were distributed to primary 1-3 pupils of public primary schools across the state.

Ambode said that getting the best from education began with proper dressing to school, adding that the foundation had observed with some pain, that many pupils were less than properly dressed to school, as some turned up in bathroom slippers while many others went barefooted.

According to her, this sort of daily appearance for school activities certainly could not guarantee them the desired self-esteem, for confidence to excel in their academic work.

Other distribution centres include Agege, Maryland, Yaba, Ojo, Amuwo Odofin, Epe, Lagos Island and Ikorodu which doubles as the flag-off venue. This arrangement is for easier accessibility to the various schools and the benefitting pupils,” she said.

Moyefunke Olayinka, the CEO of HOFOWEM, said since the commencement of operations, the foundation had touched the lives of many and is still putting smiles on the faces of the less-privileged without wavering, adding that through the foundation’s various humanitarian programmes, hundreds of women, children and youths had been reached.

Customs donates food items, others to Edo IDPs

T

he Nigeria Customs Service (NCS) has donated a total of 10,653 (50Kg) bags of rice and other relief materials to the Uhogua Internally Displaced Persons (IDPs) camp in Benin.

Abdulkadir Azarema, chairman, National Logistics Committee (NLC), said this while donating the items to the IDPs in Benin.

“I am happy to announce that we are here for the fifth phase to hand over the following items in line with presidential directive to this effect.

“Rice 10,653 (50Kg) bags, 33 cartoons of ricci tomato paste (400mg), 1,232 cartoons of ricci tomatoes paste (70mg), 210 pieces of 5 litres gallon of vegetable oil and 40 pieces of 2 litres bottle of vegetable oil.

“Others are 5,822 cartoons of small lucozade boost drink, 993 cartoons of Eva soap, 4 cartoons of liquid soap, 11 cartoons of solid soap, 329 bales of second hand clothing and 2,159 pairs of shoes.

“We urge camp officials to ensure judicious use of these relief materials for all the affected people,” Azarema said.

He explained that the committee had as members the army, police, civil defense, federal road safety corps among ohers.

Governor Godwin Obaseki of Edo, lauded for the kind gesture towards victims of insurgency in the country. Obaseki said the state government would ensure that the donated materials were given to the Intended beneficiaries.

29

Offa robbery: Kwarans react to Saraki-police rift SIKIRAT SHEHU, Ilorin with agency report

R

esidents of Kwara, including prominent indigenes of the state continue to engage in heated debate over the probe of the allegations made against Senate President Bukola Saraki by suspects arrested over the April 5 Offa bank robbery in which no fewer than 33 persons were killed.

The police had initially invited Saraki for interrogation before soft pedalling to request for only a written explanation within 48 hours.

Also linked to the bloody robbery incident in which nine policemen were killed is Governor Abdulfatah Ahmed of Kwara State following alleged claims by the suspects that they were political thugs working for the duo.

But the senate president and Ahmed had both dismissed the allegations as an attempt to frame them.

Many Kwarans have expressed support for the police in the ongoing investigation and have called on Saraki to respond to the allegations made against him in order to clear his name.

Others, however, dismissed the allegations, saying they were aimed at tarnishing the image of the senate president and the governor of his home state.

Amuda Aluko, an elder statesman, said it would be better for the senate president to respond to the police request in order to clear his name. Aluko, the Tafida of Ilorin, who is of the view that Saraki could never be involved in robbery, however, said it had become expedient for him to clear his name since he was allegedly mentioned by the suspects.

He said his Kwara Liberation Group had spoken out about a week ago urging Nigerians to allow the police carry out their duty on the case of cultists transferred to Abuja from the state.

Suleiman Abubakar, a former minister of

National Planning, was of the view that “if the senate president has no skeleton in his cupboard, he should honour police invitation to clear his name.’’

According to him, the claim by the suspects that they have links with the senate president makes it imperative that Saraki avails himself of the opportunity offered by the police to clear his name.

Abdulwahab Egbewole, a professor in the Department of Law, University of Ilorin, on his part, warned against “the politicisation of the lives of Nigerians.’’

According to him, the police have the right by law to investigate everybody. From the trajectory of the matter, it is not regarded as purely a legal issue. It has some fundamental political undertones,” he said.

The don noted that from the alleged confession of the Offa robbery suspects, it was revealed that Saraki gave a vehicle to a suspect.

“They also alleged that he gave them guns; they, however, stated that he did not tell them to rob,’’ he said. He also argued that this may be seen as being an accessory to a particular crime in law.

Egebwole, however, pointed out that the anti-cultism law in Kwara put in place by the Saraki administration was the most stringent in the country.

He wondered how “a person who puts in place such a law will now go against it,’’ adding that “Saraki after all had said he is ready to comply with the directives of the police during the course of investigation.’’

In his reaction, Rafiu Hotonu, the State Secretary of the National Union of Local Government Employers (NULGE), said there was nothing wrong with the police requesting Saraki to respond to allegations.

“He should honour the request to clear his name. NULGE wholeheartedly supports the police because the suspects

confessed that they work for the senate president, so he needs to clear his name.

“No matter how highly placed you are in the society, once the police invite you, you are bound to honour the invitation,” Hotonu said.

An Ilorin based legal practitioner, Isaac Oladele, said there was no crime in a police invitation, urging Saraki to use the opportunity to respond to the allegations.

Oladele, who noted that the police had even said the senate president needed not appear in person, added: “This is an opportunity for Saraki to clear his name of all the allegations of sponsoring cultists as thugs and having a link to the Offa robbery.

But another lawyer, Tunde Jimoh, appealed the public to stop politicising the matter and allow the police to conduct their investigation.

“Nigerians must allow the police to do a thorough finding. They must stop the different protests and distractions on social media. Enough of interference from the external forces; there is no need to mount pressure on the senate president and the Nigeria Police in order not to complicate the matter.”

For Funsho Aina, another legal practitioner, said: “It is still an allegation for now and he is not yet found guilty. The best for him (Saraki) is to honourably make his statement on the matter available before it turns to another thing.

“If there is the need for him to step down from his post as senate president to clear his name, he can do so for the sake of his integrity and that of the National Assembly,” Aina said.

The Ilorin Emirate Descendants Progressive Union (lEDPU), a soicio-cultural organisation, however, described the police action as “a calculated attempt to tarnish the image of the senate president.’’

Patients besiege Sokoto hospitals as JOHESU resumes work

P

atients are trooping to hospitals in Sokoto State following t h e re s u m p t i o n o f w o rk by members of the Joint Health Sector Union (JOHESU).

Normal healthcare ser vices have been restored as the aggrieved unionists resumed normal duties after a protracted industrial action that began on April 17. JOHESU members heeded the directive of their national secretariat to

suspend the strike. Muhammad Gold, the chairman, Senior Staff Association (S SA), Usman Danfodio University Teaching Hospital (UDUTH) branch, said that the state chapter had complied with the resumption order.

Gold explained that the state members resumed work after a congress meeting attended by all the leadership of the association to review developments affecting their members.

“ The congress envisaged victor y over JOHESU agitations and demands were certain.

“A committee that constitutes the Chief Justice of Nigeria, the Attorney General, director of Department of State Service and JOHESU leadership, was initiated to solve the problem, which the JOHESU leadership trust will do justice with the problem on ground,” he said.

29

BUSINESS DAY

Thursday 07 June 2018

GARDEN CITY BUSINESS DIGEST Adroit Landstyle battles through, delivers 1,800-seater world-class integrated cultural centre in PH •••Gov Wike wants private experts to manage the multi-billion naira centre IGNATIUS CHUKWU

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onny Street in the Old Port Harcourt Township could become a new centre for global attention and a Mecca of cultural activities because an international construction company, Adroit Landstyle Limited, has delivered what many say is the best cultural centre, an integrated theatre, with world class standards.

The Rivers State Cultural Centre which was unveiled on Saturday, June 2, 2018, was renamed Rex Lawson Cultural Centre. It is said to be the best in Sub-Sahara Africa with state-of-the-art ultra-modern facilities and equipment posed several challenges to the contractors, stretching from 18 contract months to almost eight execution years. Yet, Landstyle was said to have persisted and demonstrated huge faith that the centre would come to reality one day. The Tourist Beach for which that part of the Garden City is famous is next door to complement the leading role of that part of Town as the leisure section of Port Harcourt.

Some of the teething challenges that attempted to scuttle the multi-billion naira project are said to include youth restiveness, violence, payment politics (difficulties), delay in project execution, hike in Dollar rates and outrageous cost increases, and loss of guarantees from manufacturers due to delays.

According to the president and founder of Adroit Lanstyle, the Otunba, Dejo Olawoyin,

the greatest challenge was what he called payment politics that stalled the project for years till the present administration came in to re-fire interest in the special project. He said the Dollar exchanged for a mere N150 when the project was awarded in 2010, but by 2016, the Dollar was N525.

“This made matters worse because even some variations that were approved for us were swallowed up before they were approved. Inflation was galloping per month to almost 20 per cent. This has affected us badly.”

BusinessDay found that the project began at about N1.04Bn in 2010 but may have gulped far above N2.2Bn to get it to a successful completion.

The parties are said to still be working out final cost of the highly impactful project due to new things added to make it truly world class and efficient.

According to Adroit managers, the area where the project is located had perceptions of restiveness and violence.

“We had to hold many meetings with community persons to solicit for their cooperation.

We tried to let them know the enormous benefits of the Cultural Centre located in their midst. They seemed to buy the idea. So, they offered us huge cooperation and the area became the least in restiveness in the whole of the Niger Delta.

We enjoyed their support. I fell back on my experience in working in the Niger Delta for Shell.”

Payment, he said, was an issue. The Otunba said: “We had to fall back on our bankers and other supporters to

cushion the effect. This project proved to be the most difficult in terms of payment schedules.

Delays made construction difficulties worse because most of the items imported lost their guarantees for staying on the ground for years. The project life was to be 18 months but it lasted for eight years. Some of the things manufacturers fit in to serve on short term basis had to stay there for years. These caused a lot of difficulties.”

Adroit, established in 1998, is said to have played a major role in the economic development of Nigeria by carrying out a myriad of mega projects of social infrastructural construction, real estate, housing projects and facility management. The company with offices in Dubai (UAE), Houston, and Texas (USA) for the construction of buildings,

road and social infrastructure development is said to have ridden on the back of their unique technology as well as accumulated experiences to their success, thus contributing to the enhancement of the nation’s construction and engineering ability.

The Adroit founder hinted that a turning point in the mega-project emerged when Gov Nyesom Wike came on the scene in 2015 and soon revisited the important project. “Wike did not play politics with the project or in money.

The moment we were able to explain the critical importance of the project and benefits to the people, the government and the economy, he approved re-start and has supported us to the end. I must say he is one of the best governors I ever worked for.

He is an asset to his people.

We do not play politics and it helped our company. We are professionals.”

On the benefits already hanging to be plucked include the fact that the Centre is world class and many foreigners that have inspected it say it can well take an orchestra performance, the only place that can handle that in Nigeria due to perfect acoustic management. “Any contractor could have cut corners but we are using this to show what Nigerians can do when they want to.”

He went on: “We must say that project abandonment is very bad. In all my experience in project execution in the US, I have never seen an abandoned project there. Even in your personal projects, the contractors would insist on bank statement and guarantees as condition for starting a proj-

ect. It is a waste of resources to start a project and abandon it; the funds are trapped and the project is not in use. It is better to have the entire money down before starting any project.

That is the American standard. Of a truth, Nigeria is rich enough to lead the world if the resources are harnessed.”

Speaking at the unveiling of the Centre, Gov Wike said he did not award the initial contract but worked hard to get the contractor to resume construction work because of the enormous benefits that the centre holds. “There will be urban renewal around this neighbourhood where the centre is located. We have reconstructed Creek Road and we will develop other facilities to beautify this area”, he said.

The project which was commissioned by the Ooni of Ife, Oba Adeyeye Enitan Ogunwusi, on Saturday, is a facility for the promotion of culture, arts and tradition. The Ebonyi State Governor, David Umahi, who graced the occasion, commended Governor Wike and promised to replicate the centre in Ebonyi State.

The Ooni of Ife appealed to the Nigerian leaders to set aside politics of bitterness and destruction and focus on service to the people. “Today, I am very proud to be associated with Mr Projects, the governor of Rivers State for the love he has for his people. I want other governors to learn from him”.

Rivers State Commissioner for Culture and Tourism, Tonye Oniyide said the Rex Lawson Cultural Centre is the best on the continent. She said that it has state-of-the-art facilities.

Rex Lawson Centre: Dimensions of excellence

Port Harcourt by Boat With IGNATIUS CHUKWU

G

ov Nyesom Wike on Saturday, June 2, 2018, unveiled what has been acclaimed as the best Cultural Centre in SubSahara Africa. The governor seemed overjoyed when he stepped into the imposing arena with top dignitaries including the monarch from the seat of culture, Ooni of Ife, as well as the governor of Ebonyi State.

Before the D-Day, ‘Port Harcourt By Boat’ had paddled through the nearby rivers into the long street called Creek Road by now renamed Patience Jonathan Road, to behold the imposing edifice that would host concerts, cultural perfor mances, shows, even orchestra.

The project manager, Lanre Alawode, ever agile, was on hand to explain the technical details. Olawode has among other certificates a degree in quantity surveying from the UK. He had worked in many parts of the world, but he said he was yet to see anything that beat the beauty sitting on Bonny street. “In all my working around the world, I am yet to see an event centre of this magnitude. It is one

of the best in Sub Sahara Africa. The only one close to it is the Muson Centre in Onikan, Lagos. This is a three storey facility; ground layer of seats, fist floor seats and second floor VIP seats.”

He went on: “ This facility was built by Adroit Landstyle Limited, and no company has delivered a better and bigger event centre around Nigeria. It delivers on standards; yet, it is an indigenous company.

This project was warded in May 2010 (by the Chibuike Amaechi administration) but actual work started in January 2011. It was however abandoned after roofing stage because of funding headaches. We resumed in January 2018 and ran with it to this moment of being ready for commissioning”.

He said this project is rated as a world class facility. “Every item here is carefully manufactured and most of it is from the UK, US, and other reliable nations. It has world class items. Stage: It is designed by UK experts with sound, lighting and projections fully considered.

All items were designed for us with this in mind.’

Next is the floor of the stage which he said was measured with effective eye contact considerations. “In fact, Wole Soyinka visited and his experience and tips.

Acoustic effects were highly considered in most sections. It has acoustic ceiling, acoustic panels, droppable curtains to cover from top to floor to give enough dark effect, etc. The stage alone is 180 square meters to accom-

modate any size of cast. ‘ He said it has integrated air-conditioning system ; split unit system, central cooling system, and standing systems (in the passages). The essence is that the inside would be like the best anywhere in the world; cozy, neat, spacious, comfortable.”

Explaining the segments, he said the auditorium takes 1,800 s eats in the three floors. There are five conference halls each with a minimum of 50-seat space, some overseeing the rivers and the busy street now named Patience Jonathan Street. “It has two 400 KV generators to power the entire complex. It has Governor’s lodge, projector room, etc.

On revenue capacity, he said: “It is a multi-functional

facility that can take any event and conferences including stage acting and cinema, plays, government events, functions, convent i o n s, m e e t i n g s, s h ow s, dance, and all life performances including housemate performances. It is designed to generate huge revenues, but it needs to be heavily promoted so people around the country and beyond would know the kind of facility that is now in Rivers State and in this section of the Garden City. Management and maintenance are up to the clients, the Rivers State Government, but this place with these top class e q u i p m e nt a n d ga d g e t s needs careful handling and maintenance schedule for it to be in top fitness from year to year.

Thursday 07 June 2018

C002D5556

BUSINESS DAY

31

Live @ The Stock Exchange Top Gainers/Losers as at Wednesday 06June 2018 GAINERS Company NB

LOSERS Opening

Closing

Change

Company OKOMUOIL

N111.3

N116.8

5.5

N95

N99.75

4.75

CCNN

N34.75

N38

3.25

DANGCEM

N228

N230

2

FLOURMILL

N31.15

N32.95

1.8

GUINNESS WAPCO

Market Statistics as at Wednesday 06 June 2018

Opening

Closing

Change

N84

N82

-2

N28.95

N28

-0.95

MAYBAKER

N2.65

N2.54

-0.11

GUARANTY

N42

N41.9

-0.1

ASI (Points) DEALS (Numbers)

393,121,337.00

VALUE (N billion)

6.674

MARKET CAP (N Trn

…Year-to-date returns turn positive at 0.50% Stories by Iheanyi Nwachukwu

H

Plc, and Diamond Bank Plc. The All Share Index which closed Tuesday June 5, 2018 at 37,854.92 points increased to 38,435.29 points on Wednesday June 6, 2018.

The ASI was 36,816.29 points at this week open.

Nigerian Breweries Plc stock price rallied most by N5.5 or 4.94percent, from N111.3 to N116.8; Guinness Nigeria Plc stock price rose from N95 to N99.75, up by N4.75 or 5percent; while

5,285.00

VOLUME (Numbers)

Investors gain N580bn in three days as Nigerian stocks extend advance

ope for more money may have been the theme in trading on Nigerian Bourse Wednesday as stocks extended advance and investors booked N586billion gain in three day.

Led by gains in largely capitalised stocks, the Nigerian Stock Exchange (NSE) All Share Index (ASI) pushed higher yesterday after dipping into negative territory last week.

The Year-to-Date (YtD) returns currently stands at +0.50percent. The value of listed equities on the Bourse increased to N13.922trillion from week-open level of N13.336trillion as stock traders in 5,285 deals exchanged 393.121million units valued at N6.674billion.

Actively traded stocks include Zenith Bank Plc, Fidelity Bank Plc, United Bank for Africa Plc, Access Bank

38,435.29

that of Lafarge Africa Plc increased from N34.75 to N38, up by N3.25 or 9.35percent.

Other stocks that appreciated in price include Dangote Cement Plc which gained N2 or 0.88percent, from N228 to N230; and Flour Mills Nigeria Plc which gained N1.8 or 5.78percent, from N31.15 to N32.95.

On the loser table, Okomu Oil Palm Plc recorded the biggest loss, from N84 to N82, down by N2 or 2.38percent.

Cement Company of Northern Nigeria Plc followed after its share price declined by 95kobo or 3.28percent, from N28.95 to N28; while May & Baker Nigeria Plc stock price lost 11kobo or 4.15percent, from N2.65 to N2.54.

Guaranty Trust Bank Plc stock price lost 10kobo or 24percent, from N42 to N41.9; while that of NPF Microfinance Bank Plc decreased from N1.69 to N1.61, down by 8kobo or 4.73percent.

13.922

Stanbic IBTC wins best sub-custodian in Nigeria for 8th consecutive year

S

tanbic IBTC Bank’s experience, competence and expertise in the provision of custody services in Nigeria has again been reaffirmed as the bank was named the “Best Sub-Custodian” in Nigeria for 2018 by Global Finance magazine.

The London-based Global Finance magazine, organiser of the awards, announced winners for the 16th edition of the annual World’s Best Sub-custodian Banks following selection from across seven global regions and more than 80 countries.

The latest win makes it the eighth time in a row that Stanbic IBTC Bank will be adjudged the best in the country, in recognition of its leadership in the sector.

Demola Sogunle, Chief Executive, Stanbic IBTC Bank stated that winning the award consistently for the last eight years, reinforces the bank’s strong management, systems and innovative solutions, and its leadership of Nigeria’s custody sector.

“We are delighted to be recognized for the eighth time as the best provider of custody services in Nigeria. It is a demonstration of our strength in terms of our management, systems

and solutions. This award will energize us to continue to provide unparalleled services to our customers as we raise the bar in the provision of investor services,” Sogunle said. “The need for excellent custody services in Nigeria remains strong, driven by the impetus in cross-border investment activities, and we are well positioned to provide such services,” Sogunle added.

The yearly award, instituted 16 years ago, recognizes the pivotal role subcustodians play in business and investment activities via the safekeeping of clients’ assets, such as bonds, stocks and treasury bills.

Winners are selected by Global Finance magazine’s editors and reporters, with input from expert sources, from among institutions that reliably provide the best custody services in local markets, regions and to global custodians.

The criteria used, according to Global Finance, included technology platforms, competitive pricing, customer relations, smooth handling of exception items, technology platforms, quality of service, post-settlement operations, business continuity plans and knowledge of local regulations and practices.

Seplat assures shareholders of better returns on investments

S

eplat Petroleum Development Company Plc (Seplat) is committed to improving shareholders returns-on-investment (RoI), as the company’s 2017 annual report and accounts demonstrated Seplat’s resilience in difficult times.

The leading Nigerian independent oil and gas exploration and production company held its 2017 Annual General Meeting (AGM) on Wednesday June 6, 2018 in Lagos.

The company’s strategy to diversify and grow sources of income through the expansion of its gas business continues to gain momentum.

Seplat moved into 2018 on a substantially firmer operational and financial footing compared to a year

ago and have a high-quality portfolio that offers a material and predictable production base combined with a large inventory of production and development drilling opportunities the company plans to capitalise on.

Seplat, which was impacted by disruptions to its export routes resulting in an extended force majeure at the Forcados terminal, however, announced a return to full year profitability in 2017.

Seplat is listed on the Premium Board of the Nigerian Stock Exchange (NSE) with Market Capitalisation in excess of N435.448billion as at Wednesday June 6, 2018 and stock priced at N740.

The company’s profit before tax (PBT) for the year stood at $44 million and reflected the return to profitability in the third and fourth

quarters where net quarterly profit before tax (PBT) of $24 million and $46 million respectively offset the $26 million loss before tax recorded at mid-year.”

Seplat’s gas business made a record contribution with revenues of $124 million, which accounted for over 27percent of Seplat’s total revenues. Gas revenue grew $18 million in 2013 to a record $124 million in 2017.

Although global oil prices remained volatile in 2017, with Brent starting the year around the $55 per barrel level and trading down to a low of around $45 per barrel mid-year before, recovering steadily thereafter to exit 2017 at the $67 per barrel level, average daily productions rose considerably with the company’s average working interest production now

standing at 36,923 boepd representing an overall increase of 43percent year-on-year.

“I am pleased to report that Seplat made a return to full-year profitability in 2017, registered strong cash flow performance and significantly strengthened the balance sheet. In a year of contrast, we were plagued throughout most of the first half by force majeure at the Forcados terminal. Our proactive and decisive management coupled with the strong underlying fundamentals of the business have seen us emerge from an exceptionally challenging period a much fitter and stronger business that is well equipped to deliver longterm value for our shareholders,” said Austin Avuru, CEO, Seplat said at the meeting.

As usual, gas was a key revenue driver underlining

Seplat’s gas domestication strategy and demonstrating the robustness of gas as a key source of growth and diversification, as well as delivering a much-needed reliable supply of gas to the Nigerian power sector.

Early in 2017, the company completed and commissioned the Phase II expansion of its Oben gas processing hub, which added a further 225 MMscfd of processing capacity to take total capacity at the Oben plant to 465 MMscfd. Together with 60 MMscfd capacity at the Sapele plant Seplat now operates 525 MMscfd of gross gas processing capacity.

In his comments on the company’s return to profitability, ABC Orjiako, Chairman of the Board, Seplat Petroleum Development Company Plc emphasised

the contribution of gas to overall growth and profitability “I am pleased to report that in 2017 we made good progress as we reviewed our vision, mission and strategy towards refocusing the Company on our key priorities: to de-risk future cash flows through diversification of oil export routes; invest in and scale up our domestic gas business; maintain a liquidity buffer while continuing to reduce debt; keep tight financial control with discretion in spending; and position Seplat with a stabilised platform for sustainable growth even in a harsh operating environment”.

“Our strategy to diversify and grow our sources of income through the expansion of our gas business continues to gain momentum,” he said.

32 BUSINESS DAY NEWS Nigeria’s hope for national shipping line dashed as Singaporean partner withdraws AMAKA ANAGOR-EWUZIE

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here are indications that Nigeria’s ambitious stride to establish a national shipping line to fly its flag in the near future has hit the rocks.

This is as Pacific International Line (PIL), a Singaporean consortium that signed memorandum of understanding (MoU) with the Federal Government to float the shipping line, recently, withdrew its intention to be partner in the business.

In 2016, the Federal Government signed a Joint Venture (JV) partnership with PIL, on shareholding of 60:40 for the establishment of national shipping line. The 60 percent equity share was to be held by a group of indigenous shipping firms that are yet to be selected, while the remaining 40 percent shares go to the foreign firm.

Two years after the MoU was signed, Nigeria has failed to bring the establishment of the much talked about national shipping line to a reasonable stage, apparently due to the failure of government to select a consortium

of local shipping firm that are qualified to be part of the new shipping line.

BusinessDay understands that since the demise of the foremost Nigerian National Shipping Line (NNSL) in the 90s, Nigeria has not owned any ocean-going vessel flying her flag in foreign nations and also benefiting from the nation’s lucrative shipping business.

Therefore, it is expected that the floating of the shipping line would help Nigeria domesticate over N2 trillion annual losses to capital flight, following the domination of Nigeria’s shipping business by foreign shipping companies.

Reacting to this, Hassan Bello, executive secretary, Nigerian Shippers’ Council (NSC), said recently that the plan to establish the national shipping line was still on and the government had many options to achieve that, which PIL of Singapore was one.

Bello, who is the chairman of the committee on Establishment of National Shipping Line, said though establishing a national fleet was not cheap, but the ini-

tiative was being vigorously pursued.

“We are moving forward.

The committee is working day and night to ensure we have a national fleet. We have to involve banks, insurance companies and the flag administration. We have to look at the policies and laws to be changed, such as changing our crude oil trade policy from free on board (FOB) to Cost, Insurance and Freight (CIF) and many others things including issues around ship building and ship repair yards,” he said.

On why PIL left the MoU, Greg Ogbeifun, president, Ship Owners Association of Nigeria (SOAN), also complained that the current Nigeria’s fiscal policy stipulating that ship owners bringing ships must pay a duty charge of 14 percent out of the total cost of the vessel to the Nigeria Customs Service (NCS), was a major reason the foreign partner withdrew.

PIL pulled out because the Nigerian Fiscal Policy on importation of vessel does not make establishment of shipping fleet competitive in global trade, Ogbeifun confirmed.

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South-South governors demand 13% component of $1bn security fund SAMUEL ESE, Yenagoa

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overnors of the SouthSouthstateshavedemanded 13 percent component of the $1 billion being withdrawn from the Excess Crude Account to fight insecurity, and have also taken a firm stance on the need for restructuring, true federalism and devolution of power.

Chairman of the South-South Governors’ Forum and Governor of Bayelsa State, Henry Seriake Dickson, disclosed these when he briefedjournalistsontheoutcome of the crucial meeting in Port Harcourt,RiversState,onWednesday.

Dickson said all the governors agreed to back the growing calls across the country for restructuring and the urgent need to return thenationtoitsfoundingprinciple of true federalism.

AstatementbyFidelisSoriwei, special adviser to Governor Dickson on media relations, quoted him as saying that the forum also agreed to support the calls for devolution of power due to the excessive concentration of power at the centre.

He stressed the need for the strict adherence to the constitutional provision of 13 percent derivation, even as the governors were not opposed to the Federal Government decision to spend funds to strengthen the national security, including in the zone.

According to Dickson, the governors resolved to oppose the recent bill on management of water resources, which they described as offensive and obnoxious, and work across party lines

on issues of collective concern to communicatetheirpositiontothe relevant authorities.

He said the governors were unanimous in opposing the idea ofacentralisedcontrolofwaterresources, as the nation was already contendingwithissuesassociated with over centralisation of power in the country, and called for immediate withdrawal of the bill.

He said, “First of all, everyone is aware of the ongoing clamour for devolution of power and a return to the essential founding principles of this country. And we in our meeting resolved as we have been speaking individually over time that we associate fully withtheclamourforrestructuring, true federalism and devolution of powersthataresoconcentratedat the centre to the federating units.

“And we have agreed to support the ongoing moves in that direction by working with likeminded Nigerians who mean well for our country so that we can all have a stable prosperous and peaceful nation.

“Secondly,wetookacollective viewanddecisionthatwithregard to the Federal Government efforts to withdraw one billion dollars from the Excess Crude Account fornationalsecurityexpenditures, our position in this zone is that in line with the constitutional provision on derivation, while we have no objection to the Federal Government spending on national security including the security of this zone, we believe, that the constitutionalprovisionon13percent derivation should be applied and fully respected.

Thursday 07 June 2018

Anambra/Enugu governments to resolve boundary dispute EMMANUEL NDUKUBA, Awka

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overnor Willie Obiano of Anambra State has assured of speedy resolution of Awba-Ofemili/Ibite-Olu boundary dispute.

The governor, who was represented by his deputy, Nkem Okeke, said on Wednesday that the National Boundary Commission would soon establish final demarcations at the boundaries.

Obiano and deputy governor of Enugu State, Cecilia Ezeilo, visited the disputed area between Awba-Ofemili of Anambra State and Ibite-Olo of Enugu State.

The duo pleaded for lasting peace and explained that it was unlawful to kill and destroy properties as these hinder development.

“Our coming here is to show concern over the killings and misunderstandings witnessed in the area. The land is for you to use for your farming and other purposes, and not for killings and kidnap,” they said.

Obiano thanked the police and other security personnel deployed to the area to maintain peace.

Ezeilo called on the residents of the area to live harmoniously even after the final demarcations had been effected, and reminded them that government had the right to acquire the land for public use in line with the Land Use Act, if they fail to resolve the dispute.

Thursday 07 June 2018

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US facilitates drone tech workshop for Nigerian students, women

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nited States Consulate General Lagos in collaboration with Baltimorebased Global Air Media, on Tuesday concluded a two-day drone technology workshop for students and women STEM leaders.

The training was held at the Cedar STEM & Entrepreneurship Hub, and American Corner at Co-Creation Hub (CCHUB), both in Yaba, Lagos, on Monday and Tuesday, respectively. A team of three drone experts led

by Global Air Media co-founder Eno Umoh facilitated the series of workshops.

Thirty elementary and high school students were coached on the basics of building a drone from the scratch, as well as the requisite skills for piloting and landing an unmanned aerial vehicle (UAV).

In addition to the students’ seminar, thirteen female STEM leaders were mentored on the evolving technology needs of the 21st century, particularly in the fields of real estate and construction, cinematography, as well as humanitarian and emergency

response.

Public affairs officer, US Consulate Lagos, Darcy Zotter, explained that the handson workshop was designed to stimulate the interest of the participating students in math and science, as well as careers in the STEM fields.

“STEM enables us to find solutions to some of the most pressing issues of today such as alternative energy or even food security. Creating inventions to solve global challenges can be a catalyst for a country’s economic development,” Zotter said.

According to her, the U.S. Mission in Nigeria has funded a number of projects to increase STEM education in different parts of the country. Whether at home or abroad, she added, promoting STEM education is a top priority of the U.S. government.

“Last March, we hosted a 16-member delegation of senior women technology executives and professionals from Silicon Valley, California. The visiting delegation held a mentoring program for over 70 Nigerian female STEM leaders.

Preparation in top gear as Osinbajo visits Edo to kick-start various schemes

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ontractors handling the construction of the Benin Technology Hub and the preliminary work at the site of the 1,800 housing-unit Emotan Estate are working round the clock to deliver the projects on schedule, preparatorytothevisitofVicePresident Yemi Osinbajo to Edo State.

The Vice President’s June 14 visit will see him commission the first Benin Innovation Hub, which will host over 25 ICT companies for training of both young and old Edo people and residents on various ICT-based skills.

During an unscheduled visit to the remodelling work at the Institute of Continuing Education (ICE), in Benin City, which is being converted to the tech hub, Edo State governor, Godwin Obaseki, said he was pleased with the pace of work at the site.

“The facility will be commissioned by the Vice President of Nigeria, Professor Yemi Osinbajo, and over 25 companies will use this innovation hub for different forms of training and certification,” the governor said.

He disclosed that his administration had received solicitation from major global technology

companies that had indicated interest in the innovation hub.

Osinbajo will also perform the groundbreaking ceremony to kick-off the construction of 1,800 housing-unit Emotan Estate, a joint venture project of the Edo State government and MIXTA Africa, located in IkpobaOkha Local Government Area.

The project, according to Obaseki, was conceived to boost the state’s housing stock and assured that on completion, the houses will be affordable.

Also on the itinerary of the Vice President is a facility visit to the 450 Mega Watts Edo-Azura Power project in the state, a project that hasreceivedpositivereviewsbythe World Bank and its development partners as well as international andlocalactorsinthepowersector.

The Social Investment Programme (SIP) of the federal government will receive a boost during Prof. Osinbajo’s visit, as the vice president would hold a town hall meeting with beneficiaries. He is also expected to host the South-South tech community, where five start-ups will be picked after they pitch their ideas to a team of investors.

L-R: Adeyemi Dare, chairman of CreditRegistry, after his induction as honorary member of Institute of Directors Nigeria (IoD); Jameelah Sharrieff-Ayedun, managing director/ CEO, and Chris Okunowo, first-vice president, Institute of Directors Nigeria, after the induction ceremony of new members in Lagos.

‘Signing SLA with OPTS to transform oil, gas industry’ Only 20% of young OLUSOLA BELLO

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takeholders in oil and gas industry say the signing of Service Level Agreement (SLA) between the Nigerian Content Development Board (NCDMB) and the Oil Producers Trade Sector (OPTS) will transform the Nigerian oil and gas industry.

According to them, apart from the fact that it is aimed at shortening the contracting circle, it will also boost investors’ confidence in the oil and gas market, thereby ushering in the introduction of a set of new players.

Osagie Osunbor, managing director of Shell Petroleum Development Company, in reaction to the development, says it is a good thing that it is happening now, adding that the problems with contracting cycle is that it leads to high cost of contracts in the industry.

So, signing this agreement will go a long way to help the industry, Osunbor says, noting that contractors have to hedge in order to curtail cost in the industry.

Also supporting the view of the Shell managing director, Godwin Izimor, group managing director of MG Vowgas Group,

N/Assembly resolution: PDP asks Buhari to resign OWEDE AGBAJILEKE, Abuja

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ational chairman of the People’sDemocraticParty (PDP), Uche Secondus, has called on President Muhammadu Buhari to resign immediately.

Reacting on the Tuesday’s resolutions of the National Assembly threatening to invoke their constitutional powers on the President if a number of constitutional infringements are not quickly addressed, Secondus said there was no further confirmation to the fact that the President was presiding over a collapsed administration.

In a statement on Wednesday signed by his media adviser, Ike Abonyi, the PDP national leader said thepositionof the parliament

reflected clearly that of a cross section of Nigerians.

He contended that even though the position of the legislators was delayed, given the damage already done to democracy and the country by the Buhari administration, the lawmakers still deserved commendations for standing up for democracy and rule of law.

“Evidence abound globally that by parliamentary powers the resolution of the National Assembly means that the people have lost confidence in the President and he should quit.

“We in the opposition have been saying it that this government has no direction and does notmeanwellforthecountry,”the statement read.

Thepartycalledonallloversof

democracy to queue behind the National Assembly at this critical time and put pressure on the President to leave the stage to save the nation’s democracy.

He said the present government had exhibited all traits of a failed administration and did not need to wait for the parliament to give it a quit notice.

“Historyisawitnessthatwhen agovernmentisbereftofideasand still wants to cling on to power, it resorts to use of brute force, intimidation and harassment of opponents, a quality we have seen very blatantly in this regime,” he said.

He therefore urged the National Assembly to quickly invoke their powers on the President to avertfurtherbruisestothenation’s democratic advancement.

lauds the development, stating that it is a huge milestone in the Nigerian oil and gas industry, while also commending the innovation of NCDMB, NNPC and OPTS. According to Izimor, the agreement will reduce a lot of risk associated with contracts and will also engender confidence from banks, as they can freely support oil and gas investment because of quicker return on investment (ROI).

This, he says, will also significantly improve the Nigeria content in line with the Nigeria Oil and Gas Industry Content Development (NOGICD) Act and also terminates the unnecessary bureaucracy experienced in the oil and gas sector.

Long contracting cycles, which sometimes run into several years, undermine efforts by the Federal Government to close the infrastructure gap in the oil and gas sector as regards the provision of pipelines, refineries, storage facilities, among others.

Experts in the industry say about N18 trillion ($50bn) is required to close the gap. They list some of the causes of the long tendering process as lack of an effective strategic plan for a tendering system, inappropriate and bureaucratic

tendering process, unscheduled tendering of a huge number of projects by both public and private sectors, failed projects and low quality of project output.

The oil and gas sector is significantly hit by a lack of investments coupled with a huge infrastructure gap that requires trillions of naira to close.

The NCDMB and OPTS, the umbrella body of major international and indigenous operating oil companies in Lagos signed a SLA aimed at shortening the often protracted industry contracting cycle.

The SLA commits the 28-member OPTS companies to comply with the provisions of the NOGICD Act, essentially to submit to the NCDMB documents like their Quarterly Job Forecasts, Nigerian Content Plans, Bidders Lists, Nigerian Content Evaluation Criteria, Nigerian Content Technical Bids, among other relevant information in relation to industry contracting and procurement cycles.

On the other hand, the board pledged to respond on specific timelines and committed that should it fail to meet the set deadlines, the companies can proceed with their tendering processes after duly informing the Board.

Senate asks defence minister to withdraw comments urging Benue, Taraba to suspend anti-open grazing laws OWEDE AGBAJILEKE, Abuja

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enate on Wednesday asked Mansur Dan-Ali, minister of defence, to withdraw his statement calling for the suspension of antiopen grazing laws in Benue and Taraba states.

The upper legislative chamber believes the antiopen grazing laws passed by the two state assemblies are in line with provisions of the 1999 Constitution.

This followed a motion moved by Barnabas Gemade (APC, Benue State). Rising

on a Point of Order, Gemade submitted that the minister’s order would not only lead to anarchy but also contravened the Land Use Act, which vested the powers of control over lands on the state governors.

On Tuesday, Dan-Ali asked Benue and Taraba states to suspend the antigrazing laws as a means of stemming the tide of farmers and herdsmen clashes.

The defence minister made this call during a briefing at the end of a Security Council meeting at the Presidential Villa, Abuja.

people treated for anxiety stay well

MIKE OCHONMA

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esearchers have found that only 20 percent of young people diagnosed with anxiety will stay well over the long term, no matter the treatment they get.

The study, published in the Journal of the American Academy of Child and Adolescent Psychiatry, examined 319 young people aged 10 to 25 who had been diagnosed with separation, social, or general anxiety disorders.

According to Golda Ginsburg, co-author from the University of Connecticut, US, “When you see so few kids stay non-symptomatic after receiving the best treatments we have, that’s discouraging.”

The researcher has suggested that regular mental health checkups may be a better way to treat anxiety than the current model.

For the study, the participants received evidence-based treatment with either sertraline or cognitive behavioural therapy or a combination of these two, and then had follow-ups with the researchers every year for four years.

The follow-ups assessed anxiety levels but did not provide treatment.

Other studies have done a single follow-up at one, two, five, or 10 years out, but those were essentially snapshots in time. This is the first study to reassess youth treated for anxiety every year for four years, the researchers said.

The sequential follow-ups meant that the researchers could identify people who relapsed, recovered, and relapsed again, as well as people who stayed anxious and people who stayed well.

They also found that about half the patients relapsed at least once, and 30 per cent were chronically anxious, meeting the diagnostic criteria for an anxiety disorder at every follow-up.

Females were more likely to be chronically ill than males, the researcher said.

34 BUSINESS DAY NEWS

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FG recovers N30bn from VAIDS

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he Federal Government has recovered about N30 billion from individuals and corporate establishments through the tax amnesty scheme or the Voluntary Assets and Income Declaration Scheme (VAIDS).

According to the Chairman of the Federal Inland Revenue Service (FIRS), Babatunde Fowler, 90 percent of the amount was collected by the FIRS, while the remaining 10 percent was recovered by the States.

Fowler, who is also the Chairman of the Joint Tax Board, stated that the national taxpayers’ da-

tabase had increased from 14 million in 2016 to over 19 million in 2018.

He expressed optimism that the number would translate into a positive growth in the country’s Tax Revenue to GDP ratio.

He commended many States of the federation whom he said have achieved significant success in implementing the tax declaration policy, and urged the various tax administrators to adequately educate, enlighten and sensitise taxpayers to be fully alive to their tax obligations. The Federal Government has also approved the issuance of a Declaration Certificate

to taxpayers The Declaration Certificates, which was approved by the Minister of Finance, Kemi Adeosun, are to be given to taxpayers who voluntarily declared their previously undisclosed assets and income.

Fowler unveiled the VAIDS D e c l a ra t i o n C e r t i f i c a t e o n Wednesday in Abuja at a Workshop organised for chairmen of States’ Inland Revenue Service.

Fowler disclosed that the certificate was customised for each State tax authority with several security features and would be issued to the taxpayers upon submission of their declaration forms.

L-R: Eric Fajemisin, chief executive, Stanbic IBTC Pension Managers Limited; Bola Onadele. Koko, managing director/CEO, FMDQ OTC Securities Exchange (FMDQ); Justine Leigh-Bell, director, market development, Climate Bonds Initiative (CBI); Evans Osano, director, financial markets, FSD Africa; Tumi Sekoni, associate executive director, capital markets, FMDQ, and Olumide Lala, Africa Programme manager, CBI, during the issuers roundtable ahead of the Nigerian Green Bond Market Development Programme launch, hosted by Access Bank plc in Lagos, yesterday.

In search of South - West votes, Buhari...

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due consultations, the Federal Government has decided that henceforth, June 12, will be celebrated as Democracy Day”, the president wrote on his verified twitter handle and corroborated with an official press release from the government.

Previous governments since Nigerians return to democracy in 1999, have stoutly refused to recognise June 12 as Nigeria’s democracy day and have instead celebrated it on May 29th – the day the military disengaged from politics and the new democratic regime of former president Olusegun Obasanjo was installed.

However, South West states have continued to insist that Nigeria’s real democracy day is June 12 and have celebrated it since then.

The President’s statement avers that “in the view of Nigerians, shared by this administration, June 12th 1993 was far more symbolic of democracy in the Nigerian context than May 29th or even October 1st.

In another surprise move, the president has decided to give posthumous national awards to the late MKO Abiola, the presumed winner of the June 12 1993 elections, his running mate, Alhaji Babagana Kingibe – and most surprising of all, Chief Gani Fawehimni –

the late lawyer and civil right activist who the same Buhari jailed as a military Head of state in 1984/85 “Therefore, Government has decided to award posthumously the highest honour of the land, GCFR, to late Chief MKO Abiola, the presumed winner of the June 12th 1993 cancelled elections. His running mate as Vice President, Ambassador Baba Gana Kingibe, is also to be invested with a GCON. Furthermore, the tireless fighter for human rights and the actualisation of the June 12th elections and indeed for Democracy in general Chief Gani Fawehinmi, SAN, is to be awarded posthumously a GCON,” the statement said.

Reactions have naturally trailed President Muhammadu Buhari’s declaration of June 12 as Nigeria’s New Democracy, with some Nigerians welcoming the idea with mixed feelings especially coming at a time the country is preparing for another rounds of elections.

Yinka Odumakin, the secretary general of the Pan-Yoruba cultural and political organisation- Afenifere described it as a welcome development, as the progressives especially among the Yorubas have for long clamoured for it, but noted that it has everything to do with the forth coming elections.

“We know that another election is around the corner.

But in spite of knowing that this is about election, we welcome it because we have been clamouring for MKO Abiola to be recognised as Nigerian President having won the June 12, 1993 presidential election.

But the real test of June 12 will be seen in the February 2019 elections if it is allowed to be free and fair just as 1993 presidential in which Nigerian freely elected Abiola. If the people are not allow to free elect their leaders in 2019, then the declaration of June 12as democracy will be a mere gimmick to win election,” said Odumakin.

How reacting to the president move, the national Chairman of the advance party Yusuf Sanni, stated that the though Abiola contribution to the enthronement of democracy in the country was, but stressed that the presient should honour Abiola in another day.

Sanni said the president was desperate for his re-election ambition adding that it was obvious that the APC would lose because it has performed woefully in office.

“The president should have declared it in another day, though Abiola fight for democracy in the country he need to be honoured, but those it mean the essence of May 29 is not there. But I can tell you that the APC would lose because they have failed Nigeria”

Thursday 07 June 2018

Tinubu’s silence on Ambode’s 2019...

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Ambode.

Officials told BusinessDay on Wednesday that Tinubu’s silence was of concern and put those in government in an uncertain position to make categorical pronouncements on the governor’s ambition for 2019, since nobody knows exactly what “the political godfather’ has up his sleeves.

Tinubu’s silence is creating an air of uncertainty as officials’ tread with caution, as they await with trepidation, what they termed as the ‘formal endorsement’ of Ambode by Tinubu. Most political appointees and public office holders in Lagos hold allegiance to Tinubu, a former governor (19992007) who continues to dominate the political landscape of the state.

Officials who confided in BusinessDay said the incumbent governor himself is expecting the signal from Bourdillon before making a major statement on his ambition, though there have been moves including the constitution of committees to drive his second term project.

There have been endorsements of Ambode by several political, social and religious groups since the beginning of this year, but Tinubu, who is believed to have the party’s ticket in his pocket and gives to whoever he pleases, has maintained dignified silence.

So also has Ambode, even though the 2019 elections is now less than a year away.

This same scenario had played out in 2011 when Tinubu would not endorse the second term ambition of the former governor, Ba-

batunde Fashola, then under the platform of Action Congress of Nigeria (ACN), until four months to the election. That had also thrown up uncertain political atmosphere within the party in particular and the state generally.

But Tinubu eventually gave Fashola the go-ahead on January 5, for the April 26, 2011 governorship election, after a tense political climate, with rumours that Fashola was under pressure to leave for another political party if denied the ACN party.

“After wide consultations at home and abroad, state and national level, and with the power conferred on me as the leader of the party (ACN), I hereby endorse Babatunde Raji Fashola for second term in office,” Tinubu had announced.

“As a successor, he didn’t disappoint me and by my own assessment, he scored 85 per cent.

There is no reason a performing player should be substituted on the field of play. He remains the best man and should continue the job of state governor,” Tinubu said to the jubilation of party faithful at the Acme Road, Ogba, State secretariat of the party.

An official told BusinessDay that Tinubu may be playing the same game with Ambode, of whom he said “he has served well enough to earn continuity in office.”

Tinubu’s silence on Ambode has been compounded by the current cracks in the Lagos APC where long term allies of the godfather of Lagos politics are challenging his dominance of the political landscape.

Nigeria’s non-oil exports stage strong...

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dominate even though growing at a slower pace as it went up only 10 percent in the first quarter, earning the country N3.58 trillion or 76 percent of total exports for the period. Other oil exports also brought in additional N536 billion, up by 10.53 percent over the exports recorded in the last quarter of 2017.

Crude oil and other oil related exports therefore accounted for 85 percent of the country’s total exports in the first quarter of 2018, an indication that oil still remain the dominant source of the country’s dollar earnings.

However, analysts have noted that the sharp rise noticed in nonoil exports is good and should be sustained as it could indicate an increasing appetite by the real sector of the Nigerian economy for export earnings. Analysts also note that the weaker naira has not only discouraged imports but is also encouraging companies to start exporting goods to earn dollars.

The NBS report also showed indications of a slowdown in the country’s imports despite the rising exports, which is positive for the country’s balance of trade position, which closed positive in the first quarter.

Even though total imports grew by 19 percent to N2.52 trillion, there was a decline in major lines of imported items. Total value of agricultural imports was down 18.9 percent, solid mineral

imports also declined by 17.27 percent, energy imports was down 76.51 percent while the value of manufactured goods imports was down marginally by 1.65 percent in the same period.

The rise in exports and decline in the country’s import bill resulted in a trade in goods surplus of N2.17 trillion, which is a 21 percent growth when compared to the trade surplus recorded in the last quarter of 2017 but 221 percent increase compared with the same first quarter period of 2017.

The NBS also notes that the trade in goods surplus for the period is the sixth quarter in a role the country has had a trade in goods surplus and also the fourth consecutive quarter that there has been an increase in the trade in goods surplus.

This is also the first time in two years that the country trade in goods surplus has surpassed N2 trillion, according the NBS and this has been mainly driven by a strong growth in both oil and nonoil exports.

Total value of trade recorded for the period, including exports and imports stood at N7.21 trillion, 19 percent higher than the previous quarter but 35.1 percent higher than the same period of 2017. The first quarter trade figure is the highest since first quarter of 2016, an indication of how far the country has emerged from recession, even though many economists believe growth remains fragile.

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Thursday 07 June 2018

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APC crisis: Oki kicks against recognition of Tinubu-led faction

Imo guber aspirant pledges to empower youths, upgrade infrastructure

…Accuses Oyegun of destroying party JOSHUA BASSEY

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actional Chairman of the All Progressives Congress (APC) in Lagos State, Fouad Oki has kicked against the swearing in of Tunde Balogun as the chairman of the party in state.

Oki, who is the immediate past vice chairman central of the party in the state, staged a parallel congress of the party in the state, after accusing the party in the state of manipulating the ward and local government congresses to favour certain individuals.

But speaking in a statement to the media yesterday, Oki disagreed with the decision of John Odigie-Oyegun, national chairman of the party to sworn in Tunde Balogun, which according to him was against the decision of the national working committee of the party which had earlier cancelled the state congress in Lagos and set up a 5-man committee to investigate the crisis.

Oki expressed dismay in the manner Tunde Balogun was hurriedly sworn in by the chairman of the party, while accusing some members of the national working committee (NWC) of the party of being bribed to change their mind on their earlier decision.

“We members of the APC in Lagos State seeking for a truly internally democratised party as enshrined in the rule

L-R: Akin Oke, Oyo State chairman of the All Progressives Congress(APC), with John Oyegun, national chairman of the party, during Oke’s inauguration for a fresh term, at the party’s national headquarters, Abuja. Photo: Oyo State Governor’s Office.

of law, equity, fairness and justice are deeply concerned about the developments in the Chief John Odigie-Oyegun-led APC NWC and its rascality related to and following the purported swearing in of Tunde Balogun, as chairman of the Lagos State Chapter,” Oki said.

According to him, “Reports have reached us about events leading to the show of shame by Chief John OdigieOyegun and the disregard for the decision of the NWC meeting of Friday, June 1st 2018 to consider reports of congresses from states across the federation.

“We are concerned by allegations made by a member of the NWC at the instant meeting of bribery and compromise by some members of the NWC to subvert the rule of law and constitutionality of the congresses in Lagos State. We have also taken note of the shenanigan exhibited at the inauguration which further exposed how cheaply and weak some people can be when it comes to the matter of money and their conscience which played out at the inauguration ceremony”.

The factional chairmen further urged President Mu-

hammadu Buhari and Vice President Yemi Osibanjo to intervene and save the party from the impending problems which the action of the national chairman would cause the party, especially as the 2019 general election draws nearer.

“We call President Muhammadu Buhari and Professor Yemi Osibanjo and other leaders to join other well-meaning members of the party and direct Chief John Odigie-Oyegun and indeed the NWC to reverse itself as the action of OdigieOyegun was against the decision of NWC,” Oki said.

Police insists Saraki must come for interrogation over Offa bank robbery ...says he’s still under investigation STELLA ENENCHE, Abuja

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he Nigerian Police Force (NPF) has said the invitation to President of the Senate, Bukola Saraki to appear for cross examination over the April 5th bank robbery in Offa, Kwara State still stands .

The force said the number three man has a case to answer, even as they said there was no deadline for him to appear before the Intelligence Response Team (IRT) investigating the case.

Force Public Relations Officer (FPRO), Jimoh Moshood, an Assistant Commissioner of Police, who

made the position known at a briefing in Abuja, said withdrawal of invitation to Saraki did not emanate from them , hence should be disregarded.

He said principal suspects in the robbery incident, which left over 30

Bukola Saraki

people dead, claimed that they had been working as “political thugs” to Saraki, and the Governor of Kwara State, Abdulfatah Ahmed since 2003.

“The statement was not from us, that the invitation has been withdrawn, and that he was given a deadline of 48 hours.

“But, for everybody that is alleged of an offence, he must present himself to the Police.

“The Senate President was being invited to answer to all the allegations levelled against him from the confessions of the gang leaders here.

“As we speak, It is not until

you take somebody into custody before you investigate the person. Investigation is carried out even before the person is taken into custody.” “...the Senate President, Sen. Bukola Saraki is still under investigation in connection to the Offa bank robbery and the Nigeria Police Force will do everything possible within the ambit of the law to ensure that justice is done in this case”.

Jimoh added two additional suspects, had been arrested in connection with the crime.

He gave their names as: Alh. Kehinde Gobiri, and Alh. Oba Shuaib Olodolo.

INIOBONG IWOK

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governorship aspirant in Imo State, C h i k a Nw o ke d i has said he would initiate an empowerment programme for the youth of the state and upgrade dilapidated public infrastructure in each of the senatorial districts.

Nwokedi, who hails from Ideato and holds the title of ‘Okpoko of Obodoukwu’, stated this when he visited Umueleke community in Orlu Local Government Area to mobilise support for his governorship ambition, disclosing that he would set up machinery in motion to immediately begin an empowerment programme that would train youths on several vocational skills to alleviate the high unemployment among the youths in the state.

Nwokedi, who the president of Igbo socio-cultural group, Ndigbo Buru Otu Lagos, lamented the dilapidating infrastructure in Orlu and the entire Imo State, while promising to prioritise

the provision of infrastructure by setting up an agency that would build and maintain public infrastructure all-round the state.

“I am aware of the challenge that a lot of you face, after school no job and I am concerned. My administration would set up an empowerment programme that would train the youth and equip them with different vocational skills; everybody cannot go to school and we know that. We would also set up an agency that would work to fix roads in the state and maintain them”.

Earlier in the day, Nwokedi had paid a courtesy visit to the Commissioner of police in Imo State, Dasuki Galadanchi to inform him of his gubernatorial ambition.

Responding, the commissioner said having known Nwokedi for years as a man with high integrity and transparency, he was confident if he was voted as the governor he would transform Imo State, while assuring the gubernatorial aspirant of adequate security during his campaign in the state.

Why Nigerians will vote out Buhari in 2019, by PDP chieftain SAMUEL ESE, Yenagoa

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chieftain of the People’s Democratic Party (PDP) in Bayelsa State has said that Nigerians would vote out President Muhammadu Buhari in 2019 as a result of his alleged inability to redeem his many campaign promises.

Teinbofa Alfred Imbasi, Bayelsa State vice chairman (East) of the PDP told BusinessDay in Yenagoa that President Buhari’s alleged inability to make good his promise to reduce the price of petrol would be a significant factor in the coming elections.

Imbasi pointed out that under the PDP government, the pump price of petrol was N87 while the price of crude oil was about $65 per barrel, but at the present price of $80 per barrel, petrol is selling for N145 per litre.

He pointed out that under the PDP, the moderation of the price of petrol was a service to the people while stressing that “Nigerians are aware of these issues. They have made their comparisons.”

The former organising secretary of the party in the state said, “Nigerians are speaking more because they are aware of these issues. They have been reacting in the electron-

ics, print and social media.”

Imbasi said: “As we speak, government can comfortably bring down the pump price and still make gain if they have the people at heart. But they cannot do it. All they do is to blame the PDP.” He assured that the PDP would take over power in 2019, but neither the PDP nor the ADC can do it on their own and they need likeminds to be stronger before they wrest power from the All Progressives Congress (APC).

“For a political party to take over power from the ruling party is not easy. They still need more alliances.

CPC of Buhari contested two times but could not win until it merged with other political parties,” he stated.

On the build up to the forthcoming gubernatorial election in Bayelsa State, Imbasi noted that the PDP is still the party to beat, saying that at the appropriate time, the party will honour its zoning formula in unveiling the governorship candidate.

“I know very well that the PDP recognises the formula of zoning which is irrespective of size and population.

Without mincing words, without any contradiction, I believe and the party believes that the governorship will come from Central Senatorial District,” he stated.

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FINANCIAL TIMES Capstone: The fund betting that market volatility has a future

How millennials became the world’s most powerful consumers Page A4

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World Business Newspaper

Alan Howard hedge fund gains 37% in May on market volatility Brevan Howard co-founder likely to receive large payout from comeback MILES JOHNSON

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new $2.3bn macro hedge fund run by billionaire British investor Alan Howard gained 36.7 per cent in May as it took advantage of volatility in emerging markets and European government debt.

The large gain takes the Brevan Howard AH fund’s return so far this year to 44.3 per cent, a person familiar with the matter said, and marks a comeback for the trader since he launched the standalone fund last year, managed by himself rather than by a team.

The gain, first reported by Bloomberg News, also breaks many years of poor performance for Mr Howard and other macro traders who have struggled to make money at a time when central bank intervention has doused once successful trading strategies.

Mr Howard had previously seen the largest vehicles of the Brevan Howard hedge fund he co-founded haemorrhage assets, shrinking from being one of the largest hedge funds in the world in 2013 to managing less than $10bn in total.

By email, Mr Howard said: “I’m happy that the loyalty and confidence shown by my investors has been rewarded with a very positive result”.

A person familiar with the fund said that it was planning to open it up to new allocations from existing Brevan Howard investors who had not entered Mr Howard’s AH fund.

The fund charges investors a 30 per cent performance fee on profits, as well as a fixed 0.75 per cent management fee, meaning Mr Howard is on track to reap a large payday following its gains for the year so far.

The BH Macro fund, a separate listed vehicle tied to a master fund run by multiple traders at Brevan, has performed less strongly, recording a 9.1 per cent gain in its net asset value in the year so far.

In 2015 Brevan Howard found itself entangled in a non-compete dispute with its former star trader Chris Rokos — who generated $4 billion in profits for the firm from 2004 to 2012.

Mr Rokos, whose surname makes up the “R” in Brevan’s name — which was later settled. Mr Rokos went on to launch his own hedge fund which has since overtaken his former employer in assets.

By 2016 a number of Brevan Howard’s blue-chip public pension fund clients began to pull their money from the firm, with the New York City Employee Retirement System and New Jersey’s State Investment Council among those who redeemed investments.

The future of computing is at the edge The overwhelming volume of data that will soon be generated by internet-connected cameras, autonomous cars and smartwatches upends the logic of data centralisation RICHARD WATERS

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he economics of big data — and the machine learning algorithms that feed on it — have been a gift to the leading cloud computing companies. By drawing data-intensive tasks into their massive, centralised facilities, companies such as Amazon, Microsoft and Google have thrived by bringing down the unit costs of computing.

But artificial intelligence is also starting to feed a very different paradigm of computing. This is one that pushes more data-crunching out to the network “edge” — the name given to the many computing devices that intersect with the real world, from internet-connected cameras and smartwatches to autonomous cars. And it is fuelling a wave of new start-ups which, backers claim, represent the next significant architectural shift in computing.

While some complain that big technology platforms shut out competition in computing, Matt McIlwain, a start-up investor at Madrona Venture Group in Seattle, said that, in fact, “we’re in one of the more open periods — especially around AI”.

Xnor.ai, an early-stage AI software start-up that raised $12m this month, is typical of this new wave.

Led by Ali Farhadi, an associate professor at University of Washington, the company develops machine learning algorithms that can be run on extremely low-cost gadgets. Its image recognition software, for instance, can operate on a Raspberry Pi, a tiny computer costing just $5, designed to teach the basics of computer science.

That could make it more economical to analyse data on the spot rather than shipping it to the cloud.

One possible use: a large number of cheap cameras around the home with the brains to recognise visitors, or tell the difference between a burglar and a cat.

The overwhelming volume of data that will soon be generated by billions of devices such as these upends the logic of data centralisation, according to Mr Farhadi. “We like to say that the cloud is a way to scale AI, but to me it’s a roadblock to AI,” he said. “There is no cloud that can digest this much data.”

“The need for this is being driven by the mass of information being Continues on page A2

Alan Howard, co-founder of Brevan Howard © Zuma/Alamy

Former San Francisco mayor wins primary for California governor Democrat will face off in the general election against Republican John Cox COURTNEY WEAVER AND NAOMI ROVNICK

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avin Newsom, the Democratic former mayor of San Francisco, has emerged as the leading contender for governor of California, after a day of primaries that also provided some relief for the Republican party.

The Golden State was one of eight that voted for candidates on Tuesday for the House of Representatives, the US Senate and governorships ahead of November’s midterm elections.

But while Mr Newsom is the favourite to replace Jerry Brown as California’s governor because of the state’s centre-left leanings, his Republican rival John Cox performed strongly as well. It was also still unclear on Wednesday morning whether the Democrats had made it through to all of the Congressional races they had hoped to qualify for in November.

“We’re engaged in an epic battle, and it looks like voters will have a real choice this November — between a

governor who is going to stand up against Donald Trump and a foot soldier in his war on California,” Mr Newsom said, according to the Associated Press.

In November’s gubernatorial election, the former San Francisco mayor, who has so far raised more than $25m, will take on Mr Cox, a candidate strongly backed by Donald Trump. The president has found himself at loggerheads with California’s leadership over federal policies on everything from immigration to environmental standards.

The battle in California is crucial to the Democrats’ ambitions to win back control of the House in the midterm elections because of the party’s targeting of at least half a dozen Republican districts that voted for Hillary Clinton in the 2016 presidential race.

But under the state’s unusual voting system, the top-two vote winners in this week’s all-party primaries go through to the November vote, regardless of their parties.

Because a large number of Democratic candidates ran in some of the state’s congressional seats, the party

has been increasingly concerned it would fail to qualify for the run-off vote in those districts because of splinters in its vote. That would leave the GOP with House seats it could otherwise have lost.

While Democratic party committees have scrambled in recent weeks to thin out the number of people running in some Californian districts, the results from Republican-controlled seats that the Democrats had hoped to win back were inconclusive in the early hours of Wednesday.

According to CNN’s early tally of the votes on Wednesday Democrat candidates are leading in 38 of California’s 53 districts.

Also in California, Senator Dianne Feinstein fended off a primary challenge from the left by a Democratic opponent. In New Jersey Democratic senator Bob Menendez narrowly defeated his own primary challenge from a little-known publisher — a sign of how a 2017 corruption trial dogged his candidacy, despite the jury in the case deadlocked

EU presses ahead with retaliation against US on steel Brussels plans to target some €2.8bn of annual US imports JIM BRUNSDEN

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he European Union has confirmed it plans to target some €2.8bn of annual US imports with punitive tariffs as it gears up its retaliation against Washington’s decision to hit European steel and aluminium with additional duties.

The European Commission said on Wednesday that it had decided to press ahead with imposing extra duties on a list of US products it prepared several weeks ago in response to Donald Trump’s tariff threat.

The US decision on May 31 to hit EU exports with a 25 per cent tariff on steel and a 10 per cent tariff on aluminium was “unilateral and illegal,” Maros Sefcovic, one of the commission’s vice presidents, said, adding that it necessitated an EU response.

The list of US products to be targeted covers everything from peanut butter, to pleasure boats and motorbikes. Brussels officials have said the duties have been calibrated to inflict equivalent economic damage on the US that the EU will suffer because of the Trump administration’s steel and aluminium restrictions.

Mr Sefcovic said that the commission wants the retaliation measures to start applying in July.

Under EU procedures, the plans need to be reviewed by national governments, before they can take effect.

EU diplomats said that a preliminary discussion among national government officials in Sofia on Tuesday showed broad support for activating the retaliation measures — with France and Germany both strongly backing the plan.

Jyrki Katainen, the EU commission’s vice president overseeing trade policy, said that the Commission has had “full support for all the member states” for pressing ahead with the retaliation measures.

“Everything we are now proposing is compatible with WTO standards,” he said. “We want to defend our industries and our legitimate interests,” he said.

Asked about next steps, Mr Katainen said that “it’s difficult to assess what president Trump decides to do next, but this is our response.”

While saying that Brussels would press ahead with countermeasures against the US, Mr Katainen also emphasised that it was in the interests of both sides to avoid a further escalation or widening of the trade war. “There are no winners,” he said.

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Senior ECB officials bolster expectations of quantitative easing end Remarks on economy highlight policymakers’ view that recent weakness is transitory ADAM SAMSON

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duo of top European Central Bank policymakers on Wednesday delivered confident remarks on the eurozone economy, bolstering market expectations that the central bank will halt its bond-buying scheme this year despite a bout of weak data.

Peter Praet, ECB chief economist, said “underlying strength” of the eurozone economy has bolstered his confidence that inflation will move towards the central bank’s objective, highlighting the view by policymakers that recent weakness is transitory.

The ECB executive board member said there is “growing evidence that

labour market tightness is translating into a stronger pick-up in wage growth”, according to prepared remarks to the Congress of Actuaries in Berlin.

Jens Weidmann, president of Germany’s Bundesbank and a member of the ECB’s governing council, echoed Mr Praet’s bullish take on inflation in a video message to the gathering of

actuaries, according to wire reports.

Inflation is “now expected to gradually return to levels compatible with our target”, he said.

He added that market expectations that the ECB will halt its vast bond-buying programme by the end of this year “are plausible”.

The remarks, which were made ahead of next week’s ECB monetary policy meeting in Latvia, sent euro-

The future of computing is at the edge...

zone government bond prices falling, knocking yields higher.

Germany’s 10-year Bund yield rose 5.1 basis points (0.051 percentage points) to 0.42 per cent, while the Italian equivalent jumped 14.6bp to 2.904 per cent, having been flat earlier in the day.

In currencies, the euro climbed 0.38 per cent to $1.1766, reaching Wednesday’s highs after the remarks of the two ECB officials.

How the end of QE will affect asset prices

Facebook shared user data with four Chinese companies

Continued from page A3 collected at the edge,” added Peter Levine, a partner at Silicon Valley venture capital firm Andreessen Horowitz and investor in a number of “edge” start-ups. “The real expense is going to be shipping all that data back to the cloud to be processed when it doesn’t need to be.”

Other factors add to the attractions of processing data close to where it is collected. Latency — the lag that comes from sending information to a distant data centre and waiting for results to be returned — is debilitating for some applications, such as driverless cars that need to react instantly. And by processing data on the device, rather than sending it to the servers of a large cloud company, privacy is guaranteed.

Tobias Knaup, co-founder of Mesosphere, another US start-up, uses a recent computing truism to sum up the trend: “Data has gravity.” In the new data-centric world of computing, there is a natural tendency for applications and resources to move to where the information is, he says, rather than the other way round.

This is not just pushing more machine learning to the endpoints that intersect with the real world, but to intermediate facilities that are best suited to aggregating information in a local area.

Mesosphere’s technology, for instance, is used on cruise ships that can only connect to the internet through expensive satellite links, and it is working with carmakers in Germany to process information close to cell towers, where data from a number of vehicles nearby can be collected and processed without sending it back to a giant data centre.

Nor are the boundaries between cloud and edge distinct. Data collected locally is frequently needed to retrain machine learning algorithms to keep them relevant, a computing-intensive task best handled in the cloud. Companies such as Mesosphere — which raised $125m this month, taking the total to more than $250m — are betting that this will give rise to technologies that move information and applications to where they are best handled, from data centres out to the edge and vice versa.

The forces leading to more decentralisation in computing have not escaped the giant tech companies that control the main cloud computing platforms. Last week, Microsoft unveiled image-recognition software that was capable of running on a local device rather than its own data centres. This would be followed by other “cognitive services” that are currently only available in the cloud, the company said, such as speech recognition and sentiment analysis from language.

Thursday 07 June 2018

Social network’s partnerships with device makers including Huawei add to privacy

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Nadia Calviño’s appointment as economy minister gives the administration ‘instant credibility in Brussels’ © EPA

Pedro Sánchez picks team to enhance Spain’s pro-EU role New prime minister said to be ‘closer to France than Germany’ on eurozone reform goals MICHAEL STOTHARD

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panish prime minister Pedro Sánchez is assembling a strongly pro-European cabinet in signs that his government wants to push for deeper integration in Europe, offering a sharp contrast to the more Eurosceptic new Italian government.

Mr Sánchez, who took office days ago after winning a surprise vote of no-confidence against the previous centre-right government, has picked Nadia Calviño, director-general for budgets at the European Commission, as his economy minister.

He has also chosen Josep Borrell, a former head of the European Parliament, as his foreign minister, in a leftwing cabinet that is heavy on women and European experience.

Mr Sánchez has always defined himself as a believer in the European project and said last week he wanted to lead a “strongly pro-European” government.

But people close to the new Socialist party government said Mr Sánchez wanted to go further and play a bigger role in Europe’s debate about deeper integration, which was kick-started by the election of reform-minded Emmanuel Macron as French president a year ago.

One person close to the new government told the Financial Times that, while the official line had not been decided, they expected a more ambitious approach to further EU integration than was pursued under Mariano Rajoy, the centre-right prime minister who Mr Sánchez unseated in last week’s confidence vote.

The person said the new administration would be “more in line with France than Germany” on deeper reforms and on wanting to “give fiscal and monetary tools more power”.

Chancellor Angela Merkel has been lukewarm in support for some of Mr Macron’s integration goals.

Charles Powell, the director of the Elcano Royal Institute, a Madrid think-tank with close ties to the Spanish state, said Mr Rajoy’s government was “content to be conservative on the European reform agenda, to be in effect the Germans of the South.”

Mr Powell said: “I think this government will be bolder and more ambitious, staking out a claim to being genuinely committed to deeper economic and political integration.”

The precise position of the new government on contentious parts of eurozone reform, such as a single deposit guarantee scheme for banks and a eurozone budget, are not clear. They are among issues that have split EU governments and will be negotiated in a leaders’ summit at the end of June.

But the overall direction of the new government will probably be welcomed by many in Brussels, particularly compared with the signals coming from Rome.

Italy’s new anti-establishment government has started its mandate on a collision course with Europe, as top ministers from the League and the Five Star Movement threatened to take a harsher line on migrants and implement a number of spending measures that would challenge EU fiscal rules.

By contrast Mr Sánchez, whose bid for power was supported last week by the anti-establishment Podemos party, has moved to reassure Brussels and the financial markets that he would respect European rules.

He said after winning the confidence vote on Friday that the first goal of the government would be

to comply with “European [fiscal] objectives” and “guarantee budgetary and macroeconomic stability”.

Mr Sánchez’s cabinet appointments, to be formally announced on Wednesday, are being welcomed in Brussels in part because so many are well known faces in EU institutions.

Ms Calviño has been working at the commission since 2006, in charge of several areas, from internal markets to budgets. She was a senior figure in managing the deluge of new financial regulations on banks following the EU’s financial crisis.

One EU diplomat on Tuesday said her appointment gave “instant credibility in Brussels” for the new government “in terms of differentiation with Italy”.

Other more domestically focused ministers include María Jesús Montero, whose budgets portfolio will put her in charge of any reforms of Spain’s regional financing system, and Carmen Calvo, the deputy prime minister and also minister for equality.

The appointment of Mr Borrell as foreign minister serves two functions, according to people close to the government. As well as burnishing the administration’s pro-European credentials, it also sends a signal that Mr Sánchez will follow his predecessor Mr Rajoy in keeping to Madrid’s robust line against Catalan independence. This is despite the fact that Mr Sánchez came to power with the help of the Catalan nationalist parties.

Mr Borrell, a Catalan and an economist, is a high-profile critic of Catalan separatism.

“Borrell’s appointment makes the government’s stance on Catalonia very clear,” José Luís Abalos, the Socialist party’s head of organisation, said on Tuesday. “We aren’t negotiating or committing to anything.”

acebook shared user data with four Chinese companies including Huawei, a telecommunications group with ties to the country’s government, a revelation that comes as the social media group is under political pressure to explain how it protected users’ privacy.

The world’s largest social media network had data partnerships with 60 device makers to help them build tailored apps that showed “Facebooklike experiences”, The New York Times reported earlier this week.

Facebook has now confirmed that Huawei was one of the device makers, alongside other Chinese manufacturers Lenovo, OPPO and TCL and companies based elsewhere including Apple, BlackBerry, Samsung and Amazon.

Facebook shared user data including information on religious and political leanings with the device makers, and personal data collected from users who had asked for it not to be shared with third parties.

But the company insists the partnerships did not breach people’s privacy and that they were very different from its relationships with third-party developers.

Francisco Varela, vice-president of mobile partnerships at Facebook, said many technology companies had worked with Huawei, which is the world’s third-largest mobile manufacturer.

“Facebook’s integrations with Huawei, Lenovo, OPPO and TCL were controlled from the get-go — and we approved the Facebook experiences these companies built,” he said.

“Given the interest from Congress, we wanted to make clear that all the information from these integrations with Huawei was stored on the device, not on Huawei’s servers.”

Huawei has been investigated by the US Congress, which issued a report in 2012 that alleged it had a close relationship with the Chinese Communist party. The US military recently banned phones made by Huawei and ZTE, another Chinese manufacturer, from its bases, while Australia is considering banning Huawei from supplying 5G mobile broadband equipment.

The news comes as tensions between the US and China rise over trade and security.

Facebook is already under political pressure around the world after the revelation of a massive data leak to Cambridge Analytica, the data analytics firm that worked for the US presidential campaign of Donald Trump. Mark Zuckerberg, Facebook’s chief executive, has been grilled by Congress about privacy, disinformation and censorship.

Senator Mark Warner, the vicechairman of the Senate Select Committee on Intelligence, said the concerns about Huawei were not new.

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Capstone: The fund betting that market volatility has a future UK founder of $6bn fund insists that volatility has a future as an asset class ROBIN WIGGLESWORTH

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aul Britton was working in Amsterdam’s options trading pit in the mid-1990s when he first appreciated how technology was reshaping markets and allowing savvier traders to exploit bouts of turbulence.

He would agree seemingly lucrative trades with rivals at Timber Hill, another options market-maker, only to repeatedly lose money as prices moved unfavourably. Timber Hill and its founder Thomas Peterffy were among the first to embrace the potential of computers to calculate the value of securities and ultimately automate trading. The humbling experience proved formative for Mr Britton.

“I would giggle at how much money I’d made out of the Timber Hill guy, but within minutes it would flip on me,” he recalled.

“Tom Peterffy was a pioneer in understanding global volatility before anyone else.”

That sparked a growing fascination that ultimately spurred Mr Britton to set up Capstone, a hedge fund that would attempt to trade volatility itself, taking advantage of how financial engineers helped transform turbulence from a mathematical concept into an asset class in its own right.

Initially, Capstone only managed the money of the partners of Mako Global Derivatives, Mr Britton’s market-maker. But its early success encouraged it to open the doors to outside investors in 2007 — just before financial crisis erupted — and Capstone now manages about $6bn, making it comfortably the biggest player in the wild world of volatility trading.

“I wanted to think about the world of volatility on a global scale, see where it was overpriced and where it is underpriced, and wait for it to mean revert,” said Mr Brit-

ton. “I wanted to build a heat map of the world of volatility, and that is essentially what Capstone is.”

Volatility has morphed into a vibrant corner of the hedge fund industry. Some of the other dedicated funds include Parallax Volatility Advisors, Capula Investment Management, Argentiere Capital and Ionic Capital Management, and funds and strategies inside larger groups, such as BlueMountain, Man AHL and AQR. Some are dedicated “ tail risk” funds that help insulate investors from a massive financial shock. Others are dedicated “short volatility” funds that in practice sell insurance against turmoil, earning a steady income that hopefully more than covers the odd nasty loss. Many try to exploit differences in volatility between markets, buying protection where they think risks are underpriced and selling financial insurance when they think investors are too fearful.

There are many ways to trade volatility. Most asset classes have a vibrant options market that allow traders to punt on turbulence, and financial engineers have over the years churned out an array of “pure” volatility derivatives. The best known are based on Cboe’s Volatility Index, popularly called Vix. Last year, 73.9m Vix futures traded, a sevenfold rise from a decade ago.

It is the latter that thrust the small industry into the spotlight earlier this year, when a smattering of small Vixlinked exchange-traded products suddenly collapsed, exacerbating one of the quickest corrections in US stock market history, when the S&P fell 10 per cent.

The Capstone founder said trading through what became dubbed “volmageddon” was like being dumped in the middle of a jungle and having to hack your way through to a treasure-laden ruin (represented by more lucrative, higher-volatility markets).

ECB QE speculation pushes US Treasury yields to two-week high PETER WELLS

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S Treasuries have mirrored European bonds and sold off after European Central Bank policymakers boosted market expectations that the central bank will end its bond-buying programme this year.

That has seen benchmark Treasury yields, which move in the opposite direction to price, rise to a two-week high and nearing 3 per cent.

Jens Weidmann, president of Germany’s Bundesbank and a member of the ECB’s governing council, and Peter Praet, the ECB’s chief economist, variously said they were confident inflation across the bloc would move

towards the central bank’s target despite a recent patch of soft economic data.

The yield on the benchmark 10year US Treasury was up 5.1 basis points to 2.9699 per cent, just 0.4 basis points off its high for the day.

This is its highest level since May 25, just before uncertainty over Italy’s political situation prompted investors to rush for the relative safety of government debt (but not Italy’s), and yields tumbled.

The yield on the two-year Treasury was up 3.2 basis points to 2.5243 per cent.

In Europe, the yield on the 10-year German Bund was up 9.8 basis points to 0.463 per cent, while that on 10-year UK gilts was up 8.8 bps to 1.374 per cent.

Paul Britton: ‘I wanted to build a heat map of the world of volatility, and that is essentially what Capstone is’ © Bloomberg

Burberry to pay former CEO over £10m for final year at company JONATHAN ELEY

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hristopher Bailey, the former chief executive of Burberry, will leave the group with over £10m in pay, pension contributions, bonus and share awards — even though the group missed some of its key targets during his tenure.

The luxury goods group’s annual report showed that Mr Bailey, who stepped down as chief executive in July 2017 and left the board at the end of March, received a total of £4.2m in pay, benefits and bonus in the company’s last financial year. He remains at Burberry in an advisory capacity and will continue to be paid a salary, pension and other contractual benefits until the end of the year.

The company did not say how much these are.

Most of Mr Bailey’s “golden goodbye” stems from the final tranche of a controversial million-share “exceptional award” made in 2013, when he

was chief creative officer. At the current share price of £21.70, the final 400,000 shares — which had no performance conditions attached — are worth £8.63m.

A separate exceptional award made in 2014, by which time Mr Bailey was chief executive as well as chief creative, did have performance conditions attached and will result in a final tranche of 55,010 shares worth around £475,000.

Though substantial, the awards are some way below the numbers bandied about at the time they were made, reflecting Mr Bailey’s decision to waive elements of the performance awards. The company said he had surrendered a total of 830,550 shares awarded under various share plans, with a face value of £14m as of endMarch. At the current share price, the value is £17.9m.

The performance-based awards also did not vest in full. The 2014 award paid out only two-fifths of the

maximum possible amount, primarily because profit fell short of target and the share price underperformed luxury peers. The 2015 executive share plan paid out only a tenth of the possible amount, because revenue and profit growth fell short.

Burberry has been repeatedly criticised over its executive pay. At last year’s annual meeting, almost a third of shareholders voted against the remuneration report, although only 6.6 per cent objected in the binding vote on remuneration policy. Burberry said it had “met with shareholders who voted against the report to understand their perspectives in depth.”

Marco Gobbetti, who succeeded Mr Bailey as chief executive, will receive £1.12m in basic salary for the current financial year. He will also receive conditional share awards vesting in three and four years, subject to growth in revenue, adjusted pretax profit and return on capital. These are capped at 325 per cent of basic salary.

Eurozone bond yields rise on ECB policymakers’ remarks on stimulus Nasdaq Composite sets fresh record as global stocks tick higher MICHAEL HUNTER AND STEPHEN SMITH

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hat you need to know • Eurozone bonds sold after hawkish tone from ECB policymakers• Italian debt hit hardest by the prospect of ECB’s withdrawal from bond buying • Wall Street rally continues with Nasdaq Composite extending record run • Milan stocks recover after early weakness for banks • Dollar weaker as US labour cost data come in only mildly above forecasts “In the short run, it’s not obvious to me who wins out in the FX market — Italy or the ECB. In the long run, if you assume that this isn’t the crisis which brings Europe’s house of cards crashing down, and it really shouldn’t be, the ECB will dominate. The euro will resume its normalisation towards $1.30 as the ECB gets back on track,” — Kit Juckes, macro strategist at Société Générale.

Hot Topic Investors are selling eurozone bonds after senior figures at the European Central Bank made remarks seen as clearing the way for an end to economic stimulus this year, leaving Italian bonds looking

particularly exposed.

The stronger prospect of an end to ECB bond-buying during 2018 left Italy’s debt looking particularly exposed. The yield on two-year BTPs is up by 32 basis points to 1.32 per cent, according to Reuters data, with the benchmark 10-year yield up nearly 18bp to 2.94 per cent.

The country’s banks, major holders of BTPs, were also under early pressure but the FTSE MIB later rebounded to stand up 0.3 per cent.

The Stoxx banking index tested its recent 18-month low in morning trading, before bouncing back to stand up 1.2 per cent.

Jens Weidmann, the head of the Bundesbank and ECB board member, told a conference that market expectations that the central bank could end its bond-buying programme before the end of the year were “plausible”.

Peter Praet, also an ECB board member, pointed to what he called the “underlying strength” of the eurozone economy, increasing his confidence that inflation will move nearer its target.

The yield on the German 10year Bund is up 10 basis points to 0.47 per cent and France’s 10-year government bond yield is up 10bp to 0.81 per cent.

The euro is rising 0.5 per cent to $1.1773, a 10-session high.

Equities New York’s Nasdaq extended its record run at the opening bell with strength for US tech stocks offsetting concern over the simmering USChina trade dispute. The S&P 500 is up 0.4 per cent.

London’s FTSE 100 closed 0.3 per cent higher while Frankfurt’s Xetra Dax 30 is 0.4 per cent firmer. The Europe-wide Stoxx 600 ended flat after spending nearly all the session in negative territory.

Forex and fixed income The dollar index is down 0.3 per cent, trimming its year-to-date gain to 1.7 per cent and remaining around levels seen before today’s economic data— the US trade deficit for April narrowed to a seven-month low.

US labour costs rose by 2.9 per cent for the first quarter. The data, which will influence the outlook for inflation and so US rate rises, came in only slightly more strongly than the 2.8 per cent forecast.

The pound is up 0.1 per cent at $1.3413 against the dollar.

Commodities Oil prices are easing with Brent crude down 0.6 per cent to $74.96 a barrel while West Texas Intermediate, the main US contract, is down 1.4 per cent to $64.61 a barrel.

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ANALYSIS Emotional Musk sticks with optimistic Tesla targets Chief executive says goal of 5,000 Model 3 vehicles a week before month’s end ‘quite likely RICHARD WATERS

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How millennials became the world’s most powerful consumers

They are the biggest global generation — and their choices ​​are upending business​from the US to China

JOHN GAPPER

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hen Scott Norton and Mark Ramadan were undergraduates at Brown University in Rhode Island a decade ago, they were horrified not by the 2008 financial crisis but by Heinz tomato ketchup.

The bright red sauce was so common in shops and kitchens round the world that it seemed it would be there forever. “At the centre of supermarkets were all these classic American brands that hadn’t evolved in 70 years,” recalls Mr Norton.

As they talked to their student friends, they realised that none of them wanted bland, mass market products shipped from factories by huge corporations. So they started to mix their own organic ketchup in an off-campus apartment. On graduation, they founded a company and, having no origin story with resonance, invented a joke one. They named it after a mythical Victorian called Sir Kensington, a monocled adventurer who had “advised the British East India company in the acquisition of spices”.

The pair are now 31, at the heart of a millennial generation that has come of age, transforming business not only in the US but round the world.

In April, their company was acquired

by Unilever, the British-Dutch group that had fended off a takeover by Kraft Heinz. Their ketchup, once a student jape, has just gone on shelves in Walmart and Target. “Sir Kensington’s is the playbook for reaching millennials,” says Richard Hartell, president of strategy and transformation at Publicis Media.

Millennials are ‘core’ business This is the millennial moment, long expected and feared by companies that built their brands for baby boomers. They are ageing and their offspring, once called the “echo boom”, are no longer teenagers, or even students. Pew Research Center, the US research group, defines millennials as the 73m Americans aged between 22 and 37, who will next year overtake boomers in number. “We don’t think of them as special or different any more. They are the core of our business,” says Alan Jope, president of beauty and personal care at Unilever.

The coming of age of the world’s 2bn millennials is not only a generational shift: it is one of ethnicity and nationality. Forty three per cent of US millennials are non-white, and millennials in Asia vastly outnumber those in Europe and the US. Despite China’s former one-child policy, it has 400m millennials, more than five times the US figure (and more than the entire US population) while Morgan Stanley estimates that

India’s 410m millennials will spend $330bn annually by 2020.

Millennials have reached what the bank calls “the most important age range for economic activity”, when households are formed, babies are born and money is spent not just on going out but on settling down. Simon Isaacs, co-founder of Fatherly, an information and ecommerce site for millennial parents, cites family camping as one of its most popular topics. “That does extremely well for us. They like to buy cool family tents and share videos of their trips.”

This reflects the depth to which technology is integrated into millennials’ lives and habits. The oldest were teenagers at the time of the Netscape initial public offering in 1995, as the internet became a mass medium, and the youngest were 11 when the Apple iPhone was launched in 2007. They are used not only to communicating online but buying most things there: $25bn was spent on Alibaba’s Singles Day online shopping festival in China on November 11.

Big companies have scrambled to adjust to millennial tastes. “Local, original, and what they can feel and trust are all good. Maybe there is a bit of a reaction to globalisation,” says Laurent Freixe, who heads Nestlé’s US and Americas business, “Organic, natural, and non-GMO are crystallising in the US very fast.” Nestlé last year bought the Blue Bottle chain of coffee shops and in May signed a $7.1bn licensing deal with Starbucks to refresh its Nescafé and Nespresso brands.

Generations as a percentage of the global population over time But it is placing immense strain on institutions that once thrived on mass marketing of products through television advertising. Growth has slowed and investors are unhappy.

“They are only about global brands, one size fits all. That was great in the ’80s and ’90s but the world has changed. Millennials want these little brands, local brands,” Nelson Peltz, the 75-year-old activist investor, said last year as he attacked Procter & Gamble.

Some are being outflanked by young rivals with roots in internet and mobile. Google and Facebook have shaken marketing groups such as Publicis and WPP, and the streaming service Netflix last month overtook Walt Disney as the world’s most valuable entertainment company.

Often, revenues are simply nibbled away by upstarts: Boston Consulting Group estimates that between 2011 and 2016, large US consumer groups lost $22bn in sales to smaller brands.

‘We cannot change things’ Ella Kieran, head of WPP’s Stream conferences for its clients, is the epitome of the high-flying young global executive. At 31-years-old, she and her entrepreneur husband have a oneyear-old daughter, and she divides her time between London and New York.

But the couple are still renting and she worries about her generation’s future.

“The pessimism of my generation is the sense that you cannot change things,” she says. “If you don’t have a lot of money, it does not feel as if you are going to get it. Now, as I have a family, I’m happy that baby food is better, thanks to five years of people before me saying: ‘This brand does not speak to me.’ But you guys got houses and we got slightly nicer shampoo.”

In the US and Europe, many millennials are disenchanted with their lot as they attain maturity. A UK Resolution Foundation study found that pessimists outweighed optimists by two to one when they were asked about their chances of improving on their parents’ fortunes. They are highly educated: 39 per cent of British 25 to 39-year-olds are graduates, compared with 23 per cent of those between 55 and 64. But their sophistication and ambition is not matched by security.

This is largely an accident of history. Older millennials entered the workforce in the mid-2000s, and many lost jobs after the 2008 crisis. They were also caught by rapid inflation in house prices as interest rates fell and remained low. The milestones of leaving home, getting a job, marrying and having children have been delayed — 45 per cent of 18 to 34-year-old Americans had done all four in 1975, but only 24 per cent had in 2015.

It has spawned widespread distrust, both in organisations and individuals. A Pew study in 2014 found that only 19 per cent of millennials believed that others could be trusted, compared with 40 per cent of boomers and 31 per cent of the generation Xers born between 1965 and 1980. Millennial faith in institutions is also low.

“This generation is incredibly sceptical of governments and big corporations,” says Keith Niedermeier, professor at the Wharton business school.

Malcolm Harris, author of Kids These Days, a book about “why it sucks to have been born between 1980 and 2000”, says distrust is only natural among a generation that has to struggle for security. “If competition is the main feature of your world, you would be a fool to find people trustworthy,” he says. The preference for local, organic and craft products is also logical, in his view: “You want to be part of a circle of production and consumption that is not centred on enriching the 1 per cent.”

lon Musk has stuck to his guns over Tesla’s allimportant short-term production and financial targets — while admitting that his temperament often made him overly optimistic.

Speaking at Tesla’s annual shareholder meeting on Tuesday, Mr Musk said it was “quite likely” the company would hits its goal of producing 5,000 Model 3 vehicles in a single week before the end of June.

Although still well below the 10,000 a week that he had once predicted by this stage, that would still represent more than double the level of production

he said, choking up briefly at the beginning of the meeting.

“This is going to sound a little cheesy, but at Tesla we build our cars with love.”

Following a two-month period in which his relations with Wall Street and the media have become increasingly testy, Mr Musk generally struck a calmer note at the electric car maker’s annual meeting in Silicon Valley, in front of a crowd of mainly small shareholders who have been his most loyal backers.

Invited by one questioner to entertain a moment of selfreflection after the repeated delays to Model 3 production, Mr Musk said: “I think I do have an issue with time . . . This

Elon Musk: ‘I think I do have an issue with time . . . This is something I’m trying to get better at’ © Reuters

that the company reached three months before. It also suggested that Tesla’s manufacturing operations had rebounded after recent downtime to replace a line.

To protracted applause from shareholders, the Tesla boss also repeated his predictions that the company would be cash flow positive and reach positive net income in the third and fourth quarters of this year — in spite of forecasts from many analysts that it would need to return to the capital markets.

“We do not expect to need to raise any additional debt or equity,” Mr Musk said. The comments brought a bounce in Tesla’s stock, up 1 per cent at $294 in after-market trading, after earlier closing down almost 2 per cent.

Mr Musk, who has bristled publicly under intense criticism for much of this year, showed a moment of vulnerability in front of Tesla’s perennially supportive individual shareholders.

“Thank you for buying our product. We’re doing everything we can to make it as good as possible, as fast as possible,”

is something I’m trying to get better at.”

He added: “I’m a naturally optimistic person, I wouldn’t have done cars or rockets if not. I’m trying to recalibrate as much as possible. I will probably put some sandbags on future dates, that’s probably wise.”

In response to other questions, however, Mr Musk continued to issue the kind of optimistic-sounding predictions that have become his trademark, and which have provided fuel for the army of speculators who have shorted Tesla’s stock.

Looking ahead to future models, he said that Tesla expected to show off its Model Y — a cross-over sport utility based on the Model 3 — next March, with production beginning in the first half of 2020.

In response to other questions, he said for the first time Tesla might enter the true mass market with a compact car in the next five years, and prodded another company executive to disclose that Tesla would announce its long-awaited first plant in China “really, really soon”.

BUSINESS DAY

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NEWS YOU CAN TRUST I THURSDAY 07 JUNE 2018

Opinion Riposte to Osinbajo on Africa free trade agreement

OLA BELLO Dr Bello is Executive Director, Good Governance Africa (GGA) and a Resource Governance Expert

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emi Osinbajo, Nigeria’s Vice-President (VP), is the latest public figure to lend his voice to the debate on Nigeria’s non-signature of the Africa Continental Free Trade Agreement (AfCFTA). Osinbajo remarked at the recent FT Summit that signing A F C F TA w o u l d h av e compromised the interests of Nigeria’s private sector. The truth is that Africa is not waiting and Nigeria will do well to step-up inclusive stakeholder consultations on the agreement. We must granularly dissect its potentials whilst fashioning plans to manage the inevitable downsides that accompany such ambitious pacts. Otherwise, we risk forfeiting a historic economic opportunity.

Give and take It bears recalling an important truism in trade negotiations. No one has the ability to win it all on his own and no one party risks losing it all. As an exercise in relative gains, each par ticipant ne e ds to approach negotiations with an informed understanding of its own position relative to others. Success flows from the Socratic exhortation: man know thyself.

What our non-signature of AfCFTA at the Kigali summit really points to is Nigeria’s failure to prepare adequately, to engage in the sort of inclusive national stakeholder consultation that countries should undertake simultaneously with external trade talks.

Not owning up to this procedural flaw is tan-

tamount to burying our Nigerian head in the sand. It does not bode well for accountability, learning or progress.

Our failure proactively to define key objective in a quid pro quo negotiation, and also understand latent advantages, saw us retreating chaotically from signing AfCFTA. By not being at the signing event, we lost a symbolic opportunity of historic proportion. Signing would have sent a powerful message that we recognise as Nigerians the potential of the deal to serve our interest, including facilitating freer mobility of Nigerian capital, g o o ds and entrepreneurs which can be key engines of Africa’s resurgent economic prowess.

Whilst forty-four of the more ardent ‘free trader’ countries signed up to AfCFTA , only a handful of enthusiastic ‘free mover’ states appended their signature to the protocol on free movement. The latter was also presented for approval at the Kigali summit.

This was not helped by the absence of Nigeria, a notable freemover with the heft to constructively identify issue linkages whilst persuading the strong ‘anti-free movement’ camp of a major incongruity. Why sign up to trade liberalisation in droves without a corresponding freedom of movement for people and entrepreneurs?

Benefits threatened There are several benefits that Nigeria can look to under AfCFTA. Given our market size, which confers unrivalled advantages of scale, heft and influence, we can work to expand opportunities for Nigerian sectors such as services. The latter has grown stronger and more sophisticated as our recently rebased GDP figures reveal. Nigeria needs to raise its trade facilitation game to suppor t emergent sectorial champions, from banking through

cement manufacturers to e-commerce platforms like Jumia and Yudala. With Nollywood and ‘Yaba Valley’ and others, ‘Nigeria Incorporated’ is going out a n d b e c o m i n g m o re adroit at competing in regional markets from Ghana to Zimbabwe.

Freer movement of capital, goods and personnel under AfCFTA will be a boon to Nigeria, helping to assuage a lot of the difficulties that Nig er ians face when doing business continentally.

A l i k o D a n g o t e re cently alluded to this mobility challenge when lamenting the multiplicity of visas he has to secure to traverse his Africa-wide operations. The key lesson for

instrumental in helping to shepherd the intrastate negotiation process, a process also led on a technical level by a seasoned Nigerian trade expert, Dr Chiedu Osakwe. Many African peers continue to commend this Nigerian contribution to date although they are peeved at how Nigeria abdicated leadership literally to rain on the AfCFTA signing ceremony in Kigali.

Managing concerns Nigeria’s major failing is that through almost three years of inter-state negotiations on AfCFTA, we did not consult inclusively with all concerned domestic constituencies. This explains why the Manufacturers Association

Few African observers understand how Nigeria went from its erstwhile position of leading AfCFTA from the front to being a conscientious abstainer.

As chairman of the African Union (AU) ministers of trade, Nigeria’s Enelama was instrumental in helping to shepherd the intrastate negotiation process, a process also led on a technical level by a seasoned Nigerian trade expert, Dr Chiedu Osakwe.

Nigeria here is to recognise and weigh correctly broader benefits offered by undertakings like AfCFTA. We must also keep consolidating existing pockets of competitive advantage.

Few African observers understand how Nigeria went from its erstwhile position of leading AfCFTA from the front to being a conscientious abstainer. As chairman of the African Union (AU) ministers of trade, Nigeria’s Enelama was

of Nigeria prevailed on President Buhari at the last minute not to signup. Just as revealing, this last ditch evasive action came only after Nigeria’s Federal Executive Council had given its approval for presidential assent to the deal.

Still, not all of the AfCFTA hysteria is entirely misplaced. Responding though through shielding economic actors behind a protectionist wall will likely prove coun-

terproductive. We risk denying Nigerian businesses of opportunities to compete and upgrade capabilities within a controlled free trade environment. Whilst we doubtless require safeguards, dynamically calibrating this will be possible only through active analysis, self-discovery and a managed opening to the outside world.

To b e s u c c e s s f u l , A f C F TA i m p l e m e n t ers must shut all the potential backdoors to rigging out honest Afr ican entrepreneurs.

We face the real risks of unfair competition from more powerful external blocs, particularly if Africa botched its liberalisation attempt. The continent is still saddled with numerous, mostly incoherent, integration arrangements urgently in need of overhaul.

Proceeding to the implementation of AfCFTA will open up vistas to resolve the burdensome conundrums so that we can turn the theoretical benefits of integration into reality. Preventing dumping of goods on African markets, particularly under distorting conditions such as state subsidies, must also be a top priority.

Match heft with sophistication Our political distractions are such that we have not managed to develop the dense layers of commercial intelligence required of a big and systemically important economy like ours. Peers like South Africa (SA) fight hard to join club governance arrangements like the G20 group of the most systemically important global economies. The forum draws public functionaries, the private sector, CSOs and others into trade-supporting networks and constellations. Analytical capabilities are built around both homebased and Diaspora intelligentsia, as well as think-tanks and the likes to offer perspectives on the national economy and likely competitors.

H o w e v e r, d i s t r a c tion under President Yar’Adua kept Nigeria out of the G20. We were invited but proved irresponsive, according to anecdotes offered to this author over a dinner meeting in Ottawa by the former Canadian Prime Minister who guided his country through the important groundwork on establishing the G20.

Whilst SA and others hone their economic analysis through the G20’s think-tanks (T20) network and similar, Nigeria has neither optimised leadership opportunities nor forged the dense ecology required to distil trade capabilities and address constraints more lucidly and concertedly. Dr Osakwe’s appointment as Director-General of the recently established Nigerian Office for Trade Negotiations is astute.

His leadership of consultations across Nigeria’s six geopolitical zones to canvass economic stakeholders on AfCFTA is a good first-step.

If Nigeria’s frontline negotiators are to successfully sign us up before the expiry of the three months deadline that we now face, we will need as a collective to put in quantum efforts beyond what we have mustere d heretofore. Delivering tangible benefits also will require stellar work on the fine points of the agreement’s implementation. To that end, we must seek out more inspired appointments at home and abroad to bolster Nigeria’s economic management and technical advisory teams.

This author advises several African governments and the AU on mineral sector governance. Given past experience, one cannot be too sure that Nigeria we will optimally leverage its experts and others to fully contribute diverse viewpoints. Embracing that inclusive diversity in itself can help deliver superior outcomes in this all important trade endeavour.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana.

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