Businessday 07 may 2018 by BusinessDay

businessday market monitor Commodities Brent Oil

Biggest Gainer

$74.85

Nestle N1595

Cocoa

Biggest Loser

0.31pc

Seplat N750

-1.96pc

41,218.72

US $2,777.00

Everdon Bureau De Change

Bitcoin

NSE

3,471,111.57

...Nestle, NB, Dangote Sugar buck trend BALA AUGIE

igerian companies are not spending money on the acquisition of assets to boost growth despite the gradual economic recovery. The roughly 40 companies Continues on page 46

INSIGHT

How Nigeria can create more Azuratype power projects

Sell

$-N 360.00 363.00 £-N 494 .00 504.00 €-N 426.00 436.00

news you can trust I **monDAY 07 may 2018 I vol. 15, no 48 I N300

Corporate Nigeria not increasing Capex spending despite economic recovery

Buy

+2.52pc

FMDQ Close Foreign Exchange Market

Spot $/N

I&E FX Window 360.75 CBN Official Rate 305.20

5 Years

0.00 11.63

0.97 11.94

0.30% 13.25%

10 Years

20 Years

0.13% 13.17%

0.10% 13.02%

Benefits of lower yields eluding bulk of small businesses LOLADE AKINMURELE

o m m e rc i a l b a n k lending rates - to which millions of small businesses in Africa’s largest economy are exposed- isn’t letting up to the extent at which yields on domestic government bonds and Treasury bills have over the past one year. A change of tack by the Federal government- wherein cheaper dollar denominated loans are

making way for expensive domestic loans- has cut government debt supply and sent yields to as low as 12 percent this year from some 22 percent in 2017. The new tack is helping the federal government manage ballooning domestic debt servicing costs, while it is tipped to free up bank credit to the private sector and help companies raise debt capital at a lesser rate through commercial papers. For a large corporate or a publicly listed company, perhaps

bank credit will flow better and debt capital can be raised at a lower rate. Small businesses outside of those two categories are not as optimistic of raising capital at cheaper rates and may rightly feel hard done by. A risk-laden business environment has made commercial banks hesitant to extend credit to small businesses most of which have no formal structures and tested corporate governance structure.

Average bank lending rates stood at 25 percent as at end March 28, 2018 according to data collated by the Lagos-based economic advisory and research firm, Financial Derivatives Company. There is a wider disparity when large and less risky borrowers are separated from the smaller and riskier ones which is evident in the movement between prime lending rates (enjoyed by large corporates) and Continues on page 4

Kano, Plateau, Adamawa, others are major markets for Tramadol, Codeine Cough Syrup

OLUSOLA BELLO

ndustry experts have suggested how Nigeria can replicate the success story of Azura, following Siemens’ tech-

Iheanyi Nwachukwu

Continues on page 46

Inside ‘Understanding the NigeriaChina swap deal’ P. 4 27 feared killed as armed men attack Kaduna P. A2 village

fgn bonds

Treasury Bills

Babatunde Fashola, minister of power, works and housing (m); Ita Enang, senior special assistant to the president on National Assembly Matters (r), and James Momoh, chairman, Nigerian Electricity Regulatory Commission (NERC), shortly after the inauguration of the chairman of NERC, at the Ministry of Power, Works and Housing headquarters, Mabushi, Abuja.

any states in Northern Nigeria are major markets for two popularly abused drugs –Tramadol and codeine cough syrup. These states include Kano, Plateau, Adamawa, Sokoto, according to the most recent National Bureau of Statistics (NBS) data on drug seizure for 2017, released in April. Worried by the abuse of codeine cough syrup by Nigerian youths, the Federal Government Continues on page 46

BUSINESS DAY

Monday 07 May 2018

BUSINESS DAY

4 BUSINESS DAY NEWS

C002D5556

Monday 07 May 2018

Positive manufacturing data continue but age-old problems remain

‘Understanding the Nigeria-China swap deal’

ODINAKA ANUDU & ENDURANCE OKAFOR

umbers emerging from the manufacturing sector are encouraging, but it remains to be seen whether they are true reflections of the health of the sector. The Purchasing Managers Index (PMI) released by the Central Bank of Nigeria (CBN) shows that the manufacturing sector PMI rose to 56.9 index points last month as against 51.1 points in the same month of 2017. The April PMI data indicates an expansion in the manufacturing sector for the 13th consecutive month, according to the CBN. “Improvement in FX supply is much better than it was before and this has made more businesses across vast sectors of the economy to begin to pick up. This can be seen in the new orders of the manufacturing sector, as companies have to meet up with demand,” a real sector expert told BusinessDay. Capacity utilisation in the sector stands at 55.03, according to the manufacturers Association of Nigeria (MAN). Local input preference, which measures the rate at which manufacturers source locally available raw materials, is estimated at 60.72 percent in the first half of 2017, as against 46.3 percent recorded in the corresponding half of 2016.

In the first half of 2017, manufacturing output rose to N4.67 trillion as against N3.76 trillion recorded in the corresponding half of 2016, according to MAN. Real GDP growth in the manufacturing sector in the last quarter of 2017 was 0.14 percent (year on year), higher than the same quarter of 2016 and the preceding quarter by 2.68 percent points and 2.99 percent points respectively, according to the National Bureau of Statistics (NBS). Nominal GDP growth of manufacturing in the Q4 of 2017 was recorded at 9.20 percent (year-onyear), 5.64 percent points higher than figures recorded in the corresponding period of 2016 (3.56 percent). However, BusinessDay checks show that things are not significantly improving in the sector as is being reported and age-old problems have refused to go. First, power sector expenditure in the manufacturing sector is rising rapidly and has been so since 2014/15. Manufacturers spent N66.03 billion on alternative energy sources in the first half (H1) of 2017; N62.96 billion in the corresponding period of 2016, and N69.99 billion in the second half of 2016, according to MAN. Average daily electricity supply in H1 of 2017 declined to five hours, from seven hours supplied in the corresponding period of 2016 and eight hours in the second

half of 2016. In fact, manufacturers have given up on power distribution companies (DisCos), forming the MAN Power Development Company to cater to their own needs. Results of survey conducted by MAN shows that the average interest rate banks charged manufacturers in H1 of 2017 was 22.65 percent as against 21.4 percent in the corresponding half of 2016. Infrastructure-wise, Nigerian roads are not better and only Abuja –Kaduna Railway has been completed, which is not even a major economic rail. Lagos to Kano, and Kano to Kaduna, among others, which can help manufacturers cut logistics costs, are still at the inchoate stage. Today, manufacturers’ 20 to 40 percent expenditure goes to logistics. Today, manufacturers in various states pay 54 types of taxes and levies as against 38 in 2013-14. “These taxes need to be amalgamated into one or a few, since the whole tax cycle is a multiple chain of taxes on the same income stream,” said Vivian ChigozieNmonwu, tax expert and lead partner of Vi-M Professional Solution. Today, Ajaokuta Steel Complex is yet to be revived as has been the case, prompting manufacturers to seek steel inputs from abroad. The Federal Government is still dithering on privatising it. “Currently, I am not sure those technologies at Ajaokuta are competitive in steel making. The world

has moved on. What is required now is for the private sector to get more and more involved in the downstream and the upstream segments in the steel business,” Raj Gupta, chairman, African Industries Group, a consortium of 12 companies, including six steel plants, told BusinessDay recently. In fact, the foreign exchange crises of 2016 exposed Nigerian manufacturers as import-dependent, as even the CBN had to devote 60 percent of the entire FX market to ensure they stayed afloat. Even at that, 54 firms that could not cope went under, according to Frank Udemba Jacobs, president of MAN. Today, the tomato industry is in crisis as many players are either shut down or operating at less than 20 percent capacity. More so, the only brakepads manufacturer— Star Auto Industries Limited—is shut down. “We could not continue because we could not compete,” Chidi Ukachukwu, CEO, told BusinessDay after the closure. The automotive industry is near dead, as 22 firms which planned to set up plants did not do so, owing to an incoherent government policy and harsh business environment. The textile industry today is worse than it was in 2011 as only African Textile Manufacturers (ATM) Limited, Angel Spinning and Dyeing Limited, and Spinners and Dyers Nigeria Limited can be called textile firms.

Ecobank Group Research

he Central Bank of Nigeria (CBN) signed a $2.5bn bilateral currency swap with the People’s Bank of China (PBoC), making Nigeria, the third country in Africa (after South Africa and Egypt) to sign such a deal with China. The agreement will allow the two sides to swap a total of RMB15bn for NGN720bn, or vice versa, in the next three years. The deal can be extended by mutual consent. The currency-swap was calculated at the Nigerian central bank’s interbank rate of NGN305:USD1, rather than the Nigerian Foreign Exchange Fixings (NIFEX) rate of NGN338.7:USD1. This implies that we are unlikely to see any unification between Nigerian exchange rates anytime soon. The deal aims to facilitate bilateral trade and investment but also to promote financial stability and broader economic cooperation between the two countries. It will also help the country to position itself as a trading hub with China in the West African sub-region. This agreement will provide NGN liquidity to Chinese firms looking to do business with Nigeria and provide RMB liquidity to Nigerian firms looking to do business with China, helping achieving effectiveness and efficiency in Continues on page 46

Benefits of lower yields eluding bulk... Continued from page 1

maximum lending rates (paid by smaller businesses). Average prime lending rate was 17.78 percent as at end December 2017, while average maximum lending rate was over 30 percent, according to the latest report by the Central bank. “In Nigeria, interest rates on loans tend to be downward sticky as the tendency among banks is to delay repricing loans relative to the speed with which deposits are repriced,” said Wale Okunrinboye, a fixed income expert. “The prospects of lower interest rate on loans following dovish switches in monetary policy tends to be domiciled with large corporate borrowers who, account for 70 percent on average of banking loans, and possess stronger bargaining power relative to small business and individuals,” Okunrinboye observed. Prime lending rates are likely to be flexible while maximum lending rates tend to remain stubbornly and rigidly high. Though some Tier I banks are likely to reprice loans quickly to attract good quality corporates and boost loan growth to deal with the lower asset yields, “banks with softer capital buffers will want to delay downward adjustments to cope with the softer rate environment,” Okunrinboye

said in an emailed response to questions. At the heart of the problem is the limited source of funds in Nigeria. Fixing the problem, according to Okunrinboye, would require deepening the bond market to allow good quality corporates borrow directly from debt markets so that banks are free to take more risk with smaller businesses as with elsewhere. “Though this is slowly improving, it will take some time,” Okunrinboye said. High interest rates (60.2points) was second only to insufficient power supply (69.6points), as the major factors that constrained business activity in April 2018, according to the Central Bank’s Business Expectation survey. A five-year trend analysis shows that not much has changed since businesses then cited high interest rates on bank loans as a pain in the neck. The respondent firms to the CBN survey also expect borrowing rates to rise in the current month. However, they expect rates to fall next month. Though the reason for the optimism next month was not given, Bismarck Rewane, the chief executive officer of FDC said falling bond and treasury yields would eventually trans-

Chinwe Ighodalu, regional bank head, Victoria Island, Fidelity Bank plc (4th l), with female entrepreneurs at Impact Her Workshop after delivering a lecture to them on ‘Loan Readiness For Women in Business’ at Canton Concourse, Maroko in Lagos.

late to lower borrowing costs for small businesses. “There is a lag between when it does happen, but it will,” Rewane said. Bank credit to the private sector rose at the slowest pace in five years in 2017, as banks poured cash into high-yielding government securities as appetite waned for private sector credit amid a scathing economic recession and naira devaluation that crimped company profit and sparked a rise in non-performing loans. Now that yields on government securities are a short crawl

away from single digits, government officials expect it will lead to increased credit to the private sector which has been crowded out by government borrowing in the last two years. Declining yields would however fall short of the expected impact on credit extension to the private sector if the government doesn’t take steps to de-risk the real sector by improving infrastructure and liberalising sectors that are hampered by non-market policies. “At 12 percent, the banks will rather lend to government than to the real sector at 30 percent,

if they are not sure they will get their money back,” said Ayodeji Ebo, managing director at investment firm, Afrinvest Securities Ltd. “Government must improve the ease of doing business, invest in infrastructure from roads to power and be more consistent with its policies. “It is the only way small businesses can access credit from the banks at cheaper rates,” Ebo added. There were some 37 million SMEs in Nigeria as at 2015, according to the National Bureau of Statistics (NBS) data.

Monday 07 May 2018

BUSINESS DAY

6 BUSINESS DAY NEWS Edo to co-invest in Weppa Farm, partners Leventis Foundation on Agric Institutea

do State governor, Godwin Obaseki, says the state government will in the coming weeks sign a memorandum of understanding (MoU) with Leventis Foundation to fast-track the development of the 13,500 hectares Weppa Farm, Agenebode, in Etsako East Local Government Area of the state. Governor Obaseki disclosed this at the foundation- laying/ groundbreaking ceremony of the Leventis Foundation’s Agricultural Management Training Institute, Weppawanno, to be sited at the farm, in Agenebode. The governor said he was delighted that private interests, such as the Leventis Foundation were aligning with his vision to reposition the state as a thriving industrial hub and setting up institutions to deepen the penetration of his policies. According to Obaseki, “I know that you have only developed 50 per cent of this farm. I want to implore and inform you that the Edo State Government is willing to collaborate with you for the rapid development of this facility. To this end, in the next two weeks we will like to sign an MoU with the Leventis Foundation to co-invest in the farm.” The state will work with the foundation to train and provide support for agripreneurs in the state to guarantee a market for their produce as well as technical support for agricultural development, he said. “We want to ensure that our people do not only get trained but have access to the required support to set up, operate and

create wealth from their farms. “The establishment of the Agricultural Management Training Institute could not have come at a better time. As a state government we have decided to take action and recreate our tertiary institutions to ensure they do what they were set up to do. “In particular, we have shut down our colleges of agriculture in Iguoriakhi, Agenebode and Irrua. This is so that we can restructure and reposition them. The idea is to train dependable, dynamic and competent middle level manpower in the agricultural industry. “We want to thank the management of the facility for the assistance they have rendered to us as we strive to reposition our schools of agriculture. In the meantime, we have decided to spread the students in our schools to various agricultural enterprises in Edo State such as Okomu Oil Palm Company plc, Presco plc, Rubber Research Institute of Nigeria and the Leventis Farm,” he said. Chairman, Leventis Foundation, Ahmed Mantey, said the state government had been a worthy ally in the development of Weppa Farm, noting that this spurred the management to contribute to the economic development of the state. According to Mantey, “Our aim with the Leventis Foundation Agricultural Management Institute is to fast-track the development of young agricultural specialists to become the commercial farm managers of tomorrow.

Buhari’s second term will further divide, impoverish Nigerians - PDP OWEDE AGBAJILEKE, ABUJA

eople’s Democratic Party (PDP) has told President Muhammadu Buhari that his quest for reelection will further divide and impoverish Nigerians. In a statement on Sunday, the main opposition party said contrary to what President Buhari declaration at the All Progressives Congress (APC) ward congress in Daura, Katsina State on Saturday, his first term score card showed anti-people policies and failure to serve the good of the ordinary citizens. The statement signed by PDP National Publicity Secretary, Kola Ologbondiyan, stressed that the President’s second term agenda is directly a quest to continue to enrich the Presidency cabal, promote nepotism and protect cronies and corrupt members of the All Progressives Congress (APC) from the long arms of the law. “It is unfortunate that the same President, who, in an interview with Voice of America (VOA) last week, could not present any agenda to justify his re-election bid, is attempting to

sway Nigerians with cosmetic patriotism. “What President Buhari’s handlers fail to understand is that Nigerians, being direct victims of his misrule, are aware that the harsh and reckless policies of his incompetent administration, coupled with his body language, are expressly responsible for the untold economic hardship, ethnic division and daily bloodletting currently ravaging our nation. “If, indeed, the President was out to serve, as he claimed at the APC congress, we challenge him to show any of his 2015 campaign promises he has fulfilled or any development project initiated and implemented to the benefit of the people in the last three years. “President Buhari’s second term is a quest to continue to ignore and destroy democratic principles; to continue trampling on the rights of citizens and persecution of opposition and perceived political opponents; to continue the derailing of democracy with manifest disdain for constitutional order; to continue with the intimidation and harassment of the legislature and the judiciary;

C002D5556

Monday 07 May 2018

Eco-Stone expected in Lagos for mass housing under state’s LAPH initiative … more residents seen owning homes on increased affordability CHUKA UROKO

co-Stone, a foreign firm with expertise in mass production of affordable housing using a building system called Solar Light Weight Concrete, will soon be in Lagos to drive the state’s civil servants-focused Lagos Affordable Public Housing (LAPH) initiative, the state’s commissioner for housing, Gbolahan Lawal, says. The firm has capacity to deliver a house in just seven days, which is why the state government considers it a good ally in the implementation of the LAPH initiative, which targets 20,000 housing units to be delivered in the next four years. The company has already signed an agreement with the Federal Government to deliver 2,000 housing units under the government’s Federal Integrated Staff Housing (FISH) programme.

“The LAPH initiative is part of our efforts at addressing the supply side of the state’s housing challenge; we have about eight other partners with whom we have memorandum of understanding to deliver housing,” the commissioner said, pointing out that a 2014 survey carried out by the state revealed about 3 million housing units deficit. To address the housing demand side, he said apart from their rent-to-own homeownership scheme, which is a modification of the Lagos Homeownership Mortgage Scheme (LagosHOMS), the state had also partnered the Nigerian Mortgage Refinance Company (NMRC), to provide access to housing finance through itsmember primary mortgage banks (PMBs). The state is also working with the pension commission with a view to creating a fifth fund—pension contributors’ housing fund—that will be 20 percent of present

and future contribution. “It is proposed that this should be lent out at 5 percent interest rate to enable the mortgage banks create mortgages at 8.5 percent for home seekers as opposed to the current 22.5 percent,” he assured. Apart from commending this move, analysts also see these partnerships and funding arrangements enabling more Lagos residents to own homes, especially through the Rent-to-Own scheme, which allows tenants to pay rents on the houses they live in consistently for five to 10 years, and at the end of that period, own the houses. But there are concerns too. Given the state government’s antecedents, these partnerships may collapse mid-way into implementation. The termination of the state’s partnership agreement with the Lekki Concession Company (LCC) which was to reconstruct the Lekki-Epe Expressway on build, operate and transfer (BOT) lease

agreement is, in the opinion of analysts, a big drawback on PPP as a vehicle for delivering infrastructure. The concession agreement for the reconstruction of the Falomo Shopping Complex, which was concessioned to Afriland Properties was also terminated by the state government under Governor Akinwunmi Ambode who argued that the concession was against the interest of Lagosians. The state’s attitude to partnership arrangements have continued to be a disincentive to investors, especially property investors, who are attracted to the state because of its huge market. Lagos has a large population estimated at 20 million. Its housing market can be likened to a pyramid in which supply is concentrated at the top pointed end while the base, which harbours the chunk of the population, suffers huge housing demandsupply gap.

Ahead of Apapa/Ijora Bridge closure: AG Dangote, Julius Berger begin rehabilitation on alternative route

G Dangote and Julius Berger Construction Company have begun rehabilitating Leventis Road in Apapa that will serve as alternative route when the Apapa/Ijora Bridge is closed for repairs. Adedamola Kuti, federal controller of works, Lagos, who disclosed this development to the News Agency of Nigeria on Sunday, said this was to facilitate free flow of vehicular movement. Kuti said AG Dangote had completed constructing the concrete slab while Julius Berger was carrying out palliatives on parts of the road. “AG Dangote Construction Company Limited has already completed the concrete slab on the road but it needs 28 days to cure before vehicles can run on it. “However, Julius Berger is currently carrying out palliatives on the pot holes and the bad portions to enhance smooth flow of traffic before we close the Apapa/Ijora Bridge for repairs. “The vehicles coming toward the diversion will have to climb the slab before they can enter into Leventis Road, so the work the two contractors are doing is very important,’’ he said. He said the Federal Ministry of Power, Works and Housing would not close the bridge to traffic until it had perfected plans for mini-

mum traffic impacts within the axis. He said there was a meeting attended by all the relevant stakeholders and they came up with a map that would aid effective traffic management and avert gridlock. He said the traffic consultant on the Apapa-Wharf Road project would also be at alert to tackle all traffic related issues while the closure of the bridge lasted. A visit to the site shows that Julius Berger had placed diversion signs around the areas where it was removing asphalt, with some freshly patched portions with asphalt. The minister of power, works and housing, Babatunde Fashola, had on August 5, 2016, inspected the dilapidated Apapa/Ijora Bridge, which was damaged by fire. The effect of the fire exposed some of the steel used in constructing some of the layers of the bridge and made it to cave. Fashola, after a meeting with relevant stakeholders on August 7, 2016, ordered the immediate closure of the bridge. Julius Berger moved to site the following day to begin emergency repair works, and later carried out an impact assessment of the bridge and it advised the Federal Government to embark on its permanent repairs.

Monday 07 May 2018

BUSINESS DAY

Monday 07 May 2018

BUSINESS DAY

C002D5556

COMMENT

Monday 07 May 2018

comment is free

Send 800word comments to comment@businessdayonline.com

Lagos and Kano [L&K] – why did it take so long? BASHORUN J.K RANDLE Randle is Chairman/Chief ExecutiveJK Randle Professional Services Chartered Accountants

t may sound like fiction but seventy years ago, there was no Coca Cola; 7-Up; Fanta; Sprite; Soda Water; Vitamalt; Pepsi; Limca; Amstel Malta; Malta Guinness; Mirinda; Schweppes; etc. in Lagos or the rest of Nigeria for that matter. Air-conditioners were non-existent and only a few houses had what was described as “Frigidaires” (designed to render you frigid!!). Thankfully, there was ice cream. I was an enthusiastic apprentice salesman of “Wall’s Ice Cream” of which there were two varieties – vanilla and chocolate. As for soft drinks, there was only one brand which was bottled exclusively in Lagos and Kano. Hence, it readily acquired the name “L and K” (which stood for Lagos and Kano). To the best of my knowledge it was an admixture of water and sugar which totally overwhelmed its nearest competitor known as “Ice pokey-pokey” (consisting of sweetened milk dipped in frozen ice cubes). “Krolla” with a tinge of cola nuts in its concentrate was a distant competitor. At any rate, “L and K” reigned supreme, unchallenged as the darling and favourite drink of kids. If nothing else, the connection between Lagos and Kano was firmly implanted in young minds well before they became adults. As the Lagos bottling plant was in our neighbourhood at Oke Popo area of Lagos, children (known as “Area Boys” before the appellation acquired notoriety as a genre of thugs or miscreants) did not need much persuasion to convince themselves that the location of such an exotic refreshment within easy reach was by the special grace of the Almighty. Something else that Lagos and Kano had in common was their very liberal attitude towards strangers or visitors. Very welcoming and most generous with their hospitality. Back then, the kidnapping of children was unheard of except when overstressed parents would occasionally threaten to go and search for kidnappers to relieve them of the burden of coping with particularly troublesome children. It worked like magic!! The kidnapper became the ultimate bogeyman. Also, both Lagos and Kano were somewhat cosmopolitan with quite a significant number of Syrian, Lebanese, Indian and Jewish communities. They

were known as “Koras” for reasons which were totally inexplicable. “Kora” was probably derived from Coral beads in which they traded. It was obvious that each of those respective communities inter-married their counterparts in the Lagos and Kano axis. Consequently, there was only limited inter-mingling or cross-overs. Each community strove to preserve its own distinct identity. It is also instructive that as far back as the fourteenth/fifteenth century Kano had established trade routes dealing in camels, ostrich and leatherware to far flung places in the Middle East, even as far as Yemen. Similarly, Lagos at about the same time was already trading with Portugal and other parts of Europe. Indeed, it was the Portuguese who coined the name “Lago” which eventually became “Lagos” as a “twin” to the city of Lagos in Portugal. Prior to that, Lagos was known as “Eko” by its inhabitants. The name was changed without any consultation with the King of Lagos or the indigenes. On the contrary, Kano steadfastly rebutted all attempts by invaders to change its name. Even after all the politics of state creation, both Lagos and Kano managed (along with Katsina, Ondo, and Bauchi) to retain their name tags as cities as well as states. That is how come we have Lagos city and Lagos State. The same goes for Kano city and Kano State. Julian Assange of WikiLeaks has provided us with some nuggets about Lagos. “Lagos before the beginning of the nineteenth century was one of the centres of transatlantic slave trade in West Africa. Some of the slaves re-captured by British naval ships, who were of Yoruba descent, decided to resettle in Lagos after the British bombarded Lagos in 1851. Lagos Island also received returnees from Brazil and Cuba during the same period. These returnees, apart from increasing the population of Lagos, also added value to the quality of life of the people because many of them had acquired one skill or the other. While some were artisans and craftsmen, others had tasted western education. Indeed, their contributions to the Lagos Island landscape, in terms of physical developments and struggles against obnoxious ordinances of the British after imposition of colonial rule on the Island, were tremendous. The King of Lagos, Oba Akinsemoyin was good at trading and fostering relationships with Europeans, most especially the Portuguese. Lagos traders were encouraged to travel to such areas as Badagri, Awori and Egbado to buy goods such as cloth, palm kernels, palm oil and other materials for exchange with gunpowder.

The Lagos and Kano Economic summit is a laudable initiative. However, we must be forgiven for asking: why has it taken so long to acknowledge and recognise the profound linkages between “L” and “K” as well as the huge potentials for joint enterprise and mutual co-operation within the matrix of social and economic development? In 1874, Lagos was put under the Governor of the Gold Coast colony. It was almost at the end of the nineteenth century that Muslims also benefitted from government support with the establishment of Government Muslim School in June 1896. Nigeria was the creation of Lord Frederick Lugard who amalgamated Lagos as part of Southern Nigeria with Northern Nigeria in 1914.” Similarly, Edward Snowden the former CIA consultant who is now a fugitive in Russia has posted the following vignette about Kano: “At the beginning of the 19th century, Fulani Islamic leader Usman Dan Fodio led a Jihad affecting much of Northern Nigeria, leading to the emergence of the Sokoto Caliphate. Kano became the largest and most prosperous province of the empire. This was one of the last major slave societies, with high percentages of enslaved population long after the Atlantic slave trade had been cut off. Heinrich Barth, a classical scholar who spent several years in Northern Nigeria in the 1850’s estimated the percentage of slaves in Kano to be at least 50 per cent, most of whom lived in slave villages. Kano was acknowledged as the most important commercial entity in West Africa during the 1820’s. The state’s cotton and leather products were extensively mobilized northward through camel caravans across the Sahara and they even reached the European continent, where its goatskin goods were labelled as Morocco leather. During the 1880’s, shifting political situation in the caravan’s passageway, entry of Europeans into West Africa and the cessation of the slave trade caused the downfall of Kano’s trans-Saharan trade.” The Lagos and Kano Economic summit is a laudable initiative. However, we must be forgiven for asking: why has it taken so long to acknowledge and recognise the profound linkages between “L” and “K” as well as the huge potentials for joint enterprise and mutual co-operation within the matrix of social and economic development? The synergies are starring us in the face. Up till

the 1950’s and 1960’s, moslem women in Lagos adopted the purdah lifestyles of their Kano counterparts. They wore veils (as well as Hijabs) and were known as “Elehas”. They very rarely ventured into the public in daylight. As the custom is still largely intact in Kano, it poses a serious challenge for the enumerators who would handle the next census. Perhaps I should add that unlike their Kano counterparts, some women in Lagos defied their menfolk by forming a club called “Egbe Mesho”. They were ladies of substance in their own right. Their credo was that they would have no more than one child by any man before moving on to the next one. Hence, they would have four or five children each with a different father!! This was in the 1950’s well before the advent of “Women Liberation”.Lagos was invaded by Benin which led to the installation of “Akarigbere” (white cap) chiefs. Similarly, the Hausa who were the occupants of Kano were “conquered” by the Fulani. Eventually, both Lagos and Kano were subjugated by the British. Regardless, Lagos and Kano have established their pre-eminence in commerce. However, they suffered the anguish of previously flourishing industrial estates e.g. Apapa Industrial Estate; Sabo Industrial Estate and Ikeja Industrial Estate, all in Lagos; and Bompai; Sharada I; Sharada II; Challawa etc. in Kano which fell victim to the structural Adjustment Programme [SAP] in the late 1980’s. Perhaps we should devote some time to the emergence of both Lagos and Kano as political power houses – pre and post Independent Nigeria regardless of their respective conflicting perspectives. Of course, the massive population of Lagos (estimated at 28.4 million) and that of Kano (which is estimated at 20 million), confer on them the status of Kingmakers having regard to the fact that democracy is the game of numbers. Let us share another fascinating snippet from history: “When Muhammad Askia conquered Kano in 1513, it became a tributary state under the Songhai Empire. Later in the same century, the state of Kano became a tributary of Zazzau, a Hausa Kingdom founded in the south. Katsina became the centre of commerce after Kano was defeated by Kwararafa in 1653 and in 1671.” Even as we speak, the Yoruba community in Kano is still formidable. Many of them trace their roots to Lagos. What is even more remarkable is that they have been living in Kano for several generations. For over two hundred and fifty years they have inhabited the Sabon Gari area of Kano where the streets bear familiar Lagos/Yoruba names such as Sanyaolu Road; Olude Road; Sanusi Street; Yoruba Road etc. Indeed, in the 1950’s and 60’s

Agbonmagbe Bank which was founded by Chief Matthew Adekoya Okupe, a Yoruba man was a very successful commercial enterprise which enjoyed huge patronage from both the Yoruba traders and the Hausa/Fulani community. Similarly, there are Hausa, mostly from Kano who have been living in the Ita Agarawu area, in Lagos for over two hundred years. I vividly recollect an occasion in the 1970’s when the gentleman seated next to me at a Board Meeting of Nigerian Tobacco Company, was dressed as a Kano man (evidenced by the signature cap and babanriga). His name was Alhaji Yaro and we assumed that he could not speak Yoruba. After the formal meeting, the conversation drifted into Yoruba and not all of it was complimentary to the “Director from Kano”. Alas, after a while, he burst out in excellent Yoruba that not only was he born and bred in Lagos where his family had lived for several generations, he had never set foot in Kano or any part of the North for that matter. 5 For the better part of the 1950’s and the 1960’s, the Yoruba/Lagos community in Kano consisted mostly of employees of banks and “mercantile companies” such as United African Company [UAC]; John Holt; Leventis; UTC etc. and doctors/ nurses plus those on transfer by the police/military. They formed a very formidable club – “Egbe Omo Eko” to protect their common interest and welfare. There was no obvious threat to their property or their lives. Some of them even adopted and spoke Hausa as their first language. In Lagos, a major road in Ebute-Metta was named Kano Street and still retains the name. The original settlers were from Kano. Most of them were involved in petty trading, trade by barter (“pasi paro”) and other menial jobs. However, matters took a different direction when with the formation of political parties, Nigerian People’s Congress (NPC); National Council of Nigeria (NCNC); and Action Group (AG) reflected predominantly regional/tribal interests. NPC led by Sir Ahmadu Bello, the Sardauna of Sokoto was the voice of the north while NCNC under the leadership of Dr. Nnamdi Azikwe was predominantly Igbo and AG led by Chief Obafemi Awolowo was the preferred choice of the Yorubas. Lagos was an orphan and rapidly became the battleground for all the three combatants. The first sign of trouble emerged when Kano erupted in riots in 1953 as Chief Obafemi Awolowo and his lieutenants attempted to hold a political rally in Kano.

Send reactions to: comment@businessdayonline.com

Public-Private Partnerships in the wake of the Commonwealth Blue Charter

JOHN IRVINE John Irvine, CEO Visionscape Sanitation Solutions.

s the Commonwealth Heads of Government Meeting (CHOGM) came to an end on Friday, 20 April, the Blue Charter on Ocean Governance was adopted as a blue-

print on the protection of oceans and marine environments in all Commonwealth territories. The Blue Charter highlights action steps to be deployed by the partner nations as efforts towards ending ocean pollution, with one of the most critical considerations being plastics pollution. To ease the challenges of inadequate capacity, technology, and resources in most of the emerging economies that make up the Commonwealth, the British Government pledged £61million towards research and innovation solutions to end ocean pollution. As governments become more

vested in the protection of the ocean and marine environments, there is a greater need for sustainability companies to shore up expertise and devise relevant strategies of meeting the goals outlined in the Blue Charter by the Commonwealth of Nations. It underlines the need for more publicprivate partnerships that accelerate the implementation of the strategies laid out by the charter. Population explosion across emerging markets is putting an extraordinary strain on the provision of essential waste management services due to underdeveloped infrastructure. Emerging markets around the world face a significant

infrastructure deficit, caused by a growing gap between waste infrastructure needs and the resources the governments invest in meeting these needs. Providing adequate infrastructure to meet the waste management demand of emerging markets is pivotal to the actualization of environmental sustainability. Public-private partnerships are an effective approach in closing infrastructure gaps. Europe is a pioneering this trend, making use of partnership models to develop and deliver working systems across the country. Emerging economies are open-

ing up the market to private investors. In Lagos, a population of over 22 million, generating an estimated 16,000 tonnes of waste daily, Visionscape is implementing a sound infrastructure plan to tackle waste surplus and support recovery over landfill disposal. In collaboration with Lagos State, the company has invested in the development of facilities and infrastructure to manage the waste disposal process and improve the State’s capacity to recycle, with a focus on plastic resource recovery.

Send reactions to: comment@businessdayonline.com

Monday 07 May 2018

C002D5556

COMMENT

BUSINESS DAY

comment is free

Send 800word comments to comment@businessdayonline.com

Finding the basis for Nigeria’s unity OMAGBITSE BARROW FCA Omagbitse Barrow is a Strategy & Innovation Consultant based in Abuja @gbitsebarrow me@omagbitsebarrow.com

few years ago, on a trip abroad, I met a man from Singapore with his Malaysian wife, and we started to talk about Nigeria and its political and social problems. The couple were very educated about our affairs – they had a background in investment banking, so they had quite a lot of depth on many subjects. Incidentally at about that same time, I was reading Lee Kwan Yew’s book – “From Third World to First” and was excited to be engaging with a “real” Singaporean on the subject. My general take was that countries like Nigeria needed to learn from success stories like Singapore and try to model our society after theirs. The gentleman remarked very quickly and politely about how Singapore had gone several light years ahead of Nigeria, and that if we were to realistically try to chart the course for development,

we should perhaps set our eyes on other countries – notably Malaysia (his wife’s country), who had a similar background in Nigeria in a number of areas – two strong Religions (Christianity and Islam); a shared Colonial Legacy from the British; and a shared history of military dictatorship and the ‘militarization” of politics or the “politicization” of the military. He left me with his wife who was an expert in Malaysian affairs to be my teacher for the next couple of hours but parted with some very profound words that never left me. He reminded me that Singapore was a country made up of fourraces (Chinese, Malay, Indiana and Eurasians), and made the firm distinction between races, and what we squabble about in Nigeria – ethnic groups. His profound thought was that if Singaporeans could get beyond clear racial differences that are very conspicuous and physically obvious, countries like Nigeria with one homogeneous negro race should and MUST overcome the prejudices associated with ethnic differences. I reflected on his words, and still do till this moment. One quick thought that hit me was that if you dressed up a Hausa man in an Itsekiri wrapper shirt with bowler hat and put a Hausa babanriga on an Itsekiri man with the cap to match, they would be indeed indistinguishable (We all have wed-

Our commonalities stem from our collective deprivations. All Nigerians regardless of their ethnic or religious backgrounds have been victims of deprivation. Poverty, unemployment, poor education, corruption, lack of social amenities and physical infrastructure, indiscipline and bad leadership are pervasive all over the country ding party pictures to prove this). This wouldn’t be so if the Malays and Chinese races in Singapore exchanged clothes. Racial differences are clearly pronounced even on the surface, while ethnic ones are not. In fact, when Nigerians or indeed black people are discriminated against, we cast all our ethnic differences aside and are in one accord against our abusers. What is ironic is that as we spew our own ethnic venom against one another, we are similarly as guilty as the far-right extremists and bigots in Europe and America with their anti-black vituperations. This got me to start thinking

about finding the basis for Nigeria’s unity, and using this basis as a fulcrum for galvanizing all our people together. As a young student of our political history, I was aware of the comments of some our nation’s founding fathers regarding the lack of a basis for Nigerian Unity, since we were merely a contraption of colonial administrative convenience. But almost 60 years after successfully winning independence from the British, fighting a bitter Civil War against secession and surviving many years of brutal military dictatorships and a plethora of corrupt and ineffective political leaders, Nigerians must find the basis for national unity and forge our future together based on it. So, is there a basis for Nigeria’s unity? Certainly, there is! Our commonalities stem from our collective deprivations. All Nigerians regardless of their ethnic or religious backgrounds have been victims of deprivation. Poverty, unemployment, poor education, corruption, lack of social amenities and physical infrastructure, indiscipline and bad leadership are pervasive all over the country. To those who are actively campaigning that one ethnic group or part of the country dominates the others, they will see that all ethnic groups have been devastated by these deprivations. There is not a single part of this country that is fulfilled or less de-

prived. We are all equally victims of our deprivation, so if there is some basis for Nigeria’s unity it is our collective deprivation and suffering and working together to over-turn the tide. The truth that many of these ethnic bigots whose nationalistic sentiments are similar to the Alt-Right anarchists of America and Neo-Nazis of Europe are afraid of embracing is that the rot that our country has become is not because of the “other people”, it is because of the collective choices that our leaders and all of us as people have made over the years. It is our leaders and their excesses and the grand and system indiscipline and corruption that are the cause of our ills, and their ability to spin and manipulate us with ethnic and religious prejudices as well as our gullibility that have been the bane of our national development. So, Nigerians wake up, shakeoff the lies of ethnic and sectional prejudice, identify our common enemy – deprivation and all the forces that create and sustain it, and fight them. In the words of acclaimed leadership writer, John C Maxwell in his 101% Principle – let us find the 1% that we agree on and give it 100% of our effort to resolve. If not, we will allow the 99% that we don’t agree on to destroy us!

Send reactions to: comment@businessdayonline.com

Taming the abuse of temporary work permit

OZOR CHINEDU Ozor Chinedu is the Head Immigration and Legal Advisory Services at DCSL Corporate Services Limited. Kindly forward comments and reactions tocozor@dcsl.com.ng or +2348055402929, +2348055371550

he Nigerian Immigration Act 2015 (the Act) is widely acclaimed as the most effective Immigration legislation since Nigeria’s independence and a breath of fresh air in the country’s quest to standardize its immigration practices in sync with international best practices. In addition to facilitating foreign direct investments, the Act seeks to protect national security and wellbeing of the citizenry. Indeed, Immigration and its control, worldover, has always played a central role in national development. Aside from contributing to the inflow of requisite skills and expertise required to drive the nation’s economy, Nigerian immigration policies are built on the imperative that it is the responsibility of Government to protect and defend its citizenry against the unsavory effects of unwholesome practices that may be occasioned by a lax immigration regulation. An important area on which the Immigration Act places high premium is the facilitation of the availability of requisite skills and

expertise required to galvanize the Nigerian economy by ensuring easy an affordable access to foreign expertise wherever and whenever required in Nigeria. Thus, aside from ensuring the security of the nation and the wellbeing of its citizenry, the Act seeks to assure employment protection from external forces which might jeopardize the ease of access to decent employment by qualified Nigerians. One of the facilities put in place by the Government to ensure the availability of skilled manpower is the Combined Expatriate Residence Permit and Aliens Card (CERPAC) as cumulatively provided under Sections 36(1)(a), 36(2) and Section 37(1) of the Act. CERPAC is both a residency and a work permit that allows the holder to live and work in Nigeria on a permanent basis, subject to the conditions in respect of which it is issued. The validity period of the CERPAC however depends on the validity of the Expatriate Quota Certificate of the employing Company. An important condition for the grant of Expatriate Quota in Nigeria is the requirement that two Nigerian Understudies shall be employed for each expatriate employed to a specific role. Section 37(8) of The Act also provides for the issuance of Temporary Work Permits (TWP) by endorsement on any travel document or otherwise as the Comptroller General may direct. TWP is a single-entry work visa which applies to Expatriates invited into the Nigeria to provide short-term services. The TWP allows such expatriates to come into Nigeria to provide specific services on a shortterm basis and is usually issued for an initial period of 2 months (depending on the discretion of the Comptrol-

ler General) but may be extended for another month depending on the discretion of the Comptroller General of Immigration. The services eligible for the grant of a Temporary Work Permit include - erection / after-sales installation work, feasibility studies, erection / installation work, repairs of machinery/ equipment, research work and other relevant assignments, provision of short-term engineering work etc. Expatriates on TWP are ordinarily exempted from the payment of Personal Income Tax. However, they will be liable to pay taxes in Nigerian if they spend an aggregate of 183 days in a calendar year in Nigeria, including any period of annual leave and temporary absence. There is also no express requirement for expatriates on TWP to be under-studied by qualified Nigerians. Thus, whilst the issuance of TWP generally forecloses the payment of relevant PAYE taxes, the gains derivable from the training of qualified Nigerians on the skill-set of the expatriate on TWP is also denied. It is however ironic to note that whilst the issuance of TWP is intended to be beneficial to national development, it is the most abused immigration facility. A glaring abuse of the TWP is the grant of stay to the holders beyond the maximum and cumulative period of 90 days. It is evident from the letters and wordings of both the Immigration Act and the Immigration Regulations issued pursuant to the Act that the objective of the TWP is to provide services on a short-term or temporary basis, as against having expatriates live and work in Nigerian on the long-term. Thus, TWPs are intended to ensure availability of manpower to satisfy short-term needs. It is therefore disturbing and against the intendment of the framers of both

the Immigration Act and the Immigration Regulation to approve the extension of Temporary Work Permits before the statutory period of 90 days. It is pertinent to note that the Immigration Regulations 2017 prescribe a penalty after conviction of 3 years imprisonment term or a fine of five hundred thousand (circa $1,500) for failure to renew the TWP, whilst enjoying the benefits only those with valid TWP should enjoy. The imposition of a fine for overstaying without any further sanction would appear to be a subtle encouragement as the erring expatriates readily pay the seemingly insignificant fines and move on. Extending the permit beyond the three months period undermines the very essence of the facility one of which is to ensure the security of employment of Nigerians. Data from the National Bureau of Statics for Q3 2017 puts the general un-employment rate at 18.8%, under-employment at 21.2% and youth un/underemployment at 52.65%. These indeed are mindboggling figures and on their own, call for national and concerted action. Another area of abuse is the qualification of expatriates to whom the TWP facility is granted. It is unclear how the immigration authorities assess the qualification of the applicants for a TWP to ascertain that they possess the requisite skill-set for the services they intend to provide. It is advised that the grant of TWP to regular technicians and immigrants who possess almost nil academic qualifications and who end up overstaying the approved period in Nigeria should be discouraged, particularly when the underlining services could be easily provided by qualified Nigerians. Also, worrisome is the fact that there is yet to be a complete synergy

between the Nigerian Immigration Service and the various State Inland Revenue Services, such that relevant data on immigrants who should ordinarily be brought into the tax net would be available to the Revenue authorities. Thus, whilst it is relatively easy to bring holders of CERPAC under the tax net, the position with immigrants on TWP is quite difficult. This stems from the lack of reliable data on immigrants on TWP and their exact location at any point in time. The Immigration Regulations require registered Immigrants to notify the State Registry within seven (7) days, if they intend to change residence from one State to another, and before leaving their places of residence for any period exceeding seven days. Such expatriates are also expected to report to the Immigration Officer in the new State of residence within seven (7) days of arrival and submit their international passports and residence permits for necessary registration. An appropriate database and enforcement apparatus would facilitate the easy tracking of immigrants on TWP who remain in Nigerian for upwards of 183 days and would ensure that appropriate taxes are levied and collected on the ground of their being resident in Nigeria for more than 183 days. In the absence of such a database, the Federal Government and indeed the respective host States would continue to lose revenue required for developmental activities.

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

BUSINESS DAY

C002D5556

Editorial PUBLISHER/CEO

Frank Aigbogun EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, SALES AND MARKETING Kola Garuba EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi HEAD OF SALES, CONFERENCES Rerhe Idonije 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

Monday 07 May 2018

First takes on PMB’s visit to the USA

resident Muhammadu Buhari returned to the country May 2 after a one-day state and three-day official visit to the United States of America. Mr President met with the leader of the free world, United States President Donald Trump. Both leaders held a press conference and issued statements on the interests of their countries as well as their expectations going forward. We congratulate President Buhari and the Presidency for pulling out the feat of an international visit by our leader without a major faux pas or fallout with citizens at home and abroad. During previous visits outside our shores, President Buhari always found cause to demonise the country or insult the sensibilities of his citizens. Many people held their breath until the end of the official visit. Buhari was the first leader from sub-Saharan Africa to visit Mr Trump in his White House residence since he assumed office in January 2017. The indications are that the visit went well in terms of the optics. The visit also featured diplomatic gains and losses by both sides. What did the trip achieve in real terms? For one, Nigeria got affirmation of US cooperation and

collaboration on security issues. Security is the flagship of the Buhari administration, so it is just as well. President Trump confirmed the sales of Super Tucano helicopters to Nigeria, the first time in a long while, and assured of support with intelligence and men in the continued fight against terrorism. Buhari on his part reiterated the imperative of US support as security challenges continue to threaten the nation and colour the efforts of the government. Agriculture featured on the trade deal. However, it would seem that all the gains went to the United States, pending further details. Mr Trump got his deal to sell agricultural produce to Nigeria. Initial reports indicate that Nigeria got nothing. This is despite President Buhari repeating the disputed claims by the Federal Government of giant strides in rice cultivation, allegedly leading to a 90% reduction in rice importation. From the thrashing of fanciful effects of this rice production on mills in Thailand by the Thai ambassador to denials of any improvement in production processes by 16 Northern groups, citizens now take claims on rice production with more than a pinch of salt. Whatever the situation with rice, we wonder at the import of its inclusion in the talks. Nigeria is not likely today or tomorrow to need to sell rice to America. The USA produces

more rice in quantity and brands than it needs. What was thus the need to speak of this matter at this rare opportunity? What happened to taking advantage to canvass US purchase of more Nigerian processed or manufactured products under the AGOA platform? President Trump pushed for Nigeria to buy more US agricultural imports and got his wish. Trump is engaged in trade games with China and Nigeria as an additional market for their wheat, soybeans and other agricultural commodities is a definite win. It is not clear yet what agricultural commodities the Americans would be pushing to Nigeria with this new deal. It is noteworthy that America is home of the GMO lobby in agricultural production. They also produce outsize quantities of the various commodities in which they deal. What would happen to the Nigerian farmer and workers in the agriculture value chain? Can Nigeria get the American firms to consider local production first in addition to importation? The US president underscored his overall victory over Nigeria during this exchange by pointedly declaring that America does not want anything to do with our principal export and mainstay, crude oil. As it were, Trump even hinged the promise of fresh US investments in our economy on Nigeria creating a levelplaying field through the

removal of trade barriers and the principle of reciprocity for US aid to the tune of $1billion annually to Nigeria. Then Mr Trump imperiously declared American dislike of the current narrative of security in the country as it concerns killing of Christians. He stated: “We have had a very serious problem with Christians who are being murdered, killed in Nigeria. We gonna be working on that problem, and working on that problem very,very hard, because we can’t allow that to happen”. President Buhari played the diplomatic dove all the way. He passed off the opportunity to give an African response to Trump’s alleged shithole comment on African nations or the earlier one about Nigerian visitors to America never returning to their “huts” in the country. We agree it was probably not the platform for bric-a-brac. President Buhari continued his narrative of Libyan-trained soldiers rather than herdsmen responsible for the murders. We will address this matter in more depth. Overall, the scorecard for this visit does not look good for Nigeria. America got the upper hand. Nigeria secured confirmation of already existing agreements in security, loss of the American market for our oil and the further opening of Nigerian agriculture to foreign competition. Not worth celebrating.

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Albert Alos Funke Osibodu Afolabi Oladele Dayo Lawuyi Vincent Maduka Wole Obayomi Maneesh Garg Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Sim Shagaya Mezuo Nwuneli Emeka Emuwa Charles Anudu Tunji Adegbesan Eyo Ekpo

ENQUIRIES NEWS ROOM 08022238495 Lagos 08034009034 08033160837 Abuja

}

ADVERTISING 01-2799110 08116759801 08082496194 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 www.businessdayonline.com The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 LEGAL ADVISERS The Law Union

MISSION STATEMENT To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.

OUR CORE VALUES

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven. • The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessdayonline.com

Monday 07 May 2018

BUSINESS DAY

Monday 07 May 2018

BUSINESS DAY

Monday 07 May 2018

BUSINESS DAY

Monday 07 May 2018

C002D5556

In Association With

Tunisia votes

Big bother

The uncertain promise of local elections in the birthplace of the Arab spring Municipal councils will have little power to improve the lives of frustrated Tunisians

OCAL lore holds that seven visits to Kairouan’s imposing grand mosque are equal to the haj, the pilgrimage to Mecca that is one of the “pillars of Islam”. The city has been a centre of Sunni scholarship for centuries. Lately, though, it has acquired another landmark: the “road of death”, a rutted highway that slices south-west into the desert. The transport ministry promised to fix it in 2016 after 27 people died in wrecks the previous year. Yet the moniker still fits. On April 18th a pregnant woman was seriously hurt in a crash. She might have lived if the local hospital used paramedics qualified to operate the ambulance. Instead, she died hours later. Since their revolution in 2011, Tunisians have been stuck with unelected local governments that do little to fix up highways and hospitals. That is meant to change on May 6th, when voters choose municipal councils for the first time. The elections, originally scheduled for 2016, have been postponed four times. They come as many Tunisians are growing frustrated with democracy, which has not yet brought prosperity. Candidates have focused on local grievances. But the campaign has led to a wider debate about the imbalance of power and resources in Tunisia. Zine el-Abidine Ben Ali, the deposed dictator, steered most of Tunisia’s riches to the northern coast. It got 82% of development

Britain’s Windrush mess revives support for ID cards Establishing who does and doesn’t have the right to be in the country might be easier—and fairer—with a national register

N THE end, Big Brother was brought down by a Yorkshireman and a housewives’ league. When Clarence Willcock, a former Liberal Party parliamentary candidate, was pulled over for speeding in December 1950, he refused to produce his identity card, which had been introduced during each world war and kept after the second. “I am a Liberal,” he told the cops, “and I am against this sort of thing.” The High Court ruled against him, but commended his stand. Housewives burned their cards outside Parliament, and by 1952 they were scrapped.

funds in his final budget. The south and west lag on almost every socioeconomic indicator. Though the interior contains much of Tunisia’s farmland, its mineral resources and some of its best tourist attractions, it reaps few benefits. Tataouine, in the south, is the hub of Tunisia’s oil industry. But profits are whisked up north. The governorate has the country’s highest unemployment rate. “The revolution was supposed to address this imbalance,” says Rachid Ghannouchi, the leader of Ennahda, an Islamist party that is part of the governing coalition. Ennahda is the front-runner in the local elections. It has deep roots in rural areas and was the only party to field lists in all 350 districts. But both it and Nidaa Tounes, a secular party that leads the government, have lost some of their shine. They have struggled to kickstart the economy. The unemployment rate is over 15% nationally and higher in the countryside, leading to despair. At least 33 people have tried to kill themselves this year in Sidi Bouzid, an impoverished region of around 430,000 people where the Arab spring began. The politicians in Tunis appear out of touch. They have granted amnesty to corrupt officials and

refused to extend the term of a commission investigating abuses by the old regime. But the municipal elections have brought a surge of political newcomers. Thousands of young people are running, many as independents. In Beja, a town of whitewashed houses in the western hills, the candidates talk about water. The region is Tunisia’s breadbasket. It has the country’s largest dam, which tames the Medjerda river. For the past three years, though, water has been scarce. Shortages last summer left some villages dry for days at a time. Just 72% of homes in the surrounding province are connected to the national water grid, compared with 90% in the capital, according to the 2014 census. Candidates promise to upgrade the infrastructure and improve water distribution when droughts hit. Campaigning is also in full swing in Gabes, a city best known for two things. One is the world’s only seaside oasis. The other is a phosphate plant that belches pollution into the sky. The fumes have contributed to the deaths of hundreds of trees—and hundreds of people. Candidates from all parties say they will enforce environmental laws and stop the urban sprawl that threatens to overrun the oasis.

This all looks promising: diverse campaigns focused on local issues. The fear is that these promises will go unfulfilled. For decades local officials were unable to do anything without approval from the capital. Days before the election, parliament passed a long-debated law that grants them greater autonomy. But implementing it will require a major change from Tunisia’s notoriously centralised bureaucracy. Even with a wider mandate, the councils will have limited resources. Tunisia allocates just 4% of its budget to municipalities, compared with 10% in nearby Morocco, a richer country. There are also signs the election will be a damp squib. Polls suggest that barely one in five Tunisians plans to vote (compared with nearly 70% in the most recent parliamentary election). This is the first election in which soldiers and police officers may cast ballots. They did so on April 29th, since they will be deployed on election day. Turnout was just 12%. In the capital, some politicians fear the vote will only cause more anger— directed at them. “We should postpone local governance,” says Mohsen Marzouk, the leader of Machrouu Tounes, a secular party. “With what we have now, we can only share misery.”

But the “Englishman’s badge of servitude”, in the words of one late libertarian, is back. Tory and Labour politicians have been trying to reintroduce the cards for two decades. About 12,000 Britons were handed them under a phased roll-out in 2009, but the coalition government scrapped them a year later. The hounding of the Windrush generation of migrants who came to Britain legally but could not prove it felled the home secretary this week (see Bagehot). It has also rejuvenated the ID-card debate. A clutch of ex-home secretaries claim such cards might have prevented the affair. One of them, Charles Clarke, says governments have three options to tackle illegal immigration. They can do little and hope for the best. Like the most recent governments, they can create a “hostile environment” in which landlords carry out immigration checks but citizens who lack paperwork struggle to prove their rights. Or they can plump for identity cards, which require a register of all citizens and would enable Britons to prove their identity and status. “Of the three, I think it wins by a mile,” he concludes. How might a scheme work? There is Continues on page 19

Monday 07 May 2018

C002D5556

BUSINESS DAY

In Association With

Mother’s money

Does growing up poor harm brain development?

Britain’s Windrush mess revives support for...

A team of scientists undertakes an ambitious experiment which could change thinking about welfare

Continued from page 18

EDERAL Hill House is a squat building in central Providence, within earshot of the city’s main highway. On a recent rainy Monday, a school holiday, the building was full. Older children lounged in front of a film, while toddlers roamed around the soft play area. Some regularly spend more than ten hours a day here, on top of school hours, while their parents work. The charity provides essential support for low-income families: it picks up children from home before school starts, and looks after them long after it ends. It accomplishes a lot on a tight budget. In several places, the ceiling lets through water from the grey Rhode Island sky. The youngest group of children at Federal Hill House are between 18 months and five years old. There are 12 of them, with a waiting list to join. The executive director, Kimberly Fernandez, says some cannot name any colours when they first arrive. Some come to the centre hungry (it provides meals) or speaking no English. Others arrive with behaviour problems. Parents’ work schedules are often so inflexible that Federal Hill must cover basic logistics beyond school pick-up and drop-off. Ms Fernandez says she had to use her own car after some children took the wrong bus home from school and wound up stranded at the depot. Their mother was unable to leave work to fetch them. Plenty of evidence suggests that growing up poor, living through these kinds of scrapes, has a detrimental impact on child development. Children from rich families tend to have better language and memory skills than those from poor families. More affluent children usually perform better in school, and are less likely to end up in jail. Growing up poor risks the development of a smaller cerebral cortex. But these are associations between poverty and development, not evidence that poverty causes these bad outcomes, says Kimberly Noble, a neuroscientist at Columbia University in New York. She is part of a team of researchers running a three-year experiment which will, for the first time, search for causal links between parental income level and a child’s early development. The team will start recruiting the first of 1,000 low-income mothers next week. They will be invited to join the study, which is called Baby’s First Years, shortly after giving birth at one of ten hospitals in four cities across the United States (to avoid influencing the experiment, the researchers asked The Economist not to publish details about the cities). Of that 1,000, roughly half will be randomly selected to receive an unconditional $333

no shortage of models for ministers to pinch. Every country in the European Union has a card, save for Britain, Denmark and Ireland. So do many others, though not America. Greece and Italy are swapping paper cards for plastic ones. Cards in a handful of other EU countries have no electronic chips. One former home secretary argues that technology has made physical cards obsolete. Instead, Britons could be given a unique number with which officials could access their data, as in Denmark. Some suggest adapting National Health Service numbers, which are already assigned to most people in the country. European countries that deem plastic fantastic differ over who should carry it and when they should be required to flash it. Most insist every citizen has a card but nine, including France, do not. Belgians must carry theirs at all times, says Michel Poulain, a demographer. “When you go out you take your key, your money and your ID card. You don’t forget.” Labour’s scheme in 2009 would have made the cards voluntary for a decade. By then, most people would have applied for one anyway, reckons Alan Johnson, the home secretary at the time. What sort of data should be linked to it? Health, tax and biometric data can all be joined. Estonians use their cards to access more than 3,000 e-services. Belgian councils keep more than 90 types of information about each cardholder, including whether they want to be buried or cremated. Ken Clarke, a former Tory home secretary, argues that a scheme might satisfy civil-libertarians if it did not become an “all-singing, alldancing collection of data”. Safeguards would also help. In Estonia, powerful digital encryption guards against data breaches. In Belgium, civil servants who access data on the registry have their own ID numbers recorded. Some argue that dishing out cards might in fact create more Windrushstyle cases. Would the Home Office have given cards to the people caught up in the scandal? Mr Johnson says the scheme would need a lengthy roll-out period and for mandarins to take a generous, rather than hostile, attitude towards applicants without paperwork. Charles Clarke says a one-off amnesty could follow the launch.

a month, while the others will form a control group that will receive $20. The money, which is completely unconditional, will be loaded onto a pre-paid debit card every month for 40 months, on the date of the child’s birthday. The hypothesis is that this steady stream of payments will make a positive difference in the cognitive and emotional development of the children whose mothers receive it. The first data gathered will be baseline interviews with the mothers just after recruitment. This will reveal the various backgrounds from which the mothers come (all will have incomes below the poverty line, roughly $23,000 for a family of three). The researchers will conduct phone interviews with all 1,000 mothers around their child’s first birthday, then visit them in their homes when their children turn two. When they turn three, they will be invited with their mothers to a research lab in their city, where their child’s cognitive skills will be tested and the electrical activity of their brains studied. Living experiment The interviews will also measure mothers’ stress, mental health and employment patterns. They will ask how the amount of time mothers spend with their child is changing, and gather data on the quality and cost of child care and other child-related expenses. The researchers will also have a record of transactions made with the debit card. The unconditional nature of the cash transfer is inviolable: even if mothers choose not to take part in the follow-up studies, for which they are paid extra, they will still get the income for 40 months. The 1,000 mothers, minus potential dropouts, will provide enough statistical power to detect effects equivalent to two months’ worth of development in early childhood, says Greg Duncan, an

economist on the team from the University of California, Irvine. A real-world experiment of this magnitude comes with challenges. It has been six years in the making, and the team has spent years raising some $15m for it. About $5.8m will be given away over the next four years, to which must be added the cost of recruiting and monitoring 1,000 people over that time. The researchers worked to get new legislation passed in two states in which the experiment will be carried out, in order to make sure that those taking part remain eligible for public benefits while they receive the extra income. The entire experiment has been assessed by the Institutional Review Board (IRB) at Columbia University’s Teachers’ College, with separate IRB boards at all nine hospitals either verifying those terms, or drawing up their own, before the experiment starts. Ethical approval has been particularly complex, since mothers will be both research subjects and medical patients recovering from childbirth when they sign up. The experiment is unique in two aspects. One is its exclusive focus on the impacts of income, unrelated to employment. The other is its focus on the first three years of a child’s life. “We know virtually nothing about the causal effects of income in years zero to three,” says Lisa Gennetian, who studies the psychology of poverty at New York University. Ms Gennetian, one of several collaborators on Baby’s First Years, says its closest analogues were carried out in Minnesota in the 1990s. There parents were randomly assigned to a different mix of welfare policies which altered their incomes, and their children’s development was monitored. The Minnesota studies suggested that about $4,000 a year is enough to see significant effects on a child’s development,

but because the extra money was connected to parents’ work, they did not control for other factors that might also have influenced the children’s development. In contrast, mothers in the new experiment are free to leave their jobs to look after their new child, if they want to. How to spend it Dr Noble, Ms Gennetian and their colleagues are not alone in their ambition to study the impact of cash on well-being. Y Combinator, a startup accelerator in Silicon Valley, has formed a research arm to investigate the more general impacts of direct cash gifts of this kind. That experiment, which has not yet started, plans to give $1,000 a month to a randomly selected third of 3,000 people from two American states, monitoring any changes in health, time-use and crime induced by the cash. Part of the Baby’s First Years study will be about seeing how the extra cash is spent, but signs already suggest where it might go. In a pilot study of just 30 mothers, run in New York in 2014 to work out the logistics of handing out cash, the money was usually spent within three days of receipt, mostly at supermarkets and department stores. Ms Fernandez says nappies are a particular problem for new mothers on low incomes, as they often cannot afford the upfront membership fees required to shop at large discount supermarkets in the suburbs, or the costs of travelling to get there, and so have no way around paying a premium at nearby corner shops. “Food, diapers and travel,” says Ms Fernandez, is what this money will go towards. “You know what you do when you can’t afford to buy diapers? You change your baby less often. You let them walk around in a dirty diaper,” says Katherine Magnuson, the team’s poverty expert at the University of Wisconsin-Madison.

BUSINESS DAY

C002D5556

Monday 07 May 2018 In Association With

Augean AngolaIs

Angola’s new president serious about reform? Africa’s second-largest oil producer is even more corrupt than Nigeria. President João Lourenço will

F ANY country ever needed a fresh start, Angola does. It is more corrupt than Nigeria; its infant mortality is higher than Afghanistan’s. Until September it had been ruled by the same man, President José Eduardo dos Santos, for 38 years— more than twice as long as most Angolans have been alive. Even in retirement, many expected Mr dos Santos to continue pulling the strings; he remains head of the ruling party. Hardly anyone expected his successor, João Lourenço, to break the chokehold that the dos Santos family and their cronies have on the Angolan economy. So Mr Lourenço’s first few months in office have pleasantly surprised (see article). He has ousted Mr dos Santos’s daughter, reputed to be Africa’s richest woman, from her perch at the top of the national oil firm, and sacked the former president’s son from his job running the sovereign-wealth fund. He has even allowed the junior Mr dos Santos to be charged with fraud, which he denies, over the transfer of $500m out of the country. That would never have happened under his father’s regime. The $640bn

virtually impossible for meaningful economic activity to occur outside the charmed circle of the politically protected,” wrote Ricardo Soares de Oliveira in “Magnificent and Beggar Land: Angola since the Civil War”. When the oil price crashed in 2014, Angola was left with stalled growth, vast debts to China and no export industry of any consequence to replace hydrocarbons. This is the mess Mr Lourenço must clean up.

question is whether Mr Lourenço’s anti-corruption drive is real, or whether he plans to replace one set of snouts at the trough with another. $640bn is the amount of money that Angola is thought to have made from oil and gas exports since 2002. That was the year its ghastly, three-decade civil war ended, leaving its people traumatised and its soil studded with landmines. Soon afterwards oil prices surged, giving Africa’s second-largest oil producer a chance to reap a huge peace dividend and rebuild its bombed-out

cities. This chance was not entirely squandered—Angola has more roads and dams and skyscrapers than before, and its people are a bit less poor. But the main benefits of the oil boom flowed to a tiny elite. Tens of billions of petrodollars simply vanished. Many more were grabbed by bigwigs who won permits for projects and let their foreign partners do the work. Practically everything in Angola costs more because cronies take a cut: Luanda, the capital, was recently ranked as the most expensive city in the world for expats. Genuine entrepreneurs are crushed. “It is

Lourenço’s toil Some early signs are encouraging. Besides sidelining the dos Santos clan, he has pushed through a law making foreign investment easier, by removing a requirement to have a local partner, and asked the IMF how to stabilise the economy. But this is not nearly enough. Since Angola’s biggest problem is corruption, the government’s most urgent tasks are to promote transparency and accountability. A good start would be to allow an independent audit of the country’s public debt. How was it created, and where did the money go? The opposition is calling for such

an audit, and some members of the ruling party would support it. Those who object are largely people with something to hide. Unfortunately, they are a powerful constituency in Angola. It remains to be seen whether Mr Lourenço has the will and the wherewithal to defeat them. The ruling party is no longer Marxist, but it still seeks to control too many aspects of Angolan life. A growth-blocking forest of licences and regulations enriches those with the power to grant or waive them. It should be slashed. Political meddling in Angola’s courts grants impunity to the mighty. It should end. And assaults on press freedom shield the elite from much-needed scrutiny. Rafael Marques de Morais and Mariano Bras, two graft-illuminating journalists, are on trial—behind closed doors—for insulting the former attorney-general. The cases against them should be dropped, and the media unmuzzled. Mr Lourenço once promised to root out corruption even among the most powerful, adding that “the law is for everyone.” Angola can escape from his predecessor’s long, dark shadow only if he means it.

A tropical crime wave

Mexico’s murder rate heads for a new record

The solutions proposed by the main candidates for president are unconvincing

N APASEO EL GRANDE, a town in the central Mexican state of Guanajuato, the bodies are stacking up. In February gangsters killed a local politician. The remains of another victim were found in four bags scattered across town. Police made a similar discovery in April. In the first three months of this year the municipality of 85,000 people had 43 murders, up from 20 in all of 2016. That is about the same as London, a city 100 times larger and currently panicking about its high murder rate. A visitor might not notice anything amiss. Shiny cars made in nearby factories cruise the streets and children play in the main square. But residents are frightened. Bouncing a child on his knee in his living room, Efraín Rico Rubio, a former city councillor, now an administrative worker at a university, describes the violence. “Three blocks down they killed someone,” he says, “and three blocks in the other direction.” He sees little prospect of improvement. Schoolchildren “all want to be El Chapo”, a drug baron who became a folk hero by escaping twice from prison. (He was caught again in 2016 and extradited to the United States.) The town and the state it belongs to are suffering from a double

blow. One is a national crime wave, during which the murder rate broke through its previous record of 2011. That peak came after the then president, Felipe Calderón, deployed the army to fight drug gangs. His tactic of capturing or killing kingpins caused the gangs to split into warring factions and to enter new lines of business. The current president, Enrique Peña Nieto, who took office in 2012, promised to halve the murder rate. Instead, after an initial decline it rose sharply (see chart). By March this year the number of murders during Mr Peña’s presidency had exceeded the death toll under Mr Calderón. The murder rate so far in 2018 is around 25% higher than

it was in 2011. Guanajuato’s second problem is that it is new to such violence and thus less prepared for it. In 2011 its murder rate was half the national average. Now it has soared to double the national rate. The rise in violence is among the main issues in the general election scheduled for July 1st. Nearly half of Mexicans say crime is the main problem in their area. The disappearance of three film students in Guadalajara in March, and the discovery that their bodies had been dissolved in acid, sparked large protests last month. The first of three debates among five presidential candidates, held on April 22nd, began on the theme

of security. Their proposals were not encouraging. Andrés Manuel López Obrador, the leftist frontrunner, misdiagnosed the problem. His proposed solutions are radical but, at best, part of the answer. His two main rivals were vague. Guanajuato’s prosperity, once thought to deter crime, now seems to be attracting it. The state’s south is part of an industrial corridor that stretches from Aguascalientes to Querétaro. Factories in the region produce cars and other goods for tariff-free export to the United States and Canada under the North American Free-Trade Agreement. A quarter of Guanajuato’s workforce is employed in manufacturing. Gangs from nearby Jalisco and Michoacán moved into the state from 2015. They are not led by El Chapo-style narcos. They make most of their money from theft and extortion. Some of the loot, including grain, car parts and furniture, is hijacked from trains bound for the United States. The biggest moneymaker is fuel theft. Nearly a fifth of recorded cases occur in Guanajuato. The country-wide cost of this to Pemex, the state-controlled oil firm, is more than 30bn pesos ($1.6bn) a year. Huachicoleros, as the thieves are called, fight each other and

oil-industry workers for control of pipelines, just as drug gangs war over highways, border crossings and street corners. A politician in Guanajuato claims that 80% of murders in the state are related to fuel theft. In January the head of security at an oil refinery in the city of Salamanca was killed. Car theft can also be lethal. In 2011 less than 2% of the state’s vehicle thefts involved violence, according to government data; last year 26% did.

Monday 07 May 2018

BUSINESS

COMPANIES & MARKETS

DAY

NASCON profit surge 121%, driven by revenue from salt

Pg. 22

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

NAHCO shareholders to receive N406m dividend ...As company records improved performance Bala Augie

he shareholders of Nigerian Aviation Handling Company Plc (NAHCo) have cause to smile as the Board of Directors has recommended a dividend payment of N406 million for the year end December 31, 2017. The dividend, which translates to 25 kobo per share, is expected to be approved by shareholders at the forthcoming Annual General Meeting (AGM). Despite the challenges in 2017, NAHCo, which provides aircraft, passenger and cargo handling services and other related services, weathered the storm to end the year with higher profit after tax (PAT). Specifically, the company recorded a turnover of N7.926 billion in 2017, compared with N7.956 billion in 2016. Finance cost was reduced from N545 mil-

lion in 2016 to N213 million in 2017, while Profit After Tax stood at N776 million in 2017, from N581 million in 2016. The bottom-line showed an increase of 34 per cent. Earnings per share improved from 36 kobo to 48 kobo. Hence, the board of directors has recommended a dividend payment of 25 kobo, which is higher than the 22 kobo paid the previous year. Meanwhile, the company has begun 2018 on a very bright note, recording significant growth in PAT for the first quarter (Q1) ended March 31, 2018. According to the results released by the Nigerian Stock Exchange (NSE), NAHCo reported a turnover of N2.188 billion in Q1 of 2018, up from N1.786 billion in the corresponding period of 2017. Finance income improved from N30.916 million to N64.495 million, while the company was able to reduce finance cost

Usman Arabi Bello, chairman of NAHC

to N44.536 million, from N55.715 million in 2017. Profit Before Tax jumped to N117.405 million in 2018,

compared with N1.026 in 2017, while PAT followed same positive trajectory, rising to N97.566 million, from

N1.026 in 2017. The Q1 results are the first set of results produced by the Managing Director/ CEO, Idris Yakubu, who took over the running of the company in November 2017. Market analysts said with the Q1 performance, Yakubu, a former banker, who has an extensive experience in delivering agreed strategic business imperatives, is bringing his experience to bear in the company to the delight of all stakeholders. Elated shareholders of NAHCo had last year commended the board and management for the improved results despite the challenging operating environment. The shareholders pledged their support for better future results and urged the board and management to sustain the performance. Chairman of NAHCo, Usman Arabi Bello had in-

formed the shareholders that in spite of the recession and the global weakness in the aviation sector, the company’s performance was commendable. “Our resilience as a company and our debt management strategies resulted in bond repayment of the N2.15 billion in the third quarter of 2016,” he said. Speaking on the diversification programme, Bello noted that NAHCo Free Trade Zone (NFZ) that was approved by shareholders in 2011 as a subsidiary of the company had achieved some milestones. Some of the services offered by the NFZ include supply chain management, logistics, equipment leasing and other value-added services. Phase I of its development has been completed and now operating at almost full capacity. The Company is currently making preparations to start building phase II of its masterplan.

Mixed reactions trail CBN’s move to sanction bank CEOs

hareholders have expressed mixed reactions to plans by the Central Bank of Nigeria (CBN) to sanction Chief Executive Officers (CEOs) of banks that fail to submit audited results of their banks after 12 months. The shareholders expressed their view in separate interviews in Lagos on Friday, while reacting to the apex bank’s Monetary, Credit, Foreign Trade and Exchange Policy released recently. The Banks and Other Financial Institutions Act (BOFIA) require banks to publish their audited financial accounts not later than four months after the end of each financial year. The CBN had in the Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Year 2018/2019 also directed banks to publish their audited financial statements not later than four months after the end of each financial year. The CBN said it would hold the board chairman and CEO of any defaulting bank directly responsible for any

breach. Diamond and Unity Banks had notified the Nigeria Stock Exchange (NSE) that their results would be delayed. Skye Bank, however, is yet to publish its 2016 and 2017 results. Moses Igbrude, the Publicity Secretary, Independent Shareholders Association of Nigeria (ISAN), said sanctioning banks CEOs after four months of not releasing their accounts was too short a time. Igbrude said policies were instituted to correct and strengthen institutions not for revenue generation at the detriment of the affected institutions and the shareholders. “What we see in Nigeria from regulators is impunity, using directives and policies for revenue generation at the detriment of institutions and the shareholders,” he said. Igbrude said CBN should first engage the banks to find out the challenges to ascertain if they need assistance. According to him, the apex bank should warn the affected banks after the engagement before the option

of sanctions. “I don’t think management will deliberately delay the release of their accounts without issues. “I am appealing that CBN should look at this issue critically on one-on-one basis with the intention to assist and strengthen these institutions for the sake of all stakeholders. “Sanctions should be the last resort when all efforts fail, such officers should be sanctioned personally, not the banks bearing the cost of their wrong decisions and behaviour,’’ Igbrude said. However, Bayo Adeleke, the immediate past Secretary, ISAN, said the CBN pronouncement was in the interest of the investing public. Adeleke said companies should render their stewardship yearly within a certain time frame. “It is the duty of regulators to enforce such compliance. Skye Bank is, however, an exception. The present bank’s management was put in place by CBN. They are battling with legacy issues which CBN is

fully aware,’’ he said. Sheriffdeen Tella, a Professor of Economics, Olabisi Onabanjo University AgoIwoye, Ogun said the law had always been there but ignored. Tella said every bank was expected to present quarterly report of its activities to the CBN, noting that at the end of every operating year, an annual report should reach the apex bank before the end of the first quarter. He said many banks, particularly those in or approaching distress, keeps their books away from the regulatory authority. Tella alleged that the apex bank sometimes cover up for the banks depending on the relationship with the head of such bank. He said punitive action needed to be taken to prevent disaster because the number of banks involved was rising. “This is the situation now and the CBN is only trying to enforce the regulation. Many of the banks have not held Annual General Meeting (AGM) nor sent their annual report to shareholders for

some years and the CBN is aware. “There is no transparency and accountability in the operations of these banks but probably with the connivance of the CBN. “Of course, the value of shares of the banks continues to fall or remains low and static,’’ Tella said. Meanwhile, Boniface Okezie, the National Coordinator, Progressive Shareholders Association of Nigeria (PSAN), blamed the apex bank and the Financial Reporting Council of Nigeria (FRCN) for the delay witnessed by some banks in publishing their accounts.

Okezie attributed the delay to lots of provisions being demanded by the Financial Reporting Council of Nigeria (FRCN) and CBN. “Some of the banks are battling to see how they can overcome that until they are cleared by the apex bank and FRCN, their accounts cannot be published,’’ he said. Okezie said the apex bank had not done anything to Skye Bank over delay in the publication of 2017 accounts because the management was instituted by the CBN. “Skye Bank is on CBN life line and CBN will do everything to protect them from being penalised,’’ he said.

BUSINESS DAY

C002D5556

Monday 07 May 2018

COMPANIES & MARKETS

NASCON profit surge 121%, driven by revenue from salt ...Declares dividend of N1.50k in 2017 MICHEAL ANI

ASCON Allied industries, a subsidiary of Dangote Industry Limited, has continued its positive drive by reporting a brilliant performance in its full year 2017 score card on the back of an increase in revenue derived from the sales of its salt produce. The Fast Moving Consumer Goods (FMCG) firm reported a 121 percent surge in Profit after Tax from N2.4 billion in 2016 to N5.3 billion in 2017. Revenue for the year also jumped massively from N18.2 billion in 2016 to M27 billion in 2017. Representing the biggest result the firm has reported in the last 5 years. Earnings per share also increased from N0.91 in 2016 to N2.02 in 2017 while a dividend of N3.97 billion approved at the AGM, amounted to N1.50 per share. This represents a 110 percent increase from the N0.70 dividend paid in 2016. Salt earnings remain a key driver of revenue as revenue from salt comprised 81 percent

or N22.2 billion of the N27 billion, largely unchanged from the proportion of revenue it generated in 2016 while seasoning generated two percent of the revenues. NASCON also improved revenue across its geographical locations. Revenue from the eastern part of the country increased from N1.1 billion to N2.2 billion, the west also moved from N5 billion to N5.6 billion while the northern part of the country showed the biggest improvement as revenue jumped from N12 billion to N19 billion. The FMCG firm with a market cap of N56.698billion has its share price sold at N21.40 as at the close of trading session on Friday. Shareholders have shown a positive remark, commending the board and management following result from the firm’s 2017 financial report. “A total revenue increase of 48 percent in the year under review is a great feat given that many companies recorded losses as the domestic economy gradually recovers from recession,” Muktar Muktar,

Chairman, Trust Shareholders Association of Nigeria said while speaking at the NASCON Allied Industries Annual General Meeting (AGM) held in Lagos. He stated that NASCON adopted global best practices in maintaining strategic reserves which shows that the management cares about the future growth and expansion of the company. Another shareholder, John Evitar in his remarks commended the board and management in steering the company to greater heights, especially in consistent payment of dividends. He commended the company’s performance and appreciated the board and management who worked tirelessly to ensure that shareholders are rewarded with dividends Chairperson of the company, Yemisi Ayeni in her review said, “Through intense focus and operational discipline, we delivered unprecedented returns in our salt segment and also increased sales posted in the highly competitive seasoning market.”

Africa Finance Corporation retains Strong Performance in 2017 DIPO OLADEHINDE

frica Finance Corporation (AFC), africa’s leading infrastructure multilateral development finance institution maintained its strong financial and operational performance as the company recorded a net profit of $100.3 million in full year 2017. Andrew Alli, ceo of AFC said 2017 has seen a robust performance in the face of challenging conditions, despite a year marked by fiscal challenges, fewer bankable projects, and a market-wide reduction in terms of investment as AFC delivered strong underlying results. “It has been a great privilege to lead a team that is driven by this purpose. In its first decade, AFC has grown profit from $4.4 million to $100.3 million an approximately 20-fold increase, paid aggregate dividends of $304.4 million to its shareholders and elevated the Corporation to the second-best rated lending institution in Africa,” ceo of AFC. In 2017, the company recorded a 21 percent year on year growth to $4.2billion in total assets, while net interest income increase by 21 percent to $142.7 million. Also, commission, dividend and other income increasedby

36 percent to $29.7 million however the company also recorded an all-time low cost to income ratio of 19 percent while its liquidity position stood at $1.5 billionin 2017. The finance corporation, the first African multilateral finance institution to issue a Sukuk bond, which is the highest rated by an African supranational entity, raising $500m 7-year Eurobond that was 5 times oversubscribed furthermore recorded a total income of $109.2 millionas the company operations also expands. “Operationally, AFC also maintained its momentum, welcoming Kenya, Zambia and Benin as new member states, pioneering innovative funding instruments such as our oversubscribed Sukuk, and continuing to enable numerous successful infrastructure projects that will transform the economies we invest in,” ceo of AFC said. AFC, who is also the first multilateral institution investor in January 2018 also recorded three new member states in 2017 making a total of with 18 Member States as Malawi is also set to join in 2018. Malawi’s accession also supports AFC’s membership expansion strategy into Southern Africa, which signed its letter of adherence on 8th March 2018. Other member states include:

Benin, Cape Verde; Chad; Côte d’Ivoire; Djibouti; Gabon; G ambia; Ghana; Guinea-Bissau; Guinea-Conakry; Kenya; Liberia; Nigeria; Rwanda; Uganda; Sierra Leone and Zambia. The company recorded some significant transactions in 2017 which include the Anergi transaction, a joint venture with Harith General Partners creating a power company with a 1,786MW gross energy generation capacity that will supply reliable energy to a bout 30 million people in 5 countries. AFC also Led an international consortium to invest $205 million in Bel-Air bauxite mining in Guinea-Conakry, one of the largest foreign investments in the country since the 2014 Ebola crisis. The company recorded additional Equity investors in 2017, while also inaugurating two ports built in record time by Gabon Special Economic Zone, an AFC investee company while the mineral and generalpurpose portat Owendo will enable the diversification of the Gabonese economy. “With the balance sheet and track record in place to deliver infrastructure financing that will help Africa to fulfil its potential, AFC is well placed for its next decade of growth, to the benefit for all its stakeholders,” ceo of AFC concluded.

L-R: Yemisi Ayeni, chairperson, NASCON Allied Industries Plc; Paul Farrer, managing director, NASCON Allied Industries Plc and Fatima Aliko - Dangote, executive director, Commercial, NASCON Allied Industries Plc, at the 2017 Annual General Meeting (AGM) of NASCON Allied Industries Plc held in Lagos .

MTNF, Niger partner to improve maternal, infant health

TN Foundation (MTNF) and the Niger State government, alongside other relevant healthcare agencies, recently pledged to work together to tackle the menace of infant and maternal mortality in Niger State. The partnership, announced at MTNF Yellow Heart Health Forum in Minna, the Niger State capital, is a demonstration of MTNF’s commitment to reduce maternal and child mortality by increasing awareness of the phenomenon in Nigeria, and aligning with global efforts to meet the health targets of Sustainable Development Goals. Speaking on MTNF’s decision to support the Niger State government on this initiative, director, MTNF, Danlami Mohammed, said the foundation was indeed excited to go into a partnership that brighten the lives of people, especially within the community where it operates. “We take out time to identify

with the plights of members of the community where we carry out our operations and we are sensitive to these plights. It is because of this that the foundation created a mandate to spend towards improving the state of healthcare, education and economic empowerment,” he said. “Niger state is part of the six states selected for the MTNF Yellow Heart initiative, it is a laudable initiative and we are looking forward to a healthy collaboration with the Government and the good people of Niger state, we hope to use the Yellow Heart initiative to address predominant issues such as attitude and cultural practice that hinder women and children from accessing healthcare services in the society,” he said. While appreciating the Foundation for the yellow heart initiative, Commissioner for Health, Niger State, Mustapha Jibrin said the state is very happy to partner with the foundation on the initiative, the commissioner who was

represented by the Director Public Health, Niger State, Idris Ibrahim said that the initiative is aligned with what the Niger State Government is doing to improve healthcare in the state “It is in this administration that we are able to employ more than 500 health care workers” he said. “We have also improved the salary of the health care workers; in fact, we are one of the very few states that our salary matches that of the Federal Government. This is imperative to enable us attract and retain the best hands and we hope to keep improving. The MTN foundation has partnered with us on many initiatives, they supported the Government to provide free eye services, they also upgraded the maternity wing of our major hospitals to standard. The provision of a mobile clinic by the foundation is also a very commendable contribution that has helped to penetrate our rural areas with quality healthcare” he added

Tetra Pak appoints Oshiokamele Aruna as first ever Nigerian managing director

etra Pak West Africa has confirmed the appointment of Oshiokamele Aruna as the new managing director of the company. The appointment of Aruna makes him the first Nigerian to attain this position in the history of Tetra Pak, the world’s leading processing and packaging solutions provider. “My ambition is to reinforce Tetra Pak’s leadership in West Africa, and support our partners and customers in their respective projects. West Africa has a great development potential and I’m glad to become more involved in my native region.” Confirmed

Oshiokamele Aruna

the new MD. Tawfiq Agoumi, Communications Director North & West Africa pointed out this appointment as a reflection of

Aruna’s impeccable pedigree and competence, and confirms the strategic importance of the Nigerian market, one of the most dynamic in the Middle East and Africa region”. Aruna, a graduate of Chemical Engineering is also a Chartered Accountant. He has attended various courses in top management schools including IMD in Switzerland. He has over 18 years’ work experience spanning various senior management roles including Tetra Pak West Africa, a company that he joined in 2005. His last position was finance director from 2011 until his recent appointment.

Monday 07 May 2018

BUSINESS

DAY

COMPANIES & MARKETS Business Event

Presco records decline in revenue DIPO OLADEHINDE

P L-R: Yinka Ige, HR consultant; Seyi Adeoye, programme director, and Ibukun Badejo, programme manager, all of Market Research Academy (MRA), during the press conference to unveil the Market Research Academy in Lagos. Pic by Olawale Amoo

L-R: Olalekan Olude, co-founder Jobberman; Ifeoma Okoloko, head human resources, Eroton Exploration & Production Ltd; Abosede George-Ogan, director, strategy funding & stakeholder engagement, L ‎ agos State Employment Trust Fund (LSETF); Glory Edozien, founder ‘9 to 5 Chick’, and Seyi Akinwale, senior vice president sales, industrial finance – GE Capital, at the launch of ‘Building A Conscious Career’, a book authored by Mrs. George-Ogan held at Rele Art Gallery, Lagos Island.

L-R: James Olorunsebi, head operations, Hutchlam Services Limited Center: Mesahidu Elamah, managing partner Hutchlam Services Limited and Fatai Lawal, head enterprise infrastructure technology Fidelity Bank during the Hutchlam Services Limited Seminar on delivering cost effectiveness in digitally ready network solutions, in Lagos recently

L-R : Agboola Sunday, president of Nigeria Chapter, Temi Abimbola, lead advisor to the senior vice president of the African Development Bank, and Bamidele Obende, China Europe International Business School (CEIBS), during the breakfast session in Lagos recently

resco Plc, one of the leading palm oil producers in Nigeria, published its first quarter financial results for 2018 which showed a revenue decline by 8 percent year on year to N6.6billion from N7.1 billion recorded in 2017. According to the company financial report i n first quarter 2018, Profit Before Tax (PBT) declined by 32 percent year on year to N3.4billion from N5 billion recorded in 2017, Owing to a slightly higher tax rate of 24 percent in Q1 2018 of N835 million against the 23percent in Q1 2017 of 1.1 billion. Gross profit also declined to N5.1 billion in first quarter 2018 from N5.7 billion in the corresponding year of 2017 ,also in first quarter 2018, operating income increased by N39 million from N37 million recorded in first quarter 2017. In addition, Selling administrative expenses increased to N1.3 billion in first quarter 2018 compared to N1.1 billion in corresponding period

of 2017 while distributing expenses also increased to N92 billion in 2018 from N64 billion in 2017. This year, Presco shares have gained 2.9percent and have underperformed on the Nigeria Stock Exchange All share Index NSEASI which has gained 7.5 percent. Profit After Tax (PAT) declined by 33 percent year on year to N2.6 billion from N3.9 billion in 2017. On a sequential basis, due to quarter seasonality sales grew by 21 percent quarter on quarter. Early last month, Presco announced plans to invests N75 billion into the industry and plans to produce 47,000 metric tonnes (MT) of crude palm oil (CPO) in 2018. Felix Nwabuko, managing director of Presco, says the company plans a capital expenditure investment of N46 billion over the next five years (2018-2022). Nwabuko says the investments will go into plantations development, processing facilities, energy infrastructure and other supporting machinery, equipment and infrastructure.

“Our current capacity is 63 percent in the peak season and 24 percent in the lean season. Estimated production for 2018 is 47,000 MT of CPO. An average annual rise of 11 percent is expected over next five years,” he tells BusinessDay. He reveals that the company has a total land bank of 40,000 hectares, of which total planted area is 20,136 hectares of oil palm plantation and 138 hectares of rubber plantation. Nigeria produces between 900,000 and 1.2 million MT, out of 2.1 million MT local demand. The gap is filled by imports from Indonesia and Malaysia. Palm oil is used in foods as well as for the manufacture of the majority of packaged foods, ranging from biscuits to ice cream. Nigeria has a population of 183 million, more than half of whom are under 40. The combined commercial oil palm plantations by Okomu, Presco and PZ Wilmar is said to be under 900,000 MT, while smallholders farmers have about 400,000 MT. This is still not enough.

BUSINESS DAY

Monday 07 May 2018

C002D5556

Monday 07 May 2018

Stocks

Currencies

Commodities

Rates + Bonds

Economics

Funds

Week Ahead

BUSINESS DAY

Watchlist

P.E

ECONOMY

SHORT TAKES N3.18billion

10 banks pay N109.89bn AMCON levy in 2017 Stories by BALA AUGIE

en of Nigerian biggest lenders have paid a combined N109.89 billion as Asset Management Corporation of Nigeria (AMCON) charge for the year ended December 2017, which represents a 13.14 percent increase from the N96.87 percent recorded last year.

The AMCON charge is 10.74 percent of the cumulative operating expenses of the firms under BusinessDay’s coverage. The banks are Zenith Bank Plc, Access Bank Plc, Fidelity Bank Plc, First City Monument Bank (FCMB) Plc, Guaranty Trust Bank (GTBank) Plc, Stanbic IBTC Holdings Plc, First Bank Nigeria Holdings Plc, Sterling Bank plc, Wema Bank Plc, and United Bank for Africa (UBA) Plc.

AMCON was created to be a key stabilizing and re-vitalizing tool aimed at resolving the non-performing loan assets. The body was set up by the Central Bank of Nigeria (CBN), following the banking crisis of 2009 to buy bad debt of beleaguered lenders. Access Bank Plc’s regulatory charge grew by 28.31 percent to N15.47 billion in December 2017 as against N12.05 billion

as at December 2016. Zenith Bank Plc’s AMCON Charge increased by 14.22 percent to N21.41 billion in December 2017 from N18.75 billion as at December 2016. Guaranty Trust Bank Plc’s AMCON charge rose by 14.73 percent to N13.06 billion in December 2017 from N11.38 billion the previous year. United Bank for Africa (UBA) Plc’s AMCON Charge was up 14.58 per-

cent to N12.69 billion in December 2017 from N11.08 billion as at December 2016. First Bank Holdings Plc’s AMCON Charge increased by 9.25 percent to N31.49 billion in December 2017 from N28.82 billion as at December 2016. Stanbic IBTC Holdings Plc’s AMCON charge increased by 11.76 percent to N5.03 billion in December 2017 from N4.50 billion the previous year.

FMCGs spent more on capex than any sector in 2017

ast Moving Consumer Goods Firms (FMCGs) have spent more on the acquisition of assets to boost growth in 2017 than other sectors. The roughly 40 companies quoted on the floor of the bourse (excluding financial institutions) that have reported full year 2017 results saw their capital expenditure drop by 3.81 percent to N292.25 billion from N 303.83 billion the previous year.

“These firms have continued to launch new production plants. For instance, Nestle Nigeria and the millers have been expanding and their capacity utilization is getting to the maximum. They need to improve capacity utilization,” said Ayodeji Ebo, managing director and CEO of Afrinvest Investment. Nestle Nigeria Plc capital expenditure increased by 23.23 percent to N8.71

billion as at December 2017 as the company launched a N4.10 billion Milo plant expansion in Ogun State.

NASCON Allied Industries, a subsidiary of Dangote Industries Limited

and consumer good giant saw capital expenditure surge by 900 percent to N4.81 billion in the period under review. Nigerian Breweries Plc’s capital expenditure increased by 67.19 percent to N32.12 billion in the period under review as the firm is poised for a beer war as rivals are launching market

penetrating products with a view to increasing their market share. Dangote Flour Mills Plc and Dangote Sugar Plc, controlled by Dangote Limted, saw spending on capital expenditure surged by 206.55 percent and 146.82 percent to N4.026 billion and N9.74 billion respectively On the flip side the industrial goods sector is not

Sterling Bank Plc posts Q1 ended March 2018 group profit before taxation of N3.18 billion versus N2.03 billion year ago and Q1 group net interest income of N12.39 billion versus N13.51 billion year ago

41,244.89 points The equity market closed the week on a positive note, as the Nigerian Stock Exchange All Share Index (NSE ASI) appreciated by 1.15 percent to close at 41,244.89 points, as at market close, Friday, 27 April 2018.

5 basis points Nigerian Treasury Bills (NTBs) rates decreased by an average of 5 basis points due to some sell-off, as compiled at the close of the week, Friday, 27 April 2018. A Bond price increased by an average of 30kobo from the day’s opening levels.

Continues on page 24

BusinessDay MARKETS INTELLIGENCE (Team lead: BALA AUGIE - Analyst: DIPO OLADEHINDE, ENDURANCE OKAFOR, BUNMI BAILEY Graphics: DAVID OGAR )

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Email the BMI team patrick.atuanya@businessdayonline.com

BUSINESS DAY

C002D5556

Monday 07 May 2018

Markets Intelligence ECONOMY

Nigeria’s slow budget passage hinders infrastructural growth, productivity ...AS 2018 budget suffers most delay MICHEAL ANI & IPELE OLALEKAN

he Federal government frequent distortion of the budgetary cycle, is telling badly on the nation developmental process, hindering key infrastructural growth and productivity in the country. The budget cycle refers to the life of a budget from its formulation, through its legislative approval to its execution and evaluation. Unfortunately, scarcely has the budget implementation at the federal level commenced officially in January of any fiscal year except in 2001, 2007, 2009 and in 2013. Rather, as it has always done in the past, the government extends the timeline of the budget from December to Q1 of the next year. As at December 2017, the government had spent less than 50 percent of its 2017 CAPEX budget and had announced that the remaining funds will be rolled over to 2018. The implementation of the 2017 budget will be extended May 31st, 2018. Data compiled by Businessday shows that Nigeria has barely achieved a complete budget cycle only four times in 19 years (When the civilian rule began). Even the proposed 2018 budget which was initially thought will take a paradigm shift from the usual delay practice, has taken the foe front in the scheme of things. “Late submission of the budget to the National Assembly over the years has led to late commencement which in turn lead to poor budget implementation and its attendant consequences,” Johnson Chukwu Managing Director/CEO at Lagos-Based Cowry asset said. “Thus, we are seeing very low budget implementation of not more than 20 percent because the preparation process is a big flaw to the extent that the consultation that should have taken place to precede the budget preparation doesn’t seem to be taking place leading to misunderstanding and disagreement between the national assembly and the executive,” Furthermore, Chukwu told Businessday on phone that since the advent of the civilian government, the country has had situations where the party that controls

the executive, also controls the National assembly. Thus, we have a situation where there is a non-challant attitude as submission of budgets to the national assembly takes longer time than expected. A budget is a framework for revenue and expenditure outlays over a specified period usually one year. It is an instrument stipulating policies and programmes aimed at realizing the development objectives of a government. A delay in the passage of budget will postpone inflationary and exchange rate pressures that usually come with increased government spending. This is because more money in the system would translate into increased consumption and higher demand for forex. Ayo Akinwumi Head of research FSDH said “A major implication of a distortion in the Budget cycle process is that development will be slowed down because the capital expenditure will hardly be implemented and without the capital expenditure budget, you cannot improve the ease of doing business in the country and this will result in a low level of productivity as the economic environment won’t be attractive to investors as a result of shortage in infrastructure.” Thus, year in year out, the Nigerian economy has not been able to execute

infrastructural projects accompanying in the budget because of its late approval and before major disbursement are done, the budget would have ran out of time Akinwumi added. Another major implication of a distortion in the budget circle is the structural twist it causes in the medium term expenditure framework (MTEF), and the 12 month calendar year circle of annual budgeting, Akinwumi said on phone. BusinessDay trend watch shows that the time frame between the President’s presentation and assent of the budget is about 4 months, and the time lag between 1st Jan and date of take-off is about 3months. The maths does not seem to add up for the proposed 2018 budget, as one would have thought it would get a face lift from the usual traditional practice, but the reverse is the case as passage of the proposed budget is still in the pipeline. Making it the most delayed with a lag period of four months. More recently, the Monetary Policy Committee (MPC) chaired by Godwin Emefiele(Governor of Central Bank), held its rate at a record high of 14 percent pointing to high inflation rate above its (6-9) target and delay in budget as reasons for the committee holding its gun.

“Withholding the budget as well as low government spending, has been the reasons for shortage of money in circulation, which results in economic stagnation that is currently slowing business activities in the country,” Tony Anakebe, Managing Director of Gold-Link Investment Limited, a clearing and forwarding company, confirmed. According to him, budget delay has serious implication on businesses because when budget is delayed, importers find it difficult to make good business decision especially as regards the consignment to invest their money on. The current administration of President Mohammodu Buhari have constantly been at loggerhead with the national assembly on a number of issues of national interest ranging from the budget padding scandal to the recent delay in the 2018 budget presented by the president since the 7th of November last year this strained relationship no doubt affects budget cycle in the country. All this challenges have made achieving full budget cycle difficult if not impossible. The National Assembly has announced that the 2018 national budget will be passed in May. This is contrary to an earlier announcement by the speaker of the house, Yakubu Dogara that the N8.6trn budget will be passed on April 24th.

FMCGs spent more on capex than any sector in 2017 Continued from on page 25

spending on the acquisition of property plants and equipment. Dangote Cement Plc, the largest producer of building material saw spending on capital expenditure dip by 9.10 percent or N10.88 billion to N107.95 billion in December 2017 from N118.84 billion the previous year. Lafarge Africa Plc’s capital expenditure declined by 63.06 percent to N15.27 billion in the period under review as the cement maker continues to grapple with rising gearing level and receding sales that resulted in losses. It generally believed that in the time of economic boom, there will be more money to spend on capital assets.

However, analysts have a dissenting view to the above paragraph. Johnson Chukwu, managing director and CEO of Cowry Assets Management Assets says the decision to spend on assets depend on the strategies of firms. The fact that the country existed recession doesn’t necessary mean it will deploy money into capital expenditure. It is firms in the growth stage that invest more on the acquisition of property plant and equipment, according to Johnson Chukwu. “It depends on which sector and what they want to do. Dangote Cement has been expanding in other African countries. They may not put money into new projects as they did,” said Chukwu.

Monday 07 May 2018

C002D5556

This is M NEY A daily guide to your Personal Finance

BUSINESS DAY

• Savings • Travel • Debt & Borrowing • Utilities • Managing your Tax

Entrepreneurship is not for everyone

nternational Workers’ Day, also known as “Labour Day” or “May Day”, is “a celebration of labourers and the working class; it is promoted by the international labour movement.” Entrepreneurship is so widely promoted and there is much focus on the independent business, that the very concept of working in an office for a monthly salary for your entire career can make one feel inadequate. Entrepreneurship is not for everyone; we must be mindful of the fact that for many people, a steady monthly income is a comfortable, relatively “safe” place to be. This is their chosen path through which they can thrive, excel and make a significant impact. Do not leave your full time job if you are not ready. Most people simply cannot afford to do this with the financial obligations that they face. The right step or time is determined by your own unique circumstances. Keep being your best, and keep learning every single day. If you enjoy what you do, there is absolutely no reason why you shouldn’t continue doing it. You can build a great career by staying in one organization, or by moving to various companies over time. Follow your own path and don’t feel intimidated or insecure by colleagues who resign to run their own businesses. It is

important to stay focused on your own goals and not someone else’s. Most people live in the cycle of active income, which ties their time to their income. Active income can be earned only by investing time and effort directly in return for money. The salary you get from work is as a direct result of your efforts. With active income, if you don’t work, you don’t earn. The road to financial freedom Are you living from pay-check to pay-check? Are you always agonizing about not being able to pay your bills? Financial freedom is attained when you can work because you want to and not because

you have to. If you are serious about financial freedom and security, then do embrace the passive income machine. Passive income generally includes income that is not directly related to your daily activity and which you can generate without having to actively work for it. In fact, your money is actually working for you with no extra effort on your part, apart from the act of active investing. Creating a passive income stream does not come easily. It takes time, effort, discipline, and consistency at the beginning of the cycle before it becomes passive. It will involve disappointment, failures and frustration, but if you invest your time and effort upfront, it can be the most fruitful and worthwhile investment of your time, as it continues to pay you long after the work has been completed. Here are some reasons why Passive Income is so important: Passive income gives you the freedom and flexibility that comes with not struggling to make ends meet, particularly if the income outpaces your monthly expenses. With this, you have more choices; you can engage in work that you love, or even volunteer. It reduces anxiety and fear of the future

It is rare to find people achieving their financial goals and dreams from their salaries and subsequent pensions alone. True financial freedom requires alternative sources of income; passive income The inability to pay bills or debt can lead to fear, anxiety, depression and a sense of hopelessness. Just knowing you have that steady stream of income or emergency savings reduces stress. You can do things that you love We all have things that we’re passionate about but we often have to put them off. Passive income builds that important financial momentum of financial security and freedom that makes it possible for you to support others, to do things. You can get involved in a project that you care deeply about without worrying about a salary. Passive income in retirement If you are middle aged, and have been living solely on your salary, your goal should be to use as much of your income as possible

from your remaining peak earning years to create sources of passive income, which is often the only source of funds for most retirees. The wealthy are able to detach the time spent from the money that they earn. They earn passive income from various sources including investment property, dividend income, interest income, business interests, royalties, website advertisements and so on. Interest Income Interest is a most basic form of passive income. Interest earned on savings account balances, fixed deposits, or bonds is a relatively risk free source of passive income. However, interest rates hardly keep apace with inflation, so while it is necessary, it will be difficult for you to grow your capital in this way. Investment Property Residential or commercial property for investment purposes is a timetested way of enjoying passive income alongside capital appreciation. The location and condition of the property is of significant importance for you to realize stable income far into the future. Dividend yielding stocks One of the most effective ways to earn passive income is to buy shares in a publicly quoted company that regularly pays dividends to shareholders. A reputable stock broking house will select stocks for you but it is also important for you to develop your knowledge of investing to understand how markets

work. Both stocks and real estate have the ability to grow in value over time. Indeed, capital appreciation is one of the greatest benefits of both of these passive income sources when you sell your asset. The proceeds can then be used to create other assets. Invest in a Business Some of the greatest sources of passive income have come from people taking a chance on a promising entrepreneur, after thorough due diligence. In discussing the advantages of investing, one should never ignore the ensuing risk. There is always the very real risk of loss as markets can be volatile and prices can go up and down. A diversified portfolio will help to mitigate this. It is rare to find people achieving their financial goals and dreams from their salaries and subsequent pensions alone. True financial freedom requires alternative sources of income; passive income. This is the foundation for long term sustained wealth and future financial security.

Instagram and Twitter: @ mmwithnimi, Facebook and Google+: ‘Money Matters with Nimi’. www. moneymatterswithnimi. com, or send us an email info@ moneymatterswithnimi. com Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. For more personal finance tips, contact Nimi: Email: info@ moneymatterswithnimi Website: www. moneymatterswithnimi. com Twitter: @MMWITHNIMI Instagram: @ MMWITHNIMI Facebook: MoneyMatterswithNimi

BUSINESS DAY

Monday 07 May 2018

Access Bank Rateswatch Market Analysis and Outlook: May 4 - May 11, 2018

KEY MACROECONOMIC INDICATORS Indicators

Current Figures

Comments

GDP Growth (%)

1.92

Q4 2017 — higher by 0.52% compared to 1.40% in Q3 2017

Broad Money Supply (M2) (N’ trillion) Credit to Private Sector (N’ trillion)

24.30 22.44

Increased by 1.18% in Mar’ 2018 from N24.02 trillion in Feb’ 2018 Decreased by 0.78% in Mar’ 2018 from N22.62 trillion in Feb’ 2018

Currency in Circulation (N’ trillion)

1.67

Decreased by 13.88% in Mar’ 2018 from N1.94 trillion in Feb’ 2018

Inflation rate (%) (y-o-y) Monetary Policy Rate (%)

13.34 14

Declined to 13.34% in Mar’ 2018 from 14.33% in Feb’2018 Raised to 14% in July ’2016 from 12%

Interest Rate (Asymmetrical Corridor)

14 (+2/-5)

Lending rate changed to 16% & Deposit rate 9%

External Reserves (US$ million) Oil Price (US$/Barrel) Oil Production mbpd (OPEC)

47.36 75.14 1.81

April 25, 2018 figure — an increase of 1.83% from April start May 4, 2018 figure— a decrease of 1.07% from the previous week Mar’ 2018 figure — an increase of 1.12% from Feb’2018 figure

COMMODITIES MARKET

STOCK MARKET Indicators

Friday 4/5/18

NSE ASI

Friday

Change(%)

27/4/18

41,218.72

41,244.89

(0.06)

14.93

14.94

(0.07)

Volume (bn)

0.25

0.32

(22.20)

Value (N’bn)

3.77

2.80

34.76

Market Cap(N’tr)

MONEY MARKET NIBOR Tenor

Friday Rate

OBB

O/N CALL 30 Days 90 Days

Friday Rate

Change (Basis Point)

(%)

4/5/18

27/4/18

2.8300 3.3300 3.0000 11.2696 12.9418

2.8300 3.4200 3.5875 12.0457 14.0013

0 (9) (59) (78) (106)

FOREIGN EXCHANGE MARKET Market

Friday

1 Month

(N/$)

Rate (N/$)

4/5/18

27/4/18

4/4/18

Official (N) Inter-Bank (N)

305.70 338.71

305.65 338.26

305.60 336.43

BDC (N) Parallel (N)

360.00 362.00

359.50 363.00

359.25 362.00

BOND MARKET

Indicators

Energy Crude Oil $/bbl) Natural Gas ($/MMBtu) Agriculture Cocoa ($/MT) Coffee ($/lb.) Cotton ($/lb.) Sugar ($/lb.) Wheat ($/bu.) Metals Gold ($/t oz.) Silver ($/t oz.) Copper ($/lb.)

Tenor

Friday

Change (Basis Point)

(%)

4/5/18

27/4/18

3-Year 5-Year

0.00 12.68

0.00 12.63

0 6

7-Year 10-Year 20-Year

12.52 12.98 13.07

11.55 12.76 13.01

97 21 6

This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not take responsibility or liability for errors or fact or for any opinion expressed herein .This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc.

Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and Access Bank Economic Intelligence Group computation.

(%)

(1.07) (2.85)

16.47 (10.67)

2814.00 124.45 84.62 11.65 532.75

1.81 4.23 0.26 3.01 8.23

45.35 (4.42) 9.19 (24.01) 22.90

1309.13 16.39 307.90

(0.79) (0.73) (0.15)

(0.64) (4.65) (6.07)

75.14 2.73

Friday

Change

(%)

(Basis Point)

4/5/18

27/4/18

9.31 10.90

8.12 10.33

120 57

6 Mnths 9 Mnths

11.31 12.09

11.36 11.86

(5) 23

12 Mnths

11.94

12.29

(35)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Friday

Change

(%)

(Basis Point)

4/5/18

27/4/18

2,695.01

2,690.04

0.19

Mkt Cap Gross (N'tr) Mkt Cap Net (N'tr) YTD return (%)

9.13 5.99 9.71

9.04 5.93 9.51

1.03 0.96 0.20

YTD return (%)(US $)

-45.47

-45.64

0.17

Index

Disclaimer

YTD Change

1 Mnth 3 Mnths

Indicators

Friday

1-week Change

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

AVERAGE YIELDS Tenor

4/5/18

TREASURY BILLS (MATURITIES) Tenor 91 Day 182 Day 364 Day

Amount (N' million) 9,541.92 47,709.62 38,167.69

Rate (%) 10.2557 10.950 11.149

Date 02-May-2018 02-May-2018 02-May-2018

Global Economy In the US, the Fed's policy-setting Federal Open Market Committee (FOMC) kept its key interest rate unchanged at 1.5% to 1.75% at the conclusion of its two-day meeting held last week. The Fed reaffirmed that it expected to continue on a path of "further gradual increases" in the benchmark lending rate, which it last hiked in March. The Committee also noted that inflation “is expected to run near the committee’s symmetric 2 percent objective over the medium term.” In a separate development, the Eurozone economy expanded at a slower pace in the first quarter, preliminary flash estimate from the European Statistics Agency (Eurostat) showed. On a yearly basis, economic growth eased to 2.5 percent, as expected, from 2.8 percent in the fourth quarter. Temporary factors, including unseasonably-cold weather, striking workers, short-term bottlenecks and even an outbreak of the flu weighed on GDP growth in Q1 2018. Elsewhere in the UK, consumer confidence weakened in April. Market research firm, GfK NOP, said its main measure of consumer confidence fell to -9 points in April from -7 points in March. April’s downtick reflected consumers’ worsened views of their personal financial situation over the previous 12 months and for the year ahead. In addition, consumers grew more pessimistic concerning the general economic situation in the United Kingdom over the last 12 months and for the year ahead. In another development, activity in India’s service sector accelerated in April driven by a pick-up in new business that encouraged firms to hire at the fastest pace in seven years, a private survey showed. The Nikkei/IHS Markit Services Purchasing Managers’ Index rose to a threemonth high at 51.4 in April from March’s 50.3, holding above the 50-mark that separates growth from contraction for a second month. Local Economy The Central Bank of Nigeria (CBN) revealed the execution of a bilateral currency swap agreement with the Peoples Bank of China (PBoC). The transaction is valued at RMB 16 billion ($2.5 billion or N720 billion) and is aimed at providing adequate local currency liquidity to both Nigerian and Chinese industrialists as well as other businesses, thus reducing the difficulties encountered in the search for third party currencies. The agreement will also provide Naira liquidity to Chinese businesses and provide the Chinese currency liquidity (RMB) to Nigerian businesses. The swap deal would help improve the speed, convenience and volume of transactions between the two countries. First Bank of Nigeria Limited, Stanbic IBTC, Standard Chartered Bank (SCB) and Zenith Bank Plc have been appointed the settlement banks for the currency swap. In a separate development, the Manufacturing Purchasing Managers' Index (PMI) stood at 56.9 index points in April 2018. This indicates an expansion in the manufacturing sector for the thirteenth consecutive month. The index grew at a slightly faster pace when compared to the previous month (56.7 points). This was shown in the latest PMI report by the Central Bank of Nigeria. A composite PMI above 50 points indicates that the manufacturing sector is generally expanding, while a reading below 50 points indicates a contraction. Twelve of the fifteen sub-sectors surveyed, recorded growth during the month. The cement subsector remained unchanged, while the nonmetallic mineral and primary metal sub-sectors declined in the month under review. Stock Market Equities gave up most of the week’s opening gains to close marginally lower for the week ended May 4, 2018, as profit taking held sway. The All Share Index (ASI) finished lower by 26.17 points to close at 41,218.72 points from 41,244.89 points the previous week, representing a loss of 0.1%. Similarly, market capitalization lost 0.1% to close at N14.93 trillion

from N14.94 trillion the previous week. Stocks in the oil & gas sectors led to the marginal depreciation witnessed in the market. A temporary rebound in buying momentum may be anticipated this week as investors position for short-term gains. Money Market Rates remained stable at the money market last week due to an inflow of about N198 billion in Open Market Operations (OMO) maturing treasury bills. Short-dated placements such as Open Buy Back (OBB) rate remained unchanged at 2.83% while the Over Night (O/N) rate declined marginally to 3.33% from 3.43% the previous week. Longer dated placements also retreated. The 30-day and 90-day NIBOR closed lower at 11.27% and 12.94% from 12.05% and 14% the previous week. This week, rates may remain at the same level or likely decline due to expected retail Secondary Market Intervention Sales (SMIS) refund. Foreign Exchange Market The naira-dollar exchange rate at the interbank window depreciated marginally by 45 kobo to close at N338.71/$ from N338.26/$ the previous week. At the parallel market, the local currency closed at N362/$, lower than the previous week’s rate of N363/$. The local unit however depreciated at the official market by 5 kobo to settle at N305.70 from N305.65 the previous week. The further depreciation may have resulted from tight dollar liquidity. This week, we expect the naira to remain around prevailing levels at the CBN window, supported by the apex bank’s regular intervention. Bond Market Bond yields ticked higher for the second consecutive week due to sell-offs across all curves from counterparties. The sell-offs was propelled by investors drifting towards OMO instruments for higher returns. Yields on the five, ten- and twenty- year debt papers settled at 12.68%, 12.98% and 13.07% from 12.63%, 12.76% and 13.01% respectively the previous week. The Access Bank Bond index rose marginally by 4.98 points or 0.19% to close at 2,695.01 points from 2,690.04 points the previous week. The direction of bond yields would be determined by the expected bond auction. Commodities Market Oil prices retreated in the week ended May 4, 2018 due to a rise in U.S. crude inventories by 6.2 million barrels to about 436 million barrels as reported by the Energy Information Administration (EIA). The Organization of Petroleum Exporting Countries (OPEC) benchmark crude slipped by 0.48% to $70.66 per barrel from $71 the previous week. Bonny light, Nigeria’s benchmark crude also dipped by 1.1% to $75.14 per barrel from $75.95 the previous week. Precious metals prices inched lower as investors sought better returns elsewhere due to the threat of rising interest rates. Gold lost $10.45 to settle at $1309.13 per ounce depicting a decrease of 0.79%. There was also a slight decrease in the price of Silver by 12 cents to $16.39 from $16.51, representing a drop of 3.6%. Oil prices may advance in the coming week due to tightening global supplies from falling oil production in Venezuela and rising geopolitical tensions between the U.S. and Iran. The expectation of a further rate hike may continue to pressure the prices of precious metals.

MONTHLY MACRO ECONOMIC FORECASTS Variables

May’18

Jun’18

Jul’18

Exchange Rate (Official) (N/$)

338.90

339.90

340.10

Inflation Rate (%)

11.89

11.50

10.80

Crude Oil Price (US$/Barrel)

For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com

Monday 07 May 2018

BUSINESS

Live @ The Stock Exchange Nigerian stock market depreciates by 0.06% … year-to-date return at 7.78% as investors lose N9bn Stories by Iheanyi Nwachukwu

n the trading week to May 4, 2018, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) depreciated by 0.06percent to close last week at 41,218.72 points, from preceding trading weekend level of 41,244.89 points. The stock market’s year-to-date return stood at 7.78percent. The value of listed equities on the Nigerian bourse decreased by N9billion to N14.931 trillion, from N14.940 trillion recorded the preceding weekend. At the close of trading last week, all other indices finished lower with the exception of NSE Premium, NSE Banking, NSE Industrial goods, and NSE Pension indices that appreciated by 0.12percent, 1.56percent, 1.06percent and 0.21percent respectively, while the NSE ASeM closed flat. Thirty-seven (37) equities appreciated in price during the review week, higher than 33 in the preceding week. Thirty-two

(32) equities depreciated in price, lower than 41 equities in the preceding week, while 100 equities remained unchanged, higher than 95 equities recorded in the preceding trading weekend. C & I Leasing Plc rallied most, from N1.39 to N1.80, up by 41kobo or 29.50percent; while Dangote Flour Mills Plc declined most, from N14 to N11.40, down by N2.60 or 18.57percent. Trading in the Top Three Equities– United Bank for Africa Plc, Mutual Benefits Assurance Plc and Access Bank Plc (measured by volume) accounted for 457.930 million shares worth N3.784 billion in 1,469 deals, contributing 34.41percent and 18.16percent to the total equity turnover volume and value respectively. Last week was just four day trading sessions as Tuesday May 1, 2018 was public holiday to mark the Workers Day celebration. The market recorded a total turnover of 1.331billion shares worth N20.835 billion in 18,695 deals in contrast to a total of 1.825 billion shares valued at N24.653 billion that exchanged hands the preced-

ing week in 23,148 deals. The Financial Services Industry (measured by volume) led last week activity chart with 1.042 billion shares valued at N11.275 billion traded in 9,665 deals; thus contributing 78.32percent and 54.11percent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 84.124 million shares worth N4.322 billion in 3,691 deals; and Oil & Gas Industry with a turnover of 51.918 million shares worth N596.463 million in 2,307 deals. Also traded on the Nigerian Stock Exchange during the review week were 709,058 units of Exchange Traded Products (ETPs) valued at N3.845 million executed in 10 deals, compared with a total of 56,260 units valued at N376,387.48 transacted the preceding trading week in 6 deals. Total of 80,152 units of Federal Government and State Bonds valued at N82.543 million were traded last week in 14 deals, compared with a total of 725 units valued at N660,984.55 traded the preceding week in 10 deals.

The returning foreign fixed income investor – FBN Quest

ata in the Central Bank of Nigeria (CBN) Quarterly Statistical Bulletin for fourth-quarter (Q4) of 2017, sourced from the Debt Management Office (DMO), show that the largest category of holders of FGN domestic debt was the non-bank public, which had a 43.2percent share. This group would include the pension funds and other institutional investors, government agencies, retail players and the offshore community. The domestic money banks (DMBs) had a 42.3percent holding. Over a 12-month period, the share of the non-bank public declined by seven percentage points (pps), and that of the DMBs rose by eight

pps. Turning from the stock of the domestic debt to the flows, we have seen a breakdown of the allotment of FGN bonds at the DMO’s monthly auctions for September through to December 2017. The DMBs accounted for 27.1percent of the allotment in the period, fund managers and NBFIs 26.6percent, foreign investors 22.7percent and pension funds 12.6percent. The offshore community’s share is high but we should recall that these investors only really returned to the market in August/September. They had observed the CBN’s FX reforms earlier in the year but moved in response to a change in its market strategy as well

as to the FGN’s new debt strategy of externalization. The pension funds’ share (of total allotment of N539bn) appears low, amounting to N68bn. It may be significant that over the period the DMO only once offered the long bond, regularly said to be the PFAs’ favourite. The core point for the DMO, acting on behalf of the FGN, is always whether it can meet its funding target for domestic issuance. In its favour are (Good Morning Nigeria, 27 April 2018): the indications that that target will be reduced this year (not that we have an approved budget); the offshore community is on board: and the DMO now has other debt instruments to sell.

Vivo Energy becomes Largest UK-listed African IPO in over a decade

ondon Stock Exchange (LSE) last Friday welcomed Vivo Energy, a leading retailer and marketer of Shell-branded fuels and lubricants in Africa, to the Premium Segment of the Main Market. Shareholders raised £548 million from the sale

of existing shares to international investors, valuing the company at £1.98 billion. To celebrate the listing and start of conditional trading on Friday May 4, 2018, Tom Attenborough, Head of International Business Development, London Stock Exchange

welcomed Vivo Energy to London Stock Exchange. Admission will take place on Thursday May 10, 2018. Vivo Energy is also the first company identified in London Stock Exchange Group’s ‘Companies to Inspire Africa’ report to float on London Stock Exchange.

DAY

BUSINESS DAY

Monday 07 May 2018

BUSINESS DAY

Monday 07 May 2018

Cowry Weekly Financial Markets Review & Outlook ECONOMY: Local Business PMIs Rise in April; as March Broad Money Supply Rises on Increased Reserves… Central Bank of Nigeria (CBN) released its Purchasing Managers’ Index (PMI) survey report for April 2018, showing faster expansions in both manufacturing and non-manufacturing businesses. The positive survey results was an addition to the economy’s early expansion following the 1.92% real GDP growth of Q4 2017 (and 0.83% overal real GDP growth of 2017). Howbeit, expansion in the manufacturing sector was constrained by rising average manufacturing input cost and slowing demand, while, the growth in the non-manufacturing sector was fuelled by increased customer demand amid stable input cost. According to the survey, the manufacturing composite PMI stood at 56.9 index point in April 2018 (higher than 56.7 index point in the preceding month), the thirteenth consecutive expansion. The increase in manufacturing composite PMI occured amid increase in employment level, to 55.0 in April (from 53.3 in March) while raw materials purchases upped to 59.5 in April (from 59.4 in March). Supplier delivery time index also increased to 57.4 (from 56.6), indicative of increased idle time at suppliers possibly due to slowing demand. Indeed, production level at the manufacturers expanded slower, at 58.6 in April (from 59.1 in March) as new orders expansion slowed, to 55.8 in April (from 56.1 in March. Of the sixteen manufacturing sub-sectors under survey, twelve sectors recorded expansions (better than eleven in the preceding month) – manufacturers of ‘Fabricated metal products’, ‘Furniture & related products’, ‘Petroleum & coal products’, ‘Plastics & rubber products’ and ‘Textile, apparel, leather & footwear’ recorded expansions: of 58.6 (from 56.1), 55.0 (from 46.7), 79.0 (from 61.0), 54.8 (from 52.3) and 60.0 (51.3) respectively. On the other hand, non- manufacturing composite PMI registered 57.5 points in April (higher than 57.2 points in March), the twelth consecutive expansion. The sustained expansion in non-manufacturing sector was driven by faster increase in business activity, at 58.8 in April (from 58.7 in March) supported by faster increase in incoming business orders, at 56.4 (from 55.8). Employment level also rose, to 55.3 (from 55.1) while inventory expanded faster, at 59.5 (from 59.2). Howbeit, expansion in average input cost was flat at 50.3 while backlog of work contracted faster, at 41.5 (from 42.9). All but two of the eighteen non-manufacturing sub-sectors surveyed recorded expansions; however, “Agriculture” expanded at

FOREX MARKET: Naira/USD Rate Closes Flat at Interbank, BDC Segments… In the week under review, Nigeria and the People’s Republic of China sealed an annual USD2.5 billion (or RMB16 billion) currency swap deal to facilitate trade between the two countries, by providing adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses, thereby sidestepping a third currency, the US dollar. We expect the arrangement to ease pressure on the limited dollar supply at the Investors & Exporters Forex Window (I&E FXW) and hence, enhance stability of the NGN/USD exchange rate. Meanwhile, the local currency strengthened against the USD at the parallel (‘black’) market by 0.28% to N362/USD while the Naira/USD rate remained unchanged at the interbank foreign exchange market and the Bureau De Change segments at N330.00/USD and N360/ USD respectively. However, Naira weakened at the I&E FXW segment to close at N360.75/USD (from N360.41/USD) despite weekly injections by Central Bank of Nigeria (CBN) of USD210 million into the foreign exchange market; of which USD100 million was allocated to Wholesale (SMIS), USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles. Meanwhile,

EQUITIES MARKET: The Nigerian Equities Shed Weight amid Mixed Sentiments…

a slower pace, at 59.8 (from 62.2), as did “Finance & insurance” and “Wholesale/ Retail trade” which pointed to 64.8 (from 67.0) and 55.7 (from 57.3) respectively. In another development, CBN’s freshly released depository corporations survey, showed sustained m-o-m increase in Broad Money, by 1.18% to N24.30 trillion in March 2018; as an 8.49% m-o-m increase in Net Foreign Assets (NFA) to N15.62 trillion more than offset a 9.76% m-o-m decrease in Net Domestic Assets (NDA) to N8.68 trillion. Growth in NFA was partly attributed to increase in oil dollar revenue (boosting external reserves) and further strengthened Nigeria’s position as a net lender to the rest of the world. On domestic asset creation, the decrease in NDA resulted from a 2.39% increase in Net Domestic Credit (NDC) to N26.27 trillion, accompanied by a 1.71% m-o-m increase in Other Liabilities (net) to N17.58 trillion in the month under review. Further breakdown of NDC showed a 0.78% m-o-m moderation in Credit to the Private sector to N22.44 trillion (share of NDC increased to 85.44% from 84%), accompanied by a 10.84% decrease in Credit to the Government to N3.82 trillion. The increase in credit to the Government was, in part, informed by lower borrowings in line with with the Federal Government’s debt restructuring which favours longer maturing local and foreign debt, over short term debt. Month-on-month, Nigerian Treasury bills auctioned at the primary market fell by 32.40% to N343.72 billion.

POLITICS: Donald Trump Urges Nigeria to End Killings; Nigeria Seeks End to Open Grazing of Livestock…

most dated forward contracts at the interbank over-the-counter (OTC) segment appreciated amid rising external reserves – 2 months, 3 months, 6 months and 12 months contracts strengthened by 0.06%, 0.16%, 0.69% and 0.85% to close N366.70/ USD, N370.10/USD, N381.10/USD and N401.90/USD respectively. This week, we expect stability in exchange rate as CBN continues with the weekly intervention.

MONEY MARKET: NIBOR, NITTY Moderate In Line With Our Expectation… In the week under review, Central Bank of Nigeria (CBN) sold treasury bills worth N745.42 billion comprising N650 billion via Open Market Operations (OMO) and N95.42 billion via Primary Market. The stop rates of the 91-day, 182-day and 364-day auctioned T-bills moderated to 10.00% (from 10.90%), 10.95% (from 12.00%) and 11.15% (from 12.08%) respectively. The outflows were offset by N371.83 billion in matured T-bills as well as residual effects of FAAC disbursements worth N654.49 billion. Hence, NIBOR moderated for all tenor buckets renewed liquidity ease, in line with our expectation: NIBOR for overnight, 1 month, 3 months and 6 months tenor buckets fell w-o-w to 3.00% (from 3.59%), 11.27% (from 12.05%), 12.94% (from 14.00%) and 14.13% (from 15.84%) respectively. Elsewhere, NITTY fell for most maturities tracked on renewed buy pressure: yields on the 3 months, 6 months and 12 months maturities fell to 10.90% (from 10.92%) and 11.31% (from 11.55%) and 11.94%

BOND MARKET: FGN Eurobonds Yields Rise for All Maturities on Sustained Bearish Acivity… In the just concluded week, FGN Eurobonds traded on the London Stock Exchange depreciated in value for all maturities tracked on sustained bearish activity – the 10-year, 6.75% JAN 28, 2021, the 5-year, 5.13% JUL 12, 2018 and the 10-year, 6.38% JUL 12, 2023 declined in value by N1.18, N0.08 and N1.51 respectively; their corresponding yields rose to 5.19% (from 4.74%), 5.80% (from 5.31%) and 5.77% (from 5.44%) respectively. Meanwhile, FGN bonds traded at the over-the-counter (OTC) segment tanked in value across maturities tracked. The 20-year, 10% FGN JULY 2030 debt, the 10-year 16.39% FGN JAN 2022 debt and the 7-year 16.00% FGN JUN 2019 debt depreciated by N0.33, N0.59 and N2.18 respectively; while their corresponding yeilds rose to 13.09% (from 13.02%), 13.25% (from 13.07%) and 11.98% (from 10.09%) respectively. This week, at the OTC market, we expect some stability in the OTC bond market amid ease in financial system liquidity.

In the just concluded week, traded equities at the local bourse shed some weight on the back of general bearish sentiment. The twin overall performance measures, NSE ASI and market capitalisation, closed 6 bps lower at 41,218.72 points and N14.93 trillion respectively. Sentiments were mixed as were the earnings performance of quoted companies. Similarly, while the NSE Banking Index and NSE Industrial Index gained 1.56% and 1.06% to close at 525.53 points and 2,088.13 points, the NSE Consumer Goods Index, NSE Oil/Gas Index and NSE Insurance Index lost 1.89%, 1.42% and 0.96% to close at 993.55 points, 359.10 points and 144.36 points respectively. Meanwhile, total deals, transacted volumes and Naira votes declined w-o-w by 19.24% and 15.49% to 18,695 deals, 1.33 billion shares and N20.84 billion respectively. On the sidelines of trading activities, 11 Plc (1Q 2018) recorded a 79.10% increase in revenue to N45.08 billion as well as a spike in profit after tax to N2.76 billion (from N13.06 million in the same quarter of 2017). This week, we expect the local bourse to record mixed sentiments as the first quarter earnings season winds up and as fixed income investments continue to attract herd sentiment.

(from 12.62%) respectively; however, yield on the 12 months maturity fell to 12.62% (from 12.90%) respectively. Meanwhile, Standing Deposit Facility (SDF) worth N570.18 billion outweighed, Standing Lending Facility (SLF) worth N240.43 billion by 137.15%, indicative of liquidity surplus. This week, against the backdrop of recent ease in financial system liquidity, we anticipate stability in interbank interest rates in the absenece of aggressive mop up via OMO sales.

In the just concluded week, President Muhammadu Buhari embarked on a two-day trip to the United States where he met with his host, President Donald Trump, to discuss on mutual areas of cooperation between their respective countries as well as other burning issues such as terrorism and insecurity in Nigeria. President Trump acknowledged the first-ever sale of twelve US A29 super catena fighter aircrafts worth USD496 million by the US to Nigeria, an issue that is currently generating controversy between Nigeria’s Executive and Legislative branches for not being appropriated by the National Assembly. President Trump further encouraged his Nigerian counterpart to make every effort to protect innocent civilians and protect human rights. Meanwhile, in order to check wanton destruction of lives and property by Fulani herdsmen, the National Economic Council (NEC), at a recent meeting presided over by Vice-President Yemi Osinbajo, agreed to stop the movement of herdsmen in the country, beginning with Benue, Taraba, Adamawa, Kaduna and Plateau States – states which have mainly borne the brunt of herdsmen attacks occasioned by open grazing. According to NEC, the affected states are also expected to make land available ranching purposes in order to reduce the interaction between cattle and farmlands. NEC also attributed the farmer/herdsmen clashes to, among other things, the improper implementation of the ECOWAS treaty on pastoralism and cross-border transhumance. At a separate forum during a highlevel meeting of Ministers of Security and Agriculture/Animal Resources from ECOWAS, Cameroon, Chad, Mauritania and the Central African Republic (CAR) on pastoralism and cross-border transhumance, Nigeria’s Minister of Agriculture, Audu Ogbe, submitted that Nigeria’s solution to the crises was the ending of open grazing of cattle due to its exploitation by herders to destroy lives and property. Disclaimer This report is produced by the Research Desk of Cowry Asset Management Limited (COWRY) as a guideline for Clients that intend to invest in securities on the basis of their own investment decision without relying completely on the information contained herein. The opinion contained herein is for information purposes only and does not constitute any offer or solicitation to enter into any trading transaction. While care has been taken in preparing this document, no responsibility or liability whatsoever is accepted by any member of COWRY for errors, omission of facts, and any direct or consequential loss arising from the use of this report or its contents.

Cowry Weekly Stock Recommendations As At Friday 04 May 2018

Cowry Asset Management Limited (Member of the Nigeria Stock Exchange) Plot 1319 Karimu Kotun, Victoria Island Lagos Tel: +234-1-2715008-9; +234-1-2716614-5 www.cowryasset.com

BUSINESS DAY

Monday 07 May 2018

BUSINESS DAY

C002D5556

CEO INTERVIEW

Monday 07 May 2018

Interview with Private Sector Leaders

‘We have maintained zero percent Abubakar Jimoh, Managing Director/CEO, Coronation Merchant Bank speaks on the bank, financial sector and economy in this exclusive interview with Iheanyi Nwachukwu. Excerpts

s the Chief Executive Officer of Coronation Merchant Bank, what are your medium-to-long term strategies post- recession? Coronation Merchant Bank was established to address the shortage of long-term capital available to different sectors of Nigerian industry and commerce, and we stay very focused on that ambition. As the Nigerian economy moves out of recession there are more opportunities to meet the financing needs of our clients. But not all of these needs are going to be met with conventional lending. We are a merchant bank with a broad range of expertise across global markets, corporate banking, investment banking, securities, private banking, trustees, asset management and research. Our purpose is to bring these skill sets together for each client, so financing incorporates different elements and different solutions. Increased non-performing loans of many lenders made them to become risk averse in critical sectors of the economy. How do you describe your loan risk appetite? Last year we expanded our Loans and Advances by 42 percent, increased our Customers’ Deposits by 43 percent and kept our non-performing loan ratio at zero percent. This translated to a 66percent growth in Gross Earnings and a Profits Before Tax (PBT) of N5.1billion. Looking at the banking sector as a whole, non-performing loans are generally falling with the exception of one large loan to the telecom sector. The underlying trend is somewhat better than is widely believed. Another point which is important to appreciate is that non-performing loans are concentrated in the oil, power and telecom sectors, with varying degrees of stress in the general commerce. That leaves a lot of sectors which do not suffer a high level of non-performing loans. So we continue to look for good commercial opportunities and work with clients to reduce risk as much as possible. As Coronation Merchant Bank, we have maintained a zero percent non-performing loan (NPL). We believe that our medium level of risk appetite and conservative approach towards lending will help us sustain this level of NPL into the future How is the MPC dovish stance on key monetary policy rates impacting merchant banking

businesses? We have seen market interest rates come down rapidly this year, although this does not necessarily equate to a dovish stance on the part of the Monetary Policy Council. The important thing for us is the overall reduction in market interest rates, which gives our clients many opportunities that were not there before. Our job is to realise those opportunities for our clients and clearly we are in an ideal position to re-price assets and liabilities for them. Knowledge of, and activity in, the interest rate market are key to facilitating the transition in rates for our corporate banking customers. The implementation of IFRS-9 will make many banks cut down size of credit to private sector. How are you handling this new trend? The real determinants of credit growth to the private sector are: knowledge of your clients; ability to provide the right financing structure; and your capital base. If you examine the trend in commercial banks’ loan portfolios over the past few years, and adjust the data for the effects of currency revaluation on the US dollar portion of those portfolios, you will see that there has been very little loan growth.

As Coronation Research argues in a recent (5th April) bank sector review, ‘Nigerian Banks: Winners and Losers in 2018’, it is really capital that will enable the strongest banks to expand loan books this year. There will be strong demand for private sector loans this year and a number of banks will be able to meet that demand. IFRS 9 has not dented their ability to expand their customer business, nor ours.

Do you have plans for capital raise either in form of equity or debt? At our last AGM, we obtained the approval of the Board and the shareholders to raise additional capital at the last AGM in line with the bank’s funding plan to finance our growth aspirations. The capital raising exercise will be done in series of tranches subject

to the approvals of relevant regulatory authorities. I can comfortably tell you that the Bank is well positioned for the various capital raising initiatives. We will continue to update our stakeholders as we proceed with the process. Many analysts are bullish on economic growth this year. After IMF said it expects 2percent growth, Renacap is looking at 3 percent. What is your view on this?

Monday 07 May 2018

C002D5556

BUSINESS DAY

ABUBAKAR JIMOH

Managing Director/CEO, Coronation Merchant Bank

non-performing loans ratio’ We are becoming more bullish on the economy this year. The economic recovery so far has been patchy, but all economic recoveries are patchy, so there is nothing untoward in this. Several sectors of the economy now have several quarters of growth behind them, and this is encouraging. The feedback from our clients is good and suggests that some of the existing forecasts may be on the conservative side. We will not rush into adjusting our forecasts, but there will be a time to do this. Oil remains the big elephant in Nigeria’s growth prospects. What is your advise on this? The contribution of oil and gas to Nigeria’s economy is a function of production and price. We are fortunate in that there has been, recently, a positive trend in production levels combined with prices hovering over 70 US dollars per barrel. This compares favourably with the average level of oil prices in 2017. For example,

ments in the past, we are confident in our ability to deliver sustainable returns to our shareholders and position ourselves as a clear market leader. Over the last 3 years, we have maintained a solid financial performance, growing our Gross Earnings by a compound annual growth rate (CAGR) of 50percent to N25billion in 2017. Non-interest income and Total Operating Income grew at a CAGR of 402percent and 57percent respectively over the period under review. The growth in the Bank’s Non-Interest income was largely driven by the outstanding performance of the Bank’s non-banking subsidiaries and investment banking business. The Bank’s Profit After Tax also grew at a CAGR of 48percent to N4.7 billion between 2015 - 2017. The Bank’s Profit Before Tax of N5.1 Billion in 2017 made it one of the most profitable merchant banks in

I can comfortably tell you that the Bank is well positioned for the various capital raising initiatives. We will continue to update our stakeholders as we proceed with the process the average price of Brent in 2017 was 55 US dollars per barrel. But we advise our clients never to make assumptions about either overall production levels, when production is susceptible to disruption, or oil prices. It is best to stay hedged, as much as possible. How has your bank positioned to take advantage of increasing economic activities after recession? Our journey towards unapparelled market leadership is driven by a combination of service excellence, product innovation and market intelligence. We demonstrate innovation by developing solutions to diverse customer problems, differentiating ourselves from competition with creative products and service offerings, and proactively initiating change and improvement measures. Our unique value proposition is to deliver world class solutions like this to our esteemed clients in a cost-effective manner whilst leveraging our local extensive knowledge and technology. Our aim of attaining industry distinction is evident in our first-rate service orientation and efficient information technology platform to supports our business operations. As we look back on our achieve-

Nigeria. Coronation Merchant Bank maintains an industry leading risk management practice evidenced by zero percent non-performing loans ratio. The Bank grew its Customer Deposits, Shareholder’s Fund and Total Assets by 43percent, 14percent and 28percent respectively between 2016 and 2017. The Bank’s Capital Adequacy and Liquidity Ratios of 24.8percent and 53.4percent are comfortably above regulatory requirements. These factors resulted in the Bank being awarded Merchant Bank of the year by BusinessDay Newspaper. Coronation Merchant Bank’s Credit Rating of A+ by Nigeria’s foremost rating agency; Agusto & Co is the highest credit rating in the Nigerian Merchant Banking space. This reflects the Bank’s good asset quality, strong liquidity profile, robust risk management framework, well skilled and stable management team. Looking ahead, we are optimistic about the future and we believe the Bank is well positioned to adapt to challenges and capitalise on emerging opportunities in the current

economy. Yields on fixed income securities are expected to ease further as CBN shows commitment to single digit inflation. What are your investment strategies at the debt capital market? The yields on fixed income securities have fallen dramatically this year and the Central Bank of Nigeria is committed to single-digit inflation. Without giving too much of our strategy away, we would point out that the Monetary Policy Council is not only concerned with inflation but also, we believe, with the exchange rate. So it depends on whether you wish to make a linear relationship between rates and inflation, or whether you believe that several other targets, including exchange rates, need to be managed at the same time. Apart from record increase in crude prices, the introduction of a new FX system ended a crippling shortage of dollars and helped attract foreign inflows into the country and improve lenders liquidity. What is your take on this? The situation a year ago was that it was possible to bring foreign investment into Nigeria at prevailing spot and forward rates, and this created a consensus as to how the Naira should be priced. As that price was being established more foreign participants bought Naira. Now that the Naira has stabilised the foreign investors has better and more varied ways to invest in this country than before. The Central Bank of Nigeria is working to put the final pieces in place. The challenge is to maintain the consensus over the foreign exchange value of the Naira, but we think that the conditions for this are far better than they have been up until now.” How do you describe growth trend of your customer base. What is your medium term target on this? Ours is a very specialized market and so far, we have distunguished ourselves as a market leader through innovative products and advisory services we offer our esteemed clients. For example, we creatively introduced a credit enhancement mechanism known as Liquidity Back-Stop Facility to the commercial paper offering of a leading Real Estate Company in Nigeria. Our collaboration with the client in providing the backstop facility is the first of its kind in Nigeria and its ingenuity boosted the investment grade of the commercial paper to “A-“, despite the issuer’s “Bb-“ Agusto rating – representing a 6 notch improvement. The significant improvement in the rating made the pricing of the offer

attractive to both the Issuer and the investors as the Issuer was able to lower its cost of borrowing by c. 600 bps invariably reducing its cost of capital. It thereby created immense value for its shareholders. Novel products like these speak to our ability to develop innovative solutions for our customers through creative products and customized service offerings. Investors and analysts are more concerned about the ability of banks to replicate growth momentum this year as falling yields on T.Bills since August 2017 could be challenging for the industry. What is your hedging strategy around this negative outlook in earnings? Going into second-quarter (Q2) of 2018, I believe there will be a trend reversal as all Nigerian banks are facing a decline in interest income in 2018 as interest rates on government-issued T-bills and bonds continue to decline. As you have correctly pointed out, Q1 2018 brings to a close a two-year period when Nigerian banks could earn thick spreads between their deposits and the rates available on risk-free government paper. So it is not a surprise to see interest income under pressure. The way out of this problem is for banks to make more customer loans to the private sector, where spreads are still available. However, not all banks have sufficient capital to do this in 2018. Following Nigeria’s exit from recession and

the recovery of global commodity prices principally crude oil, we are seeing increasing credit / lending opportunities in the consumer, agriculture, industrials, oil & gas and retail segments of the economy. In 2017 we grew our loan books by 42percent from N22.7billion in 2016 to N32.3billion. Going into 2018, our goal is to increase our Loans and Advances by an additional N37billion. Though, political risks related to elections are other challenges that could cloud your industry outlook. How will you navigate the possible murky waters for improved returns to your stakeholders as well as improve customer service? For us, the political cycle is a secondary factor. The primary focus is always on the customers business cycle. By this, I mean the rise and fall of demand experienced by our banking clients, and the rise and fall in investment returns experienced by our asset management and private banking clients. At the conclusion of general elections in 2015 Nigeria enjoyed a democratic and peaceful transfer of power from one governing party to another. The events of 2015 set a good political precedent for general elections in February 2019. A banker is always looking for as much stability as possible in the medium-to-long term: foreign exchange stability, stable or predictable interest rates, and political stability.

BUSINESS DAY

Monday 07 May 2018

BUSINESS DAY

Monday 07 May 2018

Start-Up Digest

In association with

How Vivian helps SMEs overcome tax, financial challenges ODINAKA ANUDU

ivian Chigozie-Nmonwu is the lead partner of Vi-M Professional Solution, a firm that assists the micro, small and medium enterprises (MSMEs) and individuals navigate their tax, audit, business / financial advisory challenges, mostly through the use of digital technology. Vivian’s Vi-M has some digital tools designed to support the business operations of MSMEs. One of them is the Tax Law Book (TLB) app, which is a compendium of the most important Nigerian tax laws (as amended and gazetted, to date). This app was designed to demystify the Nigerian tax laws and make them readily accessible, empowering taxpayers to control their tax affairs. It also helps foreign and local companies, employees and employers, finance and tax professionals, students in related fields, government tax agencies and investors wishing to do business in Nigeria. This app costs N2, 000 and covers full and lifetime use, including updates on tax trends and changes, says Vivian. Next is Vi-M Tax Assist, an online self-help, self-tax computation and self-assessment tool for MSMEs. “It teaches and calculates value added tax (VAT), withholding tax (WHT) and Pay-As-You-Earn (PAYE)/ pensions/ payroll and it is absolutely free of charge,” the entrepreneur says. “We only charge for any ancillary services requested via the ‘Assist-Me’ pages if the user wishes to request for such services. But ordinarily, it is built in a way that

Vivian Chigozie

enables users to comfortably navigate those taxes by themselves,” Vivian explains. Next is the Vi-M Tax and Accounting Services (TAS) Cover for SMEs. This provides cover for every subscribing business on all its monthly/ annual tax and accounting requirements. Another app unveiled by this firm is known as Vi-M Talent Assist. “This is our latest initiative, designed to assist talents (employees and freelancers) and employers achieve their career and workforce recruitment/ management goals,” she says.

She adds that the app enables job seekers to find good employment and apply for them; take free online courses to improve themselves and submit their resume or profile. “As a small business, you can use it to manage your recruitment process professionally from start to finish; get professional support with recruiting and get maximum publicity on our ‘Featured Employers’ section,” she says. Vivian was motivated to set up this firm by her passion to empower MSMEs and businesses through simplified and effective

business processes. “We started off in the later part of 2015 and it has taken us from then till this February 2018 to complete the development (in partnership with our developers in South Asia) of the first cycle of our digital technology tools that will assist businesses around Nigeria have more effective business processes. “We are now actively publicising these tools to make their existence known to all MSMEs and individual stakeholders. Nevertheless, while developing these digital tools, we have also been providing value-adding services to several companies and have added value to the tax ecosystem as we partnered with the Federal Internal Revenue Service (FIRS) in the Tax Discourse series, a knowledge sharing session published weekly in a national newspaper,” she states. Vivian is operating in an environment where many MSMEs either evade or avoid taxes. The entrepreneur is aware of this, but says that MSMEs have shown keen interest in her apps, as her firm is the first to unveil them in the country. As a tax expert, she says there are 54 types of taxes and levies payable in Nigeria to different tiers of government. In Vivian’s opinion, these taxes need to be amalgamated into one or a few, since the whole tax cycle is a multiple chain of taxes on the same income stream. “Also, thresholds need to be set for compliance requirements on several of these taxes, particularly for MSMEs, in order to make doing business truly easier in Nigeria. But importantly, companies should seek for and have the capacity to determine what

is due to relevant government agencies and ensure that they are remitted in a timely manner. The ability or otherwise of a company to determine the most tax effective business, contractual and legal structures is one significant factor in defining who pays more or the right tax,” she advises. Vivian’s entrepreneurship journey started in 2011 in a multinational accounting firm, where she led the team that pioneered the tax solutions for the International Financial Reporting Standards (IFRS)-based financial statements during its implementation stage in Nigeria. Afterwards, she was nominated as the Tax Champion for the firm’s ‘Working as One’ cross functional team, a group consisting of individual champions from each of the firm’s service functions. While in this role, she had the opportunity of training over 1500 MSMEs, tax officials and professionals on tax, transfer pricing and other business process challenges. While trying to help MSMEs and individuals solve their peculiar challenges, her passion for making impact and solving problems in the society with unique skills was reawakened. “I knew I had to move out and officially commence my entrepreneurship journey at Vi-M. This decision was taken in 2015, and till date, I am still following this personal mandate of impacting lives, organisations and businesses with my unique skills. Also, as a wife and mother of four, I have continually strived to motivate younger women to dare to live t h e i r d re a m s, w h i l e t a k i n g paramount care of what matters most- the family.”

Baoba Microfinance disburses N4.5bn to SMEs in 2017 …targets more funds for start-ups in 2018 MICHAEL ANI

aoba Microfinance Bank, a leading player in the micro credit space, has disbursed N4.5 billion to small and medium enterprises (SMEs) in 2017, representing a 45 percent jump from N3 billion given to players in the sector in 2016. “In 2017, our loan disbursement increased by 45 percent from N3 billion to N4.5 billion. Our staff strength also increased from 293 in 2016 to 408 in 2017,” Kazeem Olanrewaju, chief executive of Baoba Microfinance Bank, said at the bank’s 2018 feedback

meeting with customers in Lagos at the weekend. “We have also moved our deposit from N650 million to N1.3 billion and we aim to reach N2.5N3 billion by the end of the year,” Olanrewaju said. He said the bank’s customer base rose from 11000 to 18000, signalling growth in every area. Olanrewaju noted that the bank was also working on deregulating all forms of stringent policies that had been hindering the flow of efficient loaning between the company and SMEs, including high lending/interest rate, weekend repayment of borrowed funds and also stringent cash collateral deposit (CCD).

“Prior to this time, it took us eight days to process a typical loan request. Now, it is four days and we are working on bringing it to a maximum of two days,” he said. “We also plan to open about two more branches in Lagos and Abuja so as to enable us expand our reach in serving the sector better, and we are hoping that before the year runs out, we would have increase this number to 20.” The micro lender said as part of the firm’s efforts towards driving financial inclusion in the micro credit space, the bank was launching a digital micro credit platform where it could transfer

funds to customers in any part of the country, thereby helping in easing excess traffic in the bank. He said this would be launched before the end of the year. “Baoba is the first Microfinance bank that the Central Bank of Nigeria gave the National Housing fund to lend to the middle income class to tackle issue of poor housing in the country,” he disclosed. He noted that though the funds were in excess of N10 to N20 billion, they would be disbursed in tranches since this was the first time something like that would happen in the country. The first tranche of the funds is N500 million and has been

disbursed already, he said. Olanrewaju, who explained the meaning of Baoba as a tree that provides shelter, said the financial institution, formerly known as Microcred, had grown beyond loan to other product offerings, stressing that its customers would have enough funds to grow their businesses, even as it planned to extend its branches within the region, with over 408 staff on its payroll, to effectively manage its client’s portfolio He said 2017 was a tremendous year for the bank in terms of increase in customer base, assets, efficiency and productivity despite the economic downturn that ravaged the economy.

BUSINESS DAY

C002D5556

Monday 07 May 2018

Start-Up Digest

Meet Adeshina Adewumi, entrepreneur re-inventing online marketing Josephine Okojie

deshina Adewumi is founder and chief executive of Proville.net, an online platform that provides market for

businesses. Adeshina was inspired to establish Proville.net out of his desire to bridge the gap between businesses and their customers through digital platforms. He was also inspired by his passion to drive excellent marketing delivery while helping in creating jobs for Nigerian youths. Adeshina started Proville.net in 2016, but got it registered in 2017 to provide excellent marketing delivery for clients. The young entrepreneur started in 2016 with his savings and the money he got from family and friends. The accountant-turned-entrepreneur tells Start-Up-Digest that his business has grown tremendously within the short time of its operation, but adds that there are still more milestones to cover. “Proville as a brand has shown remarkable achievements within one year. We have so far released our platform—Proville.net—and the turnout has really been remarkable. The truth is that every milestone covered gives room for new milestones. We are still at 1.0 and aspire to grow upwards, as growth never stops,” Adeshina says. Adeshina has a good, strong and sustainable business model, which has kept him in business despite challenges in the country. “Our platform allows you the option to escrow your payment. By escrow, I mean we hold the funds until the customer is satisfied with the job done and authorises for funds to be released. We also allow for direct payment, which is very rare in the industry,” the young entrepreneur says. “We are the first online service market place to launch out, with web and mobile (IOS and Android) on their respective stores, concurrently giving our users a work on the go.

Adeshina Adewumi

“We also provide current ratings and portfolio of businesses, while carrying out market services for our clients, so that they can have a better option when searching for a service provider,” he explains. Speaking on the business expansion plan, Adeshina says, “Our next

phase would be to invest heavily in our professionals through our incubator hub, which should be kicking off within the next few months.” “We also understand that one of the challenges professionals experience is having a space to work from. So, we will be opening

up our space for co-working to our registered professionals with good access to internet facilities and well-fitted office equipment to facilitate remote working and access to the world,” he further says. Answering questions on the challenges facing his business,

Adeshina says that poor power supply has remained the biggest issue confronting his business. The entrepreneur needs constant power supply to drive online marketing but does not get it, according to him, noting that his cost of production has been on the rise due to irregular power supply. “Our business model needs you to be online and active 24/7 in order to get projects done within limited time frame, but with irregular power supply, we have to generate our own power— and this has continued to shoot up our production costs,” he laments. He identifies multiple taxations as another challenge confronting his business. Adeshina urges various tax agencies in Nigeria to work and streamline the country’s tax system while providing incentives for start-ups operating in the country to increase their survival rate. He commends the Federal Government for its VAIDS initiative, but stressed the need for more collaboration between businesses and tax agencies for increased rate compliance. “Effective collaborations with the government at various levels (federal, state and local) can produce amazing results. Our business model is also in line with the current administration roadmap around the ease of doing business in Nigeria. The opportunity abounds for both professionals and businesses.” On his advice to other entrepreneurs, Adeshina says, “Commitment is the first word: You have to be committed to your drive. People would only celebrate what you celebrate. Consistency is second: Never give up on your way up. Capacity is the third C: Build capacity and skills and opportunity would find you out. Any idea or entrepreneur would shine with this 3Cs. It’s just a matter of time.” He also speaks about an upcoming event ‘Future of Work’ powered by Techpoint, holding on the 29th of May 2018. “My team and I would be there live to sign up new professionals and businesses ready to use our platform,” he adds.

LCCI inducts 105 companies, urges SMEs to see opportunities DAVID IBEMERE

abatunde Ruwase, president of the Lagos Chamber of Commerce and Industry (LCCI), has advised firms to look beyond the limitations created by the present economic situation and see opportunities for growth and inventions. Ruwase stated this during the induction of 105 new companies in Lagos last Wednesday, with a promise to provide the needed

platforms for them to grow. The president, who was excited at the increasing numbers of farmers joining the chamber, encouraged members to exploit the present situation to come up with initiatives that would improve them individually and the country at large. “Most of the new members inducted are products of the chamber’s mentorship programmes from farming, information technology, and real estate, who are ready to exploit opportunities in the business world. As a body we

have provided links to successful members for mentorship. “Farming business was not what people liked to do before, but today, 20 new farmers have joined the chamber, who are tractor assemblers, tractor hirers, and people who are producing drugs for farming, a positive sign that Nigerians are looking to exploit business opportunities. And as a body, we are ready to lead these new young members on the right path,” he reaffirmed. On the chambers’ plan for the members, he said, “they

have stated their expectations from the chamber and it will be studied to see how best to meet those expectations.” In his addresss of welcome, Soboma Ajumogobia, chairman, membership and welfare committee, charged the new members to adopt high ethical standards to achieve profitability and a long-term presence in the global business world. There are obligations which transcend profit making, he said, stressing that adequate attention to integrity of business transac-

tions and practices is essential to ensure business continuity and profitability. Ajumogobia, further disclosed that the companies inducted have fulfilled all criteria to become members of the chamber. “I will like to reiterate the need for high quality representation at the level of chief executive officers and managing directors or at least at the senior management level in participating in the activities of the chamber,” he counselled.

BUSINESS DAY

Monday 07 May 2018

Start-Up Digest

‘Nigerian fashion space now multimillion dollar industry’ Damilola Otufodunrin is the CEO of Damsco, a clothing company that designs men’s wear in Lagos. Damilola has Bachelor of Arts in History and Strategic Studies from the University of Lagos. He sits down in an interview with BUNMI BAILEY to share his love for fashion and how he teaches start-ups the business of fashion. Tell me about your business. amsco started as a dry cleaning firm in the University of Lagos and eventually became a fashion brand. Having self-trained myself through YouTube, I started out doing fashion illustrations for designers who took interest in many of my designs. In June 2013, Damsco Clothings was established, with core focus on corporate wears for both men and women, including footwear. In 2014 ‘clothings’ was removed from the name, leaving it as Damsco and shifting focus to strictly men’s wear with much emphasis on suits. It was not until 2015 that other aspects of men’s wear, aside suits, were incorporated. And then, we kicked off Damsco Consult, which involves teaching fashion start-ups the business of fashion and addressing the questions on the minds of fashion lovers across all social media platforms.

What inspired you to set up the business? It was my love for fashion, which developed as an extension of my love for art. Being a very talented artist from childhood predisposed me to doing a lot of sketching, much of which were ideas of cloth designs. However, my love for fashion as a profession became glaring towards the end of my second year in the university because, at that time, I was the only student in the whole of faculty of art that was allowed to take practical creative art courses as an elective course. No doubt, I was even better than many of the core

creative art students. It is a common saying that talent is never enough, so I was also inspired by the numerous biographies of entrepreneurs I exposed myself to. I had always known I was never going to tender my certificate for a job, so I gave in to reading a lot about business and entrepreneurship, which is still a major thing I do till date. Why do you think most start-ups fail after five years of being birthed? First, some start-ups have little or no understanding of the industry and the local bosses. Next is lack of professionalism in the small things. Professionalism has to do with how you conduct yourself in your business affairs. Breaking new grounds will require that the entrepreneur, no matter how small the business is, adopts standard methods of running his organisation. The day to day running of your business is what combines together to represent what your brand is evaluated. The way you deal with your customers, by keeping your word, delivering services and quality is important.

to grow. My first business venture started that way. I found a gap within the campus that law students needed their white shirts to be frequently laundered. So I walked up to a few of them with very little charge. I got people to do the washing and I paid my roommates to do the ironing while I took the orders. Before we knew it, our orders became too much to handle.

What was your initial startup capital? Zero capital. My mentor Vusi Thembakwayo, a young South African venture capitalist said, “If you need funding to be an entrepreneur, you are not an entrepreneur”. The interesting thing about being an entrepreneur is that they make it work. Denzel Washington says that you do what you have to do to do what you want to do. Therefore, my take is that real entrepreneurs don’t need capital to start; they only need capital

The fashion industry is highly competitive. What have you done differently to ensure that you remain in business? Innovation is what has kept us in the game. The world of fashion is highly dynamic with trends changing in less than three months as against what we used to have where fashion trends would last for years before they went out of vogue. The information age has influenced the nature of trends in fashion. Platforms like Instagram gives the consumer

Damilola Otufodunrin

a wide range of options, leaving him or her with the only option of quickly and consistently changing their style. Therefore, we as the brand have continued to be ahead of our clients, creating exclusive pieces that keep them coming back and referring us to other prospective clients. We also have a good understanding of the consumer behaviour. When it comes to fashion in Nigeria, people don’t buy clothes just because they want to buy and stock them so they can have varieties to choose from. They simply buy because they have an occasion to attend or it’s a special day for a ceremony. Therefore, what we have done as a brand is that we have identified some of these special occasions like weddings and we have positioned the brand in such a way that those who want to attend these special occasions will definitely contact us.

Does Nigeria’s fashion industry have what it takes to take over Africa? Definitely, Lagos (after Johannesburg) is the second major hub of fashion in Africa, arguably the first because 70 percent of African fashion in the Diaspora comes from Nigeria. Lagos plays host to some of the biggest fashion shows in Africa, like the just concluded Arise Fashion Week, which hosted the likes of Ozwald Boateng and Naomi Campbell. Today the likes of Mai Atafo, Lanre Da silva, Tiffany Amber Lisa Folawiyo, Maki HO and a long list of other designers have through their excellent work continued to put Nigeria on the world fashion map as a force to reckon with. It was, however, not surprising that Michel Obama frequently wear Maki OH designs. The Nigerian government is talking about diversification. Do you think the fashion industry can help the country in that direction? Until about 15 years ago, fashion to an average Nigerian did not seem to go beyond the idea of a tailor making wears for different customers. In recent years, the story has tremendously changed as fashion is now recognised as a fast growing multimillion dollar industry. Although still limited to Lagos, fashion in Nigeria has blossomed having highly creative designers who are not necessarily tailors, big time fashion schools, fashion photographers, fashion editors, professional stylist, makeup artists, international runway models and yearly fashion shows like Africa Fashion Week Nigeria

AFWN, Lagos Fashion & Design Week, LFDW. What are the challenges confronting your business? I believe the inconsistent power supply is a common challenge with every entrepreneur in Third World nations like ours. Imagine having a population of about 190 million people, which is four times the size of South Africa, and we only generate just about 16 percent the power capacity of South Africa. How would you say your business has grown since starting? My business has gone from moving from one tailor’s shop to another to learn the basics of garment production and begging them to create my designs, to signing up for online trainings with very little customer base to sell fashion illustrations. Today, we have grown to become an established brand with the sole aim of changing the narrative of fashion in Africa through the production of quality made in Nigeria men’s wear. With the help of social media, our customer base has massively expanded beyond Lagos, bringing us orders from several other locations within and outside Nigeria. What we produced for the entire year in 2015 was produced in two months in 2017. Our work force consisting of both contract and full time tailors have continued to be on the increase as we now have more experienced hands who work with us. Many of the fashion start-ups who signed up for our consulting sessions are now thriving fashion brands within the industry.

Access Bank’s Womenpreneur supports 500 SMEs in PH, Abuja, Lagos HOPE MOSES-ASHIKE

bout 500 Nigerian women in small and medium enterprises (SMEs) have benefited from the capacity building of Access Bank plc. Access Bank’s W Academy, in partnership with the Enterprise Development Centre (EDC) of the La-

gos Business School (LBS), organised a professional business capacity-building workshop for 500 female entrepreneurs in Port-Harcourt, Abuja and Lagos. These capacity building initiatives across the three states held in the last four months and served as the 3rd, 4th and 5th editions of the Second Season of the bank’s Womenpreneur Business Workshop training.

Speaking on the initiative, Ope Wemi-Jones, group head, product sales of Access Bank Plc, said, “Since 2006, the bank has maintained its commitment to drive women’s economic empowerment in the nation. The Womenpreneur Business Workshop is intended to educate and enlighten Nigerian women on the fundamentals in business which will eventually help them attain their

full potential.” The Womenpreneur Business Workshop, a flagship training of the W Academy under Access Bank’s W Initiative, is designed to address issues of skills, finance, networking, and management skills, which are key barriers to women’s economic inclusion. The objective of the Womenpreneur Business Workshop is to provide a dis-

counted and practical capacity building programme that exposes female business owners to the nation’s economic reality as well as help them simplify processes and hone the requisite skills needed to grow their businesses. So far, over 2,300 business women in Lagos, Port Harcourt, Ibadan, Abuja, Kaduna & Enugu have benefitted from the workshop with testimonials around

increasing their business network, improving their business model and thriving through the economic constraints. The workshop is highly discounted and targeted at women entrepreneurs. Wemi-Jones disclosed that plans have been concluded to hold the next editions of the workshop in Kano and Ibadan in July and August respectively.

BUSINESS DAY Harvard Business Review

C002D5556

MondayMorning

Monday 07 May 2018

In association with

Why monitoring your employees’ behavior can backfire MICHEL ANTEBY AND CURTIS K. CHAN

oday, monitoring technologies are increasingly inexpensive — and staggeringly expansive. This has made it easier than ever for managers to intensively monitor employees at work. Our research, based on interviews with 89 Transportation Security Administration employees and their managers a decade after 9/11, suggests that increased monitoring can lead to a cycle of increasingly coercive surveillance. Ultimately, we conclude, employers may be unaware that the effects of surveillance may go well beyond the initial, and often relatively innocuous, reason they chose to monitor employees. The prevalent senti-

ment expressed by TSA employees was that managers were watching them to control them. Officers used words like “Big Brother” and “spying” to articulate how

managers were monitoring them, suggesting strongly that they really did not like the feeling of constantly being seen. At the same time, of-

ficers said that even though they were constantly seen, they were seldom noticed. At first, we thought we were misunderstanding them. In fact, employ-

ees thought they were really only noticed as individuals when they made a mistake. One officer said he felt like managers were “looking for excuses to slap you on the hand.” Under such circumstances, the officers felt that the best way to handle it was to try to engage in what we call invisibility practices, seeking respite from the monitoring systems in subtle ways: going to the restroom a lot, or taking a bit longer to walk through unmonitored areas between assigned tasks. They also attempted not to stick out as individuals. “Going “under the radar” meant using tactics, such as keeping one’s private life out of work so managers had nothing personal or particular to remember, and avoiding conversations with managers in

order to be “left alone” and remain “not known.” There is an irony in these invisibility practices: Employees engaged in them to seek some respite from what they interpreted as coercive surveillance. But the more they did so, the more managers could recognize that employees were trying to escape their monitoring systems. And because it was harder for managers to get to know their employees as individuals, mistrust spiraled out of control. As a result, added monitoring measures were seen by management as justifiable. (Michel Anteby is a professor at Boston University’s Questrom School of Business. Curtis K. Chan is a professor at Boston College’s Carroll School of Management)

Learning is a learned behavior: Here’s how to get better at it ULRICH BOSER

growing body of research is making it clear that learners are made, not born. Through the deliberate use of practices and dedicated strategies to improve our ability to learn, we can all develop expertise faster and more effectively. In short, we can all get better at getting better. Here are three practical ways to build your learning skills, based on research. ORGANIZE YOUR GOALS: Studies consistent-

ly show that people with clear goals outperform people with vague aspirations like “do a good job.” By setting targets, people can manage their feelings more easily and achieve progress with their learning. THINK ABOUT THINKING: Metacognition is crucial to the talent of learning. Psychologists define metacognition as “thinking about thinking.” How do you know what you know? It’s a matter of asking ourselves questions like : Do I really get this

calm. Maybe we’re quietly writing an essay in a corner — or talking to ourselves as we’re in the shower. But it usually takes a bit of cognitive quiet, a moment of silent introspection, for us to engage in any sort of focused deliberation. The good news from all of this — for individuals and for companies looking to help their employees be their best — is that learning is a learned behavior. idea? Could I explain it to a friend? What are my goals? Do I need more back-

ground knowledge? REFLECT ON YOUR LEARNING: In short, learn-

ing benefits from reflec- (Ulrich Boser is a senior tion. This type of reflec- fellow at the Center for tion requires a moment of American Progress.)

Politics & Policy BUSINESS DAY

Monday 07 May 2018

C002D5556

Restructuring debate dominates discourse at Abraham Adesanya symposium

Oyo govt urges residents to cooperate with security agencies in securing lives, property

The memories and philosophies of Abraham Adesanya, the late Afenifere leader, re-echoed last Thursday, as eminent Nigerians and dignitaries across the country converge on the Shell Hall Onikan, Lagos, for the ten year memorial symposium, Iniobong Iwok, who attended the event report.

overnor Abiola Ajimobi of Oyo State has admonished residents of the state to join hands with the security agencies in the state to ensure safety of lives and property in their various communities. The governor who spoke through the Deputy Governor, Moses Alake-Adeyemo gave the charge at the Gala night dinner organised in honour of the participants of the Senior Executive Course No.40,2018 National Institute for Policy and Strategic Studies, NIPSS, Kuru who had been on a study tour to Oyo State for the past one week. The governor noted that the theme of the course ‘Strengthening internal security framework and community policing in Nigeria: Models, Policy Options and Strategies’ was very apt especially in the light of the

good name they say is better than gold, while integrity has been identified as the supreme quality of true leadership. Perhaps, this statement amply describes the true personality of the late Abraham Aderibigbe Adesanya who until his death was the leader of the Yoruba pan-socio-cultural group, Afenifere, and a former leader of the defunct National Democratic Coalition (NADECO). He was an activist, lawyer, and liberal progressive politician. Adesanya was born on 24 July 1922 in Ijebu Igbo; attended Ijebu Ode Grammar School, and worked briefly as a teacher; after which he left for the United Kingdom to study Law at the then Holborn College of Law, Grey Inn. Upon returning to Nigeria in 1959, as a qualified lawyer, he joined the Action Group which was then led by the late Obafemi Awolowo. And shortly after, he was elected into the Western House of Assembly to represent Ijebu Igbo constituency in the 1959 House of Representatives election. A dedicated Awoist, he led a team of lawyers that defended Chief Awolowo against the Nigerian Federal Government’s treason charges in 1962. Known for his uncompromising principles, selfless

Former President Olusegun Obasanjo (left) and former minister of state for defence and daughter of late Abraham Adesanya, Modupe Adelaja at a symposium marking the 10th anniversary of late Sen. Abraham Adesanya, at the Muson Centre in Lagos.

commitment, patriotism, he joined other democrats, to fight the various military juntas, enthroning democracy in the country, while surviving assassination attempt on his life in the process. However, Adesanya’s principles, philosophies and vision for the country was brought to the fore, last Thursday as eminent Nigerians, several dignitaries and groups converge on the Shell Hall, Onikan, Lagos, for the ten year memorial symposium with the theme: ‘Leadership and the future of Nigeria’. While political leaders across the country, including

former president Olusegun Obasanjo, showered encomium on the virtues, selfless service, patriotism and commitments of the late elder statesman, raging agitation for a restructuring of the country and true federalism, however, took a centre stage among the speakers at the event. Former Secretary General of the Commonwealth, Emeka Anyaoku; Ohanaeze Ndi-Igbo leader, John Nwodo; Senator Seth Akintoye, all noted that there was the urgent need for the Federal Government to restructure, and install true federalism in the country in view of the

current challenges bedeviling it, if Nigeria was to attain its potentials. They stressed that the country was in danger of breakup and separation, adding that the current political structure and system of governance imposed on it by the military had retarded the growth of the country. Anyaoku noted that a decade after the demise of the former Afenifere leader, the country was still in deplorable state, with lopsided appointments and increased divisiveness, expensive and ineffective political structure. He suggested that there was the need for urgent restructuring of the country and a return to the 1963 and 1960 constitution, warning that the country would not achieve meaningful development with its present complex structure. “Senator Abraham Adesanya was a symbol of authentic combination of loyalty to one’s ethnic group and loyalty to one’s country. He was at the same time an outstanding leader of Afenifere that sought to promote and protect the interest of the Yoruba and a nationalist leader of NADECO that sought to promote and protect democracy in his country, Nigeria. Inspired by the sage Chief Obafemi Awolowo, he led a life of idealism in which service to the Yoruba and to Nigeria was an uncompromising credo,” Anyaoku said.

Osun 2018: APC leaders in west senatorial district insist on zoning of guber ticket

ll notable leaders of the All Progressives Congress (APC) from Osun West Senatorial District may have unanimously agreed to demand the governorship ticket of the party. A pointer to this was witnessed recently during the Federal Constituency visits embarked upon by Governor Rauf Aregbesola and his team, obviously to give account of his stewardship and canvass support for APC emergence in the governorship battle. The West Senatorial District of Osun Sate comprises 10 local government areas and harbours three out of the 9 biggest towns in the state.

The last and only time the senatorial district produced governor for the state was when the late Senator Isiaka Adeleke was elected the first governor of the state in 1992 on the platform of Social Democratic Party (SDP). Since the return of democracy in 1999, Osun Central has produced two governors in succession in Bisi Akande and Olagunsoye Oyinlola. The incumbent governor, Rauf Aregbesola hails from Ilesa, a town in Osun East Senatorial District. In Ede, the headquarters of Ede/Ejigbo/Egbedore Federal Constituency, supporters of the ruling party practically changed APC slogan to reflect their resolve to have the governorship ticket of the party zoned to West Senatorial District.

Also, during a similar event held at Ayedaade High School, Ikire, all leaders of the party that spoke to newsmen and addressed the gathering made specific demands for the governorship ticket of APC to be given to politician from the West Senatorial District. While addressing party supporters in Ede and Ikire during his separate visits to the towns, Governor Aregbesola did not mince word on the resolve of the party to conduct party for all aspirants seeking APC ticket. He said the APC is still geared towards touching the lives of the masses in the state through purposeful government, explaining that the only way to ensure that Osun continues to enjoy steady growth and develop-

ment is by allowing the party to continue ruling the state. Aregbesola dispelled the rumour making the rounds that there is a cold war between himself and the Timi of Edeland, saying the monarch and himself are working towards ensuring that the people of the area enjoy the dividends of democracy. The governor explained that the visit was to gear party members on the need to begin door-door campaign ahead of the governorship election scheduled for September 22, 2018. “I want to appeal to members of our great party on the need to allow our party to continue in the saddle of leadership of our dear state no matter the choice of candidate, this is for the good of Osun.

current security challenges such as kidnapping, Boko Haram, herdsmen crises in the country. While emphasizing the need for individuals to embrace unity and peaceful coexistence in the country, he implored the participants to consider the interest of ethnic groups while putting up their report and security policies to enhance national integration. In his contribution, the Secretary to the state government, Olalekan Alli noted that it was imperative for all and sundry to play surveillance role in their various communities by reporting suspicious acts or behaviour to appropriate security agencies so as to maintain peaceful co-existence in their communities. He said further that Abiola Ajimobi administration would not rest on its oars to ensure lives and property of citizens are secured and protected.

Former Vice President and presidential aspirant, Atiku Abubakar addressing the Peoples Democratic Party (PDP) Southwest Mega Rally in Osogbo, Osun State on Saturday.

Unite and take back your country, Atiku urges Nigerians BENJAMIN AGESAN, Makurdi

…Aregbesola says party will conduct primaries for all aspirants BOLADALE BAMIGBOLA, Osogbo

AKINREMI FEYISIPO, Ibadan

ormer Vice President Atiku Abubakar, has called on Nigerians to unite against all forms of division currently threatening the peace of the country. Atiku Abubakar made this call at the Southwest Peoples’ Democratic Party (PDP) rally at Osogbo, the capital of Osun State on Saturday. The former Vice President who is also a presidential aspirant in the 2019 presidential elections urged all PDP stakeholders across the nation to make the required sacrifice and forge a united front to defeat the APC and Muhammadu Buhari government, declaring that all indicators in the polity are showing that the

time is ripe for the opposition to rise on behalf of the Nigerian people and take back their country from the voyage of destruction that the ruling All Progressives Congress is taking it to. He reminded the people of the south west how in 2003 he worked tirelessly to take the south west back from the then Alliance for Democracy (AD). He promised that he has done it before and he can do it again come 2019 if he is the presidential candidate of the Peoples Democratic Party. According to Atiku the PDP will reposition the country on a true path to peace and prosperity via restructuring and the strengthening of critical national institutions of government, when it returns to power next year .

BUSINESS DAY

Monday 07 May 2018

Live @ the Stock exchange Prices for Securities Traded as of Friday 04 May 2018 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 326,886.08 11.30 0.44 123 40,534,225 UNITED BANK FOR AFRICA PLC 400,133.23 11.70 -0.43 114 17,053,465 ZENITH INTERNATIONAL BANK PLC 863,403.58 27.50 -0.54 276 11,806,974 513 69,394,664 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 450,485.92 12.55 0.40 314 12,420,333 314 12,420,333 827 81,814,997 BUILDING MATERIALS DANGOTE CEMENT PLC 4,183,444.57 245.50 0.12 41 5,013,057 LAFARGE AFRICA PLC. 364,283.99 42.00 0.12 71 3,470,566 112 8,483,623 112 8,483,623 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD 441,333.42 750.00 -1.96 14 13,579 14 13,579 14 13,579 953 90,312,199 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 2 1,080 OKOMU OIL PALM PLC. 77,266.71 81.00 3.12 47 1,093,138 70,000.00 70.00 -0.71 30 276,663 PRESCO PLC 79 1,370,881 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 2,520.00 0.84 5.00 15 529,550 15 529,550 94 1,900,431 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,508.96 0.57 3.64 10 160,399 206.25 0.53 - 2 1,159 JOHN HOLT PLC. S C O A NIG. PLC. 2,111.93 3.25 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 67,882.14 1.67 -2.34 91 6,663,210 51,863.34 18.00 - 42 363,870 U A C N PLC. 145 7,188,638 145 7,188,638 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 37,026.00 28.05 - 32 126,895 ROADS NIG PLC. 165.00 6.60 - 0 0 32 126,895 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT CO. LIMITED 6,392.05 2.46 - 9 101,059 9 101,059 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 2,000.00 100.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 26,682.70 10.00 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 0 0 41 227,954 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 1,574.98 0.33 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 18,947.38 2.42 - 9 42,980 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 226,704.62 103.50 0.49 100 1,890,185 INTERNATIONAL BREWERIES PLC. 445,265.65 51.80 9.05 26 2,579,039 NIGERIAN BREW. PLC. 1,031,600.36 129.00 1.42 45 318,464 180 4,830,668 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 57,000.00 11.40 -0.44 175 3,639,607 DANGOTE SUGAR REFINERY PLC 228,000.00 19.00 -4.47 83 2,983,879 FLOUR MILLS NIG. PLC. 145,563.48 35.50 -1.13 94 2,839,073 HONEYWELL FLOUR MILL PLC 20,935.72 2.64 -1.49 22 449,500 MULTI-TREX INTEGRATED FOODS PLC 1,489.00 0.40 - 1 500 N NIG. FLOUR MILLS PLC. 1,220.67 6.85 - 0 0 NASCON ALLIED INDUSTRIES PLC 56,697.98 21.40 4.39 42 354,813 UNION DICON SALT PLC. 3,676.41 13.45 - 1 100 418 10,267,472 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 24,698.36 13.15 - 46 449,753 NESTLE NIGERIA PLC. 1,264,286.72 1,595.00 0.31 41 79,279 87 529,032 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 3,439.82 3.30 - 7 26,600 7 26,600 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 89,335.73 22.50 - 24 340,195 UNILEVER NIGERIA PLC. 301,612.78 52.50 - 54 181,626 78 521,821 770 16,175,593 BANKING DIAMOND BANK PLC 48,868.42 2.11 1.44 61 3,139,602 ECOBANK TRANSNATIONAL INCORPORATED 377,083.28 20.55 -1.20 73 3,242,484 FIDELITY BANK PLC 70,119.01 2.42 -3.59 170 14,217,349 GUARANTY TRUST BANK PLC. 1,333,232.42 45.30 0.22 144 2,819,869 JAIZ BANK PLC 22,098.19 0.75 - 12 72,510 SKYE BANK PLC 11,798.26 0.85 1.19 129 11,505,820 STERLING BANK PLC. 47,504.19 1.65 -0.60 276 25,197,825 UNION BANK NIG.PLC. 195,109.04 6.70 - 18 75,145 UNITY BANK PLC 14,027.21 1.20 4.35 17 630,601 WEMA BANK PLC. 33,945.53 0.88 -3.30 35 954,610 935 61,855,815 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE COMPANY PLC 4,528.70 0.22 - 0 0 AIICO INSURANCE PLC. 4,781.84 0.69 -2.82 27 559,616 AXAMANSARD INSURANCE PLC 24,675.00 2.35 - 0 0 CONSOLIDATED HALLMARK INSURANCE PLC 2,240.00 0.32 - 4 106,300 CONTINENTAL REINSURANCE PLC 15,766.57 1.52 -4.40 7 499,135 CORNERSTONE INSURANCE COMPANY PLC. 5,155.33 0.35 - 1 500 EQUITY ASSURANCE PLC. 4,060.00 0.29 - 0 0 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 2,456.00 0.40 - 1 10,000 INTERNATIONAL ENERGY INSURANCE COMPANY PLC 590.68 0.46 - 0 0 LASACO ASSURANCE PLC. 2,782.90 0.38 2.70 25 5,604,620 LAW UNION AND ROCK INS. PLC. 3,351.14 0.78 - 1 800 LINKAGE ASSURANCE PLC 6,800.00 0.85 - 1 8,000 MUTUAL BENEFITS ASSURANCE PLC. 2,080.00 0.26 4.00 10 427,341 N.E.M INSURANCE CO (NIG) PLC. 14,785.41 2.80 -2.86 19 1,391,931 NIGER INSURANCE CO. PLC. 2,167.05 0.28 -3.45 6 551,800 PRESTIGE ASSURANCE CO. PLC. 1,717.83 0.45 -4.26 6 276,099 REGENCY ALLIANCE INSURANCE COMPANY PLC 1,800.56 0.27 -7.41 9 1,011,000 SOVEREIGN TRUST INSURANCE PLC 1,834.98 0.22 4.55 17 11,095,500 STANDARD ALLIANCE INSURANCE PLC. 5,422.63 0.42 - 0 0 STANDARD TRUST ASSURANCE PLC 4,483.72 0.48 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE COMPANY PLC 8,000.00 0.50 - 0 0 VERITAS KAPITAL ASSURANCE PLC 4,576.00 0.33 6.45 7 883,077 WAPIC INSURANCE PLC 7,092.85 0.53 3.92 44 977,769 185 23,403,488

MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 4,344.61 1.90 - 7 51,905 NPF MICROFINANCE BANK PLC 7 51,905 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 5,460.00 1.30 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 6,005.46 1.44 - 1 500 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 1 500 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,320.00 4.16 0.24 63 1,260,624 CUSTODIAN AND ALLIED PLC 30,526.88 5.19 -2.81 22 12,333,767 720.00 0.48 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 50,694.94 2.56 1.59 108 11,233,709 NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 1 100 1,543.61 0.30 - 2 34,572 ROYAL EXCHANGE PLC. 3,312.39 103.20 - 0 0 SIM CAPITAL ALLIANCE VALUE FUND 497,448.55 49.50 - 26 5,258,900 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 19,200.00 3.20 2.19 84 6,300,711 306 36,422,383 1,434 121,734,091 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1,705.51 0.48 - 1 24,000 1 24,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 8,100.00 5.40 -1.10 4 502,000 28,701.04 24.00 - 7 93,268 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 2,606.80 2.66 0.38 25 933,511 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,346.68 0.78 - 2 27,400 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 487.85 2.25 - 0 0 38 1,556,179 39 1,580,179 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 781.44 0.22 - 4 121,612 4 121,612 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 680.40 6.30 - 1 1,000 TRIPPLE GEE AND COMPANY PLC. 435.56 0.88 - 0 0 1 1,000 PROCESSING SYSTEMS CHAMS PLC 1,972.35 0.42 -4.55 4 541,000 E-TRANZACT INTERNATIONAL PLC 19,110.00 4.55 - 0 0 4 541,000 9 663,612 BUILDING MATERIALS BERGER PAINTS PLC 2,753.32 9.50 1.06 12 221,374 CAP PLC 27,125.00 38.75 - 8 29,344 28,086.75 22.35 1.59 56 779,408 CEMENT CO. OF NORTH.NIG. PLC FIRST ALUMINIUM NIGERIA PLC 1,034.08 0.49 - 0 0 MEYER PLC. 361.24 0.68 - 0 0 PAINTS AND COATINGS MANUFACTURES PLC 467.82 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,626.50 2.05 - 0 0 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 76 1,030,126 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,597.95 2.95 - 5 12,200 5 12,200 PACKAGING/CONTAINERS BETA GLASS PLC. 41,597.67 83.20 4.98 6 54,881 GREIF NIGERIA PLC 388.02 9.10 - 2 300 8 55,181 89 1,097,507 CHEMICALS B.O.C. GASES PLC. 1,914.73 4.60 - 3 1,526 3 1,526 METALS ALUMINIUM EXTRUSION IND. PLC. 2,023.60 9.20 - 1 208 1 208 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 21,000 1 21,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 5 22,734 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 2,880.84 0.46 - 21 2,965,710 21 2,965,710 INTEGRATED OIL AND GAS SERVICES OANDO PLC 103,802.29 8.35 -4.02 226 4,310,039 226 4,310,039 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 65,051.39 180.40 -4.95 48 47,821 CONOIL PLC 22,067.68 31.80 - 20 28,638 ETERNA PLC. 7,485.79 5.74 -3.69 71 2,380,332 FORTE OIL PLC. 56,006.69 43.00 - 50 176,843 MRS OIL NIGERIA PLC. 7,200.58 28.35 - 8 2,146 TOTAL NIGERIA PLC. 75,441.75 222.20 - 28 32,288 225 2,668,068 472 9,943,817 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 20,866.39 2.14 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 564.65 0.48 - 1 24,000 1 24,000 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 2 700 TRANS-NATIONWIDE EXPRESS PLC. 403.21 0.86 - 1 10,000 3 10,700 HOSPITALITY TANTALIZERS PLC 1,188.30 0.37 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,878.66 3.15 - 0 0 IKEJA HOTEL PLC 3,700.26 1.78 - 0 0 7,862.53 3.50 - 0 0 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 56,623.01 7.45 - 2 65 2 65 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,760.00 0.48 - 2 8,000 2 8,000

Monday 07 May 2018

C002D5556

BUSINESS DAY

44 BUSINESS DAY NEWS Operators reiterate commitment to tackle unethical practices in real estate industry KELECHI EWUZIE

perators in the real estate industry have reiterated their commitment to minimise and eradicate unethical practices within the industry through quality information. Seyi Adetu, executive producer, Property First Show, says the programme will continue to tackle the issues and challenges within the real estate industry. Adetu, a quantity surveyor, observes that the industry is filled with miscreants and non-practitioners and they have almost taken over, milking undiscerning publics of their hardearned money. He states that the need to sensitise the public and also intimate them with professionals in the industry birthed Property First Show. According to Adetu, “We are pleased to announce that Property First Show is taking giant steps forward and we will be partnering with as many professionals and companies in our quest to sanitise our in-

dustry.” He further says after about 35 educating, informative and captivating episodes of Property First Show, we are poised to give the public the right information as it is happening in the real estate industry Omotoke Balogun-Adetu, executive director of Property First Show, says the show is open to collaborations from stakeholders that can help build an enviable sector for the Nigerian populace. On his part, Alex Edwin-Okon, director of the programme, says the programme has been designed in such a way that it touches every aspect of the industry; from the real estate digest, to the property showcase, to informative interview with industry experts, the awoof and vox pop segments. “We are hopeful that more professionals will join forces with us to cleanse the industry. We are proud to continue the TV show on a weekly basis with our seasoned host and we would be syndicating to all TV houses in the country very soon,” he says.

Smart Money with

Arese Arese is the Author of the finance chick-lit The Smart Money Woman and the founder of smartmoneyafrica.org

Ghanaian actress Moesha Boduong went viral on social media a few weeks ago for an interview with CNN’s Chief international correspondent, Christiane Amanpour. In that interview, Moesha stated that the economy was bad and girls need men to take care of their financial obligations. According to her she had just started working and couldn’t be expected to afford rent and other lifestyle needs. The moral outrage on social media did not impress me because; the reality is that a lot of male-female relationships in this part of the world are transactional. But I was intrigued by the fact that she didn’t think ‘as a woman’ she could ever make enough money to afford her lifestyle. This is not a woman selling guguru’ on the streets; she is an actress who has achieved reasonable success. However, from the sound of things, it hadn’t translated to financial success. Without discounting the element of greed and wanting to do things that our incomes cannot support, I began to consider another important factor that

could have led to this thinking. Have we subconsciously socialized women to think that men are naturally set up to make more than women and there’s a ceiling to what African women are capable of earning? Many African women believe that their earning potential is capped and can never earn as much as men. Let me explain, African women are way past the days of being relegated to only household chores and child bearing; women have become an important part of the workforce. However, a good number of women join the workforce and start a business with the mindset of ‘something to do until I find a husband or something to do so I’m not bored while my husband is at work’. It could be argued that because of this thinking, even though women are starting more businesses and building stronger brands, they still hardly ever turn a profit but their businesses stay in business, because of the cash injections from the men in their lives. I also considered the impact this limited thinking has on a

C002D5556

Monday 07 May 2018

Services, industrial sector drove Press Bus accident: Edo refurbishes, business confidence in April – CBN hands over accidental vehicles HOPE MOSES-ASHIKE

igerian businesses show improved confidence on macro economy as the overall confidence index (CI) rose to 28.9 in April compared with the level of 24.5 index points recorded in March 2018, according to the Central Bank of Nigeria (CBN). The optimism on macro economy in the current month was driven by businesses from the various sectors, including services (18.0 points), industrial (7.6 points) construction (2.7 points) and wholesale/ retail trade sectors (0.7), while the drivers of the optimism for next month were services (42.1 points), industrial (18.0 points), construction (3.7 points) and wholesale/retail trade. The business expectation survey report revealed that the positive outlook by type of business in April 2018 was driven by businesses that are neither import- nor export-oriented (20.0 points), import-oriented (4.5 points) both import- and export-oriented (3.9 points), those that are businesses export-related (0.7 points). However, the businesses outlook for May 2018 shows a greater confidence on the macro

economy at 66.9 index points. The surveyed firms identified major factors constraining business activity in the current month. These include insufficient power supply (69.6 points), high interest rate (60.2 points), unfavourable economic climate (52.7 points), unclear economic laws (50.9 points), financial problems (50.7), unfavourable political climate (46.7 points), and insufficient demand (46.4 points). The April 2018 Business Expectations Survey (BES) was carried out by the CBN between April 13 and 23, with a sample size of 650 businesses nationwide. A response rate of 91.7 percent was achieved, and the sample covered the services, industry, wholesale/retail trade and construction sectors. Respondents’ outlook on the volume of total order, business activity and financial conditions (working capital) stood at 18.5, 17.2, and 8.5 index points, respectively, indicating an improvement in relation to its outlook in March 2018, which was 13.3, 16.0, and 7.6, respectively. The average capacity utilisation (CUI) index rose to 20 points in April 2018, from 16.5 in March 2018, which can be attributed to the positive outlook on business activity and financial conditions.

he Edo State government has handed over two vehicles that were damaged in the accident involving the Government House Press Corps Bus to their owners, after refurbishment. The refurbished vehicles, a Toyota Corolla saloon car with registration number FC 291-APP belonging to Ezeora Obiora, and a Honda Civic saloon car with registration number USL 380-AH belonging to Obi Charles Ifechukwu, were handed over to the Nigeria Police Force at the Government House, in Benin City. Governor Godwin Obaseki, who was represented by his chief of staff, Taiwo Akerele, said the vehicles were refurbished and handed-over to the Police for onward delivery to the owners. He said the handing-over was a fulfilment of the governor’s promise, noting, “The handing over was done as we operate a responsive government that cares for its people and take responsibility for its actions.” Obaseki said the state government took care of the hospital bills of all the victims of the accident as promised, adding “All the victims were adequately attended to as the state government ensured

that the medical bills were cleared.” He expressed appreciation to the owners of the vehicles for their patience and understanding, adding, “we also appreciate the level of professionalism displayed by the Nigeria Police while investigating the cause of the accident.” CEO, Lady Mechanic Initiative, Sandra Aguebor, whose company refurbished the vehicles, said the state government made real its promise to refurbish the vehicles, adding that the vehicles were in better working condition. Recall that a bus assigned to the Press Unit of the Edo State Government House was involved in an accident on its way from an official assignment, on March 14, opposite the University of Benin Teaching Hospital (UBTH), Benin City. The medical bills of all the victims of the accident were settled by the state governor when he visited the patients in the hospital, including the bills of a medical doctor, a mother with her five-year-old child, Freeman Okoro, whose cancer treatment had been taken over by the state government.

The economics of African Feminism statistic that, 51% of entrepreneurs in Africa are women. This is an exciting statistic but begs the question do these women led businesses contribute 51% to gdp per capita and do their profits have a significant impact on the bottom line of the African economy? African women have thrived and created whole industries in beauty, fashion and event planning to name a few. Businesses like House of Tara have created thousands of jobs, but if we are honest, they are the exception not the rule. The reality is that most women led ventures are subsistence style businesses that never really scale to make a real impact. If we keep socializing women to think they are not built to earn as much as men, does this become a self fulfilling prophecy that has a negative impact on our economy? Does the negative narrative of what it means to be a feminist in Africa have an impact on our economy? In Africa, the word feminist has a negative connotation. Most of the time when anyone calls you a feminist, it is safe to assume it is not a compliment. It is spat out, usually like an obscenity. For clarity, a feminist is anyone who believes in equal access to opportunity for both men and women. In other words, if I go school and Femi sef go school, if we get the same grades, we should both have access to the same jobs and business opportunities. Unfortunately, for many African men, a feminist is a woman

that is dominant, a troublemaker, a threat to their masculinity and a symbol of economic castration. While for many African women, especially the ones from generations past, who have been entrusted with women empowerment, the feminist narrative is something that needs to be swathed away because it will ‘shake a table’ they’ve been on top of for years. Instead of helping to change the negative narrative of feminism in Africa and helping to educate people on its true meaning, these women dismiss the notion of feminism, so it doesn’t make them seem like man hating troublemakers - encouraging women to leave their husbands. In their thwarting they have agreed with society that feminism is indeed a threat to our cultural fabric. When our society views women who dare to ask for equal opportunity as threats, it poses a problem. When we create societal constructs that block women who are willing to negotiate for higher salaries and view them as combative, especially when they are paid less than their male counterparts with the same job title, it poses a problem. When female entrepreneurs are scared to charge market value for their goods and services because of the way they’ve been socialized to think about money, cumulatively these factors may have a negative impact on our economy. The rules for financial success are different for men and women We cannot discuss African feminism without looking at the role of financial independence

for women. I wrote a book titled ‘The Smart Money Woman - an African girl’s journey to Financial Freedom’ and one of the biggest misconceptions by African men was that by advocating for financial independence for women, I was somehow telling women to make their own money so that they could do away with the men in their lives. Le sigh! When a man is financially successful, society applauds him; they tell him that there are no limits to his success. The more financially successful he becomes, the more access he has to the best women, the best entertainment, the best parties, the best social circles. Money openeth doors! When a woman attempts financial success, society tells her to slow her roll because if she gets too successful, she won’t get married. Make money, but not so much that you overshadow your man; don’t buy property, rent so you don’t intimidate your future husband! Buy a car but not one that’s so ‘big’ that it scares off potential suitors. In Africa, women who declare themselves feminists and actively strive for financial independence are often asked to lower their standards and expectations. Declarations like ‘I want a man who is ambitious, powerful and financially successful’ are usually met with statements like, ‘You are too proud’! You want to eat your cake and have it! Expectations to want to be looked after by a man are viewed as greed. ‘Shebi’ it is you that wanted to be independent!

Lower your standards. Many successful men complain about the financial dependence of women in general, but seem to punish women who are financially independent. Instead of looking for the Beyoncé to their Jay-z they look for the Melania to their Trump, because they see a woman’s financial independence as a threat to their masculinity. Having her own money automatically means she wants to be a man and translates to being a woman who is incapable of submission. (Aunty! Please don’t come and cause trouble in my house o!). The irony is I have never met a successful woman who doesn’t want to be looked after by a man. I have also never met a successful woman who wants to assert herself as the head of the household. Most African women who earn more than their husbands typically put on a charade, so their husbands look like the breadwinners in order to protect his ego. How does it affect the economy, when instead of encouraging men to be more ambitious, we are encouraging women to dim their light and not strive to get to the top lest they lose the ultimate prize marriage? Let’s change the narrative! A woman becoming financially independent doesn’t equate to ‘I don’t need a man’. It just means she brings more to the table. Instead of being a financial burden, she becomes a value addition. Her success does not take away from his success. The pie they share just becomes bigger.

Monday 07 May 2018

C002D5556

Mixed reactions trail CBN’s move to sanction bank CEOs

hareholders have expressed mixed reactions to plans by the Central Bank of Nigeria (CBN) to sanction Chief Executive Officers (CEOs) of banks that fail to submit audited results of their banks after 12 months. The shareholders expressed their view in separate interviews with the News Agency of Nigeria in Lagos on Friday, while reacting to the apex bank’s Monetary, Credit, Foreign Trade and Exchange Policy released recently. NAN reports that the Banks and Other Financial Institutions Act (BOFIA) require banks to publish their audited financial accounts not later than four months after the end of each financial year. The CBN had in the Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2018/2019 also directed banks to publish their audited financial statements not later than four months after the end of each financial year. The CBN said it would hold the board chairman and CEO of any defaulting bank directly responsible for any breach. Diamond and Unity Banks had notified the Nigeria Stock Exchange (NSE) that their results would be delayed. Skye

Bank, however, is yet to publish its 2016 and 2017 results. Moses Igbrude, the publicity secretary, Independent Shareholders Association of Nigeria (ISAN), said sanctioning banks CEOs after four months of not releasing their accounts was too short a time. Igbrude said policies were instituted to correct and strengthen institutions not for revenue generation at the detriment of the affected institutions and the shareholders. “What we see in Nigeria from regulators is impunity, using directives and policies for revenue generation at the detriment of institutions and the shareholders, he said. Igbrude said CBN should first engage the banks to find out the challenges to ascertain if they need assistance. According to Igbrude, the apex bank should warn the affected banks after the engagement before the option of sanctions. “I don’t think management will deliberately delay the release of their accounts without issues. I am appealing that CBN should look at this issue critically on one-on-one basis with the intention to assist and strengthen these institutions for the sake of all stakeholders.

45 NEWS

BUSINESS DAY

Police personnel condemn illegal deductions from salaries … call for revert to old salary platform HARRISON EDEH, Abuja

fficers of Nigerian Police Force (NPF), many of whom had their salaries deducted on the account of movement from old GIFMIS payment model under Treasury Single Account (TSA), to the Integrated Payroll and Payment Information System (IPPIS), are lamenting all manners of errors in the computation and payment of their monthly salaries. Some of the officers, who spoke with BusinessDay on the condition of anonymity, said their salaries had not been accurate since February 2018, when the payment of salaries was moved from GIFMIS TSA to IPPIS. “I have been noticing deductions in my salary since February this year. When you call the pay roller, they don’t even give you a satisfactorily answer. It is as bad as that. I don’t even understand what is going on. I don’t know why the government is not keen on addressing it. I am a sergeant, my salary is N52,000, and I keep getting N47,000,” a police officer who does not

want her name mention in print told BusinessDay. ”We have made the complaints known to the authorities at the Police Force Headquarters. We were given a form to fill and articulate our complaints, then get to the bank get our financial statement and submit back to accountant General. Tomorrow being Monday, we will go with other credentials to the force headquarters and know the steps they would take on this development,” a male sergeant who also pleaded anonymity told BusinessDay. Another policeman confirmed that salaries were stable until February when the irregular payments started. “We have heard from some internal sources that our payments are not being processed in line with government regulations,” he lamented. Another said, “The government should revert to the previous arrangement which we never had any problem with. We are police officers and we should be treated better. We don’t know what is happening, but we are sure some people may be profiting from this without the knowl-

edge of the government.” Ikechukwu Ani, the spokesperson of Police Service Commission, told BusinessDay that the commission cannot directly speak on the issue of deductions as their mandate was linked to police promotion issues and discipline of force personnel. Meanwhile, BusinessDay several calls to the duo - IPPS director, Joshua Olufenhinti, and Sylva Okolieaboh, TSA director, to speak on the development were not responded to. However, several other officers spoken with all said the old payment platform was still better, as they never experienced any miscomputation they were all experiencing now. They said they were sure the Presidency was not aware of this new development, as it was causing serious demotivation among the ranks and file of the force. They all called for revert to the old salary platform directly via GIFMIS It would be noted that protesting police officers in the early hours of Friday, stormed and barricaded the office of the Accountant-General of the Federation at the Treasury

House in Abuja, following continued discrepancies in their salaries after April salary was paid. They lamented the continued gross manipulation of the payment of their monthly salaries since the beginning of 2018, which has led to the under-payment, late payment, and non-payment of salaries with attendant embarrassing tales of woe. Reacting to the latest uproar, Jimoh Moshood, force public relations officer, said in a statement had been released to placate the officers that the differentials would be paid before May 7. “The Office of the Accountant-General of the Federation has assured the NPF that salary short payment for police personnel for the month of April 2018, was due to system error and is being promptly resolved. “All other issues relating to payment of salary to police personnel are being addressed. The affected personnel will according to OAGF get the salary differential paid on or before Monday, May 7, 2018,” he said.

FG, Ambode task accountantsgeneral on transparency JOSHUA BASSEY & JOHN SALAU

L-R: John Ehiguese, CEO, Mediacraft /president, Public Relations Consultants of Association Nigeria (PRCAN) ; Emevwo Biakolo, guest lecturer, and Muyiwa Akintunde, vice president, PRCAN, at the 2018 annual golden medal lecture in Lagos. Pic by Pius Okeosisi

FG to harmonise tax payment nationwide – FIRS

he Federal Inland Revenue Service (FIRS) says it has started harmonising taxes in Nigeria as part of moves to reduce cases of multiple taxation. Babatunde Fowler, executive chairman of FIRS, announced the plan at a roundtable discussion on women and the informal sector. The roundtable was organised by the Centre for Democracy and Development (CDD) on Friday in Abuja. Fowler, who was represented by Clara Nnachi, senior manager on investigation, said the administration would soon sort out all problems of multiple taxation in states.

He said this would give Nigerians clear direction of what tax to pay, alleging that many states hide under FIRS to tax citizens, saying, “Some of the taxes Nigerians complain of as being imposed on them, especially on the market women, are done by states, not FIRS. “The Joint Tax Board as a body is working together with the FIRS to harmonise tax collection from small businesses all over Nigeria. “We have the National Tax Implementation Committee working on the National Tax Policy to harmonies the taxes that are being paid in different states. It is going to address the

issue of multiple taxation.” He expressed optimism that the government in a very short time would come up with policies on harmonised taxation. The tax boss added that the government understood what the people, especially those in the informal sector, were going through. He said the National Tax Standard Board was also doing a lot toward harmonisation of taxes. With the bodies coming together in a short time, he said the Federal Government would be able to address the issue of multiple taxation. Abdullah Candido, chairman of the Abuja Municipal

Area Council (AMAC), said the council was also working to curb multiple taxation in the FCT. Candido, who was represented by Ramat Abisola, supervisory councillor for Education in AMAC, said many people parading themselves as the council’s staff and collecting taxes were fake. He said that the council was working on ways to stem this act and bring the perpetrators to book. Ruth Agbo, president of the National Association of Nigerian Traders (NANTS), said women as traders and farmers were part of the labour force contributing to economic growth.

ederal Government and Lagos State governor, Akinwunmi Ambode, at the weekend called on accountants-general across the country to leverage technology and emerging techniques to ensure transparency, good governance and accountability in the public sector. Speaking at a retreat for accountants-general in Epe, Lagos, on Friday, Ambode said accountants-general occupied one of the most sensitive and demanding positions in the public service, especially when viewed against the clamour for good governance, accountability and transparency. Ambode, who was represented by his commissioner for finance, Akinyemi Ashade, said to achieve better accountability and transparency in public accounting at all levels, there was the need for strong political will by leadership and robust financial management systems that reflected global best practices. He said Lagos State was at the forefront of this having pioneered the International Public Sector Accounting Standard (IPSAS) implementation in public accounting and reporting systems in the country. “We also introduced central billing system and cashless payment system for collection of government revenue, among others initiatives, to minimise revenue leakages. In addition,

with the realisation that our people are our most important asset, we continue to invest inhuman capacity development through periodic training for accounting staff,” he said. Minister of finance, Kemi Adeosun, who was represented by the accountantgeneral of the Federation (AGF), Ahmed Idris, said Nigeria was currently experiencing pressure on the budget due to mono economic culture practice in the country, adding that the pressure was much especially with this year’s budget and significant reduction in the oil price. She said in some cases, citizens lost faith in government because of phenomenal national failure to provide essential services while in some other cases it was because of prevalence monumental corruption. Speaking on the theme of the forum, ‘Change in Nigeria’s accountability and transparency: Towards professionalism and good governance,’ the minister urged the accountants-general to make fiscal responsibility and transparency their priority in the nation’s economic development. “Good governance in Nigeria, institutions and individuals working for public sector entities must try to actualise the entities’ goals and objectives; while acting in best public practice at all times; consistent with the requirement of legislation and government policies; avoiding self-interest and if necessary overriding other perceived interests,” she said.

46 BUSINESS DAY NEWS

C002D5556

How Nigeria can create more Azura-type... ‘Understanding the Nigeria-China swap... Continued from page 1

nical hand-over of the 450MW Open Cycle Gas Turbine power station last week. According to them, for Nigeria to have more power plants like the Azura project in place, sweeping market reforms must happen to give the electricity industry a much-needed face lift. They added that efforts should be made to fix the fundamentals so that every megawatt of power generated has value by paying a market-determined tariff, paying for power and gas. Without market reforms, Africa’s largest economy may continue to build idle power plants lacking in attractiveness to private investors. Edu Okeke, deputy managing director of Azura Power told BusinessDay that one of the ways Nigeria can build more viable projects like Azura, is that it should be private sector-driven. Okeke said if government insists on driving that market, it must fully take the responsibility of financing the projects, adding that in reality, however, the government does not havethemoneytobuildsuchprojects now and the smart option is to allow theprivatesectortakethedrivingseat. The Azura Power boss said “What Azura project has done is to create a template that both local and international lenders can look at and say it’s good enough for them to key into. “If they are fine with this template, we can lend money to a project in Nigeria. We just have to replicate it so that any other investors coming into the country would not have to reinvent the wheel because the template is already in existence,” Okeke told BusinessDay in an interview. Also speaking John Uwajumogu, partner, Transaction Advosry Services of Ernst and Young Nigeria, said if Nigerian electricity supply industry fundamentals can be fixed, then other investors would want to replicate Azura in the country. Uwajumogu said that the Nigerian Electricity Regulatory Commission (NERC) has taken some step towards this direction with its eligible customers’ policy as this is expected to make the electricity value chain valuable. He said building large scale power industry in Nigeria is often not

viable because of all the problems associated with the power value chain. “If the ultimate customers are not paying for electricity then you cannot have large scale electricity market in the country. Tariff needs to be cost reflective. This will lead to more power projects coming into the country,” he said. Okeke however said this is the first project financed Independent power project (IPP). “Project finance does not depend on collateral or lenders to give money. so it is not like they want to build power plants and have an oil block and you tell the lenders give me the money and if I fail you can come and take my block. The thing about this is about papers, the agreements that make up the whole contractual structure. So it is making sure that risk in the whole project is apportioned to the right parties to bear,” he explained. He stated that when one thinks about the Azura project, from gas supply to generating power whatever that is being done is based on the agreement between Azura and Seplat Petroleum Development, which are two private companies. “So the risk is with us as Azura because we solicited and we found a party that would supply gas to us and we have an agreement. Of course the penalty for this is that if they don’t supply the gas, we are not going to pay them,” he said.

quoted on the floor of the bourse (excluding financial institutions) that have reported full year 2017 results saw their capital expenditure drop by 3.81 percent to N292.25 billion from N 303.83 billion the previous year. It is generally expected that as the business cycle turns and growth resumes, firms will expend more money on capital assets. However some analysts have a dissenting view. Johnson Chukwu, managing director and CEO of Cowry Assets Management Limited says the decision to spend on assets depend on the strategies of firms. The fact that the country exited recession doesn’t necessary mean firms will deploy money into capital expenditure, according to Chukwu. Chukwu adds that it is firms in

trade transactions between the two countries, without being exposed to the challenge of seeking another foreign currency. In terms of the impact implication, we believe that pressure on Nigerian importers who need US dollars to import goods from China is likely to dissipate, improving CBN’s management of the country’s FX reserves. Nigeria’s FX reserves have improved over the past year and stands at USD47.0bn (as of April 2018) from USD30.9bn a year ago, reflecting improved oil receipts

alongside significant FPI inflows via the Investor and Exporter (I&E) window introduced in April 2017. The CBN has also diversified its FX reserves away from the dollar by switching into Yuan, which currently represents approximately a tenth of its total reserves. In addition, this agreement (in addition to ongoing import ban on selected items) is likely to reduce further the strong demand for the USD and support the NGN. With improved trading activity, stronger FX reserves and continued CBN support, the official exchange rate has been static at

Kano, Plateau, Adamawa, others are... Continued from page 1

last week directed the National Agency for Food and Drug Administration and Control (NAFDAC) to ban with immediate effect further issuance of permits for the importation of codeine as active pharmaceutical ingredient for cough preparations. Drug seizure and arrest statistics for 2017 reflected that 309,713kg of drugs was seized in 2017, according to the NBS. A total of 191,353 kg of Cannabis was also seized in 2017. This represents 61.8 percent of the totaldrugseizedwithintheperiodunderreview.Tramadolfollowedclosely with 96,136kg seized representing 31

percent of the total drugs seized. “The Federal Ministry of Health shall ensure collaboration among regulatory agencies namely, NAFDAC, PCN, National Drug Law Enforcement Agency (NDLEA), Nursing and Midwifery Council of Nigeria (NMCN), for effective implementation of extant Acts, regulations, policies and guidelines on codeine control and usage. Furthermore, these agencies shall work together to increase pharmacovigilance around codeine, tramadol and other related substances of abuse,” Minister of Health, Isaac Adewole said while announcing the ban.

L-R: Adebiyi Bamgbose, chairman, Tafsan Investment Limited; Yomi Bolarinwa, president, NASFAT; Tunde Adeola, divisional head, commercial banking, Sterling Bank plc, and Sheriff Yusuff, chairman, Tafsan Tours and Travels Limited, during the Sterling Bank’s formal launch of Hajj Savings Scheme in Lagos.

Corporate Nigeria is not increasing Capex spending... Continued from page 1

Continued from page 4

the growth stage that invest more on the acquisition of property plant and equipment. “It depends on which sector and what they want to do. Dangote Cement has been expanding in other Africa countries. They may not put money into new projects as they previously did,” Chukwu said. In the 2015 and 2016 periods when a sudden drop in oil price tipped the country into its first recession in 25 years, firms cash flow were hard hit and they were hindered from moving ahead with projects with a positive net present value. An investment project has a positive net present value when the internal rate of return is greater than the cost of capital. However, an increase in crude prices and the introduction of a new foreign-exchange system that ended a crippling shortage of dollars helped attract more invest-

ment flows into the country, while improving liquidity for the nation’s corporates. The gross domestic product (GDP) of Africa’s largest oil producer expanded for three straight quarters last year after a 1.6 percent contraction in 2016, with year-onyear growth reaching 1.9 percent in the final three months of 2017. Analysis by BusinessDay shows the industrial goods sector saw spending on the acquisition of property plants and equipment slide for the 2017 period. Dangote Cement Plc, the largest producer of the building material saw spending on capital expenditure dip by 9.10 percent or N10.88 billion to N107.95 billion in December 2017 from N118.84 billion the previous year. Lafarge Africa Plc’s capital expenditure declined by 63.06 percent to N15.27 billion in the period under review as the cement maker continues to grapple with rising gearing level and receding sales

that resulted in losses. There are indications firms in the sector could deploy more capital for the acquisition of property plants and equipment as the demand for cement products are expected to spike on the back of the huge infrastructure deficit bedevilling the country. But firms in the fast moving consumer goods sector have resumed spending on property and equipment to bolster production as capital spending surged after the severe dollar scarcity of 2016 crimped their future expansion plans. “These firms have continued to launch new production plants. For instance Nestle Nigeria and the millers have been expanding and their capacity utilization is getting to the maximum. They need to improve plant capacity,” said Ayodeji Ebo, managing director and CEO of Afrinvest Investment. Nestle Nigeria Plc capital expenditure increased by 23.23 percent to N8.71 billion as at December 2017

Monday 07 May 2018

NGN360:USD1. In light of this new currency swap, we expect a strengthening bias on the NGN in the near term as this agreement is likely to improve FX liquidity and lead to higher flows from China. The CBN is likely to retain its exchange rate at NGN305-306:USD1 and maintain interventions in the Secondary Market Intervention Sales (SMIS) windows at the NIFEX exchangerateofNGN327-340:USD1. By year end, our expectations of lower oil prices and increased FPI exits from NGN assets ahead of the 2019 elections, are likely to offset some of the gains, resulting in softer NGN and bearish activity in the bonds market. In 2017, 8,882.63kg of Tramadol was seized in Kano State. In this same state, 3,911.23 kg of codeine cough syrup was seized. In Kano State, out of 635 people arrested for drugs in the review period, 625 were male while 10 were female. In Plateau State, 4,820.02 kg of Tramadol was seized in 2017. Regulatory agencies also seized 4,196.55 kg of codeine cough syrup in Plateau State in 2017. In Plateau State, out of 418 people that were arrested, 391 were male while 27 were female. Among others States, in Nasarawa, 2,873.88kg of Tramadol was seized; 58 people were arrested, 57 male and 1 female. In Edo State, 919.93kg of was seized; 253 people arrested, 190 male and 63 female. In Sokoto State, law enforcement agencies last year seized 1,033.49kg of codeine cough syrup and 432.36kg of Tramadol. They arrested 225 people; 9 female and 216 male. Statistics on Tramadol seizure show: Kaduna State (322.37kg); Bauchi State (249.45kg); Borno State (167.58kg); Gombe State (821.69kg); Jigawa State (253.35kg); and Kebbi State (2,381.04kg), among others. Before the recent ban, drug makers’ sales shot remarkably as the street price of codeine cough syrup increased to N5, 000. Barely a month ago, drug dealers were selling codeine cough syrup on the street for up to N3, 000 - the dark addictive syrup had turned to gold. Analysts say law enforcement agencies will need to up their games because the ban on codeine cough syrup (an additive drug) will drive up the price in the black market.

•Continues online at www.businessdayonline.com as the company launched a N4.10 billion Milo plant in Ogun State. NASCON Allied Industries, a subsidiary of Dangote Industries Limited and consumer good giant saw capital expenditure surge by 900 percent to N4.81 billion in the period under review. Nigerian Breweries Plc’s capital expenditure increased by 67.19 percent to N32.12 billion in the period under review as the firm is poised for a beer war as rivals are launching market penetrating products with a view to increasing their market share. Dangote Flour Mills Plc and Dangote Sugar Plc, controlled by Dangote Industry Limited, saw spending on capital expenditure surge by 206.55 percent and 146.82 percent to N4.026 billion and N9.74 billion respectively. “Firms will increase spending on capital expenditure especially in the manufacturing sector as the demand for their product is price sensitive,” summed Ebo.

Monday 07 May 2018

C002D5556

BUSINESS DAY

AbujaCityBusiness Comprehensive coverage of Nation’s capital

Capital market: Reps probe over 100 firms on alleged market infractions KEHINDE AKINTOLA, Abuja

pparently peeved by the plethora of petitions by shareholders against Public Limited Companies, over unwholesome practices and sharp malpractices, the sub-committee of the Capital Market on Regulation and Compliance in the market has started a massive probe in the capital market operations. So far over a 100 firms have been invited by the sub-committee to present their position papers on the several petitions submitted to the committee from all aggrieved stakeholders. Findings revealed that in the last two weeks the committee had unearthed a lot of underhand dealings and sharp practices perpetuated by some companies while some of them refused to make submissions as directed by the Tony Nwulu led sub-committee. A source close to the committee informed BusinessDay that: “what we requested from the companies were their corporate governance status, assets valuation and other vital documents.

“This is just to ensure that they are in compliance with the extant laws and some of the companies are already scared. “Before this exercise, we got clearance from the apex regulatory body the Securities and Exchange Commission (SEC) as the sole aim is to restore investors’ confidence in the Nigerian Capital Market,” he added. Another prominent

member of the committee who spoke under the condition of anonymity said: “sanitization is the key in this whole exercise because those who failed to comply and there is proof of unwholesome practices will be severely sanctioned. “And those with proof of poor valuation mostly the insurance companies will be handed over to the

Economic and Financial Crimes Commission, EFCC for prosecution,” he said. When contacted, Chairman of the sub-committee, Tony Nwulu confirmed that the Sub-Committee has flagged off its sitting. “We have commenced the investigation and it’s primarily designed to sanitize the capital market and restore investors’ confidence.

h e U N Wo r l d Tourism Organisation (UNWTO) Commission for Africa (CAF), has paid an inspection visit to Nigeria to check Nigeria’s level of preparedness to host the 61st UNWTO-CAF meeting coming up next month. The Programme Inspection Officer, Programme Inspection Officer, UN World Tourism Organisation (UNWTO) Commission for Africa (CAF), Lydia Bebekun, disclosed that the main objective of her visit to Nigeria is to support all the efforts of the Minister of Information and Culture and other collaborators. “Today is a great day for nigeria and the tourism sector, the objective of my

OYIN AMINU, Abuja

O L-R: Member, House of Representatives, Ahmed Abu; Minister of Communication Technology, Adebayo Shittu; MD/CEO, Airtel Nigeria, Segun Ogunsanya; Executive Commissioner, Technical Services, NCC, Ubale Maska, and Director-General, National Office for Technology Acquisition and Promotion, Danazumu Ibrahim, during the launch of Airtel 4G LTE in Abuja.

... targets additional 41,000 children orried by the over 10 million out of school children in Nigeria, and the fact that most of them are girl child, United Nations Children Education Fund (UNICEF), said it has spent about N118.755 million in order to increase girl child enrolments in Sokoto and Niger States from September 2014 to October 2016. UNICEF stated this while briefing journalists in Abuja, on the impact evaluation of UNICEF Nigeria Girls’ Education project phase 3 (GEP3), Cash Transfer Programme (CTP), in Niger and Sokoto States, Terry Durnnian, UNICEF Chief Education, said 23,665 girls have already benefitted from CTP. UNICEF has also commenced the implementation of Cash Transfer Programme in Kebbi and Zamfara State as part of efforts to

OYIN AMINU, Abuja

mission is to support all the effort of the minister and collaborators to ensure the 61st UNWTO-CAF meeting and tourism statistics to be held on 4th to 6th June a success. “As you know UNWTOCAF meeting is a statutory meeting where all tourism ministers of the region meets to discuss the tourism agenda for the continents and especially Nigeria. Tourism is a tool for sustaining the development in the country, it can create jobs for the youths and also reduce poverty,” Bebekun said. Responding, the Minister of information and culture, Lai Mohammed welcome Bebekun and said she has been a very great friend of Nigeria and have been of great assistance to Nigeria in the last two years.

Onu commends peer review mechanism on productivity

UNICEF paid N118.8m to enrol out of school children in 2 states LAIDE AKINBOADE-ORIERE

UNWTO program inspection officer visits Nigeria to ascertain level of preparedness

increase school enrolment and school attendance rates for boys and girls. The UNICEF programme targets 41,391 children and will hold for two years. This would enhance the socio economic well-being of beneficiary households. Durnian hinted that the UNICEF targets 31,044 children in Kebbi state while 10,347 children are numbers of target beneficiaries. Speaking on first phase disbursement, the UNICEF Chief said 8,353 children will receive the cash transfer in Kebbi state and 2,629 children will also receive their cash transfer in Zamfara state. Durnnian revealed that each child enlisted on the cash transfer programme would receive $152 US equivalent to N48,000. “In the Phase two of the programme’ 1,995 numbers of children are targeted to receive first disbursement under the second phase in

Kebbi State and only 820 children will get transfer in Zamfara state.” He stressed that both states use mobile data collection application to register beneficiaries and monitor payment. Speaking on numbers of Out of school children in the world and Nigeria, Durnnian said 264 million children are not in school globally and more than 10 million children are out of school in Nigeria. He further stated that 23,665 girls from Niger and Sokoto states had benefitted from the first UNICEF sponsored Cash Transfer Programs . “Our target was to reach 58,484 girls in Niger state to help them return to school but so far 12,314 girls benefited. We also targeted 54,081 girls for disbursement of CTP in sokoto state, 11,341 girls benefitted “ he said. CTP in Niger and Sokoto is funded by UK De-

partment for International Development (DFID). In partnership with Educate a Child (EAC), CTP in Kebbi and Zamfara is funded by Education Above All Foundation, Qatar, a personal initiative of HH Shekha bint Nasser of Qatar. Economic Policy Research Institute (EPRI), has been providing technical support to the programme. He said poverty related reasons are normally cited as the most important reason why children are not in school. It would be recalled that in order to address poverty related reason for non attendance, UNICEF initiated the Cash Transfer Programme (CTP), in 2014 in two states , Niger and Sokoto, expecting to increase girls’ enrollment and attendance in the selected schools to contribute to increased enrollment and retention of girls in basic education.

gbonnaya Onu, Minister of Science and Technology, has commended the Peer Review Mechanism introduced by the Head of Civil Service of the Federation, Winifred Oyo-Ita, in order to reposition the service and improve productivity. Onu, gave the commendation during an interactive session with the Peer Review Team led by Head of Civil Service of the Federation in Abuja. The Minister stressed the need for a first class Civil

Service that would assist the President in implementing projects and programmes of the administration. “The reform put in place by the Head of Service has helped us improved the services that we render to our nation. We want Nigeria to be a great nation and we are working very hard to achieve it. We believe very strongly that we cannot do it without the Civil Service,” he observed. The Minister praised the league of Permanent Secretaries, noting that they have important role to play in ensuring that the main programmes of this administration are realised.

FCTA loses over N5bn to public asset vandals, damages LAIDE AKINBOADE-ORIERE

he Federal Capital Territory Administration (FCTA), has lamented the huge burden posed by the vandalism of public assets and critical infrastructure, which it has estimated to run into billions of naira. The Administration, while decrying public amnesia towards public assets, which it said emboldens the hoodlums, expressed readiness to leverage the very wide network of the National Orientation Agency (NOA) in the concerted action to stem the ugly trend. The FCT Minister Muhammad Bello made this revelation in a paper he presented at a recent stake-

holder conference on the Protection, Preservation and Community Ownership of Public Assets and Critical Infrastructure, organized by the National Orientation Agency. Bello who was represented at the occasion by the Director of Engineering, Federal Capital Development Authority (FCDA), Shehu Hadi, lamented that preliminary assessment of losses put the cost of replacement of vandalized, stolen or damaged facilities in the four major roads of FCT alone at over N5 billion. This, he noted, is money which could have been spent on executing new infrastructure or providing utilities in new districts.

Monday 07 May 2018

BUSINESS DAY

C002D5556

NEWS Government sees Airtel’s launch of 4GLTE improving broadband penetration targets HARRISON EDEH, Abuja

ederalGovernmenthas expressed optimism that Airtel Nigeria’s launch of 4GLTE will improve access of broadband penetrations to underserved areas in the country. Adebayo Shittu, minister of communication, said this while commending Airtel Nigeria for the launch in Abuja, saying broadband penetration in Nigeria would improve to the underserved area in the country. “What is happening today is giving lots of relief to us with regard to broadband penetrations. There is no way we could develop as a nation at the pace we desire without proper broadband penetration. Broadband penetration helps in financial inclusion, helps in business transactions, health service delivery. In modern world, internet access is like breathing fresh air,” the minister said. It is indeed a major milestone for Airtel in providing leadership in setting the technology standard for 4G services by rolling out its cutting-edge network in line with its corpo-

rate vision of becoming a first class mobile internet service provider in Nigeria, he said. “The Federal Government is happy to celebrate with Airtel on this milestone and on other effort aimed at achieving robust and extensive network coverage in Nigeria. “I am happy with this development because it aligns with the Federal Government’s plan of empowering Nigerians and democratising mobile broadband by making it affordable to all,” he noted. The latest technology would empower more Nigerians, stimulate economic activities across all sectors as well as provide unfettered access to affordable and reliable mobile broadband. Segun Ogunsanya, Airtel’s managing director/CEO, while speaking during the event, said, “The 4G LTE is a technology that puts power in the hands of its users because it provides a superfast mobile broadband to Nigerians.” The telco has in the past seven weeks upgraded and modernised its network infrastructure in the nation’s capital to improve productivity, spread prosperity, and help telecoms

consumers in Abuja to fulfil their potentials as well as realise their dreams, he said. “Ours is a 4G service that is not only fast and reliable but a 4G Service that works! We are enabling mobile first, mobile only access to the Internet. If you have only one TV in your household, you don’t have to argue over remote control. Your Phone equals Your TV! “Already, I have started getting some positive reviews of the Airtel 4G service in Abuja. We pioneered GSM in Nigeria. First GSM call in Nigeria was made on our Network in 2001. Now we are launching the best 4G network in Abuja. We keep connecting people and businesses,” he said. He also noted that since the 4G was first launched in Ibadan in February this year, the positive feedback from users, friends and other stakeholders in Ibadan had been excellent, attesting to the speed of the network. He said the company plans to extend the technology to all over the country before the end of the year, making it the widest 4G network in Nigeria. In his presentation, Airtel’s chief commercial officer, Ah-

Business in Emerging Africa: Indimi shares lessons at Harvard

ne of Africa’s most successful businessmen and founder of Oriental Energy Resources Limited, Muhammadu Indimi, has reiterated the importance of partnership and collaboration in the long-term success of businesses. He made the submission on Thursday while sharing lessons in Business, Leadership and Life at the May edition of the Nigeria In the World Seminar Series sponsored by Harvard University’s Weatherhead Centre for International Affairs in Massachusetts, United States of America, organised by Jacob K. Olupona, professor of African and African American Studies in Harvard University. In his thought-provoking lecture, Indimi brought to the fore valuable lessons he

has learnt in life and business over time: “Life is indeed the best teacher and the lessons that it teaches are useful in your journey. You must learn to endure pain, loss, handle failure, make the right decisions, have the wisdom to learn from mistakes and manage relationships. Life is one institution you never stop learning from”. According to him, to be successful in life and business you must give your best consistently and believe in your vision: “Having a positive attitude has helped me in everything I have done in my life. Never give up even if the odds are against you.” He recalled his venture into the Nigerian oil and gas industry in 1991 when the government launched the indigenous concession pro-

gram in response to slumping oil prices and at a time when international oil companies were reluctant to invest in offshore oil blocks in the country. “It took over twenty years and many false starts and dead ends for me to get to the point where I could produce and reach first oil in 2011. Those twenty years were very uncertain. It required a lot of determination, perseverance and lots of money”, Dr. Indimi said. During the lecture, Indimi also called attention to the importance of sustainable development and contribution to the socio-economic wellbeing of communities in Africa by successful businessmen. The Nigerian business tycoon established the Indimi Foundation for purposeful and proactive intervention

27 feared killed as armed men attack Kaduna village

t least 27 people have been reported killed and some others injured as armed bandits attacked Gwaska village in Birnin Gwari Local Government Area of Kaduna State. The latest attack is coming barely a week after 14 local miners were killed by gunmen at Janruwa community, also in Birnin-Gwari. Although the Kaduna State Police Command is yet to confirm the attack, indigenes of the area said the armed bandits who allegedly came from neighbouring Zamfara State invaded the village at about

7pm, according to Channels Television. The Saturday night attack, according to the residents, saw the armed bandits shooting sporadically. The gunmen were also said to have burnt down houses in the community. Survivors, mostly women now at Doka district, said most of those killed were volunteers who tried to defend the vulnerable villagers from the attack. They appealed to the state and the Federal Government to take urgent steps to forestall further attacks and extinction

of communities in BirninGwari Local Government Area of Kaduna State. The Kaduna State Police Command has earlier deployed a special strike force to curb the activities of terrorists, armed robbers, cattle rustlers and other criminal elements in the Kuyanbana and Kaumuku forests in Birnin Gwari Local Government Area of the state. The operation codenamed Operation Restore Hope was aimed at flushing out the bandits from their hideouts and restore peace and security in the area.

Monday 07 May 2018

Experts see immunisation bill closing health sector funding gap HARRISON EDEH & LAIDE AKINBOADE-ORIERE Abuja

ealth experts are now pushing for the quicker passage of the National Immunisation Bill currently before the National Assembly, which seeks, among other things, to close huge funding gap in the country, particularly as donor agencies signal possible withdrawal of support in nearest future. Sponsored by Usman Mohammed in the Federal House of Representatives, the bill that passed first reading in the House of Representatives seeks to facilitate key alternative, sustainable sources for vaccine financing in Nigeria. It also seeks to ensure that the Nigeria’s health system does not collapse in the event of a withdrawal of funding support by donor agencies. Apart from the interest shown by the lawmaker, the bill is also being championed by the National Immunisation and Finance Task Team, whose members are worried that the imminent withdrawal of donor funding could reverse progress made on vaccine financing in Nigeria. Eze Onyekpere, lead director, Centre for Social Justice, told BusinessDay that the centre

was pushing for the quicker passage of the bill because of the negative consequences of government’s heavy reliance on foreign donors for vaccine financing, especially in immunisation. Health experts are particularly worried that the amount needed to fund vaccine in the country is huge, much more larger than the entire capital budget for Primary Health Care (PHC) under the Ministry of Health budget, and indicates the need for a new law that will address those concerns. While the PHC budget of Nigeria in 2017 was N24.7 billion, the projected cost required for vaccine that same year was put at N98 billion, BusinessDay’s checks show. Also, the Global Alliance for Vaccine Immunisation (GAVI) projected to fund vaccine in 2017 with $199 million, amounting to N60 billion, but in the Federal Government budget, N12.88 billion was budgeted, leaving a funding gap of N26 billion. Aliko Dangote, president of Dangote Group, suggested recently that the private sector operators should commit 1 percent of their annual profits to funding health care services in Nigeria, since the government could no longer meet the funding requirements.

In a telephone interview with BusinessDay, Benjamin Anyene, chairman, board of trustees, Health Reform Foundation of Nigeria (HEFRON), said there was nothing new about Dangote’s proposal and disclosed of a bill that had already been drafted by National Immunisation Financing Task Team (NIFT), that would be submitted to the National Assembly soon. He therefore urged the general public to support the National Assembly in the passage of the bill, while affirming that the Nigeria’s health sector needed the extra funding to address some of the challenges in the sector. In an interview, Ejike Orji, chairman, Association for the Advancement of Family Planning, said for Nigeria to address its health sector challenges, there was urgent need for the Federal Government to explore additional funding, especially from the private sector for the health sector. “Even before Aliko Dangote said it, I had always said it that for Nigeria to address its health sector challenges, there is need for the country to have other mechanisms for funding health, because it is quite obvious the Federal Government cannot fund the sector alone,” Ejike said.

Monday 07 May 2018

BUSINESS DAY

Monday 07 May 2018

BUSINESS DAY

A6 BUSINESS DAY

C002D5556

Monday 07 May 2018

NEWS

Private sector operators urged to emulate Dangote’s support for economy, health development

ealth minister, Isaac Adewole, has described as unparallel the intervention of the Dangote Group in the Nigerian health sector, and urged other private sector operators to take a cue from his public spirit. The minister, in an interview with a team from Dangote News, an in-house journal of Dangote Group, Global, hailed the support and partnership with the Aliko Dangote Foundation, even as he sought further collaboration with the conglomerate in the areas of malnutrition and malaria eradication. President of the Group, Aliko Dangote, has been advocating that the private sector operators in the country commit 1 percent of their profit annually to funding healthcare services. The minister said the partnership with the Group was crucial in view of the inadequate funding in the healthcare sector, saying Dangote had enormous influence in the sector and that his involvement in the general economic well being of the nation was unquantifiable. The Aliko Dangote Foundation has been championing the eradication of Polio Virus and malaria in Nigeria as well as providing micro grants to vulnerable women in all the local governments of the federation to boost

the economy at the grassroots. The minister said, “My message to the President of Dangote Foundation is to sincerely appreciate his unparalleled support to the health sector and to urge him to champion the drive to secure private sector funding for the health sector. Generations of Nigerian children yet unborn will ever be grateful to him and the Foundation.” Only last week, the Foundation was rebranded and endowed with $1.25 billion, making it the largest private foundation in sub-Saharan Africa. Commenting last on the difference between Dangote Cement CSR and Aliko Dangote Foundation, the CEO of the Foundation, Zouera Youssoufou, said, “ll projects of Dangote Cement CSR are located in communities in which they have factories, and such CSR initiative include community relations, health, education, employment, infrastructure, water, electricity, roads and buildings (schools, hospitals). “Aliko Dangote Foundation projects and funds are allocated on need basis in each part of the country where we have intervened and in projects such as health (including nutrition), education, empowerment, humanitarian crisis and disaster relief,” she said.

Banks are ripping us through ATMs, stamp duty - customers

ommercial bank customers within the Federal Capital Territory (FCT) and Lagos have decried excess charges by banks through Automated Teller Machine (ATM) withdrawals and excess deduction on stamp duty. Some customers, who spoke with the News Agency of Nigeria, said they dreaded making withdrawals using other banks’ ATMs because of the continued charge of N65 for every transaction. According to the customers, most banks within Abuja and Lagosmetropolishaveprogrammed their ATMs to dispense only N10,000 or less per transaction, thus ripping off customers withdrawing more than that amount. The customers complained that if they had to withdraw N100,000 or more through other banks’ATMs,itmeanttheywould lose so much money. Also, the Central Bank of Nigeria (CBN) said the stamp duty chargeofN50shouldbededucted pereverydeposit,buttodaysome banks deduct N100 per deposit, Victor Osagioduwa, Access Bank customer, said. “I have visited the branch at Point Road, Apapa, Lagos, severally to complain, and nothinghadbeendone.Themost worrisome aspect is that every time I went to complain, I always metothercustomerscomplaining of the same illegal deductions,” he said. They, however, called on the CBN and other relevant authorities to look into the matter so as to help Nigerians.

Agatha Young, a First Bank customer, said, “I live in Kubwa, one of the suburbs around the city centre and almost all the banks’ATMsinmyareadispense maximum of N10,000. “Recently, I needed to withdraw N200,000 and my bank’s ATM was crowded, so I went to use another bank’s ATM only to discover that the machine was dispensing only N10,000 per transaction. “I was only able to withdraw N150,000 because other customers were waiting on the queue, and I was tired of going through the same process. “I also discovered I was charged almost N1,000 for that transaction as I had exceeded three withdrawal limit using the other bank’s ATM, which is outrageous.’ Sunday Mgbede, a GTBank customer, residing in Nyanya, another suburb around the city centre also said most of the ATMs in his area dispensed maximum of N10,000 per transaction. “If you want to make withdrawals at weekends around the Nyanya/Mararaba axis, you will discover that only few ATMs are dispensing over N10,000 per transaction. “The concerned authorities should please look into this matter because people are suffering, there is no money in the country, yet banks want to make profit off customers. “Even the N65 charge which CBN authorised should be charged after three transactions, I am not sure the banks follow the rule due to the debit alerts we receive after withdrawals.’ Another customer of First

Bank, Erica Jonah who narrated her experience, said she used her ATM card to withdraw N100,000fromanotherbankand discoveredthemachinewasprogrammed to dispense N10,000 per transaction and was charged N65 per every transaction. Jonah said that was not her first experience, describing the practice by banks involved in it as fraudulent. She also called on regulatory bodies in the industry to look into the matter with a view to curbing such excesses by banks involved in the practice. Meanwhile, Gift Agbo, a formerbanker,saidmostATMsused by banks in the country were not designed for Nigeria’s currency and that was why the amount it dispensed was limited. “Some of these machines are old and not programmed for the kind of money we have in the country. The notes, which many banks put in the machines, also limits the amount that can be dispensed by the machines. “Iamsurethisproblemcanbe resolved if Nigerian banks invest in customised machines that are suitable for our environment and currency,’ she said. In its reaction, CBN Consumer Protection Department said it had received several complaints from bank customers over the low withdrawal limit set by banks on their ATMs. Fada David, the senior manager,complaintsmanagementdivisionoftheDepartment,assured customersthattheapexbankwas working to make sure that such complaints were addressed. “Yes we have received complaints from people saying they

could withdraw for example N40,000 from bank A yet they are not able to get that much if they carry a card of Bank A to bank B ATM. “First of all, I want the public to know that withdrawal from any ATM at all is not supposed to attract any charges until you withdraw more than three times in a month. “If you are using your bank’s ATM, you are at liberty to withdraw as many times as you like in a month without incurring any charges. Also, we want to encourage customers to engage their banks to find out why there issuchawithdrawalrestrictionon ATMs,’ he said. David also urged customers to embrace the cashless policy and use other payment methods such as POS, internet and other Mobile banking applications; to reduceoverdependenceoncash. “You can use other payment channels for goods and services. You can go to the market, buy something and use your mobile app, pay for that product. “Unless it is absolutely necessary that you need to take cash, consumers can take advantage of a lot of other payment channels to pay for goods and services and do other transactions,’’ he said. David said that bank customers also have the responsibility to improve the way their bank serves them by officially writing to complain about bad services. According to him, it is only then will the bank address the issue to make sure that their customers are happy with the services being rendered.

Monday 07 May 2018

BUSINESS DAY

Monday 07 May 2018

UBA disrupts future of payments for SMEs … introduces MasterPass QR Bot in partnership with MasterCard

nited Bank for Africa (UBA) has again disrupted the e-payment space with the introduction of Master Pass ‘Quick Response’ (QR) Bot. The revolutionary solution enables the micro, small and medium enterprises (MSMEs) in Nigeria and across Africa to receive digital payments from their customers through scanning, using their Facebook account. Developed by MasterCard International in partnership with Facebook, Master Pass ‘Quick Response’ (QR), allows payment collection by SMEs through Facebook Messenger and delivers unified and instant self-service across a range of interconnected payment solutions. Like LEO, the acclaimed artificial intelligence payment solution introduced by the Africa’s global bank, UBA, Master Pass ‘Quick Response’ (QR)is a a chat Bot, currently available via Facebook Messenger as Masterpass QR for Merchants With this development, customers are given the freedom to shop across devices and channels. With Masterpass QR for Merchants, small and informal micro merchants,

large corporates and governments now have access to fast, simple and secure digital payments options, a global digital system that allows people pay for services using mobile phones. In addition, Individuals can now make purchases via merchant apps, in-store or online by simply clicking the Masterpass button and authenticating to complete a transaction. All a user simply needs to do is Scan the QR Code generated by the merchants to pay. Making transactions for both the merchant and customer fast and seamless. Speaking on the development, group executive, digital and consumer banking, Anant Rao, said: “Our customers are at the heart of our business, that’s why we keep going the extra mile to satisfy them. As we very well know Micro, Small and Medium Enterprises (MSMEs) contribute significantly to the economy but remain heavily dependent on cash to run their business; however, consumers are demanding safer and more convenient ways to pay. The innovative new platform enables micro, small and medium enterprises (MSMEs) in Ni-

geria receive digital payments from millions of customers by simply scanning.” He noted that, access to mobile technology presents an opportunity to meet this demand, and the new UBA Masterpass QR Merchant App is set to change the payment landscape to the benefit of micro merchants across the country. Rao further explained that, Banking is going conversational and UBA in partnership with Facebook is at the forefront of driving this innovation globally. “Itis100%self-serviceandgeneration of the QR is immediate. Acceptance of payments can begin immediately the QR is generated, it is making banking simple” The announcement follows the Pan African commitment made by UBA to introduce safer and more convenient ways to pay for goods and services in Nigeria and across the continent. “As a group, we are committed to driving financial inclusion and empowering businesses across Africa. Our partnership with Mastercard enables us to deploy safe digital solutions for customers, and the UBA Masterpass QR Merchant App is just such a solution,” said Rao.

Group threatens to mobilise against illegal collection of access control fees … seeks NPA, Shippers’ Council intervention AMAKA ANAGOR-EWUZIE

roup, under the auspices of the National Association of Government Approved Freight Forwarders (NAGAFF), has called on the Nigerian Ports Authority (NPA) and the Nigerian Shippers’ Council (NSC), which is the economic regulator of the port, to put an end to the collection of unapproved fees from freight forwarders by any terminal operator to issue access card to them. The freight forwarders accused the Port and Terminal Multiservices Limited (PTML) of charging freight forwarders and licensed customs agents of unapproved sum of N30,000 from each to issue access cards to them. Speaking with newsmen in Lagos on Friday, Boniface Aniebonam, founder of NAGAFF,

who tagged the fee as illegal, threatened that the freight forwarders would have no option than to mobilise coalition of NAGAFF members and other licensed customs agents associations to stop the seeming fraud occasioned by illegal collection of access card fees by PTML. According to Aniebonam, the minister of transport, Rotimi Ameachi, directed that the freight forwarders and customs agents require Council for the Regulation of Freight Forwarders of Nigeria’s identification and the NPA’s approved access card, to be allowed into the port terminals. Aniebonam said every other terminal in Apapa and TinCan Island ports observe the minister’s directive, except for PTML that insist on collecting N30,000 from freight forwarders and customs agents, to issue another form of access cards to freight agents operating in PTML

terminal. “PTML may have become a government of its own in our port and is most unfortunate. How can PTML management impose fees on freight agents authorised by law to have access to terminals in the course of carrying out their legitimate businesses,” he questioned. He therefore said that it was only the NPA that could collect administrative charge for the issuance of port passes, but to the contrary, PTML, a terminal operator, impose an illegal charge with regard to access into the port. We therefore call on the management of the NPA and the NSC to immediately initiate an action to recover all illegal monies collected from the defenceless port users and freight agents by the PTML management ever since it commenced the illegal collection.

NNPC disowns phantom recruitment announcement HARRISON EDEH, ABUJA

igerian National Petroleum Corporation (NNPC) has disowned a recruitment advertisement currently trending in the social media. The corporation, in a statement issued, explained that the advertisement, set in NNPC’s corporate colour with its logo, invites candidates with background in Sciences, Engineering, Business/Finance, Social Sciences, Arts/ Humanities as well as Medical/Health Sciences to apply, giving required educational attainments of prospects to include: Master’s degree, Bach-

A9 NEWS TMT, finance experts to discuss Fintech investments at DOA business series C002D5556

elor’s degree, Higher National Diploma (HND) and National Diploma. Describing the advertisement as phantom, the corporation called on unsuspecting members of the public to be wary of the scam. NNPC advised members of the public to disregard any announcement of recruitment or invitation to recruitment interview appearing in the social media, saying the corporation was not carrying out any recruitment exercise now. The corporation reminded job seekers to note the antics of scammers who deploy such communication strategies as

text messages, vacancy announcements on social media platforms as well as forged letters inviting job seekers for non-existing job interviews with a view to extorting money from them. NNPC cautioned that any applicant who entertained such invitations would have himself or herself to blame, encouraging those who had already fallen victims to volunteer information to the law enforcement agencies. The corporation stated that as an equal opportunities going concern, it would, as usual, advertise vacancies in the corporation through the national dailies.

BUSINESS DAY

xperts in telecoms, media and technology (TMT) and finance will be at the inaugural business series of the law firm, Duale, Ovia & Alex-Adedipe (DOA), to discuss investment in Nigeria’s telecoms, media and technology market. The event, which will hold May 8, at The Wheatbaker Hotel, Ikoyi, Lagos, would focus on topical issues in the Financial Technology (Fintech) space with an opportunity to discuss and review new developments from a global perspective. Speaking about the event, Adeniyi Duale, the firm’s managing partner, said the breakfast session would provide opportunity for Fintech companies to meet with potential investors to dialogue and listen to various private equity firms on what forms the basis of their investment criteria in start-ups and companies seeking growth capital. “The panel sessions are made up of a distinguished faculty of knowledgeable

Adeniyi Duale, Managin Partner

speakers and resource persons in TMT, finance and the legal industries,” he said, adding that participants would be afforded the opportunity to deliberate on ways to build and identify opportunities that allow investors or venture capitalists invest in the budding Fintech sector. The DOA Business Series is a platform for the crosspollination of ideas between the legal and business communities, so as to encourage

growth and the development of skills in key sectors of the economy. For this edition, the firm has partnered Terragon Group, Bluechip Technologies Limited and Blue Point Global Resource Limited to enable wider stakeholder engagement in the focus sectors. DOA is a full-service commercial law firm in Nigeria providing a wide range of expert legal services to a highly diversified client base, both local and international operating in various sectors of the economy. The firm has specialist skills in areas including telecoms, media and technology, banking and finance, company secretarial, capital market, energy and natural resources, litigation and dispute resolution, taxation, real estate and construction. The firm is recognised in telecoms, media and technology, finance, as well as in the real estate and construction space by the Nigeria Legal Awards and IFLR 1000, a global legal rating and ranking organisation.

A10 BUSINESS DAY

Monday 07 May 2018

BUSINESS DAY

A11

A12

BUSINESS DAY

Monday 07 May 2018

CityFile Over 67, 000 HIV positive persons on treatment in Lagos JOSHUA BASSEY

ver 67, 763 persons are currently on Human Immunodeficiency Virus (HIV) treatment care in Lagos as against the 64, 000 it had as of June 2017. Jide Idris, commissioner for health released the figures at the weekend, adding that malaria, HIV and tuberculosis programmes have been very effective. Idris said 64,000 doses of oral antimalarial and 10,000 doses of injectable Artesunate were procured and distributed across the state. “The program has been able to place and retain 67,763 HIV positive persons on treatment care and support across the state out of which 1,989 persons are on treatment in three Global Fund supported Ikorodu, Oshodi-Isolo and Epe as at December 2017. This has earned the state GF supported HIV Control program an extension period of implementation of eighteen (18) months. ‘’The programme had been able to counsel, test and give results to 1,125,939 persons. The State has been able to scale up ProviderInitiated Testing and Counseling (PITC), Option B+ for pregnant women and test and start strategies in government tertiary, secondary and primary health facilities.’’

Protest on the no to Chinese Slavery on Nigeria workers in Lagos. Pic by Pius Okeosisi

Killings: Benue decries increasing number of widows, orphans

s the killing of Nigerians by blood-thirsty herdsmen continue unabated, especially in the middle belt, Ngohemba Agaigbe, a member of the Benue State House of Assembly, has decried the increasing number of widows and orphans in the state and their plight. Agaigbe said in Makurdi at the weekend that due to the untimely demise of their breadwinners, life had become unbearable for the widows, with thousands of children now dropping out of school. She said that the orphans needed care and education because most of them had nobody to take care of them. According

to the lawmaker, many orphans are brilliant and intelligent students who, if given quality education, could be of immense benefit to the society. Agaigbe further said that if given adequate care, they would shun societal vices, which most of them indulge in just to survive. She said that she was training 36 orphans in her constituency at primary to post-primary schools because she considered them as her own biological children. “It is my sincere and humble desire that I see them through to university education. Anytime that their schools resume and I haven’t paid school fees, I hardly

have sound sleep nor enjoy my meals. “I am doing this from the depth of my heart and I pay their fees with joy because I know I am touching lives. “I do not only pay their fees but I buy all their requirements in school.’’ “What I am doing is not scholarship because I buy virtually everything they need in school from pencil to the highest thing. “I pray God to continue to give me the power to adequately take care of them, especially seeing them through their university education,’’ she said. The lawmaker appealed to well-meaning Nigerians and the society at large to extend a helping hand to the orphans.

NAPTIP seals up hotel, rescues 13 victims of human trafficking KEHINDE AKINTOLA, Abuja

he National Agency for the Prohibition of Trafficking in Persons (NAPTIP) last weekend sealed up Amazonia Guest House at Dagri in Gwagwalada area of Anuja and rescued 13 women suspected to be victims of human trafficking. NAPTIP’s assistant director of intelligence, investigation and monitoring, Tina Ugwu who disclosed this, said that two suspects including the manager of the lodge have been arrested. Ugwu alleged that one Hafeez Abdulsalam who had been on NAPTIPs watch list and a suspected trafficker in the South-West who specialises in trafficking young girls to Saudi Arabia was the person that brought the girls from various states

to Abuja. “From our findings, Abdulsalam is a major recruiter of young girls to Saudi Arabia and Dubai because he has been on our Osun state’s office watch list. “The investigation is still ongoing, we will study all the things we recovered from the hotel and then charge the suspects to court” she said. One of the victims, who gave her name as Rokibat, 22 from Oyo State, said that her aunt in Saudi Arabia told her mother to bring her to Saudi through Abdulsalam to be engaged as housemaid. She explained that she met with Abdulsalam in Osogbo who took her to a hospital for medical check-up in preparation for the journey before she was brought to Abuja. Another victim, Rodiya 23, from Lagos

said that Abdulsalam who is a family friend allegedly promised to take her to Saudi Arabia to earn a living since she was not doing anything. Rodiya explained that Abdulsalam took her to a hospital in Osogbo for medical test and then brought her to Abuja to process her international passport for the journey to the Kingdom of Saudi Arabia. Another victim from Kwara, said that her older sister introduced her to Abdulsalam. The arrested suspect, Abdulsalam when interrogated, claimed that the company he worked for known as Western Royal Manpower Solution was legal and registered company known to Federal Government. The suspected trafficker declined further comments.

Attack: Lawmaker wants IDPs camp in Numan

odom Daniel, member representing Numan state constituency in Adamawa House of Assembly, has appealed to the Federal Government to establish an Internally Displaced Persons’ (IDPs) camp in the area. Daniel said that the camp could carter for many internally displaced persons in the area including victims of the recent attack. She said that continuous attacks on the communities within Numan local government area had rendered many people homeless. She called on concerned citizens and groups to come to the aid of the victims of this perpetual human degrading status. “It has become a serious matter of worry as we wake up from time to time to observe increasing number of displaced persons resulting from incessant attacks on our communities in Numan by herdsmen. “I am appealing to the Federal Government to establish IDPs camp that would cater for this growing number of internally displaced people. “This crisis started in November 2017 till date my people have been displaced, even today, on Thursday I visited some of the villages that came under herdsmen attack resulting in the killing of over 30 people. “Many people have been rendered homeless as a result and that makes life so devastating. “I am also calling on well meaning Nigerians, donor agencies, philanthropists and many other groups to come and assist us in tackling this enormous humanitarian task,” she said. Daniel also called on the Federal Government to compensate the victims of these heinous crimes. She regretted the level of devastation of those affected communities, adding that the level of damages to property in the community could not be quantified. The legislator also appealed to the Federal Government to find a lasting solution to the crisis, and also urged the security agencies to put in more efforts to safeguard lives and property. She regretted that the bandits had earlier issued a threat for the recent attack that claimed over 30 lives in the area. She, however, commended the security agencies for their patrol on the villages but urged them to do more.

Monday 07 May 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES Emerging market investors braced for turbulence

A13

Airlines to launch payments system to rival credit card groups

Page A15

Page A16

World Business Newspaper

Buffett’s Berkshire suffers $1bn loss after accounting change

Swings in portfolio value overshadow improvements in underlying businesses ERIC PLATT

erkshire Hathaway suffered a $1.1bn loss at the start of 2018 as swings in its investment portfolio overshadowed improvements in the sprawling conglomerate’s underlying businesses. The company, led by billionaire investor Warren Buffett, said new accounting rules meant the group now had to include unrealised gains and losses on its equity and derivatives portfolio as part of its earnings. For the first quarter, that included a $6.4bn hit to net income. Using Mr Buffett’s preferred method of measuring Berkshire’s underlying performance, operating earnings — which strips out investment gains and losses — rose 49 per cent from a year earlier to $5.3bn. The group’s insurance underwriting business returned to a profit from a loss the year prior, while operating earnings in the railroad, energy and utility arm improved. “The amount of investment gains [and] losses in any given quarter is usually meaningless,” the company said in a statement. Overall, net income fell from $4.14bn to the loss of $1bn after the investment writedowns while revenues fell from $64.3bn to $58.5bn. The results come as tens of thousands of Berkshire investors have descended on downtown Omaha for the company’s annual shareholder meeting, a day known by some as the Woodstock of Capitalism and by others simply as Buffett-palooza. Mr Buffett and vice-chairman Charlie Munger will take questions for five hours in the CenturyLink Center. The focus in recent years has been on succession planning at the nearly

$500bn company, with Mr Buffett elevating two of his top lieutenants to vice-chairman roles in January. The promotions of Greg Abel, chief executive of Berkshire Hathaway Energy, and Ajit Jain, head of the Omahabased group’s reinsurance business, were seen as endorsements of two potential heirs apparent at the group. The 87-year old chief executive has said it was his intention to reduce his travel commitments, after last month stepping down from the board of consumer goods behemoth Kraft Heinz. He was also expected to skip an activity the former paper boy has held at the annual Omaha gathering for the last few years: the 35-feet newspaper throwing competition. Despite his age and the recent elevations of Messrs Abel and Jain, both Messrs Buffett and Munger have remained in charge of capital decisions and investments of more than $300bn. Earlier this week Mr Buffett disclosed that he had added to his holdings in iPhone maker Apple, sending shares of the company to an all-time high. The improvement in Berkshire’s performance at the start of 2018 was credited in part to the cut to the US corporate tax rate, which fell to 21 per cent from 35 per cent. The company also saw stronger revenues across a swath of its businesses — including its BNSF railroad, Marmon industrial unit and Clayton Homes house building division — reflecting broader demand and the vitality of the global economy. The Geico insurance unit reported a jump in insurance premiums earned in the first three months of the year, as the company increased rates after years of accelerating losses. The pre-tax underwriting gain from the division more than tripled from a year before $677m.

Pharma and healthcare companies brace for Trump shake-up US president expected to outline plans in speech to lower drug prices

DAVID CROW AND BARNEY JOPSON

harmaceutical and healthcare companies are bracing for a string of new regulations designed to lower drug prices in the US as President Donald Trump tries to fulfil his pledge to stop them “getting away with murder”. Mr Trump is expected to give a speech outlining his plans as early as this week, after charging his health secretary and advisers with devising policies to shield patients from soaring healthcare

costs. The most radical proposal under consideration would effectively outlaw drug rebates, according to two people briefed on the speech, who cautioned that plans had not been finalised and were still subject to change. If enacted, such a policy threatens to plunge the industry into a protracted period of uncertainty and to scramble the business models of pharmacy benefits managers such as Express Scripts, CVS’s Caremark and UnitedHealth’s Optum, which Continues on page A14

Iran’s president says US would ‘regret’ leaving nuclear deal UK foreign secretary Johnson flies to Washington for talks aimed at saving accord GEORGE PARKER, MONAVAR KHALAJ AND MEHUL SRIVASTAVA

ran’s president has warned Donald Trump that he would be making a “historic” mistake if the US were to withdraw from a global nuclear deal with Tehran, as the UK foreign secretary flew to Washington to help save the deal. Hassan Rouhani said in a televised speech on Sunday that Iran had “plans to resist any decision by Mr Trump on the nuclear accord”. He said if the US pulled out of the deal by the May 12 deadline, it would “soon realise that this decision will become a historic regret for them”. Boris Johnson, Britain’s foreign minister, is the third senior representative of the so-called E3 — the European powers of Britain, France and Germany — to urge the Trump administration to stick to the deal, which global powers

agreed in 2015 to ease sanctions on Tehran in exchange for Iran limiting its nuclear ambitions. France’s President Emmanuel Macron and German chancellor Angela Merkel have lobbied Mr Trump in recent days to renew a waiver on US sanctions. Iran’s oil ministry on Sunday shrugged off fears that there would be a big drop in oil exports if the US walked away. “I do not think we will face any problems in [selling] oil to our traditional customers, which are our major customers,” Ali Kardor, managing director of the National Iranian Oil Company, said, referring to China and India. A decline in oil exports was one of the main reasons Tehran signed the deal with major powers and shut down its nuclear activities. Since the agreement, oil exports and production are back to pre-sanctions level with exports hitting a record high of 2.6m barrels per

day in April. Mr Kardor said exports to some European customers of less than 300,000 barrels per day could face problems if the US withdrew from the agreement. He said Iran’s $4.8bn contract with France’s Total — one of the main fruits of the nuclear agreement — would be at risk if the US withdrew from the accord. Mr Kardor said China’s CNPC would replace Total to continue developing South Pars, the world’s largest gasfield shared between Iran and Qatar. When Mr Trump last waived sanctions in January, he warned it was “a last chance” to fix the deal’s “terrible flaws” through additional measures. “In the absence of such an agreement the United States will not again waive sanctions in order to stay in the Iran nuclear deal,” Mr Trump said. He wants to include Tehran’s long-range missile programme in the deal, saying there was “near total silence” on the subject in the pact.

VW board considers seeking damages from former CEO Latest blow for Martin Winterkorn comes days after charge from US prosecutors GUY CHAZAN AND PATRICK MCGEE

he Volkswagen supervisory board is considering whether to seek damages from former chief executive Martin Winterkorn, who was last week charged by US prosecutors over the decade-long diesel scandal. US prosecutors listed Mr Winterkorn as one of six former VW employees who participated in the design and cover-up of illegal “defeat devices” used by the carmaker from 2006 to 2015. It was in 2015 that VW admitted to rigging hundreds of thousands of cars with software to cheat diesel emissions tests. The company has had to fork out $25bn over the scandal, a figure that covers the cost of vehicle buybacks, technical fixes and compensation paid to consumers. Mr Winterkorn resigned days after the affair was exposed, saying he was “stunned” by the cheating and insisting he was “not aware” of any wrongdoing on his part. Michael Brendel, a spokesman for the VW supervisory board, said it

had long been investigating whether compensation claims could be made against former or serving members of the VW management board. “In this issue we are solely guided by the good of the company,” he said. Claims were being considered “unreservedly and without regard to the person[’s position]”, he added. The board is being advised by the law firm Gleiss Lutz. Mr Winterkorn, through his lawyers, declined to comment. The board later issued a statement saying its inquiry into possible compensation claims against Mr Winterkorn was “not yet concluded”. “Accordingly no final decision has been made,” it said. The Frankfurter Allgemeine Sonntagszeitung reported that Mr Winterkorn could face financial ruin if the board did indeed seek to make him liable for the billions in losses the company had sustained since the diesel scandal broke in 2015. In September that year US authorities revealed that VW had deployed so-called defeat devices that allowed its cars to recognise when they were being tested in the lab

and enter a low-emissions mode. Mr Winterkorn earned more than €100m in his career at Volkswagen, and left with a pension pot of nearly €30m. FAS reported that his entire fortune could be at risk if the board successfully sued him for damages. According to German law, managers are materially liable not only for any deliberate harm they cause the company, but also for any failure of internal control mechanisms — a concept known as “negligent breach of duty”. The first big German trial against VW is due to start in September at a regional court in Braunschweig, where shareholders will be seeking damages of almost €10bn. They believe that the automaker took too long to inform them that it had cheated the diesel tests. Public prosecutors in Braunschweig are also investigating Mr Winterkorn and 38 others on suspicion of fraud and market manipulation. One of the prosecutors said there “was [and is] a very good and intense working contact between the American and German authorities”.

A14

BUSINESS DAY

C002D5556

NATIONAL

SoftBank cools on Swiss Re stake deal Japanese group had been in discussions with reinsurer for 3 months ARASH MASSOUDI, OLIVER RALPH AND RALPH ATKINS

alks between Swiss Re and SoftBank over an investment in the reinsurance company are close to collapsing after three months of discussions. SoftBank has been in talks to take a minority stake in the Swiss group but

people close to the situation say the Japanese company’s enthusiasm has waned in recent weeks. The size of the deal, which would involve SoftBank buying existing shares rather than Swiss Re issuing new ones, has already been scaled back. When the talks were first revealed in February, SoftBank was considering taking a stake of up to 33 per cent

alongside several seats on the board. But in April, Swiss Re said the stake would probably not exceed 10 per cent. At the time it said the two companies were also looking at other areas of cooperation. Announcing first-quarter results on Friday, John Dacey, Swiss Re’s chief financial officer, said only that discussions between the two companies were

continuing and that the outcome was still open. He said the company “was constantly in discussions with current and potential investors and with corporates and other groups about business ideas”. SoftBank declined to comment. News of the talks between SoftBank and Swiss Re sparked intense discussion in the insurance world over why the acquisitive Japanese technology, telecoms and financial services conglomerate would want a minority stake in a traditional Swiss reinsurer. Speculation centred on the possibil-

ity that Swiss Re could help to provide insurance for some of SoftBank’s other businesses. Walter Keilholz, Swiss Re’s chairman, is still said to be “intrigued” by the idea of a tie-up with Masayoshi Son, SoftBank’s founder and chief executive, and by the insights he could provide into the latest tech developments. Swiss Re does not need any extra capital from new investors. On Friday, Mr Dacey said the company’s annual share buyback programme, which will total Sfr1bn ($1bn) this year, will start earlier than usual.

Tory rebels urged to drop resistance to Brexit customs plan

Pharma and healthcare companies brace for Trump... Continued from page A13 act as middlemen during pricing negotiations. It could also hurt the bargaining power of some drugmakers that offer hefty rebates to ensure they are reimbursed for their products. In the US, pharma companies tend to set a high list price for their medicines before subsequently offering large discounts in the form of rebates to insurers, employers and governmentsponsored schemes, commonly known as “the payers”. In exchange for giving the rebates, the drugmakers demand the payers guarantee to reimburse them for their medicines and allow them access to a broad swath of patients. However, rebating has come under growing scrutiny from policymakers amid claims it stokes drug price inflation: as payers have demanded larger rebates, pharma companies have protected margins by raising their list prices. PBMs and insurers have also been accused of hanging on to a portion of the rebates to boost their profitability rather than passing the savings through to patients. In a speech last week, Scott Gottlieb, the US Food and Drug Administration commissioner, raised the possibility that the practice could effectively be outlawed. Drug rebates are protected by federal law via an exemption that shields them from anti-kickback legislation, but he suggested that could change. “What if we took on this system directly, by having the federal government re-examine the current safe harbour for drug rebates under the anti-kickback statute?” he asked. Such a policy could be achieved through regulatory changes and would not require new legislation or an executive order from Mr Trump, according to one source briefed on the proposal, which means it could be implemented relatively quickly. One person familiar with the plans said Mr Trump had demanded his advisers come up with a high-profile policy that would make a splash and match his fiery rhetoric and tweets on high drug prices. The real negotiated price of a drug after it has been rebated is a fiercely kept secret, known only by the payer and drugmaker, which critics say makes it impossible for a free market to operate.

Monday 07 May 2018

Business secretary warns British jobs at risk if frictionless UK-EU trade not maintained

GEORGE PARKER

Budget chief aims to restore France’s credibility in Europe Gérald Darmanin is determined to push for reforms to end era of deficit ANNE-SYLVAINE CHASSANY

“

he right deficit is zero.” It is the kind of statement Europe expected from Wolfgang Schäuble, the former German finance minister schooled in fiscal discipline. But this time the minister is French. “Non,” said Gérald Darmanin when asked if he and president Emmanuel Macron celebrated with champagne when France’s budget deficit fell below the EU limit — 3 per cent of gross domestic product — for the first time in a decade. “No, because we’re still at 2.6 per cent . . . Since France is not in an economic crisis, we need to have a balanced budget, so that we can afford a deficit in tougher times.” France has frequently promised to balance its finances. It has not done so since 1974. A deficit has become a feature of French economic and political life, partly justified by a preference across the political spectrum for public spending and redistribution policies to boost consumption and growth. But after the eurozone debt crisis it widened while public sector debt swelled to 96 per cent of GDP, from about 20 per cent in the 1970s. As the deficit deepened, French credibility in Europe waned. Failure to meet EU requirements pitted Paris against Brussels. French leaders lost influence as German chancellors grew sceptical. Now Mr Macron and his budget minister are determined to end this era. The French president has showcased fiscal discipline and his ability to pass contentious pro-business labour legislation as ways to win back trust in Brussels and Berlin. The fact that France has brought back its deficit into line with EU targets last year, from 3.4 per cent in 2016, adds weight to its target of a balanced budget in 2022, when Mr Macron is up for re-election. After pass-

ing a bill making its jobs market more flexible, Paris has vowed to overhaul complex pension regimes. It is also seeking to end life-long employment and introduce performance-based pay for civil servants. “It’s a reform of the French mind,” Mr Darmanin insisted in an interview. The European Commission, and Germany, have welcomed the new attitude. France is widely expected to exit the so-called excessive deficit procedure — a series of measures against countries that break EU fiscal rules — this month. But Mr Darmanin said that while strict fiscal rules ensured financial stability in the single currency bloc, they had to be accompanied by policies to boost investments and growth. In return for fiscal discipline, France wants an overhaul of the eurozone, including tools to mutualise risk and investment — such as a shared budget — to absorb economic shocks and stimulate growth. Echoing Mr Macron’s call to the European Parliament last month, Mr Darmanin said eurozone leaders must act to head off resurgent populist forces in EU elections next year. “France needs to follow EU rules, but budgetary tools must be used to boost employment too. I am not here to be an accountant, but a politician, and politics must be used for jobs,” he said. Critics point out that for all its flurry of legislation, the government has gone easy on public spending cuts. Mr Macron has pledged €60bn of savings over five years; public spending is expected to decrease from 56 per cent of GDP in 2018, to 52 per cent in 2022. The planned civil service job cuts amount to 120,000 out of more than 5m. Mr Darmanin acknowledged a need to avoid upsetting too many voters, amid union protests and strikes against plans to reform the state-owned rail operator.

“We’re perfectly conscious that Emmanuel Macron was elected in totally exceptional circumstances that propelled [far-right candidate] Marine Le Pen to the second round of the election, decimated the two largest parties that had governed France since the 1950s and triggered profound discontent. We cannot afford to be authoritarian and arrogant,” he said. Raised in a working-class family in the north of France, Mr Darmanin was a rising star in the centre-right Republican party, becoming the mayor of Tourcoing, a declining textile stronghold, and working closely with former centre-right president Nicolas Sarkozy. He is now an En Marche convert, one of three key defectors — along with Edouard Philippe, prime minister, and Bruno Le Maire, finance minister — whose presence in the government has helped Mr Macron to cement his “neither-left-nor-right” credentials. “Something happened that makes it impossible for the old world to resurface,” Mr Darmanin said of Mr Macron’s unexpected ascent to the presidency. As Mr Darmanin tries to fix France’s finances, clouds are gathering, however. They include a possible rise in interest rates — “We are reasonably worried but we are attentive. We have factored in an increase in interest rates that is higher that what is generally expected,” he said — and a possible trade war with the US. A Chinese debt bubble and political uncertainty in Europe, including Brexit, are other threats. Mr Darmanin recalled the fable, known to French schoolchildren through the 17th century tale by Jean de LaFontaine, of the cicada who sang all summer while the thrifty ant gathered supplies for the winter. “Since the future is hard to predict, we had better be the ant, rather than the cicada,” he said.

reg Clark, business secretary, has warned cabinet Eurosceptics not to risk British jobs by continuing to resist Prime Minister Theresa May’s preferred hybrid customs model. Mr Clark said Toyota had “a choice” on whether to develop future engines at its plant on Deeside in North Wales or on the continent, and that maintaining frictionless trade between Britain and the EU was essential. The business secretary last week backed Mrs May’s “customs partnership” plan, which would remove the need for a customs border between Britain and the EU, eliminating the need for paperwork or rules of origin checks. It would also allow Britain to set its own tariffs and trade policy, a key demand of ardent Brexiters. The scheme would rely on “track and trace” technology — dubbed “magical thinking” by Brussels — to determine whether goods entering British ports were heading for the UK or EU. The plan, in which would Britain would collect tariffs on behalf of the EU, was rejected as unworkable by six of the 11 members of Mrs May’s Brexit inner cabinet last week. They fear its adoption would result in the UK remaining in an EU customs union by default. But the prime minister insists it is still on the table. Eurosceptics are threatening a revolt if Mrs May presses ahead with the plan. A cabinet source told the Sunday Telegraph: “It would be unimaginable for the prime minister to press on with the hybrid model after it has been torn apart by members of her own Brexit committee.” But Mr Clark said companies like Toyota were dependent on frictionless trade with the EU to maintain “just in time” manufacturing techniques. “This requirement to do what it takes to get that minimum of friction is something to which we have made a public commitment,” he told the BBC’s Andrew Marr Show. Mr Clark denied reports that he had been left “close to tears” after last week’s cabinet meeting derailed Mrs May’s compromise, saying he had “never been as clear-eyed” about what was needed to defend Britain’s economy. Carolyn Fairbairn, head of the CBI employers’ group, said: “The single most important Brexit priority for British manufacturers is to protect frictionless trade with the EU. Hundreds of thousands of jobs across the UK depend on it.” She added: “This is a time for pragmatic solutions, not ideology. To protect frictionless trade and ensure no return to a hard border on the island of Ireland, a customs union model based on status quo principles should remain in place unless and until an alternative is ready and workable.”

Monday 07 May 2018

C002D5556

BUSINESS DAY

A15

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Emerging market investors braced for turbulence All eyes are on US and the performance of the dollar JONATHAN WHEATLEY

merging markets investors are braced for turbulence in the coming days following last week’s sharp currencies selloff that led to drastic measures by Argentina’s central bank to stop a slide in the peso. Markets have been roiled by a stronger US dollar, which has prompted a wave of selling in emerging market currencies, stocks and bonds. Argentina, which is struggling with high inflation and large deficits, responded to the hit on the peso last week by raising interest rates three times — from 27.25 per cent to 40 per cent. The “paradigm shift” of a stronger dollar could trigger a bigger and longer-lasting emerging markets sell-off, warned Sonja Gibbs, senior director of the Institute of International Finance, an industry association. “If you look at the futures market for the dollar and US Treasuries, short positions are at very high levels, akin to the taper tantrum,” she said, referring to the developing markets shake-up in 2013 when the US announced an end to ultra-loose monetary policies. “If the dollar continues to strengthen we will get to a point where those are very painful and the risk is they will have to unwind,” Ms Gibbs added. During the “taper tantrum” of 2013, emerging market securities suffered as investors feared a stronger dollar would make dollar debt harder to repay. Since then many emerging markets have improved their government finances, but corporate debt levels — both in local currency and dollars — have continued to rise. Argentina’s woes have been shared by other countries in the re-

gion, with companies from Argentina, Colombia and Paraguay scrapping plans to issue $2bn in bonds last week because of rising US interest rates, according to Bloomberg. The hit to emerging markets currencies has affected countries from Turkey to Poland. While the lira has been driven lower by concerns over Ankara’s economic imbalances, the zloty has been caught up in the wider sell-off despite a more stable economic situation in Warsaw. However, some analysts said the extent of the damage may be limited because of better macroeconomic conditions in developing countries in recent years. Paul McNamara, a fund manager at Gam, said there was potential for a milder echo of the taper tantrum — but only on the currency side. “I think the fundamentals are different now, and the currencies that have been hit the worst are the ones with big current account deficits,” he said. “I’m willing to defend the idea that this time really is different.” Sergio Trigo Paz, head of EM fixed income at BlackRock, the world’s biggest asset manager, said some emerging countries wishing to issue debt this year would have to pay higher interest rates than planned, but this would offer investors the chance to switch into higher-yielding assets. Yet the outlook for emerging markets may be determined by conditions beyond their control. Simon Quijano-Evans, EM strategist at Legal & General Asset Management in London, said a combination of more assertive US foreign policy, leading to higher oil prices, and continued dollar appreciation would be “a double whammy” for emerging market currencies. “All eyes are on one thing, which is US policy, and the impact of that on the performance of the dollar,” he said.

Emerging economies tipped to weather market turmoil Strong growth and more flexible exchange rates could limit fallout DELPHINE STRAUSS AND JOHN PAUL

il prices and the dollar are stronger. US Treasury yields are rising in anticipation of fiscal expansion and monetary tightening. Global debt has ballooned during a long spell of strong growth and easy money. After a week when Argentina’s central bank battled furiously to defend the value of the peso — raising interest rates from 27.25 per cent to 40 per cent in the course of a few days — are these warning signs of further distress to come across emerging markets? For investors of a nervous disposition, there are echoes here of the conditions that led in 1982 to one of the best-remembered episodes of market turmoil: the Latin American debt crisis. Add to this the risk of a full-blown trade war between the US and China, and the ingredients are there for an emerging markets meltdown. Yet the prevailing view among economists is that Argentina was an outlier, with factors that mitigate against a wider crisis. “We don’t see how it’s going to turn

into a big macro reversal,” said Gabriel Sterne of Oxford Economics. With interest rates still low by historic standards, the situation was much less threatening than in the 1980s, he said. At that time, when many emerging market central banks were still pegging their currencies to the US dollar, “there was a big, big rise in [US Federal Reserve] rates and nothing could withstand that”. The backdrop of solid global growth remains supportive. The IMF predicts that growth in emerging and developing economies will accelerate from 4.8 per cent in 2017 to 4.9 per cent this year and 5.1 per cent in 2019 — even if a softening in recent data makes these forecasts look optimistic. Most of the larger emerging markets are also better able to withstand shocks than in the past. As well as more flexible exchange rates, they have higher foreign currency reserves, smaller current account deficits and a bigger share of sovereign debt issued in local currency. Mr Sterne noted that emerging markets weathered the biggest capital outflows on record in the last period of turbulence, from 2013-2015, with only two large economies — Brazil and Ukraine — sinking into recession.

Investors will retreat deeper from emerging market assets if they think the dollar rally has further to go

Unilever credit initiative aims to drive Africa revenues Kenya scheme offers alternative lending to local traders to help increase sales JOHN AGLIONBY

rancis Magambo could not be happier. Sales of Unilever products at his Magson supermarket — a 35-square-metre, dimly lit shop in the Tassia district of Nairobi — have risen 40 per cent to Ks21,000 ($207) a week since January. He expects them to rise at least another 50 per cent in the next three months. The surge is not the result of a boycott of Unilever competitors or new-found wealth by residents in a neighbourhood where few roads are paved and many sewers are open streams. Mr Magambo has joined a project launched by the consumer goods company to help the tens of thousands of small and medium-sized businesses in Kenya sell its products, from margarine to washing detergent. With most traders not having bank accounts let alone a formal credit history, Unilever is using big data to unlock their hitherto extremely restricted access to credit, and thus expand its own sales.

Bruno Witvoet, president of Unilever Africa, said the project, called “Jaza Duka”, or “Fill the Kiosks” in Swahili, highlighted the need to “look at different models” to succeed in subSaharan Africa, where most retail trade is through the informal sector. Informal traders account for just over 50% of retail sales for Unilever in Kenya “To grow our business means developing volume,” he said. “And that means increasing coverage of traditional traders. But the cost of financing for these people is a real hurdle, it’s crippling many economies.” Other multinationals, including Procter & Gamble and East African Breweries, majority owned by Diageo, have started similar, but smaller, initiatives with 4G Capital, a Nairobi-based microfinance institution. Unilever uses its traders’ purchasing history to determine whether they qualify for loans and the maximum credit available. Traders are given 17 days to repay the loans interest free. It has partnered with Kenya Commercial Bank, east Africa’s biggest

lender by assets, and Mastercard, the payments company, to provide the finance and technology respectively. Under Jaza Duka, the money is loaned to Unilever’s distributors which supply the traders who then repay KCB directly, usually via a mobile money platform. The year-long pilot has involved 800 traders in and around Nairobi. The scheme will be rolled out to 35,000 retailers nationwide this month and then internationally. Mr Witvoet said Tanzania and Nigeria are among the countries being considered. Joshua Oigara, KCB’s chief executive, said the 97 per cent repayment rate among Jaza Duka traders highlighted how banks needed toadopt alternative methods of doing business. “The future of lending decisions is going to bebased on data, so we have to move away from the old model of know your customer,” he said. “Sometimes we don’t know them but the data show that theycan be trusted. It’s the ability to analyse the data that we are collecting and linking to the customer’s behaviour which is the reason for our success.”

UK’s oldest bank taps 32-year-old as new partner C Hoare & Co looks to inject ‘millennial thinking’ into venerable institution HANNAH MURPHY

ritain’s oldest bank is replacing two of its octogenarian owners with a 32-year-old partner — to inject some “millennial thinking” into the venerable family-controlled institution. In an effort to carry C Hoare & Co into the digital age, Rennie Hoare, the bank’s youthful head of philanthropy, will be appointed as one of six shareholding “partners” on June 1. The small London-based private bank, founded in 1672 to serve a blueblooded British clientele, is based on Fleet Street, the City’s old newspaper hub. It is almost unique in the UK in that its founding family owners have unlimited liability for all its actions. In a long-awaited shake-up, two of the current shareholders — both 11th-generation descendants of the founding family and former directors of the company — will retire from the partnership this summer. A third has recently left. The succession comes as the staid financial institution, which has in the past proclaimed itself “proud to be boring”, grapples with increased competition from digital challenger banks

offering cheaper, faster services, as well as increased regulation from UK and European watchdogs. “Rennie brings us a very important dimension of millennial thinking,” said Alexander S Hoare, one of the bank’s partners. “We consciously wish to avoid the bleeding edge …but] our belief is that we can adopt new fintech and technologies as they come out.” The bank, which has around 15,000 clients, only launched contactless cards and a mobile banking app in 2015 and is currently testing a new online system. “My approach will be to learn as much as I can from the century of banking experience that the other 11th-generation partners have …and where I can, I will look to add or develop something completely new,” said Rennie Hoare, who has previously worked in consultant relations at T Rowe Price and, before that, at Threadneedle Asset Management. Partners alone oversaw the company up until 2001, when it added some non-family members to its management and supervisory board. The retiring partners are Henry, Sir David and Richard “Tigger” Hoare, who between them have 182 years of experience. They will continue to act

as consultants to the company, it said. For the remaining shareholders, regulation remains the biggest bugbear. “There’s a constant battle over meeting the requirements from multiple regulators,” Alexander Hoare said. In 2017, the bank had to pay out more than £12m in client redress over a documentation error after breaching the UK’s consumer credit act. Hoare also sold its wealth management division to Cazenove Capital Management, a subsidiary of Schroders, last year for £72m, in a move that has helped it “sidestep” new onerous European markets legislation known as Mifid II, Alexander Hoare said. “[Otherwise], that would have been a huge burden for a small bank.” In its latest full-year results ending March 2017, profit before tax more than doubled to £70.8m from £28m, helped by the sale of the wealth management business. However pre-tax profit on its continuing operations fell to £17.6m from £29.8m, dented by the customer repayment costs. Hoare argues its idiosyncratic structure and “play-it-safe” approach has enticed new customers who have lost faith in financial institutions in the wake of the financial crisis.

A16

BUSINESS DAY

C002D5556

Monday 07 May 2018

ANALYSIS

Money flies out of bond funds as bull market ends Some investors are pulling out but others will still relish a stable income OWEN WALKER

Airlines to launch payments system to rival credit card groups Industry strikes alliance with Deutsche to cut billions of euros in transaction costs OLAF STORBECK

frontal assault on credit card companies is being launched by the global airline industry and Deutsche Bank with a new electronic real-time payment system for plane tickets that seeks to save carriers billions of euros in transaction fees. The new system for web-based ticket sales to individual passengers, which does not have a brand name yet, is scheduled to be rolled out across Europe from the end of 2018, with Germany as the first market. “We are developing an industrywide payment solution that is an alternative to credit cards,” said Javier Orejas of the International Air Transport Association. Iata estimates that the global airline industry’s payment processing costs add up to $8bn a year, with credit card companies such as Visa and Mastercard usually charging between 1 and 3 per cent in fees. In contrast, the system developed by Iata and Deutsche Bank will charge a fixed fee which will be “a matter of cents”, said Mr Orejas. The project is made possible by a new EU’s payments regulation that

is forcing banks to give third parties access to customer data and initiate payments. Combined with a looming panEuropean scheme for instant electronic payments this year, the second payment services directive (PSD2) will make possible electronic money transfers between bank accounts in a matter of seconds. The rationale behind this socalled “open banking” idea, which is at the core of PSD2, is to promote competition within the financial industry and encourage innovation from tech companies and other nonbank rivals. Customers using the new payments scheme would enter their bank account data and Deutsche would then check in real time if the passenger has sufficient funds, collect the fares and transfer the money to the airline. “Most banks view this in a defensive manner and only reluctantly open their data,” said Shahrokh Moinian, global head of cash products at Deutsche, adding that Germany’s largest lender takes a different view. “For us, it’s an opportunity for change. We have asked ourselves: Why can’t we behave like a tech company?”

Payment solutions — long seen as dull and unappealing compared with more sparkling investment banking activities — have become one of the most attractive areas in banking, because margins are high and revenues stable. “Over the last decade, payment system providers were the best-performing segment of within financial sector,” said Reinhard Höll, associate partner at McKinsey. Deutsche’s new chief executive Christian Sewing wants to strengthen the lender’s global transaction bank, the largest clearer of eurodenominated transaction. The unit generates a quarter of Deutsche’s overall corporate and investment banking revenue. Yet establishing new payment solutions is anything but easy. “We have seen plenty of well-functioning alternative payment systems which did not manage to achieve a breakthrough,” said Christian Meiske, manager strategy and organisation at ZEB, the German financial services consultancy. Any new solution has to overcome a chicken-and-egg problem, because the acceptance of merchants depends on their customers’ willingness to use it and vice versa.

Investors deliver harsh verdicts on earnings calls Negative responses reveal anxieties about the durability of the bull market in stocks NICOLE BULLOCK, ALISTAIR GRAY AND TIM BRADSHAW

aterpillar’s earnings report for the first quarter should have been a slam dunk. The US blue-chip beat Wall Street estimates for sales and profits and it increased full-year estimates. But the good news quickly faded when Bradley Halverson, the chief financial officer, told analysts on the earnings call that the outlook “assumes that first quarter adjusted profit per share will be the high watermark for the year”. The shares tumbled more than 6 per cent that day, leading the broader market lower. Some 10 years into a bull run in the stock market, investors are paying particularly close attention to what

executives are saying during earning calls, searching for signs of how long the good times are going to last. “There have been more surprises in calls than there normally are,” said Kate Warne, investment strategist at Edward Jones, noting that “there is always more focus on what a company is expected to do versus what they have done because the market is forward looking”. Tesla’s founder Elon Musk shocked investors with his combative demeanour on an earnings call last week. His company’s shares, which were already under pressure in recent weeks, tumbled as much as 8.6 per cent on Thursday after Mr Musk cut off a question about whether the company would need to raise money. “Boring bonehead questions are not cool,” he declared.

Brian Duperreault, AIG’s chief executive, was faulted by some analysts for a lack of specificity as he failed to quell concerns about the pace of the insurer’s turnround. During an earnings call, Erik Bass, analyst at Autonomous Research, told Mr Duperreault that he had picked up some “confusion” about the group’s financial targets. He asked what the chief executive’s target was for return on equity, and whether the insurer might hold an investor day “to discuss this in detail”. Mr Duperreault replied that he had no plans for an investor day, but would “certainly think” about it. Although he had provided a new target for the group’s general insurance business, he said: “You can work out the arithmetic on the ROEs.”

ond funds hoovered up cash for more than a third of a century as investors were drawn by their promise of modest, reliable returns that balanced out their allocations against more adventurous asset classes. But as global monetary policy tightens and central banks promise further interest rate rises, many commentators have called the end of the 36-year bond bull market. The most popular fixed income funds are losing their lustre. “Clearly market sentiment towards bonds has deteriorated,” said Andreas Utermann, chief executive of Allianz Global Investors, the €498bn fund house that has 40 per cent of its assets in fixed-income products. “Some investors who were in bond funds because they thought they were in a 30-year-plus bull market will pull out, but investing in bonds is also about receiving a stable income.” Of the 20 funds with the biggest outflows in the US for the first three months of the year, nine were

bond funds, with several others also investing in fixed-income assets, according to Morningstar. The data provider’s list includes the $32bn iShares iBoxx dollar investment grade corporate bond ETF, which suffered $5.7bn of outflows; the $14bn iShares iBoxx dollar high yield corporate bond ETF, which lost $3.2bn in redemptions; and the SPDR Bloomberg Barclays highyield bond ETF, from which investors withdrew $3.2bn. Several large mutual funds also suffered heavy redemptions. Among them were Franklin Templeton’s $78bn income fund with $2bn of outflows; T Rowe Price’s $30bn new income fund, $2.5bn of outflows; and BlackRock’s $14.8bn high-yield bond portfolio, $1.9bn of outflows. Detlef Glow, head of Emea research at Lipper, the data company, said it was no surprise that the biggest bond funds are among those suffering most from the turn in sentiment. “That’s the nature of the beast,” he said. “If you make the majority of the inflows, you will probably make the majority of the outflows.” In Europe, more than half of the 20 biggest bleeders in the opening quarter were fixed income funds. The list includes Amundi’s €10.7bn 6 M fund, with €874m outflows, and Jupiter’s €9.5bn dynamic bond fund, with €1.3bn outflows. Europe’s biggest fund, Pimco’s €59bn GIS income fund, recorded inflows of €697m over the quarter but had outflows

of €616m in February and €548m in March. The fund was Europe’s fastest-selling last year, attracting €41.5bn. Dan Ivascyn, chief investment officer at Pimco, said he did not believe the tide has turned on his company’s flagship fund. “We don’t focus on flows other than to the extent that meeting the liquidity needs of our end investors is always of the utmost priority,” he said. “We think it’s a very attractive environment for these more flexible bond mandates — not just Pimco’s income fund but products that can take advantage of a global opportunity set, which is about $100tn in size.” The income fund follows an unconstrained strategy, which means it is not confined to traditional bonds but can invest freely in assets as diverse as mortgages and higher yielding debt instruments. Market volatility in the first couple of months of the year revealed that equity and bond prices were no longer negatively correlated. For three weeks running the S&P 500, the US stock market index, fell and the yield on the 10-year US Treasury note rose, sending bond prices

lower. Investors had been used to equity and bond prices moving in opposite directions and positioned their portfolios accordingly. Commentators have said that inflationary pressures have brought an end to the inverse relationship, which has caused investors to reassess fixed income allocations. Many of the funds being hit by big outflows have also suffered market losses. Franklin Templeton’s income fund, which bled $2bn of investor money, recorded a $2.4bn loss in the first three months, while iShares’ investment grade corporate bond ETF, which suffered $5.7bn of outflows, made a $1.3bn loss. Large institutional investors have also suffered from underperformance of their fixed income holdings. For example, ATP, the Danish pension fund with $123bn of assets, saw its holding shrink 1 per cent in the first quarter, having risen 29.5 per cent in 2017. This was largely due to a €230m loss on its bond and mortgage investments. It was the first quarter in four years that the scheme had posted a negative return. In announcing the results, Christian Hyldahl, chief executive of ATP, said: “In a difficult market, a negative return of 1 per cent for the first quarter of the year was satisfactory in light of the very high returns realised in 2017. The result indicates that returns are about to be normalised as central banks place a tighter hold on liquidity and ramp up interest rates.”

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I MONDAY 07 MAY 2018

Opinion AfCFTA: The long, hard road to one African market GLOBAL PERSPECTIVES

OLU FASAN Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

ast week, the African Union published the consolidated text of the agreement establishing the African Continental Free Trade Area (AfCFTA), launched in Rwanda on 21 March this year. Most of us who hailed the launch of the AfCFTA and praised those behind it, as I did in this column last week, had not seen the full text of the agreement, but were simply impressed by the emergence of a long-hoped-for intra-Africa free trade zone. But we can now go beyond the symbolism and consider the substance of what was achieved. The consolidated text is 253-page long and, like all trade agreements, it’s dense, written in specialised language with, for the uninitiated, recondite clauses. Yet this is an important, if somewhat dreary, subject. So, I want to examine the instruments within the bounds of what can be achieved in a newspaper column rather than an academic journal. For context, the AfCFTA has its root in the Abuja Treaty of 1991, which established the African Economic Community (AEC). Yet, it also marks a diminution of the Abuja Treaty, because under the treaty’s six-stage roadmap to Africa’s full economic integration, there should have been harmonisation among the regional economic communities (RECs) by 2007. There should also be a continental Customs Union by 2019, a continental common market by 2023 and an African economic and monetary union by 2028. Of course, the multiple and overlapping RECs are not harmonised. There is no Africawide Customs Union, and the Single Market remains an aspiration under the “Agenda 2063”, adopted in 2013. Africa had always tried to mimic Europe’s model of economic integration, but while the EU turbocharged its integration agenda, with the creation of a Single Market 25 years ago, making it the world’s largest economy, Africa has largely paid lip service to the idea of integrating its economies. But the tide, it seems, is now turning! AfCFTA is hailed as the tool for achieving the Single Market objective. But to what extent does it lay the foundations for a future African Single Market? Well, let examine the agreement.

The consolidated text consists of: the agreement establishing the AfCFTA; three protocols, each on trade in goods, trade in services and the rules and procedures on the settlement of disputes; and eight annexes, each on rules of origin, customs cooperation, trade facilitation, non-tariff barriers (NTBs), technical barriers to trade (TBT), sanitary and phytosanitary measures (SPS), transit, and trade remedies. There are also appendixes. Yet, despite the seeming comprehensiveness, AfCFTA is work in progress. The schedules of tariff concessions and the schedules of specific commitments (for services) are not yet concluded. Phase 2 of the negotiations on competition, investment and intellectual property rights will not start until August this year, with the draft legal texts expected in January 2020. Importantly, however, Article 8 of the AfCFTA Agreement states that all the current and future protocols, annexes and appendixes will be part of the single undertaking, that is, they will form an integral part of the agreement as a single treaty instrument. This will ensure consistency and coherence across the AfCFTA Agreement and its components. But, key question remains: Is AfCFTA a credible forerunner of a Single Market for Africa? Well, Yes and No! Yes, because many aspects of the instruments point in the direction of a single market. No, because some aspects don’t. First, on the former. The comprehensiveness of the annexes on trade in goods, particularly those relating to rules of origin, trade facilita-

on NTBs, indicate a serious attempt to tackle the difficult issue of NTBs across Africa, which is a critical step towards creating a single market. Yet, despite the above, there are some aspects of the AfCFTA instruments that appear to undermine the goal of a future single market. For space constraint, I will briefly discuss three potential obstacles inherent in the agreement. The first is the contradictions between the stated aims of AfCFTA and some of the principles set out in the AfCFTA Agreement. It is stated in Art 3 that the objectives of AfCFTA are, inter alia, to “create a single market” and to “lay the foundations for the establishment of … a Continental Customs Union”. Yet, one of the principles under Article 5 is “variable geometry”, that is, differentiated integration. Of course, this is designed to recognise the heterogeneity and diversity in Africa’s economies. But you cannot talk about creating a single market and yet at the same time explicitly recognise and encourage an a la carte approach. Special and differential treatment, flexibility and technical assistance in relation to the implementation of obligations would be the best way to address the issue of diversity in an integrated market. In any case, how is variable geometry, which suggests a multi-speed integration, consistent with consensus in decision-making, another principle of the AfCFTA? Surely, if countries are going to integrate at different speeds, decision-making can-

But, key question remains: Is AfCFTA a credible forerunner of a Single Market for Africa? Well, Yes and No! Yes, because many aspects of the instruments point in the direction of a single market. No, because some aspects don’t tion and non-tariff barriers, would, if fully implemented, support the integration of Africa’s markets. For example, the annex on rules of origin recognises cumulation of origin within the continent, treating Africa as “a single territory”. Furthermore, the harmonisation, as envisaged, of customs tariff nomenclatures, valuation laws and practices, and customs procedures across Africa would boost its economic integration. What’s more, the elaborate provisions on the mechanism for identifying, reporting, monitoring and elimination of non-tariff barriers, set out in the annex

not be based on consensus to avoid some holding others back! Another critical issue is the legal relationship between the RECs and the AfCFTA. The agreement describes the RECs as “building blocks for the AfCFTA”. But Article 20 states that “In the event of any inconsistency between this Agreement and any regional agreement; this Agreement shall prevail to the extent of the specific inconsistency”. This suggests that AfCFTA rules take precedence over the rules of the RECs, although that seems to contradict the principle, under Article 5, of “preservation of

the acquis”, presumably REC acquis. It’s a mistake that the RECs, which are separate legal entities, are not signatories to the AfCFTA agreement. This means AfCFTA state parties that are members of RECs would be expected to bring their REC’s inconsistent rules into conformity with AfCFTA rules. It’s wishful thinking, a tall order! Expect regular clashes between the RECs and the AfCFTA! The second disincentive to the emergence of one African market is the unwillingness of African countries to embrace economic and trade liberalisation. The depth and breadth of the AfCFTA would be measured by the binding obligations that the parties accept in their individual schedule of tariff concessions and schedule of specific commitments. But this would be contentious, and the countries would have to be dragged kicking and screaming to submit their schedules. Unfortunately, for a free trade deal that is expected to evolve into a single market and a customs union, the AfCFTA treaty contains many references to sensitive products, exclusion list, priority sectors, MFN exemption list, market access conditions and limitations etc. All of these would be difficult to dismantle once established, thus creating obstacles to, rather than laying foundations for, establishing a single market or a Continental Customs Union. What’s more, free movement is a prerequisite for a free trade area. Yet only 30 African countries signed the Protocol on Free Movement in Kigali. Finally, the third limitation is that the AfCFTA agreement is based almost entirely on the WTO system. In fact, the AfCFTA can be described as a continental version of the W TO. The texts of the protocols and annexes, including the rules and procedures on dispute settlement, virtually replicate the corresponding WTO instrument. One must, indeed, wish that AfCFTA does not suffer the curse of the WTO! Of course, there is an argument for not reinventing the wheel. Replicating WTO provisions also means that AfCFTA state parties, being WTO members, should be familiar with their AfCFTA obligations. But regional trade blocs are often created to achieve deeper and more comprehensive integration than is ever possible under the WTO. And for a region that aims to become a Single Market, like the EU, its level of ambition should be greater. But AfCFTA shows a continent approaching economic integration gingerly. The AU’s strapline for AfCFTA is “Creating One African Market”. Well, as an FTA, the AfCFTA is great, but it can’t usher in a single market in its present form. That’s not even mentioning concerns about implementation, a subject for another day!

fivethings for your new week

Fascinating business facts 6%

Malawi’s economy will grow by as much as 6 percent in 2019 from a 4 percent expansion expected in 2018, says President Peter Mutharika in remarks ahead of the presentation of the national budget in parliament. Landlocked Malawi is heavily reliant on financing from foreign donors, mostly Britain but the donors fled after a period when the siphoning off of funds by government officials became commonplace. A former justice minister and scores of other government officials were convicted of complicity in the “Cashgate” scandal. “It has taken us three years to turn around the economy from the devastation of Cashgate, and through national disasters of floods, drought and hunger,” Mutharika said.

56.4

Kenya’s private sector activity jumped in April, continuing its recovery after months of slowdown last year due to a prolonged and volatile election period, a survey showed on Friday. The Markit Stanbic Bank Kenya Purchasing Managers’ Index(PMI) for manufacturing and services rose to 56.4 in April from 55.7 in March. Anything above 50 denotes growth. The survey shows that the underlying demand conditions in the economy are consistent with a solid recovery in economic activity.

75m Shares of Apple hit a record after Warren Buffett told CNBC he bought an additional 75 million shares of the iPhone maker in the first quarter. The Apple purchase, costing between $11 billion and $14 billion, adds to the almost 170 million shares that Buffett-run Berkshire Hathaway Inc. owned at the end of 2017, when it was already his biggest shareholding. Just days before Buffett disclosed the larger stake, Apple reported quarterly results that topped analysts’ estimates on surging services revenue and stable iPhone performance.

10% Zambia’s currency extended its decline to a four-month low against the dollar and its Eurobond yields soared as loan talks with the International Monetary Fund stalled amid concern the country is under-reporting its external debt. The kwacha weakened 0.8 percent to 10.034 per dollar Friday, bringing its decline in the past two weeks to 5.9 percent. Yields on $1.25 billion of 2027 Eurobonds climbed 12 basis points to 9.43 percent, the highest since December 2016. The yield has surged 246 basis points from a record low in January.

164,000 The US kept creating jobs at a moderate pace last month, while wage growth was more subdued than Wall Street had forecast, highlighting how the labour market may have further room to improve despite years of brisk employment gains. Non-farm employment increased by 164,000 jobs last month, according to the Bureau of Labor Statistics, recovering from an upwardly revised 135,000 in March (previously 103,000). However, this fell below economists’ expectations for a gain of 192,000. The unemployment rate fell to 3.9 per cent, from 4.1 per cent in March, but remains at its lowest level since December 2000. Average earnings grew 2.6 per cent yearon-year, steady from March, which had been revised 0.1 percentage points lower from 2.7 per cent. Economists expected growth of 2.7 per cent.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08116759801, 08082496194. Subscriptions 01-2950687, 07045792677. Newsroom: 08022238495 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

Glitz, Glamour at BusinessDay Events BusinessDay last week held three major events in Lagos. BusinessDay Capital Market and Investors Forum 2018 and BusinessDay Top 25 CEOs Award 2018 took place on Thursday, April 26, while BusinessDay Agribusiness and Food Security Summit 2018 was held on Friday, April 27. We bring you the faces that graced the three occasions.

BUSINESS DAY

Monday 07 May 2018

BusinessDay Capital Market and Investors Forum 2018

Oscar Onyema, CEO, Nigerian Stock Exchange (NSE), delivering his keynote address at the conference.

Patience Oniha, director-general, Debt Management Office (DMO), giving a speech at the conference.

Frank Aigbogun, publisher/CEO, BusinessDay Media, delivering his welcome address at the conference.

L-R: Adekunle Adebiyi, vice president, MBO Capital; Adeniyi Falade, Crusader Sterling Pensions Ltd, and Alice Tomodio, senior manager, capital markets services, PwC.

L-R: Uche Val Obi, managing partner, Alliance Law Firm, and Kennedy Ichibor, vice president, Zenith Capital Ltd.

L-R: Kehinde Ayo-Kasumu, managing partner, Ayo-Kasumu & Company Legal Practitioners, and Tajudeen Ahmed, general manager/group head, business development, BUA Group.

L-R: Joseph Kadiri, media relations officer; Olumide Orojimi, head of corporate communications, and Clifford Akpolo, digital manager, all of Nigerian Stock Exchange (NSE).

Seyi Osunkeye, MD/CEO, Pilot Securities Ltd, and Akeem Shadare, MD/CEO, Chapel Hill Denham Securities Ltd.

Chuka Mordi (l), with Tony Ibeziako, acting divisional head, listing business and head, primary markets, Nigerian Stock Exchange (NSE).

L-R: Richard Arowolo, Elisabet Ekpenyong and Tosin Kalegha, all of Perchstone and Graeys .

L-R: Ted Iwere, publisher, SME Media Limited; Yomi Adebule and Yemisi Otugbile, both of Zenith Capital.

L-R: Adekunle Adebiyi, VP, MBO Capital Management; Patrick Atuanya, news editor, BusinessDay, and Dolapo Ashiru, MD, Mega Capital Financial Services .

Monday 07 May 2018

BUSINESS DAY

BusinessDay Capital Market and Investors Forum 2018

L-R: Bayo Olugbemi, MD/CEO, First Registrars; Frank Aigbogun, publisher/CEO, BusinessDay Media, and Bola Onadele.Koko, MD/CEO, FMDQ OTC Securities Exchange.

L-R: Osaro Eghobamien, managing partner, Perchstone & Graeys; Bola Ajomale, MD/CEO, NASD OTC, and Haruna Jalo-Waiziri, MD/CEO, Central Securities Clearing System.

L-R: Ezeagu Onyenwechukwu, chairman, ASHON; Charles Ohamara, consultant, financial system strategy (FSS) 2020, Central Bank of Nigeria (CBN), and Muhd Alibaba of CNB Abuja.

L-R: Zella Akindele, partner, Templars; Michelle Watts, director, PwC; Niyi Onifade, head, client coverage, United Capital, and Susan Adeoye, partner, Alliance Law Firm.

L-R: Igah Cletus and Temitope Sanni, both of CSCS.

L-R: Uche Obi, managing partner, Alliance Law Firm; Oscar Onyema, CEO, NSE; Bayo Olugbemi, MD/ CEO, First Registrars and president, CC Institute of Capital Market Registrars, and Simeon Oyakhilome, partner, Alliance Law Firm.

L-R: Taiwo Titilayo, head, operations, Infoware Limited, and Adetola Fasuyi, head L-R: Uwa Egbomile of Infoware Limited and Chukwudi Akpulonu, L-R: Kemi Adeniji of Goldmine Global and Amaka Ajaegbu of Broll of wealth management, United Capital Plc. online services, CSCS. Nigeria. Pictures by Pius Okeosisi and Olawale Amoo

BUSINESS DAY

Monday 07 May 2018

BUSINESS DAY

BusinessDay Agribusiness and Food Security Summit 2018

Frank Aigbogun, publisher/CEO, BusinessDay Media, giving his welcome address at the conference.

Godwin Obaseki, governor, Edo State/special guest of honour, delivering his speech.

L-R: Uche Odazor, managing director, AG Aviation West Africa; Frank Aigbogun, publisher/CEO, BusinessDay Media, and Godwin Obaseki, governor, Edo State.

A cross section of the participants at the conference.

L-R: Mohammed Kagu, group head, agriculture finance, First Bank; Ismail Darma of NIPC, and Kabiru Musa.

Audu Ogbeh, minister, federal ministry of agriculture and rural development/ special guest of honour, giving a speech at the conference.

Audu Ogbeh, minister of agriculture and rural development (l), with Mauricio Alarcon, MD/CEO, Nestle Nigeria Plc.

L-R: Folusho Olaniyan, programme director, Agrainnovate West Africa; Edeme Kelikume, CEO, Connect Rail Services Limited; Nwaneri Olubukola, CEO, Naija Pride Agribusiness Global Limited; Hans-Willem Van Ser Waal, managing director, Agrofair Europe BV; Fatih Ermis, head of agricultural services, Nestle Central and West Africa Region Limited, and Prakash Kanth, senior vice president, Olam International Limited, all panellists at the conference. With them is Bernard Orji, partner, Consumer and Industrial Products Consulting Practice, Deloitte and Touche, who moderated the panel.

L-R: Fatih Ermis, head of agriculture services, Nestle CWAR; Oluwaseun Akinoso, supplier development manager, Nestle Nigeria Plc, and Francis Widm of French Embassy.

R-L: Seidu Adebowale, Mayowa Fakolujo and Opera Alexander.

Uche Orji, MD/CEO, Nigeria Sovereign Investment Authority (NSIA)/ guest speaker, delivering a speech.

L-R: Eme Tony-Uwebo, Nkiru Okpreke and Alex Iwu.

L-R: Omobola Adekoya, Biodun Ariyo, and Ikenna Egbukole.

Hans-Willem Van Ser Waal, managing director, Agrofair Europe BV/keynote speaker, delivering his keynote address.

L-R: Bukola Awosanya, group head, agric and export, Sterling Bank; Muhammad Kagu, acting group head, agric finance, First Bank of Nigeria Plc; Mezuo Nwuneli, managing partner, Sahel Capital Agribusiness Mangers Limited; Lois Sankey, head, agrifinance desk, Diamond Bank Plc; Emmanuel Ijewere, vice president, Nigeria Agribusiness Group; Ujwalkanta Senapati, managing director, WACOT Limited, all panellists at the conference, and Andrei Ugarov, partner, corporate finance practice, PwC, moderator of the panel.

L-R: Gbola Lala, Akinwobi Biodun, and Ernest Urhude.

L-R: Godwin Obaseki , governor, Edo State, Rerhe Idonije, head of conferences, BusinessDay Media, and Mauricio Alarcon, MD, Nestle Nigeria.

Michel Deelen, deputy Netherlands ambassador to Nigeria, and representative of the ambassador, delivering a goodwill message.

L-R: Olusegun Ojo, director-general, National Agricultural Seedcouncil; Nneka Eze, partner, Dalberg; Soji Apampa, CEO, The Convention on Business Integrity; Kola Masha, managing director/CEO, Babban Gona; Onyeka Akumah, co-founder/CEO, Farmcrowdy; Fred Ijewere, chairman, ESAN MFB, all panellists at the conference, and Caleb Ojewale, agric correspondent, BusinessDay Media, who moderated the panel.

L-R: Adesola Afolabi, Kikilowo Akpati and Lekan Tobi.

Participants at the event.

Pictures Okeosisi and Olawale Amoo

BUSINESS DAY

Monday 07 May 2018

BusinessDay Top 25 CEOs Award in Lagos

L-R: Frank Aigbogun, publisher/CEO, BusinessDay Media; Oscar Onyema, CEO, Nigerian Stock Exchange (NSE), receiving the Top 25 CEOs special award from Bamanga Tukur, businessman and politician.

L-R: Abimbola Ogunbanjo, president, Nigerian Stock Exchange (NSE), presenting the CEO award to Lanre Jaiyeola, managing director, Honeywell Flour Mills Plc.

L-R: Abimbola Ogunbanjo, president, NSE, presenting the CEO award to Pius Apere, MD/CEO, Linkage Asssurance Plc.

Ayo Aboderin, finance director, May & Baker Nigeria Plc (r), receiving the CEO award from Abimbola Ogunbanjo, president, NSE, on behalf of Nnamdi Nathan Okafor, MD/CEO, May & Baker Nigeria Plc.

Aderemi Saka, chief finance officer, Nascon Allied Industries Plc (r), receiving the CEO award from Abimbola Ogunbanjo, president, NSE, on behalf of Paul Farrer, MD, Nascon Allied Industries Plc.

Saraki Iyiola, S.A to GMD, NEM Insurance Plc (r), receiving the CEO award from Abimbola Ogunbanjo, president, NSE, on behalf of Tope Smart, GMD/CEO, NEM Insurance Plc.

L-R: Abimbola Ogunbanjo, president, NSE, presenting the CEO award to Ibrahim Aminu, MD/CEO, Cement Company of Northern Nigeria Plc.

L-R: Abimbola Ogunbanjo, president, NSE, presenting the CEO award to Mauricio Alarcon, MD/CEO, Nestle Nigeria Plc.

Monday 07 May 2018

BUSINESS DAY

Top 25 CEOs Award in Lagos

Demola Shogunle, chief executive, Stanbic IBTC Bank (r), receiving the CEO award from Abimbola Ogunbanjo, president, NSE, on behalf of Yinka Sanni, chief executive, Stanbic IBTC Holdings Plc.

Tope Fasoranti, executive director, Zenith Bank Plc (r), receiving the CEO award from Abimbola Ogunbanjo, president, NSE, on behalf of Peter Amangbo, GMD/CEO, Zenith Bank Plc.

L-R: Oscar Onyema, CEO, NSE, presenting the CEO award to Peter Ashade, MD/CEO, Africa Prudential Plc.

Aderemi Saka (r), CFO, Nascon Allied Industries Plc, receiving the CEO award from Adenrele Adesina, commissioner for budget and planning, Ogun State, on behalf of the CEO.

Olusegun Ajala (r), head marketing, Nascon, receiving the CEO award from Adenrele Adesina, commissioner for budget and planning, Ogun State, on behalf of the Ag GMD, Dangote Sugar Refinery Plc .

L-R: Adenrele Adesina, commissioner for budget and planning, Ogun State, presenting the CEO award to Uzoma Dozie, GMD/CEO Diamond Bank Plc.

Haruna Jalo-Waziri,( left ) MD/CEO CSCS, presenting the CEO award to Urum Kalu Eke, GMD/CEO FBN Holdings Plc.

Obaro Odegbe, general manager, Fidelity Bank Plc, receiving the award on behalf of Nnamdi Okonkwo, the MD/CEO of the bank from Haruna Jalo-Waziri,( left ) MD/CEO CSCS.

Imokha Ayebae, corporate finance manager, Fidson Healthcare Plc receiving the CEO award from Haruna Jalo-Waziri,( left ) MD/CEO CSCS, on behalf Fidelis Ayebae the CEO of the company.

L-R: Bola Onadele. Koko, MD/CEO, FMDQ OTC Securities Exchange; Patience Oniha, director-general, Debt Management Office (DMO)/guest of honour; Oscar Onyema, CEO, Nigerian Stock Exchange (NSE)/keynote speaker; Bola Ajomale, MD/CEO, NASD OTC, and Haruna Jalo-Waiziri, MD/CEO, Central Securities Clearing System. A cross section of award recipients

BUSINESS DAY

Monday 07 May 2018

Top 25 CEOs Award in Lagos

Oscar Onyema, CEO, NSE, presenting the CEO award to Peter Folikwe, MD/CEO, Berger Paints Nigeria Plc.

L-R: Oscar Onyema, CEO, NSE , presenting the CEO award to Alex Mbakogu, who is representing the MD/CEO, C&I Leasing Plc.

L-R: Adenrele Adesina, commissioner for budget and planning,Ogun State, presenting the CEO award to Ade Ayeyemi, group CEO, Ecobank Transnational Incorporated Plc.

Adenrele Adesina, commissioner for budget and planning,Ogun State, presenting the CEO award to Mahmud Tukur, MD/CEO, Eterna Plc.

L-R: Haruna Jalo-Waziri, MD/CEO, CSCS, presenting the CEO award to Joseph Umolu, company secretary, representing Paul Gbededo, GMD/CEO, Flour Mills Nigeria Plc.

Tolulope Onipade (r) of GTB receiving the CEO award from Haruna Jalo-Waziri, MD/CEO, CSCS, on behalf of Segun Agbaje, GMD/ CEO, GTB.

Kennedy Uzoka (r), GMD/CEO, UBA Plc, receiving the CEO award from Anthony Osae-Brown, editor, BusinessDay. Pictures Okeosisi and Olawale Amoo